Dear fellow signatories to the Comprehensive Settlement: 

On Friday of last week, SoCalGas and PG&E informed ALJ Biren that Altra had 
definitively declined to offer the electronic trading services that both the 
already-approved PG&E settlement and the pending SoCalGas/SDG&E Comprehensive 
Settlement contemplated would be provided specifically by Altra for at least 
an intial period.? Both SoCalGas and PG&E sent a letter and email to to the 
full service list yesterday (Tues, 9/5) informing parties of this development.

SoCalGas believes that some modification to the Comprehensive Settlement in 
necessary to take this development into account, and that we then need to 
file the modification as soon as possible with the Commission.? The ALJ has 
indicated to us that some formal filing with the Commission in response to 
this development will be necessary.

We want to work with the signatories to the Comprehensive Settlement to reach 
a consensus as soon as possible.? Our goal is to cause little or no delay in 
the processing of a decision on the Comprehensive Settlement.

What SoCalGas has in mind is modifying the settlement to remove the specific 
naming of Altra and to insert language saying that SoCalGas will select and 
contract with a third-party provider for a specified period of time, without 
identifying in the settlement who that will be.?? We also need to consider 
whether we should address in the revision to the settlement how we will 
handle the possibility that the third-party provider will not be ready to 
operate by the April 1, 2001 date the settlement provides for the monthly 
imbalance trading, OFO day imbalance chip trading, and storage rights 
trading.? SoCalGas is looking at interim arrangements that it could provide 
in-house starting April 1, 2001, until the third-party provider could begin 
service.? We also might consider what would happen if no third party provider 
can be found.

To avoid any claims that we have not complied with the settlement rules, 
today we mailed and emailed to the full service list a notice of a settlement 
conference for Wednesday of next week.? We want to file something with the 
Commission very promptly thereafter.

Please feel free to contact Glen Sullivan at 619-699-5027, Lad Lorenz at 
213-244-3820, Bob Betonte at 213-244-3832, or June Suwara at 213-244-3504 on 
this subject.? 

For those of you who have not heard, Brian Cherry has submitted his 
resignation from Sempra Energy's Regulatory Affairs Dept. and will be going 
to work shortly for PG&E in a similar capacity.