PARTIES In The Gas Strategy OII, I.99-07-003

PG&E is holding the first Gas OFO Forum on Thursday, August 29, 2000.  The
Forum was established by PG&E's OFO Settlement that was approved by the CPUC
in Decision 00-02-050.  Below is the list of issues from the Settlement that
the Forum is to explore (Section B.3.a).  This Settlement also initiated a
quarterly OFO Report (Section C.f).  PG&E completed the first OFO Report on
July 31, 2000, and would like to review this report with the Forum.

In addition, the Comprehensive Gas OII Settlement approved by the CPUC in
Decision 00-05-049 made the issue of adding more storage to balancing a
first priority for the Forum (Section 2.1.3.7) and required PG&E to provide
a balancing study (Section 5.1.3).  The "Report on Adding Storage to PG&E's
Bundled Pipeline Balancing Service" was sent to parties on March 7, 2000.

The OFO Forum will be held in San Francisco at PG&E's Pacific Energy Center,
851 Howard Street (between 4th and 5th Streets).  The meeting will start at
9:30 a.m. and end around 4:00 p.m.  We will provide refreshments and lunch.
We will send our proposed detailed agenda to you next week.

Please RSVP to Belinda Bates at bdb9@pge.com or 415-973-6626, so we can get
an accurate count of attendees.  Please call or e-mail Geoff Bellenger at
gjb2@PGE.com or (415) 973-8415, if you have questions, or need copies of
either the March 7 Balancing Report or the July 31 OFO Report.

Ron Stoner    Randy Litteneker
(415) 973-3606   (415) 973-2179


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 B.3.   The Gas OFO Forum will further explore the following issues:
  a. The effectiveness of customer-specific OFOs and
possible improvements to the procedure outlined in this Settlement,
including the need and methodology for changes to the Performance Factor set
forth in Section C.3.b.(7).
  b. Whether and how parties who significantly contribute
to system-wide OFOs on a repeated basis, e.g. to three (3) or more per
month, should be specifically identified.  A "significant contributor" is
defined as any balancing entity with total imbalances greater than 5,000 Dth
and 10 percent of its usage in the three days leading up to each system-wide
or customer-specific OFO.  For Core Procurement Groups, supply will be
compared to their Determined Usage, which is the Cumulative Imbalance
(except for OFO days when the 24-hour forecast will be used).
  c. Whether the exemption for OFO noncompliance charges
set forth in Section D.3.b should be increased.
  d. The need for the allocation of additional storage to
balancing (see Section C.6).
  e. Changing the Cash-out procedures.
  f. Other issues which relate to PG&E pipeline balancing
and OFOs.