PRIVILEGED & CONFIDENTIAL - ATTORNEY/CLIENT COMMUNICATION

FROM GREG PORTER

We have agreed with SoCalGas and FERC's ADR group lead by Rick Miles, to meet in Chicago on December 4, 2001 to begin mediation.  In anticipation of mediation, over the next month we will be meeting to prepare our mediation presentation and discuss potential settlement scenarios and strategies. We will have a better sense after the mediation session on December 4th whether SoCalGas is serious about its desire to resolve this proceeding amicably.  SoCalGas' lawyer has represented to me that they are interested in settlement and "prepared at some level" to compromise.  

Should you have any questions regarding this matter, please do not hesitate to contact me.