PG&E REBUTTAL POSITION

Jeff&Susan,

I just got off the phone with Rich Hall, Mr. PG&E, . It was all good news.
First, PG&E does not plan to file any rebuttal testimony. Secondly, Rich
indicated that their prep for the witness stand is to AVOID bringing Hector
Rd. into their position. Wheeler Ridge will be characterized as a unique
situation that requires further consideration. He acknowledged and
appreciated the work the Transwestern team has been putting forth trying to
at least give PG&E's requested settlement modification a fair and thoughtful
chance. Specifically, he understood and appreciated the "educational" effort
we have been expending with the Indicated Shippers. As to whom might file
rebuttal testimony to PG&E, like we assessed earlier, it is probably going
to be Kern. There is still an element in the PG&E camp that is advocating a
tougher position, but Rich is still successfully pulling them to our
preferred approach.

We will of course reassess the landscape after all the rebuttal testimony
has been filed, but so far the " seas are calm". I look forward to your
visit next week. You guys have a great weekend.

Mark, IGS