Pricing for CA IOU's Core Gas Customers

Paul: Here's additional info for the "curtailment" data that we're pulling
together.

Utility Pricing for Core Gas Customers

Prior to the month in question, the utility forecasts gas prices based on
NYMEX monthly prices. So for example, based on November's forecast, the
utility sets prices to be charged to core consumers in December.

When December's over, the utility compares forecast prices with actual
prices. If the forecast was too low, and there's an undercollection, the
utility will increase January's price forecast by "just enough" to make up
for the December undercollection. If prices were too high and there's an
overcollection, the utility will reduce January price forecast by just enough
to refund the overcollection.

If the overcollection/undercollection is very large, the utilities have
generally spread out the "true-up" over several months to avoid "rate shock"
one way or the other. However, under the current circumstances, the
utilities may be less willing to spread it out, and may wish to recover the
entire undercollection in the following month. In short, there's at least a
one-month lag in customer prices to account for differences in forecasts
versus actual.