3. Termination Provision

Since 1997, Crystal's interconnection with PG&E has been governed by a CPIOA, also known as Agreement No. 4044.² Crystal signed the agreement in May 1997 and PG&E signed it in July 1997. Section 7.2 of the agreement permits either party to terminate after the agreement has been in effect for one year. Specifically, Section 7.2 states:

(a) Termination for Convenience: Either Party may terminate this Agreement after the Initial One Year Period upon thirty (30) days written notice.

The agreement also provides at Section 7.2(d) that "[u]pon termination of this Agreement, PG&E shall have the right to disconnect from PG&E's Gas Plant the Facilities used to receive Producer's gas." PG&E's Gas Plant includes Line 156.

An amendment to Agreement No. 4044, called "Amendment No. 1," was executed in April 1999. Amendment No. 1 expressly retains all provisions of the underlying agreement, including Section 7.2.

The initial one-year period of Agreement No. 4044 has elapsed. On February 23, 2000, PG&E gave written notice that it was terminating Agreement No. 4044, including Amendment No. 1, pursuant to the 30-day termination provision in Section 7.2. In the same letter, PG&E offered to continue to receive Crystal's gas deliveries at a different connection location.

Crystal responds that PG&E is or should be precluded from terminating the contract pursuant to Section 7.2(a), alleging that Agreement No. 4044 is a contract of adhesion and the termination provision is unconscionable.