Wood Alternate Comment Dec. Final Opinion Approval with Modifications of the Interim Settlement Enhancing and Enabling Competitive Markets on the SoCalGas Company System and Other Decisiions on the Promising Options Set Forth in D.99-07-015

VII. Conclusions of Law

1. Southwest Gas filed its Reply brief late with good cause and without prejudicing other litigants.

2. The market structure of the gas industry should be reformed cautiously in light of recent energy and gas price rises.

3. The interests of the many stakeholders in the gas industry should be balanced by approving the IS and its appendices in part and disapproving them in part.

4. The IS should be approved, with modifications, because it is in the public interest, reasonable in light of the record as a whole and consistent with law.

5. With regard to the choice given to the Commission in the IS, Section VII.E, on how to deal with risk in storage unbundling, we should adhere to the provisions of the Joint Recommendation approved in D.00-04-060, for 50/50 ratepayer/shareholder risk-sharing.

6. We should not unbundle the storage held in excess of meeting core reliability requirements from core rates.

7. Sections III, X, XI, and XIII should be modified by deleting that portion of each section limiting the Commission's ability to approve the settlement in part. Those portions of each of these sections should be disapproved.

8. Section III of the IS should be modified to set forth criteria for expansion of Wheeler Ridge, but provide that upon the meeting of that criteria, SoCalGas shall submit an application, if appropriate under Public Utility Code Section 1005.5, for an expansion of the receipt point capacity. That application shall be processed regularly, with all issues subject to Commission decision.

9. The modification in Section III should be in the first sentence of the first full paragraph on page 8. The words "apply to" should be inserted after "SoCalGas will". The IS language in the middle on page 8 beginning with the words "This Settlement" through the end of the paragraph, and the concomitant language in Appendix A setting the cost at $12 million in 1999 dollars should be disapproved.

10. The exemplary tariffs attached to the IS should not be approved, although SoCalGas should file similar tariffs as part of the implementation of this decision.

11. In order to deter any question of the applicability of this decision if any of the parties to the IS no longer support the IS with the modifications we make, this decision should be viewed as a decision on the record made in R.98-01-011 and I.99-07-015 and officially noticed facts, as well as an approval of the settlement as modified.

12. The provisions in this decision and the IS regarding core aggregation programs do not substantially change the existing core aggregation program so as to exclude core aggregators from providing billing to their customers.

13. SoCalGas should withdraw Advice Letter No. 2837 and file instead a tariff embodying the IS provisions we are approving.

14. SoCalGas' Advice Letter No. 2895 and SDG&E's Advice No. 1185-G should be rejected. The protests of SCGC, CIG/CMA, TURN, Aglet and ORA should be granted.

15. Because Advice Letter No. 2895 is rejected, within 10 business days from the effective date of this decision, SoCalGas should file a new advice letter to implement a gas industry restructuring memorandum account with the restricted purpose of implementing the IS, including "developing and implementing new or enhanced computer systems" with a ceiling of $3.5 million. This advice letter should not include the provisions disapproved in Advice Letter No. 2895 at pp. 66 to 69 in this decision. The costs booked should be limited to those beginning on the effective date of this decision. The booked costs should be subject to review for their reasonableness, duplicativeness, and their incremental nature in the next BCAP.

16. As of the effective date of the tariffs arising out of this decision, the core should stop contributing to the noncore ITCS, and the noncore should pay all the noncore ITCS.

17. SoCalGas should not unbundle its core interstate transportation costs from core rates at this time.

18. SoCalGas should not change the brokerage fee of $.0201/Dth.

19. SoCalGas should file a rate adjustment advice letter regarding noncore ITCS and related matters within 30 calendar days from the effective date of this decision. The revised rates should become effective within 60 days of the effective date of this decision.

20. No core subscription contracts should be let after April 1, 2001, and contracts let between the effective date of this decision and April 1, 2001, should expire on July 31, 2001.

21. The revenues from those core subscription customers switching to core status should be recorded in the CFCA.

22. SoCalGas should post on its GasSelect system operating information as extensive as that required of PG&E and including post-OFO data by customer class sufficient to allow readers to understand why an OFO was called.

23. SoCalGas and SDG&E should work with customers and/or ESPs to provide customer-specific information like consumption data in consistent formats across different contexts, consistent with consumer protection and privacy considerations. Customers and/or ESPs should pay the reasonable costs of any requests for such information.

24. SoCalGas and SDG&E should be authorized to file applications for rate changes based on needed expenditures to cope with customer transfers to core aggregators when transfers exceed 8% of total core volume has switched from utility procurement to core aggregator procurement. An application or BCAP proposal for a rate increase to fund, in conjunction with ESPs, necessary computer hardware, software, training and education efforts at that point should closely match customer needs instead of being well in advance of such needs.

25. The Energy Division should first deal with any disputes concerning the content of a utility-provided insert. This process may lead to a recommendation for a resolution, with other offices of the Commission participating as parties.

26. The costs of the retail reforms should be paid by the utilities until the next PBR or rate case.

27. SoCalGas should withdraw Advice Letter No. 2895.

28. SoCalGas should file one or more compliance advice letters to implement this decision within 10 business days from the effective date of this decision unless another provision of our order allows longer for a specific matter. The new and revised tariffs should be effective unless rejected by the Energy Division within 30 days after their filing.

29. The compliance filing should specify compliance monitoring, cost responsibility, and enforcement measures.

30. Sempra, on behalf of SoCalGas and SDG&E, should file a Market Assessment Report with the Energy Division two years after the effective date of the tariff revisions ordered in this decision, elucidating the effect on the market of the reforms instituted herein, and, in cooperation with PG&E, the effect on the market in northern California of the reforms instituted through the earlier decisions in this docket at least through the end of 2002 and longer if desired.

31. Upon receipt of the Market Assessment Report, a new investigation may be initiated by the Commission to determine whether further reforms are needed in the gas industry structure in southern California. If initiated, such an investigation should begin by requesting responses to the utilities' market assessment report and may be consolidated or otherwise linked to extant proceedings regarding the gas industry structure in northern California.

32. The terms of the IS that are adopted, and the other reforms adopted herein should continue in place until changed by action of the Commission.

33. The proposed decision herein should be our draft report to the Legislature. The final decision should be our final report.

34. The Commission should establish natural gas consumer protections as outlined in our 1999 consumer protection report to the Legislature.

35. This proceeding should be closed.

36. This order should be effective today, so that the restructuring provisions found in the settlement and adopted by us with modifications may be implemented expeditiously.

ORDER

IT IS ORDERED that:

1. The motion of Southwest Gas Corporation to allow the late filing of its Reply Brief is granted.

2. The Joint Motion for Approval of Interim Settlement Enhancing and Enabling Competitive Markets on the Southern California Gas Company (SoCalGas) System, filed December 27, 1999, is granted in part and denied in part.

3. We approve sections II, V, VIII, and IX and associated appendices of the Interim Settlement (IS), which is attached in full as Appendix I to this Opinion.

4. We do not approve sections III, X, XI, and XIII insofar as each section limits the Commission's ability to approve the settlement in part.

5. We approve that portion of Section III of the IS that sets forth criteria for expansion, but provide that upon the meeting of that criteria, SoCalGas shall submit an application, if appropriate, for an expansion of the receipt point capacity. That application shall be processed regularly, with all issues subject to Commission decision.

6. We approve the third paragraph of section IV of the IS, which requires SoCalGas to provide certain operating and OFO information.

7. We approve section VI.C of the IS, which allows for continued trading of monthly imbalances and for the trading of OFO imbalances.

8. Thus, we will modify the IS in the first sentence of the first full paragraph on page 8. The words "apply to" shall be inserted after "SoCalGas will." We specifically disapprove the IS language in the middle on page 8 beginning with the words "This Settlement" through the end of the paragraph, and the concomitant language in Appendix A setting the cost at $12 million in 1999 dollars.

9. We do not approve the exemplary tariffs filed along with the IS, although we expect similar tariffs to be filed as part of the implementation of this decision.

10. The provisions regarding core aggregation programs shall not be construed as substantially changing the existing core aggregation program so as to exclude core aggregators from providing billing to their customers.

11. SoCalGas shall withdraw Advice Letter No. 2837 and file instead a tariff embodying the IS provisions we are approving.

12. SoCalGas' Advice Letter No. 2895 and San Diego Gas & Electric Company's (SDG&E) Advice Letter No. 1185-G are rejected. The protests of Southern California Generation Coalition, California Industrial Group and California Manufacturers Association, The Utility Reform Network, Aglet Consumer Alliance, and the Office of Ratepayer Advocates are granted.

13. Because Advice Letter No. 2895 is rejected, within 10 business days from the effective date of this decision, SoCalGas shall file a new advice letter to implement a gas industry restructuring memorandum account with a ceiling of $3.5 million and the restricted purpose of implementing the IS including "developing and implementing new or enhanced computer systems." This advice letter shall not include the provisions disapproved in Advice Letter No. 2895 in this decision. The costs booked shall be limited to those beginning on the effective date of this decision. The booked costs shall be subject to review for their reasonableness, their duplicativeness and their incremental nature in the next BCAP.

14. The costs of the retail reforms shall be paid by the utilities until the next PBR or rate case.

15. As of the effective date of the tariffs arising out of this decision, the core shall stop contributing to the noncore interstate transition cost surcharges (ITCS), and the noncore shall pay all the noncore ITCS.

16. SoCalGas shall not change the brokerage fee of $.0201/Dth.

17. SoCalGas shall file a rate adjustment advice letter regarding noncore ITCS and related matters within 30 calendar days from the effective date of this decision. The revised rates will become effective within 60 days of the effective date of this decision.

18. No core subscription contracts shall be let by either SoCalGas or SDG&E after April 1, 2001, and contracts let between the effective date of this decision and April 1, 2001, must expire on July 31, 2001.

19. The revenues from those core subscription customers switching to core status shall be recorded in the Core Fixed Cost Account.

20. SoCalGas shall post on its GasSelect system operating information as extensive as that required of Pacific Gas and Electric Company (PG&E) and including post- operational flow order (OFO) data by customer class sufficient to allow readers to understand why an OFO was called.

21. SoCalGas and SDG&E shall work with customers and/or energy service providers (ESPs) to provide customer-specific information like consumption data in consistent formats across different contexts, consistent with consumer protection and privacy considerations. Customers and/or ESPs shall pay the reasonable costs of any requests for such information.

22. SoCalGas and SDG&E may file applications for rate changes based on needed expenditures to cope with customer transfers to core aggregators when 8% of total core volume has switched from utility procurement to core aggregator procurement. Such applications shall include provision for ESP or CTA contribution.

23. SoCalGas shall file compliance advice letters to implement this decision within 10 business days from the effective date of this decision except for those provisions of this decision for which we have explicitly ordered that more time can be taken. The new and revised tariffs shall be effective unless rejected by the Energy Division within 30 days after their filing.

24. The compliance filing shall specify compliance monitoring, cost responsibility, and enforcement measures.

25. Sempra, on behalf of SoCalGas and SDG&E, shall file a Market Assessment Report with the Energy Division two years after the effective date of the tariff revisions ordered in this decision, elucidating the effect on the market of the reforms instituted herein, and, in cooperation with PG&E, the effect on the market in northern California of the reforms instituted through the earlier decisions in this docket at least through the end of 2002 and longer if desired.

26. Upon receipt of the Market Assessment Report, a new investigation may be initiated to determine whether further reforms are needed in the gas industry structure in southern California. Such an investigation, if any, shall begin by requesting responses to the utilities' Market Assessment Report and may be consolidated or otherwise linked to extant proceedings regarding the gas industry structure in northern California.

27. The terms of the IS that are adopted, and the other reforms adopted herein shall continue in place until changed by action of the Commission or its staff.

28. This proceeding is closed.

This order is effective today.

Dated __________ , 2001, at San Francisco, California.

ATTACHMENT A

LIST OF APPEARANCES

Dave` Finigan ABAG POWER 101 EIGHTH STREET OAKLAND CA 94604-2050 (510) 464-7905 davef@abag.ca.gov For: ABAG Power	Marc D. Joseph Attorney At Law ADAMS BROADWELL JOSEPH & CARDOZO 651 GATEWAY BOULEVARD, SUITE 900 SOUTH SAN FRANCISCO CA 94080 (650) 589-1660 mdjoseph@adamsbroadwell.com For: Coalition of California Utility Employees
Harold Orndorff AERA ENERGY LLC PO BOX 11164 BAKERSFIELD CA 93389 (661) 665-5530 haorndorff@aeraenergy.com	Kevan Hensman AERA ENERGY, LLC PO BOX 11164 BAKERSFIELD CA 93389 (661) 326-5497 kbhensman@aeraenergy.com
James Weil AGLET CONSUMER ALLIANCE PO BOX 1599 FORESTHILL CA 95631 (530) 367-3300 jweil@aglet.org	Christine H. Jun Attorney At Law ALCANTAR & ELSESSER LLP ONE EMBARCADERO CENTER, SUITE 2420 SAN FRANCISCO CA 94111 (415) 421-4143 chj@aelaw.com For: Indicated Producers; Arca Energy
Evelyn Kahl Elsesser Attorney At Law ALCANTAR & ELSESSER LLP ONE EMBARCADERO CENTER, STE 2420 SAN FRANCISCO CA 94111 (415) 421-4143 eke@aelaw.com For: AERA ENERGY LLC	Edward G. Poole ATTORNEY AT LAW ANDERSON & POOLE 601 CALIFORNIA STREET, SUITE 1300 SAN FRANCISCO, CA 94108-2818 (415) 956-6413 For: ANDERSON, DONOVAN & POOLE
Gary Binger DEPUTY EXECUTIVE DIRECTOR ASSOCIATION OF BAY AREA GOVERNMENTS 101 EIGHT STREET, FIRST FLOOR OAKLAND, CA 94607-4756 (510) 464-7902	Catherine E. Yap BARKOVICH AND YAP, INC. 114 RICARDO AVENUE PIEDMONT, CA 94611 (510) 652-9778 For: BARKOVICH & YAP, INC.
John W. Jimison BERLINER, CANDON & JIMISON 1225 19^TH STREET, NW, SUITE 800 WASHINGTON DC 20036 (202) 955-6067 For: City of Vernon	John Burkholder BETA CONSULTING 2023 TUDOR LANE FALLBROOK, CA 92028 (760) 723-1831 For: Western Hub Properties/City of Long Beach

Page 2

Matthew Brady ATTORNEY AT LAW BRADY & ASSOCIATES 300 CAPITOL MALL, STE. 1100 SACRAMENTO, CA 95814 (916) 442-5600 For: DYNEGY	Jennifer Tachera Attorney At Law CALIFORNIA ENERGY COMMISSION 1516 9TH STREET, MS-31 SACRAMENTO CA 95814-5504 (916) 654-3870 jtachera@energy.state.ca.us For: California Energy Commission
Karen Norene Mills Attorney At Law CALIFORNIA FARM BUREAU FEDERATION 2300 RIVER PLAZA DRIVE SACRAMENTO CA 95833 (916) 561-5655 kmills@cfbf.com For: CALIFORNIA FARM BUREAU FEDERATION	Michael Rochman Managing Director CALIFORNIA UTILITY BUYERS JPA 1430 WILLOW PASS ROAD, SUITE 240 CONCORD CA 94520 (925) 609-1142 rochmanm@cubjpa.org For: CALIFORNIA UTILITY BUYERS JPA
Craig Chancellor CALPINE CORPORATION 6700 KNOLL CENTER PARKWAY, SUITE 200 PLEASANTON, CA 94566 (925) 600-2071 For: Calpine Corporation	Ronald Davis CITY OF BURBANK 164 W. MAGNOLIA BLVD. BURBANK, CA 91502 (818) 548-238-3700 For: City of Burbank
Bernard Palk PUBLIC SERVICE DEPARTMENT CITY OF GLENDALE 141 NORTH GLENDALE AVENUE 4^TH LEVEL GLENDALE, CA 91206 (818) 548-2107 For: City of Glendale	Grant Kolling ATTORNEY AT LAW CITY OF PALO ALTO 250 HAMILTON AVENUE PALO ALTO, CA 94070 (650) 329-2171 For: City of Palo Alto
Raveen Maan CITY OF PALO ALTO PO BOX 10250 PALO ALTO, CA 94303 (650) 329-2343 For: City of Palo Alto	Rufus Hightower CITY OF PASADENA 45 E. GLENARM AVE. PASADENA, CA 91105 (626) 744-4579 For: City of Pasadena
Tom Beach CROSSBORDER ENERGY 2560 NINTH ST., SUITE 316 BERKELEY, CA 94710 (510) 649-9790 For: Watson Cogeneration Company	Edward W. O'Neill Attorney At Law JEFFER, MANGELS, BUTLER & MARMARO, LLP ONE SANSOME STREET SAN FRANCISCO CA 94104 (415) 398-8080 ewo@jmbm.com For: EL PASO NATURAL GAS CO. and WESTERN GAS RESOURCES-CALIFORNIA

Page 3

Lindsey How-Downing ATTORNEY AT LAW DAVIS WRIGHT TREMAINE LLP ONE EMBARCADERO CENTER, STE 600 SAN FRANCISCO, CA 94111 (415) 276-6500 For: Calpine Corporation	Dan L. Carroll Attorney At Law DOWNEY, BRAND, SEYMOUR & ROHWER 555 CAPITOL MALL, 10TH FLOOR SACRAMENTO CA 95814 (916) 441-0131 dcarroll@dbsr.com For: Western Hub Properties LLC
Joseph M. Paul DYNEGY, INC. 976 WEST LOS POSITAS BOULEVARD, SUITE 20 PLEASANTON CA 94588 (925) 469-2314 jmpa@dynegy.com For: Dynegy Inc., Dynegy Power, Inc. and Dynegy Marketing & Trade	Gregory T. Blue Manager, State Regulatory Affairs DYNEGY, INC. 5976 W. LAS POSITAS BLVD., STE. 200 PLEASANTON CA 94588 (925) 469-2355 gtbl@dynegy.com For: DYNEGY, INC.
Lynn M. Haug ANDREW BROWN Attorney At Law ELLISON, SCHNEIDER & HARRIS, LLP 2015 H STREET SACRAMENTO CA 95814-3109 (916) 447-2166 lmh@eslawfirm.com For: INDEPENDENT ENERGY PRODUCERS ASSN.	Andrew J. Skaff Attorney At Law ENERGY LAW GROUP, LLP 1999 HARRISON STREET, 27TH FLOOR OAKLAND CA 94612 (510) 874-4370 askaff@energy-law-group.com For: DYNEGY MARKETING & TRADE / INDEPENDENT ENERGY PRODUCERS ASSOCIATION
Darwin Farrar Legal Division RM. 5039 505 VAN NESS AVE San Francisco CA 94102 (415) 703-1599 edf@cpuc.ca.gov For: OFFICE OF RATEPAYER ADVOCATES (ORA)	Brian Cragg MICHAEL B. DAY ATTORNEY AT LAW GOODIN MACBRIDE SQUERI RITCHIE & DAY LLP 505 SANSOME ST., SUITE 900 SAN FRANCISCO, CA 94111 (415) 392-7900 For: WILD GOOSE STORAGE, INC.
James W. Mc Tarnaghan MICHAEL DAY ATTORNEY AT LAW GOODIN MACBRIDE SQUERI RITCHIE & DAY LLP 505 SANSOME STREET, SUITE 900 SAN FRANCISCO, CA 94111 (415) 765-8409 For: KERN RIVER GAS TRANSMISSION CO.	Michael B. Day ATTORNEY AT LAW GOODIN MACBRIDE SQUERI RITCHIE & DAY LLP 505 SANSOME STREET, SUITE 900 SAN FRANCISCO, CA 94111-3133 (415) 392-7900 For: Wild Goose Storage, Inc.
Richard H. Counihan GREENMOUNTAIN.COM 50 CALIFORNIA STREET, SUITE 1500 SAN FRANCISCO, CA 94111 (415) 439-5310 For: Self	Patrick L. Gileau Legal Division, RM. 5000 505 VAN NESS AVE. San Francisco, CA 94102 (415) 703-3080 For: OFFICE OF RATEPAYER ADVOCATES (ORA)

Page 4

John Steffen IMPERIAL IRRIGATION DISTRICT POWER DEPARTMENT 333 EAST BARIONI BOULEVARD IMPERIAL, CA 92251 (760) 339-9224 For: IMPERIAL IRRIGATION DISTRICT	Steven Kelly INDEPENDENT ENERGY PRODUCERS ASSOCIATION 1112 I STREET, SUITE 380 SACRAMENTO CA 95814 (916) 448-9499 iep@iepa.com For: INDEPENDENT ENERGY PRODUCERS ASSOCIATION
Mark A. Baldwin INTERSTATE GAS SERVICES, INC. 2600 KITTYHAWK ROAD, SUITE 101 LIVERMORE CA 94550 (925) 243-0350 igsinc@ix.netcom.com For: Interstate Gas Services, Inc.	Norman A. Pedersen Attorney At Law JONES DAY REAVIS & POGUE 555 WEST FIFTH STREET, SUITE 4600 LOS ANGELES CA 90013-1025 (213) 243-2810 napedersen@jonesday.com For: Northern California Generation Coalition
Mark Moench Attorney At Law KERN RIVER GAS TRANSMISSION CO. 295 CHIPETA WAY SALT LAKE CITY UT 84108 (801) 584-7059 mark.c.moench@wgp.twc.com For: KERN RIVER GAS TRANSMISSION CO.	Jose Atilio Hernandez LATINO ISSUES FORUM 785 MARKET STREET, 3RD FLOOR SAN FRANCISCO CA 94103 (415) 284-7226 joseh@lif.org For: LATINO ISSUES FORUM
Susan E. Brown ATTORNEY AT LAW LATINO ISSUES FORUM 785 MARKET STREET, 3^RD FLOOR SAN FRANCISCO, CA 94103-2003 (415) 284-7224 For: LATINO ISSUES FORUM	Christopher A. Hilen ATTORNEY AT LAW LEBOEUF LAMB GREENE & MACRAE LLP ONE EMBARCADERO CENTER, SUITE 400 SAN FRANCISCO, CA 94111 (415) 951-1141 For: Reliant Energy Power Generation, Inc.
Robert L. Pettinat LOS ANGELES DEPT. OF WATER & POWER 10322 SUNLAND BLVD. SUNLAND, CA 91040 (818) 771-6715 For: LOS ANGELES DEPT. OF WATER & POWER	Alvin Chan LOS ANGELES DEPT. OF WATER & POWER POBOX 5 1111, SUITE 340 LOS ANGELES, CA 90051-0100 (213) 367-4500 For: LADWP
John W. Leslie ATTORNEY AT LAW LUCE FORWARD HAMILTON & SCRIPPS, LLP 600 WEST BROADWAY, SUITE 2600 SAN DIEGO, CA 92101 (619) 699-2536 For: TXU Energy Services, Inc.	Michael D. McNamara Office of Ratepayer Advocates RM. 4101 505 VAN NESS AVE. San Francisco, CA 94102 (415) 703-2265

Page 5

Ronald G. Oechsler NAVIGANT CONSULTING, INC. - PRINCIPAL PO BOX 15516 SACRAMENTO CA 95852-1516 (916) 852-1300 ron_oechsler@rmiinc.com For: NAVIGANT CONSULTING, INC. (NCI)	Donald D. Dame NORTHERN CALIFORNIA POWER AGENCY 180 CIRBY WAY ROSEVILLE CA 95678
Steve Frank PACIFIC GAS AND ELECTRIC CO PO BOX 770000 77 BEALE STREET, B30A SAN FRANCISCO CA 94177 (415) 973-6976	Edward V. Kurz Attorney At Law PACIFIC GAS AND ELECTRIC COMPANY 77 BEALE ST., MAIL STOP B30A SAN FRANCISCO CA 94105 (415) 973-6669 evk1@pge.com For: PACIFIC GAS AND ELECTRIC COMPANY
Alan C. Reid PANCANADIAN ENERGY SERVICES, INC. 125 9TH AVENUE S.E. CALGARY AB T2P 2S5 CANADA (403) 268-6592 alan_reid@pcp.ca For: PanCanadian Energy Services, Inc.	John J. Cattermole Director, Marketing PANCANADIAN ENERGY SERVICES, INC. 350 RAILROAD AVENUE, SUITE 200 DANVILLE CA 94526 (925) 831-6850 jcattermole@pcenergy.com
Patrick J. Power Attorney At Law 1300 CLAY STREET, SUITE 600 OAKLAND CA 94612 (510) 446-7742 pjpowerlaw@aol.com For: CITY OF LONG BEACH	Tom Bradley POWERSPRING, INC. 531 ENCINITAS BLVD., SUITE 200 ENCINITAS, CA 92024 (760) 944-1999
Gary Hinners RELIANT ENERGY, INC. PO BOX 4455 HOUSTON, TX 77210-4455 (713) 2071321 For: RELIANT ENERGY, INC.	Glen Sullivan BRIAN C. CHERRY ATTORNEY AT LAW SEMPRA ENERGY 101 ASH STREET SAN DIEGO, CA 92101-3017 (619) 696-4817 For: Southern California Gas Company and San Diego Gas and Electric Company
Stefanie Katz SEMPRA ENERGY TRADING 58 COMMERCE ROAD STAMFORD, CT 06902 For: Sempra Energy Trading	Douglas Porter ATTORNEY AT LAW SOUTERHN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA 91770 (626) 302-3964 For: Southern California Edison Company

Page 6

Gloria M. Ing DOUGLAS PORTER ATTORNEY AT LAW SOUTHERN CALIFORNIA EDISON COMPANY 2244 WALNUT GROVE AVENUE ROSEMEAD, CA 91770 (626) 302-1922 For: Southern California Edison Company	Kelvin Yip SOUTHERN ENERGY CALIFORNIA, LLC 1350 TREAT BLVD, SUITE 500 WALNUT CREEK CA 94596 (925) 287-3106 kfyip@seiworldwide.com For: SOUTHERN ENERGY CALIFORNIA
Andrew W. Bettwy JOHN WALLEY; ROBERT M. JOHNSON Attorney At Law SOUTHWEST GAS CORPORATION 5241 SPRING MOUNTAIN ROAD LAS VEGAS NV 89102 (702) 876-7107 andy.bettwy@swgas.com For: Southwest Gas Corporation	John C. Walley Attorney At Law SOUTHWEST GAS CORPORATION PO BOX 98510 LAS VEGAS NV 89193-8510 (702) 876-7182 johnwalley@swgas.com For: Southwest Gas Corporation
Lyn Hebert Attorney At Law STATE OF NEW MEXICO, DEPT. OF ENERGY... 2040 S. PACHECO SANTA FE NM 87505 (505) 827-1364 For: DEPT. OF ENERGY, MINERALS & NATURAL RESOURCES, STATE OF NEW MEXICO	Keith Mc Crea Attorney At Law SUTHERLAND, ASBILL & BRENNAN LLC 1275 PENNSYLVANIA AVENUE, N.W. WASHINGTON DC 20004-2415 (202) 383-0705 kmccrea@sablaw.com For: CALIFORNIA INDUSTRIAL GROUP and CALIFORNIA MANUFACTURERS ASSOCIATION
Marcel Hawiger Attorney At Law THE UTILITY REFORM NETWORK 711 VAN NESS AVENUE, SUITE 350 SAN FRANCISCO CA 94102 (415) 929-8876 marcel@turn.org For: THE UTILITY REFORM NETWORK (TURN)	Susan Scott TRANSWESTERN PIPELINE COMPANY 1400 SMITH STREET, ROOM 4788 HOUSTON, TX 77002 (713) 853-0596 For: Transwestern Pipeline Company
Gerard Worster TXU ENERGY SERVICE 353 SACRAMENTO STREET, SUITE 400 SAN FRANCISCO, CA 94111 (415) 981-2980	Brian Dingwall UNITED ENERGY MANAGEMENT, INC. 1210 SHEPPARD AVE. EAST, SUITE 401 TORONTO, BC M2K 1E3 CANADA (416) 498-6298
Terri M. Dickerson WESTERN GAS RESOURCES CALIFORNIA 12200 N. PECOS ST. DENVER, CO 80234 (303) 252-6224 For: WESTERN GAS RESOURCES - CALIFORNIA	Thomas R. Dill WESTERN HUB PROPERTIES 14811 ST. MARYS LANE, SUITE 150 HOUSTON, TX 77079 (281) 679-3599 For: Western Hub Properties, LLC

Page 7

Joe Karp ATTORNEY AT LAW WHITE & CASE TWO EMBARCADEERO CENTER, SUITE 650 SAN FRANCISCO, CA 94111 (415) 544-1103 For: California Cogeneration Council, Southern Energy California, LLC,; Three Mountain Power, LLC	Joseph M. Karp ATTORNEY AT LAW WHITE & CASE LLP TWO EMBARCADERO CENTER, SUITE 650 SAN FRANCISCO, CA 94111 (415) 544-1100 For: Southern Energy California, LLC
Paul M. Amirault WILD GOOSE STORAGE, INC. 3900 421 7^TH AVENUE S.W. CALGARY, ALBERTA BC T2P 4K9 CANADA (403) 266-8298	Roger T. Pelote WILLIAMS ENERGY SERVICES 12731 CALIFA STREET VALLEY VILLAGE, CA 91607 (818) 761-5954 For: Williams Energy Services
Michael J. Thompson ATTORNEY AT LAW WRIGHT & TALISMAN, P.C. 1200 G STREET, N.W., SUITE 600 WASHINGTON DC 20005 (202) 393-1200 For: Kern River Gas Transmission Co.	Ed Yates 980 NINTH STREET, SUITE 230 SACRAMENTO, CA 95814 (916) 444-9260 For: CALIFORNIA LEAGUE OF FOOD PROCESSORS

(END OF ATTACHMENT A)

APPENDIX I

INTERIM SETTLEMENT ENHANCING AND ENABLING
COMPETITIVE MARKETS ON THE SOCALGAS SYSTEM

Note: See CPUC Formal Files for `SoCalGas Pooling' pages.

APPENDIX II

COMPARISON OF COMPREHENSIVE, INTERIM,
AND POST INTERIM SETTLEMENTS


Comparison of Comprehensive, Interim, and Post Interim Settlements in I.99-07-003
CPUC IDENTIFIED MOST PROMISING OPTIONS	INTERIM SETTLEMENT	POST INTERIM PROPOSAL	COMPREHENSIVE SETTLEMENT
Effective dates	Effective first day of second month after month of approval. Continues through 12/31/02.	Same effective date as Interim. Continues through August 31, 2006.	Implementation is phased from 90 days after approval through 10/1/01. Continues through August 2006
TRANSMISSION
Create Firm, Tradable Intrastate Rights	No	No	Yes
Create Secondary Market for Intrastate Rights	N/A	N/A	Yes -- The secondary market will not be regulated with respect to price or term.
Place Utility at Risk for Unused Capacity Resources	Utility at risk for 25% of noncore transmission revenues through 12/31/02. No risk for core transmission capacity.	Same as Interim through 12/31/02. Issue open for consideration after 1/1/03.	Utility at risk for 100% of noncore backbone transmission capacity. Utility at risk for 25% of noncore local transmission capacity through 12/31/02, unresolved after 1/1/03. No risk for retail core transmission capacity.
Develop Clear Procedure for Allocating Capacity	Receipt point capacities established on basis of physical maximums. Allocation through receipt points based on upstream pipeline capacity rights system.	Same as Interim.	Receipt point capacities initially established based on physical maximums. Defined backbone rights are then established through an open season effective 10/1/01.
Make Hector Road Delivery Point	Yes	Yes	Yes

CPUC IDENTIFIED MOST PROMISING OPTIONS	INTERIM SETTLEMENT	POST INTERIM PROPOSAL	COMPREHENSIVE SETTLEMENT
STORAGE
Create Firm, Tradable Storage Rights	Customers granted right to assign storage contracts. CTAs have option to reject portion of core's 35 Bcf and associated injection.	Same as Interim.	Customers given firm storage inventory, withdrawal, or injection rights.
Create Secondary Market for Storage Rights	Provides for assignment of storage contracts. Creates EBB to facilitate trading.	Same as Interim.	Customers can trade any portion of their storage injection, withdrawal and inventory rights in the secondary market. Expanded trading opportunities through third-party provider ALTRA.
Place Utility at Risk for Unused Storage Resources	Utility at risk for 50% of unbundled storage through 12/31/02.	Utility at risk for 50% of unbundled storage through 12/31/02. Utility 100% at risk after 1/1/03.	50/50 risk between shareholders/ratepayers through 3/31/02. 75/25 through 3/31/03. SoCalGas 100% at risk effective 4/1/03.
BALANCING
Examine structural means for SoCalGas to provide balancing services without drawing on core assets	Maintains system-wide balancing.	Same as Interim.	Separate balancing of core and noncore.
Cost and Rate Separation for Balancing Services	Maintain bundled balancing service through 12/31/02.	Same as Interim through 12/31/02. Issue open for consideration after 1/1/03.	Customers may opt out of the default balancing service and elect to self balance while receiving a self-balancing credit.
Electronic Trading of Imbalances	Permit daily and winter imbalance trading.	Same as Interim.	Expanded imbalance trading flexibility and independent trading opportunities through third-party provider ALTRA.

CPUC IDENTIFIED MOST PROMISING OPTIONS	INTERIM SETTLEMENT	POST INTERIM PROPOSAL	COMPREHENSIVE SETTLEMENT
HUB SERVICES
Separate Utility Hub Services from Procurement Function	Hub revenues in GCIM through 12/31/02.	Same as Interim through 12/31/02. Issue open for consideration after 1/1/03.	Core Hub revenues in GCIM through 12/31/02. Separates core Hub activity and creates gas operations HUB.
CORE PROCUREMENT
Re-Examine Utility Role in Core Procurement Once a Specified Competitor Market Share has Been Established	No	No	Within 6 months of settlement approval, SoCalGas shall file an application to address competitive alternatives.
Eliminate Core Aggregation Transportation Thresholds After Adoption of Consumer Protection Measures	Does not address.	Does not address.	Reduces participation eligibility to 120,000 therms/year and eliminates 10% market cap.
Unbundle Utility Interstate Capacity Costs for Core Customers	No	Unbundles all interstate capacity for CTA customers. Stranded costs allocated 50/50 between core transport and core sales.	Unbundles all interstate capacity for CTA customers. Stranded costs allocated 50/50 between core/noncore (with cap) until 12/31/01; and within core class after 1/1/02.
Unbundle Utility Storage Costs for Core Customers	Unbundle 50% of core injection and inventory storage reservation for CTA customers.	Same as Interim.	Unbundle all storage costs (associated with non-reliability and reliability storage for CTA customers) subject to certain caps.
Eliminate Core Subscription Service	Does not address.	Does not address.	Yes
Separate Costs and Rates for Core Utility Services. Treat Utility Core Procurement Departments as Any Other Utility Customer	Core procurement subject to same rules and penalties as noncore for monthly, OFO and winter balancing, except winter flowing supply requirements continue to apply to core.	Same as Interim.	Core procurement subject to same rules and penalties as noncore.

CPUC IDENTIFIED MOST PROMISING OPTIONS	INTERIM SETTLEMENT	POST INTERIM PROPOSAL	COMPREHENSIVE SETTLEMENT
INFORMATION
Provide Real-Time, Customer-Specific Information	No change to current system.	No change to current system.	Offers noncore customers real-time access; provides for daily customer data.
Provide Details of Completed Transactions	No change to current system.	No change to current system.	Adds information regarding open season contracts.
Establish Secondary Market Via a Utility Electronic Bulletin Board	Yes	Yes	Yes -- Also includes a third party auctioneer, ALTRA, for imbalance trading.
Provide pipeline operator demand forecasts by customer class	Yes	Yes	Yes
REVENUE CYCLE SERVICES
Provide for Competitive Metering Technologies	Does not address.	Does not address.	Customer meter ownership and add-on pilot program through 12/31/02.
Provide Competitive Billing Options to Customers Similar to Those Offered in the Electric Industry	Does not address.	Does not address.	Yes

Other Relevant Issues (not identified as "Most Promising Options")
Creation of Pools for Transmission	Creates receipt point pools.	Creates receipt point pools.	Creates both receipt point and city gate pools.
Provide for Wheeler Ridge Expansion	Yes -- Automatic trigger on expansion during Interim period.	Same as Interim.	Does not address.
Eliminate Core contribution to traditional ITCS	No	Yes -- Effective 1/1/02 Noncore will bear 75% of costs SoCalGas will bear 25% of the costs of traditional ITCS.	Yes -- Effective 1/1/2002, Noncore will bear full costs of traditional ITCS.

APPENDIX III

LIST OF ACRONYMS

SOCALGAS - Southern California Gas Company

SDG&E - San Diego Gas & Electric Company

IS - Interim Settlement Agreement

PI - Post-Interim Settlement Agreement

CS - Comprehensive Settlement Agreement

PG&E - Pacific Gas and Electric Company

OFO - Operational Flow Order

ITCS - Interstate Transition Cost Surcharges

ALJ - Administrative Law Judge

PGA - Purchased Gas Account

CAT - Core Aggregation Transportation

BCAP - Biennial Cost Allocation Proceeding

NSBA - Noncore Storage Balancing Account

ORA - Office of Ratepayer Advocates

ESP - Energy Service Provider

CTA - Core Transport Agent

GCIM - Gas Cost Incentive Mechanism

ECPT - Equal-Cents-Per-Therm

TURN - The Utility Reform Network

UDC - Utility Distribution Company

GIRMA -Gas Industry Restructuring Memorandum Account

IRMA - Industry Restructuring Memorandum Account

SCGC - Southern California Generation Coalition

MFV - Modified-Fixed Variable

LRMC - Long-Run Marginal Cost

PBR - Performance-Based Ratemaking

NFCA - Noncore Fixed Cost Account

CFCA - Core Fixed Cost Account

DASR - Direct Access Service Request

CERTIFICATE OF SERVICE

I certify that I have by mail this day served a true copy of the original attached Alternate Proposed Decision of Commissioner Wood on all parties of record in this proceeding or their attorneys of record.

Dated November 26, 2001, at San Francisco, California.

/s/ EVELYN P. GONZALES

Evelyn P. Gonzales

NOTICE

Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to insure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.

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