Pacific Gas and Electric Company filed its Gas Accord II application with the California Public Utilities Commission on October 9, 2001. The application proposes a simple two-year extension of the current Gas Accord structure.

One element of the Company's proposed Plan of Reorganization would move California Gas Transmission's assets to Federal Energy Regulatory Commission jurisdiction. Pacific Gas and Electric Company believes a two-year extension of the Gas Accord structure will allow for resolution of many uncertainties affecting gas markets today, including the PoR, and will serve as safeguard for customers in the event that implementation of the PoR is delayed for any reason.

Please contact your CGT Representative if you have any questions.