New In-Kind Shrinkage Factors

Friday, March 25, 2005

Pacific Gas and Electric Company filed a temporary shrinkage credit mechanism with the California Public Utilities Commission on January 8, 2002. The Company anticipates the CPUC will approve the new in-kind shrinkage factors effective March 1, 2002. These new in-kind shrinkage factors are located on Pipe Ranger's Shrinkage Factors page.

The purpose of the shrinkage credit mechanism is to eliminate a natural gas shrinkage over-collection on Pacific Gas and Electric Company's gas pipeline system. The mechanism will effectively lower the amount of gas customers must supply in-kind when moving gas on Pacific Gas and Electric Company's system. The lower in-kind shrinkage factors are proposed to remain in effect until the natural gas shrinkage over-collection is reduced to zero.

As the surplus shrinkage volume approaches zero, Pacific Gas and Electric Company will ask the CPUC to eliminate the in-kind shrinkage credits. Pacific Gas and Electric Company expects the surplus shrinkage volume to reach zero in approximately 12 months but the actual time required will depend on the volume of on-system usage. Once the in-kind shrinkage credits are eliminated, in-kind shrinkage factors should return to their current values.

Please contact your CGT Account Services Representative if you have any questions.

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