Annual Quiet Period at McDonald Island

Monday, January 10, 2005

Pacific Gas and Electric Company's California Gas Transmission will conduct its annual "quiet period" at McDonald Island storage field early next month. During the quiet period, CGT may limit storage injections.

Each year CGT ceases injection and withdrawal activity at its largest storage field, McDonald Island, allowing pressure in various gas wells to settle and stabilize. This dearth of activity allows CGT engineers to accurately determine the volume of gas inventory held at McDonald Island. To minimize impacts to its customers, CGT schedules this operation when demand for storage services is low.

During the quiet period, CGT's injection and withdrawal capacity will be limited to that available at its smaller storage fields. Although CGT expects its withdrawal capacity will be sufficient to fully meet the demand for withdrawal services, some demand for injection services will likely go unmet. During the quiet period, CGT's physical injection capacity will total approximately 60 MMcf/d.

Balancing services will have first priority to this injection capacity, although balancing injections are not available when imbalance gas in storage is above 4.04 Bcf. Any injection capacity not utilized for balancing services will be available for Golden Gate Market Center services.

CGT estimates this year's McDonald Island quiet period will commence November 2, 2004, and last between eight and fourteen days. Because of the unpredictable nature of storage field dynamics, the exact start and duration of the event cannot be known in advance. Pipe Ranger and E-XPRESS will announce the start date of the quiet period at least two days in advance.

Please contact your CGT Account Services Representative if you have any questions about your storage account during November.