FIRM TRANSPORTATION SERVICE AGREEMENT


THIS AGREEMENT is made and entered into this 13th day of October,
1994 by and between

PACIFIC GAS TRANSMISSION COMPANY, a California corporation 
(hereinafter referred to as "PGT")

                              and

SAN DIEGO GAS & ELECTRIC COMPANY, a California corporation existing
under the laws of the State of California, (hereinafter referred to
as "Shipper").

WHEREAS, PGT owns and operates a natural gas pipeline transmission 
system which extends from a point of interconnection with the 
pipeline facilities of Alberta Natural Gas Company Ltd. (ANG) at 
the International Boundary near Kingsgate, British Columbia, through 
the states of Idaho, Washington and Oregon to a point of 
interconnection with Pacific Gas and Electric Company at the Oregon-
California border near Malin, Oregon; and

WHEREAS, Shipper desires PGT, on a firm basis, to transport certain 
quantities of natural gas as specified on Exhibit A of this 
Agreement; and

WHEREAS, PGT is willing to transport certain quantities of natural 
gas for Shipper, on a firm basis,

NOW, THEREFORE, the parties agree as follows:


                      I.  GOVERNMENTAL AUTHORITY

1.1  This Firm Transportation Agreement ("Agreement") is made 
pursuant to the regulations of the Federal Energy Regulatory 
Commission (FERC) contained in 18 CFR Part 284, as amended from time
to time.

1.2  This Agreement is subject to all valid legislation with 
respect to the subject matters hereof, either state or federal, and 
to all valid present and future decisions, orders, rules, regulations 
and ordinances of all duly constituted governmental authorities having 
jurisdiction.


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                     I.  GOVERNMENTAL AUTHORITY
                           (continued)

      1.3  Shipper shall reimburse PGT for any and all FERC filing fees 
incurred by PGT in seeking governmental authorization for the 
initiation, extension, or termination of service under this Agreement 
and Rate Schedule FTS-1.  Shipper shall reimburse PGT for such fees at 
PGT's designated office within ten (10) days of receipt of notice from 
PGT that such fees are due and payable.  Additionally, Shipper shall 
reimburse PGT for any and all penalty fees or fines assessed PGT by 
either the government of the United States or Canada caused strictly by 
the negligence of Shipper or Shipper's Agent in not obtaining all proper 
Canadian and U.S. domestic import/export licenses, surety bonds or any 
other documents and approvals related to the Canadian exportation and 
subsequent domestic importation of natural gas transported by PGT 
hereunder.

             II.  QUANTITY OF GAS AND PRIORITY OF SERVICE

     2.1  Subject to the terms and provisions of this Agreement and 
PGT's Transportation General Terms and Conditions contained in PGT's 
FERC Gas Tariff, First Revised Volume No. 1-A or superseding tariff(s) 
(Transportation General Terms and Conditions) applicable to Rate 
Schedule FTS-1 or superseding rate schedule(s) (Effective Rate Schedule) 
daily receipts of gas by PGT from Shipper at the point(s) of receipt 
shall be equal to daily deliveries of gas by PGT to Shipper at the 
point(s) of delivery; provided, however, Shipper shall deliver to PGT an 
additional quantity of natural gas at the point(s) of receipt as 
compressor station fuel, line loss and unaccounted for gas as specified 
in the Statement of Effective Rates and Charges of PGT's FERC Gas 
Tariff, First Revised Volume No. 1-A or superseding tariff(s) (Statement 
of Effective Rates and Charges).  Any limitations of the quantities to 
be received from each point of receipt and/or delivered to each point of 
delivery shall be as specified on the Exhibit A attached hereto.

     2.2  The maximum quantities of gas to be delivered by PGT for 
Shipper's account at the point(s) of delivery are set forth in Exhibit 
A.

     2.3  In providing service to its existing or new customers, PGT 
will use the priorities of service specified in Paragraph 18 of PGT's 
Transportation General Terms and Conditions on file with the FERC.

     2.4  Prior to initiation of service, Shipper shall provide PGT with 
any information required by the FERC, as well as all information 
identified in PGT's Transportation General Terms and Conditions 
applicable to the Effective Rate Schedule.



<PAGE>

                          III.  TERM OF AGREEMENT

     3.1  This Agreement shall become effective _________________, and 
shall continue in full force and effect until October 31, 2023 (Initial 
Term).  Thereafter, this Agreement shall continue in full force and 
effect from year to year (Subsequent Term) unless either party gives 
twelve (12) months prior written notice of its desire to terminate this 
Agreement.

     3.2  Neither party may terminate this Agreement during the Initial 
Term except as provided by Paragraph 6.9 of this Agreement.

                 IV.  POINTS OF RECEIPT AND DELIVERY

      4.1  The point(s) of receipt of gas deliveries to PGT is/are as 
designated in Exhibit A, attached hereto.

      4.2  The point(s) of delivery of gas to Shipper is/are as 
designated in Exhibit A, attached hereto.

      4.3  Shipper shall deliver or cause to be delivered to PGT the gas 
to be transported hereunder at pressures sufficient to deliver such gas 
into PGT's system at the point(s) of receipt.  PGT shall deliver the gas 
to be transported hereunder to or for the account of Shipper  at the 
pressures existing in PGT's system at the point(s) of delivery.

     4.4  Pursuant to PGT's Transportation General Terms and Conditions, 
Shipper may designate other receipt and/or delivery points as secondary 
receipt and/or delivery points.

                      V.  OPERATING PROCEDURES

     5.1  Both PGT's and Shipper's performance hereunder shall be 
subject to and must conform with all applicable operating procedures 
contained in PGT's Transportation General Terms and Conditions.

     5.2  PGT shall have the right to interrupt or curtail the transport 
of gas for the account of Shipper pursuant to PGT's Transportation 
General Terms and Conditions.




<PAGE>


                   VI. RATE(S), RATE SCHEDULES, AND
               GENERAL TERMS AND CONDITIONS OF SERVICE

     6.1  Shipper shall pay PGT each month for services rendered 
pursuant to this Agreement in accordance with the, Effective Rate 
Schedule, on file with and subject to the jurisdiction of the FERC.

     6.2  Shipper shall provide PGT each month with gas for compressor 
station fuel, line loss and other unaccounted for gas associated with 
this transportation service provided herein in accordance with PGT's 
Statement of Effective Rates and Charges on file with. and subject to 
the jurisdiction of the FERC.

     6.3  This Agreement in all respects shall be and remains subject to 
the applicable provisions of the Effective Rate Schedule and of the 
applicable Transportation General Terms and Conditions , all of which 
are by this reference made a part hereof.

     6.4  PGT shall have the right from time to time to propose and file 
with the FERC such changes in the rates and charges applicable to 
transportation services pursuant to this Agreement, the rate schedule(s) 
under which this service is hereunder provided, or any provisions of 
PGT's Transportation General Terms and Conditions applicable to such 
services.  Shipper shall have the right to protest any such changes 
proposed by PGT and to exercise any other rights that Shipper may have 
with respect thereto.

     6.5  If PGT fails to deliver to Malin, Oregon ninety-five percent 
(95%) or more of the aggregate Confirmed Daily Nominations (as 
hereinafter defined) of all Converting Shippers with a Malin primary 
delivery point receiving service under the Effective Rate Schedule 
(hereinafter referred to as the "Non-Deficiency Amount") for more than 
twenty-five (25) days in any given Contract Year, then for each day 
during that Contract Year in excess of twenty-five (25) days that PGT so 
fails to deliver the Non-Deficiency Amount (a "Credit Day"), Converting 
Shipper shall be entitled to a Reservation Charge Credit calculated in 
the manner hereinafter set forth.
          For the purpose of this Paragraph 6.5, Confirmed Daily 
Nomination shall mean for any day, the lesser of (i) Converting 
Shipper's Maximum Daily Quantity or (ii) the actual quantity of gas that 
the connecting pipeline upstream of PGT is capable of delivering for 
Converting Shipper's account to PGT at Converting Shipper's primary 
point(s) of receipt on PGT less Converting Shipper's requirement to 
provide compressor fuel and line losses under PGT's Statement of 
Effective Rates and Charges or (iii) the quantity of gas that Pacific 
Gas and Electric Company (PG&E) is capable of accepting at Malin for 
Converting Shipper's account, or (iv) Converting Shipper's nomination to 
PGT.



<PAGE>


                 VI.  RATE(S), RATE SCHEDULES, AND 
              GENERAL TERMS AND CONDITIONS OF SERVICE 
                            (continued)

     The Reservation Charge Credit for each Credit Day for a particular 
Converting Shipper shall be computed as follows:

Reservation Charge
Credit for Each       =          A      x     B - C
                              -------         ------
Credit Day                     30.4             B

where  A =  Converting Shipper's Monthly Reservation Charge
       B =  Converting Shipper's confirmed daily nomination for the 
            Credit Day
       C =  Actual quantity of gas delivered by PGT to PG&E at Malin for 
            Converting Shipper's account for the Credit Day

          Except as provided for in Paragraphs 6.6 and 6.9 of this 
Agreement, these circumstances are the only circumstances are the only 
circumstances under which a Reservation Charge Credit will be provided 
and except to this limited extent, the provisions of Paragraph 10.3 of 
PGT's General Terms and Conditions continue to apply.

     6.6  If PGT fails to deliver to a primary delivery point on its 
system other than Malin, Oregon ninety-five percent (95%) or more of the 
aggregate Confirmed Daily Nominations (as hereinafter defined) of all 
Converting Shippers at such primary delivery point other than Malin 
receiving service under this rate schedule (hereinafter referred to as 
the "Non-Deficiency Amount") for more than twenty-five (25) days that 
PGT so fails to deliver the Non-Deficiency Amount (a "Credit Day"), 
Converting Shipper shall be entitled to a Reservation Charge Credit 
calculated in the manner hereinafter set forth.

           For the purpose of this Paragraph 6.6, Confirmed Daily 
Nomination shall mean for any day, the lesser of (I) Converting 
Shipper's Maximum Daily Quantity or (ii)  the quantity of gas that the 
connecting downstream pipeline(s), local distribution company 
pipeline(s), or end-user(s) is/are capable of accepting for Converting 
Shipper's account at Converting Shipper's primary point(s) of delivery 
on PGT or (iii) the quantity of gas that the connecting pipeline 
upstream of PGT is capable of delivering for the Converting Shipper's 
primary point(s) of receipt on PGT less Converting Shipper's requirement 
to provide compressor fuel and line losses under PGT's Statement of 
Effective Rates and Charges, or (iv) Converting Shipper's nomination to 
PGT.




<PAGE>




                     VI.  RATE(S), RATE SCHEDULES, AND 
                  GENERAL TERMS AND CONDITIONS OF SERVICE 
                                (continued)

          The Reservation Charge Credit for each Credit Day for a 
particular Converting Shipper shall be computed as follows:

Reservation Charge
Credit for Each       =          A      x     B - C
                               -----          -----
Credit Day                     30.4            B

where     A =  Converting Shipper's Monthly Reservation Charge
          B =  Converting Shipper's confirmed daily nomination for the 
               Credit Day
          C =  Actual quantity of gas delivered by PGT to a Converting 
               Shipper's primary delivery point(s) (other than Malin) 
               for Converting Shipper's account for the Credit Day

          Except as provided for in Paragraphs 6.5 and 6.9 of this 
Agreement, these circumstances are the only circumstances under which a 
Reservation Charge Credit will be provided and except to this limited 
extent, the provisions of Paragraph 10.3 of PGT's General Terms and 
Conditions continue to apply.

   6.7  For the purposes of Paragraphs 6.5, 6.6, 6.9, and 7.9 of this 
Agreement, (i) the term "Converting Shipper" shall mean any Shipper 
receiving service under PGT's Effective Rate Schedule which has 
converted its firm transportation service from Rate Schedule T-3 in 
accordance with the FERC's July 2, 1993 order at Docket No. RS92-46, and 
(ii) the term "Contract Year" shall be the period of twelve (I 2) 
consecutive months commencing the first month that this Agreement 
becomes effective and each such consecutive twelve (I 2) month period 
thereafter during the term of this Agreement.

   6.8  The Reservation Charge Credit contemplated in Paragraphs 6.5, 
6.6 and 6.9 of this Agreement shall only apply to the reservation 
charges associated with the firm capacity that Shipper has not 
permanently released in accordance with PGT's Transportation General 
Terms and Conditions.





                VI.  RATE(S), RATE SCHEDULES, AND 
              GENERAL TERMS AND CONDITIONS OF SERVICE 
                             (continued)


     6.9  Shipper shall be relieved from its Reservation Charge payment 
obligation for any period ("Relief Period") when an unforeseeable 
action, after service commences on the PGT Expansion Project, by the 
federal or provincial governments of Canada or the United States having 
jurisdiction ("Event") occurs which: (1) prohibits directly all gas 
exports or imports through the PGT Expansion Project, or (2) prohibits 
through economic means intended to have prohibitory effect, all gas 
exports or imports from Canada to the U.S.. This provision shall only 
apply, however, if the Event: is equally applicable to all Converting 
Shippers subject to such governmental jurisdiction; is not peculiar to 
the circumstances of a particular Converting Shipper; and is not 
attributable to the actions or non-actions of any particular Converting 
Shipper.  In order for Shipper to invoke this provision, Shipper must 
notify PGT of such Event within four weeks after Shipper becomes aware 
of such Event.  The Relief Period shall commence twelve months after 
service is curtailed as a result of such Event'("Commencement Date") 
provided Shipper has resisted such Event by all reasonable means 
(including appeals) within the twelve month period whether or not all 
such appeals have been resolved as of the Commencement Date.
     If this provision is invoked by a Shipper to relieve its 
Reservation Charge payment obligations, PGT shall have the unilateral 
right during the first two years of the Relief Period to terminate the 
Firm Transportation Service Agreement with that Shipper, however, such 
right to terminate may be exercised by PGT only if the PG&E and ANG Firm 
Transportation Service Agreements are coincidentally terminated.

     6.10  The Reservation Charge Relief contemplated in Paragraph 6.9 
of this Agreement shall terminate and have no force or effect if the 
FERC should require PGT to offer such relief to any Part 284 firm 
shipper on PGT which is not a "Converting Shipper" as that term is 
defined in Paragraph 6.7 of this Agreement.


                          VII.  MISCELLANEOUS

     7.1  This Agreement shall be interpreted according to the laws of 
the State of California.

     7.2  Unless otherwise stated in this Agreement, in the case of 
inconsistencies between this Agreement, the applicable Transportation 
General Terms and Conditions, and PGT's Effective Rate Schedule , the 
applicable Transportation General Terms and Conditions and PGT's 
Effective Rate Schedule shall control.  In the case of inconsistencies 
between PGT's Effective Rate Schedule and the applicable Transportation 
General Terms and Conditions, PGT's Effective Rate Schedule shall 
control.




<PAGE>


                        VII.  MISCELLANEOUS 
                            (continued)

     7.3  Shipper agrees to indemnify and hold PGT harmless for refusal 
to transport gas hereunder in the event any upstream or downstream 
transporter fails to receive or deliver gas as	contemplated by this 
Agreement, except to the extent such failure to receive or deliver gas 
by the upstream or downstream transporter is a direct result of PGT's 
failure to perform according to the terms and conditions of this 
Agreement.

     7.4  Unless herein provided to the contrary, any notice called for 
in this Agreement shall be in writing and shall be considered as having 
been given if delivered by facsimile or registered mail with all postage 
or charges prepaid, to either PGT or Shipper at the place designated 
below.  Routine communications, including monthly statements , shall be 
considered duly delivered when received by ordinary mail or facsimile.  
Payments shall be considered duly delivered when received by ordinary 
mail, registered mail, or electronic wire transfer.  Shipper's daily 
nomination shall be considered as duly delivered when received by 
electronic data interchange when such system(s) is/are available.  If 
such system(s) is/are not available, Shipper's daily nominations shall 
be considered duly delivered when received by facsimile.  Unless 
changed, the addresses of the parties are as
follows:

          "PGT"          PACIFIC GAS TRANSMISSION COMPANY 
                         160 Spear Street
                         Room 1900
                         San Francisco, California 94105-1570
                         Attention:  President & CEO

          "Shipper"     SAN DIEGO GAS & ELECTRIC COMPANY 
                        101 Ash Street
                        San Diego, California 92101
                        Attention:  Manager, Fuels Department

     7.5  A waiver by either party of any one or more defaults by the 
other hereunder shall not operate as waiver of any future default or 
defaults, whether of a like or of a different character.

     7.6  This Agreement may only be amended by an instrument in writing 
executed by both parties hereto.

     7.7  Nothing in this Agreement shall be deemed to create any rights 
or obligations between the parties hereto after the expiration of the 
Initial or Subsequent Terms set forth herein, except that termination of 
this Agreement shall not relieve either party of the obligation to 
correct any quantity imbalances or Shipper of the obligation -.to pay 
any amounts due hereunder to PGT.




<PAGE>


                          VII.  MISCELLANEOUS 
                             (continued)

     7.8  Exhibits A and C attached hereto are incorporated herein by 
reference and made a part hereof for all purposes.

     7.9  If PGT modified or changes any term or condition specified in 
an effective Firm Transportation Service Agreement with any Converting 
Shipper receiving service under PGT's Effective Rate Schedule, within 
sixty (60) days thereafter, PGT shall offer to make the same term(s) and 
condition(s) applicable to any other Converting Shipper then receiving 
service under the Effective Rate Schedule.

     IN WITNESS WHEREOF the parties hereto have caused this Agreement to 
be executed as of the day and year first above written.

                            PACIFIC GAS TRANSMISSION COMPANY

                            By:  __________________________________

                            Name:     Stephen P. Reynolds

                            Title:      President & CEO

                            SAN DIEGO GAS & ELECTRIC COMPANY

                            By:  __________________________________

                            Name:     Edwin A. Guiles

                            Title: Senior Vice President - Energy Supply

                            Date:       October 11, 1994




<PAGE>


                            EXHIBIT A

                              To the
               FIRM TRANSPORTATION SERVICE AGREEMENT
                 Dated                    Between
                 PACIFIC GAS TRANSMISSION COMPANY
                               And
                 SAN DIEGO GAS & ELECTRIC COMPANY




Primary             Primary              Maximum Daily Quantity (MDQ)
Receipt             Delivery             (Delivered) MMBtu/d(1)
Point(4)            Point(4)

                                        Summer(2)          Winter(3)

Kingsgate,          Malin, Oregon       52,508             52,508
British Columbia








(1)  Shipper's Maximum Daily Quantity or MDQ for service under this 
     Agreement, the Effective Rate Schedule, and the Transportation 
     General Terms and Conditions shall be based on the quantity of gas 
     delivered at Shipper's point(s) of delivery as stated in this 
     Exhibit A.

(2)  Summer = April through September

(3)  Winter = October through March

(4)  Shipper may designate secondary points of receipt and/or delivery 
    in accordance with Paragraph 29 of the Transportation General Terms 
    and Conditions.




<PAGE>


          TO BE COMPLETED WHEN SHIPPER RELEASES CAPACITY

                            EXHIBIT C

                             To the
            FIRM TRANSPORTATION SERVICE AGREEMENT
                   Dated               Between
                PACIFIC GAS TRANSMISSION COMPANY
                              And
                SAN DIEGO GAS & ELECTRIC COMPANY



Type of Replacement Service:

Replacement Shipper:

Receipt Point:

Delivery Point:

Maximum Daily Quantity:

Commencement of Credit:

Termination of Credit:

Level of Credit:    __________percent of the maximum rate defined as
                    __________________________________________
                    __________________________________________

                    applicable for service under Rate Schedule FTS-1

Other Terms and Conditions:

1)_______________________________________________________________

2)_______________________________________________________________

3)_______________________________________________________________