AMENDMENT TO THE FIRM TRANSPORTATION SERVICE AGREEMENT BETWEEN
SAN DIEGO GAS & ELECTRIC COMPANY AND PACIFIC GAS AND ELECTRIC COMPANY

Pacific Gas and Electric Company (PG&E) and San Diego Gas & 
Electric Company (SDG&E) hereby agree to amend the Firm 
Transportation Service Agreement (FTSA) between them, dated 
December 31, 1991, as follows:

1.   For the "Negotiated Period" as defined in Section 11, 
     SDG&E's rate for gas transportation service under the FTSA 
     shall be a "Negotiated Rate".

     1.1.  NEGOTIATED RATE:

           The "Negotiated Rate" shall be $ 0.28 per decatherm.
           SDG&E shall pay PG&E each month an amount calculated
           as follows.  SDG&E shall pay a reservation charge
           equal to the Negotiated Rate times the number of 
           calendar days in the month times the Maximum Daily
           Quantity.  There shall be no usage charge.

     1.2.  The payment provisions of PG&E's tariffs shall apply.

     1.3.  During the Negotiated Period, SDG&E shall have a one-
           time option to elect to pay the standard tariff rates
           applicable to Expansion deliveries to the Southern 
           Terminus for delivery off system.  If SDG&E elects to 
           pay standard tariff rates, SDG&E shall not be able to 
           revert to the Negotiated Rate.

2.   Following the Negotiated Period, SDG&E shall pay rates and 
     charges as specified in the CPUC-approved tariff applicable
     to firm Expansion service, with the exception that such
     rates and charges shall be no higher than a rate calculated
     using the methodology in effect at the time the rates and
     charges are calculated, with a Line 401 capital cost of $736
     million, and a utility capital structure.  SDG&E shall pay 
     rates on an SFV basis.

3.   Upon a CPUC decision on the PEBA balance, the owing party 
     shall pay all amounts due in a manner consistent with the 
     CPUC decision.  Payment of the balance shall be independent 
     of the monthly payments calculated in Section 1.1.

4.   SDG&E agrees that PG&E may transfer all or part of its 
     ownership interest in Line 401 without SDG&E's consent and, 
     if PG&E's successor in interest assumes all of PG&E's 
     obligations under the FTSA, PG&E shall have no further or 
     continuing obligations to SDG&E, its successor, or its 
     assignees.

5.   SDG&E agrees that, if PG&E or its successor in interest at 
     any time seeks, in accordance with California Public 
     Utilities Commission (CPUC) Resolution L-244, to transfer 

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     Line 401 to the jurisdiction of the Federal Energy 
     Regulatory Commission, SDG&E will neither oppose such a 
     transfer nor claim that such a transfer violates any 
     provision of the FTSA.

6.   As consideration for PG&E's agreement to the Negotiated Rate 
     set forth in paragraph 1, effective immediately, and for the 
     remainder of the 30-year term of the FTSA, SDG&E irrevocably 
     waives rights it has under the "Uniform Terms of Service" 
     set forth in the March, 1994 Amendment to the FTSA, and 
     relinquishes all claims it may have either arising under or 
     relating in any way to rights under that provision.

7.   For the period beginning on the first day of the Negotiated 
     Period and ending on the last day of the Negotiated Period, 
     SDG&E agrees to deliver all gas transported under this  
     amendment off PG&E's system, using the delivery point 
     specified in Exhibit A attached to the original FTSA.  
     Following the Negotiated Period, SDG&E shall have a right to 
     whatever delivery point options are available in effective 
     CPUC-approved tariffs applicable to long-term firm Expansion 
     service.

8.   Within five calendar days of execution of this amendment by 
     both SDG&E and PG&E, SDG&E agrees to withdraw with prejudice 
     all opposition to PG&E's positions in all phases of the 
     consolidated PEPR/ITCS cases; including the so-called 
     `statewide ITCS' issue.

9.   SDG&E agrees to:  (a) actively support approval by the CPUC 
     of this amendment, without modification or condition; and 
     (b) actively support PG&E's Gas Accord before the CPUC.

10.  Within 60 days of execution of this amendment, PG&E shall  
     file the amendment with the CPUC by advice letter.

11.  The Negotiated Period shall begin on the date the CPUC 
     approves this amendment and shall continue until the later 
     of (a) five years from the date or (b) the end of the Gas 
     Accord period, as approved by the CPUC. 

12.  As consideration for SDG&E's agreement to execute this 
     amendment by December 2, 1996 without the limited protection 
     of a favored-nations provision granting SDG&E the right to 
     take possible subsequent arrangements PG&E might agree to 
     with other firm Expansion shippers under the August 12, 1996 
     letter, PG&E shall pay to SDG&E the sum of $150,000 within 
     thirty (30) calendar days from the date this amendment is 
     approved by the CPUC.

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13.  Prior to any future expansion of PG&E's Line 400/401 system, 
     PG&E agrees to offer SDG&E the option to reduce its firm 
     transportation commitment by the lesser of SDG&E's contract 
     demand, the proposed amount of the new expansion, or, if 
     applicable, a pro rata share (with other firm Expansion 
     Shippers) of the amount of the new expansion.

14.  Each provision of this amendment is agreed to by the parties 
     as quid pro quo consideration for each of the other 
     provisions, so that no provision of this amendment is 
     separable from the others for any purpose.  If any provision 
     of this amend is deleted, this amendment shall be null and 
     void and of no binding effect on any party.



For SDG&E:                       For PG&E:


By:   __________________________By:   ___________________________
Title:__________________________Title:___________________________
Date: __________________________Date: ___________________________


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