RE: Variance Request #115 (revised) - Modify the CPUC approval of Variance Request #115 which allowed the delay of the initial smart pig run from prior to operations (as required by Applicant-Proposed Measure SS-49**) to within 30 days of the commencement of operation.

Dear Mr. Shauers:

We have reviewed the above-referenced variance request, and approve your request based on the following factors:

•      Variance Request #115 was approved by CPUC on September 23, 1998.

•    PPSI is now requesting that the initial smart pig run be allowed to take place within 120 days of "full operation," with contract execution with a smart pig company occurring within 30 days of full operation. PPSI defines "full operation" as the "first 7 consecutive days of delivering product." The delay has been requested to accommodate the typical backlog of smart pig companies.

•     The intent of the initial smart pig run is to establish the baseline condition of the pipeline so that the integrity of the pipeline can be monitored over time via an annual smart pig program (as required by Mitigation Measure SS-7). A couple month delay would have a nominal affect on the pipeline baseline condition.

•     The measures noted below shall be implemented:

- All applicable mitigation measures shall be implemented during project operation.