Blue Lake Gas Storage Company

First Revised Volume No. 1

Effective Date: 11/01/2007, Docket: RP08- 17-001, Status: Effective

Sub Second Revised Sheet No. 146 Sub Second Revised Sheet No. 146 : Effective

Superseding: First Revised Sheet No. 146

GENERAL TERMS AND CONDITIONS

(Continued)

remedy the situation and to remove the cause in an adequate

manner and with all reasonable dispatch, nor shall such causes

or contingencies affecting such performance relieve Customer,

in whole or in part, from its obligations to pay the monthly

charges provided for in Section 8 of these General Terms and

Conditions.

10. PRIORITY OF SERVICE REQUESTS AND SERVICE AGREEMENTS

10.1 FIRM STORAGE

(a) Priority Of Request For Initial Firm Storage Agreements:

After notification, pursuant to Section 14 of these

General Terms and Conditions hereof, that Seller has

available firm Storage capacity which is not subject to

contract or is released pursuant to Section 8 of Rate

Schedule FS, Seller will accept requests that Seller

enter into an Agreement for firm Storage Service. Except

as provided in Section 10.1(b), below, the order of

priority among such requests shall be based upon the

economic value of the transaction to Seller, with the

transaction producing the greatest economic value having

the highest priority of request, provided, however, that

nothing herein shall require Seller to provide service at

any rates less than Seller's applicable Maximum Rates,

and provided further, that Seller shall not be required

to enter into Service Agreements with terms of more than

one Year unless Customer has a long-term debt rating of

at least Baa3 according to Moody's Investors Service or

BBB- according to Standard & Poor's Corporation or if its

obligations to the Seller are guaranteed by a person with

a long-term debt rating equal to or greater than stated

above. Economic value shall be determined on the basis

of the product of the term of service in years in the

request, (using a term not to exceed twenty (20) years)

and the Reservation Charges for each year in the life of

the Agreement agreed to in the request by the requesting

party, discounted to present value by the then-current

interest rate determined in accordance with Section

154.501(d) of the Commission's Rules and Regulations.

The sum of the present value for each year in the life of

the Agreement shall be the economic value of the

Agreement. In the event two or more bids with equal