Blue Lake Gas Storage Company

First Revised Volume No. 1

Effective Date: 11/01/2007, Docket: RP08- 17-000, Status: Effective

First Revised Sheet No. 155E First Revised Sheet No. 155E : Effective

Superseding: Original Sheet No. 155E

GENERAL TERMS AND CONDITIONS

(Continued)

18. BILLING ADJUSTMENT FOR RATE SCHEDULE IS WITHDRAWAL PENALTY

18.1 Billing Adjustment. A billing adjustment shall be made to non-

offending Customers' bills crediting all revenues from Rate

Schedule IS Withdrawal Penalties collected by Seller, net of

costs. All such revenue shall be generated from the sale of

Working Storage Gas retained by Seller ("Penalty Gas"). A pro

rata allocation of such revenue will be credited to each non-

offending Customer, and will appear on the invoice for the next

Month's business following actual receipt by Seller of such

revenues. Seller shall have 90 Days from the end of the Month,

in which such Penalty Gas was retained, to sell the Penalty Gas.

The Penalty Gas shall be sold as near as practical to the market

rate existing at the time the Penalty Gas is sold. If sale of

Penalty Gas is made to an affiliate of Seller, Seller shall sell

such Penalty Gas at no less than the spot market price on the

Day of such sale.

18.2 Allocation Base. Customers will receive a pro rata allocation

of net penalty revenue, based upon the following allocation

base:

(a) Non-offending Rate Schedule FS Customers: The Maximum

Storage Quantity such Customer had a right to store in

the Month Withdrawal Penalty invoked; and

(b) Non-offending Rate Schedule IS Customers: The Average

Monthly Storage Volume the Customer stored in the Month

Withdrawal Penalty invoked.

18.3 Monthly Credit. Each Customer will receive a Monthly Credit

based upon the formula

X (Y / Z), where:

X = Total net Penalties collected by Seller in a Month

Y = The Customer's allocation base derived in accordance with

Section 18.2, above; and

Z = The Sum of all of Customers' allocation bases derived in

accordance with Section 18.2, above.