Columbia Gulf Transmission Company

Second Revised Volume No. 1

Effective Date: 07/01/2003, Docket: RP00-326-004, Status: Effective

Sixth Revised Sheet No. 162 Sixth Revised Sheet No. 162 : Effective

Superseding: Fifth Revised Sheet No. 162

GENERAL TERMS AND CONDITIONS (Continued)

Schedules and Rate Schedule PAL.

(1) Where Shippers have nominated deliveries to commence on the first Day of the Month for (i)

quantities under the ITS-1 and ITS-2 Rate Schedules, (ii) overrun quantities under the FTS-1 and FTS-2

Rate Schedules, or (iii) interruptible quantities under interruptible X-Rate Schedules set forth in

Volume No. 2 of this Tariff, Transporter shall award capacity to those Shippers offering to pay the

highest rate for service during that Month. Transporter shall allocate capacity among Shippers

offering to pay the same rate first to those Shippers flowing gas during the previous Month pro rata

based upon the quantities flowing on the nomination deadline day, up to but not exceeding such flowing

quantities. Transporter then shall allocate any remaining capacity equally among the remaining

Shippers offering to pay the same rate for service during that Month, up to but not exceeding nominated

quantities.

(2) Where Shippers have requested deliveries in excess of capacity to commence on any day other

than the first Day of the Month of (i) quantities under the ITS-1 and ITS-2 Rate Schedules, or (ii)

overrun quantities under the FTS-1 and FTS-2 Rate Schedules, or (iii) interruptible quantities under

interruptible X-Rate Schedules set forth in Volume No. 2 of this Tariff, Transporter shall allocate any

capacity on the basis of the highest rate being offered for such capacity. Where requested deliveries

at the highest offered rate exceed Transporter's capacity, Transporter shall allocate capacity first to

those Shippers flowing gas on a pro rata basis, based upon each such Shipper's respective confirmed

nominations, and second to all remaining Shippers based upon the order in which Transporter received

nominations from those Shippers (equally to any Shippers submitting nominations within the same

Nomination Cycle on the same day). Any Shipper which is flowing gas and which would have their flowing

quantities reduced because a Shipper is willing to pay a higher rate may retain its capacity by

immediately agreeing to match the higher rate which is being offered to Transporter.

(3) Any Shipper which is flowing gas may have their quantities reduced effective at the beginning

of each gas day by another party willing to pay a higher rate subject to conditions set forth below:

(a) Except when bumped by higher priority services, flowing interruptible quantities may

not be bumped on an intra-day basis.

(b) Shippers flowing interruptible quantities in danger of being bumped by another

party nominating interruptible quantities at a higher rate shall receive written notice via

Electronic Notice Delivery and shall have one hour to match the higher bid to retain the

capacity. Such Shippers shall only have to match the higher rate up to the quantities and

duration nominated by the higher bidding party to retain the capacity.