Granite State Gas Transmission, Inc.

Third Revised Volume No. 1

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Effective Date: 01/31/2003, Docket: RP00-502-000, Status: Effective

Third Revised Sheet No. 297 Third Revised Sheet No. 297 : Superseded

Superseding: Second Revised Sheet No. 297

GENERAL TERMS AND CONDITIONS

(continued)

29. CAPACITY RELEASE (continued)

29.3 General Provisions

(iv) Transporter will enter into a Service Agreement

with the Replacement Customer prior to the

commencement of service which confirms the terms

and conditions applicable to the released

capacity. A Replacement Customer acquires all

rights and obligations of the Releasing Customer

except that it will not be permitted to change

the primary receipt and delivery points

specified in its service agreement unless the

subject capacity has been released on a

permanent, non-recallable basis.

(v) Irrespective of the release of its capacity,

the Releasing Customer remains bound and liable

for performance under its service agreement

unless excused in writing by Transporter. The

excuse of performance under a service agreement

of a Releasing Customer shall be at

Transporter's sole discretion, and may be

conditioned on exit fees or other requirements.

(vi) A Releasing Customer may release capacity on a

firm or recallable basis, but not both

simultaneously.

(vii) Any specific release conditions requested by

a Releasing Customer must relate solely to

acquiring capacity on the Transporter's system,

be operationally feasible, and be

nondiscriminatory to other Shippers.

(viii) Upon electronic notification to Transporter, a

bid may be withdrawn after it is received by

Transporter at any time prior to the expiration

of the bidding period. Once a bid from an

approved bidder is accepted by Transporter, it

shall be considered a legally binding agreement.

Transporter will post all completed release

transactions on its electronic bulletin board.

(ix) Bids for released capacity, including bids for

released capacity under negotiated rate

agreements, may not exceed the maximum tariff

rate including all surcharges for the applicable

service set forth in Transporter's FERC Gas

Tariff, as may be changed from time to time;

provided, however, that until September 30,

2002, the maximum rate ceiling does not apply

to capacity release transactions of less than

one year. Bids may be adjusted to reflect

either a daily or monthly rate as well as any

other time-period rate. Further, the format

of a bid should include the same number

of decimal places as the rates included

elsewhere in this tariff.