Michigan Gas Storage Company

First Revised Volume No 1

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Effective Date: 01/01/1997, Docket: RP96-290-000, Status: Effective

First Revised Sheet No. 68 First Revised Sheet No. 68 : Superseded

Superseding: Original Sheet No. 68

GENERAL TERMS AND CONDITIONS

(continued)

service was received by MGS. If separate requests have

the same economic values and the same date of request,

service shall be offered to such requests pro-rata, based

upon the service entitlement requested.

(b) If MGS tenders a Service Agreement, but does not receive

the executed Service Agreement within 30 Days from the

date the Service Agreement is tendered, the request for

service rights shall expire. This expiration shall not

prejudice to the prospective Shipper's right to submit a

new request for service rights.

(c) In the event the prospective Shipper returns a Service

Agreement with a rate less than that used to determine

the economic value of the request or with a term less

than that used to determine the economic value of the

request or both, MGS shall redetermine the economic value

of the Shipper's request. If the request continues to

qualify for service, and MGS agrees to the rate, MGS

shall execute the Service Agreement. If the request does

not continue to qualify for service, the Service

Agreement shall be deemed null and void, and the

prospective Shipper's request shall be modified in

accordance with the terms proposed by the prospective

Shipper.

23.2 Economic Value

The economic value of request(s) for service rights shall

be the net present value of the reservation charges,

capacity charges and deliverability charges that Shipper

would pay at the rates Shipper has requested. These

rates shall not be less than the minimum nor greater than

the maximum rates stated on the currently effective

Tariff Sheet governing such service, over the term of

service specified in the request(s), utilizing as the

annual discount factor the overall rate of return

underlying MGS's currently effective rates.

23.3 Right of First Refusal

(a) In the event Shipper wants to continue receiving

service under a Long-Term Agreement beyond the

term specified in such Agreement, MGS shall

continue to provide such service pursuant to

such Agreement if:

(i) The Long-Term Agreement is extended

according to its terms, or

(ii) Shipper agrees to match the

longest term and highest rate

for the firm service Shipper

receives, or any portion

thereof, which MGS is offered

by any other Shipper, and

executes a new Service

Agreement matching those

terms.