North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 07/30/2008, Docket: RP09-208-000, Status: Effective

Second Revised Sheet No. 164 Second Revised Sheet No. 164

Superseding: First Revised Sheet No. 164

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

19. CAPACITY RELEASE

19.2 Types of Release

A Releasing Shipper may release a Parcel for a term (Release Term)

up to or equivalent to the remaining term under its service

agreement with NBP. No rate cap applies to releases of capacity

for a period of one year or less only when the release is to take

effect on or before one year from the date on which the pipeline

is notified of the release. Types of releases include:

NON-PREARRANGED - BIDDING REQUIRED

Capacity releases that are not prearranged require bidding.

PREARRANGED RELEASES - BIDDING REQUIRED

(1) Unless capacity is released pursuant to either an asset

management agreement or a state-approved retail access

program, releases with terms greater than thirty-one (31)

days and up to one year require bidding. This type of

release allows a right of first refusal for the prearranged

bidder. Bidding is pursuant to the methodology selected by

the Releasing Shipper.

(2) Unless capacity is released pursuant to either an asset

management agreement or a state-approved retail access

program, releases with terms greater than one year at a rate

that is less than the maximum applicable tariff rate require

bidding up to the maximum applicable tariff rate. This type

of release allows a right of first refusal for the

prearranged bidder. Bidding is pursuant to the methodology

selected by the Releasing Shipper.

PREARRANGED RELEASES - BIDDING NOT REQUIRED

(1) Releases for any period of thirty-one (31) days or less do

not require bidding. Unless capacity is released pursuant to

either an asset management agreement or a state-approved

retail access program, a firm shipper may not roll over,

extend, or in any way continue the release to the same

replacement shipper using the 31 days or less bidding

exemption until 28 days after the first release period has

ended. The 28-day hiatus does not apply to any re-release to

the same replacement shipper that is posted for bidding or

that qualifies for any of the other exemptions from bidding

set forth herein.

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