Northern Natural Gas Company

Fifth Revised Volume No. 1

Effective Date: 06/11/2007, Docket: RP07-446-000, Status: Effective

Seventh Revised Sheet No. 253 Seventh Revised Sheet No. 253 : Effective

Superseding: Sixth Revised Sheet No. 253

GENERAL TERMS AND CONDITIONS

Northern will utilize the standard NPV calculation based on the revenue stream

over the specified term (which shall not exceed twenty (20) years), discounted by

the FERC interest rate to determine the highest total incremental revenues. If an

alternate bid evaluation methodology is used, Northern will post the evaluation

factors to be utilized along with each factor's weight. The NPV calculation shall

include only revenues generated by the reservation rate or a guaranteed throughput

volume and if LFT service is requested Northern will not include any revenues

attributable to the potential resale of capacity on any Limited Day(s). In those

cases where one or more bidders is willing to pay the maximum recourse rate, the

NPV used in such cases is capped at, and may not exceed, the NPV equal to the

maximum reservation rate available to recourse shippers. For purposes of NPV

evaluation, the aggregate NPVs of two or more bids for contiguous service may be

considered provided that the combined capacity under those bids does not exceed

the maximum capacity available for bid. For purposes of bid comparisons in

allocating capacity, Shippers willing to pay more than the maximum tariff rate

will be considered to be paying the maximum tariff rate and for purposes of bid

comparisons in allocating capacity, guaranteed throughput volume service applies

only in the case of a negotiated rate. However, if bids received from a TF, TFX,

and LFT Shipper(s) are equal in the bid evaluation process, capacity would be

awarded to any TF and/or TFX Shipper(s) first.

To the extent necessary, Northern will allocate capacity among requests on a

pro rata basis. However, any requested capacity at a point which is greater than

the total capacity available at that point will be allocated as if the request was

for the maximum capacity available at that point.

C. Reservation of Capacity - Expansion Projects:

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Northern may elect to reserve for a future expansion project any unsubscribed

capacity or capacity under expiring or terminating service agreements where such

agreements do not have a right of first refusal or Shipper does not exercise its

right of first refusal. Northern may only reserve capacity for a future expansion

project for which an open season has been or will be held within one (1) year of

the date that Northern posts such capacity as being reserved. Prior to reserving

capacity for an expansion project, Northern shall first post for bid all of its

available capacity on its website for at least five (5) business days before

capacity will be reserved.