Northwest Pipeline Corporation G P

Fourth Revised Volume No. 1

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Effective Date: 01/31/2008, Docket: RP08-130-000, Status: Effective

Original Sheet No. 254 Original Sheet No. 254 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

21. RECEIPT AND DELIVERY FACILITIES (Continued)

materials, and such construction will be subject to approval by

Transporter's inspectors. Shipper will make a lump sum payment to

Transporter for all costs associated with Transporter's design

review and inspection of the facilities within 30 days of

Transporter submitting an invoice detailing such costs. Interest

calculated in accordance with 18 CFR Section 154.501(d) will

accrue on any balance remaining after the due date specified in

the invoice. Shipper assumes full responsibility and liability

and agrees to hold Transporter harmless from any liability of any

nature arising from the installation of such facilities by Shipper

or by a third party for Shipper.

21.3 Facilities Reimbursement. All receipt or delivery facilities

constructed by Transporter hereunder will be paid for by Shipper as

provided below:

(a) Shipper will reimburse Transporter in full upon completion

of construction for the actual construction costs of facilities

constructed by Transporter, and related income taxes (i.e., the

difference between Transporter's current federal and state tax

liability resulting from Shipper's reimbursement to Transporter of

the actual construction costs of such facilities and the present

value of Transporter's future tax benefits resulting from tax

depreciation on such facilities, grossed-up for income taxes); or

(b) Shipper will reimburse Transporter for the cost of service

attributable to subject facilities through a facilities surcharge

under a valid transportation service agreement. The terms of

reimbursement will be set forth on Exhibit C to the applicable

Rate Schedule TF-1, TF-2, TI-1, TFL-1 or TIL-1 service agreement

between Transporter and Shipper. Determination of the initial

cost of service shall be consistent with the principles underlying

Transporter's currently effective transportation rates at the time

Transporter and Shipper execute an agreement for the construction

of the facilities. Such applicable cost of service will be

adjusted prospectively to reflect Commission-approved cost

factors, including only operation and maintenance and

administrative and general costs actually incurred as a result of