Gas Transmission Northwest Corp.

Third Revised Volume No. 1-A

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Effective Date: 01/01/2007, Docket: RP06-407-008, Status: Pending

Original Sheet No. 221B Original Sheet No. 221B : Pending

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

35. PIPELINE INTEGRITY PLAN (PIP) SURCHARGE (Continued)

35.3 PIP Surcharge Rate Cap (Continued)

Qualifying Costs, except as set forth in Section 35.2 above.

To the extent that eligible PIP costs are not recovered in any

given year due to cost recovery limits imposed by a PIP

Surcharge Rate Cap, Transporter may defer recovery of such

costs to a subsequent year, subject to application of the PIP

Surcharge Rate Cap for such subsequent year and subject to the

overall limitations as set forth in Section 35.2 above.

35.4 Filing of the PIP Surcharge: Following each year of the Tracker

Period, Transporter shall determine the Net Qualifying Costs,

inclusive of unused Cost Threshold Credits, if any. To the

extent there are any such costs, Transporter will submit a

limited section 4 filing to establish a PIP surcharge, not to

exceed the PIP Surcharge Rate Cap, at least thirty (30) days

prior to April 1st of each year (Effective Date). Transporter

shall include with each PIP surcharge filing tariff sheets

setting forth the PIP surcharge, work papers detailing the

calculation of such surcharge in accordance with this Section

35, and work papers providing all PIP cost data from January 1,

2007 through December 31 of the most recent calendar year. If

the Net Qualifying Costs for the applicable Tracker Period are

zero (0), then Transporter will not be required to file tariff

sheets with the Commission and instead will post, at least

thirty (30) days prior to April 1st of each year, the same cost

detail in a separate location on Transporter's Internet

website. The informational posting shall remain accessible on

the website and shall be available for use in any subsequent

PIP Surcharge filing or in a true-up filing made pursuant to

Section 35.8. Transporter shall provide in each annual PIP

filing or website posting a detailed written description of all

PIP capital expenditures, including for each project: the

location of the work, a description of the type of work and why

it was necessary for pipeline integrity purposes, whether the

work was required by the Pipeline Safety Improvement Act of

2002 or goes beyond those requirements, and the actual or

estimated costs of the project. Transporter also shall provide

information detailing the basis of the PIP O&M expenses, with

an explanation of how those expenditures were required and

reasonable for pipeline integrity purposes. All issues related

to the prudence of cost incurrence, prudence of the PIP's

implementation, qualification of the claimed costs for recovery

(Continued)