Gas Transmission Northwest Corp.

Third Revised Volume No. 1-A

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

Original Sheet No. 221C Original Sheet No. 221C : Pending

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

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

35.4 Filing of the PIP Surcharge (Continued)

under this surcharge mechanism, whether the PIP O&M expenses

related solely to PIP-related O&M costs whether the capital

expenditures are Qualifying Costs, and calculation of the

charges are preserved for protest and resolution in the annual

filings submitted pursuant to this provision.

35.5 Applicability: The PIP Surcharge shall apply to and be paid in

addition to the rates applicable to services provided under

Rate Schedules FTS-1, LFS-1, and ITS-1.

a. The PIP surcharge shall be expressed in dollars per Dth and

may be recovered only in a manner consistent with the ACA

surcharge (that is, only once per Dth transported by

Transporter).

b. To the extent a PIP Surcharge is placed into effect, the

surcharge will remain in effect for one year from April 1

through March 31. The PIP Surcharge will be subject to

refund with interest until approved by FERC.

c. With regard to transportation services that are discounted

by Transporter, the PIP Surcharge will be considered as

being discounted first, before other items included in the

maximum rate levels are impacted. Transporter shall have no

right to re-allocate to or otherwise recover from Shippers

any PIP Surcharges that it may have agreed to discount.

35.6 Calculation of the PIP Surcharge:

a. Transporter shall determine the amount of Net Qualifying

Costs to be recovered through a PIP Surcharge by calculating

actual Qualifying Costs as of each December 31 preceding

each Effective Date, subject to the limitations as set forth

in Section 35.2 above. The PIP related gross plant balance

as of each December 31st shall be reduced by the

corresponding accumulated provisions for depreciation and

deferred income taxes to arrive at a PIP Rate Base. The PIP

Rate Base shall be multiplied by a fifteen percent (15%)

pre-tax return on total invested capital to arrive at a PIP

Pre-Tax Return Amount. The PIP Pre-Tax Return Amount shall

be added to PIP O&M and depreciation expenses incurred

during the previous calendar year.

(Continued)