Paiute Pipeline Company

Second Revised Volume No. 1-A

Effective Date: 12/07/2003, Docket: RP04- 51-000, Status: Effective

First Revised Sheet No. 85 First Revised Sheet No. 85 : Effective

Superseding: Original Sheet No. 85

GENERAL TERMS AND CONDITIONS

(Continued)

5. OVERRUN AND UNDERRUN, BALANCING AND PENALTY PAYMENTS (Continued)

5.3 Balancing:

(a) Applicability: This section applies to both firm and

interruptible transportation service under Rate Schedules

FT-1 and IT-1. The balancing of amounts scheduled and

amounts taken by Shipper shall be on a thermally

equivalent basis, taking into account Shipper's allocated

portion of the Gas Used by Paiute. Such balancing shall be

achieved on a daily basis in accordance with this Section

5.3, subject to Shipper's right, upon Paiute's approval, to

vary amounts scheduled and amounts taken from time to time

within limits specified by Paiute. Such balancing shall be

measured by comparing the quantities scheduled for receipt

by Paiute from Shipper at the Receipt Point(s), less Gas

Used by Paiute, with the quantities taken by Shipper from

Paiute at the Delivery Point(s). Shipper shall be subject

to penalty payments as set forth below for any imbalances

between quantities scheduled and amounts taken by Shipper

that are outside the imbalance tolerance ranges set forth

in Sections 5.3(c) and 5.3(d) below.

Shipper shall eliminate any cumulative imbalance between

amounts scheduled and amounts actually taken by Shipper

within sixty (60) days after its Service Agreement is

terminated.

(b) Responsibility of Shipper: It is the responsibility of

Shipper to control, and if necessary, adjust amounts

scheduled by Shipper at the Receipt Point(s), and amounts

taken by Shipper at the Delivery Point(s) in order to

maintain a daily balance between the two quantities.

Paiute shall not be obligated to receive or deliver gas in

excess of the quantities scheduled by Shipper, nor shall

Paiute be obligated to deliver to Shipper at the Delivery