Paiute Pipeline Company

Second Revised Volume No. 1-A

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Effective Date: 12/09/2003, Docket: RP04- 51-003, Status: Effective

2nd Sub Second Revised Sheet No. 100 2nd Sub Second Revised Sheet No. 100 : Effective

Superseding: First Revised Sheet No. 100

GENERAL TERMS AND CONDITIONS

(Continued)

12. LATERAL PIPELINES POLICY

Paiute will not build or contribute to the cost of building any lateral

pipelines to transportation shippers. Nothing in this policy statement

shall require Paiute to file an application for a certificate of public

convenience and necessity under Section 7(c) of the Natural Gas Act

("Act"), and nothing in this policy statement shall prevent Paiute from

contesting an application for service filed pursuant to Section 7(a) of

the Act. Paiute reserves the right to seek a waiver of the policy set

forth herein, for good cause shown, during any proceeding before the

Commission instituted under Section 7 of the Act.

13. SEGMENTATION AND BACKHAUL TRANSPORTATION

13.1 To the extent operationally feasible, a firm Shipper may segment

its capacity into separate parts for its own use or for the

purpose of releasing a portion of its capacity to another Shipper.

Subject to the limitations set forth below, such segmentation may

be on a primary firm basis (using primary firm receipt and delivery

points) or secondary firm basis (using secondary firm receipt

and/or delivery points). Any segment must extend from a Receipt

Point on Paiute's system to a Delivery Point, except that for

purposes of segmentation, the LNG Plant and Wadsworth Junction

Receipt Points may also be designated as Delivery Points. Paiute

will respond to a Shipper's segmentation request within two busi-

ness days following the request. If the segmentation request is

approved, Paiute will issue new service agreements for each of the

segments within one hour of notification to the Shipper that the

request is approved.

13.2 Segmentation Without Capacity Release:

(a) To the extent operationally feasible, a Shipper from time to

time may segment its capacity into separate parts for its own

use and may nominate up to its applicable Reserved Capacity

(i.e., Daily Reserved Capacity or Summer Daily Reserved

Capacity) in any segment, provided, however, that if Shipper's

Service Agreement contains a limitation on the capacity that

Shipper is entitled to use on a particular lateral (LCL),

Shipper may nominate, on a primary firm basis, only up to the

applicable LCL for any segment that includes a portion of such

lateral. Shipper may nominate transportation quantities in

excess of its LCL, up to its applicable Reserved Capacity,

on a secondary firm basis. If primary firm capacity is avail-

able, Shipper may amend its Service Agreement to increase

any applicable LCL on a primary basis up to its applicable

Reserved Capacity by reducing its primary firm rights on a

different lateral to an equivalent extent.