Paiute Pipeline Company

Second Revised Volume No. 1-A

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Effective Date: 06/01/1997, Docket: RP97-136-001, Status: Effective

First Revised Sheet No. 118 First Revised Sheet No. 118 : Effective

Superseding: Original Sheet No. 118

GENERAL TERMS AND CONDITIONS

(Continued)

16. PREGRANTED ABANDONMENT AND RIGHT-OF-FIRST-REFUSAL (Continued)

16.5 Procedures: (Continued)

the capacity that is subject to the expiring Service Agreement may

be submitted for posting to the Electronic Bulletin Board, using

the "Bid Form to Acquire Firm Capacity" contained in Section 25 of

the General Terms and Conditions of this tariff, until 7:00 p.m.

(5:00 p.m. Pacific Clock Time) on the second Monday of the month

following the month the available capacity was posted.

(i) The maximum rate which may be bid shall be the applicable

maximum rate for such service. Notwithstanding any other

provisions of this Section 16, Paiute shall not be obligated

or required to enter into any Service Agreement that

provides for a rate that is less than the applicable maximum

rate for such service.

(j) Paiute will determine, based on the Economic Value of the

bids submitted, which bid(s) it might accept if the existing

Shipper were to choose not to match the Economic Value of

the bid(s), and will present the bid(s) to the existing

Shipper no later than 7:00 p.m. (5:00 p.m. Pacific Clock

Time) on the Wednesday following the close of bidding. The

existing Shipper will have until 7:00 p.m. (5:00 p.m.

Pacific Clock Time) on the Monday following the close of

bidding to match the winning bid(s). If the Economic Value

is equal for more than one bid, Paiute will determine the

winning bid(s) by holding a lottery using a computerized

random number generator. If the existing Shipper elects to

match the bid(s) presented, then Paiute will initiate a new

bidding process by posting to the Electronic Bulletin Board

the following day the terms of the bid(s) matched by the

existing Shipper; provided, however, that if the existing

Shipper has matched a bid at the maximum effective rate for

the maximum bid term, no further bidding process will be

held. The posting and bidding process will be reiterated

over successive 2-week periods, with bids received by 7:00

p.m. (5:00 p.m. Pacific Clock Time) on the second Wednesday

after posting and the existing Shipper electing by 7:00 p.m.

(5:00 p.m. Pacific Clock Time) on the following Monday

whether to match the highest bid, until either (1) the

existing Shipper elects to match any bid made at the

applicable maximum rate, or (2) only one offer among the

bidders and the existing Shipper remains for the capacity.

If the existing Shipper is the winning bidder, then the