Petal Gas Storage, L. L. C.

Original Volume No. 1

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Effective Date: 01/09/2010, Docket: RP10-229-000, Status: Effective

Fourth Revised Sheet No. 112 Fourth Revised Sheet No. 112

Superseding: Third Revised Sheet No. 112

GENERAL TERMS AND CONDITIONS (Continued)

allocated to those customers offering to pay the highest rates.

Specifically, storage capacity will be allocated to those

customers offering to pay the highest present value of the

weighted average per unit Capacity and Deliverability Charges

over the terms of each agreement. For customers seeking firm

transportation service, capacity will be allocated to those

customers offering to pay the highest rate, regardless of

whether that rate is negotiated or the maximum recourse rate.

For purposes of determining priority for firm transportation

service, negotiated rate bids higher than the maximum recourse

rate will be valued as if they are at the maximum recourse

rate. Transportation capacity will be allocated to those

customers offering to pay the highest present value of the

weighted average per unit of firm transportation capacity over

the term of each agreement. Such present value of the Capacity

and Deliverability Charges and transportation capacity shall be

calculated in accordance with the following formula:

(Monthly Charges Per Unit of Storage or Transportation Capacity)

X [1 - ((1 + i) to the -n power)/i] X ((1 + i) to the -t power) =

Present Value Per Unit of Storage or Transportation Capacity

Where: i = The prime rate as published by the Wall Street Journal

on the first day of the open season plus five percent (5%) (or

500 basis points). The sum of which is then divided by twelve

(12).

n = The term of the agreement, in months.

t = Month of contract start (example: May = 5) minus the first

month capacity is available (Feb = 2), not to exceed 3 months.

For example, a bid of $.08/dth (storage capacity charge) and $1.45/dth

(storage deliverability charge) would equal a weighted per unit charge

of $.225/dth/month, ([($.08 x 100,000) + ($1.45 x 10,000)]/100,000). A

bid equal to $.225/dth/month for five years (60 months) starting in

May, assuming capacity is available in February and using a 7% prime

rate, yields a present value per unit of $9.82.

(b) During the allocation process of an open season, should requests

for storage or transportation capacity exceed available capacity,

capacity will first be allocated to the highest present value bids

received. When remaining unallocated capacity is not sufficient

to meet the next highest present value bidder's capacity

requirements, that next highest bidder has the option of declining

the remaining capacity. Petal will then offer the remaining

capacity to the next highest bidder, until all the remaining

capacity is allocated.

submitted by two or more Customers (e.g., tied bids) and there

is insufficient remaining capacity available to serve such

Customers, then capacity will be allocated to the Customer

submitting the earliest tied bid, until the remaining

unallocated capacity is insufficient to serve the next tied

Customer's capacity requirements. That next tied Customer has

the option of declining the remaining capacity. However, should

the last of the tied bidders decline the remaining capacity,

then Petal will offer the remaining capacity to the next highest

bidder, until all the remaining capacity is allocated.