Portland Natural Gas Transmission System

Second Revised Volume No. 1

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Effective Date: 09/01/2008, Docket: RP08-306-000, Status: Suspended

First Revised Sheet No. 204 First Revised Sheet No. 204 : Suspended

Superseding: Original Sheet No. 204

RATE SCHEDULE FT (Continued)

3.5 Notwithstanding any provision of Transporter's Tariff to the

contrary, Transporter and Shipper may mutually agree in writing to rates, rate

components, charges, or credits for service under this Rate Schedule that

differ from those rates, rate components, charges, or credits that are

otherwise prescribed, required, established or imposed by this Rate Schedule

or by any other applicable provision of Transporter's effective FERC Gas

Tariff. If Transporter agrees to such negotiated rate(s), then such negotiated

rate(s) shall be set forth in the Gas Transportation Contract and shall be

effective only for the period agreed upon by Transporter. During such period,

the negotiated rate(s) shall govern and apply to the Shipper's service and the

otherwise applicable rate, rate component, charge, or credit (i.e., any

reduction in rates which might otherwise apply) which the parties have agreed

to replace with the negotiated rate(s), shall not apply to, or be available

to, the Shipper. At the end of such period, the otherwise applicable maximum

rates or charges shall govern the service provided to Shipper, unless

otherwise agreed by Transporter and Shipper. Only those rates, rate

components, charges, or credits identified by Transporter and Shipper in

writing as being superseded by a negotiated rate(s) shall be ineffective

during the period that the negotiated rate is effective; all other rates, rate

components, charges, or credits (i.e., any reduction in rates which might

otherwise apply) prescribed, required, established for service under this Rate

Schedule, shall remain in effect. Transporter shall file with the Commission

pursuant to its current policies and/or regulations tariff sheets describing

the services being provided pursuant to this Section 3.5. All services

provided hereunder are available to all similarly situated Shippers on a non-

discriminatory basis.

3.6 RATE SCHEDULE FT RESERVATION CHARGE CREDITING MECHANISM

(a) In the event that during a Fiscal Period, as defined in Subsection

3.6(c) below, the total revenue PNGTS collects for rendering jurisdictional

services is in excess of twice the annual cost of service applicable for such

period, as established in the resolution of Company's last NGA Section 4

general rate case (such difference constituting the "Excess Revenues"), then a

Short Term Service Revenue Credit calculated pursuant to Subsection 3.6(b)

below shall be credited by Company.

(b) Long Term FT Shippers may receive the Short Term Service Revenue

Credit when such current Long Term FT Shipper has paid Company the Rate

Schedule Long Term FT Maximum Recourse Reservation Charges in accordance with

Section 15.2 of the General Terms and Conditions of PNGTS' FERC Gas Tariff

during the Fiscal Period used to calculate the Short Term Service Revenue

Credit. The Short Term Service Revenue Credit shall be 75% of the Excess

Revenues received during an applicable Fiscal Period. No later than seventy

(70) days from the end of each Fiscal Period, the Short Term Service Revenue

Credit shall be reflected, in proportion to the Rate Schedule FT Long Term

Maximum Recourse Reservation Charges paid by each Shipper receiving FT Long

Term service, during the same subject Fiscal Period on such Shipper's invoice.