Portland Natural Gas Transmission System

Second Revised Volume No. 1

Effective Date: 09/01/2006, Docket: RP06-449-000, Status: Effective

Original Sheet No. 221 Original Sheet No. 221 : Effective

RATE SCHEDULE HRS (cont.)

Hourly Reserve Service

c) Transportation Service rendered under this Rate Schedule shall be firm, up to

the Primary Delivery Point MDQs and MHQs specified in the executed Agreement.

Transporter shall enter into no more than one agreement for Rate Schedule HRS

Service at any Primary Delivery Point on the system. Transportation service

under this rate schedule at secondary points shall be firm, up to the shipper's

MDQ at an MHQ equal to the Shipper's MDQ divided by 24, provided, however, that

Transporter shall honor Shipper's MHQ at a Secondary Delivery Point if doing so

will not interfere with the provision of any other service request on the

system.

d) Shipper shall be deemed to be within its contract entitlement to the extent

the actual flow rate during any hour is less than the combined scheduled hourly

flow rates at the primary point pursuant to Section 7.10 of the General Terms

and Conditions contained in Transporter's FERC Gas Tariff and within its MDQ

during any Gas Day.

e) Shipper may nominate as Authorized Overrun and Transporter may schedule,

pursuant to Section 7.4 of the General Terms and Conditions contained herein, an

amount above its MDQ during any Day and/or above its MHQ during any hour.

Shipper may nominate an MHQ overrun for a limited number of hours during any day

but no less than one hour of service overrun may be nominated.

3. RATES AND CHARGES

3.1 Reservation Rates shall consist of:

a) A Capacity Reservation Rate, as stated on Sheet No. 102, paid each month. The

Capacity Reservation Charge shall be the product of Shipper's MDQ (in

Dekatherms) multiplied by the rate shown on Sheet No. 102 (or such

discounted/negotiated rate as may be established under Section 3.3 of Rate

Schedule HRS), and

b) A Deliverability Reservation Rate, as stated on Sheet No. 102, paid each

Month. The Deliverability Reservation Charge shall be the product of Shipper's

MDQ (in Dekatherms), times the rate shown on Sheet No. 102 applicable to the

Maximum Hourly Flow Rate selected by Shipper and agreed to by Transporter which

appears on Schedule 2 of Shipper's service agreement (or such discounted/

negotiated rate as may be established under Section 3.3 of Rate Schedule HRS).

3.2 Usage Rates

a) On a monthly basis, the Usage-1 Rate, as stated on Sheet No. 102, will be

multiplied by that portion of the total quantity of Gas deliveries on any Day

during the month, pursuant to the Shipper's Agreement which is not in excess of

the lower of (i) 105% of the scheduled quantities of Gas under the Agreement for

such Day or (ii) the MDQ in effect under the Agreement for such Day.