Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 314 Original Sheet No. 314 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

(b) for a Shipper requesting service under Rate Schedule FT, the

Shipper prepays for service, or provides an irrevocable standby letter of

credit which meets the standards set forth in Section 3.6 herein, to secure

payment of an amount equal to:

(1) the sum of the Monthly reservation charges applicable to

the proposed service for a three-Month period; plus

(2) the usage charges applicable to the proposed service for a

three-Month period; or

(c) for a Shipper requesting service under Rate Schedule IT, the

Shipper prepays for service, or provides an irrevocable standby letter of

credit which meets the standards set forth in Section 3.6 herein, for an

amount equal to the usage charge applicable to the proposed service for a

three-Month period; or

(d) for a Shipper requesting service pursuant to Rate Schedule FT the

Shipper provides a guarantee or other form of security, from an entity which

meets the creditworthiness standards set forth in Section 3.5(a) herein, to

secure payment of an amount equal to:

(1) the sum of the Monthly reservation charges applicable to

the proposed service for a three-Month period; plus

(2) the usage charges applicable to the proposed service for a

three-Month period; or

(e) for a Shipper requesting service pursuant to the Rate Schedule

IT, the Shipper provides a guarantee or other form of security to secure

payment of an amount equal to the usage charge applicable to the proposed

service for a three-Month period, such guarantee or other security to be

provided by an entity which meets the creditworthiness standards set forth in

Section 3.5(a) herein.

(f) for a Shipper requesting service pursuant to Rate Schedule PAL,

the Shipper provides a guarantee (such guarantee or other security to be

provided by an entity which meets the creditworthiness standards set forth in

Section 3.5(a) herein), or an irrevocable standby letter of credit which meets

the standards set forth in Section 3.6 herein, or other form of security

acceptable to Transporter to secure payment of an amount equal to the higher

of (1) the usage rate applicable to the proposed service for a three-Month

period, or (2) the Maximum Loaned Quantity requested by Shipper for a ninety

day period at the price of gas listed in Gas Daily for Tennessee Gas

Pipeline's Zone 6.

3.6 Letters of Credit. Any letter of credit submitted pursuant to

Section 3.5 herein shall:

(a) be an irrevocable standby letter of credit in favor of

Transporter, in such form as may reasonably be approved by Transporter, issued

by a commercial bank or financial institution located in the United States or

Canada whose long-term