Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 316 Original Sheet No. 316 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

(b) Except as provided in Section 15.4 and Section 20.6 herein,

Transporter shall seek appropriate authorization from the FERC prior to

termination of service for any Shipper that fails to demonstrate

creditworthiness or has become insolvent. For purposes herein, the insolvency

of a Shipper shall be evidenced by the filing by Shipper, or its parent, of a

voluntary petition in bankruptcy or the entry of a decree or order by a court

having jurisdiction in the premises adjudging Shipper or its parent bankrupt

or insolvent, or approving, as properly filed, a petition seeking

reorganization, arrangement, adjustment or composition of or in respect of

Shipper, or its parent, under the Federal Bankruptcy Act or any other

applicable federal or state law, or appointing a receiver, liquidator,

assignee, trustee, sequestrator (or other similar official of Shipper or of

any substantial part of its property, or the ordering of the winding-up or

liquidation of its affairs, with said order or decree continuing unstayed and

in effect for a period of at least sixty (60) consecutive Days.

3.8 Validation of Service Request. Each request for firm service

shall be evaluated by Transporter to determine Shipper's creditworthiness,

whether there is adequate System Capacity to fulfill the request, and whether

the request is compatible with the System's operating conditions. Transporter

may require any additional information necessary to process the request for

service, consistent with all applicable rules, regulations, or orders of the

FERC or other regulatory authority having jurisdiction. After validation of

the information submitted by Shipper in support of a request for service,

Transporter shall notify Shipper in writing.

3.9 Pre-qualification for Creditworthiness. Any prospective bidder

for capacity on the System may, but is not required to, apply to establish

creditworthiness prior to submitting a bid for capacity. To pre-qualify, a

prospective bidder must submit to Transporter a request for pre-qualification

for creditworthiness that includes the information specified in Section 3.4

herein. Transporter will evaluate the prospective bidder's creditworthiness

in accordance with the provisions of this Section 3, advise the prospective

bidder of the results of its credit evaluation, and establish a list of all

pre-qualified bidders. To remain on this list, a prospective bidder must

update the information required by Section 3.4 herein on an annual basis.

Based on a subsequent review of the prospective bidder's financial status,

Transporter may delete a pre-qualified bidder from its list of pre-qualified

bidders or may amend that list with respect to any limitations on credit. All

of the provisions of this Section 3 involving creditworthiness shall continue

to remain applicable to prospective bidders who pre-qualify under this

provision.