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. 326 Original Sheet No. 326 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

(1) First, Transporter shall schedule the following service on a pro-rata

basis based on Maximum Contract Demand: (1) service under Rate Schedule FT-Flex

for Shippers whose nominated volumes Transporter has previously declined to

schedule on 10 days during the current Month and whose current nomination is for

Primary Receipt and Delivery Point(s), (2) service under Rate Schedule FT and

(3) service under Rate Schedule HRS nominated at Primary Receipt and Delivery

Point(s) based on evenly hourly flows at 1/24th of MDQ. For purposes of

allocating mainline capacity pursuant to this paragraph, any Nomination for

service at a Secondary Receipt Point located downstream of a Shipper's Primary

Receipt Point, shall be treated as a Nomination for service at Shipper's Primary

Receipt Point, up to the Shipper's Maximum Contract Demand at such Primary

Receipt Point. For purposes of allocating mainline capacity pursuant to this

paragraph, any Nominations for service at a Secondary Delivery Point located

upstream of a Shipper's Primary Delivery Point, shall be treated as a Nomination

for service at Shipper's Primary Delivery Point, up to the Shipper's Maximum

Daily Quantity, pursuant to Section 7.10(a) herein, regardless of the contracted

flow rate, at such downstream Primary Delivery Point.

(2)Second, Transporter shall schedule service under Rate Schedule HRS

nominated at Primary Receipt and Delivery Points up to Shipper's MDQ and MHQ to

the extent not scheduled in accordance with Paragraph 1 herein. For purposes of

allocating mainline capacity pursuant to this paragraph, any Nomination for

service at a Secondary Receipt Point located downstream of a Shipper's Primary

Receipt Point, shall be treated as a Nomination for service at Shipper's Primary

Receipt Point, up to the Shipper's Maximum Contract Demand at such Primary

Receipt Point. For purposes of allocating mainline capacity pursuant to this

paragraph, any Nominations for service at a Secondary Delivery Point located

upstream of a Shipper's Primary Delivery Point, shall be treated as a Nomination

for service at Shipper's Primary Delivery Point, up to the Shipper's Maximum

Daily Quantity, pursuant to Section 7.10(a) herein, regardless of the contracted

flow rate, at such downstream Primary Delivery Point. In the event Transporter

has insufficient capacity to schedule all service within this priority, service

shall be scheduled on a pro-rata basis based on hourly quantity nominated.

3) Third, Transporter shall schedule service under Rate Schedule FT-FLEX for

Shippers whose nominated volumes Transporter has previously declined to schedule

on 10 Days during the current Month and whose current nomination is for

Secondary Receipt and Delivery Point(s) and Rate Schedule FT and Rate Schedule

HRS at Secondary Receipt and Delivery Point(s) on a pro-rata basis based on the

highest percentage of the Maximum Demand Rate for the service being provided.

Shippers that are paying the same percentage of the Maximum Demand Rate for such

service shall be allocated capacity on a pro rata basis. For purposes of

allocating mainline capacity pursuant to this paragraph, any nomination for

service at a Secondary Delivery Point, up to Shipper's Maximum Daily Quantity,

shall be scheduled pursuant to Section 7.10(a) herein, regardless of the

contracted flow rate.