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. 327 Original Sheet No. 327 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

4) Fourth, Transporter shall schedule service on the basis of the rate

being paid from highest to lowest, under Rate Schedule IT, Authorized Overrun

under any firm rate schedule, and Rate Schedule FT-FLEX Shippers for whom

Transporter has failed to schedule nominated service less than 10 Days during

the current Month. Nominations for service that are being provided at the same

rate shall be scheduled on a pro-rata basis based on Daily Nominations. For

purposes of this paragraph, the rate being paid under FT-FLEX shall be the Usage

rate being paid.

5) Fifth, Transporter shall schedule service on a pro-rata basis under Rate

Schedule PAL which is being provided at the maximum rate applicable to the

service.

6) Sixth, Transporter shall schedule service on a pro-rata basis under Rate

Schedule PAL on the basis of the rate being paid.

7) Seventh, Transporter shall schedule "make-up" quantities contemplated in

Section 10.4 herein.

8) Eighth, Transporter shall schedule service pursuant to Article III of Gas

Transportation Contracts (having an initial term of 20 years or longer) under

Rate Schedule FT.

For purposes of applying the above priorities only, any Shipper paying a

rate above the maximum 100% Load Factor Equivalent Rate for the Shipper's

service, shall be deemed to be paying the maximum applicable rate.