Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 334 Original Sheet No. 334 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

delivery of a quantity of Gas from Transporter at any Delivery Point

which exceeds or falls short of the Scheduled Quantity for such Delivery

Point by the greater of five percent (5%) or 400 DTH, then Shipper shall

pay to Transporter $1.30 per DTH for all quantities in excess of or which

fall short of the Scheduled Quantity by more than the greater of five

percent (5%) of the Scheduled Quantity or 400 DTH for such Delivery

Point.

(d) Penalty Waiver. Transporter shall waive such scheduling

penalties in the event that Shipper's reason for exceeding the applicable

tolerance is the result of actions by Transporter or an interruption of

upstream gas supply or transportation service. As to any such upstream gas

supply or transportation service interruption, Shipper must furnish to

Transporter all information necessary to document and quantify the dimensions

of that upstream interruption.

8.3 Imbalance Penalties.

(a) Applicability. Transporter may assess against Shipper one or

more imbalance penalties in accordance with this Section 8.3, so long as

Transporter has notified Shipper that an imbalance has occurred (or will

occur, absent corrective action having been taken by Shipper in response to a

prior problem that is ongoing, for which notice was already given by

Transporter to Shipper); provided, however, that Transporter shall not assess

a Daily or Monthly imbalance penalty against Shipper:

(1) in the event Shipper's failure to take corrective action

is caused by Force Majeure conditions as defined in Section 2 of this Tariff;

(2) during any period an Operational Balancing Agreement is

in effect at Shipper's Receipt Point and Delivery Point.

In addition, Transporter shall not assess a Monthly imbalance penalty

against Shipper if, upon receiving Transporter's notification of an imbalance

situation, Shipper takes action, in coordination with Transporter, which

corrects such imbalance within thirty (30) days of notification.