Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 336 Original Sheet No. 336 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

deleted from excess or deficient quantities used in calculating the Monthly

imbalance penalty. In calculating excess and deficient quantities,

Transporter shall take into consideration make-up quantities that were used

pursuant to Transporter's notification to correct any excess or deficiency in

deliveries under other Gas Transportation Contracts between Transporter and

Shipper.

(d) Penalty Waiver. Transporter shall waive such balancing 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.

8.4 Overrun Penalty.

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

overrun penalties in accordance with this Section 8.4; provided, however, that

during the period that an Operational Balancing Agreement is in effect at the

relevant Delivery Point:

(1) overrun penalties shall apply during the periods in which

operational balancing agreements are in effect at the relevant Delivery

Point(s) only if: (A) there is an overall overrun at the Delivery Point and

(B) such overrun causes operational difficulties or affects the integrity of

the System or Transporter's ability to render scheduled service.

(2) upon giving or receiving notice of the termination of any

effective Operational Balancing Agreement, Transporter shall promptly notify

all Shippers via posting on its electronic bulletin board, and will provide

written notification of the giving or receiving of such notice to the affected

shippers by fax or overnight mail.

(b) Overrun Penalties. If on any Day Shipper takes delivery of a

quantity of Gas from Transporter at any Delivery Point which exceeds Shipper's

MDQ at such Delivery Point by two percent (2%) or more, then Shipper shall pay

to Transporter $2.50 for each Dth up to 50 Dth in excess of the