Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 337 Original Sheet No. 337 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

applicable MDQ, and $25 per DTH for any additional quantity of unauthorized

Daily overrun taken by Shipper at such Delivery Point.

8.5 Crediting of Penalty Revenues. In the event that Transporter

assesses and collects penalties in accordance with the provisions of Sections

8.2 - 8.4, such revenues in excess of Transporter Penalty Costs (such excess

revenues herein referred to as "Excess Penalty Revenues") shall be credited to

the bills of firm and interruptible service Shippers who did not receive

scheduled service as a result of the actions that led to penalties being

assessed by Transporter. If more than one firm or interruptible service

Shipper was unable to receive scheduled service, then the Excess Penalty

Revenues shall be credited among such Shippers based on the ratios of the

Scheduled Quantity of gas each Shipper was unable to receive under firm or

interruptible service rate schedules divided by the total Scheduled Quantities

of gas that all Shippers were unable to receive under such firm or

interruptible service rate schedules.

Shippers entitled under this Section 8.5 to Excess Penalty Revenue

Credits shall receive such credits to their invoices for the month following

the month in which the later of the following events occurs:

(1) Transporter collects the associated Excess Penalty Revenues from all

Shippers responsible for the actions that led to penalties being assessed by

Transporter; and

(2) Transporter reasonably is able to determine the total amount of all

Transporter Penalty Costs.

8.6 Automatic Waiver. If no shipper has been impeded from receiving its

scheduled service, Transporter shall not impose penalties under this Section

8.7 Penalty Provisions Not Exclusive. Nothing in this Section 8 shall

limit Transporter's right to take such action as may be required to adjust

deliveries and receipts in order to alleviate conditions which threaten the

integrity of its System, nor prevent Transporter from exercising any other

legal remedies which may be available.