Portland Natural Gas Transmission System

Second Revised Volume No. 1

Effective Date: 08/01/2010, Docket: RP10-885-000, Status: Effective

First Revised Sheet No. 338 First Revised Sheet No. 338

Superseding: Original Sheet No. 338

GENERAL TERMS AND CONDITIONS (Continued)

8.8 Operational Balancing Agreements: Transporter will operate its

system in a manner that will discourage and limit any instances in which the

actions of one or more shippers (e.g., excess or deficient tenders of gas at

Receipt Points, excess or deficient takes of gas at Delivery Points, or

similarly disruptive imbalances between gas that is nominated, scheduled and

transported for shippers) result in degraded service or operational conditions

for other Shippers. Transporter's Scheduling, Imbalance and Overrun penalties

are intended to deter such actions in situations in which the interests of an

individual Shipper depart from those of the Joint interests of Transporter's

entire base of Shippers. Consequently, it is Transporter's policy to mitigate

such adverse operating circumstances by entering into Operational Balancing

Agreements with willing, mutually agreeable, creditworthy third parties that

will aggregate the receipt or delivery entitlements of two or more Shippers,

with respect to gas transportation Nominations, scheduling, dispatching,

balancing and related gas receipt or delivery functions. During those periods

when an Operational Balancing Agreement is in effect for any Shipper's Receipt

and Delivery Points, such Shipper shall not be subject to the scheduling and

imbalance penalties of Sections 8.2 and 8.3 hereof.

8.9 Apportionment Practices. Shipper's respective entitlements shall be

determined with reference to the reverse order of the priorities specified in

Section 10.2 herein, regardless of whether the Shipper receives service under

one or multiple contracts. In the absence of an Operational Balancing

Agreement at a Receipt or Delivery Point, gas will be apportioned pro rata on

any Day among multiple Shippers, based upon each Shipper's accepted and

approved Nomination, across all applicable services.