Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 359 Original Sheet No. 359 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

(1) Transporter shall notify the Releasing Shipper of the delinquency

within five (5) Business Days after payment is due; and

(2) If Replacement Shipper does not pay Transporter the amount billed

within thirty (30) Days of the original billing date, the Releasing Shipper's

previously granted credit shall be reversed. If a credit is reversed,

interest shall be calculated in accordance with Section 154.501(d) of the

FERC's Regulations, and charged to the Releasing Shipper on the amount of the

credit received from the date due until paid by the Releasing Shipper.

11.18 Other Obligations of Releasing Shipper. Where capacity has been

released for the entire remaining term of a Releasing Shipper's Gas

Transportation Contract, the Releasing Shipper may request Transporter to

amend its Gas Transportation Contract to reflect that release of capacity.

Unless Transporter agrees in writing to such an amendment, which may be

conditioned on exit fees or other terms and conditions, the Releasing Shipper

shall remain bound by and liable for payment of the reservation charge(s)

applicable to the released capacity. In the event that the Replacement

Shipper(s) fails to pay any or all of the amount of its Replacement

Reservation Charge(s) in a timely manner, all the terms of Section 15.4 herein

with regard to nonpayment shall apply; provided, however, that Transporter and

any Shipper may, in connection with their agreement to a negotiated rate under

a firm transportation rate schedule, agree upon Releasing Shipper payment

obligations and procedures and crediting mechanisms in the event of a capacity

release that vary from or are in addition to those set forth in this Section

and in Section 11.14 herein. In no event, shall any remedy under Section 15.4

relieve the Releasing Shipper from its obligations under its Gas

Transportation Contract for firm service or this Tariff. In no event shall

the fact that Transporter has followed the credit evaluation procedures

provided in Section 3 herein release the Releasing Shipper from its

obligations to pay the reservation charge(s) or its equivalent if a negotiated

rate(s) is applicable to the released capacity.

11.19 Priority of Released Capacity. Capacity released under the

terms of this Section shall have the same priority as the capacity held by the

Releasing Shipper under its original Gas Transportation Contract, which shall

include the right to Secondary Receipt and Delivery Points set forth in

Section 9 herein.