Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 362 Original Sheet No. 362 : Effective

11A. SEGMENTED CAPACITY

A Shipper may segment its capacity into separate parts for its own use

or for the purpose of releasing that capacity to Replacement Shippers.

Transporter shall not have the obligation to schedule Shipper's firm capacity

in segments if, in Transporter's discretion, scheduling such segments (whether

such segments be on the mainline or on a lateral) will: (a) impair the safe

operation of Transporter's system,(b) impair Transporter's ability to provide

reliable service to any Shipper, or (c) result in the combined nominations of

Releasing Shipper and any Replacement Shipper who has obtained all or a

portion of Releasing Shipper's capacity through capacity release to exceed

Releasing Shipper's MDQ for the contract with Transporter on any segment of

capacity (but Transporter will schedule overlapping segmented capacity

nominations when the releasing shippers' MDQ for that overlapping segment is

not exceeded). A Shipper's segmented transactions may consist of a forwardhaul

up to the Shipper's MDQ and a backhaul up to Shipper's MDQ to the same point

at the same time.

Unless Releasing Shipper and its Replacement Shipper agree otherwise, if

Releasing Shipper and its Replacement Shipper do submit combined nominations

that exceed Releasing Shipper's MDQ for the contract with Transporter on any

segment of capacity, then Releasing Shipper's nomination shall be scheduled

first by Transporter up to the level of Releasing Shipper's MDQ, and the

remaining segmented capacity, if any, shall be available for scheduling

Replacement Shipper's nomination.

If Transporter does deny a Shipper's request for scheduling use of

segmented capacity, Transporter must provide Shipper with an explanation of

the reasons for the denial within 24 hours.