Portland Natural Gas Transmission System

Second Revised Volume No. 1

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

Original Sheet No. 364 Original Sheet No. 364 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

selection shall be made on a basis that is not unduly discriminatory. Shipper

shall have thirty (30) Days to match the offer in terms of price, quantity and

duration; provided, however, that Shipper shall not be required to pay any

rate higher than the maximum applicable Recourse Rate. If the Shipper fails

to match the offer presented by Transporter, Transporter shall enter into a

firm Gas Transportation Contract with the person submitting the competing

offer pursuant to the terms and conditions of the offer.

12.4 Iteration. Transporter shall post any matched offer below the

maximum Recourse Rate on its Interactive Internet Website for an additional

thirty (30) Days, during which time bids may be submitted at a higher price.

Shipper again will be given an opportunity to match any higher bid. This

process will iterate until either the Shipper has agreed to pay Transporter's

maximum Recourse Rate, the Shipper fails to match an offer, or no higher bid

is submitted.

12.5 Renegotiation. If no bids are submitted at the maximum Recourse

Rate and Transporter refuses to accept a lower bid, or if no competing offers

are submitted, Transporter may abandon service to Shipper unless Shipper

agrees to pay the maximum Recourse Rate for a period of one Year and one Day,

or if Transporter and Shipper negotiate the terms and conditions of a Gas

Transportation Contract extension.

12.6 Effective Rate During Renegotiation. If, at the expiration of

Shipper's Gas Transportation Contract, the iterative process of Section 12.4

is still in process or Shipper and Transporter are negotiating the terms of a

new Gas Transportation Contract pursuant to Section 12.5, then Transporter

shall continue to provide firm transportation service to Shipper pursuant to

the terms and conditions, including the pricing terms, of the expired Gas

Transportation Contract.