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. 504 First Revised Sheet No. 504

Superseding: Original Sheet No. 504

2. For each Month, Shipper agrees to pay the Recourse Reservation

Rate, or the Seasonal Recourse Reservation Rate if applicable, or a negotiated

rate mutually agreed to in writing by Shipper and Transporter, multiplied by

the Shipper's Maximum Contract Demand as specified in this Contract; provided

however, that in the event that Transporter determines, in its sole discretion

or otherwise pursuant to this Contract, to render service on behalf of Shipper

for a discounted reservation rate, Transporter shall notify Shipper in writing

of the amount of such discounted reservation rate, the Day(s) on which such

rate shall be in effect and the quantities of which such rate applies. For

each DTH of the Maximum Contract Demand to which a discounted reservation rate

applies, as set forth in Transporter's notice, Shipper agrees to pay and shall

pay the applicable discounted reservation rate in lieu of the maximum

reservation rate.

3. Shipper agrees to pay and shall pay all applicable charges

specified in Rate Schedule FT.

4. For all capacity allocated to Shipper under Article III herein,

Shipper shall not pay reservation charges but Shipper shall pay transportation

usage charges, surcharges, fees, and other charges allocated to such capacity

or the quantities transported.

ARTICLE V - DECONTRACTING

Transporter will provide a notice to Shipper after all the following

conditions are satisfied: (a) Transporter on a pro forma basis is projected

to receive during the next 12 month period revenues at least equal to its

annualized Cost of Service (as hereinafter defined), (b) Transporter has

executed an agreement with a new or existing replacement shipper for firm

capacity which, together with all other transportation agreements (including

the Firm Transportation Contracts), will provide revenues in excess of

Transporter's Cost of Service, and (c) the replacement shipper has a

creditworthiness rating of BBB (investment grade) or better.

Within sixty (60) days after giving such notice, Shipper will be permitted to

request a reduction in the Maximum Contract Demand in its Firm Transportation

Contracts.