Portland Natural Gas Transmission System

Original Volume No.1

Effective Date: 02/11/1999, Docket: CP96-248-009, Status: Effective

Original Sheet No.351 Original Sheet No.351 : Superseded

GENERAL TERMS AND CONDITIONS (Continued)

(a) Prearranged Replacement Shipper. If, at the same time it

provides its Release Notice to Transporter, the Releasing Shipper provides

Transporter with notice of a prearranged agreement with a prospective

Prearranged Replacement Shipper, Transporter will post notice of that

arrangement on its electronic bulletin board in accordance with the provisions

of Section 11.7 herein. In accordance with the timeline specified in Section

11.6, Transporter shall evaluate all bids that satisfy the minimum terms of

the Release Notice. If the Prearranged Replacement Shipper's bid is the

highest Present Value, up to the maximum Recourse Reservation charge that

Transporter is authorized to charge the Releasing Shipper, then Transporter

shall select the Prearranged Replacement Shipper as the Successful Bidder.

If a "better offer" (i.e., an offer that meets all other minimum terms

of the Release Notice while providing a higher Present Value, up to the

maximum Recourse Rate reservation charge Transporter is authorized to charge)

is received, Transporter shall post the better offer on its electronic

bulletin board, and the Prearranged Replacement Shipper shall have the

opportunity to match that offer, in accordance with the timeline specified in

Section 11.6. If the Prearranged Replacement Shipper matches the better

offer, then Transporter shall select the Prearranged Replacement Shipper as

the Successful Bidder. The Prearranged Replacement Shipper shall not be

required to pay any rate higher than the maximum applicable Recourse Rate.

If the Prearranged Replacement Shipper does not match the better offer,

Transporter shall select the bidder(s) that made the better offer as the

Successful Bidder(s). If two or more bidders made the same better offer, then

the capacity will be prorated in the manner described in Section 11.9(c)

herein.

(b) No Prearranged Replacement Shipper. If Transporter receives

notice of a Releasing Shipper's election to release capacity, without

receiving notice of a Prearranged Replacement Shipper, Transporter shall post

that notice on its electronic bulletin board in accordance with the provisions

of Section 11.7 herein. Within one (1) Business Day of the end of the bidding

period, Transporter shall evaluate all bids that satisfy the minimum terms of

the Release Notice. The bid providing the highest Present Value, up to the

maximum Recourse Rate reservation charge that Transporter is authorized to

charge, while meeting all other minimum terms of the Release Notice, will be

selected as the best bid. If two or more bidders made bids that provide the

same highest Present Value, then the capacity will be prorated in the manner

described in Section 11.9(c)herein.