Southwest Gas Storage Company

First Revised Volume No. 1

Effective Date: 03/01/2004, Docket: RP04-146-001, Status: Effective

Third Revised Sheet No. 125 Third Revised Sheet No. 125 : Effective

Superseding: 1st Rev First Revised Sheet No. 125

GENERAL TERMS AND CONDITIONS

(Continued)

6. CAPACITY RELEASE (Continued)

Southwest shall issue an Addendum to the PRS unless a better

bid, established in accordance with Section 6.2(A)(11) herein,

is received within the time period specified in the posting.

In the event the PRS does not match the better bid, Southwest

shall issue an Addendum to the party who made the best bid.

(F) All bids not withdrawn by written or electronic notice to

Southwest prior to the close of the posting period specified

in the Shipper Notice shall be binding. Bids cannot be

withdrawn after the bid period ends.

(G) In the event that a winning bid has a contingency, and

Southwest is not notified through the Messenger system that

such contingency has been removed within the time period

specified in the Shipper Notice, such contingent bid will be

rejected by Southwest.

(H) The Releasing Shipper may define in the Shipper Notice the

criteria for determining the best bid. If the Releasing

Shipper does not specify the criteria, Southwest shall use

the Net Present Value calculation as set forth in Section 7.3

herein to determine the best bid. If there are multiple bids

meeting the minimum conditions, Southwest shall rank the bids

and Southwest shall award the bids, best bid first, until all

offered capacity is awarded. Southwest will notify, through

the Messenger system by 2:00 p.m. Central Time following

the end of the posting period, or by 3:00 p.m. Central Time

if a matching period is applicable, the PRS or Replacement

Shipper that capacity has been awarded.

(I) Southwest shall post the winning bids and Replacement

Shippers' identity on the Messenger system for at least five

Business Days.

6.5 Rights and Obligations of Releasing Shipper

(A) Regardless of the amount of capacity Releasing Shipper

releases under this Section 6, Releasing Shipper shall remain

liable for the Capacity and Deliverability Charges

attributable to the released capacity unless otherwise agreed

to in writing and in advance by Southwest. In the event of a

permanent release, Southwest may, and will not unreasonably

refuse to, waive liability of Releasing Shipper for the

Capacity and Deliverability Charges.