Southwest Gas Storage Company

First Revised Volume No. 1

Effective Date: 03/01/2004, Docket: RP04-146-000, Status: Effective

First Revised Sheet No. 127 First Revised Sheet No. 127 : Effective

Superseding: Original Revised Sheet No. 127

GENERAL TERMS AND CONDITIONS

(Continued)

6. CAPACITY RELEASE (Continued)

applicable Capacity and Deliverability Charges, and any

surcharges thereon, in the amount of its winning bid.

Replacement Shipper is also responsible for all other

billings, e.g., Injection Charge and Withdrawal Charge and

applicable surcharges. In the event of payment default,

subject to Section 12 herein, Southwest may elect to

terminate that Replacement Shipper's Capacity Release Service

Agreement which shall terminate all service thereunder

utilized by the Replacement Shipper.

(D) Once Replacement Shipper or PRS is notified of a winning bid,

such Replacement Shipper or PRS shall have all the rights and

obligations specified under the Releasing Shipper's Rate

Schedule, the Releasing Shipper's Service Agreement and the

General Terms and Conditions of this Tariff including the

right to release firm capacity pursuant to this Section

unless the conditions prescribed by the Shipper Notice

require otherwise.

(E) Replacement Shipper shall have no Right of First Refusal with

respect to the released capacity, unless such release is

permanent.

6.7 Rights and Obligations of Southwest

Southwest shall determine, in its sole discretion, the best bid

based upon the best bid criteria established pursuant to Section

6.2(A)(11) or Section 6.4(H) herein. Southwest shall have the

right, but not the obligation, to reject, in whole or in part, the

terms of any Shipper Notice or bid which is discriminatory or

conflicts with any order or regulation issued by the FERC, or

provision of the Service Agreement, Rate Schedule or General Terms

and Conditions. Such Shipper Notice shall be rejected in its

entirety unless Shipper, pursuant to Section 6.2(A)(14), permits a

partial rejection. Southwest shall provide simultaneous

notification to Shipper, through the Messenger system, of the

reason(s) for rejecting a release notice with the notice of

rejection. Southwest shall not have any liability to any Shipper,