Southwest Gas Storage Company

First Revised Volume No. 1

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

First Revised Sheet No. 130 First Revised Sheet No. 130 : Effective

Superseding: Original Sheet No. 130

GENERAL TERMS AND CONDITIONS

(Continued)

7. CONTRACTING FOR UNSUBSCRIBED CAPACITY

This Section 7 governs the order in which requests for storage service

shall be accommodated when unsubscribed firm capacity, other than

released capacity, becomes available. It does not govern scheduling,

which is governed by Section 3 herein. Requests for firm capacity

shall be accommodated in the following manner and subject to the

following conditions and limitations:

7.1 In order to be eligible for firm capacity, a party requesting

service (potential Shipper) must submit a valid request in

accordance with the provisions of Section 2 herein.

7.2 Southwest will post on the Messenger system and the Web Site

available capacity. A potential Shipper that submits a valid

request may submit in writing a bid for the available capacity at

any time. In the event of multiple bids, Southwest will evaluate

the bids and determine the bid having the greatest economic value

as determined in Section 7.3.

7.3 Southwest shall tender a Storage Service Agreement for execution

to the potential Shipper submitting the bid having the greatest

economic value for the capacity available, subject to the

provisions of Section 7.5. The criteria for determining which

potential Shipper has submitted the bid with the greatest economic

value shall be the Net Present Value (NPV) of the capacity and

deliverability charges that potential Shipper would pay at the

rates potential Shipper has bid, which shall not be less than the

Minimum Rate nor greater than the Maximum Rate, as stated on the

currently effective Tariff Sheet governing such service, over the

term of service specified in the request, utilizing a ten percent

(10%) annual discount factor. For purposes of calculating each

potential Shipper's NPV, the term will be limited to ten (10)

years. If the economic values of separate service requests are

equal, then service shall be offered in sequence starting with the

request with the earliest date. If separate service requests have

equal economic values and the same date of request, service shall

be offered to such potential Shippers on a pro rata basis.

7.4 If potential Shipper fails to execute a Storage Service Agreement

within thirty (30) Days of the date on which it was tendered by

Southwest, potential Shipper's request for service may be

considered withdrawn.