Puget Sound Energy, Inc.

Original Volume No. 1

Effective Date: 11/01/1998, Docket: CP98-250-002, Status: Effective

Original Sheet No. 37 Original Sheet No. 37 : Effective

5.7 Specific Duties

Prior to October 1st of each year, the Committee shall perform the

following, consistent with applicable FERC regulations:

5.7.1 Approve the operational plans for the Storage Project, the

dollar limitations of any contracts which the Project Operator may

execute without prior approval of the Committee, and the Storage

Project construction and operating budgets. Such approved

operating budget will be provided to the Project Operator within

forty-five (45) days from the date the Project Operator submits

the proposed annual budget to the Committee, pursuant to

Section 6.4.2.

5.7.2 Approve Storage Service Rights for each Owner in the

Storage Project (as set forth in Exhibit E) and the Seasonal

Working Gas Quantities for each Owner for the forthcoming year

(pursuant to the Operating Rules as set forth in Part 1 of Exhibit

F).

5.7.3 Approve the quantity of and schedule for cushion gas, if

any, to be injected into the Storage Reservoir.

5.7.4 Develop, approve and modify, as appropriate, daily

nominating, operating, balancing and measurement procedures.

5.7.5 Monitor, review and adjust, as appropriate, the Btu

Conversion Factor set forth on Exhibit E, which is used to

translate the FERC certificated volumetric (Mcf) levels of service

from the Storage Project into MMBtus.

5.7.6 Review the gas balances and establish temporary reductions

in Project Firm Working Gas Capacity to the extent deemed

necessary to avoid overpressurization of the Storage Reservoir.

5.8 Insurance

The Committee shall adopt, periodically review and revise as it

deems appropriate an insurance program for the protection of the

Storage