Puget Sound Energy, Inc.

Original Volume No. 1

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

Original Sheet No. 58 Original Sheet No. 58 : Effective

7.13 In Field Transfer

Owners may agree to transfer portions of their respective

Available Working Gas Inventories among themselves. Transfers of

Available Working Gas Inventory shall not result in any Owner

taking title to Working Gas Inventory quantities in excess of such

Owner's Storage Service Rights. Owners participating in a

transfer of Available Working Gas Inventory shall provide written

notice to the Project Operator of the quantities involved prior to

actual transfer.

ARTICLE 8. GAS GAINS, LOSSES AND FUEL USE

8.1 Risk of Gas Loss

Each Owner will be responsible for insuring its own interest

against risk of gas loss.

8.2 Allocation of Gains and Losses

Except for gas loss in connection with an expansion or an addition

pursuant to ARTICLE 4 and except for occurrences resulting from

the Project Operator's willful misconduct or any other Owner's

gross negligence or willful misconduct, each Owner shall be

responsible for gas loss or benefit from gas gain in the Storage

Project, notwithstanding provisions addressing indemnification.

8.2.1 Each calendar year, the net monthly gas gain or gas loss,

including loss of line-pack owned by the Storage Project, but

exclusive of such losses which relate to additions to or

expansions of the Storage Project, will be accumulated and

apportioned among the Owners pursuant to each Owner's Weighted

Share of Capital Costs, as set forth on Exhibit B.

8.2.2 Net gas loss will be replaced in-kind as and when directed

by the Project Operator.

8.2.3 Net gas gains will be allocated to each Owner's account.