Western Gas Interstate Company

Third Revised Volume No. 1

Effective Date: 06/01/1993, Docket: RS92- 53-003, Status: Effective

Revised Original Sheet No. 186 Revised Original Sheet No. 186 : Superseded

RATE SCHEDULE IT-N

INTERRUPTIBLE TRANSPORTATION SERVICE - NORTHERN DIVISION

(continued)

(3) The projected costs and revenues in nominal

dollars will be evaluated using a standard

discounted cash flow analysis, with a discount

rate equal to the most recently approved overall

rate of return for Western or the FERC generic

rate of return for utilities, whichever is

greater. Western will undertake projects for

which the internal rate of return is positive by

greater than 3%.

(4) When Western has previously paid for all or a

portion of delivery point facilities under this

facilities reimbursement policy, Shipper shall,

nevertheless, within thirty days after receipt of

invoice prepared by Western, pay Western for

Western's net book value of such facilities when

either of the following events occurs: (1) When

Western's ability to fully recover such costs is

denied in any Section 4 or Section 5 rate

proceeding, or (2) when Shipper ceases operations

at the delivery point where the facilities were

installed.

(b) Any new facilities contemplated by Section 5.3(e)

which do not meet the economic test of Section

5.4(a)(3) shall be installed by Western at Shipper's

expense.

(1) Western shall install, own, operate, and maintain

all such equipment at Shipper's expense unless

otherwise agreed to in writing by Western and

Shipper. All such facilities owned and operated

by Western must include any rights-of-way

necessary to access facilities for inspection and

maintenance. Any such facilities constructed by

Shipper or Shipper's agent must be in accordance

with Western's specifications. Western must

approve design drawings and bills of materials,

and construction shall be subject to approval by

Western's inspectors.