Canyon Creek Compression Company

Third Revised Volume No. 1

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Effective Date: 07/23/2001, Docket: RP01-460-000, Status: Effective

Original Sheet No. 196 Original Sheet No. 196 : Effective

GENERAL TERMS AND CONDITIONS

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allocation purposes, as if the rate(s) paid had been equal to the

Recourse Rate. Any Shipper, existing or new, paying the Recourse

Rate(s) has the same right to capacity as a Shipper willing to pay

a higher Negotiated Rate(s) or rate(s) under a Negotiated Rate

Formula. If the Negotiated Rate or the rate under a Negotiated

Rate Formula is higher than the corresponding Recourse Rate, the

Recourse Rate rather than the Negotiated Rate will be used as the

price cap for release capacity pursuant to Section 16.8 of these

General Terms and Conditions and for the Right of First Refusal

pursuant to Section 18.2 of these General Terms and Conditions.

Where the Negotiated Rate(s) or rate(s) under a Negotiated Rate

Formula results in revenue which is greater than the Recourse Rate

during certain portions of the relevant evaluation period but less

than the revenue at the Recourse Rate during other portions of the

relevant evaluation period (but the revenue pursuant to the

Negotiated Rate(s) or rate(s) under a Negotiated Rate Formula

equals or exceeds that which would be generated at the Recourse

Rate for the entire evaluation period), the value of bids and

requests at the Negotiated Rate(s) or rate(s) under a Negotiated

Rate Formula shall be evaluated as though the Recourse Rate

applied under such bid or request for the entire evaluation

period. Where the Negotiated Rate(s) or rate(s) under the

Negotiated Rate Formula result in revenue which is less than

revenue at the Recourse Rate over the relevant evaluation period,

the value of the bids or requests at the Negotiated Rate(s) or

rate(s) under the Negotiated Rate Formula shall be evaluated based

on such lower revenue and shall be afforded a correspondingly

lower priority than bids or requests at the Recourse Rate.

(b) In evaluating bids for firm service, in any

capacity auction or in otherwise allocating capacity among

competing requests for firm service where one or more bid is at a

Negotiated Rate or Negotiated Rate Formula, Canyon will consider,

in assigning value to such bid(s), only reservation or demand

charge revenue or other revenue which is guaranteed to be received

by Canyon (i.e., a minimum throughput condition or minimum bill).

For capacity evaluation purposes, the net present value of any

such bid for firm service shall be capped by the net present value

of the maximum applicable reservation rate for such service over

the contract term bid.