Trailblazer Pipeline Company

Fourth Revised Volume No. 1

Effective Date: 12/28/2007, Docket: RP08-168-000, Status: Effective

Original Sheet No. 260 Original Sheet No. 260 : Effective

GENERAL TERMS AND CONDITIONS

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40.10 USE OF PENALTY FUNDS

All amounts collected by Trailblazer, and attributable to a

period after April 30, 2003, for Unauthorized Overrun Charges, under the

cash-out provision of this Tariff in excess of cash-out costs and for

failure to comply with an Operational Flow Order, including during a

Critical Time, shall be allocated and distributed to Shippers within

twenty (20) days after the end of each calendar quarter, commencing with

the quarter ended September 30, 2003. The first distribution will be

within twenty (20) days after September 30, 2003. Such allocations and

distributions are to be made as follows:

(a) These amounts will be used to compensate Trailblazer

for any cash-out expenses and for any costs it has incurred (including

any compensation Trailblazer agreed to provide for voluntary actions) to

alleviate the conditions which resulted in the imbalance, in the

unauthorized overrun, in issuance of Operational Flow Orders or in

declaration of Critical Time. If these amounts are not adequate to

reimburse Trailblazer for cash-out expenses, the unrecovered cash-out

expenses shall be carried forward to future quarters until recouped.

(b) Any remaining amounts will be refunded pro rata, based

on a Shipper's total reservation and commodity charges paid during the

quarter, to all Shippers; excluding, however, any Shipper which failed

to comply with an Operational Flow Order or which had an Unauthorized

Overrun. A Shipper's eligibility for refunds shall be determined on a

monthly basis and a Shipper which failed to comply with any Operational

Flow Order or which had an Unauthorized Overrun shall be excluded from

refunds only for the month in which that event occurred. Where capacity

has been released, amounts shall be distributed to the original Shipper,

except in the case of a permanent release where amounts shall be

distributed to the Replacement Shipper.

be carried forward to the next quarter's calculation with interest at

the rate set forth in 18 C.F.R. 154.501(d)(1).

40.11 STANDARDS

(a) In issuing Operational Flow Orders or taking other

operational control action under this Section, Trailblazer shall apply

consistent and objective engineering and operational criteria to define

the overall operational integrity of the system and acceptable pressure

levels to be protected, to evaluate the imminent nature of any threat to

these factors, and to determine what steps are necessary to preserve

such factors. Such criteria may be changed from time to time as

operating experience indicates.