Quest Pipelines (Kpc)

Second Revised Volume No. 1

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Effective Date: 02/01/2008, Docket: RP08-174-000, Status: Effective

Original Sheet No. 135 Original Sheet No. 135 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

(e) At all receipt and delivery points, unconfirmed nominations will be

scheduled at the lesser volume of the new nomination or the previously

scheduled volume.

8.8 Discounting Policy: (a) In the event that KPC agrees to discount its rate to

Shipper below KPC's maximum rate under KPC's Rate Schedules, the following discount

terms may be reflected on the applicable Service Agreements and will apply without

the discount constituting a material deviation from KPC's applicable pro forma

Service Agreements; provided, however, that any such discounted rates set forth

below shall be between the minimum and maximum rates applicable to the service

provided under the applicable Rate Schedule. KPC and Shipper may agree that a

specified discounted rate will apply under the following conditions:

(i) to specified quantities under Shipper's Service Agreement(s);

(ii) to specified quantities above or below a certain level or all quantities if

quantities exceed a certain level;

(iii) in a specified relationship to quantities actually transported (i.e., that

the Reservation Charge will be adjusted in a specified relationship to

quantities actually transported);

(iv) to specified quantities during specified periods of time or during

specified periods of the year;

(v) to specified quantities at specific Point(s) of Receipt or Point(s) of

Delivery or other geographical locations;

(vi) to production reserves committed or dedicated by Shipper; and/or

(vii) that a specific discounted rate is based on published index prices for

specific Point(s) of Receipt and/or Point(s) of Delivery or other agreed-

upon published pricing reference points (such discounted rate may be based

upon the differential between published prices or arrived at by formula).

Any agreement containing such discounted rate shall specify the rate

component(s) to be discounted (i.e., Reservation Charge or Commodity Charge

or both), and any formula will provide a reservation rate per unit of

contract demand (Maximum Daily Contract Quantity). To the extent the firm

Reservation Charge is discounted, the index price differential rate formula

shall be calculated to state a rate per Dth. Furthermore, such discount

shall not change the underlying rate design of the service being provided

or include any minimum bill or maximum take provision that would have the

effect of guaranteeing revenue.

In addition, the discount agreement may include a provision that if one

rate component which was at or below the applicable maximum rate at the

time the discount agreement was executed subsequently exceeds the

applicable maximum rate or is less than the applicable minimum rate due to

a change in KPC's maximum (minimum) rates so that such rate component must

be adjusted downward (upward) to equal the new applicable maximum (minimum)

rate, the other rate components may be adjusted upward (downward) to

achieve the agreed overall rate, so long as none of the resulting rate

components exceed the maximum rate or are less than the minimum rate

applicable to that rate component. Such changes to rate components shall

be applied prospectively, commencing with the date a Commission order

accepts revised tariff sheets. Nothing contained herein shall be construed

to alter a refund obligation under applicable law for any period during

which rates which had been charged under a discount agreement exceeded

rates which ultimately are found to be just and reasonable.

(b) To the extent that KPC elects to provide service pursuant to this FERC Gas

Tariff at a discounted rate, transportation rate components shall be

discounted in the following order:

(i) The Reservation Charge component, if applicable, shall be the first

component discounted and shall be the only component discounted until such

component has been reduced to the level established as the Minimum Rate for

the applicable Rate Schedule, but in no case shall KPC discount to a level

which would allow the Reservation Charge component to equate to less than a

Minimum Rate specified by KPC for the applicable Rate Schedule.