Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

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Effective Date: 04/18/2008, Docket: RP08-319-000, Status: Effective

Original Sheet No. 534 Original Sheet No. 534 : Pending

GENERAL TERMS AND CONDITIONS

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49.2 CAPACITY ALLOCATION

(a) To the extent the revenue level pursuant to the

Negotiated Rate(s) or Negotiated Rate Formula provided for in Section

49.1 above, as calculated under Subsection (b) of this Section 49.2,

exceeds the comparable revenue level at the Recourse Rate, the Shipper

bidding or paying such Negotiated Rate(s) or rate(s) under a

Negotiated Rate Formula shall be treated, for all capacity allocation

purposes, as if the rate(s) bid or 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 19.5 of these General Terms and Conditions and for

the Right of First Refusal pursuant to Section 22.3 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, Natural 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 Natural (i.e., a