Pacific Interstate Transmission Company

Original Volume No. 1

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Effective Date: 11/01/1988, Docket: GT97- 67-000, Status: Effective

First Revised Sheet No. 6 First Revised Sheet No. 6 : Effective

Superseding: Original Sheet No. 6

RATE SCHEDULE CQS-1 (Cont'd)

(Contract Quantity Service)

4. COST OF SERVICE (Continued)

4.43 Other O&M: Other reasonable gas operating and

maintenance expenses relative to the billing month,

as recorded in Account Nos. 800 through 932,

inclusive, (other than those provided for in

Subsections 4.41 and 4.42), including payments of

interest by Seller required under Subsections 5.22 and

excluding any provision with respect to doubtful

accounts or bad debts relating to amounts payable by

Buyers hereunder and excluding expenses related to

research and development unless specific prior

authorization therefor has been received from the

FERC.

4.5 Depreciation and Amortization Expenses: A provision for

depreciation and amortization of Seller's depreciable or

amortizable gas plant in service properly recorded in

Account Nos. 403 through 407.2, which shall be an amount

equal to one-twelfth of the sum of the products of

multiplying each annual straight-line depreciation rate

set forth in the Depreciation Rate Table below times the

actual original cost, at the beginning of the billing

month, of the items included in each applicable class of

depreciable or amortizable gas plant in service to which

such rate applies on such Table; provided, however, that

(a) leasehold improvements may, at the option of Seller, be

amortized on a straight-line basis over the initial term

of the lease to which they relate, and (b) transportation

and power operated equipment may, at the option of Seller,

be depreciated using the accelerated method of depreciation

and a five-year life.

DEPRECIATION RATE TABLE

Uniform System Annual

of Accounts Straight-

Line

Classes of Gas Plant in Service Account No. Rate

------------------------------- ----------- ---------

Communication, office, shop,

garage, stores, laboratory

and miscellaneous equipment, 370, 393

tools, and other tangible 394, 395, 397

property. 398 and 399 10%

(Continued)