Pacific Interstate Transmission Company

Original Volume No. 1

Effective Date: 08/01/1989, Docket: GT97- 67-000, Status: Effective

Fourth Revised Sheet No. 9 Fourth Revised Sheet No. 9 : Effective

Superseding: Third Revised Sheet No. 9

RATE SCHEDULE CQS-1 (Cont'd)

(Contract Quantity Service)

4. COST OF SERVICE (Continued)

4.9 Return: An amount of return for the billing month which

shall be the product of multiplying one-twelfth of the

annual Rate of Return set forth in Subsection 4.91 hereof

times the Rate Base for the billing month computed

pursuant to Subsection 4.92 hereof.

4.91 The annual Rate of Return for the billing month shall be

11.10%.

4.92 The Rate Base for the billing month shall be the average

of the sum of the balances of the items listed in (a)

below as of the beginning and as of the end of such

billing month, except in the case of the balance of

accumulated deferred income taxes (Account Nos. 190, 281,

282 and 283), which shall be as of the beginning of the

billing month, plus the amount determined in accordance

with (b) below.

(a) (i) The sum of the balances of: actual or original

investments in gas plant in service as properly recorded

in Account Nos. 301 through 399; gas plant leased to

others (Account No. 104); gas plant held for future use

(Account No. 105) if specific prior authorization for

inclusion in Seller's Rate Base has been received from

the FERC; completed construction not classified (Account

No. 106); miscellaneous deferred debits (Account No. 186);

if specific prior authorization for inclusion in Seller's

Rate Base has been received from the FERC; and accumulated

deferred income taxes (Account No. 190); less (ii) the

sum of the balances of: accumulated depreciation and

amortization reserves (Account Nos. 108 and 111);

customer advances for construction (Account No. 252); and

accumulated deferred income taxes (Account No. 281, 282 and

283).

(b) A working capital allowance represented in the sum

of outstanding balances of prepayments and necessary

materials and supplies for operating purposes.

(continued)