Hardy Storage Company, LLC

Original Volume No. 1

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Effective Date: 04/01/2007, Docket: CP05-150-003, Status: Effective

Original Sheet No. 85 Original Sheet No. 85 : Effective

GENERAL TERMS AND CONDITIONS (Cont'd)

7. CAPACITY ALLOCATION

This Section sets forth the manner in which Seller shall allocate capacity

among its Rate Schedules when it has received nominations from Customers

that exceed available capacity.

7.1 Storage Withdrawal For nominations for which Seller's storage is the

point of receipt, Seller shall allocate capacity sequentially among the

Rate Schedule priority groupings set forth below, and within those Rate

Schedule priority groupings, in the manner set forth below:

(a) Rate Schedule HSS. Seller shall allocate capacity among

Customers requesting receipt point capacity from storage under the HSS Rate

Schedule on a pro rata basis, based upon each such Customer's respective

Maximum Daily Withdrawal Quantity (HMDWQ).

(b) Overruns of HMDWQ Levels - HSS Rate Schedule. When Customers

seek to withdraw quantities from storage in excess of their storage ratchet

levels (or HMDWQ), but below their respective Maximum Daily Storage

Quantity (HMDSQ), Seller shall allocate capacity pro rata on the basis of

those Customers' respective HMDWQ levels.

(c) Rate Schedule IHSS and Overrun under Rate Schedule HSS.

When Customers seek to withdraw quantities from storage either under the

IHSS Rate Schedule or as overrun quantities in excess of their respective

HMDSQ under the HSS Rate Schedule, Seller shall allocate capacity first on

the basis of the highest rate being paid for that capacity, and then among

Customers paying the same rate, pro rata on the basis of those Customers'

nominated receipt quantities.