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. 194 Original Sheet No. 194 : Effective

GENERAL TERMS AND CONDITIONS (Cont'd)

38. NEGOTIATED RATES

38.1 Availability. Seller and Customer may mutually agree to a

Negotiated Rate for service under any Rate Schedule, provided Customer has

not acquired its capacity as a temporary capacity release under Section 14

(Release and Assignment of Service Rights) of the General Terms and

Conditions.

38.2 Recourse Rate Availability. The Recourse Rate shall be available

to any Customer that does not wish to mutually agree to a Negotiated Rate.

38.3 Limitations. This Section 38 does not authorize the negotiation

of terms and conditions of service.

38.4 Allocations/Interruptions Based on Price. Under any circumstances

where the allocation or interruption of capacity is determined by the rate

being paid (including pursuant to General Terms and Conditions Sections

7.1(c) and 7.2(b), and pursuant to General Terms and Conditions Section

16.4(a)(1), Customers paying more than the Recourse Rate will be

considered to be paying the Recourse Rate.

38.5 Capacity Release. The maximum price cap for the release of

capacity under a Negotiated Rate agreement shall be the Recourse Rate.

Seller and a Releasor under Section 14 (Release and Assignment of Service

Rights) of the General Terms and Conditions may, in connection with their

agreement to a Negotiated Rate, agree upon payment obligations and

crediting mechanisms in the event of a capacity release that vary from or

are in addition to those set forth in General Terms and Conditions Section

14.8.

38.6 Right of First Refusal. Unless otherwise mutually agreed to by

Seller and Customer pursuant to General Terms and Conditions Section

4.1(c)(1)(b), the right of first refusal provided with respect to certain

Customer's firm Service Agreements, as described in Section 4 (Auctions of

Available Firm Service) of the General Terms and Conditions, shall not

apply to firm Service Agreements with Negotiated Rates.

38.7 Assessing Negotiated Rate Bids for Available Firm Capacity. For

purposes of assessing bids for available firm capacity pursuant to General

Terms and Conditions Section 4, the net present value of Negotiated Rate

bids containing a reservation rate or other form of revenue guarantee which

exceeds the applicable Recourse Rate during all or any portion of the term

contained in the bid, shall not exceed the net present value that is

calculated assuming that the applicable Recourse Rate is in effect during

the full term contained in the bid, in place of the reservation rate or

other revenue guarantee contained in the bid.