Norteño Pipeline Company

First Revised Volume No. 1

Effective Date: 04/01/1996, Docket: CP96- 81-007, Status: Effective

Original Sheet No. 262 Original Sheet No. 262 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

19.5 Waiver of Imbalance Charges

(a) If Norte¤o determines that due to operational

constraints or otherwise it cannot reasonably

apply any or all of the provisions set forth

in Section 19.3 and 19.4 it may, at its

discretion, waive any or all such provisions;

provided, however, any such waiver shall be

on a non-discriminatory basis.

(b) The imbalance charge provisions set forth in

Section 19.3 of the General Terms and

Conditions shall not apply if the excess or

deficiency quantities were caused by

Norte¤o's actions.

without the obligation, upon determining that

deficiency or excess quantities were not

willfully received or delivered by Shipper to

partially or completely waive any charge for

such imbalance to the extent that such waiver

is not unduly discriminatory, if in Norte¤o's

judgment for the period for which the charge

was incurred: (a) authorized deliveries to

Norte¤o's other Shipper's were not reduced or

otherwise adversely affected by the taking of

such quantities and (b) western's operations

were not adversely affected.

19.6 Rights of Parties - The payment of an imbalance

charge or a waiver shall not give the Shipper the

right to take unauthorized quantities, nor prevent

Norte¤o from seeking additional remedies.

19.7 Failure to Nominate - If any Shipper under Rate

Schedules IT-S or IT-DN that has executed a

Service Agreement fails to nominate any volumes

for transportation within 60 days of such

execution, Shipper's Service Agreement shall be

terminated and Shipper's request for service shall

be considered null and void.