Pacific Interstate Offshore Company

Second Revised Volume No. 1

Effective Date: 01/01/1994, Docket: RS92- 73-001, Status: Effective

Original Sheet No. 47 Original Sheet No. 47 : Effective

GENERAL TERMS AND CONDITIONS (cont'd)

13. SALES FOR RESALE FROM PIPELINE FACILITIES

It is the policy of Transporter that it will not build or

contribute to the cost of building any sales lateral

pipelines to resale customers.

Nothing in this policy statement shall require

Transporter to file an application for a certificate of

public convenience and necessity under Section 7(c) of

the Natural Gas Act. Nothing in this policy statement,

further, shall prevent Transporter from contesting an

application for service filed pursuant to Section 7(a).

Transporter reserves the right to seek a waiver of the

policy set forth herein, for good cause shown, during any

proceeding before the Commission instituted under Section

7 of the Natural Gas Act.

14. FERC ANNUAL CHARGE ADJUSTMENT

14.1 Purpose. For the purpose of funding Transporter's

share of the Federal Energy Regulatory Commission's

gas program costs, this section established an

Annual Charge Adjustment ("ACA") provision to be

applicable to all rate schedules as set forth in

Transporter's currently effective FERC Gas Tariff.

14.2 Basis of the Annual Charge Adjustment. The rate

schedules specified in Section 14.1 hereof shall

include an increment for ACA charges as required by

the Federal Energy Regulatory Commission. Such

adjustment charge shall be that increment adjusted

to Transporter's pressure base and heating value, if

required, which is listed on the Commission's Annual

Charges Billing. The ACA charge shall be reflected

in Section 3.1.2 of Rate Schedule FT-1.