Pacific Interstate Offshore Company

Second Revised Volume No. 1

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

Original Sheet No. 49 Original Sheet No. 49 : Effective

GENERAL TERMS AND CONDITIONS (cont'd)

14. FERC ANNUAL CHARGE ADJUSTMENT (cont'd)

14.5 (cont'd)

At the conclusion of each NGA Section 4 Rate

Proceeding settlement period, any over or under

recovered difference may be included in a NGA

Section 4 Rate Proceeding to collect from or

refund this difference to its customers.

Transporter shall not attempt to collect through a

NGA Section 4 Rate Proceeding those charges to

Account No. 928 which have been previously

recovered from its customers through the monthly

billings.

15. Right Of First Refusal

Any Shipper under Rate Schedule FT-1 shall have the

right of first refusal to retain capacity for

transportation up to the Daily Contract Receipt

Quantity set forth in Exhibit A of its service

agreement. Buyer/Shipper shall notify Transporter no

later than 180 days prior to expiration of the service

agreement if such retention is desired.

Prior to the expiration of the Service Agreement,

Transporter will post a notice on its EBB that the

existing Shipper's service agreement will terminate in

180 days and the Shipper has either elected or not

elected to terminate.

15.1 In the event a Shipper elects termination,

Transporter shall subject this capacity to a

bidding process. Transporter shall require bids

be submitted no later than 120 days prior to the

Service Agreement expiration. The bid period will

be 30 days. Transporter will announce the bid

winner(s) 30 days after the close of the bid

period. Winning Shipper(s) and Transporter must

execute a new firm transportation service

agreement prior to service commencement.