Pacific Interstate Offshore Company

Second Revised Volume No. 1

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

Original Sheet No. 55 Original Sheet No. 55 : Effective

GENERAL TERMS AND CONDITIONS (cont'd)

17. CAPACITY RELEASE (cont'd)

17.2 Competitive Bidding Procedure: Transporter shall

post on Transporter's EBB each offer to release for

the length of time specified pursuant to Section

17.1 hereof and shall post all of the other

information required pursuant to Section 17.1.

Potential Replacement Shippers may tender to

Transporter bids to accept an offer posted on the

electronic bulletin board prior to the expiration of

the length of time for the posting of such offer. A

bid may include an offer to pay up to Transporter's

Maximum Rate set forth in Section 3.1 of Rate

Schedule FT-1, regardless of the rate paid by

Releasing Shipper. Any offer to release capacity

can be withdrawn up to the end of the time period

for accepting bids. Any bid shall constitute an

offer which can be withdrawn up to the end of the

time period for accepting bids. However, if a bid

is withdrawn, the bidder may not submit a new bid at

a lower rate. All bids shall be kept posted on the

EBB (excluding name of bidder) until the time for

bidding as described in Section 17.1 has expired.

Upon expiration of such time, Transporter shall

remove such offer of release from its EBB and

determine the winning bid. Transporter shall reveal

the winning bid and all other bids on the EBB

immediately upon the close of bidding. In all cases,

Replacement Shippers and potential Replacement

Shippers will be subject to all requirements of this

Tariff. Transporter shall contract with the

Replacement Shipper which otherwise satisfies the

requirements of this Tariff and whose bid is highest

under the criteria specified to Transporter by

Releasing Shipper.