Pacific Interstate Offshore Company

Second Revised Volume No. 1

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

Original Sheet No. 58 Original Sheet No. 58 : Effective

GENERAL TERMS AND CONDITIONS (cont'd)

17. CAPACITY RELEASE (Cont'd)

17.5 Billing Adjustment:

Transporter shall continue to bill Releasing Shipper for

the released capacity as follows:

a. Releasing Shipper will be billed for its

contractual Reservation Fee.

b. The Releasing Shipper's invoice shall include a

credit for Reservation Fee billings by

Transporter to the Replacement Shipper up to the

amount of the Reservation Fee per MMBtu set forth

in Releasing Shipper's transportation service

agreement.

c. Releasing Shipper shall remain fully obligated

under the terms of its Service Agreement with

Transporter during and irrespective of any

capacity release, for all charges described

above. Releasing Shipper shall not be liable for

other charges incurred by any Replacement Shipper

that has purchased capacity released by the

Releasing Shipper, including, but not limited to,

the usage fees to be paid by Replacement Shipper,

surcharges, overruns, or other charges.

d. In the month following the termination of

Replacement Shipper's transportation service

agreement, Transporter shall pay Releasing

Shipper an amount equal to any credit that

otherwise would be due under this Section 17.5.