Petal Gas Storage Company

Original Volume No. 1

Effective Date: 06/01/1998, Docket: RP97-280-001, Status: Effective

First Revised Sheet No. 112 First Revised Sheet No. 112 : Effective

Superseding: Original Sheet No. 112

GENERAL TERMS AND CONDITIONS

(continued)

Where: i = The prime rate as published by the Wall

Street Journal on the first day of the

open season plus five percent (5%) (or

500 basis points). The sum of which is

then divided by twelve (12).

n = The term of the agreement, in months.

t = Month of contract start (example:

May = 5) minus the first month capacity

is available (Feb = 2), not to exceed 3

months.

For example, a bid of $.08/dth (storage capacity charge) and $1.45/dth

(storage deliverability charge) would equal a weighted per unit charge

of $.225/dth/month, ([($.08 x 100,000) + ($1.45 x 10,000)]/100,000).

A bid equal to $.225/dth/month for five years (60 months) starting in

May, assuming capacity is available in February and using a 7% prime

rate, yields a present value per unit of $9.82.

(b) During the allocation process of an open season, should requests

for storage capacity exceed available capacity, capacity will

first be allocated to the highest present value bids received.

When remaining unallocated capacity is not sufficient to meet the

next highest present value bidder's capacity requirements, that

next highest bidder has the option of declining the remaining

capacity. Petal will then offer the remaining capacity to the

next highest bidder, until all the remaining capacity is

allocated.

submitted by two or more Customers (e.g., tied bids) and there is

insufficient remaining capacity available to serve such Customers,

then capacity will be allocated to the Customer submitting the

earliest tied bid, until the remaining unallocated capacity is

insufficient to serve the next tied Customer's capacity

requirements. That next tied Customer has the option of declining

the remaining capacity. However, should the last of the tied

bidders decline the remaining capacity, then Petal will offer the

remaining capacity to the next highest bidder, until all the

remaining capacity is allocated.