Transwestern Pipeline Company

Second Revised Volume No. 1

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Effective Date: 04/14/2003, Docket: RP03-307-000, Status: Effective

Fifth Revised Sheet No. 95 Fifth Revised Sheet No. 95 : Effective

Superseding: Substitute Fourth Revised Sheet No. 95

GENERAL TERMS AND CONDITIONS

(continued)

30. CAPACITY RELEASE PROGRAM

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In this Section 30, Releasing Shipper shall mean a Shipper who releases or is seeking to release

all or any part of its firm transportation capacity to a third party.

Replacement Shipper shall mean a third party who receives either temporarily or permanently

released capacity, as defined below, from the Releasing Shipper under the Capacity Release Program.

30.1 Introduction

Permanent Release: Under the FTS-1, LFT, FTS-3, and EFBH Rate Schedules, Releasing

Shipper will have the ability to permanently release its capacity, or any portion thereof.

Transporter is not required to but may choose to accept a bid at less than the rate

provided for in Releasing Shipper's service agreement provided that (i) Releasing Shipper

remits as an exit fee, a lump sum payment for the positive difference between the rate

provided for in the Releasing Shipper's service agreement and the bid rate for the full

term of the capacity release, or agrees to remain liable for any positive difference

between the Releasing Shipper's contract rate and the bid rate for the full term of the

capacity release, and (ii) when the Releasing Shipper's contract is at maximum tariff

rates, Transporter and Replacement Shipper reach agreement on a mechanism permitting the

periodic adjustment to the bid rate to reflect subsequent rate adjustments filed for and

approved by the FERC. Upon such permanent release, except as provided for herein for

releases at less than the Releasing Shipper's contract rates, Releasing Shipper is relieved

of its obligation to Transporter for payment of reservation charges and any surcharges to

the reservation charge.

Temporary Release: Under the FTS-1, LFT, FTS-3, and EFBH Rate Schedules, Releasing Shipper

will have the ability to temporarily release its capacity, or any portion thereof, for a

term designated by Releasing Shipper not to exceed the term of its underlying Service

Agreement. Upon such release, Releasing Shipper remains responsible to the Transporter

only for payment of reservation charges and any surcharges to the reservation charge, in

compliance with the underlying Service Agreement.

Releasing Shipper has the right to tender its capacity to Transporter to be released to

potential Replacement Shippers. The release of capacity is a permanent or temporary release

of capacity from specified receipt points to specified delivery points, for a designated

term and rate.

30.2 Allocation Methods

All capacity available for release shall be allocated to the Replacement Shipper(s) based

upon one of the following methods, as determined by Releasing Shipper:

a) Highest Rate

b) Highest Net Revenue

c) Highest Present Value: Capacity shall be allocated to the Replacement Shipper(s) based

upon the bid or combination of bids that represent the highest total present value, in

accordance with the following formula:

-n

R x 1 - (1 + i ) x Q = present value

i