Nautilus Pipeline Company, LLC

Original Volume No. 1

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Effective Date: 06/08/2005, Docket: RP05-371-000, Status: Effective

Second Revised Sheet No. 203 Second Revised Sheet No. 203 : Effective

Superseding: First Revised Sheet No. 203






27.1 Discounting



(a) In the event that Transporter agrees to discount its

rate to Shipper below Transporter's maximum rate under

Transporter's Rate Schedules, the following discount

terms may be reflected on the applicable Service

Agreements and will apply without the discount

constituting a material deviation from Transporter's

applicable pro forma Service Agreements; provided,

however, that any such discounted rates set forth below

shall be between the minimum and maximum rates

applicable to the service provided under the applicable

Rate Schedule. Transporter and Shipper may agree that

a specified discounted rate will apply under the

following conditions:


(i) to specified quantities under Shipper's Service


(ii) to specified quantities above or below a certain

level or all quantities if quantities exceed a

certain level;

(iii) in a specified relationship to quantities

actually transported (i.e., that the Reservation

charge will be adjusted in a specified

relationship to quantities actually transported);

(iv) to specified quantities during specified periods

of time or during specified periods of the year;

(v) to specified quantities at specific Point(s) of

Receipt or Point(s) of Delivery;

(vi) to production reserves committed or dedicated by

Shipper; and/or

(vii) that a specific discounted rate is based on

published index prices for specific Point(s) of

Receipt and/or Point(s) of Delivery or other

agreed-upon published pricing reference points

(such discounted rate may be based upon the

differential between published prices or arrived

at by formula). Any agreement containing such

discounted rate shall specify the rate

component(s) to be discounted (i.e., Reservation

charge or Commodity charge or both), and any

formula will provide a reservation rate per unit

of contract demand (Maximum Daily Transportation

Quantity). To the extent the firm Reservation

charge is discounted, the index price differential

rate formula shall be calculated to state a rate

per Dth. Furthermore, such discount shall not

change the underlying rate design of the service

being provided or include any minimum bill or

maximum take provision that would have the effect

of guaranteeing revenue.