Puget Sound Energy, Inc.

Original Volume No. 1

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Effective Date: 11/01/1998, Docket: CP98-250-002, Status: Effective

Original Sheet No. 32 Original Sheet No. 32 : Effective





4.1 Proposal


An expansion or addition to the Storage Project can be initiated

by any Owner or combination thereof, representing not less than

twenty-five percent (25%) of the total Ownership Interests in the

Storage Project, by presenting a written proposal ("Proposal") to

the Committee. Such Proposal shall be presented no later than

ninety (90) days prior to the commencing of such expansion or

addition. Such Proposal shall be provided in such a manner that

an analysis of it by the Project Operator does not create an

unreasonable investment of time or resources. The costs of

preparing the Proposal and the review and analysis of it by the

Project Operator shall be paid by the Owner(s) submitting the

Proposal. The Project Operator will submit to the Committee the

information described in Section The Project Operator

must concur that any such proposed expansion meets sound

engineering, design and construction practices. Any review,

concurrence or failure to concur by the Project Operator shall not

be, and shall not be deemed, a warranty or representation of any

kind by the Project Operator. Without limiting the generality of

the foregoing, review or concurrence by the Project Operator is

not a representation or warranty that (i) the Proposal does in

fact meet sound engineering, design and construction practices,

(ii) the Proposal will serve its intended purpose or any other

purpose or (iii) construction or operation of the Proposal will

not impair the function or integrity of the Storage Project. Such

Proposal shall be deemed accepted unless 75% majority agreement of

the Owners, pursuant to Section 5.4, denies such Proposal.


4.2 Participation


Subject to this Section 4.2, the Owner(s) not initiating an

expansion or addition proposal will have the option, exercisable

in writing within thirty (30) days after receipt of such written

proposal, to participate in any such expansion or addition. If

all Owners participate in such expansion or