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. 33 Original Sheet No. 33 : Effective



addition, the extent of each Owner's participation shall be its

then current Ownership Percentage prior to such expansion or

addition, unless all Owners agree otherwise. If fewer than all

Owners participate in the expansion or addition, then the extent

of each Owner's participation shall be the percentage

corresponding to the ratio of such Owner's Ownership Percentage to

the aggregate Ownership Percentages of the participating Owners,

unless all participating Owners agree otherwise. Non-initiating

Owner(s) electing to participate in an expansion or addition shall

reimburse a proportionate share of the costs of preparation,

analysis and review of the proposal discussed in Section 4.1.


4.3 Damages


The participating Owner(s) shall indemnify and hold harmless the

non-participating Owner(s) for any damage or loss to person or

property, including any Storage Reservoir or part thereof, arising

from, or incidental to, an expansion or addition.


4.4 Impact on Ownership and Storage Service Rights


4.4.1 An Owner's Ownership Percentage, allocations of gains and

losses pursuant to Section 8.2, and proportionate allocation of

Capital Costs may be affected by an expansion or addition. The

Ownership Percentage and Weighted Share of Capital Costs of each

Owner after an expansion or addition will be determined by (a)

calculating the sum of (i) the quotient obtained from a Owner's

Firm Withdrawal Deliverability divided by the Project Firm

Withdrawal Capability, plus (ii) the quotient obtained from a

Owner's Firm Working Gas Capacity divided by the Project Firm

Working Gas Capacity, and then (b) dividing the sum by two (2).


4.4.2 After each expansion or addition, the Committee by 75%

majority agreement of the Owners will equitably adjust the

Weighted Shares of the O&M Costs for all Owners, taking into

account the dollars invested in the expansion, the relative

percentages of Storage Service Rights, and changes in overall O&M

Costs as a result of such expansion.