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. 42 Original Sheet No. 42 : Effective



estimates will be incurred to operate and maintain the Storage

Project during the following calendar year. Modifications may be

made to such budget whenever any related series of expenditures

that were not contemplated in such annual budget are expected to

exceed five percent (5%) of the total annual budget or $25,000,

whichever is less. Provide the Owners with a monthly operating report

containing such information as any Owner may reasonably specify to

be included in said report. Prepare a monthly physical gas balance report for the

Storage Project detailing the measured Mcf and MMBtu balance of

Project Gas Inventory, by respective Owners' account, segregated

between cushion and working gas, and the balance of Northwest

System Balancing Account. Coordinate with Northwest to render monthly volume

statements of: Project Gas Inventory injected and withdrawn by

respective Owners' account, segregated between cushion and working

gas; the quantity of measured fuel use by the Storage Project, and

the allocation of such fuel use pursuant to Section 8.3; net line

pack increase or decrease of the Storage Project, and deliveries

at the Chehalis Farm Tap. To the extent reasonably possible, providing daily

volume reports to the Owners, as may be requested by the Owners. Procure and maintain all such insurance as the Project

Operator is required to maintain pursuant to Section 5.8 of this

Agreement. Receive from each of the Owners, analyze and confirm, as

appropriate, daily nominations for injection and withdrawal of

working gas and coordinate with Northwest for the confirmation of

the related nominations for transportation service to or from the

Storage Project. Nominations procedures shall conform to all

applicable FERC and Gas Industry Standards Board requirements.