Puget Sound Energy, Inc.

Original Volume No. 1

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Effective Date: 01/03/2004, Docket: RP04-100-000, Status: Effective

Original Sheet No. 105 Original Sheet No. 105 : Effective




(revised February 28, 2003, pursuant to Amendment No. 3)

to the




1. The Owners intend to have a single project, phased-in over up to seven

water withdrawal/gas injection cycles, beginning in 2002 and finishing

in 2008, which is intended to expand the Jackson Prairie cushion and

working gas capacity by a total of approximately 10.5 Bcf. This project

shall be known as the "2002 - 2008 Expansion Project."


2. During the expansion phases of the 2002 - 2008 Expansion Project, the

Owners' respective Shares of Storage Service Rights, but not their

respective Ownership Percentages, may vary. Although at this time, it

is the Owners' intent that the 2002 - 2008 Expansion Project shall go

forward on an equal ownership basis among the Owners, upon completion of

the 2002 - 2008 Expansion Project, it is possible that the Owners'

Storage Service Rights and their Ownership Percentages may not be equal,

as discussed further in paragraph 8 hereof.


3. Commencing in 2002, on or before July 15th of each year, the Project

Operator will provide written notice to each of the Owners as to the

expected amount of water withdrawal and as to each Owner's expected 1/3

share of cushion and working gas additions required for the next water

withdrawal and injection period (March through February of the next

calendar year, with expansion development during the November through

February portion of the cycle available only to the extent mutually

agreed upon by the Owners and Project Operator). By July 31st of each

year, each Owner will notify, in writing, the Project Operator of its

intent either to participate in the next expansion phase or not to

participate. If any Owner elects not to participate or fails to notify

the Project Operator, such Owner will be deemed to be a Deferring Party.


4. If any Owner elects not to participate and not to inject its one-third

share of the applicable cushion and working gas for that water

withdrawal and injection period, then the remaining Owners have the

right to develop for their account(s) the Deferring Party's deferred



5. During the progress of the 2002 - 2008 Expansion Project, an Owner's

share of the expansion project storage capacity will be based upon its

proportion of the expansion cushion gas capacity.