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Bluelake Storage Company   Sub Second Revised Sheet No. 146 : Effective
FERC Gas Tariff Supersedes First Revised Sheet No. 146
Bluelake Storage Company


   
   
                         GENERAL TERMS AND CONDITIONS
                                  (Continued)
   
   
            remedy the situation and to remove the cause in an adequate
            manner and with all reasonable dispatch, nor shall such causes
            or contingencies affecting such performance relieve Customer,
            in whole or in part, from its obligations to pay the monthly
            charges provided for in Section 8 of these General Terms and
            Conditions.
   
  10.  PRIORITY OF SERVICE REQUESTS AND SERVICE AGREEMENTS
   
       10.1 FIRM STORAGE
   
            (a)  Priority Of Request For Initial Firm Storage Agreements:
                 After notification, pursuant to Section 14 of these
                 General Terms and Conditions hereof, that Seller has
                 available firm Storage capacity which is not subject to
                 contract or is released pursuant to Section 8 of Rate
                 Schedule FS, Seller will accept requests that Seller
                 enter into an Agreement for firm Storage Service.  Except
                 as provided in Section 10.1(b), below, the order of
                 priority among such requests shall be based upon the
                 economic value of the transaction to Seller, with the
                 transaction producing the greatest economic value having
                 the highest priority of request, provided, however, that
                 nothing herein shall require Seller to provide service at
                 any rates less than Seller's applicable Maximum Rates,
                 and provided further, that Seller shall not be required
                 to enter into Service Agreements with terms of more than
                 one Year unless Customer has a long-term debt rating of
                 at least Baa3 according to Moody's Investors Service or
                 BBB- according to Standard & Poor's Corporation or if its
                 obligations to the Seller are guaranteed by a person with
                 a long-term debt rating equal to or greater than stated
                 above.  Economic value shall be determined on the basis
                 of the product of the term of service in years in the
                 request, (using a term not to exceed twenty (20) years)
                 and the Reservation Charges for each year in the life of
                 the Agreement agreed to in the request by the requesting
                 party, discounted to present value by the then-current
                 interest rate determined in accordance with Section
                 154.501(d) of the Commission's Rules and Regulations.
                 The sum of the present value for each year in the life of
                 the Agreement shall be the economic value of the
                 Agreement.  In the event two or more bids with equal







Issued by: J.M. Lane, Chairman
Issue date: 04/01/97 Effective date: 06/01/97