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Portland Natural Gas Transmission System   Original Sheet No. 363 : Effective
FERC Gas Tariff
Portland Natural Gas Transmission System

                   GENERAL TERMS AND CONDITIONS (Continued)
      12.1 Notice of Contract Expiration. For each firm Gas Transportation
Contract of one year duration or longer at the maximum rate, Transporter
shall, six (6) Months prior to the expiration of the contract, or as soon as
possible after an earlier termination, post notice of the expiration on its
Interactive Internet Website and solicit bids for the capacity represented by
the Gas Transportation Contract. Such notice shall be displayed on the
bulletin board no less than one (1) Month. Transporter may require bidders to
make assurances that offers are bona fide by making cash deposits or posting
bonds or letters of credit.
      12.2 Abandonment of Transportation Service. Subject to the terms of this
Section 12, Transporter shall be entitled to abandon long-term (greater than
twelve (12) Months) firm transportation service, as authorized by Section
284.221(d) of the Commissions Regulations, upon the termination, or the
expiration of the term (including the expiration of any applicable contract
extension provisions), of a long-term firm Gas Transportation Contract, and
Transporter shall seek offers from competing Shippers interested in receiving
such firm transportation service. If termination is caused by a failure of
Shipper to perform any of the material covenants or obligations imposed upon
it by the Gas Transportation Contract, Transporter shall be entitled to
abandon service immediately upon termination.
      12.3 Right of First Refusal. Transporter shall not be required to accept
any bid at less than Transporters maximum Recourse Rate. If Transporter
receives no bids, or if Transporter receives no bids at its maximum Recourse
Rate and Transporter determines not to accept any bids below the maximum
Recourse Rate, Transporter shall notify the Shipper of the maximum bid
received, or that no bids were received. If Transporter receives a bid at a
maximum Recourse Rate, or if it accepts any bid below the maximum Recourse
Rate, Transporter shall, no less than four (4) Months before the expiration of
the Shippers firm Gas Transportation Contract, or no more than four (4)
Months after an earlier termination, inform Shipper of the offer to purchase
capacity solicited pursuant to Section 12.1 herein that Transporter intends to
accept.  Transporters

Issued by: David J.Haag, Rates And Tariff Specialist
Issue date: 07/28/06 Effective date: 09/01/06