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Portland Natural Gas Transmission System   Original Sheet No. 315 : Effective
FERC Gas Tariff
Portland Natural Gas Transmission System


                   GENERAL TERMS AND CONDITIONS (Continued)
   
unsecured debt securities are rated A or better by Standard & Poors
Corporation, A or better by Dominion Bond Rating Service or A2 or better by
Moodys Investor Service, Inc.; and with an expiration date not earlier than
one (1) Year from the date of issuance; and
   
            (b)  be held by Transporter as security for payment of all amounts
due under the Gas Transportation Contract, and shall be drawn upon by
Transporter, upon Transporters determination that either:
   
                 (1)  Shipper has breached its obligations under the Gas
Transportation Contract and Shipper has failed to cure within five (5) days of
Transporter giving notice of said breach; or
   
                 (2)  if such letter of credit expires prior to the expiration
date of the Gas Transportation Contract, and Shipper does not provide a
replacement letter of credit meeting the requirements of this Section 3 at
least thirty (30) days prior to the expiration of the issued letter of credit.
   
       3.7  Shipper Insolvency or Failure to Demonstrate Creditworthiness.
   
            (a)  Transporter shall not be required to perform or to continue
service for or on behalf of any Shipper which is or has become insolvent or
who, at Transporters request, fails within five (5) Days to demonstrate
creditworthiness as defined in Section 3.5 herein.  In the event a Shipper
which has previously qualified as creditworthy becomes insolvent or can no
longer demonstrate creditworthiness, Transporter shall provide service under
the applicable Rate Schedule for such Shipper if Shipper prepays for such
service or furnishes good and sufficient security, as determined by
Transporter in its reasonable discretion, in an amount equal to:
   
                 (1) the usage charges applicable to the proposed service for
a three-Month period; plus
   
                 (2)  the sum of the Monthly reservation charges (if any)
  applicable to the proposed service for a three-Month period.
   
            In the event that usage charges are prepaid, Transporter shall
upon termination of service refund to Shipper any amount exceeding an amount
equal to the applicable usage rate multiplied by the Scheduled Quantity, less
any applicable penalties.







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