TF03     89A0000005P128Original Sheet No. 89A.1
TF04 
TF05Edward C. McMurtrie, Vice President/General Manager
TF06063005050905RM96-1-026          090105
TF0711161203
                      GENERAL TERMS AND CONDITIONS
                                (Continued)


5.  OVERRUN AND UNDERRUN, BALANCING AND PENALTY PAYMENTS (Continued)

     5.4  Overrun and Underrun, Scheduling and Balancing Penalties, General
          Provisions:

          (a)  Overrun and underrun, scheduling and balancing penalties
               will be levied by Paiute against the Shipper who controls
               the facilities into which gas is delivered. If the Shipper
               is receiving transportation on one or more agreements with
               Paiute, all imbalances will be on that agreement with the
               Shipper which is last in the determination of delivery 
               categories, as per Section 4.4 of the General Terms and
               Conditions of this tariff, unless otherwise agreed upon by
               the parties.

          (b)  Overrun and underrun, scheduling and balancing penalties 
               will be assessed in addition to all otherwise applicable
               charges under Rate Schedules FT-1, IT-1 and LGS-1. In the
               event that more than one of the penalties specified in 
               Sections 5.1, 5.2 and 5.3(c) of the General Terms and
               Conditions are applicable to the same volume of gas, Paiute
               shall assess only one penalty, which shall be the highest
               of such applicable penalties, upon such gas. No imbalance
               penalty should be imposed when a prior period adjustment
               applied to the current period causes or increases a current
               monthly penalty.

          (c)  One hundred percent (100%) of all net penalty revenues receiv-
               ed by Paiute pursuant to Sections 5.1(c), 5.2(a), and 5.3(c)
               of the General Terms and Conditions of this tariff will be
               credited to Shippers receiving service under Rate Schedules
               FT-1 and IT-1. Paiute shall net against such penalty revenue
               amounts that it must pay to an upstream pipeline for penalties
               assessed to Paiute arising from a restricted entitlement or
               cumulative imbalance period as described in Sections 5.2(b)
               and 5.3(d) where Paiute would have collected penalties under
               Section 5.2(b) and/or 5.3(d) but for the application of 
               Section 5.4(b). The credits will be allocated pro rata
               based on the total revenues received from each Shipper