Nautilus Pipeline Company, LLC

Original Volume No. 1

Effective Date: 04/05/2010, Docket: RP10-475-000, Status: Effective

Third Revised Sheet No. 155 Third Revised Sheet No. 155

Superseding: Second Revised Sheet No. 155

GENERAL TERMS AND CONDITIONS

15. PENALTY CREDITING

15.1 Crediting of Penalty Revenue

All penalty amounts received by Transporter, net of costs,

pursuant to Section 19.3, shall be credited to all Shippers who

had Service Agreements in effect during said Month and were not in

violation of the OFO (non-offending Shippers).

(a) The credit shall be calculated without interest to each non-

offending Shipper on a pro rata basis based on the monthly

MDTQ in effect under each of the Shipper's Service

Agreements.

(b) The credit will be reflected on each Shipper's respective

invoice within sixty (60) Days after the end of the calendar

Month any penalty was collected.

credited only to those non-offending Shippers, and reduced

by any costs directly incurred and revenues foregone by

Transporter as a result of an OFO violation. Net revenues

credited to shippers will be penalties received less costs

directly incurred. Costs directly incurred are actual out-

of-pocket costs incurred by Transporter in response to the

emergency situation or OFO. Revenues foregone are those

revenues that would have otherwise been earned had volumes

not been curtailed as a result of an OFO violation. These

revenues are measured in relation to each affected

Shipper's respective Transportation Service Agreement and

the volumes and rates provided for therein.