Carolina Gas Transmission Corporation

Original Volume No. 1

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Effective Date: 11/01/2006, Docket: CP06- 71-001, Status: Effective

Original Sheet No. 189 Original Sheet No. 189 : Effective

22. TRANSITION COST RECOVERY SURCHARGE

22.1 Applicability. The TC Surcharge shall be applicable to customers

that subscribed for firm sales service from Pipeline’s

predecessor, South Carolina Pipeline Corporation, on June 25,

2004, and have not taken their share of upstream gas supply

agreement assets and transportation contract assets, as allocated

by Pipeline.

22.2 Eligible Transition Costs. The TC Surcharge shall recover

eligible transition costs. Eligible transition costs shall

include amounts paid by Pipeline, after the effective date of

this Tariff, as successor to any South Carolina Pipeline

Corporation gas supply agreements, including for gas storage

inventory on upstream interstate pipelines, and any pipeline

reservation charges paid for upstream transportation capacity, to

the extent such eligible transition costs are not recovered from

a replacement shipper.

22.3 TC Surcharge Amounts. Pipeline shall be entitled to recover 100%

of the principal of Section 22.2 eligible transition cost

amounts, but Pipeline shall not collect any interest on such

amounts, except for interest that may accrue to an individual

Shipper on its delinquent payment of TC Surcharges. Further, TC

Surcharge amounts shall be reduced by whatever revenues Pipeline

receives from release of capacity refused by Shipper(s).

22.4 TC Surcharge Calculation. The TC Surcharge shall be based on an

allocation factor calculated initially for purposes of Pipeline’s

first TC Surcharge filing and then recalculated to be effective

on each subsequent November 1. The TC Surcharge shall be

calculated in the following manner:

(a) The allocation factor for each capacity asset shall be

calculated as follows:

(1) The numerator of the allocation factor for each asset

to the extent not assigned shall be equal to the

quantity of each asset refused by Shipper (and not

provided to other Shippers); and

(2) The denominator of the allocation factor for each

respective asset shall be the sum of the numerators

for the respective asset of all Shippers then

currently subject to the TC Surcharge.