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. 196 Original Sheet No. 196 : Effective

25. FUEL RETAINAGE QUANTITY

25.1 General. Pipeline will track changes in its requirements to

retain gas in-kind for the FRQ used to provide service for

Shippers. The purpose of the FRQ is to ensure that Pipeline

recovers the total actual amount of Company Use Gas and LAUF.

25.2 Fuel Retainage Percentages. Fuel Retainage Percentages shall be

as quantified under this Section 25 and stated for each zone,

where applicable, in the Summary of Rates and Charges of this

Tariff. Fuel Retainage Percentages shall be subject to

adjustment hereunder for service under all rate schedules unless

otherwise explicitly provided in the rate schedule.

25.3 Fuel Retainage Percentage Calculation. Each year, Pipeline shall

calculate the Fuel Retainage Percentage as follows:

(a) LAUF Percentage. The LAUF Percentage shall be calculated

by dividing the Base FRQ Period’s system LAUF quantities by

the Base FRQ Period’s system throughput.

(b) Company Use Percentage. The Company Use Percentage for

each zone shall be calculated by dividing the zone’s

estimated Company Use Gas by the zone’s estimated

throughput.

25.4 Filing with the Commission. By October 1 each year, Pipeline

shall file for Commission approval a report containing proposed

Fuel Retainage Percentages for the 12-month period beginning on

November 1 immediately following the Base FRQ Period.

25.5 True Up. Pipeline will determine the difference each Month

between: (i) the quantity of gas retained in-kind through the

FRQ, and (ii) the quantity of gas used to provide service for

Shippers. Each Month the under- or over-retainage of gas in-kind

will be recorded as a debit or credit, as the case may be, with

the monetary value of the quantity of gas credited or debited

based on the Median Price for the Month, plus charges for

applicable upstream transportation, to the Transportation

Deferred Account.