Southern Star Central Gas Pipeline, Inc.

Original Volume No. 1

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Effective Date: 05/01/2003, Docket: RP03-352-000, Status: Effective

Original Sheet No. 304 Original Sheet No. 304 : Effective

GENERAL TERMS AND CONDITIONS

31. Negotiated Rates (cont'd)

31.5 Filing Requirements: No later than the business day on which

Southern Star commences service at a negotiated rate (or if the

day on which Southern Star commences such service is not a

business day, then the next business day after Southern Star

commences such service), Southern Star will file with the

Commission either its negotiated rate agreement or a numbered

tariff sheet stating the name of the Customer, the actual

negotiated rate or the formula used to calculate the rate, the

applicable receipt and delivery points, the quantity of gas to be

transported, the applicable Rate Schedule for the service and an

affirmation that the negotiated rate agreement does not deviate

in any material aspect from the applicable form of service

agreement in Southern Star's tariff.

31.6 Accounting For Costs and Revenues: The allocation of costs

to, and the recording of revenues from, service at negotiated

rate(s) will follow Southern Star's normal practices

associated with all of its services under this Tariff.

Southern Star will maintain separate records of negotiated

rate transactions for each billing period. These records

shall include the volumes transported, the billing

determinants, the rates charged and the revenue received

associated with such transactions and surcharges. Southern

Star will separately identify such transactions in Statements

G, I and J (or their equivalents) filed in any general rate

proceeding.

31.7 Rate Treatment: Southern Star shall have the right to seek in

future general rate proceedings discount-type adjustments in the

design of its rates related to negotiated rate agreements that

were converted from pre-existing discount agreements to

negotiated rate agreements, provided that the type of pre-

existing service is not altered as a result of the conversion to

a negotiated rate. In these situations, Southern Star may seek a

discount-type adjustment based upon the greater of the negotiated

rate revenues received or the discounted rate revenues which

otherwise would have been received.

31.8 Limitations: This Section 31 does not authorize Southern Star to

negotiate terms and conditions of service.

31.9 Right of First Refusal: For purposes of exercising rights to

continue service pursuant to Section 6 of these General Terms and

Conditions, the highest rate that the existing capacity holder

must match if it desires to retain all or a portion of its

capacity, is the applicable maximum tariff rate, including

surcharges, for such service.