Eastern Shore Natural Gas Company

Second Revised Volume No. 1

Effective Date: 11/01/1997, Docket: CP96-128-004, Status: Effective

Original Sheet No. 22 Original Sheet No. 22 : Effective

RATE SCHEDULE FT

FIRM TRANSPORTATION SERVICE

(Continued)

3. Rates and Charges

(a) For Firm Transportation Service rendered for Buyer each

Month under this Rate Schedule, Buyer shall pay to Seller

the sum of Seller's Reservation and Commodity Charges

determined as follows:

(1) Reservation Charge: The applicable Reservation

Rate multiplied by the applicable Maximum Daily

Transportation Quantity (MDTQ).

(2) Commodity Charge: The applicable Commodity Rate

and surcharges multiplied by the quantities

delivered pursuant to Section 5 of this Rate

Schedule from the Point(s) of Receipt on Seller's

system to Buyer's Delivery Point Area(s).

(b) The maximum and minimum Reservation and Commodity Rates

for Firm Transportation Service on Seller's system under

Rate Schedule FT are shown on the currently effective

Sheet No. 4 and Sheet No. 5, as applicable, of this

Tariff. Buyer shall pay such maximum rates for service

under this Rate Schedule unless Seller agrees to discount

one or more of its rates to Buyer. If Seller agrees to

discount one or more of such rates, it shall, upon

forty-eight (48) hours written notice, advise Buyer of

the effective date of such rates and the quantity of gas

so affected; provided however, such discount shall not be

unduly discriminatory. The rates for service under this

Rate Schedule shall not be discounted below the minimum

rate(s).

Buyer and Seller may mutually agree to a negotiated rate,

which rate shall be less than, equal to, or greater than

Seller's maximum rate and shall not be less than the

minimum rate, and may be based upon a rate design other

than straight fixed variable (SFV). Such negotiated rate

shall be set forth in the executed Service Agreement.

associated with rendering service pursuant to this Rate

Schedule. Such reimbursement shall be accomplished by

adjusting the quantity of gas delivered for the account

of Buyer(s) under this Rate Schedule at the Delivery