Eastern Shore Natural Gas Company

Second Revised Volume No. 1

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Effective Date: 11/01/2002, Docket: RP00-393-002, Status: Effective

Fourth Revised Sheet No. 169 Fourth Revised Sheet No. 169 : Effective

Superseding: Third Revised Sheet No. 169

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

23. Balancing of Transportation Services (Continued)

(f) Imbalances shall be "Cashed Out" (Continued)

(4) Imbalance due Buyer with Swing Price basis

In the event of an imbalance caused when actual

total deliveries at the Point(s) of Delivery

and/or Delivery Point Area(s) are less than the

actual total receipts at the Point(s) of Receipt,

Seller shall make a "cash out" payment to Buyer

for such excess receipt. The Swing Price for such

payment shall be Buyer's Quoted Swing Price for

the relevant Month as defined in Seller's Rate

Schedule ST multiplied by the appropriate

Imbalance Level Factor as specified in Section

23(f)(3) above.

(5) Imbalance due Seller with Swing Price basis

In the event of an imbalance caused when actual

total deliveries at the Point(s) of Delivery

and/or Delivery Point Area(s) exceed the actual

total receipts at the Point(s) of Receipt, Seller

shall charge Buyer for such excess delivery. The

Swing Price charged Buyer shall be Buyer's Quoted

Swing Price for the relevant Month as defined in

Seller's Rate Schedule ST multiplied by the

appropriate Imbalance Level Factor as specified in

Section 23(f)(2) above.

(g) Imbalance Netting and Trading

All Transportation Service Providers shall allow

Service Requesters (including agents of Service

Requesters) to net imbalances within the same

Operational Impact Area on and across contracts with

the Service Requester and to trade imbalances within

the same Operational Impact Area. The total quantity of

natural gas received and delivered under Buyer's

transportation agreements shall be netted and excess

receipts or excess deliveries ("imbalance") shall be