Eastern Shore Natural Gas Company

Second Revised Volume No. 1

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

Original Sheet No. 209 Original Sheet No. 209 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

29. Capacity Release (Continued)

(n) Releases that are Not Prearranged but are Subject to

Prior Notice and Competitive Bidding (Continued)

(10) Any tie-breaking methodologies.

The terms of the awarded bid(s) shall be posted by Seller

in accordance with Section 29(h).

(o) Permanent Releases

A Buyer which has a currently effective executed Service

Agreement with Seller under either of Seller's firm

transportation Rate Schedules FT and ST may release its

capacity to a qualified Replacement Buyer for the

remaining term of the Service Agreement(s) and be

relieved of all liability under its Service Agreement(s)

prospective from the effective date of such release,

provided that the following conditions are satisfied:

(1) The Replacement Buyer executes a new Service

Agreement(s) under the applicable Rate Schedule

pursuant to Part 284 of the regulations of the

Commission that is subject to pre-granted

abandonment;

(2) The Replacement Buyer agrees to pay the maximum

rates for service thereunder (unless otherwise

agreed to by Seller) and accepts all obligations of

the Releasing Buyer;

(3) The Commission provides any necessary abandonment

authorization for the service subject to such

permanent release on or before the effective date

thereof; and

(4) The Replacement Buyer meets the creditworthiness

requirements specified in Section 11(e) and Section

19 of the General Terms and Conditions of Seller's

FERC Gas Tariff.