Eastern Shore Natural Gas Company

Second Revised Volume No. 1

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

Original Sheet No. 218 Original Sheet No. 218 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

32. Annual Charge Adjustment (ACA)

(a) Annual Filing

Seller is authorized to recover from Buyer the annual

charge assessed to Seller by the Commission for

Commission budgetary expenses. Seller shall recover this

annual charge by including in its transportation rates a

per unit surcharge rate equivalent to the per dt charge

assessed against Seller by the Commission. During the

effectiveness of this Annual Charge Adjustment (ACA)

provision, Seller will not recover in a Natural Gas Act

(NGA) Section 4 rate case any annual charges recorded in

FERC Account No. 928 assessed to Seller by the Commission

pursuant to Order No. 472.

(b) Seller shall adjust its ACA surcharge rate annually to be

effective each October 1. Seller shall comply with the

notice requirements of Section 154.207 of the

Commission's Regulations.

(c) Seller's ACA Surcharge rate shall be the per unit rate

used by the Commission to determine the annual charge

assessment to Seller adjusted, if necessary, to a

dekatherm basis, rounded to the nearest one-hundredth of

one cent ($0.0001).

(d) The affected Rate Schedules are transportation Rate

Schedules contained in Seller's Volume No 1, FERC Gas

Tariff and all transportation performed under Part 284 of

the Commission's Regulations.