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. 219 Original Sheet No. 219 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

33. Periodic Rate Adjustments and Surcharges

Seller and Buyer recognizes that Seller will, from time to

time, experience changes in costs related to providing service

under this Tariff, including, but not limited to, changes in

the cost of labor, benefits, materials and supplies, taxes,

required rate of return, costs associated with the resolution

of past disputes or outstanding uncertainties concerning

amounts owed by Seller or Buyer or attributable to Seller or

Buyer, and costs generated by decisions of the Commission, the

courts, or by an arbitration panel or other body having

jurisdiction over Seller. Seller hereby notifies Buyer that it

may be appropriate, equitable, and consistent with the cost

responsibility to allocate such costs among Buyers based on,

or taking into account, past period factors, such as contract

demand levels, purchases, or any other factors related to a

prior period of time. Seller shall have the right, from time

to time, to make rate change filings based in whole or in part

on factors related to past periods, however, Seller may not

thereby engage in retroactive ratemaking. Buyer shall have

the right to intervene and protest any such filings.