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. 223 Original Sheet No. 223 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

37. Interruptible Revenue Sharing

(a) Seller will share the Net Revenues it receives from its

interruptible transportation service under Rate Schedule

IT with its firm transportation customers.

(b) Net Revenues shall be defined as the total revenues

received under Rate Schedule IT less: (i) the fixed cost

of service allocated to Rate Schedule IT, (ii) the

variable costs of providing service under such Rate

Schedule, (i.e. the firm transportation commodity rate),

and (iii) any surcharges applicable to such Rate

Schedule. Seller will credit ninety percent (90%) of Net

Revenues under Rate Schedule IT to its firm

transportation customers on a pro-rata basis using each

firm customer's total unadjusted MDTQ and MDSTQ under

firm transportation Rate Schedules FT and ST. Credits

shall include interest at the FERC approved rate from the

date that revenues are received from the interruptible

service to the date of the credit.

(c) Seller will calculate Net Revenues at the end of each

twelve (12) Month period ending March 31. Within ninety

(90) calendar days after the end of each such period,

Seller will return the shared portion of Net Revenues in

the form of billing credits to its firm transportation

customers.