Eastern Shore Natural Gas Company

Second Revised Volume No. 1

Effective Date: 11/01/1997, Docket: CP96-128-005, Status: Effective

Substitute Original Sheet No 230 Substitute Original Sheet No 230 : Effective

Superseding: Original Sheet No 230

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

38. Transition Cost Recovery Mechanism (Continued)

(b) Recovery of Gas Supply Realignment Costs (Continued)

Seller shall be entitled to update and revise either

upward or downward, the GSRC amounts used for the

development of the reservation surcharge, GSRC allocated

to Rate Schedule IT, and/or negotiated exit fees through

additional filings in order to permit Seller to recover

all recoverable GSRC, and to ensure that Seller will not

overcollect the recoverable GSRC.

Seller may request recovery of the full cost of any new

facilities obtained to implement, or which are the result

of implementing, restructured services pursuant to Order

No. 636 in all rate filings under Section 4 of the

Natural Gas Act made by Seller subsequent to

construction/purchase of such facilities.

(d) Stranded Costs

Seller may request recovery of all costs incurred in

connection with bundled sales service that is not

subscribed or assigned to unbundled service Buyers, which

recovery shall be made in all rate filings under Section

4 of the Natural Gas Act made by Seller in which Seller

has determined that such stranded costs have been

incurred.

(e) Departing Buyers

To the extent that any Buyer subject to the provisions of

Section 38 of the General Terms and Conditions of

Seller's FERC gas Tariff terminates or reduces the

quantity under its Service Agreement prior to Seller's

full recovery of the Transition Costs collectible

hereunder, Seller shall negotiate with such departing

Buyer for the recovery of all or part, as applicable, of

the departing Buyer's share of such remaining unrecovered

Transition Costs.