Eastern Shore Natural Gas Company

Second Revised Volume No. 1

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Effective Date: 02/01/1998, Docket: CP96-128-006, Status: Effective

Original Sheet No. 232 Original Sheet No. 232 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

39. Negotiated Rates (Continued)

Seller shall, for each Negotiated Rate transaction undertaken,

maintain records of the quantities transported, billing

determinants, rate components, surcharges, and revenues

associated with the Negotiated Rates for each billing period.

Seller will separately identify and total such transactions in

Statements G, I, and J (or their equivalent) filed in any

general rate proceeding.

Penalty amounts assessed pursuant to the penalty provisions of

Section 22 (Unauthorized Daily Overrun); Section 24

(Operational Flow Orders); Section 25 (Capacity Curtailment);

and Section 26 (Emergency Capacity Reallocation),

respectively, shall not be subject to negotiation.