Eastern Shore Natural Gas Company

Second Revised Volume No. 1

 Contents / Previous / Next / Main Tariff Index

Effective Date: 09/07/2006, Docket: RP06-404-001, Status: Effective

Original Sheet No. 234 Original Sheet No. 234 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

41. Pre-Certification Cost Surcharge

(a) Applicability

Shippers on Eastern Shore's system who enter into a

Precedent Agreement with Eastern Shore to subscribe to

firm transportation service capacity on the Project,

described in the Stipulation and Agreement of Settlement

approved by the Commission in Docket No. RP06-404-000

("Participating Shippers"), shall be subject to a Pre-

Certification Cost Surcharge, based on the formula set

forth below. Eastern Shore will not seek to recover such

costs from any other Shipper on its system in this or any

future Commission proceeding.

(b) Formula for Determining Surcharge

The Pre-Certification Costs Surcharge to be charged to

each Participating Shipper shall be determined as

follows:

(1) In the event that the Project is not certificated

by the Commission, Eastern Shore does not accept

the certificate, or the Project is not completely

constructed and placed into service, Eastern

Shore shall compute all costs incurred through

the date of the Final Order by the Commission,

which is no longer subject to rehearing or

appeal, authorizing or denying Eastern Shore's

application to construct and operate the Project

(the "Pre-Certification Costs Period"), including

costs incurred by Eastern Shore for engineering,

communications, governmental relations, economic

studies, environmental, regulatory, and legal

services (collectively, "Pre-Certification

Costs"). Such Project Pre-Certification Costs

shall be accounted for in accordance with the

FERC's Uniform System of Accounts, and Eastern

Shore shall certify to each Participating Shipper

the total amount of such Pre-Certification Costs.