Eastern Shore Natural Gas Company

Second Revised Volume No. 1

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

Original Sheet No. 235 Original Sheet No. 235 : Effective

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

41. Pre-Certification Cost Surcharge (Continued)

(b) Formula for Determining Surcharge: (Continued)

(2) Each Participating Shipper's proportionate share

of such Pre-Certification Costs shall be

computed by taking its Maximum Daily

Transportation Quantity ("MDTQ"), contained in its

Project Precedent Agreement, divided by the sum of

the MDTQ's contained in all executed Project

Precedent Agreements and multiplying such result

by the total level of actual Pre-Certification

Costs, such costs not to exceed three million

dollars ($3 million). For Pre-Certification Costs

in excess of $3 million dollars, each

Participating Shipper's proportionate share shall

be one (1) divided by the sum of all Participating

Shippers plus Eastern Shore (for example, once

total Pre-Certification Costs exceed $3 million,

with a total of two (2) participating Shippers

each Participating Shipper's proportionate share

of the Pre-Certification Costs over $3 million

would equal: one (1) divided by three (3), or

thirty-three and one-third (33 1/3 percent of such

costs in excess of $3 million dollars). Unless a

change is agreed to in writing by a Participating

Shipper, its total share of Pre-Certification

Costs, excluding interest, shall in no event

exceed two million dollars ($2 million).

Each Participating Shipper's proportionate share of Pre-

Certification Costs shall: (1) be amortized and billed

monthly over a period of twenty (20) years; and (ii)

shall earn a return of 10.70% after tax, such amount

accruing, until date of payment by Participating Shipper.