Eastern Shore Natural Gas Company

First Revised Volume No. 1

Effective Date: 11/13/1995, Docket: RP96-118-000, Status: Effective

Second Revised Sheet No. 247 Second Revised Sheet No. 247 : Superseded

Superseding: First Revised Sheet No. 247

GENERAL TERMS AND CONDTIONS

(Continued)

21. Purchased Gas Cost Adjustment Clause (Continued)

21.1 Filing of Purchased Gas Cost Adjustment (Continued)

(a) Filing Procedures (Continued)

determining the currently effective rates. Seller

shall serve copies of all filings made to the

Commission pursuant to this section upon its

jurisdictional customers and interested state

commissions.

(b) Effective Rates

For each rate schedule, Seller's effective rate

shall be the sum of (1) Seller's Base Tariff Rate

i.e., the rate level determined: (a) at the time

Seller adopts a PGA clause; (b) in a general rate

case under Section 154.301; (c) under Section 5 of

the Natural Gas Act; and (2) any adjustments as

provided for in Seller's FERC Gas Tariff, as

accepted or approved by the Commission. The

effective rates are contained in First Revised

Volume No. 1 of Seller's FERC Gas Tariff as shown on

tariff sheets 5 and 6.

21.2 Determination of Current Purchased Gas Rate Adjustment

(a) Current Purchased Gas Cost Rate Adjustment

Changes in Seller's Demand Charge and Commodity

Charge Rates shall be stated to the nearest one-

hundredth of a cent ($.0001) per dt.

(b) Current Demand Charge Rate Adjustment

The Current Demand Charge Rate Adjustment for the

PGA Period shall be computed using the following

steps: (1) Multiply Seller's projected purchased gas

demand cost by the ratio of (a) Seller's

jurisdictional contract demand billing determinants

to (b) Seller's current total jurisdictional and

non-jurisdictional contract demand billing

determinants. Such ratio shall be Seller's

jurisdictional contract demand allocation factor.