Eastern Shore Natural Gas Company

First Revised Volume No. 1

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Effective Date: 07/01/1993, Docket: RP92-227-002, Status: Effective

Original Sheet No. 254A Original Sheet No. 254A : Superseded

GENERAL TERMS AND CONDITIONS

(Continued)

23. Transportation Cost Adjustment Clause

The rates and charges applicable to Rate Schedules CD-1,

CD-E, G-1, PS-1, I-1 and E-1 in First Revised Volume No. 1

of Seller's FERC Gas Tariff (hereinafter collectively

referred to as the applicable Rate Schedules) are subject

to adjustment in Seller's first quarterly or annual Pur-

chased Gas Adjustment (PGA) filing made pursuant to Section

21.1 herein following the effective date of this Section 23,

and in each quarterly, out-of-cycle quarterly, interim and

annual PGA thereafter, to reflect changes in Transportation

Costs. Transportation Costs are costs for the transmission

and compression of Seller's gas by others (Account No. 858).

23.1 Filing of Transportation Cost Rate Adjustment

The effective Transportation Cost Rate Adjustment

under the applicable Rate Schedules included in

Seller's FERC Gas Tariff shall be shown on Seller's

Tariff Sheet Nos. 10, 11, 12, 13, 14 and 15. The

effective date of each Transportation Cost Rate

Adjustment shall coincide with the effective date

of Seller's PGA filings described in Section 21 of

Seller's FERC Gas Tariff. Concurrently with each

such PGA filing Seller shall file its Transportation

Cost Rate Adjustment which will include computations

showing the derivation of the Transportation Cost

Rate Adjustment.

23.2 Determination of Current Transportation Cost Rate

Adjustment

(a) Current Transportation Cost Rate Adjustment

The Current Transportation Cost shall be

Seller's estimated Demand and Commodity Account

No. 858 amounts attributable to the applicable

Rate Schedules for the Calculation Period. The

Calculation Period shall be Seller's corresponding

PGA calculation period.