Eastern Shore Natural Gas Company

First Revised Volume No. 1

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

Original Sheet No. 254C Original Sheet No. 254C : Superseded

GENERAL TERMS AND CONDITIONS

(Continued)

23. Transportation Cost Adjustment Clause (Continued)

23.3 Unrecovered Transportation Cost Account

(a) Recording of Unrecovered Transportation Cost

Seller shall establish and maintain Account 186 -

Unrecovered Transportation Costs, with subaccounts

for demand and commodity costs. The balance in

such subaccounts shall be increased for positive,

or decreased for negative, Unrecovered Transpor-

tation Costs.

The balance in such subaccounts shall be increased

for positive, or decreased for negative, amounts

of carrying charges determined pursuant to Section

23.3(b). The balance in such subaccounts shall be

decreased for positive, or increased for negative,

recoveries of Unrecovered Transportation Costs

determined pursuant to Section 23.3(c).

This account shall be maintained by separate sub-

account for each of the twelve (12) month deferral

periods ending four months prior to the effective

date of Seller's annual PGA filing, namely Novem-

ber 1st. At the end of each twelve (12) month

amortization period any balance remaining in the

demand and/or commodity subaccounts shall be

transferred to the then-current demand and commod-

ity subaccounts.

(b) Carrying Charges

Seller shall debit or credit, as appropriate, the

Unrecovered Transportation Cost Account for each

month with a carrying charge which shall be deter-

mined by multiplying the cash balance in such

account, exclusive of carrying charges accrued in

the current calendar quarter and net of related

amounts in Account Nos. 283 and 190, as appropri-

ate, as of the end of the immediately preceding

month, by a monthly carrying charge rate deter-

mined by dividing the annual rate specified for

refunds in Section 154.67(c)(2)(iii)(A) of the

Commission's Regulations by 365 (or 366 if a leap

year) and multiplying the result by the number