Columbia Gulf Transmission Company

Second Revised Volume No. 1

Effective Date: 10/19/2006, Docket: RP06-596-000, Status: Effective

Original Sheet No. 171B Original Sheet No. 171B : Effective

GENERAL TERMS AND CONDITIONS (Continued)

Transporter has the right to seek additional security to cover the value of any imbalance owed Transporter by a

non-creditworthy Shipper. The imbalances shall be valued at the “Spot Market Price” which shall be defined,

for each Dth on each applicable Day on which the gas is owed, as follows: (a) for the mainline system, the

“Columbia Gulf, Mainline” price index for Louisiana-Onshore South as published in Gas Daily’s Daily Price

Survey, or any successor publication; (b) for the onshore lateral system, the “Columbia Gulf, LA” price index

for Louisiana-Onshore South, as published in Gas Daily’s Daily Price Survey, or any successor publication; and

published in Gas Daily’s Daily Price Survey, or any successor publication, less applicable transportation

charges. Furthermore, Transporter has the right to seek security to cover the estimated value of a future

monthly imbalance for non-creditworthy Shippers as follows: For a non-creditworthy new Shipper, a security

amount equal to 10% of such Shipper’s estimated monthly usage multiplied by the Estimated Imbalance Rate as

described below. For a non-creditworthy existing Shipper, a security amount equal to such Shipper’s largest

monthly imbalance owed to Transporter over the most recent 12-month period multiplied by the Estimated

Imbalance Rate. The term "Estimated Imbalance Rate" shall equal the average of the NYMEX future prices for the

available 12-month period as such prices close on the day the Estimated Imbalance Rate is determined.

(d) Notwithstanding the foregoing requirements, if Transporter constructs new facilities to

accommodate a Shipper, Transporter may require credit assurance in an amount up to Shipper’s proportionate

share of the cost of the new facilities. This credit assurance may be requested at any time before or after

the in-service date of the facilities, to the extent mutually agreed to as a condition of the construction. As

Transporter recovers the cost of these facilities through its rates, the credit assurance required will be

reduced accordingly. Specifically, any credit assurance provided by a Shipper related to new facilities shall

be returned to that Shipper in equal monthly amounts over the term of its Service Agreement for service related

to the new facilities or as otherwise mutually agreed by Transporter and Shipper. This requirement is in

addition to and shall not supersede or replace any other rights that Transporter may have regarding the

construction of and reimbursement for facilities.

If Shipper defaults and Transporter terminates service to Shipper, then Transporter shall draw upon and retain

such collateral as necessary to reimburse Transporter for the unamortized cost of the facilities constructed

for Shipper. The capacity underlying any terminated Service Agreement shall be made available pursuant to

Section 4 of these General Terms and Conditions. Within 60 days of the capacity being made available, to the

extent such capacity has been awarded, the credit assurance retained by Transporter from the original Shipper

shall be reduced to an amount equal to the net present value of that portion of the future reservation charge

revenues of the original Shipper that would have been attributed to the cost of those facilities less the net

present value of that portion of the future reservation charge revenues of the newly awarded Shipper that may

be attributed to the cost of the facilities.