Columbia Gulf Transmission Company

Second Revised Volume No. 1

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Effective Date: 08/01/2008, Docket: RP07-174-005, Status: Effective

Tenth Revised Sheet No. 216 Tenth Revised Sheet No. 216

Superseding: Ninth Revised Sheet No. 216

GENERAL TERMS AND CONDITIONS (Continued)

19. PENALTIES

The penalties set forth in this Section apply to the FTS-1, FTS-2, ITS-1, ITS-2, AS-Gulf, IPP-Gulf,

PAL and IMS Rate Schedules, unless otherwise indicated in this Section or the individual Rate Schedules.

19.1 Takes in Excess of Total Firm Entitlements. If Shipper's takes within a zone on any Day exceed 103

percent of its Total Firm Entitlement (TFE) for that zone, Shipper shall be assessed and pay a penalty based

on a price per Dth equal to three times the midpoint of the range of prices reported for "Columbia Gulf,

Louisiana" as published in Platts Gas Daily price survey for all such quantities in excess of 103 percent of

its applicable TFE. This penalty will be waived if the unauthorized overrun does not cause an operational

problem.

19.2 Failure to Interrupt Service. If Shipper fails to interrupt service as directed by Transporter

pursuant to Section 16 (Interruptions of Service) of the General Terms and Conditions, and thereby delivers

gas to or takes gas from Transporter in excess of 103 percent of the sum of the lowered Scheduled Daily

Receipt Quantity or Scheduled Daily Delivery Quantity under all applicable Rate Schedules set by Transporter's

interruption order, Shipper shall be assessed and pay penalties based on a price per Dth equal to three times

the midpoint of the range of prices reported for "Columbia Gulf, Louisiana" as published in Platts Gas Daily

price survey for all quantities taken or delivered in excess of its Scheduled Daily Receipt Quantity or Daily

Scheduled Delivery Quantity. The penalties set forth in this Section and in Section 19.1 shall not both be

assessed for the same actions by Shipper.

19.3 Failure to Comply with OFO. If Shipper fails to comply with an operational flow order issued by

Transporter pursuant to Section 17 (Operational Flow Orders) of the General Terms and Conditions, a penalty

shall be assessed on all quantities taken or delivered in violation of that OFO based on a price per Dth equal

to three times the midpoint of the range of prices reported for "Columbia Gulf, Louisiana" as published in

Platts Gas Daily price survey for the days on which the OFO is issued.

19.4 Delivery Point Scheduling Penalty.

(a) Non-Critical Day Scheduling Penalty. When a Critical Day has not been declared, Shipper must

pay a daily scheduling penalty for each Dth Transporter delivers to Shipper at the Delivery Point that varies

by 1000 Dth or by 5% or more over or under scheduled quantities, which ever is greater. The daily scheduling

penalty will be equal to the currently effective rate for service under Transporter's Rate Schedule ITS-1 for

each Dth by which Transporter's deliveries at Shipper's Delivery Point vary by 1000 Dth or 5% or more from

scheduled quantities, which ever is greater. The non-Critical Day scheduling penalty based on the ITS-1 rate

does not apply when a Critical Day has been declared.

(b) Critical Day Scheduling Penalty. When a Critical Day has been declared, Shipper must pay a

daily scheduling penalty for each Dth Transporter delivers to Shipper at the Delivery Point that varies by

1,000 Dth or by 3% or more over or under scheduled quantities, which ever is greater. When Transporter has

declared a Critical Day, the scheduling penalty will be equal to three times the midpoint of the range of

prices reported for "Columbia Gulf, Louisiana" as published in Platts Gas Daily price survey for each Dth by

which Transporter's deliveries vary by 1,000 Dth or by 3% or more from scheduled quantities, which ever is

greater.

(d) Transporter may not impose a non-Critical Day scheduling penalty for the same conduct for which

it imposes a Critical Day scheduling penalty, and may not impose either a Critical Day or non-Critical Day

scheduling penalty for the same conduct that is also subject to a TFE, Failure to Interrupt or OFO penalty.

(e) Scheduling penalties will not apply at points of interconnection for which an OBA exists.

19.5 Cumulative Monthly Imbalance Cash-Out Mechanism.

(a) Definition of Cumulative Monthly Imbalance. A Cumulative Monthly Imbalance means: any

outstanding imbalance associated with prior months that have yet to be cashed out plus the difference between

(1) the total gas quantities Transporter actually received from or for Shipper's account (adjusted for

Retainage) at the point(s) of receipt under all of Shipper's firm and interruptible transportation service

agreement(s), interruptible paper pool service agreement(s), and aggregation service agreement(s); and (2)