Columbia Gulf Transmission Company

Second Revised Volume No. 1

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Effective Date: 08/01/2008, Docket: RP07-174-000, Status: Suspended

Eighth Revised Sheet No. 216 Eighth Revised Sheet No. 216 : Suspended

Superseding: Seventh 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. Shipper must pay a daily scheduling penalty for each Dth

Transporter delivers to Shipper at the Delivery Point that varies by 5% or more over or under scheduled

quantities or by 2% or more over or under scheduled quantities if a critical notice has been issued. 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 5% or more

from scheduled quantities. When Transporter has issued a critical notice, 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 2% or more

from scheduled quantities as long as the critical notice is in effect. Shipper must pay the daily scheduling

penalty in addition to any other applicable charges.

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) the total gas quantities Transporter actually delivered to or for Shipper’s account at the point(s)

of delivery under all of Shipper’s firm and interruptible transportation service agreement(s), interruptible

paper pool service agreement(s), and aggregation service agreement(s).

(b) Netting. For each rate zone, Cumulative Monthly Imbalances will be netted among Shipper’s

firm and/or interruptible transportation service agreement(s), interruptible paper pool service agreement(s)

and aggregation service agreement(s) with Transporter.

from the 1st calendar day until the end of the 17th Business Day following the end of the Month. Trading

will be allowed when the resulting trade will reduce the imbalances for each Shipper. Trading will be

allowed within each rate zone for the Cumulative Monthly Imbalance associated with each zone. No fee will be

assessed for this intra-zone imbalance trading.

Columbia Gulf Transmission Company Sixth Revised Sheet No. 216

FERC Gas Tariff Superseding

Second Revised Volume No. 1 Fifth Revised Sheet No. 216

Issued by: Carl W. Levander, Vice President

Issued on: October 25, 2002 Effective: