Columbia Gulf Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 216A Original Sheet No. 216A : Suspended

GENERAL TERMS AND CONDITIONS (Continued)

(d) Transportation Charges for Inter-Zone Netting and Trading. A Shipper that nets or trades

imbalances across rate zones will be assessed the appropriate transportation charges and retainage for the

required movement of gas.

(e) Netting and Trading Process. With the exception of the off-system zone on Transporter’s

system, the process for netting and trading will follow this sequence:

(1) Shippers are permitted to net Cumulative Monthly Imbalances within rate zones.

(2) Shippers are permitted to trade Cumulative Monthly Imbalance within rate zones, and can

voluntarily move gas between rate zones to collect imbalances for trading purposes. Transportation

across rate zones will be subject to the appropriate transportation charges and retainage.

With respect to Netting and Trading, a Shipper that is long one month and short the next month

cannot offset the two months via netting or trading. Each month’s imbalance can only be offset with

an opposite imbalance incurred for the same month.

(3) If any Cumulative Monthly Imbalances remain in any rate zone that Shippers have not

cleared by the 17th Business Day of the month following, Transporter will net those Cumulative

Monthly Imbalances to the least-cost rate zone (i.e., the rate zone that results in the lowest

transportation charge to the Shipper), based on the applicable maximum transportation rate and

retainage across the rate zones.

(4) Any Shipper with a remaining Cumulative Monthly Imbalance is cashed-out by Transporter

in accordance with Section 19.6.

(f) Correction of Imbalances During the Month. Shipper or Shipper’s agent may nominate

transactions (in accordance with GTC Section 6) during the course of the month in order to correct

imbalances. Third parties may offer imbalance management services to Shippers on Transporter’s system.

Transporter’s ability to receive or deliver imbalance quantities will depend upon Transporter’s physical

operations, and Transporter will not be obligated to allow receipt or delivery of quantities for the

resolution of imbalances if Transporter determines that activity would jeopardize the operational integrity

of its system.

(g) Cash Settlement to Eliminate Imbalances for Prior Period Adjustments (“PPA”). Subject to the

rights in Sections 19.5(b)-(e), Netting and Trading, Transporter will provide an invoice credit for PPA

quantities that are over-received and an invoice charge for PPA quantities that are over-delivered. If the

PPA imbalance is in the opposite position than the original imbalance (i.e. original position was short and

PPA was long or vice versa), than the PPA imbalance will be credited or charged at the originally charged

“Buy” or “Sell” price described in Section 19.6, up to the original imbalance quantities. If an imbalance

remains after the original imbalance is reversed, then the remaining PPA imbalance will be credited or

charged at the index “Midpoint” price. If the PPA imbalance is the same position as the original imbalance,

or if there was no original imbalance, then the PPA imbalance will be credited or charged at the index

“Midpoint” price.

(h) Determination of “Index Midpoint” Price. For the month in which the imbalance occurred, the

index “Midpoint” price per Dekatherm used in the calculation will be the arithmetic average of the original

month’s “Buy” and the “Sell” price, multiplied by a factor of 1.0