Columbia Gulf Transmission Company

Second Revised Volume No. 1

Effective Date: 02/01/2007, Docket: RP07-125-001, Status: Effective

Second Revised Sheet No. 289 Second Revised Sheet No. 289 : Effective

Superseding: First Revised Sheet No. 289

GENERAL TERMS AND CONDITIONS (Cont'd)

41. OPERATIONAL PURCHASE AND SALES

41.1 Transporter may buy and/or sell gas to the extent necessary to:

(i) maintain system pressure and line pack;

(ii) manage system imbalances;

(iii) perform other operational functions of Transporter in connection with

transportation, and other similar services;

(iv) otherwise protect the operational integrity of Transporter’s system.

Any operational purchases and/or sales will be made on an unbundled basis and the purchaser will be

responsible for any transportation. Sales by Transporter will be made at receipt point(s), which may include

Pooling Points or Aggregation Points, as defined in Transporter’s IPP or AS-Gulf Rate Schedules, or at the

points of interconnection with the upstream pipelines prior to receipt into Transporter’s system. Purchases by

Transporter will be made at locations where the gas may be most operationally needed from time to time.

41.2 Transporter will post its operational sales quantities for bidding on its electronic bulletin board

in accordance with the applicable bidding provisions which will be posted at the time of the sale. Transporter

reserves the right, in its sole discretion,

(i) to withdrawal its postings;

(ii) reject all bids due to operational changes; and

(iii) reject any bids which do not meet or which contain modifications to the terms of the

posting or which contain terms that are operationally unacceptable.

41.3 Transporter will file a report on or before March 1 of each year reflecting the operational

purchases/sales for the 12-month period ending the preceding December 31. The report will indicate:

(i) the source of the operational gas purchased/sold;

(ii) the date of the purchase/sale;

(iii) volumes;

(iv) the purchase/sale price;

(v) the costs and revenues from the purchase/sale;

(vi) the disposition of the associated costs and revenues, including their absorption by

Transporter;

(vii) an explanation of the purpose of any operational purchase/sales; and

(viii) whether Transporter exercised its rights under Section 41.2(i) and (ii).