Discovery Gas Transmission LLC

Original Volume No. 1

Effective Date: 01/01/2008, Docket: RP08- 70-001, Status: Effective

Original Sheet No. 198B Original Sheet No. 198B : Effective

c. Shippers shall have the right to challenge Transporter's

HMRE Surcharge filings only with respect to: (1) whether

the expenditures included are Qualifying HMRE Expenditures;

(2) whether the Qualifying HMRE Expenditures were prudently

incurred; and (3) whether the HMRE Surcharge is properly

calculated.

27.4 CALCULATION OF THE HMRE SURCHARGE -

a. Transporter shall establish and maintain an HMRE Deferred

Cost Account with its initial balance equal to the sum of

the Qualifying HMRE Expenditures for the twelve-month

period ending September 30, 2007. For each billing month

thereafter and to ensure a true-up of the Qualifying HMRE

Expenditures, the HMRE Deferred Cost Account shall be (1)

debited by the actual Qualifying HMRE Expenditures incurred

after September 30, 2007, (2) credited by the HMRE

Surcharge amounts collected by Transporter, and (3) debited

or credited, as appropriate, by the carrying charges on the

balance in the HMRE Deferred Cost Account, calculated in

accord with Section 154.501 of the Commission's

Regulations.

b. Any capital costs that are Qualifying HMRE Expenditures

shall be recovered as expenses through the HMRE Deferred

Cost Account without any associated return (other than

carrying charges as provided for in Section 27.4.a above),

depreciation or taxes.

c. The subsequent HMRE Surcharges, to be effective January 1

of each year, shall equal (1) the balance in the HMRE

Deferred Cost Account (including carrying charges) as of

the prior September 30, divided by (2) projected

transportation throughput on Transporter's Mainline

Facilities for the period January 1 through December 31.

d. The HMRE Surcharge shall not exceed $0.05 per Dt. However,

the $0.05 per Dt cap will not serve to limit the recovery

of any Qualifying HMRE Expenditures credited to the HMRE

Deferred Cost Account.