East Tennessee Natural Gas, LLC

Third Revised Volume No. 1

Effective Date: 07/01/2004, Docket: RP04-362-000, Status: Effective

Original Sheet No. 329 Original Sheet No. 329 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

(iii) forced balancing such that Balancing Parties will be

required to assure that nominations equal flows or

that receipts and deliveries fall within the tolerance

level designated in the Balancing Alert.

14.8 Shipper/Balancing Party Compliance: A Shipper/Balancing Party

must comply with an Action Alert and/or Balancing Alert (referred

to collectively as OFOs) within the time period set forth therein

unless the Shipper/Balancing Party is able to demonstrate that

such compliance (1) is not within the Shipper's/Balancing Party's

physical control or capability; (2) is prevented by operating

conditions on a third party system that are beyond the

Shipper's/Balancing Party's control; (3) is precluded by

contractual restrictions with persons other than Transporter;

and/or (4) is prevented due to a force majeure event as defined in

Section 24 of Transporter's General Terms and Conditions.

Provided that the Shipper/Balancing Party shall make a good faith

effort to comply with any such OFO, including seeking waivers of

any contractual limits with third parties or modifications of

operating conditions on third party systems. Shipper/Balancing

Party shall notify Transporter immediately if it believes that it

is excused from compliance with the OFO for any of the above

stated reasons, and shall provide Transporter with documentation

sufficient to support its basis for non-compliance.

14.9 Penalties: If a Shipper/Balancing Party fails to comply with an

Action Alert or a Balancing Alert, it shall be subject to an OFO

penalty as set forth in Section 47.5 of the General Terms and

Conditions of this FERC Gas Tariff. These penalties will be

imposed only to the extent necessary to prevent the impairment of

reliable firm service on Transporter's system. A

Shipper/Balancing Party shall not incur any charges or penalties

if such charges or penalties would not have been incurred but for

Shipper's/Balancing Party's compliance with an Action Alert or

Balancing Alert, including any preliminary action taken by

Shipper/Balancing Party in response to a warning issued by

Transporter as a precondition to an Action Alert. A

Shipper/Balancing Party shall not incur any penalties if the

Action or Balancing Alert was necessitated exclusively by

Transporter's negligence or willful misconduct.