East Tennessee Natural Gas, LLC

Third Revised Volume No. 1

Effective Date: 08/02/2010, Docket: RP10-946-000, Status: Effective

Second Revised Sheet No. 397 Second Revised Sheet No. 397

Superseding: First Revised Sheet No. 397

GENERAL TERMS AND CONDITIONS (Continued)

47. PENALTIES AND PENALTY CREDITING MECHANISM (continued)

47.3 Balances Remaining Upon PAL Contract Termination

In the event that Shipper's PAL service transaction expires or is

terminated and Shipper does not eliminate the quantities of gas in

Shipper's PAL account utilizing any of the options specified in

Section 11 of Rate Schedule PAL, Shipper shall pay Transporter a

PAL Penalty Charge equal to the daily PAL maximum rate, set forth

on the Notice of Rates and Other Tariff Rate Changes multiplied by

the quantities of gas in Shipper's PAL account (inclusive of

quantities subject to Park Service and quantities subject to Loan

Service) for each Day that quantities of gas remain in Shipper's

PAL account, beginning on the Day after the expiration or

termination and ending on the earlier of (i) the resolution of the

imbalance, or (ii) the last Day of the Month in which the

expiration or termination occurred.

Transporter shall credit the penalty revenue received pursuant to

this Section 47.3, net of costs, to all other Shippers holding a

PAL service agreement ("Qualifying PAL Shipper") based on the

ratio of the total charges paid by each Qualifying PAL Shipper for

PAL service to the total amount of such charges paid by all

Qualifying PAL Shippers during the Month in which the penalty

revenues were received.

Any credits required by this Section 47.3 shall be made within 90

days following each anniversary of the Implementation Date.

47.4 Deliveries in Excess of Daily Limit

In the event that Transporter receives penalty revenue from an

LMS-PA Balancing Party pursuant to Section 5 of Rate Schedule

LMS-PA, such penalty revenue will be credited, net of costs, to

any Balancing Party under Rate Schedule LMS-PA that did not incur

penalties pursuant to Section 5 of Rate Schedule LMS-PA in the

Month for which penalty revenues were received ("Non-Offending

LMS-PA Balancing Party") based on the ratio of the actual

quantities delivered by the Non-Offending LMS-PA Balancing Party

to the actual quantities delivered by all Non-Offending LMS-PA

Balancing Parties.

Any credits required by this Section 47.4 shall be made within 90

days following each anniversary of the Implementation Date.