East Tennessee Natural Gas, LLC

Third Revised Volume No. 1

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Effective Date: 09/01/2008, Docket: RP08-475-000, Status: Effective

Third Revised Sheet No. 401 Third Revised Sheet No. 401

Superseding: Second Revised Sheet No. 401

GENERAL TERMS AND CONDITIONS (Continued)

49. NEGOTIATED RATES

Transporter and Shipper may mutually agree on a negotiated rate or rate

formula with respect to rates, rate components, charges, or credits

differing from the otherwise applicable tariff rate under Rate Schedules

FT-A, FT-L, FT-GS, LNGS, IT, IT-L, and/or PAL.

49.1 Definition

A negotiated rate may be less than, equal to, or greater than the

maximum recourse rate and/or the minimum rate; may be a rate

design other than the straight fixed-variable; and may include a

minimum quantity. The recourse rates will be available to any

Shipper that does not wish to negotiate a rate.

49.2 Limitations

This Section 49 does not authorize the negotiation of terms and

conditions of service.

49.3 Bidding for Capacity

The cap for bidding for capacity under the right of first refusal

provisions of this tariff is the maximum recourse rate.

49.4 Capacity Release

Except as expressly provided for in Sections 17 and 18 of the

General Terms and Conditions, the release of capacity under a

negotiated rate agreement is capped at the maximum recourse rate;

provided, however, the negotiated rate Shipper will continue to be

obligated to pay Transporter the difference by which the

negotiated rate exceeds the rate paid by the Replacement Shipper.

Transporter and a negotiated rate Shipper may agree upon payment

obligations and crediting mechanisms, which vary from or are

different from those set forth in Transporter's capacity release

provisions.

49.5 Accounting Treatment

Transporter will establish a new sub-account to record the

revenues received from any negotiated rate transactions and shall

maintain supporting information at a level of detail that would

be sufficient for Natural Gas Act Section 4 rate change filing

purposes. Transporter will keep separate and identifiable each

volume transported, billing determinant, rate component,

surcharge, and revenue associated with a negotiated rate to

permit filings in the form of Statements G, I, and J in future

rate proceedings.