Energy West Development, Inc.

Original Volume No. 1

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Effective Date: 06/11/2010, Docket: RP10-732-000, Status: Effective

Third Revised Sheet No. 42 Third Revised Sheet No. 42

Superseding: Second Revised Sheet No. 42

General Terms and Conditions

6.5 Operational Balancing Agreement (“OBA”):

(a) An OBA is a contract between two parties which specifies the procedures to

manage operating variances at an interconnect.

(b) Transporter will enter into an Operational Balancing Agreement with

the Receiving Party. The Receiving Party is the downstream pipeline or

local distribution company (LDC) that takes delivery of the Gas at the

Delivery Point for its own account and/or the account of its

Transportation customers. The Receiving Party will be responsible for any

imbalances at the Delivery Points and for any scheduling and/or balancing

penalties resulting from these imbalances.

6.6 Penalty Provisions Inapplicable.

(a) No monthly imbalance charge shall be assessed unless Transporter has

notified Shipper that an imbalance has occurred or will occur without

corrective action and Shipper has failed to take action in coordination

with Transporter’s Gas dispatchers which corrects such imbalance within 45

days of notification. Transporter will not assess imbalance or scheduling

penalties in the event Shipper’s failure to take corrective action or

Shipper’s failure to correctly schedule Gas deliveries is caused by

Transporter’s actions or force majeure conditions as defined in Section 18

of the General Terms and Conditions of this Tariff. In addition, in any

Month in which Shipper may be liable for both daily and monthly imbalance

penalties, the sum of the imbalance quantities for which Shipper has been

assessed a daily penalty shall be deleted from the imbalance quantities

used in calculating the monthly penalty. In calculating excess and

deficient quantities, Transporter shall take into consideration (1)

scheduled make-up quantities, and (2) any offsetting excess or deficiency

in deliveries under other Transportation Service Agreements between

Transporter and Shipper.

6.7 Penalty Provisions Not Exclusive. Nothing in this Section 6 shall limit

Transporter’s right to take such action as may be required to adjust deliveries or

receipts in order to alleviate conditions which threaten the integrity of its

system, nor prevent Transporter from exercising any other legal remedies which may

be available. In the event that Transporter reasonably determines that Shipper’s

receipts or deliveries must be adjusted in order to alleviate a threat to the

integrity of Transporter’s system, and Shipper fails after reasonable notice to

implement the action prescribed by Transporter to alleviate the threat to system

integrity, then in addition to all other remedies Transporter may have,

Transporter may assess a penalty equal to two times the maximum IT Rate Schedule

rate per MMBtu by which Shipper’s receipts or deliveries exceed the level

specified by Transporter.

6.8 Proceeds resulting from penalties, net of costs, including imbalance, overrun and

OFO penalties, shall be credited to Shippers receiving service under Rate

Schedules FT and IT. The credits will be allocated pro rata based on the total

revenues received from each Shipper under Rate Schedule FT and IT during the

calendar year, compared to the total revenues received from all Shippers under

Rate Schedules FT and IT during the calendar year. Penalty revenue credits will

be allocated only to those Shippers that were not assessed penalties on the day(s)

for which such penalty revenues are to be credited. Penalty revenue credits will

be reflected as a credit billing adjustment to each May billing for credits

accrued during the prior calendar year.