Granite State Gas Transmission, Inc.

Third Revised Volume No. 1

Effective Date: 01/31/2003, Docket: RS93- 1-001, Status: Effective

Original Sheet No. 328 Original Sheet No. 328 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

31. OPERATIONAL BALANCING AGREEMENTS

31.1 General: Any imbalances arising under any transporta-

tion agreement at Delivery Points from Transporter's

pipeline system, which Delivery Points are subject to

Operational Balancing Agreements as more fully described

below, on the day or days such imbalances arise, will be

resolved by Transporter pursuant to the terms of the

applicable Operational Balancing Agreement.

31.2 Terms Governing: For the purpose of minimizing opera-

tional conflicts between various natural gas facilities

with respect to the delivery of gas to and from

Transporter's system, Transporter is willing to negoti-

ate and execute Operational Balancing Agreements with

Shippers whose natural gas facilities interconnect with

Transporter's system. Such Operational Balancing Agree-

ments shall specify the gas custody transfer procedures

to be followed by Transporter/Shipper for the confirma-

tion of scheduled quantities to be received by Trans-

porter at Receipt Points and delivered by Transporter at

Delivery Points. Such Operational Balancing Agreements

will provide that any variance between actual quantities

and scheduled and confirmed quantities for any day shall

be resolved in-kind promptly, or pursuant to such cash

out provisions as Transporter and the Shipper may agree

upon. To facilitate such determination of variances on

a timely basis, Transporter and the Shipper will agree

in the Operational Balancing Agreement on necessary

measurement and accounting procedures. Transporter

shall post on its electronic bulletin board those Deliv-

ery Points which are subject to an Operational Balancing

Agreement. Transporter will also provide to any party

upon request a copy of any executed Operational Balanc-

ing Agreement.