Granite State Gas Transmission, Inc.

Third Revised Volume No. 1

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Effective Date: 12/13/1993, Docket: RS93- 1-001, Status: Effective

Original Sheet No. 438 Original Sheet No. 438 : Effective

OPERATIONAL BALANCING AGREEMENT

(For Use Pursuant to Rate Schedule LMS)

(Continued)

ARTICLE I

NOMINATIONS AND CONFIRMATIONS

Confirmation of Nominations - Prior to the beginning of the month in

which service is to commence, Granite State and Operator shall

confirm the quantities nominated to be transported by Granite State

at the Delivery Point(s) commencing on the first day of the month

following the confirmation. The quantities determined through this

confirmation and reconciliation shall be the "Scheduled Quantities."

Any modification to such scheduled quantities shall be confirmed by

Granite State and Operator prior to the commencement of the revised

service. Granite State shall provide evidence of such scheduled

quantities (in writing) within two business days after such confir-

mation, unless mutually agreed to otherwise. Operator shall notify

Granite State of any errors in the scheduled quantities within two

business days of receipt of such information from Granite State. If

Operator fails to respond to Granite State's request to confirm the

quantities to be transported at any Delivery Point(s) in accordance

with the above, then this Agreement shall terminate upon written

notice from Granite State at the end of that calendar month.

Allocations Based on Scheduled Quantities - The Parties intend that

the quantity actually delivered at the Delivery Point(s) will be

equal to the scheduled quantities. Operator shall use all reason-

able efforts to ensure that the quantities actually delivered at the

Delivery Point(s) are equal to the scheduled quantities. Unless

prohibited by applicable law or regulation, all transportation

services by Granite State shall be allocated each day based upon the

scheduled quantities set forth above, or by such other methods as

may be mutually agreed to by both Parties.