Granite State Gas Transmission, Inc.

Third Revised Volume No. 1

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

Original Sheet No. 439 Original Sheet No. 439 : Effective

OPERATIONAL BALANCING AGREEMENT

(For Use Pursuant to Rate Schedule LMS)

(Continued)

Allocation of Variances - The difference on any day between the

scheduled quantities set forth above and the actual quantity deliv-

ered at the Delivery Point(s) shall be the Daily Operational Imbal-

ance and shall be allocated to this Agreement. The difference

between the sum of the scheduled quantities set forth above during a

calendar month shall be the Monthly Operational Imbalance. Any

Operational Imbalances will be corrected in accordance with Article

II.

Reports on Actual Deliveries - Should Granite State not have the

ability to monitor actual deliveries at any Delivery Point on a

daily basis, Operator shall provide to Granite State the best

available information compiled on a daily basis on the actual

deliveries at such Delivery Point(s) within two business days after

the date of delivery.

ARTICLE II

CORRECTION OF OPERATIONAL PENALTIES

Correction in Flow Rates During A Day - Operator will be able to

request adjustments to actual deliveries at its Delivery Points at

any time during the day by coordinating with Granite State's gas

dispatchers. Granite State will use reasonable efforts to deliver

those changed quantities when the operating conditions on Granite

State's system permits, taking into consideration the nominations

made by firm customers on Granite State's system.

Corrections During the Month - Estimated metered quantities, or

actual metered quantities where available, may be used by Granite

State for purposes of adjustments under this Section on a daily

basis during the month to determine the estimated Operational

Imbalance at all of the Delivery Point(s). Granite State shall make

the estimated Daily and Monthly Operational Imbalance at each