Horizon Pipeline Company, L.L.C.

Original Volume No. 1

Effective Date: 04/18/2002, Docket: CP00-129-001, Status: Effective

Original Sheet No. 147 Original Sheet No. 147 : Effective

GENERAL TERMS AND CONDITIONS

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VARIANCE CHARGE

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0% to 3% Greater of $4.00/Dth or 2 times AMIP

3% to 5% Greater of $12.00/Dth or 6 times AMIP

5% to 20% Greater of $40.00/Dth or 20 times AMIP

20% to 50% Greater of $80.00/Dth or 40 times AMIP

Above 50% Greater of $200.00/Dth or 100 times AMIP

(b) Shipper shall in addition pay all applicable

charges specified in Sections 10.2(a)(1) and 10.2(b). Charges

hereunder shall be in lieu of any otherwise applicable Balancing

Service Charges under Sections 10.2(a)(2) and 10.3, but the charges

identified in the prior sentence shall still apply.

is not eliminated before the end of the month will be subject to the

cashout and offsetting provisions of Section 11; provided, however,

that any remaining imbalance created during a Critical Time which

helped the system will be cashed out at 100% of the AMIP.

10.5 DECLARATION OF A CRITICAL TIME

(a) A Critical Time may be declared (1) when the total

physical receipts to all or a portion of the system are approaching

or expected to approach, a level that is in excess of the total

physical deliveries Horizon can transport without jeopardizing the

integrity of its facilities; (2) when system pressure is falling and

approaching a level or is expected to fall and approach a level that

is at or below the minimum that Horizon considers necessary for

system integrity or to fulfill its firm contractual obligations; (3)

when system pressure on one or more pipeline segments is rising and

approaching a level or is expected to rise and approach a level that

is at or above the maximum pressure at which Horizon's facilities

may be safely operated; or (4) at other times when Horizon is unable

or anticipates it may not be able to fulfill its firm contractual

obligations or otherwise when necessary to maintain the overall

operational integrity of all or a portion of Horizon's system. A

Critical Time may not be declared on all or a portion of the system

for the purpose of maintaining interruptible services on that

portion of the system, but interruptible gas may flow at times or on

portions of the system when such flow would not violate any

operational control restrictions or provisions of this Tariff.

Horizon shall notify Shippers on the DART system as to the reason(s)

why a Critical Time was declared.