Horizon Pipeline Company, L.L.C.

Original Volume No. 1

Effective Date: 10/01/2004, Docket: RP04-534-000, Status: Effective

First Revised Sheet No. 222 First Revised Sheet No. 222 : Effective

Superseding: Original Sheet No. 222

GENERAL TERMS AND CONDITIONS

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31. ANNUAL CHARGES ADJUSTMENT CHARGE

31.1 PURPOSE

This Section of the General Terms and Conditions is

filed pursuant to Section 154.402 and Subpart B of Part 382 of the

Commission's Regulations under the Natural Gas Act (NGA) and the

Natural Gas Policy Act of 1978. The intent and purpose of this

Section is to establish an Annual Charges Adjustment (ACA)

provision under which Horizon can recover from its customers annual

charges assessed to it by the Commission pursuant to Part 382 of

the Commission's Regulations (ACA Cost). All amounts assessed

pursuant to Part 382 of the Commission's Regulations shall be

recorded in Account 928. Horizon will not seek to recover annual

charges assessed to it pursuant to Part 382 of the Commission's

Regulations in an NGA Section 4 rate case. For the purpose of

recovering annual charges assessed to Horizon pursuant to Part 382

of the Commission's Regulations, this Section establishes an ACA

charge as set forth in the Currently Effective Rates section of

this Tariff.

31.2 APPLICABILITY

The ACA charge shall be applicable to all

transportation transactions performed by Horizon.

31.3 BASIS OF THE ACA CHARGE

The rates for all transactions specified in Section

31.2 hereof shall be adjusted by a unit charge to recover ACA Cost.

Such unit charge shall be that increment, adjusted to Horizon's

pressure base and Heating Value, if required, which has been

established by the Commission. The ACA unit charge shall be

applied to the commodity component of rates.

31.4 FILING PROCEDURE

The ACA charge shall be filed annually by Horizon at

least thirty (30) days prior to the Effective Date of Charge. Any

such filing shall become effective on the effective date of charges

hereunder without suspension or refund obligation.

31.5 EFFECTIVE DATE OF CHARGE

The effective date of charges filed pursuant to this

Section shall be October 1.