Kentucky West Virginia Gas Company

Third Revised Volume No. 1

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Effective Date: 07/01/1993, Docket: RS92- 18-002, Status: Effective

Original Sheet No. 60A Original Sheet No. 60A : Superseded

GENERAL TERMS AND CONDITIONS (Continued)

(b) Gas Supply Realignment Costs

Gas supply realignment costs are those costs incurred by

Pipeline in reforming or terminating its existing gas supply

contracts in connection with its transition to an unbundled

transporter of natural gas under Order No. 636. Pipeline

shall be entitled to file a limited Section 4 filing under

the Natural Gas Act to collect 100% of its actual prudently

incurred gas supply realignment costs after the effective date

of this Section 31. Ninety percent (90%) of such prudently

incurred costs shall be recovered through a reservation

surcharge assessed against Part 284 firm service customers,

and allocated on the basis of each customer's currently

effective maximum daily contract quantity entitlement subject

to adjustment as such entitlements are changed during the

period in which the surcharge will be in effect. Ten percent

(10%) of such costs shall be recovered from Part 284

interruptible service customers through interruptible rates as

a cost of providing such service.

(c) New Facilities Costs

New facilities costs are those costs incurred by Pipeline in

expanding and upgrading its facilities in order to meet the

operational and service requirements of Order No. 636.

Pipeline shall be entitled to file a general Section 4

filing under the Natural Gas Act to collect 100% of its new

facilities costs after the effective date of this Section.

(d) Stranded Costs

Stranded costs are those costs incurred by Pipeline in

connection with its former bundled sales services which

cannot be included in the base rate applicable to the new

unbundled services which Pipeline is required to offer under

Order No. 636. Pipeline shall be entitled to file a general

Section 4 filing under the Natural Gas Act to collect 100%

of its stranded costs after the effective date of this

Section.