Kentucky West Virginia Gas Company

Third Revised Volume No. 1

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

Original Sheet No. 61C Original Sheet No. 61C : Superseded

GENERAL TERMS AND CONDITIONS (Continued)

It is Pipeline's intention to operate without having to impose

imbalance penalties. Therefore, Pipeline will waive imbalance

penalties so long as the Customer is making reasonable effort

to balance receipts and deliveries and has attempted to work with

Pipeline to alleviate the imbalances. Additionally, no

imbalance penalties will be assessed against Customer

delivering gas on-system (i.e., at primary delivery points in

Kentucky) so long as the Customer designates a secondary

delivery point and recipient of gas at the Columbia Gas

Transmission interconnects who will be responsible for any excess

volumes transported on Pipeline and not delivered at the primary

delivery point.

b. Disposition of Penalties or Cash Out Amounts

Any net penalty revenue received under (a)(1) from affiliated

companies of Pipeline will be credited on a prospective basis to

firm customers in proportion to their contract quantity. Any

net cash out revenue will be credited to customers in the form of

a negative surcharge on firm and interruptible service rates.

36. EXIT FEES

36.1 Upon the effective date of this Tariff, any Customer that desires

to reduce or terminate any capacity entitlement it holds on

Pipeline's system may do so upon payment of an exit fee. Pipeline

will permit the negotiation of an exit fee in the event no other

party equals or betters the current Customer's rate or no bids are

made and the current customer wants to be released from the

capacity prior to the end of its service agreement. However, if

another party bids for the capacity at a rate equal to or higher

than the current customer's rate, up to the maximum rate, Pipeline

will release the current customer if it does not wish to retain the

capacity.

36.2 For any exit fee payable under this Section 36, Pipeline shall

issue a bill for the amount of the negotiated exit fee. The

entire amount of the bill shall be payable ten (10) days after

receipt of the bill and interest shall accrue on all amounts not

paid when such amounts become payable, at the rate computed using

the factors specified in Section 157.67 of the Commission's

regulations, until such time as the full amount has been paid.

Any Customer liable for the payment of an exit fee under this

Section 36 may elect to pay the exit fee amortized over a period of