Kentucky West Virginia Gas Company

Third Revised Volume No. 1

Effective Date: 11/01/1997, Docket: RP97-104-005, Status: Effective

Second Revised Sheet No. 171 Second Revised Sheet No. 171 : Superseded

Superseding: First Revised Sheet No. 171

GENERAL TERMS AND CONDITIONS (Continued)

in excess of four percent which exists at the end of the 45

day period.

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 quantities transported on Pipeline and not

delivered at the primary delivery point. No imbalance penalty

will be assessed when a prior period adjustment applied to

the current period causes or increases a current month penalty.

b. Disposition of Penalties or Cash Out Amounts

Any net penalty revenue received under (a)(1) and (2) 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 an invoice for the amount of the negotiated exit fee. The

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

receipt of the invoice 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.