ANR Pipeline Company

Second Revised Volume No. 1

Effective Date: 04/01/1998, Docket: RP94- 43-017, Status: Effective

Second Revised Sheet No. 187.2 Second Revised Sheet No. 187.2 : Superseded

Superseding: 2nd Sub First Revised Sheet No. 187.2

GENERAL TERMS AND CONDITIONS

(Continued)

(1) Qualifying Transportation Costs. As used in this Section 29, the term Qualifying

Transportation Costs shall mean the fixed monthly charges and commodity costs

which Transporter incurs for the transmission and compression of gas by others

recorded in FERC Account No. 858, for service set forth on Schedule I-4 of the rate

case filed by Transporter on November 1, 1993, as adjusted by compliance filing

dated April 7, 1994. Qualifying Transportation Costs shall include the costs of any

contract amendments and contract replacements. Qualifying Transportation Costs

shall also include the costs of Northern Natural Gas Company transportation capacity

used to deliver Dakota volumes to the extent such capacity costs are no longer

recovered pursuant to Section 28.1(c) of these General Terms and Conditions.

Qualifying Transportation Costs shall exclude: (a) Viking Transportation Costs and

(b) the amortization of any Reverse Auction costs included on the Schedule I-4

referenced above and (c) any costs or credits for periods prior to the effectiveness of

the rates set forth in Transporter's general rate case filing of November 1, 1993. This

Section shall not be construed to affect Transporter's right to recover transition costs

as Transporter may incur in connection with its contracts with other pipelines

providing transmission and compression services or otherwise, such rights being

expressly reserved, subject to applicable Commission orders and regulations.

(2) Effective Date. Transporter shall file to place into effect on each May 1, beginning

with May 1, 1995, a Deferred Transportation Cost Adjustment, provided, however,

that such filings shall only be required to be made by Transporter to the extent that

the level of Qualifying Transportation Costs varies by greater than ten percent (10%)

from the level of such costs as of the effective date of the rates established by

Transporter's settlement at Docket No. RP94-43-000; provided, further, that in the

event that any Account No. 858 service provider increases or decreases its aggregate

charges to Transporter by such ten percent (10%) level in any twelve (12) Month

period, and subsequently refunds or surcharges any portion of those amounts,

Transporter shall then credit or direct bill the refunded or surcharged amount, as the

case may be, to shippers. Further, no change shall be made under the provisions

hereof to any Rate Schedule unless the change in rates for such Rate Schedule is at

least one cent per dth of MDQ for Reservation charges, or at least one mill for

Commodity Charges. The change in commodity rates shall be computed to the

nearest 1/100th of one cent. In the event any such change is precluded by law from

going into effect on such date, it shall be made effective as soon thereafter as

permitted by law.