ANR Pipeline Company

Second Revised Volume No. 1

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Effective Date: 11/01/2006, Docket: RP06-613-000, Status: Effective

Fourth Revised Sheet No. 191B Fourth Revised Sheet No. 191B : Effective

Superseding: Sub Third Revised Sheet No. 191B

GENERAL TERMS AND CONDITIONS

(Continued)

34. CREDITING OF PENALTY REVENUES

34.1 Definition. As used in this Section 34, the term "penalty

revenues" shall mean any net revenues that Transporter actually

receives for any of the following:

(a) daily scheduling penalties assessed as a result of

allocations of deliveries pursuant to Section 14.1(a)(3)

(iii) of these General Terms and Conditions;

(b) penalty rates for unauthorized overrun charges assessed

pursuant to any of Transporter's firm service rate schedules;

(c) penalties assessed for failure to comply with the OFO

pursuant to Section 8.8 of these General Terms and

Conditions; or

(d) penalties assessed to FTS-4 Shippers for failure to comply

with their MFO obligations under their Agreements.

34.2 Crediting of Penalty Revenues. Transporter shall record all

penalty revenues received from time to time in a separate

account, and credit such penalty revenues to its Firm Service

Shippers on an annual basis in accordance with the following

procedures:

(a) on July 1, 2001, and on each July 1, thereafter, Transporter

shall determine the outstanding balance in its penalty

revenues account for the previous annual period. Such annual

period shall consist of the twelve (12) Month period ending

three (3) Months prior to the determination date of July 1;

(b) if there is a positive balance in such account exceeding

$100,000, Transporter shall allocate such positive balance to

its "Eligible Credit Shippers", who shall consist of those

Firm Service Shippers who received service during any such

previous annual period provided, however, that any such

Shipper that paid any penalty revenues to Transporter during

any Month of the applicable annual period shall not be an

Eligible Credit Shipper to receive any of that Month's

penalty revenues. Notwithstanding the above, any penalty

revenues received by Transporter from an FTS-4 Shipper due to

that Shipper's failure to comply with its MFO obligations,

shall be credited directly to the affected FTS-4L Shipper(s);

(c) the allocation of the credits to the qualifying Eligible

Credit Shippers shall be determined pro rata based on the

firm service revenues paid to Transporter by such Firm

Service Shippers during the applicable annual period, and

each Shipper's cumulative annual credit, if any, shall be

reflected as a credit to the billing statement(s) due to

such Shipper on the ninth (9th) business Day of the next

Month. If no such billing statement is due to any such

Eligible Credit Shipper, then the credit shall be paid to

such Shipper by Transporter in cash; and

(d) any positive balance less than $100,000 shall be carried

forward, with interest to the next July 1 determination.