North Penn Gas Company

First Revised Volume No. 1

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Effective Date: 04/01/1991, Docket: RP90- 23-001, Status: Effective

Seventh Revised Sheet No. 15C Seventh Revised Sheet No. 15C : Effective

Superseding: Substitute Sixth Revised Sheet No. 15C

GENERAL TERMS AND CONDITIONS (Continued)

14 PURCHASED GAS COST ADJUSTMENT (PGA)

North Penn Gas Company (North Penn) shall file an annual PGA

to be effective each March 1 on sixty days' notice and

quarterly PGA's to be effective each June 1, September 1 and

December 1 on 30 days' notice. A revision to the annual PGA

filing may be filed at least 30 days before the annual PGA

effective date.

14.1 The rates contained in the First Revised Volume No. 1

are based on a projected weighted average

jurisdictional cost of gas (WACOG) per unit of sales

(herein referred to as WACOG). Such cost of gas is

based on the cost of gas purchased from pipeline

suppliers 1/ and the cost of field line purchases net

of storage injections and withdrawals. Such cost of

gas does not include costs relating to fuel use and

lost and unaccounted-for gas that North Penn incurs in

connection with its storage operation.

North Penn shall compute a Current Adjustment to its

WACOG per unit of sales for the purpose of determining

the amount to be included in its PGA in the following

manner:

I. The best estimate of the quantities of natural gas

North Penn expects to purchase and to receive in

non-current exchange transactions during the three

months beginning on the effective date of the PGA;

II. Known and measurable changes in the rate, for all

but pipeline supplier rates, based on contractual

obligations which are in existence on the date the

PGA is filed. The rate to be used for each

projected purchase of pipeline supply will be the

rate in effect as of the effective date of the PGA

or a rate which will come out of suspension during

the PGA effective period. The rate for producer

supply may be adjusted, if applicable, by the

monthly ceiling price escalations allowed under

the Natural Gas Policy Act of 1978; and

III. The best estimate of quantity and cost adjustments

for storage injections and withdrawals.

IV. The jurisdictional portion of the total purchased

gas cost as developed in I, II and III above shall

be the ratio of the total estimated jurisdictional

sales to total estimated sales for the projected

period.

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1/ Includes any portion of minimum bill amounts billed Seller

by its pipeline suppliers and paid by Seller.