Northern Natural Gas Company

Fifth Revised Volume No. 1

Effective Date: 11/01/1993, Docket: RS92- 8-004, Status: Effective

Original Sheet No. 237 Original Sheet No. 237 : Effective

GENERAL TERMS AND CONDITIONS

D. TCR DEMAND SURCHARGE PROVISIONS:

1. The TCR Demand Surcharge shall be calculated by first annualizing the TCR

Demand surcharge costs by dividing by five (5) years. This quotient is then

divided by the Total Annual Billing Units.

Even if the method of calculating entitlements units changes, e.g., because

of implementation of service restructuring, the surcharge will continue to be

billed according to Section 21.D.2.

2. The TCR Demand Surcharge is a surcharge applied to the monthly entitlement

quantities of Northern's firm customers, including the GS-1 customers. The

total monthly amount to be surcharged is determined by multiplying the

monthly entitlement quantity times the surcharge rate as set forth on Tariff

Sheet Nos. 50 through 58.

The billing of the Demand Surcharge will be limited to the customers and the

Total Annual Billing Units listed on Appendix B of the Stipulation and

Agreement of Settlement, Docket No. RP91-40-002.

In the event any service agreement between Northern and a traditional

Firm Sales Customer liable for charges under this Section 21 is terminated or

its term is reduced for any reason, including, but not limited to, the

expiration of said agreement, cancellation and abandonment of service, or a

change in corporate identity or bankruptcy occurs, such Customer shall not be

relieved of its obligation under this Section 21. In such event, Northern

shall at such Customer's option either (a) bill the customer, within 45 days

after Northern receives notice of such termination, reduction or change, a

one-time charge equal to the uncollected portion of the 5-year demand

surcharge total, as would result from the annual billing units detailed on

Appendix B of the Stipulation and Agreement of Settlement, Docket No. RP91-

40-002, or (b) continue billing the TCR Demand Surcharge on a Monthly basis

to said Customer or, if appropriate, such Customer's successor in interest in

whole or in part, during the remainder of the Amortization Period (including

under its new corporate identity, if any, and/or under said Customer's new

Rate Schedule, if any, or in any other manner allowable.)

To the extent an existing traditional Firm Sales Customer transfers a

portion of its respective service territory to a new Firm Sales Customer, a

proportionate share of the entitlements and associated TCR demand surcharge

shall be applicable to the new Firm Customers.