Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 03/01/1996, Docket: RP96-137-000, Status: Effective

Original Sheet No. 237A Original Sheet No. 237A : Superseded

GENERAL TERMS AND CONDITIONS

21.A. ORDER NO. 528 SURCHARGE MECHANISM

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1. Purpose and Applicability: This Section 21.A. establishes an Order No. 528

Surcharge Mechanism for the purpose of recovering Order No. 528 Costs as

defined in Section 21.A.2.a., through an Order No. 528 Reservation

Surcharge and an Order No. 528 Volumetric Surcharge. Northern will absorb

twenty-five percent (25%) of the Order No. 528 Costs. Twenty-five percent

(25%) of the Order No. 528 Costs shall be charged via a Reservation

Surcharge. The Reservation Surcharge shall be derived from the total

annual billing units, as defined in Section 21.A.2.d., and assessed on

monthly entitlement quantities, as defined in Section 21.A.4.B.

The remaining fifty percent (50%) of Order No. 528 Costs shall be charged

to all of Northern's transportation customers through an Order No. 528

Volumetric Surcharge applicable to quantities of natural gas transported

under any applicable Northern Rate Schedule or service. The Order No. 528

Demand and Volumetric Surcharges shall be charged over a one (1) year

period.

2. Definitions:

a. Order No. 528 Costs: Order No. 528 Costs include costs related to the

period prior to November 1, 1993, for activity under the

contracts in Appendix D of the Global Settlement, which shall include

the following costs:

(i) Costs relating to take-or-pay, pricing or other contract

provisions, and buyout, buydown or reformation costs

which are incurred by Northern (whether paid to a supplier

or to a third-party).

(ii) carrying charges on (i) above for the one (1) year

amortization period.

b. Order No. 528 Volumetric Surcharge: The Order No. 528 Volumetric

Surcharge shall be charged to all transportation volumes under all of

Northern's Transportation Rate Schedules or successors thereto as

contained in Northern's Tariff. Northern may, in accordance with any

applicable Commission Regulation, discount the Order No. 528 Surcharge for

transportation services. Any such discount will be offered on a

nondiscriminatory basis and shall be subject to Commission Order No. 497.

c. Order No. 528 Reservation Surcharge: The Order No. 528 Reservation

Surcharge shall be charged to the monthly entitlement quantities of

Northern's firm shippers, as defined in Section 21.A.2.e., where

Northern has the contractual right to collect the surcharge.

d. Total Annual Billing Units: The Total Annual Billing Units are set

forth on Appendix E of the Global Settlement, Docket No. RP92-8,

et al. and include the sum of the following entitlement units

associated with Northern's firm shippers:

(i) Firm Market Area entitlements; and

(ii) Firm Field-to-Field Area entitlements.