Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 11/01/2003, Docket: RP00-404-007, Status: Effective

Fourth Revised Sheet No. 263C Fourth Revised Sheet No. 263C : Effective

Superseding: Third Revised Sheet No. 263C

GENERAL TERMS AND CONDITIONS

Northern has the right to require an increase or reduction of firm receipts at

Carlton on a non-discriminatory basis for system integrity. The phrase, "for

system integrity", means that Northern has the right to require, in resolving the

Carlton problem, an increase or decrease of receipts at Carlton on a

non-discriminatory basis in order for Northern to meet its contractual firm

delivery obligations downstream of Farmington up to a maximum of 250,000

MMBtu/day as provided for under the Settlement. Northern will schedule the

nominated volume in accordance with its tariff as further provided herein. In

the event that an increase in flow is needed, Northern shall call on the volume

on a pro rata basis. In the event Northern calls on the volume, Northern shall

also require the Other Carlton Entitlement to flow an amount equal to the

percentage of the volume Northern has called on to the Total Current Peak

Entitlement on Schedule 1, times their primary receipt point capacity at Carlton.

This Other Carlton Entitlement shall not be required to nominate or flow less

than or more than the Shipper's market requirements and/or uses.

A Carlton Sourcer or Other Carlton Shipper with a delivery point downstream of

Farmington may reduce its deliveries at that specific point and receive a

concomitant reduction in its requirement to receive its specified level of

volumes at Carlton provided such shipper's nomination is at an individual

point/TBS level and the individual delivery point/market reduction is verifiable.

To the extent a shipper has the right and utilizes zone nominations, if such

shipper nominates to reduce its obligation by reducing deliveries to a qualified

delivery point in the zone, all nominations for the respective zone must be at

the individual point/TBS level. Verification of the market reduction will be via

affidavit which may be provided by fax or electronically as part of the

nomination process. In the event a shipper exercising this provision to reduce

its Carlton requirements fails to correspondingly reduce its delivery

point/market, such shipper shall pay a penalty of twenty-five dollars ($25.00)

for each MMBtu of reduced Carlton requirement that does not have a concomitant

reduction in delivery.

During the heating season, Northern will not reduce any nomination for firm

receipts at Carlton for any Sourcer or Other Carlton Entitlement Shipper

who has a verifiable market or use. Verification of such market or use may be

provided by fax or electronically as part of the nomination process or otherwise

in the daily routine.

When Northern requires an increase in firm receipts at Carlton, Northern will

notify the appropriate parties to flow no later than twenty-four (24) hours prior

to Northern's Timely Nomination deadline. When Northern requires a decrease in

firm receipts at Carlton, Northern will notify the appropriate parties to

decrease flow no later than twenty-four (24) hours prior to Northern's Timely

Nomination deadline.

No Carlton Sourcer or Carlton Supplier/Shipper will be required to flow at

Carlton for the purpose of allowing Northern to avoid curtailment, as

defined in Northern's tariff, of TI service.

If, as a result of the operational flow requirements being invoked by Northern at

Carlton, those shipper(s) for whom flow modifications were required, incur an

imbalance penalty related solely to such flow change,

the imbalance penalty shall be waived.

If any Sourcer releases any portion of the Volume, the Carlton flow obligation

and all other obligations follow the Volume. In addition, the primary receipt

point may not be modified. A Carlton Supplier/Shipper may not release its

obligation.