Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 02/21/2009, Docket: RP01-223-004, Status: Effective

Fifth Revised Sheet No. 300 Fifth Revised Sheet No. 300 : Pending

Superseding: Substitute Fourth Revised Sheet No. 300

GENERAL TERMS AND CONDITIONS

53A. PERIODIC RATE ADJUSTMENT (PRA) - FUEL

1. Purpose and Applicability: This Section 53 establishes a Fuel PRA mechanism

for the purpose of annually deriving the Market Area and Field Area FUEL

PERCENTAGES and the UNACCOUNTED-FOR PERCENTAGE as set forth on Tariff Sheet

No. 54 and Sheet Nos. 61-64, applicable to all Throughput Rate Schedules

included in Northern's F.E.R.C. Gas Tariff, including TF, TFX, VFT, LFT,

GS-T and TI.

2. Definitions.

(a) Fuel. Fuel consists of fuel burned and company used fuels: compressor,

heater, dehydrate, actuators, un-metered, blow-down and purge.

(b) Throughput. Throughput is the actual volumes received, inclusive of fuel

and unaccounted-for, from the respective receipt points on Northern's

system.

3. The methodologies used to derive the Field Area "Field Fuel Percentage" (MIDs

1-16B), Field Area "M/L Fuel Percentage" (MIDs 1-7 and MIDs 8-16B), Market

Area "M/L Fuel Percentage" (MID 17) and Unaccounted-For are as follows:

Field Area "Field Fuel Percentages" (MIDs 1-16B to MIDs 1-16B)

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The Field Fuel Percentages are based upon the actual fuel consumed,

as defined in Section 2.(a) above, at field compressor facilities on

Northern's system. The actual fuel consumed at these designated field

compressor facilities, as measured and defined in Northern's measurement

reporting system, is (1) aggregated by each MID, (2) summed for the

twelve-month period ending March 31, as adjusted for known and measurable

changes, and (3) divided by the total throughput applicable to Field Fuel

in each MID for the same annual period. Only those volumes which have

been received upstream or at a field fuel facility are subject to a Field

Fuel Percentage.

Field Area "M/L Percentages" (MIDs 1-7 and MIDs 8-16B)

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Northern has established two Field Area M/L Fuel Recovery Sections. Fuel

Section 1 consists of MIDs 1 through 7. Fuel Section 2 consists of

MIDs 8 through 16B. In addition there is a third mainline fuel rate for

the Market Area (MID 17) which is referred to as Market MID or Fuel

Section 3 for purposes herein. To calculate the M/L Fuel Percentages,

Northern determines a fuel retention percentage for each such Fuel

Section and then combines the individual fuel retention percentages for

such Fuel Section into fuel retention percentages for each MID to MID

transaction, subject to the methodology described below.

(a) The individual fuel retention percentage for each Fuel Section is

derived as follows (i) the actual fuel consumed in such Fuel Section

during the twelve-month period ending March 31 each year ("PRA

Period") as adjusted for changes which are known and measurable with

reasonable accuracy, is divided by (ii) the actual throughput for such

Fuel Section during the same twelve-month period. Each adjustment to

the actual data in any PRA filing must be separately identified and

supported with detailed workpapers in such PRA filing.

(b) The actual fuel consumed for each PRA Period for each Fuel Section is

the fuel consumed in the facilities located in the geographic

boundaries of such Fuel Section.