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. 302 Fifth Revised Sheet No. 302 : Pending

Superseding: Substitute Fourth Revised Sheet No. 302

GENERAL TERMS AND CONDITIONS

53B. PERIODIC RATE ADJUSTMENT (PRA) - ELECTRIC COMPRESSION POWER COSTS

1. Purpose and Applicability: This Section 53B establishes an electric compression

power costs PRA mechanism for the purpose of annually deriving the Market Area and

Field Area electric compression commodity rates as set forth on Tariff Sheet No. 54,

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, as may be revised from time to

time. 2. Definitions.

(a) Electric Compression Power Costs. The costs of electric power used in the

operation of any new electric horsepower compression installed after

October 1, 1998.

(b) Throughput. Throughput is actual throughput in the Market Area or Field Area

for the 12-month period ending March 31 each year.

3. The methodology used to derive the Market Area and Field Area electric compression

commodity rates is as follows:

Field Area Electric Compression Commodity Rate

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The Field Area electric compression rate will be based upon the actual Electric

Compression Power Costs, as defined in 2.(a) above, for electric compressors

installed in the Field Area. The actual Electric Compression Power Costs for

these Field Area Compression facilities will be summed for the twelve-month

period ending March 31, as adjusted for changes that are known and measurable

with reasonable accuracy, and divided by the respective Field Area Throughput,

as defined in 2.(b) above, to determine the applicable commodity rate to be set

forth on Sheet No. 54. Each adjustment to actual data in any PRA filing must

be separately identified and supported with detailed workpapers in such PRA

filing.

Market Area Electric Compression Commodity Rate

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The Market Area electric compression rate will be based upon the actual

Electric Compression Power Costs, as defined in 2.(a) above, for compressors

installed in the Market Area. The actual Electric Compression Power Costs for

these Market Area Compression facilities will be summed for the twelve-month

period ending March 31, as adjusted for changes that are known and measurable

with reasonable accuracy, and divided by the respective Market Area Throughput,

as defined in 2.(b) above, to determine the applicable commodity rate to be set

forth on Sheet No. 54. Each adjustment to actual data in any PRA filing must

be separately identified and supported with detailed workpapers in such PRA

filing.

4. Effective Date. The Field Area and Market Area electric compression commodity rates

will be applicable beginning June 1, 1999 and each annual period thereafter.

5. True-up Mechanism. Northern shall annually compare the amount of Electric

Compression Power Costs collected via the Market Area and the Field Area commodity

rates for the most recent twelve (12) months ended March 31 with the amount of

actual Electric Compression Power Costs for the Market Area and the Field Area for

the same period to determine the Market Area and the Field Area Adjustment Amounts.

The Adjustment Amounts will be divided by the applicable Market Area and Field Area

Throughput to determine the Market Area and Field Area Adjustment rates to be added

to the Market Area and the Field Area electric compression commodity rates for the

period beginning the subsequent June 1. Under-collection will result in a positive

Adjustment Amount. Over-collection will result in a negative Adjustment Amount.