Scg Pipeline Inc.

Original Volume No. 1

Effective Date: 11/01/2003, Docket: RP03-611-000, Status: Effective

Original Sheet No.78 Original Sheet No.78 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

Pipeline shall give backhaul transportation nominations secondary priority for

purposes of this GT&Cs Section 6.7, and Pipeline shall net backhaul nomination

against nominations for forward haul service in determining available segment

capacity, unless Pipeline has reason to believe that the backhaul

transportation service will not be performed on a continuous basis throughout

the Gas Day.

7. OPERATIONAL BALANCING AGREEMENTS, DETERMINATION OF RECEIPTS AND

DELIVERIES, ALLOWABLE DAILY DISPATCHING VARIATIONS, OVERRUN PENALTIES AND

SCHEDULING PENALTIES

7.1 Operational Balancing Agreements (“OBA”)

(a) For the purpose of minimizing operational conflicts between various

pipeline facilities with respect to the delivery of gas to and from Pipeline’s

facilities, Pipeline may enter into Operational Balancing Agreements (“OBAs”)

with interstate or intrastate pipelines that operate natural gas facilities

that directly interconnect with Pipeline’s system (herein called “OBA Party”).

Such OBA shall specify the gas custody transfer procedures to be followed by

Pipeline and OBA Party for the confirmation of scheduled quantities of gas to

be received by Pipeline at the Receipt Point or delivered by Pipeline at the

Delivery Point. Such OBA will provide that any variance between actual

quantities and scheduled and confirmed quantities at the point where the OBA

is in place for any Gas Day shall be cashed out or resolved in-kind promptly

pursuant to the terms of the OBA and that such daily scheduling and monthly

balancing variances are the responsibility of the OBA Party.