Scg Pipeline Inc.

Original Volume No. 1

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

Original Sheet No.80 Original Sheet No.80 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

(d) Pipeline shall recover any costs and penalties directly associated with

Pipeline’s OBAs through the System Balancing Cost Reconciliation Mechanism

pursuant to GT&Cs Section 12.8.

7.2 Determination of Receipts

A Shipper’s receipts shall be the scheduled quantities transported to the

Receipt Point, plus the Fuel Retainage Quantity. Any imbalances resulting

from a variation between the aggregate of Shipper’s receipts and measured flow

at an interconnect shall be managed pursuant to an OBA with an upstream

pipeline.

Shipper shall be responsible for any imbalances that it

creates on the upstream pipeline. Such imbalance charges and penalties on the

upstream pipeline shall be recovered by the upstream pipeline directly from

the Shipper.

7.3 Determination of Deliveries.

The Delivery Point operator shall have sole physical control of a Delivery

Point, including access to the measured volumes and shall maintain firm

contract entitlements that are sufficient to control imbalances at the

Delivery Point, and that reflect Primary Delivery Point entitlements

corresponding to the Delivery Point.

(a) Each Delivery Point operator which takes gas quantities from Pipeline’s

system shall, in accordance with the nomination and ranking deadlines, set

forth in Section 5 of the GT&Cs, provide Pipeline (or Shipper shall cause the

interconnecting Delivery Point operator to provide Pipeline, if applicable)

with a predetermined allocation (PDA) at the Delivery Point(s) where Pipeline

tenders gas to such Delivery Point operator by 8:00 p.m. CCT on the day of gas

flow. The Delivery Point operator shall select one of the following forms of

PDA: (1) swing PDA, (2) percentage PDA, (3) pro rata PDA or (4) ranked PDA.