Scg Pipeline Inc.

Original Volume No. 1

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

Original Sheet No.84 Original Sheet No.84 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

and a penalty of $20.00 per Dt for any quantity in excess of the 8% of

that allowable variation for the particular day. The cost of gas shall be the

Daily Gas Index Price for the higher of the Gas Day of receipt and delivery,

the Gas Day preceding receipt or delivery, or the Gas Day following receipt

and delivery, as applicable. Provided however, if Pipeline's allowable daily

dispatch variation is higher than the minimum floor set forth pursuant to

Section 7.5, Shipper will not incur a penalty for any unauthorized overrun

quantities equal to or less than that particular day's posted allowable daily

dispatch variation. Such penalties do not mitigate Shipper’s responsibility

to resolve imbalances resulting from such overruns.

The payment of a penalty for such daily unauthorized overrun

gas hereunder shall under no circumstances be considered as giving Shipper the

right to take unauthorized overrun gas or be considered as a substitute for

any other remedy available to Pipeline against the offending Shipper for

failure to stay within Shipper’s applicable, allowable daily dispatching

variation.

7.8 Unauthorized Daily Underdelivery Penalties. Shipper shall pay a penalty

for unauthorized daily underdeliveries occurring at the time an OFO is issued.

Such OFO penalty amount under this section shall be calculated as follows: If

Shipper does not transport on any day its scheduled quantities minus the

allowable daily dispatch variations set forth in Section 7.4 above, Shipper

shall pay a penalty of $5.00 per Dt for unauthorized underdelivery quantities

in excess of 2% up to 5% of that allowable variation for the particular day;

$15.00 per Dt for unauthorized underdelivery quantities in excess of 5% up to

8% of that allowable variation for the particular day, and a penalty of $20.00

per Dt for unauthorized underdelivery quantities in excess of the 8% of that

allowable variation for the particular day. Provided however, if Pipeline's

allowable daily dispatch variation is higher than the minimum floor set forth

pursuant to Section 7.5, Shipper will not incur a penalty for any unauthorized

underdelivered quantities equal to or less than that particular day's posted

allowable daily dispatching variation. Shipper shall pay a penalty only for

unauthorized underdelivery quantities occurring at the time an OFO is issued.

Such penalties do not mitigate Shipper’s responsibility to resolve imbalances

resulting from such underdelivery.