Scg Pipeline Inc.

Original Volume No. 1

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

Original Sheet No.123 Original Sheet No.123 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

and at the end of the same Month of each succeeding calendar year, Pipeline

shall determine whether the balance in the Deferred Account, whether debit or

credit, is in excess of $50,000.00. If so, Pipeline shall refund or

surcharge, as appropriate and as hereinafter provided, the portion of the

Deferred Account balance representing fixed and realized gains or losses from

the purchase and sale of Fuel Retainage Quantity. Such amount shall be

divided by the total volume in Dt that Pipeline projects it will transport

during the next succeeding twelve calendar Months under Rate Schedules FT and

IT. With respect to transportation service provided by Pipeline during the

twelve calendar Months referred to in the preceding sentence, the amount so

computed shall be applied as a reduction (if the balance in the Deferred

Account was a credit) or as a surcharge (if the balance in the Deferred

Account was a debit) to the Transportation Charge otherwise applicable under

Rate Schedules FT and IT. The total amount of any such reductions applied

during any Month shall be debited to the Deferred Account and the total amount

of any such surcharges collected during any Month shall be credited to the

Deferred Account. The portion of the Deferred Account representing contingent

and unrealized gains and losses from the purchase and sale of gas shall be

carried forward in the Deferred Account.

(d) Nothing in this Section 12.8 shall limit Pipeline's rights

to take action as may be required to adjust receipts and deliveries under any

Service Agreement to reflect actual experience or to alleviate conditions

which threaten the integrity of Pipeline's system, including maintenance of

service to higher priority Shippers and/or services.