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Original Sheet No.148 Original Sheet No.148 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

(b) Carrying Charges. Each Month the FRQ Deferred Account shall be debited

(if the balance in said account is a debit balance) and shall be credited (if

the balance in said account is a credit balance) for a carrying charge, which

shall be determined by the product of (1) and (2) below.

(1) The cash balance in the FRQ Deferred Account, exclusive of carrying

charges accrued pursuant to this subsection (2) net of the related deferred

tax amounts, if any, as of the end of the immediately preceding Month.

(2) The applicable FERC interest rate (18 C.F.R. §154.501(d)) as divided by

365, or 366 in a leap year, and then multiplied by the number of Gas Days in

the applicable Month.

(c) Calculation of Surcharge or Refund. With each annual

filing hereunder Pipeline shall calculate surcharges or refunds designed to

amortize the net monetary value of the balance in the FRQ Deferred Account at

the end of the previous accumulation period. The surcharge or refund shall be

based upon the allocation of the FRQ Deferred Account balance at the end of

the twelve Month accumulation period over the actual throughput during the

twelve Month accumulation period. A Shipper's net debit or credit for the

twelve Month period shall be due and payable sixty Gas Days after the

Commission's acceptance of the annual filing.