Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 09/01/2003, Docket: RP00-476-004, Status: Effective

Second Revised Sheet No. 153 Second Revised Sheet No. 153 : Effective

Superseding: First Revised Sheet No. 153

GENERAL TERMS AND CONDITIONS

(Continued)

17. PENALTIES

17.1 Limitation on Collection of Multiple Penalties:

Notwithstanding the other provisions of COMPANY'S FERC Gas Tariff to

the contrary, and subject to the provisions of Section 17.2 below, if in any

month SHIPPER incurs penalty charges under its Service Agreement(s) pursuant to

more than one of the following provisions: Sections 41.2, 41.3, or 41.4 of the

General Terms and Conditions, COMPANY will bill, and SHIPPER shall be obligated

to pay, only the total penalty charges accruing under the one provision from

the foregoing list which yields the largest dollar amount for the total penalty

charges incurred under that provision by SHIPPER during the entire month.

17.2 Waiver:

In recognition of the fact that each penalty provision in this FERC Gas Tariff

is intended to promote conscientious operations by the SHIPPER such that

service to other SHIPPERS is not impaired in any way, COMPANY may

waive any penalty charges incurred by SHIPPER if COMPANY determines,

in its reasonable judgment, that SHIPPER was conducting its operations in a

responsible manner at the time the penalty charges were incurred and that

SHIPPER'S conduct did not impair service to another SHIPPER.

COMPANY must grant waivers