Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 11/01/1993, Docket: RP92-134-014, Status: Effective

Original Sheet No. 188B Original Sheet No. 188B : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

Section 23.2(2) (continued)

For each 12-month period thereafter, COMPANY shall credit the

following percentages of the Net Transportation Revenues against the

costs on which COMPANY bases its GSR Volumetric Surcharge for

the 12-month period commencing January 1, 1996, and for each 12-

month period thereafter, until such surcharge is terminated:

Up to $7 million = 75% credited

(25% retained by COMPANY)

>$7 million = 90% credited

(10% retained by COMPANY)

Once COMPANY'S GSR Volumetric Surcharge is terminated,

COMPANY will resume crediting the above percentages of the Net

Transportation Revenues to its SHIPPERS under Rate Schedule FT

and FT-NN based on the ratio that each SHIPPER'S revenues

generated from its Reservation Charges bear to the total revenues

generated from all Reservation Charges billed during the applicable

12-month period, provided that Reservation Charge revenues

generated under Short-Term Firm Service Agreements shall not be

utilized in determining this ratio.

(3) Credits under this section shall be calculated within sixty (60) days

after the end of each twelve-month period. In determining the Net IT

Revenues under Section 23.2(1) above and that portion of the Net

Transportation Revenues attributable to IT Service Agreements under

Section 23.2(2) above to be divided between the contesting firm

SHIPPERS and supporting firm SHIPPERS under the aforementioned

Stipulation, COMPANY shall prorate said revenues based on the ratio

that the Reservation Charge revenues calculated under Section 23.2(1)

and Section 23.2(2), respectively, bear to the total Reservation Charge

revenues. For firm SHIPPERS who support or are bound by the

Stipulation and Agreement filed in Docket Nos. RP89-224, et al., on

March 15, 1995, their respective shares of the total credits calculated

under Section 23.2(2) at the end of each 12-month period shall be

credited to the GSR Volumetric Surcharge costs or each such

SHIPPER'S bill for the month of service following the date that the

credit is calculated pursuant to this provision. For firm SHIPPERS

who are contesting parties to the aforementioned Stipulation and

Agreement, COMPANY shall place their respective shares of the total

credits calculated under Section 23.2(1) in a reserve account pending

the final outcome of the litigation in Docket No. RP93-15. In any

future rate case,