Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 03/01/2005, Docket: RP04-523-000, Status: Effective

Fourth Revised Sheet No. 196 Fourth Revised Sheet No. 196 : Effective

Superseding: Third Revised Sheet No. 196

GENERAL TERMS AND CONDITIONS

(Continued)

29.4 Remittance to GRI:

COMPANY shall remit to GRI, not later than fifteen (15) days after the

receipt thereof, all monies received by virtue of the GRI Adjustment Charges,

less any amounts properly payable to a federal, state or local authority

relating to the monies received hereunder.

29.5 Voluntary Contributions

The COMPANY has agreed to act as a fully voluntary agent for SHIPPERS who voluntarily

choose to support GRI programs. COMPANY shall remit to GRI all such amounts

voluntarily contributed by Southern's SHIPPERS pursuant to a mutually agreeable

methodology.

30. RESEARCH AND DEVELOPMENT EXPENDITURE ADJUSTMENT

30.1 Purpose:

In order to recover research and development expenditures as defined by

Definition 28.B of the Commission's Uniform System of Accounts pursuant

to the provisions of Federal Power Commission Order No. 483, this Section

30 of the General Terms and Conditions is established to be applicable to all

of COMPANY'S Rate Schedules for the transportation of gas contained in

Volume No. 1 of COMPANY'S FERC Gas Tariff.

30.2 Research and Development Expenditure Adjustment:

(a) The unit rate set forth on Sheet Nos. 14-18, 22, 26-30 and 34 of this FERC Gas

Tariff shall be subject to adjustment to reflect changes in

COMPANY'S cost of service for research and development

expenditures.

(b) No Research and Development Expenditure Adjustment shall be made

unless such adjustment, as computed under Section 30.2(c) hereof,

equals or exceeds one-tenth of one mill ($.0001) per Dth, nor shall

an adjustment be placed into effect more frequently than semi-

annually.

sum of: (i) research and development expenditures chargeable to

operations as determined under Section 30.2(d), and (ii) return and

related income taxes on research and development expenditures

included in Account 188 as determined under Section 30.2(e). The

effect upon