Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 09/01/2009, Docket: RP09-427-000, Status: Suspended

Seventh Revised Sheet No. 204 Seventh Revised Sheet No. 204

Superseding: Sixth Revised Sheet No. 204

GENERAL TERMS AND CONDITIONS

(Continued)

32. APPLICATION OF DISCOUNTED RATES

32.1 Discounts of Reservation Charges and Surcharges

In the event COMPANY discounts the total rate applicable on a reservation basis under a SHIPPER'S

FT or FT-NN Service Agreement, it will discount the components of such total rate in the following

order: (1) GRI Adjustment Demand Charge; (2) Reservation Charge.

32.2 Discounts of Volumetric Charges or Surcharges

In the event COMPANY discounts the total rate applicable on a volumetric basis under SHIPPER'S FT,

FT-NN or IT Service Agreement, it will discount the components of such total rate in the following

order: (1) GRI Adjustment Charge; (2) Storage Cost Reconciliation Mechanism Volumetric Surcharge;

(3) Transportation Charge or Small Shipper Charge, as applicable; (4) ACA Surcharge; (5) Hurricane

Surcharge.