Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 05/01/1994, Docket: TM94-4-7-000, Status: Effective

First Revised Sheet No. 206 First Revised Sheet No. 206 : Effective

Superseding: Original Sheet No. 206

GENERAL TERMS AND CONDITIONS

(Continued)

33.2 Fixed Take-or-Pay Surcharge:

Pursuant to this Section 33.2 of the General Terms and Conditions, each of

the PURCHASERS under COMPANY'S former OCD-1, OCDL-1, OCD-2,

OCD-3, G-1, G-2 and G-3 sales rate schedules shall be assessed a fixed

monthly take-or-pay charge in the amount authorized by the Commission and

set forth for each such PURCHASER on Sheet Nos. 23 through 25 of COM-

PANY'S FERC Gas Tariff. The total fixed monthly take-or-pay charge shall

be equal to the buy-out and buy-down costs direct billed to COMPANY from

COMPANY'S pipeline suppliers and authorized for recovery by the Commis-

sion, all as set forth on Sheet Nos. 23 through 25.

In addition, commencing on May 1, 1990, and each year thereafter, COMPA-

NY shall recalculate the interest amounts that would have accrued under the

actual Commission prescribed interest rates in effect during the previous 12-

month period and shall reflect any overcollections or undercollections during

the next 12-month amortization period. Any PURCHASER may eliminate

interest expense accruing under this section by remitting the total amount

assessed under this section against such PURCHASER within sixty days of the

effective date of any Commission order authorizing COMPANY to bill PUR-

CHASER for buy-out and buy-down costs pursuant to this section.

Any PURCHASER whose sales Service Agreement with COMPANY under

the above-referenced sales rate schedules expires prior to COMPANY'S

recovery from such PURCHASER of all amounts due from such PUR-

CHASER pursuant to this Section 33 shall at PURCHASER's election

exercisable within 60 days of the expiration of its sales Service Agreement

with COMPANY either (1) remit to COMPANY the balance of amounts due

to COMPANY from such PURCHASER pursuant to this Section 33 or (2)

elect to continue to pay the fixed monthly charge provided for hereunder for

the duration of any applicable amortization period. Unless COMPANY is

advised in writing to the contrary within the 60 day period following expiration

of its