Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 02/01/2001, Docket: RP01-205-000, Status: Effective

Second Revised Sheet No. 209 Second Revised Sheet No. 209 : Effective

Superseding: First Revised Sheet No. 209

GENERAL TERMS AND CONDITIONS

(Continued)

Section 34.2 (continued)

Rate, shall not apply to, or be available to, the SHIPPER. At the end of such

period, the otherwise applicable maximum rates or charges shall govern the service

provided to SHIPPER. Only those rates, rate components, charges, or credits by

COMPANY and SHIPPER in writing as being superseded by a Negotiated Rate shall be

ineffective during the period that the Negotiated Rate is effective; all other

rates, rate components, charges, or credits prescribed, required, established or

imposed by COMPANY's Tariff shall remain in effect. COMPANY shall make any filing

at the FERC necessary to effectuate a Negotiated Rate.

34.3 Rate Treatment:

COMPANY shall have the right to seek in future general rate proceedings, discount-

type adjustments in the design of its rates related to negotiated rate agreements

that were converted from pre-existing discount agreements to negotiated rate

agreements, provided that the type of service received by SHIPPER prior to the

conversion is not altered as a result of the conversion to a negotiated rate. In

those situations, COMPANY may seek a discount-type adjustment based on the greater

of: (a) the negotiated rate revenues received or (b) the discounted rate

revenues which otherwise would have been received. In addition, COMPANY, shall not

be precluded from seeking discount recognition in future general rate proceedings

for negotiated rate transactions in which the total rate to be charged under the

Negotiated Rate Agreement cannot exceed the applicable maximum rate on a 100%

load-factor basis. For purposes of determining whether the rates charged under

any Negotiated Rate agreement constitute a discounted rate, the actual revenue

generated from the transaction under all of the rate components in total will be

compared to the revenue generated as though COMPANY had charged the maximum rate

under the applicable rate schedule at the actual load factor at which the service

under the Negotiated Rate transaction was utilized.