Southern Natural Gas Company

Seventh Revised Volume No. 1

Effective Date: 11/01/1994, Docket: RP94-387-001, Status: Effective

First Revised Sheet No. 212D First Revised Sheet No. 212D : Effective

Superseding: Original Sheet No. 212d

GENERAL TERMS AND CONDITIONS

(Continued)

37.3 Verification Requirements:

(a) On any day that the Small Shipper does not fully utilize its Small

Shipper Agreement, and there are deliveries allocated to other

transportation agreements at the Small Shipper's Delivery Point

on that day (other than as allowed under Section 37.2(b) above),

then COMPANY shall have the right to require the Small Shipper

to submit verification for such deliveries as described below.

(b) COMPANY shall provide to the Small Shipper a listing of the days,

and relevant allocation information, on which the situation

described in Section 37.3(a) occurred during the previous month,

or such other time period agreed upon by the parties. COMPANY also

shall provide a Verification Form with the statement which requests the

Small Shipper to identify the industrial load and volume being served.

Within thirty (30) days thereafter, the Small Shipper shall fill out

and return the Verification Form to COMPANY showing whether or not the

volumes delivered under third-party transportation agreements were for

the account of an industrial customer as allowed by Section 37.2(c)

above. If the Verification Form shows that any third-party deliveries

were on behalf of the Small Shipper, however, then COMPANY will

have the right to adjust its previous bills as set forth below.

37.4 Right to Audit and Adjust Bills:

(a) Upon at least fifteen (15) days prior notice to the Small Shipper,

COMPANY shall have the right, but not the requirement, to audit the

Small Shipper's records hereunder solely for the purpose of

verifying the accuracy of the information previously provided by the

Small Shipper on the Verification Form.

(b) If the Verification Form or COMPANY'S audit shows that deliveries made

to a Small Shipper Delivery Point on any day under one or more

third-party transportation agreements should have been made under the

Small Shipper Agreement, COMPANY shall have the right to reallocate the

delivered volumes on that day such that the correct volume is allocated

to the Small Shipper Agreement (rather than other agreements) up to the

Transportation Demand thereof, and to make a prior period adjustment on

the subsequent bills of all SHIPPERS affected by the reallocation.