Southern Natural Gas Company

Seventh Revised Volume No. 1

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

Second Revised Sheet No. 212I.07 Second Revised Sheet No. 212I.07 : Effective

Superseding: First Revised Sheet No. 212I.07

GENERAL TERMS AND CONDITIONS

(Continued)

41.3(b)(Continued)

Notwithstanding the fact that SHIPPER's scheduled quantities and

SHIPPER's actual receipts vary by more than the four (4) percent

tolerance described above, if the total scheduled quantities (i)

at the Receipt Point identified in the notice or (ii) at a group

of Receipt Points indentified in the notice set forth in Section

41.3(a) above, if applicable; or (iii) at those Receipt Points

within the group of Receipt Points in (ii) above, having the same

Point Operator as the Receipt Point at which SHIPPER has scheduled

quantities, if applicable, do not vary by more than four (4)

percent of the daily quantities received by COMPANY at the Receipt

Point, the group level, or the operator level, respectively, then

the scheduling penalty shall not be assessed hereunder. Subject

to the provisions of Section 41.3(d) below, the scheduling penalty

shall be equal to the maximum Transportation Charge under the IT

Rate Schedule multiplied by the quantities in excess of the

allowed variance, provided, however, that such penalty shall be

waived for an interruptible SHIPPER whose scheduled volumes are

bumped by a firm intra-day nomination but shall be waived only for

the day that such bumping occurs.

(c) If during any day of the month the actual quantities of gas

delivered at each Delivery Point set forth in a notice given under

(a) above by COMPANY for SHIPPER'S account vary by more than four

(4) percent of SHIPPER's scheduled quantities, including any

applicable no-notice entitlements for each Delivery Point, and

such variance is in the direction prohibited in such notice, then

a scheduling penalty shall be assessed. Notwithstanding the fact

that SHIPPER's scheduled quantities and SHIPPER's actual

deliveries vary by more than the four (4) percent tolerance

described above, if the total scheduled quantities (i) at the

Delivery Point identified in the notice or (ii) at a group of

Delivery Points identified in the notice set forth in Section

41.3(a) above, if applicable; or (iii) at those Delivery Points

within the group of Delivery Points in (ii) above, having the same

Point Operator as the Delivery Point at which SHIPPER has

scheduled quantities, if applicable, do not vary by more than four