Southern Natural Gas Company

Original Volume No. 2

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Effective Date: 02/03/1991, Docket: RP90-139-004, Status: Effective

First Sub. Twelfth Rev. Sheet No. 703 First Sub. Twelfth Rev. Sheet No. 703 : Effective

Superseding: Eleventh Revised Sheet No. 703

RATE SCHEDULE X-65 (Continued)

retained by Southern under Subsection 1(b) of this Article VI. 1/

b. Fuel and Uses- Southern will deduct from the quantity of gas

delivered by Tennessee at the Point of Receipt, at no cost to Southern, a daily

quantity of gas for Southern's system fuel and uses equal to one percent (1%)

of the quantity received from Tennessee at the Point of Receipt hereunder on

any day. Title to such gas shall pass to Southern at the Point of Receipt

hereunder. 2/ 3/

2. Rate Changes - Tennessee agrees that Southern shall have the right to

adjust its transportation rates in effect hereunder, without any further

agreement by Tennessee, from time to time as may be needed to assure Southern

of receiving just and reasonable rates for the service it performs and to seek

approval of such rates from the Commission or any governmental body having or

asserting jurisdiction thereof; provided, however, Tennessee's agreement herein

is without prejudice to its right to intervene in proceedings relative to such

adjustment and to contest such changes.

3. Taxes - Southern will be reimbursed in full by Tennessee for any taxes

or other assessments or charges that are lawfully assessed against Southern and

paid by Southern by reason of the service performed by Southern in receiving,

transporting and delivering liquefiable hydrocarbons for Tennessee's producers.

4. In the event the Commission, or any governmental body having or

asserting jurisdiction thereof, requires from time to time that a rate

different than the rate set forth in Paragraph 1(a) of Article VI hereof be

charged for or assigned to the transportation of PVR hereunder, then Tennessee

shall pay to Southern such rate. If the Commission does not specify a rate to

be charged for or assigned to the transportation of PVR but does provide,

through its cost allocation powers in determining pipeline rates, that a

portion of Southern's rate base and/or cost of service shall be allocated to

the transportation of PVR hereunder, then Tennessee shall pay Southern a rate

for the transportation of PVR hereunder based on said allocated cost of service

(including the return on equity allowed by the Commission). If Southern is

required by the Commission to make refunds to its customers arising out of its

transportation of PVR hereunder, Tennessee shall reimburse Southern for such

entire amount that it is required to refund.

5. Tennessee hereby agrees to reimburse Southern for all filing fees

incurred by Southern for the purpose of seeking regulatory authority with the

Commission or any other regulatory agency to proceed with amendments to this

Agreement or any further modifications under this Agreement which may be

necessary from time to time. 2/

1/ Revised Charge: Winter 27.7› Summer 16.7›

Plus the ACA unit charge and the volumetric Take-or-Pay surcharge which

are set forth in Sections 21 and 22, respectively, of Southern's FERC

Gas Tariff, Sixth Revised Volume Number 1.

2/ Per amendment dated June 26, 1987.

3/ Revised fuel used and unaccounted for charge: 1.5%