Steuben Gas Storage Company

Original Volume No. 1

Effective Date: 09/14/2001, Docket: RP00-485-002, Status: Effective

Original Sheet No. 156E Original Sheet No. 156E : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

19. BILLING ADJUSTMENT FOR RATE SCHEDULE FS AND IS WITHDRAWAL PENALTY

19.1 Billing Adjustment. A billing adjustment shall be made to non-

offending Customers' bills crediting all revenues from Rate

Schedule FS and IS Withdrawal Penalties collected by Seller, net of

costs. All such revenue shall be generated from the sale of

Working Storage Gas retained by Seller ("Penalty Gas"). A pro

rata allocation of such revenue will be credited to each non-

offending Customer, and will appear on the invoice for the next

Month's business following actual receipt by Seller of such

revenues. Seller shall have 90 Days from the end of the Month, in

which such Penalty Gas was retained, to sell the Penalty Gas. The

Penalty Gas shall be sold as near as practical to the market rate

existing at the time the Penalty Gas is sold. If sale of Penalty

Gas is made to an affiliate of Seller, Seller shall sell such

Penalty Gas at no less then the spot market price on the Day of

such sale.

19.2 Allocation Base. Customers will recieve a pro rate allocation of

net penalty revenue, based upon the following allocation base:

(a) Non-offending Rate Schedule FS Customers: The Maximum

Storage Quantity such Customer had a right to store in

the Month withdrawal penalty invoked; and

(b) Non-offending Rate Schedule IS Customers: The Average

Monthly Storage Volume the Customer stored in the Month

withdrawal penalty invoked.

19.3 Monthly Credit. Each Customer will recieve a Monthly Credit based

upon the formula

X(Y/Z), where:

X = Total net Penalties collected by Seller in a Month

Y = The Customer's allocation base derived in accordance

with Section 19.2 above; and

Z = The Sum of all of Customers' allocation bases derived

in accordance with Section 19.2 above.