Central Kentucky Transmission Company

Original Volume No. 1

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Effective Date: 05/01/2006, Docket: CP05- 48-002, Status: Effective

Original Sheet No. 146 Original Sheet No. 146 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

14.8 Billing.

(a) Transporter, in accordance with the terms of this Tariff,

shall: (i) bill the Releasor for the full reservation charge, applicable

reservation-related surcharges and any other fixed charges for which

Releasor is otherwise obligated to Transporter, less either the reservation

charge bid by Releasor's Replacement Shipper, or the reservation charge

portion of amounts billed to Replacement Shippers paying one-part

volumetric rates; and (ii) bill the Replacement Shipper for (A) the

reservation charge bid by that Replacement Shipper (except for periods

during which the Releasor has recalled the capacity), (B) all commodity

charges, or all payments under one-part volumetric rates, and any minimum

volumetric commitment agreed to but not met by the Replacement Shipper, (C)

any commodity surcharges, (D) any penalties or imbalance correction costs

associated with the assigned capacity, and (E) any applicable overrun

charges, as any of these charges may change from time to time upon approval

of the Commission. For all payments received from Replacement Shipper,

Transporter shall allocate such payment first to the reservation charge (or

to the reservation charge component under a one-part rate) and then any

amounts above that level to the commodity charge (or to the commodity

charge component under a one-part rate). Replacement Shipper may, upon

notice to Transporter and approval of the Releasor, appoint Releasor as its

agent to receive such billings from Transporter. The charges shall be pro-

rated for a Billing Month if necessary.

(b) For all assignments of service rights, Releasor shall remain

ultimately responsible to Transporter for full payment of the reservation

charge, any applicable reservation-related surcharges, and any other fixed

charges for which Releasor is otherwise obligated to Transporter. For

permanent releases of capacity, Transporter may in its reasonable

discretion agree to release the Releasor from this responsibility. Such

discretion shall be exercised by Transporter in a nondiscriminatory manner.

Until payment by Replacement Shipper to Transporter of any unpaid

reservation charges, any claims Releasor may have relating to those charges

shall be subordinated to those of Transporter. Any reservation charge

payments made by Replacement Shipper to Transporter will not be withheld

from Releasor by Transporter due to Replacement Shipper's failure to pay

Transporter other amounts owed that are unrelated to the released capacity.

In the event of termination of Releasor's Service Agreement with

Transporter, Replacement Shipper's Service Agreement with Transporter,

Replacement Shipper's Service Agreement with Transporter is deemed

terminated unless (1) Replacement Shipper agrees to pay Transporters the

currently effective maximum rate for service under the tariff, or (2)

Transporter and Replacement Shipper mutually agree upon a discounted rate

or negotiated rate for services under this tariff; provided, however, that

any Replacement Shipper shall be entitled to continued service at the

contract rate between the Releasor and Transporter.