Central Kentucky Transmission Company

Original Volume No. 1

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

Original Sheet No. 177 Original Sheet No. 177 : Effective

GENERAL TERMS AND CONDIITONS

(Continued)

(2) "Netting" is the term used to describe the process of resolving

imbalances for Shipper within an Operational Impact Area. There are two

types of Netting:

(a) Summing is the accumulation of all imbalances above

any applicable tolerances for Shipper or agent; and

(b) Offsetting is the combination of positive or negative

imbalances above any applicable tolerances for Shipper or agent.

18.7 Month-end Imbalances.

(a) Transporter shall allow Shipper (including agents of Shipper)

to net imbalances within the same Operational Impact Area on and across

Service Agreements with Shipper and to trade imbalances within the same

Operational Impact Area.

(b) Transporter shall provide Shippers the ability to post and

trade imbalances until at least the close of the seventeenth (17th)

business day of the month.

upon request, download posted imbalances.

(d) Imbalances to be posted for trading should be authorized by

Shipper.

(e) Authorizations to post imbalances that are received by

Transporter by 11:45 a.m. (C.T.) should be effective by 8:00 a.m. (C.T.)

the next business day. Imbalances previously authorized for posting should

be posted on or before the ninth (9th) business day of the month.

(f) Transporter is not required to post zero imbalances.

(g) Netting, posting, and trading of imbalances shall be

accomplished based upon Transporter's current method for accounting for

imbalances and does not require Transporter to institute daily imbalance

procedures, if they are not already present on the Transporter's system.