Central Kentucky Transmission Company

Original Volume No. 1

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

Original Sheet No. 408 Original Sheet No. 408 : Effective

OPERATIONAL BALANCING AGREEMENT

(Continued)

ARTICLE II

RECONCILIATION OF OPERATIONAL IMBALANCES

2.1 The Parties intend that the quantities of gas actually delivered and

received each day at the Interconnection Point(s) will equal the confirmed

nominations, and the party controlling the flow at the Interconnection

Point(s), as set forth on Exhibit A, shall control such flow accordingly.

Each Party shall allocate the volumes to be delivered and received at the

Interconnection Point(s) among the Shippers in accordance with the

confirmed nominations. Any difference between the aggregate quantity of

gas nominated and the aggregate quantity of gas actually delivered at the

Interconnection Point(s) on any given day by each Party shall constitute

the Operational Imbalance for each Party for that day (Daily Operational

Imbalance).

2.2 During any given month, estimated meter quantities (mcf) shall be

used by each Party on a daily basis to determine the estimated Daily

Operational Imbalance, if any, at the Interconnection Point(s) for any

given day. The Parties shall promptly make such physical flow adjustments

as may be necessary in order to prevent, reduce or eliminate any Daily

Operational Imbalance. The daily variance in the estimated Daily

Operational Imbalance should not exceed ____ percent (_%) of the aggregate

quantities nominated for the day, nor _____ percent (_%) of the aggregate

monthly quantities.

2.3 The sum of estimated Daily Operational Imbalances for each day in a

given month shall constitute the estimated Monthly Operational Imbalance

for such month. By the fifth day of the month following any given month in

which an estimated Monthly Operational Imbalance arises, the measuring

Party, as identified on Exhibit A, will notify the other Party as to the

estimated Monthly Operational Imbalance for the prior month, and the

Parties shall promptly make such physical flow modifications as may be

necessary to reduce or eliminate any such Monthly Operational Imbalance.