Tennessee Gas Pipeline Company

FIFTH REVISED VOLUME NO. 1

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Effective Date: 12/04/1997, Docket: RP97-386-000, Status: Effective

Third Revised Sheet No. 208 Third Revised Sheet No. 208 : Effective

Superseding: Second Revised Sheet No. 208

Schedule LMS - MA

Load Management Service - Market Area (continued)

(b) If I < zero then:

- Price for negative imbalances =

(abv(I) x HP) + (P x AP)

_______ ________

N N

- Price for positive imbalances and imbalances less than or equal to

1,000 Dth = AP

(C) For all Parties whose % monthly imbalance is greater than 5% (as calculated

according to Section 7(c) of this Rate Schedule) and greater than 1,000 Dth, the

actual negative imbalance volumes shall be "cashed out" according to the following

formula:

Imbalance Tier Price

0 - 5% 100% of HP

> 5% - 10% 115% of HP

> 10% - 15% 130% of HP

> 15% - 20% 140% of HP

> 20% 150% of HP

For purposes of determining the tier at which an imbalance will be cashed out, the

price will apply only to volumes within a tier. For example, if there is a 7%

imbalance, volumes that make up the first 5% of the imbalance are priced at 100%

of the HP. Volumes making up the remaining 2% of the imbalance are priced at 115%

of the HP.

(D) For all Parties whose % monthly imbalance is greater than 5 % (as calculated

according to Section 7(c) of this Rate Schedule) and greater than 1,000 Dth, the

actual positive imbalance volumes shall be "cashed out" according to the following

formula:

0 - 5% 100% of LP

> 5% - 10% 85% of LP

> 10% - 15% 70% of LP

> 15% - 20% 60% of LP

> 20% 50% of LP