Kinder Morgan Interstate Gas Transmission LLC

Fourth Revised Volume No. 1-A

Effective Date: 07/01/2001, Docket: RP01-438-000, Status: Effective

Original Sheet No. 148N Original Sheet No. 148N : Effective

RATE SCHEDULE PALS

7. QUANTITY

Each PALS RO shall specify in Dth the MAQ RO and a daily schedule of

the quantities (including the MDQ RO) to be parked and/or loaned under

the specific transaction. The daily schedule of returned volumes by

the Shipper or Transporter shall also be specified in the PALS RO. The

quantities may be specified as a range of volumes (maximum and minimum

aggregate and daily quantities and the related time periods) to be

parked and/or loaned and returned, and the schedule may include the

flexibility to do either a park or a loan within specified volume and

time limits. The schedule may provide for flexibility in total volumes

and in the daily volumes parked and/or loaned, in the timing of the

park or the loan (or any portion thereof), in the duration of the park

and/or loan (or portion thereof), and/or in the timing of the

completion of the park or loan (or portion thereof) by the return of

gas to the Shipper or to Transporter, and shall specify the limits of

the flexibility allowed. Subject to the flexibility specified in the

PALS RO, the MDQ RO shall be the maximum quantity Transporter is

obligated, on an interruptible basis, to receive from or deliver to

Shipper hereunder on the specified day. The MAQ RO shall be the

maximum aggregate quantity Transporter is obligated to hold or loan for

the account of Shipper hereunder on an interruptible basis for the

specific transaction covered by the PALS RO. The minimum aggregate and

daily volumes to be parked and/or loaned and returned on an

interruptible basis shall also be specified in the PALS RO schedule.

The sum total of a Shipper's MAQ ROs and MDQ ROs shall not exceed the

MAQ and MDQ specified in the PALS Agreement. If a Shipper exceeds the

timing parameter in the applicable PALS RO (unless such failure is due

to Transporter not confirming a nomination properly submitted), it

shall be subject to overrun charges consistent with Section 6.2 of this

Rate Schedule.

8. MANDATORY BALANCING

8.1 Mandatory Balancing shall apply in the following instances: (a)

at the end of the term specified in any applicable PALS Agreement or

PALS RO; (b) where the Shipper fails to comply either with the

requirements of Transporter's notice referenced in Sections 3 and

8.3(b) hereof; or (c) where Shipper fails to comply with the schedule

of activities set forth in the applicable PALS RO and the deviation has

not been agreed to and confirmed by Transporter.