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. 148P Original Sheet No. 148P : Effective

RATE SCHEDULE PALS

8.4 (a) In the event that Shipper still has gas parked at the end

of its contract term or because of failure to comply with the

notice pursuant to Sections 3 and 8.3 above, the remaining

balance shall be forfeited to Transporter, free and clear of any

adverse claims.

(b) Conversely, if the Shipper has not redelivered gas which

was loaned by Transporter by the end of its contract term or

within the timeframe specified in the notice in Sections 3 and

8.3 above, the Shipper must purchase the unreturned balance at

150% of the highest Weekly Index Prices (WIPs) of the "Spot Gas

Prices Delivered to Pipelines" for CIG or PEPL, as published in

"Natural Gas Intelligence" during the term of the loan. In the

event that the information used to determine the WIPs for the

term of the loan is not available, then the Shipper must purchase

the unreturned balance at 150% of the highest monthly index price

of the "Spot Gas Priced Delivered to Pipelines" for CIG or PEPL,

as published in "Natural Gas Intelligence" during the term of the

loan. The amounts collected in excess of 100% of the highest

Weekly or Monthly Index Price, as applicable, are subject to

refund in accordance with Section 35 of the General Terms and

Conditions of this Tariff. If Operational Flow Orders are in

effect on the date Shipper is required to comply with the notice,

Shipper shall be subject to the highest charges set forth in

Section 29.2 of the General Terms and Conditions of this Tariff.

be implemented by Transporter on a non-discriminatory basis.

8.5 In circumstances where Shipper is unable to eliminate its PALS RO

balance because Transporter is unable to accept the PALS RO

nomination, Shipper shall take any action to reduce the balance

which Transporter can accommodate and Shipper shall be granted

additional time to eliminate its PALS RO balance corresponding to

the time Transporter was unable to accept the PALS RO nomination.

Shipper shall not incur any penalty or daily fees as to that

portion of the balance resulting from Transporter's inability to

accept the PALS RO nomination. Such extension shall only apply

in instances where a Shipper's inability to eliminate the PALS RO

balance is attributable to Transporter's inability to accept and

confirm PALS RO nominations. Shipper remains responsible to

nominate the appropriate level of transportation to meet

Transporter's notification requirements.