Kinder Morgan Interstate Gas Transmission LLC

Fourth Revised Volume No. 1-B

Effective Date: 01/01/2001, Docket: RP01-155-000, Status: Effective

First Revised Sheet No. 85 First Revised Sheet No. 85 : Effective

Superseding: Original Sheet No. 85

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

33. DISCOUNTING

A. Rate Discount Order

If and when Transporter discounts the rates and charges

applicable for service under any Rate Schedule, the components

of the currently applicable Maximum Rate shall be discounted in

the following order: The first item of the overall charge

discounted will be the GRI surcharge, followed by the base rate

charge, any transition cost components including the Account 858

component, and last, any Transporter GSR surcharges. Other non-

transition cost surcharges will be attributed in accordance with

the applicable section of the General Terms and Conditions which

provides for the surcharge as established in individual

proceedings.

B. Types of Discounts

If Transporter agrees to a discounted rate under Transporter's

Rate Schedules, the following terms may be agreed to without

constituting a material deviation from Transporter's applicable

pro forma Service Agreement; provided, however, any such rate or

component thereof shall not be less than Transporter's

applicable minimum rate, nor greater than Transporter's

applicable maximum rate.

Such rate may apply:

(1) to specified quantities under Shipper's Service

Agreement(s);

(2) to quantities above or below a certain level, or all

quantities if quantities exceed a certain level;

(3) in a specified relationship to quantities actually

transported (i.e., that the rates shall be adjusted in a

specified relationship to the quantities actually

transported);

(4) during specified periods of the year or over specifically

defined periods of time;

(5) to specified receipt points, delivery points, zones,

pooling areas, transportation routes, markets or other

defined geographical areas;