K O Transmission Company

Original Volume No. 1

Effective Date: 07/01/2003, Docket: RP03-421-000, Status: Effective

Second Revised Sheet No. 58 Second Revised Sheet No. 58 : Effective

Superseding: First Revised Sheet No. 58

GENERAL TERMS AND CONDITIONS (continued)

4. Release and Assignment of Service Rights (con't.)

4.8 Billing

(a)

Transporter, in accordance with the terms of this Tariff, shall: (i) bill

the Releasing Shipper for the full reservation charge, applicable reservation-

related surcharges and any other fixed charges which the Releasing Shipper

is obligated to the Transporter, less either the reservation charge bid by

Releasing Shipper's Replacement Shipper, or the reservation charge portion

of the payments received from Replacement Shippers, and (ii) bill the

Replacement Shipper for (1) the reservation charge bid by that Replacement

Shipper, (2) all commodity charges and surcharges, and any minimum volumetric

commitment agreed to but not met by the Replacement Shipper, and (3)any penalties

or imbalance correction costs associated with the assigned capacity, as any of these

charges may change from time to time upon approval of the Commission. For all

payments received from Replacement Shipper, Transporter shall allocate such

payment first to the reservation charge and then to any amounts above that level

to the commodity charge. Replacement Shipper may, upon notice to Transporter

and approval of Releasing Shipper, appoint Releasing Shipper as its agent to

receive such billings from Transporter. The charges shall be pro rated for any

Billing month if necessary.

(b)

For all assignments of service rights, Releasing Shipper shall remain ultimately

responsible to Transporter for full payment of the reservation charge, any

applicable reservation-related surcharges, and any other fixed charges for which

Releasing Shipper is otherwise obligated to Transporter. For permanent releases

of capacity, Transporter may in its reasonable discretion agree to release the

Releasing Shipper from this responsibility. Such discretion shall be exercised by

Transporter in a nondiscriminatory manner. Until payment by Replacement Shipper

to Transporter of any unpaid reservation charges, any claims Releasing

Shipper may have relating to those charges shall be subordinated to those of

Transporter.