Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

Effective Date: 04/18/2008, Docket: RP08-319-000, Status: Effective

Original Sheet No. 382 Original Sheet No. 382 : Pending

GENERAL TERMS AND CONDITIONS

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(d) No additional Balancing Service Charges will be

assessed when a prior period adjustment applied to the current month

would otherwise cause or increase the Balancing Service Charges to be

billed.

12.8 All amounts collected by Natural for penalties commencing

with December 1, 2003, the initial effective date of Natural's Order

No. 637 Compliance Plan, shall be determined for each semi-annual

period ending June 30 and December 31 and distributed, through a credit

to current billings wherever feasible, within ninety (90) days after

each such June 30 and December 31 which occurs after the initial

effective date of Natural's Order No. 637 Compliance Plan, with the

first such distribution being made within ninety (90) days after June

30, 2004. For purposes of this Section 12.8, penalties shall include:

Unauthorized Overrun Charges, Balancing Service Charges, charges for

failure to comply with an Operational Flow Order (including during a

Critical Time), charges for cashout of imbalances, and gas forfeited to

or amounts collected by Natural under Section 9.3 of Rate Schedule LPS.

Such distribution shall be made as follows:

(a) These amounts shall be used first to compensate

Natural for any cashout expenses and for any extraordinary out-of-

pocket costs it has incurred (including any compensation Natural agreed

to provide for voluntary actions and any storage injection or

withdrawal costs not collected because of the waiver of the injection

and withdrawal charges as described in Section 23.7) to alleviate the

conditions which were created by the imbalance or the Unauthorized

Overrun or other violation or which resulted in the issuance of an

Operational Flow Order or the declaration of Critical Time or other

operational action taken by Natural under Section 23 of these General

Terms and Conditions. Costs that may be netted against penalty revenue

may include only actual, verifiable and prudent incremental costs

incurred to resolve the reliability concerns actually caused by the

particular party or parties against which the penalty has been assessed

and must relate to a circumstance which resulted in the penalty revenue

to be credited under this provision. If these amounts are not adequate

to reimburse Natural for cashout expenses, the unreimbursed cashout

expenses shall be carried forward to future years until recouped.

(b) Any remaining amounts will be refunded pro rata to

all Shippers (both firm and interruptible), except as provided below,

through a credit to current billings wherever feasible, based on the

ratio of a Shipper's total base reservation and commodity charges paid

during the relevant 6-month period to all such charges paid during such

period; provided, however, that such calculation shall exclude charges