Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

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

Original Sheet No. 522 Original Sheet No. 522 : Pending

GENERAL TERMS AND CONDITIONS

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41. RESEARCH, DEVELOPMENT AND DEMONSTRATION ADJUSTMENT

Periodically, rates and charges under Natural's Tariff shall be

adjusted to reflect changes in Natural's expenditures for research,

development and demonstration (RD&D); provided, however,

such adjustment shall not include funding payments to Gas Research

Institute (GRI) that are to be recovered by Natural under the

provisions of Section 39 of these General Terms and Conditions.

The expenditures recoverable under this Section shall include both

expenditures chargeable to operations as well as expenditures

includible in rate base.

41.1 PROCEDURES FOR COMPUTATION OF ADJUSTMENT

The Research, Development and Demonstration Adjustment

(RD&D Adjustment) shall be reflected in rates only when it amounts

to at least $0.0001 per Dth of annual jurisdictional services. The

RD&D Adjustment shall be applied to the commodity component of all

applicable rates and shall maintain the then existing rate design

relationships among the rates and charges under affected Rate

Schedules.

(a) RESEARCH, DEVELOPMENT AND DEMONSTRATION CHARGEABLE

TO OPERATIONS

Except for expenditures as to which approval has

been granted pursuant to Section 154.401 of the Commission's

Regulations under the Natural Gas Act, Natural's RD&D Adjustment for

expenditures chargeable to operations shall reflect the amount by

which actual RD&D expenditures chargeable to operations during the

twelve (12) month period ending three (3) months prior to the

effective date of the RD&D Adjustment exceed or are less than the

actual RD&D expenditures in Natural's last RD&D Adjustment under

this Section.

(b) RESEARCH, DEVELOPMENT AND DEMONSTRATION INCLUDIBLE

IN RATE BASE

The RD&D Adjustment shall reflect the amount by

which the actual balances in Account 188 during the twelve (12)

month period ending three (3) months prior to the effective date of

the RD&D Adjustment exceed or are less than the balances in

Account 188 included in Natural's last prior RD&D Adjustment under

this Section. For the purpose of the computation under this