Saltville Gas Storage Company L.L.C.

Original Volume No. 1

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Effective Date: 02/07/2008, Docket: RP08-156-000, Status: Effective

First Revised Sheet No. 133 First Revised Sheet No. 133 : Effective

Superseding: Original Sheet No. 133

GENERAL TERMS AND CONDITIONS

(Continued)

6.5 Penalties: All quantities tendered to Saltville and/or taken by

Customer on a daily basis in violation of an Action Alert or OFO

shall constitute unauthorized receipts or deliveries for which the

applicable Action Alert or OFO penalty charge stated below shall

be assessed; provided, however, Saltville shall not assess both

the Action Alert Penalty and the OFO Penalty on the same

quantities.

(1) Action Alert penalty charge for each Dekatherm of Gas by

which Customer deviated from the requirements of the Action

Alert equal to an Action Alert Index Price calculated as

110% of the applicable daily Gas Daily posting for the "Gas

Daily" Columbia App. Midpoint Index for the Day on which the

deviation occurred, multiplied by the quantity by which the

Customer deviated from the requirements of the Action Alert.

(2) OFO penalty charge for each Dekatherm of Gas by which

Customer deviated from the requirements of the OFO equal to

an OFO Index Price calculated as three (3) times the

applicable daily Gas Daily posting for the "Gas Daily"

Columbia App. Midpoint Index for the Day on which the

deviation occurred, multiplied by the quantity by which the

Customer deviated from the requirements of the OFO.

Any penalty revenue collected by Saltville pursuant to this

Section 6.5 shall be credited to those firm and Interruptible

Customers that did not incur Action Alert or OFO penalties

pursuant to this Section 6.5 in the Month for which Action Alert

or OFO penalty revenues were received ("Non-Offending Customers"),

based on the ratio of the total charges paid during that Month by

the Non-Offending Customer to the sum of the total charges paid

during that Month by all Non-Offending Customers. Such credits

shall be calculated for each Month of the twelve (12) Month period

ending August 31 of each year, and will be included on the Non-

Offending Customer's invoice for the Month following the date of

the final Commission order approving Saltville's penalty

disbursement report; provided however that Saltville will

calculate and include such credits on Non-Offending Customers'

invoices for a period shorter than twelve Months in the event and

to the extent that the total accumulated amount of Action Alert or

OFO penalty revenue collected pursuant to this Section 6.5 by

Saltville as of the end of any Month exceeds $1,000,000.

Saltville will file a penalty disbursement report within sixty

days of August 31 or sixty days after the end of the Month for

which revenue collected exceeds $1,000,000. Any penalty revenue

credited to Non-offending Customers pursuant to this section shall

include interest calculated in accordance with Section 154.501(d)

of the Commission's regulations.