Pine Needle LNG Company, LLC

Original Volume No. 1

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Effective Date: 01/01/2003, Docket: RP01-243-000, Status: Effective

First Revised Sheet No. 56 First Revised Sheet No. 56 : Effective

Superseding: Original Sheet No. 56

GENERAL TERMS AND CONDITIONS

(Continued)

16. ANNUAL CHARGE ADJUSTMENT (ACA) PROVISION

16.1 Application. This Section of the General Terms and Conditions is filed pursuant to

Section 154.402 of the Federal Energy Regulatory Commission's Regulations and Order

No. 472 issued May 29, 1987. This Section authorizes Pine Needle to recover from

Customers the annual charge assessed to Pine Needle by the Commission for Commission

budgetary expenses. Pine Needle shall recover this charge by including in Pine

Needle's rates a per unit rate equivalent to the per dt charge assessed against Pine

Needle by the Commission. During the effectiveness of this ACA provision, it is Pine

Needle's intent not to recover in an NGA Section 4 rate case any annual charges

recorded in FERC Account No. 928 assessed to Pine Needle by the Commission pursuant to

Order No. 472.

16.2 Definitions

(a) Effective Date. Pine Needle shall adjust its rates annually to be effective each

October 1. Pine Needle shall comply with the notice requirements of Section

154.22 of the Commission's Regulations.

(b) Unit Rate. Pine Needle's Unit Rate shall be the unit rate used by the Commission

to determine the annual charge assessment to Pine Needle adjusted, as

appropriate, to a thermal basis.

(c) Affected Rate Schedules. The affected Rate Schedules are all storage Rate

Schedules contained in Pine Needle's Original Volume No. 1 FERC Gas Tariff.

16.3 Procedures to Determine Annual Charge Adjustment (ACA) Unit Rate.

Pine Needle shall determine the ACA Unit Rate by utilizing the unit rate used by the

Commission to determine Pine Needle's annual charge adjustment and adjust such unit

rate, as appropriate, to a thermal basis. Pine Needle shall round such Unit Rate to

the nearest one-hundredth of one cent ($0.0001). Pine Needle will assess the ACA Unit

Rate on the quantities withdrawn under Rate Schedule LNG-1 and LNG-2.