Pine Needle LNG Company, LLC

Original Volume No. 1

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Effective Date: 05/01/1999, Docket: CP96- 52-003, Status: Effective

Original Sheet No. 63 Original Sheet No. 63 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

18. FUEL RETENTION ADJUSTMENT PROVISION

18.1 General

This section of the General Terms and Conditions sets forth the

procedures to reflect changes in Pine Needle's fuel retention

percentage (FRP) applicable to Pine Needle's storage services under

which Pine Needle retains fuel.

18.2 Conditions

(a) The FRP set forth on Sheet No. 4 of this tariff may be

increased to reflect a net positive change in FRP and shall

be decreased to reflect a net negative change in FRP.

(b) Pine Needle shall file with the Federal Energy Regulatory

Commission to reflect net changes in FRP at least 30 days

prior to each May 1 which is the beginning date for the

Annual Period.

18.3 Definitions

(a) Annual Period - The annual period beginning each May 1.

(b) Actual Gas Required for Operations (GRO) - Actual gas used

in Pine Needle's operations including all gas otherwise

used, lost or unaccounted for.

(c) Estimated GRO - Actual GRO quantities for the latest twelve

month period adjusted, where necessary, for known variations

from actual experience.

(d) Estimated Volumes - Actual annual volume determinants

attributable to services to which Pine Needle allocates or

assigns GRO quantities for the latest twelve month period

adjusted, where necessary, for known variations from actual

experience.

(e) Deferral Period - The period of 12 months ending 2 months

prior to the effective date of a change in rates filed

pursuant to this Section 18.