Phillips Gas Pipeline Company

First Revised Volume No. 1

Effective Date: / / , Docket: RS92- 47-001, Status: Effective

Original Sheet No. 18 Original Sheet No. 18 : Superseded

prospective basis within 48 hours after receipt by

Shipper of PGPL's notification. Such penalty

shall apply on an individual service agreement

basis. Nothing herein shall limit PGPL's right to

take such actions of whatever nature as may be

required to correct imbalances which threaten

the integrity of its system, including maintenance

of service to other customers. Any cash

balancing provided for herein shall be based on

the sum of the actual volumes which are out of

balance; i.e., daily receipts of natural gas under

a Shipper's transportation service agreement as

compared to the actual daily deliveries (pipeline

receipts minus pipeline deliveries).

The applicable penalty shall be applied to the

quantities which exceed the limits specified below

on a prospective basis, 48 hours following initial

notification by PGPL, in the following instances:

(i) Shipper delivers or causes to be delivered to

PGPL a quantity which exceeds by more than 5%

or 50 MMBtu, whichever is greater, Shipper's

Firm Transportation Quantity; or

(ii) Shipper delivers or causes to be delivered to

PGPL a quantity which, after appropriate

reductions, exceeds by more than 5% or

50 MMBtu, whichever is greater, the quantities

taken from PGPL; or

(iii) The Shipper takes quantities from PGPL

which exceed by more than 5% or 50 MMBtu,

whichever is greater, the quantities received by

PGPL after appropriate reductions.

(b) Balancing Penalty Computation - As to

paragraph (a) (i) and (a) (ii) above, the penalty

shall be the retention by PGPL of the total

quantity of gas exceeding the 5% or 50 MMBtu

limits specified therein at no cost to PGPL and

free and clear of any adverse claims relating

thereto. In the event Shipper does not balance