Phillips Gas Pipeline Company

First Revised Volume No. 1

Effective Date: / / , Docket: RS92- 47-002, Status: Effective

Original Sheet No. 25 Original Sheet No. 25 : Superseded

(b) Balancing Penalty Computation - As to paragraph (a) (i)

and (a) (iii) 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 within

the applicable month following Shipper's receipt of

notification as provided in paragraph (a) above from

PGPL, PGPL shall also retain any remaining net

balance of excess deliveries which exists at the

conclusion of such month.

As to paragraph (a) (iii) above, the penalty shall be the

dollar equivalent of two (2) times the average

"Mid-Continent Spot Gas Price Delivered to Pipeline" as

published by Natural Gas Week for the period in which

the imbalance occurred, multiplied by the quantities

exceeding the 5% or 50 MMBtu limits specified in

paragraph (a)(iii) above. In the event Shipper does not

balance within the applicable month following Shipper's

receipt of notification as provided in paragraph (a)

above from PGPL, redeliveries may be suspended until

such time as balance is achieved. All penalty revenues

received by PGPL pursuant to this Section 3.5 will be

credited to those firm transportation Shippers that did

not cause the imbalance situation.