U S G Pipeline Company

ORIGINAL VOLUME NO. 1

Effective Date: 04/01/2000, Docket: CP99-211-001, Status: Effective

Original Sheet No. 49 Original Sheet No. 49 : Effective

GENERAL TERMS AND CONDITIONS

(i) Such invoice will be based on the Sales Index Price

multiplied by the applicable factor as follows:

Imbalance Level Factor

0% - 5% 1.05

Greater than 5% - 10% 1.10

Greater than 10% 1.20

Imbalance Level shall be calculated by dividing the

Positive Imbalance Quantity by the sum of the total

quantities scheduled for delivery.

For Positive Imbalances, the Sales Index Price

shall equal the highest of the daily spot prices

for gas delivered during the month at Tennessee 500

Leg as reported in Gas Daily. In the event that

this price is no longer available or the basis upon

which such price is reported or calculated in such

publication changes substantively, Transporter will

file to change its tariff and may, at its

discretion, select representative price(s) in the

interim period, subject to Commission approval.

(ii) The amount due Transporter for Positive Imbalances

shall be the sum of:

(1.) the Positive Imbalance Quantity multiplied by

the product of the corresponding Imbalance Level

Factor multiplied by the Sales Index Price; plus

(2.) the Positive Imbalance Quantity multiplied by

the sum of the filed maximum rates for

interruptible transportation (including fuel

adjustment) of Tennessee Gas Pipeline Company (Zone

1) and East Tennessee Natural Gas Company.