National Fuel Gas Supply Corporation

Fourth Revised Volume No. 1

Effective Date: 01/01/2002, Docket: RP00-399-004, Status: Effective

First Revised Sheet No. 387 First Revised Sheet No. 387 : Effective

Superseding: Original Sheet No. 387

GENERAL TERMS AND CONDITIONS

14. ALLOCATION AND IMBALANCES (Cont'd.)

Types of costs that may constitute Incremental Costs hereunder

include, but are not limited to, the cost of replacement gas and

the cost of services or penalties incurred with respect to other

transporters of gas in response to the operational consequences

set forth above. Incremental Costs shall not include any

allocation of a portion of regular, ongoing expenses of

Transporter that would have been incurred irrespective of the

imbalances or events giving rise to Creditable Penalties. For

purposes of this section, "Annual Billing Period" shall be the

period commencing January 1, 2002 and ending March 31, 2002, and

thereafter the twelve month period commencing each April 1 and

ending the following March 31.

14.9 Imbalance Resolution

A Shipper may elect to resolve imbalances either "in kind" or by

"cash-out". This election must be made by submitting a completed

and signed "Imbalance Resolution Methodology Form" (see Section

14.12 below). Any Shipper not submitting that form will be deemed

to have elected to resolve imbalances via cash-out. All

imbalances on all of Shipper's contracts must be resolved using

the same methodology. The election of methodologies must be made

at or before the earliest time a monthly nomination is required to

be submitted under any of Shipper's contracts.