National Fuel Gas Supply Corporation

Fourth Revised Volume No. 1

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Effective Date: 08/01/1997, Docket: RP97-398-000, Status: Effective

Original Sheet No. 406 Original Sheet No. 406 : Effective

GENERAL TERMS AND CONDITIONS

17. ADJUSTMENTS, SURCHARGES AND NEGOTIATED RATES

17.1Adjustments and Surcharges

Transporter and Shipper recognize that Transporter shall, from

time to time, experience changes in costs related to providing

service under this FERC Gas Tariff, including, but not limited

to, changes in the cost of labor, benefits, materials and

supplies, taxes, and required rate of return, costs associated

with the resolution of past disputes or outstanding

uncertainties concerning amounts owed by Transporter or

attributable to Transporter, and costs generated by decisions

by the Commission, the courts, or by an arbitration panel or

other body having jurisdiction over Transporter. It may be

appropriate, equitable, and consistent with cost responsibility

to allocate such costs among Shippers based on taking into

account past period factors, such as contract demand levels,

purchases, or other factors related to a prior period of time.

Shipper agrees that Transporter shall have the right, from time

to time, to make rate change filings based in whole or in part

on factors related to past periods. Shipper shall have the

right to intervene and protest any such filings.

17.2Negotiated Rates

Notwithstanding anything to the contrary contained in this

tariff, Transporter may charge a negotiated rate for service

under any rate schedule contained in this tariff to any shipper

that has access to service at the rates set forth in the

applicable rate schedule and agrees to pay such negotiated

rate.

A Negotiated Rate shall mean a rate for service, where one or

more of the individual rate components exceed the maximum

charge, or are less than the minimum charge, for such

components. This definition shall include a formula rate where

one or more of the individual rate components may exceed the

maximum charge, or may be less than the minimum charge, for

such components in some months but not in others.

With respect to a Negotiated Rate which exceeds Transporter's

maximum rate for that service, for the purposes of allocation

of capacity pursuant to Sections 13, 16 and 26 of these General

Terms and Conditions, a Shipper paying said Negotiated Rate

would be considered to have paid the maximum rate for such

service.