National Fuel Gas Supply Corporation

Fourth Revised Volume No. 1

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

Original Sheet No. 410 Original Sheet No. 410 : Effective

GENERAL TERMS AND CONDITIONS

20. PASS-THROUGH OF FIXED TAKE-OR-PAY SURCHARGE

20.1Purpose

This Section establishes the procedures under which Seller will

recover from Buyers who formerly received service under

Seller's former RQ and CD rate schedules, the total take-or-pay

charges approved by the Federal Energy Regulatory Com- mission

("Commission") and billed to Seller on a fixed basis by its

pipeline suppliers and pipeline transporters ("upstream

pipelines"). Such charges by Seller shall be paid by each such

Buyer (hereinafter "Shipper") until Seller has recovered from

such Shipper the total allocated amounts, principal and

carrying charges, to be recovered from Shipper pursuant to this

Section 20.

20.2Procedures

This Subsection 20.2 establishes the procedures under which

Seller will recover from Shippers, through a fixed Surcharge

under Seller's firm transportation rate schedules, the total

take-or-pay charges approved by the Commission to be billed to

Seller by its upstream pipelines. Each Shipper's share of the

fixed take-or-pay charges billed to Seller by its upstream

pipelines shall be separately calculated for each increment of

upstream pipeline take-or-pay permitted by the Commission to be

collected from Seller.

(a) Basis of the Surcharge. Each Shipper's share of the fixed

take-or-pay charges collected from Seller by its upstream

pipelines subject to Order No. 528, shall be determined

according to allocation factors set forth in Section

20.2(b)(1), (4), (5) and (6) below. Each Shipper's share

of the fixed take-or-pay charges collected from Seller by

its upstream pipelines exempt from Order No. 528 shall be

calculated upon the purchase deficiency methodology.

(b) Allocation Factor. Each Shipper's share of the fixed

take-or-pay charges permitted by the Commission to be

billed to Seller by its upstream pipelines subject to

Order No. 528 shall be calculated according to the