National Fuel Gas Supply Corporation

Fourth Revised Volume No. 1

Effective Date: 11/01/1998, Docket: RP98-416-000, Status: Effective

First Revised Sheet No. 431 First Revised Sheet No. 431 : Effective

Superseding: Original Sheet No. 431

GENERAL TERMS AND CONDITIONS

21. TRANSITION COSTS (Cont'd.)

(i) Ninety (90) percent of such GSR costs shall be

allocated to Transporter's shippers under the EFT, FT,

FST, FT-S and FSS Rate Schedules, based on the ratio of

the Shipper's Contract MDTQ or Maximum Storage Quantity

(MSQ) to the total Contract MDTQ and MSQ of

surcharged shippers under Rate Schedules EFT, FT, FST,

FT-S and FSS; provided, however, that a FSS shipper

shall not be surcharged, nor shall its MSQ be used in

the above calculation, with respect to any level of

service associated with Firm transportation under the

EFT, FT, FT-S or FST Rate Schedules. GSR Costs shall

be recovered from shippers under Rate Schedules EFT,

FT, FST, FT-S and FSS by means of a GSR Demand

Surcharge per Contract MDTQ or MSQ over a three-year

amortization period commencing on the date authorized

by the Commission. At the end of the three-year

period, Transporter shall continue to charge or refund

to the extent necessary to cause the under or over-

collections to be adjusted such that Transporter fully

recovers its GSR Costs allocated to Shippers under the

EFT, FT, FST, FT-S and FSS Rate Schedules.

Transporter will perform an annual revision of the

billing determinants to properly reflect changes in the

service levels of the Shippers receiving service.

(ii) Transporter shall recover the remaining ten (10)

percent of its GSR costs from Transporter's Shippers

under the IT Rate Schedule, over a three-year

amortization period, commencing on the date authorized

by the Commission. At the end of the three-year

period, Transporter shall continue to charge or refund

to the extent necessary to cause the under- or over-

collections to be adjusted such that Transporter fully

recovers its GSR costs allocated to Shippers under the

IT Rate Schedule.

If operating experience indicates that Transporter is

unable to recover said ten (10) percent from Shippers

under the IT Rate Schedule, Transporter may make a new

proposal to the Commission to recover any amount of GSR

costs not recovered through IT rates.