National Fuel Gas Supply Corporation

Third Revised Volume No. 1

Effective Date: 12/31/1996, Docket: RP97-191-000, Status: Effective

Original Sheet No. 237.16 Original Sheet No. 237.16 : Superseded

GENERAL TERMS AND CONDITIONS

28. POLICY WITH RESPECT TO FEES AND CONSTRUCTION OF NEW FACILITIES

28.1 Except as provided in Section 28.2 herein, Shipper shall reimburse

Transporter (a) for the costs of any facilities installed by

Transporter with Shipper's consent to receive, measure, transport

or deliver natural gas for Shipper's account and (b) for any and

all filings and approval fees required in connection with

Shipper's Service Agreement that Transporter is obligated to pay

to the Commission or any other governmental authority having

jurisdiction. Any reimbursement due Transporter by Shipper

pursuant to this Section 28.1 shall be due and payable to

Transporter within ten (10) days of receipt by Shipper of

Transporter's bill(s) for same; provided, however, subject to

Transporter's consent such reimbursement, plus carrying charges

thereon, may be amortized over a mutually agreeable period not to

extend beyond the primary contract term of the service agreement

between Transporter and Shipper. Carrying charges shall be

computed utilizing interest factors acceptable to both Transporter

and Shipper.

28.2 Transporter may waive from time to time, at its discretion, all or

a portion of the facility cost reimbursement requirement set forth

in Section 28.1 if Shipper provides Transporter adequate

assurances of transportation throughput to make construction of

the facilities economical to Transporter. All requests for waiver

shall be handled by Transporter in a manner which is not unduly

discriminatory. For purposes of determining whether a project is

economical, Transporter will evaluate projects on the basis of

various economic criteria, which will include the estimated

transportation throughput, cost of the facilities, operating and

maintenance as well as administrative and general expenses

attributable to the facilities, the revenues Transporter estimates

will be generated as a result of such construction, and the

availability of capital funds on terms and conditions acceptable

to Transporter. In estimating the revenues to be generated,

Transporter will evaluate the existence of capacity limitations

downstream of the facilities, the marketability of the capacity,

the location of the markets, the interruptible versus the firm

nature of the transportation service, and other similar factors

which impact whether the available deliverability will actually be

transported.