Transcolorado Gas Transmission Company LLC

Second Revised Volume No. 1

Effective Date: 12/28/2007, Docket: RP08-167-000, Status: Effective

Original Sheet No. 276 Original Sheet No. 276 : Effective

GENERAL TERMS AND CONDITIONS

12. BALANCING OF GAS (Continued)

(iv) Phase II prior 12 months ending December 31 variance

adjustment. The Phase II variance adjustment for each 12 months ending

December 31 shall be: the sum of the 12 months' actual monthly gas

consumption and the Phase II Shippers' proportionate share of the 12 months'

lost or gained and unaccounted-for quantities; less the sum of the month's

Phase II FGRP quantity collected, as adjusted to exclude the variance-

adjustment component of the FGRP plus the unamortized balance at December 31;

all divided by actual Phase II annual transportation volumes for the 12 months

ended December 31, as adjusted for anticipated changes in system operations.

Monthly variances will be accumulated in the appropriate accounts. The

variance adjustment component of the FGRP will be used to amortize the

previous 12 months ended December 31 variance account balance over the 12-

month period April 1 through March 31.

(b) The FGRP-N applicable to North Expansion Transportation will be

equal to (i) plus (ii) plus (iii) of this section.

(i) Projected annual lost and unaccounted-for component of the

FGRP-N will equal (i)(1) divided by (i)(2):

(1) Projected annual transmission system losses or

gains and unaccounted-for quantities will be calculated by subtracting the

annual system-wide physical transmission deliveries, including actual system

gas consumed, from corresponding physical transmission receipts as adjusted

for anticipated changes in system operations.

(2) Sum of projected annual scheduled Phase I, Phase II

and North Expansion Transportation receipt quantities. Projected annual

scheduled transportation receipts will be based on the scheduled Phase I,

Phase II and North Expansion Transportation transmission receipt quantities

for the annual period, as adjusted for anticipated changes in system

operations.

(ii) Projected annual North Expansion Transportation system

gas consumption. Projected North Expansion Project transmission system gas

consumption will be based on the actual fuel consumed for North Expansion

Transportation for the year, as adjusted for anticipated changes in system

operations divided by projected annual scheduled North Expansion

Transportation receipt quantities. Projected annual scheduled North Expansion

Transportation receipts will be based on the scheduled transmission receipt

quantities for the year, as adjusted for anticipated changes in system

operations.