Steckman Ridge, LP

Original Volume No. 1

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Effective Date: 04/01/2009, Docket: RP09-389-000, Status: Effective

Original Sheet No. 268 Original Sheet No. 268

GENERAL TERMS AND CONDITIONS

(Continued)

14. ACTION ALERTS AND OPERATIONAL FLOW ORDERS (continued)

14.9 Penalties: All quantities tendered to Steckman Ridge and/or taken

by Customer on a daily basis in violation of an Action Alert or

OFO shall constitute unauthorized receipts or deliveries for which

the applicable Action Alert or OFO penalty charge stated below

shall be assessed.

(a) Action Alert penalty charge for each Dekatherm of Gas by

which Customer deviated from the requirements of the Action

Alert equal to an Action Alert Index Price calculated as

110% of the applicable daily Gas Daily posting for

Customer's Transporter on whose pipeline the deviation

occurred for the day on which the deviation occurred,

multiplied by the quantity by which the Customer deviated

from the requirements of the Action Alert.

(b) OFO penalty charge for each Dekatherm of Gas by which

Customer deviated from the requirements of the OFO equal to

an OFO Index Price calculated as three (3) times the

applicable daily Gas Daily posting for Customer's

Transporter on whose pipeline the deviation occurred for the

day on which the deviation occurred, multiplied by the

quantity by which the Customer deviated from the

requirements of the OFO.

Any penalty revenue collected by Steckman Ridge pursuant to this

Section 14.9, less any costs incurred by Steckman Ridge in an

attempt to mitigate an Action Alert or OFO and the resulting

penalties, shall be credited to those firm, enhanced and

interruptible Customers that did not incur Action Alert or OFO

penalties pursuant to this Section 14.9 in the Month for which

Action Alert or OFO penalty revenues were received ("Non-Offending

Customers"), based on the ratio of the total charges paid during

that Month by the Non-Offending Customer to the sum of the total

charges paid during that Month by all Non-Offending Customers.

Such credits shall be calculated for each Month of the twelve (12)

Month period ending August 31 of each year, and will be included

on the Non-Offending Customer's invoice for the Month following

the date of the final Commission order approving Steckman Ridge's

penalty disbursement report; provided however that Steckman Ridge

will calculate and include such credits on Non-Offending

Customers' invoices for a period shorter than twelve Months in the

event and to the extent that the total accumulated amount of

Action Alert or OFO penalty revenue collected pursuant to this

Section 14.9 by Steckman Ridge as of the end of any month exceeds

$1,000,000. Steckman Ridge will file a penalty disbursement

report within sixty days of August 31 or sixty days after the end

of the Month for which revenue collected exceeds $1,000,000. Any

penalty revenue credited to Non-offending Customers pursuant to

this section shall include interest calculated in accordance with

Section 154.501(d) of the Commission's regulations.