Norteño Pipeline Company

First Revised Volume No. 1

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Effective Date: 04/01/1996, Docket: CP96- 81-007, Status: Effective

Original Sheet No. 259 Original Sheet No. 259 : Superseded

GENERAL TERMS AND CONDITIONS

(continued)

as the Positive Imbalance or Negative

Imbalance exists, until Shipper brings its

cumulative imbalance within the 10 percent

tolerance level.

(c) Cumulative Monthly Balancing Charges -

Subsequent to the close of each Billing

Month, Norte¤o shall notify Shipper of its

cumulative imbalance quantity, measured as

the difference between cumulative receipts

and deliveries by Norte¤o under the

transportation Service Agreement. If the

absolute value of the cumulative imbalance is

more than 10 percent of the volumes scheduled

by Norte¤o for Shipper under the Service

Agreement in the Billing Month, then Shipper

and Norte¤o's dispatchers shall agree on

appropriate corrective action within ten days

and Shipper shall bring its cumulative

imbalance within this 10 percent limit within

45 days after such agreement.

If Shipper fails to bring its cumulative

imbalance within the 10 percent limit within

the 45 day period, then Norte¤o shall charge

Shipper $0.01 per MMBTU per day for each

MMBTU of cumulative imbalance over the 10

percent limit until the cumulative imbalance

is brought within the limit.

If after 90 days any cumulative imbalance in

excess of the ten percent limit remains,

Norte¤o shall either:

(i) charge Shipper for a Negative Imbalance,

including applicable Retention

Quantities, at a rate equal to 150% of

the spot market commodity rate

applicable for that Division, as

required to bring the cumulative

imbalance to within the 10 percent

limit.