Caledonia Gas And Storage

Original Volume No. 1

Effective Date: 05/01/2007, Docket: CP05- 15-003, Status: Effective

Original Sheet No. 37 Original Sheet No. 37 : Effective

4.5 Operational Flow Orders. Caledonia, in its discretion, shall have the

right to issue OFOs when in its judgment it is necessary to maintain or restore

the operational integrity of Caledonia’s storage system.

4.5.1 OFO Notice, Contents and Procedures. Caledonia shall issue an OFO as

expeditiously as is reasonably practicable in the circumstances, utilizing

electronic communication, (information transmitted via Caledonia’s Internet

Website, electronic delivery mechanism prescribed by NAESB or other mutually

agreed communication methodologies used to transmit and receive information,

including communication by telephone). Caledonia shall post and provide

Customers with updated information concerning the status of operational

variables related to the OFO as soon as it is available. Each OFO will contain

the following provisions:

(a) time and date of issuance;

(b) time that the OFO is considered to be effective (if no time is specified,

the OFO shall be effective immediately);

further notice);

(d) the party or parties receiving the OFO;

(e) the quantity of Gas required to remedy the operational condition requiring

the issuance of the OFO; and

(f) any other terms Caledonia may reasonably require to ensure the

effectiveness of the OFO.

4.5.2 Failure to Comply with OFO. If Customer or agent fails to comply with

the terms of an OFO, for any reason other than force majeure on an upstream or

downstream pipeline, such Customer shall be : (a) liable for any damages

including, but not limited to direct, consequential, exemplary or punitive

damages incurred by Caledonia or any other affected party as a result of such

failure; and (b) subject to the following penalty for each Dth of gas

associated with the quantity of gas that does not comply with the

OFO:

$15 + spot price

For purposes of this section 4.5.2, "spot price" shall mean the highest daily

spot price during the OFO period for the location Tennessee, La., 500 Leg as

reported in the Daily Price Survey in the industry publication of Gas Daily

plus applicable transportation costs to move gas to the Caledonia Storage

Facility. Notwithstanding anything to the contrary in