East Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 10/01/1999, Docket: RP99-488-000, Status: Effective

Fourth Revised Sheet No. 53 Fourth Revised Sheet No. 53 : Superseded

Superseding: Third Revised Sheet No. 53

Rate Schedule LMS-MA

Load Management (Market Area) Service (Continued)

8.3 Monthly Imbalances: The Balancing Party's monthly imbalance shall be the net

total of daily variances from all points covered by the OBA adjusted for make-up

quantities and imbalance trades. For supply aggregators under Rate Schedule SA,

the daily variance shall be the difference, by pooling area, between actual

deliveries under the Supply Aggregation Service Agreement and the actual

quantities received at all points covered by such Agreement. In addition, unless

Transporter and the Balancing Party mutually agree to correct the imbalance in

kind on a nondiscriminatory basis, each month Transporter and the Balancing Party

shall "cashout" any imbalance between Scheduled Quantities and actual deliveries.

Transporter shall divide the lesser of the monthly imbalance based on Operational

Data or the actual monthly imbalance by the total scheduled volumes for the month

for all applicable points, then multiply by 100, to determine the % monthly

imbalance.

(a) If the monthly imbalance is due to an excess of scheduled quantities

relative to actual deliveries, then the monthly imbalance shall be

considered a "positive" imbalance and Balancing Party shall sell to

Transporter, and Transporter shall buy from the Balancing Party, in

accordance with the formula listed in Section 8.3(c) below. If the monthly

imbalance is due to an excess of actual deliveries relative to scheduled

quantities, then the monthly imbalance shall be considered a "negative"

imbalance and Transporter shall sell to the Balancing Party, and Balancing

Party shall buy from Transporter, in accordance with the formula listed in

Section 8.3(c) below. In addition to the cash out of the monthly imbalance:

(A) Balancing Party shall pay to Transporter the "Transportation Component"

if total actual quantities delivered are greater than scheduled quantities,

or (B) Transporter shall pay to the Balancing Party the "Transportation

Component" if total actual quantities delivered are less than scheduled

quantities. The "Transportation Component" shall be equal to (1) the

commodity rate pursuant to Tennessee Gas Pipeline Company's Rate Schedule

FT-A for transportation from Tennessee's Zone 1 to Transporter's system

multiplied by the monthly imbalance plus, (2) Transporter's commodity rate

under Rate Schedule FT-A or FT-GS, as applicable, multiplied by the monthly

imbalance, plus (3) an additional amount to cover Transporter's cost of gas

for the system fuel and use and lost and unaccounted for gas. The

additional amount shall be calculated by multiplying (1) the amount of fuel

necessary to transport the imbalance on the systems of both Tennessee and

Transporter by (2) the Average Price as defined in Section 8.3(c)(i) below.