East Tennessee Natural Gas Company

Second Revised Volume No. 1

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

Original Sheet No. 54A Original Sheet No. 54A : Superseded

Rate Schedule LMS-MA

Load Management (Market Area) Service (Continued)

The Parties' actual imbalance volumes shall be "cashed out" according to

the following formula:

(A) If I > or = zero then:

- Price for negative imbalances and imbalances less than or

equal to 1,000 Dth = AP

- Price for positive imbalances =

(abv(I) x LP) + (N x AP)

_______ ________

P P

(B) If I < zero then:

- Price for negative imbalances =

(abv(I) x HP) + (P x AP)

_______ ________

N N

- Price for positive imbalances and imbalances less than or

equal to 1,000 Dth = AP

(iii) For all Parties whose % monthly imbalance is greater than 5% (as

calculated according to Section 8.3 of this Rate Schedule) and greater

than 1,000 Dth, the actual negative imbalance volumes shall be "cashed

out" according to the following formula:

Imbalance Tier Price

0 - 5% 100% of HP

> 5% - 10% 115% of HP

> 10% - 15% 130% of HP

> 15% - 20% 140% of HP

> 20% - 150% of HP

For purposes of determining the tier at which an imbalance will be cashed

out, the price will apply only to volumes within a tier. For example,

if there is a 7% imbalance, volumes that make up the first 5% of the

imbalance are priced at 100% of the HP. Volumes making up the remaining

2% of the imbalance are priced at 115% of the HP.

(iv) For all Parties whose % monthly imbalance is greater than 5% (as

calculated according to Section 8.3 of this Rate Schedule) and greater

than 1,000 Dth, the actual positive imbalance volumes shall be "cashed

out" according to the following formula:

0 - 5% 100% of LP

> 5% - 10% 85% of LP

> 10% - 15% 70% of LP

> 15% - 20% 60% of LP

> 20% - 50% of LP

For purposes of determining the tier at which an imbalance will be cashed

out, the price will apply only to volumes within a tier. For example,

if there is a 7% imbalance, volumes that make up the first 5% of the

imbalance are priced at 100% of the LP. Volumes making up the remaining

2% of the imbalance are priced at 85% of the LP.