East Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 11/01/1993, Docket: RS92- 33-007, Status: Effective

Substitute Original Sheet No. 171 Substitute Original Sheet No. 171 : Superseded

GENERAL TERMS AND CONDITIONS (Continued)

form of payment is otherwise mutually agreed upon. Such payment shall be

applied to the actual cost of such new facilities; provided, however, any excess

shall be returned to the Shipper or Balancing Party and any amounts still owing

shall be paid by the Shipper or the Balancing Party to Transporter within thirty

days after final determination.

37. FLOW THROUGH OF TRANSITION COSTS

(a) Except as otherwise mutually agreed to by Transporter and Shipper,

Sections 37.1 through 37.9 hereof establish the procedures under which

Transporter recovers from each Shipper under Transporter's Rate Schedules

that Shipper's allocable share of the transition costs (Transition Costs)

assessed to and paid by Transporter to Tennessee Gas Pipeline Company

(Tennessee) by any means other than by a volumetric surcharge consistent

with the terms and conditions of the Stipulation and Agreement filed by

Transporter on March 20, 1992 in Docket No. RP91-79, et al.

(b) The Affected Services subject to Transition Cost recovery shall be

Transporter's firm transportation services under Rate Schedules FT-A and

FT-GS.

37.1 Direct Billing of Transition Costs

Transporter shall recover the Transition Costs in part through a direct billing

of its jurisdictional customers. The Transition Costs to be directly billed

have been offset in part on a customer-by-customer basis by the amounts

specified in Article I, Section 3 of the Stipulation in Docket No. RP91-79, et

al., and have been increased in part on a customer-by-customer basis in

resolution of the remanded proceeding in Docket No. RP85-47, as provided by

Article III of the aforesaid Stipulation in Docket No. RP91-79, et al.

37.2 Payment or Refund of Direct Bill Amounts

(a) The net direct bill amounts specified in Section 37.1, plus interest

calculated in accordance with Section 154.67(c)(2) of the Commission's

regulations, will be amortized and collected by Transporter over a 12-

month period commencing on the date the Stipulation in Docket No. RP91-79,

et al., becomes effective in accordance with Article IV thereof.