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Substitute Original Sheet No. 174 Substitute Original Sheet No. 174 : Superseded

GENERAL TERMS AND CONDITIONS (Continued)

37.8 Lump Sum Payment

In lieu of the amortization of direct bill and Demand Surcharge Amount, as

specified in Sections 37.1, 37.2, 37.3, 37.4, 37.5 and 37.6, respectively,

Shipper may at any time elect to pay the unamortized direct bill and/or Demand

Surcharge amount(s) in one lump sum payment.

37.9 Reduction in Transition Cost Responsibility

In the event Transporter commences new firm service to a customer traditionally

served by a wholesale distributor customer of Transporter during the 12-month

period during which Transition Costs will be billed pursuant to Sections 37.2(a)

and 37.4(b), as may be modified by Section 37.5, the Transition Cost

responsibility of the wholesale distributor customer under Section 37, et seq.,

shall be reduced pursuant to the terms set forth in Article II of the

Stipulation in Docket No. RP91-79. Such reduction shall not be effective unless

and until Transporter and its wholesale distributor customer amend all

applicable contract(s) and service agreement(s) in a mutually satisfactory

manner in order to reduce the firm capacity entitlement of the wholesale

customer in an amount commensurate to the new firm capacity of the customer, and

to allocate such reduction over Shipper's service agreement(s) and contract(s)

with Transporter.

38. INCORPORATION IN RATE SCHEDULES AND SERVICE AGREEMENTS

These General Terms and Conditions are incorporated in and are a part of

Transporter's Rate Schedules and Service Agreements. To the extent that any

provision of a gas service agreement conflicts with any provision of the

corresponding rate schedule, the provisions in the Rate Schedule shall govern. To

the extent that any provision in either a gas service agreement or a Rate Schedule

conflicts with any of Transporter's General Terms and Conditions, Transporter's

General Terms and Conditions shall govern.

39. DISPOSITION OF EXCESS GAS

Transporter may make interruptible sales of gas from time to time pursuant to the

cash-out procedures of Rate Schedules LMS-MA and LMS-PA, Section 6 and to provide

fuel and use quantities to Shippers. Further, under the cash-out procedures of Rate

Schedules LMS-MA and LMS-PA, Section 6 and in order to alleviate conditions that

threaten the integrity of its system, Transporter may periodically acquire quantities

of gas that are excess to system needs. Transporter shall have the right to make

interruptible sales of such excess gas and gas for cash-outs from time to time at

system receipt points pursuant to the terms of the blanket certificate of public

convenience and necessity granted to Transporter