East Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 12/01/1996, Docket: RP97- 34-000, Status: Effective

First Revised Sheet No. 217 First Revised Sheet No. 217 : Superseded

Superseding: Substitute Original Sheet No. 217

BALANCING AGREEMENT (continued)

(For Use at Points of Delivery)

3.2 Corrections During the Month - Estimated metered quantities, or actual metered

quantities where available, may be used by Transporter for purposes of

adjustments under this section on a daily basis during the production month to

determine the estimated Operational Imbalance at all of the Delivery Point(s).

Transporter shall make the estimated Daily Variances and Monthly Operational

Imbalance at each Delivery Point available to Balancing Party on or before the

third business day after each production day. Adjustments in nominations and

actual deliveries will be made by Balancing Party during the production month to

adequately control imbalance levels. If Balancing Party fails to take such

corrective action, Transporter may, upon 48 hours' notice, adjust the scheduled

Quantities and actual deliveries during the remainder of the production month to

adequately control imbalance levels. Any such adjustments will be e

incorporated in the daily nominations confirmed between Transporter and

Balancing Party.

3.3 Corrections in Subsequent Periods - As soon as practicable following the close

of each month, Transporter will send Balancing Party a statement setting forth

the Operational Imbalance existing at the end of the prior month. Any Monthly

Imbalance shall be collected in cash in accordance with Rate Schedule LMS-MA,

unless the Parties mutually agree otherwise.

3.4 Measurement of Operational Imbalance - Measurement of gas for all purposes shall

be in accordance with Transporter's Tariff.

3.5 Operational Integrity - Nothing in this Article III shall limit Transporter's

right to take action as may be required to adjust deliveries of gas in order to

alleviate conditions that threaten the integrity of its system.

ARTICLE IV

TERM

4.1 Duration of Agreement - Subject to the other termination rights provided herein,

this Agreement shall be in full force from ______________, 19__, for a primary

term commensurate with that of the underlying converted firm Transportation

Agreements and shall continue thereafter on a month-to-month basis unless

canceled by either Party upon thirty days' prior written notice with the

termination to be effective at the end of a calendar month. Notwithstanding the

above, if any material problems arise as a result of the provisions of this

Agreement, then the Parties will enter into good faith negotiations to amend

this Agreement to resolve such problems. If the Parties are unable to resolve

such problems as a result of such negotiations, then either Party may terminate

this Agreement upon forty-eight (48) hours' prior written notice, with the

termination to be effective at the end of a calendar month.