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First Revised Sheet No. 224 First Revised Sheet No. 224 : Superseded

Superseding: Substitute Original Sheet No. 224

BALANCING AGREEMENT

(For Use by Aggregator at Points of Delivery)

ARTICLE II

NOMINATIONS AND CONFIRMATIONS

2.1 Confirmation of Nominations - Prior to the beginning of the month in which

service is to commence, Transporter and Balancing Party shall confirm or cause

to be confirmed the quantities nominated to be transported by Transporter to the

Delivery Point(s) commencing on the first day of the month following the

confirmation. The quantities confirmed through this process shall become the

"Scheduled Quantities". Balancing Party shall reconfirm any modification to

such confirmations or cause such modification to be re-confirmed prior to the

commencement of the revised service. Transporter shall notify Balancing Party

or Balancing Party's designee of any problem(s) regarding the scheduling of gas

in accordance with confirmations made hereunder within one business day after

such confirmation, unless mutually agreed to otherwise. Balancing Party shall

notify Transporter or cause Transporter to be notified of any errors in the

quantities scheduled pursuant to its confirmation within one business day of

receipt of such information from Transporter. If Balancing Party fails to

confirm the quantities to be transported to any Delivery Point(s) in accordance

with the above, and such failure continues for two days or more (whether or not

such days are consecutive) after 24-hour written notice to the Balancing Party

by Transporter at the end of that calendar month.

2.2 Allocation Based on Scheduled Quantities - The Parties intend that the quantity

actually delivered at Delivery Point(s) will equal the Scheduled Quantities.

Unless prohibited by applicable law or regulation, all transportation services

by Transporter shall be allocated each day based upon the Scheduled Quantities

or by such other methods as may be mutually agreed to by both Parties.

2.3 Allocations of Variances - The difference on any day between the Scheduled

Quantities set forth in Section 1.1 above and the actual quantity delivered at

the Delivery Point(s) shall be the Daily Variance and shall be allocated to this

Agreement. The difference between the sum of the Scheduled Quantities during a

calendar month and the total actual quantity delivered at the Delivery Point(s)

during the calendar month shall be the Monthly Operational Imbalance. Any

Operational Imbalances will be corrected in accordance with Article II.

2.4 Unauthorized Overruns - Balancing Party may not take gas in excess of the

adjusted daily variance tolerance applicable to the Delivery Point(s) as

specified in an Operational Flow Order issued pursuant to Article 14 of the

General Terms and Conditions. Any such takes will be treated as unauthorized

overruns and shall be subject to Unauthorized Overrun Charges in accord with

Section 14.8 of the General Terms and Conditions of Transporter's FERC Gas

Tariff.