Reliant Energy Gas Transmission Company

Fourth Revised Volume No. 1

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Effective Date: 12/31/1996, Docket: RP97-193-000, Status: Effective

Third Revised Sheet No. 316 Third Revised Sheet No. 316 : Effective

Superseding: Sub Second Revised Sheet No. 316

GENERAL TERMS AND CONDITIONS

(continued)

Transporter shall compare total Rate Schedule ISS revenue

during the twelve (12) months ended January 31 ("Accrual

Period") against the costs of service allocated to be

recovered from Rate Schedule ISS, less applicable

surcharges and variable costs associated with providing

the service. The resulting amount defined as the "Excess

ISS Revenues", or the "Remaining ISS Costs", as

applicable, shall be netted in accordance with the

procedure set out in Section 23.9, hereof, to determine

the amount of Excess Interruptible Revenues, if any.

23.9 For purposes of the annual crediting filings set out

in the General Terms and Conditions, Sections

5.7(c)(ii)(2)(B) (Imbalance Cash-Out), and Sections

23.2 (b)(iv) and 23.7 (IT and SBS Revenue Crediting),

Transporter shall net Cash-Out Excess Revenues or

Cash-Out Remaining Costs, Excess IT Revenues or

Remaining IT Costs, Excess ISS Revenues or Remaining

ISS Costs and Carryover Costs (as defined below). If

the resulting net amount is an excess of revenues, it

shall be defined as the "Excess Interruptible

Revenues." If the Excess Interruptible Revenues are

less than or equal to the Excess IT Revenues, then

the IT Crediting Revenues shall be equal to the

Excess Interruptible Revenues. If the Excess

Interruptible Revenues exceed the Excess IT Revenues

("Remaining Interruptible Revenues"), then the IT

Crediting Revenues shall be equal to the Excess IT

Revenues and the "Cash-Out Crediting Revenues" shall

be determined by multiplying the Remaining

Interruptible Revenues by a fraction, the numerator

of which is the Cash-Out Excess Revenues, if any, and

the denominator of which is the Cash-Out Excess

Revenues plus the Excess ISS Revenues. If the

resulting net amount is an excess of costs (Carryover

Costs), such Carryover Costs, including interest in

accordance with Section 154.501 of the

Commission's regulations, calculated from the end of

the Accrual Period (defined in the Sections set out

above) in which the Carryover Costs were incurred

until the end of the next Accrual Period, shall be

included in the next annual calculation performed

under this Section 23.9.