Midcoast Interstate Transmission, Inc.

Second Revised Volume No. 1

Effective Date: 10/01/1997, Docket: GT97- 71-000, Status: Effective

Second Revised Sheet No. 87 Second Revised Sheet No. 87 : Effective

Superseding: FIRST REVISED SHEET NO. 87

GENERAL TERMS AND CONDITIONS (continued)

corrected pursuant to the procedures in effect at the

time the imbalance was incurred.

(f) Limitation on Penalties - Any imbalances caused by an

event which excuses performance under Section II of the

General Terms and Conditions or caused by an action of

Transporter, including providing the OBA Parties

inaccurate imbalance information at points with

Electronic Data, (1) will not be included in the

calculation of the total monthly imbalance for purposes

of determining the appropriate cash-out level and (2)

will be cashed-out at the 0-5% tolerance level in this

Section 3.7.

(g) Disposition of Cash-Out Provisions - All Cash-out

Provision revenues received by Transporter in

accordance with Section 3.7 (d) that are in excess of

Transporter's costs, including, but not limited to: (1)

payments made by Transporter in accordance with Section

3.7, and (2) Transporter's gas costs and fuel and loss

costs properly allocable to operators, will be credited

annually to the Volumetric Take-or-Pay Charge

established pursuant to Section 26 of the General Terms

and Conditions of Transporter's Tariff or, if there is

no Volumetric Take-or-Pay Surcharge in effect, such

excess Cash-Out Provision revenue shall be refunded

annually to all shippers pro-rata based on the ratio of

such shipper's through-put for the most recent twelve

(12) months to the total through-put of all Shippers

during the same period.

(h) Operational Integrity - Transporter shall have the

right to take any action that may be required to adjust

receipts and deliveries under any transportation

agreement to reflect actual experience or to alleviate

conditions which threaten the operational integrity of

Transporter's system, including without limitation

maintenance of service to Shippers with a higher

scheduling priority and/or services.