Midcoast Interstate Transmission, Inc.

Second Revised Volume No. 1

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

Third Revised Sheet No. 140 Third Revised Sheet No. 140 : Effective

Superseding: SECOND REVISED SHEET NO. 140

GENERAL TERMS AND CONDITIONS (Continued)

(b) Amounts billed by Tennessee to Transporter

pursuant to Section XIX of the General Terms and

Conditions contained in Tennessee's Tariff that

becomes effective upon the implementation of

restructured services in Docket No. RS92-27-000

("Tennessee Gas Costs"); and

(c) Transportation Costs amounts reflected in

Transporter's Unrecovered Transportation Cost

Account pursuant to Section 33.4 of these General

Terms and Conditions.

33.2 Recovery of Transporter Gas Costs: Transporter will

terminate its existing Purchased Gas Cost Adjustment

clause effective on the implementation date of

Transporter's filing in FERC Docket No. RS92-27

("Implementation Date"). The Unrecovered Gas Cost

Account balance, including any amounts subsequently

billed or refunded, regardless of when such amounts are

received, applicable to the period the PGA was in

effect, on the Implementation Date shall be

billed/refunded in a lump sum amount to Shippers that

were formerly bundled jurisdictional sales customers

who had contracted to purchase gas from Transporter

under Transporter's Rate Schedules G and SG on the day

prior to the Implementation Date ("Affected Shippers").

Transporter will invoice/refund in a lump sum amount to

Shippers for Transporter's Gas Costs attributable to

each Shipper as follows:

(a) Each Affected Shipper will be allocated a portion

of Transporter's demand and commodity Unrecovered

Purchased Gas Cost Account balance on the

Implementation Date, including any amounts

subsequently billed or refunded applicable to the

period the PGA was in effect, plus adjustments to

reflect changes in the accruals and estimates for

billing dispute settlements, carrying charges and

other amounts that are known and measurable within

the six-month period following the Implementation

Date.