Midcoast Interstate Transmission, Inc.

Second Revised Volume No. 1

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

Second Revised Sheet No. 145 Second Revised Sheet No. 145 : Effective

Superseding: FIRST REVISED SHEET NO. 145

GENERAL TERMS AND CONDITIONS (Continued)

(1) Each month the Unrecovered Transportation

Cost Account shall be (1) debited by

Transporter's actual Transportation Costs

(net of any cost reductions or revenues from

Transporter's assignment of its capacity or

obligations related to those actual

Transportation Costs), and (2) credited by

the actual revenues received attributable to

the Transportation Costs reflected in

Transporter's Rates, which revenues shall be

determined by multiplying (i) the actual

Demand and Commodity billing units under the

Affected Rate Schedules for the billing

month by (ii) the effective Current

Transportation Cost Rate determined in

accordance with this Section 33.4(d).

(2) Commencing with the effective date of this

Article, all transportation refunds received

by Transporter, which relate to the

Transportation Costs recovered pursuant to

this Section, shall be credited to this

Account.

(3) Each month the Account shall be debited (in

the event of a debit balance) or credited

(in the event of a credit balance) with

interest, calculated in accordance with the

procedures set forth in Section 254.305 (h)

of the Commission's regulations, on the

prior month's ending balance.

(4) In each annual Transportation Cost filing,

Transporter shall adjust its rates either

positively or negatively to include a

surcharge to recover or return the balances

in the applicable FERC Account No. 186 sub-

accounts for Unrecovered Transportation

Costs at the end of the month ending four

(4) months prior to the effective date of

the adjustments. The surcharge shall equal

the applicable balance divided by the

applicable estimated billing determinants

for the TCRA Calculation Period.