Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 04/01/1997, Docket: RP96-387-001, Status: Effective

Substitute First Revised Sheet No. 229B Substitute First Revised Sheet No. 229B : Superseded

Superseding: 2 Substitute Original Sheet No. 229B

GENERAL TERMS AND CONDITIONS

9. SCHEDULING, CURTAILMENT AND IMBALANCES (Cont'd)

represent undersubscriptions of capacity and WNG will retain

penalty revenues resulting from the highest level of MDTQ or

MDWQ Unauthorized Capacity Overrun incurred by any Shipper on

any day during each winter heating season (November through

March). Penalty revenues resulting from lower levels of MDTQ

or MDWQ Unauthorized Capacity Overrun incurred by the same

Shipper on any other day during the same winter heating season

will be credited to those Shippers who did not incur

Unauthorized Capacity Overrun penalties on that day. Such

credited penalty revenue associated with MDTQ overruns will be

credited to Shippers who did not overrun their MDTQ on the

same respective day and such credited penalty revenue

associated with MDWQ overruns will be credited to Shippers who

did not overrun their MDWQ on the same respective day.

Credits will be pro rata based on MDTQ and MDWQ, respectively.

Payment of a penalty under this paragraph shall not entitle

Shipper to any future increased MDTQ or MDWQ.

Storage withdrawals made after a Shipper's storage account(s)

is/are depleted shall be subject to daily balancing penalties

equal to $15 per Dth. Daily penalty revenue related to

storage depletion will be credited to those Shippers whose

storage account was not depleted on that day.

(d) For deliveries taken by any Receiving Party that are greater

than 103% of the sum of confirmed delivery nominations plus

the TSS/STS MDQ (Overdeliveries), or for receipts delivered by

any Delivering Party that are less than 97% of confirmed

receipt nominations (Under Receipts), on any day during a

period of daily balancing, said Receiving or Delivering Party

shall pay to WNG a balancing penalty for each Dth of

Overdeliveries or Under Receipts as follows:

(i) the greater of $10 or 5 times the average Gas Daily Index

for WNG for each day for which daily balancing is in

effect for each Dth of Overdeliveries or Under Receipts

in excess of 3% through 10% of authorized delivery levels

(for Overdeliveries) or confirmed nominations (for Under

Receipts);