Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 05/01/1997, Docket: RP97- 67-002, Status: Effective

Second Revised Sheet No. 231 Second Revised Sheet No. 231 : Superseded

Superseding: First Revised Sheet No. 231

GENERAL TERMS AND CONDITIONS

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

An imbalance results when a Shipper delivers or causes delivery to

WNG at the receipt point(s) of a quantity of gas which, after

appropriate reduction for fuel and loss, is less than or greater

than the quantity of gas taken from WNG at the delivery point(s).

Shippers shall maintain thermal balancing of receipts and

deliveries on a daily basis to the maximum extent possible. Any

monthly imbalances which do remain, however, shall be subject to

the provisions of this Article 9.8.

(a) All transportation agreements with each Shipper within the

same area (production/market) will be combined for purposes of

determining whether a net monthly imbalance exists. If a

Shipper utilizes more than one agreement to transport the same

gas sequentially within the same area, WNG will utilize

original receipts and ultimate deliveries for purposes of

determining the monthly imbalance. An imbalance statement

shall be generated for each Shipper at the same time or prior

to the generation of the transportation invoice, which will

state their level of imbalance for the preceding calendar

month. Shippers may elect to resolve their imbalances by the

end of the calendar month following the month in which the

imbalance occurs by any of the following means:

(i) imbalance trading among Shippers in the same area,

(ii) treating the imbalance as if it had been injected into or

withdrawn from the Shipper's storage account to the

extent Shipper has storage capacity available or

Shipper's storage inventory is sufficient to cover the

imbalance (applies only to those Shippers who also have

storage agreements with WNG),

(iii) adjusting nominations for the remainder of the current

month, or

(iv) cashing-out imbalances in excess of the tolerance level,

as defined in (b) below, at 100% of the spot market price

applicable to WNG as published in the first issue of

Inside FERC's Gas Market Report for the month in which

the imbalance occurred.