Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 08/01/1997, Docket: RP97-258-004, Status: Effective

2 Sub Fourth Revised Sheet No. 233 2 Sub Fourth Revised Sheet No. 233 : Superseded

Superseding: 1 Revised Third Revised Sheet No. 233

GENERAL TERMS AND CONDITIONS

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

(d) During each twelve month period beginning on the effective

date of this Article 9, WNG shall refund any net revenue

(sales revenue less purchase cost) received from operation of

paragraphs (a)(iv) and (c) to all Shippers on a pro-rata basis

based on quantity delivered under rate schedules applicable to

this Article 9.8 to each Shipper during such twelve month

period. This refund shall be net of costs WNG incurs for

purchases made for operational purposes. If WNG incurs a net

cost during such twelve month period, the amount will be

deferred and offset against revenue received in the next

twelve month period. Carrying costs shall be calculated on

the net balance each month (either net revenue or net cost)

utilizing the rate set forth in Section 154.501 of the

Commission's regulations.

(e) In the event a monthly imbalance exceeding the tolerance set

forth in Sections 9.8(b) and 9.8(c) results directly from (1)

compliance with an operational flow order issued by WNG

pursuant to Article 10, (2) inaccurate information provided by

WNG, or (3) a force majeure event, such Shipper shall be

allowed an additional month to resolve such imbalances.

(f) No imbalance penalty will be imposed when a prior period

adjustment applied to the current period causes or increases

a current month penalty.

(g) In the event actual or expected imbalances threaten the

integrity of its system, WNG may take whatever actions it

deems necessary to protect such system integrity, including,

but not limited to, adjusting or rejecting Shipper

nominations. Any actions taken by WNG pursuant to this

paragraph shall not be unduly discriminatory.

(h) Imbalances will not be cashed-out more than once.

9.9 Imbalances at Termination of Agreement

Imbalances existing at the termination of a service agreement shall

be eliminated by the end of the second month following the

termination of the agreement. Imbalances not eliminated within the

two month period will be purchased by WNG from the Shipper at a

price equal to 50% of the spot market price applicable to WNG as

published in the first issue of Inside FERC's Gas Market Report for

the last month of the agreement or sold by WNG to the Shipper at

150% of such spot market price for the last month of the agreement.