Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 01/01/1996, Docket: TM96-2-43-000, Status: Effective

Third Revised Sheet No. 250 Third Revised Sheet No. 250 : Superseded

Superseding: Substitute Second Revised Sheet No. 250

GENERAL TERMS AND CONDITIONS

12. INTERRUPTIBLE CAPACITY AND CREDITING OF INTERRUPTIBLE AND AOS REVENUE

(Cont'd)

12.2 Rate Schedule ISS Revenues

Gross revenues received from interruptible storage services,

reduced by applicable penalties, surcharges and the variable cost

of providing the service, shall first be applied to costs allocated

to such service. Remaining Rate Schedule ISS revenues shall be

refunded to Primary Shippers purchasing firm storage service based

on each Shipper's pro-rata share of total reservation charge

revenue received by WNG during the twelve-month period the ISS

revenue was received.

13. FUEL AND LOSS REIMBURSEMENT

Shippers shall reimburse WNG for fuel and loss (fuel and loss) in kind.

A separate fuel and loss reimbursement percentage shall be stated for

each gathering area, the Production Area, the Market Area and for

storage.

13.1 Filing of Fuel and Loss Reimbursement Percentages

WNG shall file revised fuel and loss reimbursement percentages each

year based on actuals for the preceding twelve month period ended

September 30. Any difference between actual fuel and loss in the

prior twelve month period and the quantity retained in kind

hereunder for such twelve month period shall be included in the

calculation of revised fuel and loss reimbursement percentages for

the following year. Such annual filing shall be made no later than

December 1st to be effective January 1st.

13.2 Method of Calculation of Fuel and Loss

Actual fuel consumed at each compressor station or other fuel

consuming facility is measured and is assigned to the area

(Production/Market/Storage) where such facility is located.

Transmission system losses are calculated by (1) subtracting actual

deliveries off the system and actual fuel consumed from actual

receipts on the system; and (2) subtracting net storage injections

or adding net storage withdrawals to the result obtained in (1).

Such transmission system losses are then allocated to the