Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 09/25/1997, Docket: RP97-484-000, Status: Effective

Fourth Revised Sheet No. 254 Fourth Revised Sheet No. 254 : Superseded

Superseding: Substitute Third Revised Sheet No. 254

GENERAL TERMS AND CONDITIONS

14. TRANSITION COSTS AND EXIT FEES (Cont'd)

price WNG pays under its below-market contracts and the higher

of (1) the spot market price, as calculated in paragraph

(c)(2), or (2) the actual sales price at which WNG sells the

gas purchased under the contract(s). Costs incurred under

(c)(2) above through and including October 1, 1997 shall be

eligible for recovery under this Section 14.2

WNG will file lists of above-market and below-market contracts

with the first filing in which it proposes to recover GSR

Costs under this paragraph (c).

(d) Ninety five percent (95%) of such GSR Costs shall be allocated

to WNG's Shippers under Rate Schedules TSS, STS, FTS and SFT

pro rata based on the ratio of the Shipper's aggregate MDTQ to

the total aggregate MDTQ under Rate Schedules TSS, STS, FTS and

SFT and recovered from such Shippers under Rate Schedules TSS,

STS, FTS and SFT by means of a GSR Reservation Surcharge per

MDTQ.

(1) WNG shall render a bill for the entire amount of each

Shipper's GSR Reservation Surcharge Amount with respect

to the quarterly filing on or after the fifteenth day of

the month following the effective date of the filing.

Such amount shall be payable in three (3) consecutive

monthly installments equal to 1/3 of such entire amount.

(2) Each Shipper shall have the option, in lieu of payment of

such GSR Reservation Surcharge in three installments, of

paying twenty-four (24) consecutive monthly installments

equal to 1/24 of such entire amount. Additional carrying

charges on such amount shall be calculated and included

on each monthly bill for those Shippers electing the

twenty-four (24) month payment option.

(3) Monthly amounts shall be payable within ten days after

the date of the invoice. Any Shipper may, at any time,

pay all or a portion of its unpaid GSR Reservation

Surcharge Amount and in such event its obligation for

carrying charges shall be applicable only to amounts

unpaid. Carrying charges on unpaid principal amounts for

those Shippers electing to extend their payments

hereunder shall be determined using the methods specified

in Section 154.305 of the Commission's regulations.