Williams Natural Gas Company

Second Revised Volume No. 1

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Effective Date: 10/01/1993, Docket: RS92- 12-003, Status: Effective

Original Sheet No. 258 Original Sheet No. 258 : Superseded

GENERAL TERMS AND CONDITIONS

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

(c) Costs eligible for recovery under this Article 14.2 could

include:

(1) payments to reform or terminate contracts, or

(2) for contracts where WNG has determined that it can

minimize GSR Costs by continuing to purchase gas under

the contract, the difference between the contract price

and the higher of (a) the price at which WNG resells

gas purchased under the contract(s), or (b) an average

of the spot index prices shown for WNG, Natural Gas

Pipeline Company of America, Northern Natural Gas

Company, ANR Pipeline Company, and Panhandle Eastern

Pipe Line Company, for Texas, Oklahoma, and Kansas, as

reported in the first issue of Inside F.E.R.C.'s Gas

Market Report for the month in which the gas was sold.

The differential calculated in (c)(2) above shall be reduced

by net revenue received under WNG's below-market contracts.

The net revenue will be the differential between the actual

price WNG pays under its below-market contracts and the

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

preceding paragraph, or (2) the actual sales price at which

WNG sells the gas purchased under the contract(s).

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 percent (90%) 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.