Williams Natural Gas Company

Second Revised Volume No. 1

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

Original Sheet No. 282 Original Sheet No. 282 : Superseded

GENERAL TERMS AND CONDITIONS

27. RECOVERY OF PIPELINE SUPPLIER BILLINGS OF ORDER NO. 528 TAKE-OR-PAY

AND CONTRACT REFORMATION COSTS (Cont')

27.1 Purpose

This Article establishes, pursuant to Section 2.104(e) of the

Commission's General Policy and Interpretations, the mechanism

for the recovery by WNG from Buyers, under WNG's Sales Rate

Schedules of the take-or-pay buyout, buydown and contract

reformation costs billed to WNG by its pipeline suppliers by

fixed charges also pursuant to Section 2.104 of the Commission's

General Policy and Interpretations.

27.2 Fixed Charge Recovery Mechanism

WNG shall allocate to and recover from its Buyers each month the

fixed charges billed by its pipeline suppliers in such month.

The amounts billed to each Buyer shall equal the sum of the

amounts billed to WNG by each pipeline supplier times the

Allocation Factor for each Buyer under an allocation based on the

average three-day peak purchase volumes of December 21, 22 and

23, 1989. The Allocation Factor shall be the percentage computed

by comparing each customer's average three-day peak purchase

volume to the total average purchase volumes in the three-day

peak period. In the event fixed charges from WNG's pipeline

suppliers are being collected by such suppliers subject to

refund, WNG's charges to Buyers pursuant to Section 27.2 will

also be subject to refund. Any increase or decrease in such

fixed charges to WNG will likewise be allocated and charged to

Buyers based on the Allocation Factor specified above. The fixed

monthly charges applicable to Buyers shall remain in effect until

all charges, including all associated carrying charges, are fully

recovered by WNG from Buyers. Such fixed monthly charge to

Buyers, which may include carrying charges estimated by WNG's

pipeline suppliers, shall be set forth on the currently effective

Sheet Nos. 7 and 7A herein. Any additional carrying charges

billed to WNG by its pipeline suppliers shall be allocated among

Buyers in accordance with the allocation percentages as set forth

on Sheet Nos. 7 and 7A herein.