CNG Transmission Corporation

Second Revised Volume No. 1

Effective Date: 01/01/1998, Docket: RP97-406-005, Status: Effective

Sub. Fourth Revised Sheet No. 354 Sub. Fourth Revised Sheet No. 354 : Superseded

Superseding: Third Revised Sheet No. 354

GENERAL TERMS AND CONDITIONS

Fuel Adjustment Provision

the products extraction fuel and shrinkage costs

reflected in base rates is $19,007,110 on an annual

basis. This amount shall be modified by Pipeline in

its general rate change proceedings under Section 4 or

5 of the Natural Gas Act.

D. Carrying charges on the prior month's ending balance

calculated by utilizing the procedures set forth in

Section 33 of the General Terms and Conditions.

The Unrecovered Fuel Cost Reimbursement Subaccount will be

adjusted to remove the effects of the cost of fuel

capitalized, the net effect of exchange and transportation

imbalances, and the net effect of third-party pipeline

cash-in/cash-out amounts. Storage injections and

withdrawals shall be valued at the current replacement cost

of gas. The cost of natural gas purchased shall include

any cost of transporting gas to Pipeline's system. Entries

into the subaccount shall be allocated between

transportation and storage services consistent with the

functional cost allocations underlying Pipeline's base

rates.

16.5 Fuel Reimbursement Cost Recovery. Each June 30, Pipeline

shall transfer the balance of the Unrecovered Fuel Cost

Reimbursement Subaccount to the appropriate subaccounts of

the Unrecovered Transportation Cost Account. The TCRA to

become effective each November 1 shall be calculated to

amortize the balance in the combined account consistent

with Section 16.4.

16.6 Transportation Service Fuel Retention Percentage. The

Transportation Service Fuel Retention Percentage shall be

determined by dividing the Projected Transportation Fuel

Quantity by the projected Transportation Quantity for the

Effective Period.

16.7 Storage Service Fuel Retention Percentage. The Storage

Service Fuel Retention Percentage shall be determined by

dividing the Projected Storage Fuel Quantity by the

projected Storage Quantity for the Effective Period.