CNG Transmission Corporation

Second Revised Volume No. 1

Effective Date: 12/31/1996, Docket: RP97-212-000, Status: Effective

Second Revised Sheet No. 358A Second Revised Sheet No. 358A : Superseded

Superseding: First Revised Sheet No. 358A

GENERAL TERMS AND CONDITIONS

Transition Cost Adjustments

Customer's share determined in accordance with the

percentages set forth on Sheet No. 58.

18.2 Stranded Costs. Pipeline shall recover from its Firm

Customers two types of Stranded Costs: Stranded Costs and

Stranded Account No. 858 Costs.

A. Stranded Costs.

1. Pipeline shall recover Stranded Costs from its

Customers by filing general rate change applications

with the Commission, in accordance with the

requirements of Section 4 of the Natural Gas Act and

18 C.F.R. Section 154. The eligibility and prudence

of any claimed costs shall be issues to be resolved

in the Section 4 proceedings.

2. In any general rate filings made on or before July

1, 1997, the Commission's test period regulations,

18 C.F.R. Section 154.303 shall be waived to permit

Pipeline to recover Stranded Costs incurred outside

the test period of the Section 4 filings. Pipeline

shall be permitted to defer recognition of any

Stranded Cost on its books of account pending the

resolution of the general Section 4 filings

described in Section 18.2.A.1. In instances

involving Pipeline's sale of gathering facilities to

non-affiliated parties at a net loss, Pipeline shall

seek to recover such net losses in the next general

rate proceeding after the incurrence or deferral of

such costs, without the requirement that Pipeline

further unbundle its gathering system. Pipeline

shall seek to recover other Stranded costs related

to the gathering system in the next general rate

proceeding after the incurrence or deferral of such

costs in which Pipeline seeks to further unbundle

its gathering rates. Pipeline shall seek to recover

other Stranded costs in the next general rate

proceeding after the incurrence or deferral of such

costs. This waiver of test period regulations shall

extend to any rate case filed on or before July 1,

1997; provided, however, that nothing in this Tariff

shall be deemed to prohibit Pipeline's recovery of

Stranded Costs in any Section 4 rate filing after

July 1, 1997.