TransColorado Gas Transmission Company

Original Volume No. 1

Effective Date: 10/01/2002, Docket: RP02-460-000, Status: Effective

Original Sheet No. 245A Original Sheet No. 245A : Superseded

GENERAL TERMS AND CONDITIONS

12. BALANCING OF GAS (Continued)

(e) After receipt of an Imbalance Trade Confirmation,

TransColorado shall send the Imbalance Trade Notification to the

initiating trader and the confirming trader no later than noon the next

Business Day.

(f) Shipper imbalances remaining after the imbalance netting

and trading procedures set out in subsections (a)-(e) shall be cashed out

as described in Section 12.6 of these General Terms and Conditions.

12.6 Cashout Procedures

(a) Any imbalance remaining will be cashed out on a tiered

basis, pursuant to the following schedule. In determining the cashout

tier applicable, TransColorado will utilize the operational data posted on

its Interactive Website as of the end of the month or the actual flow

volumes, whichever results in a lower cashout tier.

Overage Underage

(TransColorado pays (Shipper pays

Imbalance Level Shipper) TransColorado)

0% to 5% 100% x MIP* 100% x MIP

Greater than 5% to 10% 90% x MIP 110% x MIP

Greater than 10% to 15% 80% x MIP 120% x MIP

Greater than 15% to 20% 70% x MIP 130% x MIP

Greater than 20% 60% x MIP 140% x MIP

*Monthly Index Price

(b) Following any offsetting with other Shippers, a Shipper s

remaining imbalance will be cashed out based on the percentage of that

imbalance compared to the total receipts for that Shipper during the

month. For example, if the total receipts were 1,000 Dth and the

remaining underage imbalance after offsetting with other Shippers was 100

Dth, the total imbalance level would be 10%. The first 5% (50 Dth) would

be cashed out at 100% of the MIP and the remaining 50 Dth would be cashed

out at 110% of the MIP.