Transwestern Pipeline Company

Second Revised Volume No. 1

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Effective Date: 01/01/2003, Docket: RP00-490-002, Status: Effective

Third Revised Sheet No. 148 Third Revised Sheet No. 148 : Effective

Superseding: 2nd Revised Sheet No. 148

TRANSPORTATION SERVICE AGREEMENT - FORM N

(continued)

5. Operational Imbalances shall be indexed to a price (hereinafter referred to as the "Monthly Index

Price" or "MIP") which shall be calculated as follows, as may be amended from time to time:

(a) Transporter shall first determine any Operational Imbalance quantity for each month on

a dekatherm basis. Transporter shall then determine a dollar equivalent utilizing the

dekatherm quantity and the established MIP ("Dollar Valued Operational Imbalance").

(b) For Dollar-Valued Operational Imbalances remaining from previous month(s), the Dollar-

Valued Operational Imbalance remaining from the previous month(s) will be added to the

Dollar-Valued Operational Imbalance amount for the Current Month and divided by the

current month's MIP to get the volume applicable to the Operation Imbalance for the

OBA.

(c) The MIP for each month shall equal the average of the daily prices for that month as

reported in Gas Daily's table entitled "DAILY PRICE SURVEY" for delivery into

Transporter's mainline system ____________________. (If a range of prices is shown

for any particular day, the midpoint of such range shall represent that day's price at

a particular location.) If, for any reason, Gas Daily ceases to be available for a

particular month, the MIP for that month will equal the average of the applicable

daily prices for the above-described location for the applicable month as reported in

any other generally accepted available industry publication chosen by Transporter.

(d) Prices used to calculate the MIP will be prices quoted "into the mainline" in order to

eliminate inconsistencies due to varying gathering and treating charges. Transporter

will post the MIP for each month on its Internet Website within one (1) business day

following the end of the applicable month.

(e) Subject to the provisions of 4.b. above, Operational Imbalances that may arise from

time-to-time may be resolved, on a not unduly discriminatory basis, by payment on an

"in-kind" basis or by either Transporter or Company, as appropriate, purchasing

volumes necessary to clear the entire Dollar-Valued Operational Imbalance.

Transporter will accept nominations for and schedule the volumes necessary to resolve

the Operational Imbalance subject to operational considerations.