Kansas Pipeline Company

Original Volume No. 1

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Effective Date: 05/11/1998, Docket: CP96-152-009, Status: Effective

Original Sheet No. 241 Original Sheet No. 241 : Effective

GENERAL TERMS AND CONDITIONS (Continued)

Percentage Applicable Imbalance

Level Mid-Continent

in Excess of MAIQ Spot Index

0% - 5% 1.0 x Highest Weekly Price

> 5% - 10% 1.1 x Highest Weekly Price

>10% - 15% 1.2 x Highest Weekly Price

>15% - 20% 1.3 x Highest Weekly Price

>20% 1.4 x Highest Weekly Price

The percentage imbalance level shall be calculated

by dividing the imbalance in excess of MAIQ by the

actual Quantity of Gas delivered during the Month

in which the excess occurred, unless the

percentage imbalance level would be lower if

calculated using operating data provided pursuant

to Section 12.9 of these General Terms and

Conditions, in which case the percentage imbalance

level shall be calculated using such operating

data.

(3) During each twelve month period beginning on

the effective date of this Section 12, Kansas

Pipeline shall refund any net revenue (sales

revenue less purchase cost) received from

operation of paragraphs (a)(1) and (2) to all

shippers on a pro-rata basis based on quantity

delivered under rate schedules applicable

to this Section 12 to each shipper during such

twelve (12) month period. If Kansas Pipeline

incurs a net cost during such twelve month period,

the amount will be deferred and offset against

revenue in the next twelve (12) month period.

Carrying costs shall be calculated on the net

balance each month (either net revenue

or net cost) utilizing the rate set forth in

Section 154.501 of the Commission's regulations.

(b) Mid-Continent Spot Price Calculation

For disposition of excess receipts and deliveries

under Sections 12.11(a)(1) and (2) herein, the weekly

Mid Continent Spot Index shall be the Kansas/Oklahoma

Field Zone Price for Gas delivered to Panhandle Eastern

Pipeline Company from the table "Spot Prices on