Alabama-Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 06/01/1997, Docket: RP97-165-001, Status: Effective

First Revised Sheet No. 78 First Revised Sheet No. 78 : Superseded

Superseding: ORIGINAL SHEET NO. 78

GENERAL TERMS AND CONDITIONS (continued)

(2) Allocation of Deliveries - Unless prohibited by

applicable law or regulation, the quantities of

natural gas delivered by Transporter at any

Delivery Point(s) shall be allocated among

Shippers and services in accordance with

allocation procedures agreed to by Transporter

and the OBA Party at the Delivery Point(s) as

set forth in the OBA in a form contained in

Transporter's Tariff beginning at Sheet No. 226.

(b) Where Transporter delivers gas at a Delivery Point(s)

not covered by an OBA, to multiple Shippers, the

operator of the Delivery Point shall appoint a

designee who shall provide Transporter, an agreeable

predetermined allocation ("PDA") methodology prior to

the commencement of the Gas Day. Transporter shall

confirm receipt of the PDA within fifteen (15)

minutes of receipt. Provided, however, if on any day,

for any reason, transportation quantities are

scheduled by Transporter for Shipper and no PDA is

provided by the designee, then the quantities

received at such Delivery Point shall be prorated

among all of the transportation agreements scheduled

for all Shipper(s) receiving service at such Delivery

Point that day. The determination of deliveries

herein is subject to modifications based upon pre-

existing delivery sequence arrangements between

Transporter and Shipper(s).

(1) PDA methodologies - The point operator, or the

designee, submitting the PDA may choose one of

the following methodologies for allocating

deliveries: Ranked, Pro Rata, Percentage or

Swing. Changes to a PDA may be made

prospectively during the month if such changes

are approved by Transporter. Only one PDA may

be in effect per gas day per point. No

retroactive reallocations of any transactions

shall be permitted without the approval of

Transporter and the agreement of those Shippers

affected by such retroactive reallocations,

provided that the agreement by such Shippers

shall not be unreasonably withheld.