Alabama-Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 09/01/1993, Docket: RS92- 27-003, Status: Effective

Original Sheet No. 134 Original Sheet No. 134 : Superseded

GENERAL TERMS AND CONDITIONS (Continued)

26. ALLOCATED TAKE-OR-PAY CHARGES

This section establishes the procedures under which Transporter

will flow-through, pursuant to Section 2.104(e) of the

Commission's Regulations, the jurisdictional portion of take-or-

pay charges billed to it by upstream gas pipeline supplier(s)

pursuant to FERC Docket No. RP86-119, et al. The allocation of

such costs to Transporter's customers is based a method

acceptable pursuant to FERC order Nos. 528 and 528-A.

26.1 Basis of the Allocated Take-or-Pay Charge: This section

establishes Allocated Take-or-Pay Charges applicable to

each of Transporter's transportation customers pursuant to

Rate Schedules FT, FT-SG and IT for recovery of take-or-pay

charges billed to Transporter by upstream gas pipeline

supplier(s).

(a) Such Allocated Take-or-Pay Charges applicable to each

of Transporter's transportation customers shall be

the amounts as set out on Sheet No. 4A of

Transporter's FERC Gas Tariff, Original Volume No. 1.

The charges set out thereon shall be adjusted from

time to time to reflect either increases or decreases

in the take-or-pay charges billed to Transporter by

Tennessee. Such allocated Take-Or-Pay Charges shall

be paid by each Shipper until Transporter has

recovered from such Shipper its total aggregate

allocated amount, including carrying charges.

(b) Each customer's Allocated Take-or-Pay Charge shall be

amortized over a five (5) year period or such shorter

time as may be mutually agreeable.

transportation, shall pay the Volumetric Take-Or-Pay

Surcharge as set forth on the then current Tariff

Sheet No. 4A.

(d) Transporter shall file, not less than annually, to

adjust the Volumetric Take-Or-Pay Surcharge to