Alabama-Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 09/01/1993, Docket: RS92- 27-007, Status: Effective

First Revised Sheet No. 142 First Revised Sheet No. 142 : Superseded

Superseding: ORIGINAL SHEET NO. 142

GENERAL TERMS AND CONDITIONS (Continued)

(a) Each Affected Shipper will be allocated a portion

of Tennessee Gas Costs as of the effective date of

termination of Tennessee's Purchased Gas

Adjustment clause ("Tennessee Termination Date")

plus adjustments to reflect changes in the

accruals and estimates for billing dispute

settlements, carrying charges and other amounts

which are known and measurable within the six-

month period following the Tennessee Termination

Date.

(b) Each Affected Shipper will have allocated to it an

amount of Tennessee Gas Costs according to the

following formula:

((X/Y)times(Z)= Affected Shipper's allocated share

of Tennessee Gas Cost;

where

X= the Affected Shipper's firm sales Contract

Demands effective immediately prior to the

implementation date of transporter's

restructuring pursuant to FERC Docket No.

RS92-27; and

Y= the total of the firm sales Contract Demand

under all of Transporter's Affected firm

sales contracts effective immediately prior

to the implementation date of transporter's

restructuring pursuant to FERC Docket No.

RS92-27; and

Z= the total Tennessee Gas Cost.

33.4 Transportation Cost Rate Adjustments

The rates and charges for the Affected Rate Schedules

are subject to adjustments following the affective date

of the rates filed by Transporter in Docket No. RP92-

237 to reflect changes in Transportation Costs;

provided; however, that these adjustments shall be

effected no more frequently than on a semiannual basis.

"Transportation Costs" are defined as the as-billed

demand and commodity charges incurred by Transporter

for the remaining demand charges after the temporary or

permanent assignment of any such contracts.