NorAm Gas Transmission Company

Fourth Revised Volume No. 1

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Effective Date: 09/01/1997, Docket: RP96-200-025, Status: Effective

Second Revised Sheet No. 7H Second Revised Sheet No. 7H : Superseded

Superseding: First Revised Sheet No. 7H

STATEMENT OF NEGOTIATED RATES

Contract Rate Contract

Shipper Name Number Schedule Demand Receipt Point(s) Delivery Point(s) Rate

------------ -------- -------- -------- ---------------- ----------------- ----

Duke Energy Trading & 1952 FT 10,000 South Pooling Area CGT @ Perryville (thru 10/31/97) See Formula below

Marketing, L.L.C. North Pooling Area ANR @ Perryville

(East of Chandler) Koch @ West Monroe

Tennessee 100

Tennessee 800

TET @ West Monroe

TGT @ Perryville

Trunkline @ Richland

Sonat @ Perryville

Formula Rates for Services up to Contract Demand:

The formula rate shall be based on the index prices ("Index Prices") for spot gas delivered to the pipelines at the areas indicated, as published in the first

issue of the Month of Inside FERC's Gas Market Report for the Service Month. If the information or publication ceases to be published, the parties shall

select another mutually agreeable Index Price.

The Index Spread shall be (a) (2) less (1) below, less (b) the Compressor Fuel Value. The Compressor Fuel Value (b) shall be calculated by multiplying the

applicable Compressor Fuel percentage as authorized and in effect from time to time in Transporter's Tariff times the Index Price set forth in (1) below.

(1) NorAm Gas Transmission (East)

(2) Columbia Gulf Transmission Co. plus $0.03 from April 1, 1997 through October 31, 1997. Texas Gas Transmission (Zone 1) from November 1, 1997 until

the end of the primary contract term.

If the Index Spread is greater than the maximum applicable Tariff Rate, then the unit rate per MMBtu of Contract Demand shall be (a) the difference between

the Index Spread and the maximum applicable Tariff Rate multiplied by (b) sixty Percent (60%), plus the maximum applicable Tariff Rate. Otherwise, the unit

rate per MMBtu of Contract Demand shall be equal to the Index Spread. In any event, however, the unit rate per MMBtu of Contract Demand in any Month shall

never be below Transporter's then effective minimum Tariff rate.