NorAm Gas Transmission Company

Fourth Revised Volume No. 1

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

Second Revised Sheet No. 7E.03 Second Revised Sheet No. 7E.03 : Superseded

Superseding: First Revised Sheet No. 7E.03

STATEMENT OF NEGOTIATED RATES

Contract Rate Contract

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

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

PG&E Energy Trading Corp. 1860 FT 7,500 Transok @ Latimer TET @ West Monroe See Formula below

Amoco @ Red Oak ANR @ Perryville

MRT @ Glendale

Koch @ West Monroe

Trunkline @ Richland

Tennessee 100

Tennessee 800

Sonat @ Perryville

TGT @ Perryville

CGT @ Perryville

Formula Rates for Services up to Contract Demand:

The formula rate will be based on the following index prices as reflected for spot gas delivered to the pipelines

at the points indicated, as published in the first monthly issue of Inside FERC's Gas Market Report for the

Service Month, ("Index Price"). The Index Spread shall be equal to (a) the amount remaining when the Index Price

specified in (1) below is subtracted from the Index Price specified in (2) below, less (b) the Compressor Fuel

Value calculated as described below.

(1) NorAm Gas Transmission (East);

(2) Texas Eastern Transmission Company - East Louisiana, plus $0.0275.

The Compressor Fuel Value shall be calculated by multiplying the applicable Compressor Fuel percentage as

specified and in effect from time to time in NGT's Tariff times the Index Price set forth in (1) above. An

additional $0.04 per MMBtu shall be added to the monthly average unit rate as described above for deliveries to

Columbia Gulf Transmission at Perryville.

If the Index Spread is less than $0.06 per MMBtu (hereinafter $0.06 per MMBtu shall be referred to as the

"Base Rate"), then the unit rate per MMBtu of Contract Demand shall be (c) the difference between the

Index Spread and the Base Rate multiplied by (d) fifty percent (50%) plus (e) the Index Spread; provided,

however that the unit rate per MMBtu of Contract Demand in any month shall never be below Transporter's then effective

minimum Tariff rate. If the Index Spread is between $0.28 and $0.06 per MMBtu, then the unit rate shall be the Index Spread.

If the Index Spread is greater than $0.28 per MMBtu, (hereinafter $0.28 per MMBtu shall be referred to as

the "Threshold"), then the unit rate per MMBtu of Contract Demand shall be (f) the difference between the

Index Spread and the Threshold multiplied by (g) sixty percent (60%) plus (h) the Threshold.