NorAm Gas Transmission Company

Fourth Revised Volume No. 1

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Effective Date: 01/01/1996, Docket: RP94-343-013, Status: Effective

Second Revised Sheet No. 214 Second Revised Sheet No. 214 : Superseded

Superseding: First Revised Sheet No. 214

GENERAL TERMS AND CONDITIONS

(continued)

(2) A. Transporter may use proceeds

received from the cash-out of

Imbalances in accordance with

Section 5.7(c)(ii) to purchase,

at any time and from time to

time, quantities of Gas for

system operation purposes. Gas

purchased by Transporter pursuant

to this Section 5.7(c)(ii)(2)A.

may be utilized by Transporter to

satisfy such operational

requirements as are necessary on

its system from time to time, or

may be disposed of by sale.

Transporter shall establish

accounts in which to book

payments made to or by

Transporter under the procedures

specified in this Section 5.7.

B. Transporter shall calculate the

total net revenues or net costs

attributable to the cash-out

provisions of this Tariff for

each 12 month period ending

January 31, beginning with the 12

month period ending January 31,

1996 ("Accrual Period"),

including interest, in accordance

with Section 154.67(c)(2) of the

Commission's regulations, on the

appropriate amounts calculated

from the end of the Accrual

Period to the end of the calendar

quarter in which the adjustment

for such Accrual Period is made.

The resulting amount, defined as

the "Cash-Out Excess Revenues" or

the "Cash-Out Remaining Costs",

as applicable, shall be netted in

accordance with the procedure set

out in Section 23.9, hereof, to

determine the amount of Excess

Interruptible Revenues, if any.