K N Interstate Gas Transmission Co.

First Revised Volume No. 1-C

Effective Date: 12/02/1994, Docket: RP95- 35-002, Status: Effective

Substitute Original Sheet No. 14 Substitute Original Sheet No. 14 : Superseded

Superseding: Original Sheet No. 14

RATE SCHEDULE FT-BW - continued

desire for Transporter to offset the imbalances.

After receiving notices from both trading parties,

Transporter will reflect the trade by posting adjusted

imbalances on the EBB.

(3) At the end of the trading period, Transporter will

charge for, or credit for, any remaining imbalance

according to the Schedule below:

Imbalance as Rate as a % of Average Market Index*

% of Actual Deliveries KNI Charge KNI Credit

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

0 to 3% 100% 100%

Over 3% - less than 5% 105% 95%

5% - less than 10% 110% 90%

10% - less than 20% 120% 80%

20% or more 130% 70%

* Average of the first of the month index and the mid-

point of the aftermarket range for ANR, El Paso, NGPL,

NorAm, PEPL, Transwestern, and WNG as reported by "Inside

FERC Gas Market Report", for the month in which the

imbalance occurred.

e. DAILY VARIANCE CHARGE.

(1) If the sum of actual receipts at all physical Receipt

Points under the Service Agreement varies from the

aggregate Approved Daily Nomination at such Receipt

Points or the sum of all deliveries at all physical

delivery points varies from the aggregate Approved

Daily Nomination at such Delivery Points by 7% or 50

MMBtu, whichever is greater (hereinafter called the

Tolerance Level), a Daily Variance Charge shall be

assessed. The Daily Variance Charge shall be applied

to each Service Agreement with respect to which actual

receipt or deliveries vary from the aggregate Approved

Daily Nomination in excess of the Tolerance Level.

The Daily Variance Charge shall be $0.09 per MMBtu for

each MMBtu of receipts or deliveries in excess of the

Tolerance Level, on a daily basis.