K N Interstate Gas Transmission Co.

Third Revised Volume No. 1-B

Effective Date: 08/01/1996, Docket: RP96-296-000, Status: Effective

Original Sheet No. 21 Original Sheet No. 21 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

Unpaid and Disputed Bills. Should Shipper fail to pay

part or all of the amount of any such bill, interest

thereon shall accrue at an average prime interest rate

computed in a manner consistent with section 154.501(d)

of the FERC's Regulations from the DUE DATE until date

of receipt of payment by transporter. If such failure

to pay continues 30 days after payment is due,

Transporter, in addition to any other remedy it may

have, after Transporter provides Shipper with 20 days

prior written notice may suspend further service to

Shipper until such amount is paid; provided however,

that if Shipper in good faith disputes in writing the

amount of any such bill or parts thereof and pays to

Transporter such amounts as it concedes to be correct,

and at any time thereafter within 30 days of the demand

made by Transporter shall furnish a good and sufficient

surety bond guaranteeing payment to Transporter of the

amount ultimately found due upon such bills after a

final determination, which may be either by agreement

or judgment of the courts as may be the case, then

Transporter shall not be entitled to suspend further

service unless and until default be made in the

condition of such bond. If resolution of the dispute

is in favor of Shipper and the Shipper furnished a

surety bond and any interest assessed instead of paying

the disputed amount, then the Transporter shall

reimburse Shipper for the cost of securing the surety

bond and any interest assessed.. No payment by Shipper

or the amount of a disputed bill shall prejudice the

right of Shipper to claim an adjustment of the disputed

bill.

10.2 Any payments received shall first be applied to accrued

interest, then to additional charges due, then to the

previously outstanding principal due, and lastly, to

the most current principal due.