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Original Sheet No. 86 Original Sheet No. 86 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICE - continued

(b) To the extent out of zone revenue is received by

Transporter during a reporting period, certain of

the out of zone revenue shall be refunded through

a direct payment. A refund allocation factor for

each FT and NNS customer shall be calculated by

dividing the actual FT reservation revenues,

including the imbedded FT reservation revenues

within NNS, for each customer by the total FT

reservation revenues inclusive of the imbedded FT

reservation revenues within NNS during the

reporting period; provided that only the portion

of the reporting period shall be used which

coincides with this Section 34 being in effect.

The reservation revenues used to calculate the

refund allocation factor shall be net of all

applicable surcharges, including but not limited

to, ACA and GRI surcharges. The resulting refund

allocation factor shall be multiplied by fifty

percent (50%) of the out of zone revenue to arrive

at the applicable direct payment for each FT and

NNS customer.

Transporter places into effect its next general

rate increase under Section 4 of the Natural Gas

Act.