K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-A

Effective Date: 11/01/1994, Docket: RP94-397-000, Status: Effective

Original Sheet No. 135 Original Sheet No. 135 : Superseded

Form of Operational Balancing Agreement - cont.

Unless the Parties otherwise mutually agree in writing:

Each Party shall adjust the operations of its natural gas

facilities as necessary in order to keep the measured flow of gas at

the point(s) of interconnection as nearly as possible equal to the

confirmed, scheduled nominations, but in any event to within a 7%

tolerance. The measuring facilities owned and operated by a Party which

measures receipts and deliveries at the points of interconnection shall

be a part of that Party's natural gas facilities for purposes of this

Agreement.

Neither Party shall be expected to adjust the operation of its natural

gas facilities below a minimum delivery pressure of ___________, or above the

maximum allowable operating pressures of its natural gas facilities at the

point(s) of interconnection.

The Parties agree to cooperate with each other in the making of the

adjustments required under subparagraph 2.3(a).

If it becomes apparent to either Party that the Daily Operational

Imbalance, if any, exceeds, or is projected to exceed, the 7% tolerance, such

Party shall immediately orally notify the other Party thereof and the Parties

shall immediately adjust the operations of their natural gas facilities

pursuant to paragraph 2 in order to keep the confirmed, scheduled nominations

and the Daily Operational Imbalances within the applicable tolerance set

forth above. In the event the Parties cannot, for any reason, adjust

operations of their natural gas facilities as provided in this paragraph 3,

the Parties shall adjust the allocation of gas to Shippers at the points of

interconnection in order to keep the confirmed nominations and the Daily

Operational Imbalances within the applicable 7% tolerance. The Parties will

orally notify each other of such adjustment prior to making the adjustment,

with written notice given as soon as reasonably possible. The OBA Party

shall also provide notice to shippers when Daily Operational Imbalances

exceed the 7% tolerance. The sum of Daily Operational Imbalances for each

day in a given month shall constitute the Monthly Operational Imbalance for

such month.