K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

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

Second Revised Sheet No. 60 Second Revised Sheet No. 60 : Superseded

Superseding: First Revised Sheet No. 60

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

(2) NPV of CAM Gas - The net present value discounted cash

flow of the total projected cost of CAM gas over a twenty

(20) year period.

26.4 TRANSITION COST RECOVERY MECHANISM

a. In addition to the other costs included in the rates set forth

in this FERC Gas Tariff for Rate Schedules FT, NNS and IT,

Shipper shall, beginning one (1) month from Commission

authorization in a Section 4 proceeding, recover from

Customers under Rate Schedules FT, NNS and IT its Gas Supply

Realignment Costs in accordance with the procedures set forth

in this Section 15.2. Gas Supply Realignment Costs are those

costs attributable to realigning Shipper's gas supply

contracts as permitted by Order No. 636, et al. including but

not limited to Pricing Differential costs. Pricing

Differential costs are costs incurred beginning one (1) month

from the implementation date that are equal to 1) the

difference between the contract price under List A and List B

Contracts and the higher of (a) the price paid by a third

party purchaser from time to time for gas quantities available

for sale attributable to such Contracts or (b) a floor price

equal to the applicable GSR Index Price 2) times the quantity

sold. Transporter will continue to negotiate to buyout,

buydown, assign, modify or settle the terms and conditions of

the Contracts from time to time so as to result in the

minimization of transition costs without regard to

continuation of any other Contract. In addition, within seven

(7) days after receipt of a final Commission order in Docket

No. RS92-19-000, Transporter will file under seal List A and

List B. Contracts under List A and List B will be available

for review in Lakewood and Washington upon execution of an

appropriate protective and non-disclosure agreement.

b. Transporter will make filings to be effective commencing one

(1) month after Commission authorization in a Section 4

proceeding, and quarterly thereafter, to recover any Gas

Supply Realignment Costs actually