K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

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

First Revised Sheet No. 62 First Revised Sheet No. 62 : Superseded

Superseding: Original Sheet No. 62

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

of the date of Transporter's GSR surcharge filings and

adjusted as necessary during that recovery period to

reflect any changes in Shipper's MDQ, and recovered from

such Shippers under Rate Schedules FT and NNS by means of

a GSR Demand Surcharge per MDQ. Allocation of Gas Supply

Realignment Costs shall not be reduced for any Shipper by

virtue of any discounted FT or NSS services commencing

after the implementation date. Shippers under Rate

Schedules FT and NNS taking assignment of gas supply

contracts from Transporter shall be excluded from the

allocation of Gas Supply Realignment Costs as calculated

pursuant to Section 26.4.

(a) Transporter shall render a bill for the entire

amount of each Shipper's GSR Demand Surcharge Amount

with respect to any quarterly filing on or after the

tenth day of the month following the effective date

of the filing. Such amount shall be payable in

three (3) consecutive monthly installments equal to

one-third (þ)of such amount on each date following

submission of such bill on which payment is payable.

(b) Each Shipper shall have the option, in lieu of

payment of such GSR Demand Surcharge in three

installments, of paying twelve (12) consecutive

monthly installments equal to 1/12th of such amount.

Additional carrying charges on such amount shall be

calculated and included on each monthly bill for

those Shippers electing the twelve (12) month

payment option. Monthly amounts shall be payable on

the 20th of each month following submission of the

bill referred to in paragraph (a). Any Shipper may,

at any time, pay all or a portion of its unpaid GSR

Demand Surcharge Amount and in such event its

obligation for carrying charges shall be applicable

only to amounts unpaid.