K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

Effective Date: 11/01/1994, Docket: RP94-397-003, Status: Effective

Substitute Second Revised Sheet No. 65 Substitute Second Revised Sheet No. 65 : Superseded

Superseding: First Revised Sheet No. 65

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

d. To determine pursuant to Section 26.4 c.(2) whether

Transporter has recovered Gas Supply Realignment Costs

pursuant to Rate Schedule IT, Transporter shall compare

total IT revenues during the initial twelve (12) month

period of the GSR surcharge against the cost of service

allocated to be recovered from Rate Schedule IT excluding

Gas Supply Realignment Costs. To the extent such revenue

exceeds such cost of service allocation, excluding Gas

Supply Realignment Cost, Transporter shall consider such

excess revenue, less applicable surcharges and variable

costs incurred in providing the service, to be recovery of

the Gas Supply Realignment Costs allocated to Rate Schedule

IT for such period. Ninety percent (90%) of any additional

excess revenue, less applicable surcharges and variable

costs incurred in providing the service, shall also be

considered recovery of Gas Supply Realignment Costs and

shall be credited against future Gas Supply Realignment

Costs. Transporter shall retain the remaining ten percent

(10%) of such excess revenue without any refund obligation.

e. Shipper's aggregate MDQ for purposes of allocating Gas

Supply Realignment Costs shall be reduced by a credit

percentage to the extent Customer takes assignment of a CAM

Gas Supply contract(s). Shipper's credit percentage shall

be calculated as follows:

(1) Shipper's GSR responsibility shall be equal to an

allocation of total NPV of CAM gas based upon

aggregate MDQ under Rate Schedules FT and NNS.

(2) Shipper's credit percentage shall equal the NPV of CAM

gas associated with the contract(s) assigned to the

Customer divided by Customer's GSR responsibility.

27. CREDITING OF EXCESS RATE SCHEDULE IT REVENUE

27.1 This Section 27 establishes the procedures to be used by

Transporter to credit to Shippers under Rate Schedules FT and NNS

for revenues received under Rate Schedule IT. Transporter shall

make separate calculations of excess IT revenues, in accordance

with the provisions of this section,