K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

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Effective Date: 11/01/1994, Docket: RP94- 93-005, Status: Effective

Sub. Second Revised Sheet No. 67 Sub. Second Revised Sheet No. 67 : Superseded

Superseding: 1st Rev. First Revised Sheet No. 67

GENERAL TERMS AND CONDITIONS - continued

28. CREDITING OF EXCESS FIXED STORAGE COST REVENUE

28.1 This Section 28 establishes the procedures to be used by

Transporter to credit to Shippers under Rate Schedules FSS and NNS

for storage related revenues received under Rate Schedules ISS,

FSS, NNS, and SCS in excess of the applicable fixed storage costs

allocated to all storage related services.

a. By December 30 of each year, Transporter shall submit to

the FERC a reconciliation filing setting forth a comparison

of storage related revenues received from Rate Schedules

ISS, FSS, NNS, and SCS (excluding transition cost

surcharges, the variable cost component of such rates in

effect when the revenues were generated and any other

applicable surcharges allocated to related storage services)

for the twelve (12) month period ended on September 30.

For purposes of determining the imbedded storage component

fixed cost recovery received from NNS and SCS services,

Transporter will allocate the total fixed cost recovery

in the ratio of the imbedded storage reservation rate

component to the maximum reservation rates for these

services. Storage related revenues received in excess of

such allocated costs shall be considered excess revenues and

be subject to the provisions of Subsection 28.1.b. hereof.

b. To the extent the revenues received from storage related

services, as described in Subsection 28.1.a. above, exceed

the costs allocated to such service, certain of the excess

revenues shall be refunded through a direct payment. A

refund allocation factor for each FSS and NNS customer shall

be calculated by dividing the actual FSS reservation

revenues, including the imbedded FSS reservation revenues

within NNS, for each customer by the total FSS reservation

revenues inclusive of the imbedded FSS reservation revenues

within NNS during the preceding twelve (12) month period

ending on the anniversary date of this provision. The

reservation revenues used to calculate the refund allocation

factor shall be net of all applicable surcharges. The

resulting refund allocation factor shall be multiplied by

the excess revenues as defined in Subsection 28.1.a. to

arrive at the applicable direct payment for each FSS and NNS

customer.