K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

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

Original Sheet No. 75 Original Sheet No. 75 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

30.5 Carrying Charges

Carrying costs at the interest rate allowed under the Commission's

Rules and Regulations, 18 C.F.R. 154.67 (c), shall be applicable to

any adjustments under Section 30.3 of these General Terms and

Conditions and to any amount amortized under Section 30.4 of these

General Terms and Conditions.

30.6 Sunset Provision

(a) This tracking mechanism shall terminate September 30, 1996;

provided, however, that any balance remaining in the deferred

account under Section 30.3(c) as of September 30, 1996 shall

be collected or refunded as appropriate by adjusting the

January 1997 billings of each customer of record on July 1,

1996, pro rata based on each customer's Account No. 858 cost

recovery contribution for the period July 1 through September

30, 1996. If any such customer has left Transporter's system,

any amounts owed or due shall be directly refunded or

invoiced, as appropriate, on the same pro rata basis.

(b) Any applicable refunds received after January 1997 shall be

directly refunded pro rata in accordance with the procedure

set out in subsection 30.6(a).

31. OPERATIONAL BALANCING AGREEMENTS

31.1 General. Any imbalances arising under any transportation agreement

between Shipper and Transporter that are attributable to variances

(1) between actual receipts of natural gas and scheduled and

confirmed receipts of natural gas at Point(s) of Receipt into

Pipeline's system, or (2) between actual deliveries of natural gas

and scheduled and confirmed deliveries of natural gas at Point(s)

of Delivery from Transporter's system, which Point(s) of Receipt

and/or Point(s) of Delivery are subject to Operational Balancing

Agreements ("OBAs") as more fully described in Section 31.2 on the

day or days such variances arise, will be resolved pursuant to the

applicable OBA and Shipper will not be subject to any imbalance

charges or penalties pursuant to its transportation agreements with

Transporter for such imbalances.