*East Tennessee Natural Gas, LLC*

*Third Revised Volume No. 1*

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Effective Date: 07/01/2004, Docket: RP04-362-000, Status: Effective

**Original Sheet No. 180 **Original Sheet No. 180 : Effective

Rate Schedule LMS-MA

Load Management (Market Area) Service (Continued)

The Parties' actual imbalance volumes shall be "cashed out"

according to the following formula:

(A) If I > or = zero then:

- Price for negative imbalances and imbalances

less than or equal to 1,000 Dth = AP

- Price for positive imbalances =

(abv(I) x LP) + (N x AP)

_______ ________

P P

(B) If I < zero then:

- Price for negative imbalances =

(abv(I) x HP) + (P x AP)

_______ ________

N N

- Price for positive imbalances and imbalances

less than or equal to 1,000 Dth = AP

(iii) For all Parties whose % monthly imbalance is greater than 5%

(as calculated according to Section 8.5 of this Rate

Schedule) and greater than 1,000 Dth, the actual negative

imbalance volumes shall be "cashed out" according to the

following formula:

Imbalance Tier Price

0 - 5% 100% of HP

> 5% - 10% 115% of HP

> 10% - 15% 130% of HP

> 15% - 20% 140% of HP

> 20% - 150% of HP

For purposes of determining the tier at which an imbalance

will be cashed out, the price will apply only to volumes

within a tier. For example, if there is a 7% imbalance,

volumes that make up the first 5% of the imbalance are

priced at 100% of the HP. Volumes making up the remaining

2% of the imbalance are priced at 115% of the HP.

(iv) For all Parties whose % monthly imbalance is greater than 5%

(as calculated according to Section 8.5 of this Rate

Schedule) and greater than 1,000 Dth, the actual positive

imbalance volumes shall be "cashed out" according to the

following formula:

0 - 5% 100% of LP

> 5% - 10% 85% of LP

> 10% - 15% 70% of LP

> 15% - 20% 60% of LP

> 20% - 50% of LP

For purposes of determining the tier at which an imbalance

will be cashed out, the price will apply only to volumes

within a tier. For example, if there is a 7% imbalance,

volumes that make up the first 5% of the imbalance are

priced at 100% of the LP. Volumes making up the remaining

2% of the imbalance are priced at 85% of the LP.