Iroquois Gas Transmission System, L.P.


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Effective Date: 07/19/2004, Docket: RP98- 18-012, Status: Effective

Original Sheet No. 6C Original Sheet No. 6C : Effective




7/ Eastchester Credits. To the extent that either through a FERC-approved

settlement agreement or through its Gas Tariff, Iroquois' firm Eastchester

recourse rate is or would have been effectively reduced on a 100% load factor

basis to less than $0.59/Dth by Eastchester Credit(s), then Con Edison shall

receive a refund or credit to its rate to reflect the same effectively

reduced rate on its year-round capacity position of 30,000 Dt/day during the

period July 1, 2004 through January 1, 2008 or the period that the RP04-136

rates are effective, whichever is longer. "Eastchester Credits" shall include

any credits, payments, remittances, refunds, adjustments or the like related

to insurance proceeds, litigation costs, civil judgments and restitutions or

similar items recovered by Iroquois from claims and/or legal or regulatory

proceedings related to the construction of the Eastchester Project, netted

against any litigation costs, civil judgments, and restitutions rendered

against Iroquois from claims and/or legal or regulatory proceedings related

to the initial construction of the Eastchester Project [hereinafter

"Eastchester Costs"]. In determining the amount of the Eastchester Credit,

Iroquois shall: (1) calculate an implied initial annual revenue stream based

upon the RP04-136 recourse rate and the billing determinants of 230,000

Dt/day; and (2) on the earlier of December 31, 2012 or the date the

Eastchester Credit can be accurately quantified, Iroquois shall then deduct

10% of the Eastchester Credit from such implied initial annual revenue stream

(in order to spread such Eastchester Credit over the ten year period of the

rate) and recalculate a new implied rate by dividing this new revenue stream

by the billing determinants. Refunds or credits will be provided to Con

Edison to the extent such resulting implied rate is less than $0.59/Dth; such

refunds or credits shall include interest as calculated at the FERC-approved

interest rate.

8/ In the event that after June 1, 2004, Iroquois executes with any other

Eastchester Shipper (defined for purposes of this rate sheet as (KeySpan-

Ravenswood, LLC, Consolidated Edison Company of New York, Inc.,

Virginia Power Energy Marketing, Inc., and Reliant Energy Services, Inc.))

or an affiliate of an Eastchester Shipper a settlement agreement,

negotiated rate agreement, or discounted rate agreement for Eastchester

capacity and that settlement, negotiated rate, or discounted rate

agreement (1) resolves rate issues as between such Eastchester Shipper and

Iroquois in Docket No. RP04-136, regardless of whether such Eastchester

Shipper was an active participant in that proceeding; and (2) provides for a

rate given to such other Eastchester Shipper or its affiliate for the

remainder of the primary term of its Eastchester service agreement that is

less on a 100% load factor basis than $0.59/Dth exclusive of surcharges

and/or that has discounted or eliminated surcharges, then Con Edison will

receive such lower rate and/or surcharge(s) or will have such surcharge(s)

terminated effective as of the same date(s) as they are received by such

Eastchester Shipper or affiliate pursuant to its year-round capacity

position of 30,000 Dt/day for the term of its service agreement.

9/ This Letter Agreement resolves any and all issues in Iroquois' Docket No.

RP04-136 related to the Eastchester rates for Rate Schedule RTS; provided,

however, that Con Edison does not waive any of its rights to participate in

the proceedings in Docket No. RP04-136 on issues concerning the quality of

Con Edison's Eastchester service, the terms and conditions of such service,

or new services.