Tennessee Gas Pipeline Company


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Effective Date: 09/01/1998, Docket: RP95- 64-005, Status: Effective

Original Sheet No. 209.03 Original Sheet No. 209.03 : Effective




Schedule LMS - MA

Load Management Service - Market Area (continued)



(d) Balancing Entry Pricing Adjustment: the Balancing

Entry prices shall be adjusted for a "basis spread

differential" between NYMEX Henry Hub prices and

prices in the Gulf of Mexico gas supply area;

specifically, any Balancing Entry price shall be

adjusted from the NYMEX price for a "basis spread

differential" equal to the difference between (i)

the average of Tennessee's twelve average monthly

cashout prices (as determined pursuant to Section

7(c)(iv) of this Rate Schedule) for the Annual

Cashout Period and (ii) the average of the Cash

Market Hub Trading monthly prices for the Henry Hub

(as quoted in Natural Gas Week) for the twelve

months covered by the Annual Cashout Period.


Item No. 4. Interruptible Storage Revenues: A credit to Tennessee's

Net Cashout Balance equal to the total value of gas forfeited to

Tennessee by Rate Schedule IS shippers pursuant to Sections 3.3 and

3.4 of Rate Schedule IS during the Annual Cashout Period; the total

value under this subsection shall be based on pricing the forfeited

gas at the simple average of the weekly spot price postings provided

by Natural Gas Week, for the month in which the gas is forfeited, for

each of Tennessee's four geographic gas receipt regions, i.e.

Louisiana Offshore, Louisiana Onshore, Texas Offshore, and Texas

Onshore. In addition, Tennessee's Net Cashout Balance shall be

credited with the revenue received, if any, from the sale of storage

inventory pursuant to Section 6.4 of Rate Schedule IS during the

Annual Cashout Period. The quantity of storage inventory sold

pursuant to Section 6.4 of Rate Schedule IS shall be treated as a

cashout sale and included for purposes of reconciliation in the net

quantity described in Item No. 1(b) of this Section 7(g)(i);


Item No. 5. Third-Party Storage Costs: A debit to Tennessee's Net

Cashout Balance equal to the actual costs incurred by Tennessee to use

third-party storage to balance its system pursuant to Section 7(f) of

this Rate Schedule, not to exceed $1 million per Cashout Report.