Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 09/15/2008, Docket: RP08-392-000, Status: Effective

Original Sheet No. 2601 Original Sheet No. 2601 GENERAL TERMS AND CONDITIONS Section 14 (Cont'd) (e) If Customer has accrued a net monthly imbalance such that the total quantities of gas received by Texas Gas for Customer's account during the month are greater than the total quantities of gas delivered by Texas Gas for Customer's account during the month, then Customer shall make up in-kind any imbalance equal to or below a net imbalance percentage of two percent and may elect to make up in-kind net imbalances from two to five percent pursuant to Sections 14 (I) and (j) below. Texas Gas shall pay Customer for the remainder, if any, of its net monthly imbalance (in MMBtu) in excess of that to be made up in-kind according to the following table: Net Imbalance Percentage of Applicable Percentage Index Price >2% to 5% 100% x lowest weekly average price >5% to 10% 90% x lowest weekly average price >10% to 15% 80% x lowest weekly average price >15% to 20% 70% x lowest weekly average price >20% to 25% 60% x lowest weekly average price > 25% 50% x lowest weekly average price It is agreed, however, that in the event Customer owes Texas Gas any payments under Section 14(d) above, from a previous month which are past due, Texas Gas shall have the right hereunder to offset payments it owes to Customer under Section 14(e) by such past due amounts (inclusive of interest). (f) The Net Imbalance Percentages contained in Section 14(d) and Section 14(e), will be used to calculate the cash-out price for imbalances that fall within each category. For example, Customer with a Net Imbalance Percentage of 12% will: make-up in-kind for 2% of the imbalance; at its election either make-up in-kind or cash-out at the 2% to 5% price for 3% of the imbalance; cash-out at the 5% to 10% price for 5% of the imbalance; and cash-out at the 10% to 15% price for the remaining 2% of the imbalance. (g) Except as provided in subsections (i) and (m) of this Section 14, Texas Gas shall use either the highest or lowest weekly average price determined each month as the applicable "Index Price" for cashing out all monthly imbalances subject to cash-out hereunder. The weekly average price for each week shall be a price determined by averaging the weekly price for spot gas supplies "Delivered to Pipeline" at Gulf Coast, Onshore Louisiana and at North Louisiana as contained in the table "Gas Price Report" of the publication "Natural Gas Week." The weeks to be used in determining each month's highest weekly average price and lowest weekly average price shall include all weeks that such publication is issued within that calendar month plus the first week of the next calendar month. The monthly average index price used in subsection (i) and (m) shall be the average of each of the weekly average prices for the month as determined above.