East Tennessee Natural Gas Company

Second Revised Volume No. 1

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Effective Date: 12/01/1996, Docket: RP97- 34-000, Status: Effective

First Revised Sheet No. 126 First Revised Sheet No. 126 : Superseded

Superseding: Substitute Original Sheet No. 126





(iii) forced balancing such that Balancing Parties will be required

to assure that nominations equal flows or that receipts and

deliveries fall within the tolerance level designated in the



14.7 Shipper/Balancing Party Compliance: A Shipper/Balancing Party must comply

with an Action Alert and/or Balance Alert (referred to collectively as

OFOs) within the time period set forth therein unless the

Shipper/Balancing Party is able to demonstrate that such compliance (1) is

not within the Shipper's/Balancing Party's physical control or capability;

(2) is prevented by operating conditions on a third party system that are

beyond the Shipper's/Balancing Party's control; (3) is precluded by

contractual restrictions with persons other than Transporter; and/or (4)

is prevented due to a force majeure event as defined in Article X of

Transporter's General Terms and Conditions. Provided that the

Shipper/Balancing Party shall make a good faith effort to comply with any

such OFO, including seeking waivers of any contractual limits with third

parties or modifications of operating conditions on third party systems.

Shipper/Balancing Party shall notify Transporter immediately if it

believes that it is excused from compliance with the OFO for any of the

above stated reasons, and shall provide Transporter with documentation

sufficient to support its basis for non-compliance.


14.8 Penalties: If a Shipper/Balancing Party fails to comply with an Action

Alert, it shall be subject to a penalty of $0.98 per dth for any volume of

gas by which it deviated from the requirements of the Action Alert. If a

Shipper/Balancing Party fails to comply with a Balancing Alert, it will be

subject to an Unauthorized Overrun Charge of $15.00, plus an index price

based on the Henry Hub Spot Price published in Gas Daily's "Gas Price

Report" for each dekatherm of gas by which it deviated from the

requirements of the Balancing Alert. A Shipper/Balancing Party shall not

incur any charges or penalties if such charges or penalties would not have

been incurred but for Shipper's/Balancing Party's compliance with an

Action Alert or Balancing Alert, including any preliminary action taken by

Shipper/Balancing Party in response to a warning issued by Transporter as

a precondition to an Action Alert. A Shipper/Balancing Party shall not

incur any penalties if the Action or Balancing Alert was necessitated

exclusively by Transporter's negligence or willful misconduct.