Carnegie Interstate Pipeline Company

Original Volume No. 1

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Effective Date: 01/01/1995, Docket: CP93-552-003, Status: Effective

Original Sheet No. 111 Original Sheet No. 111 : Effective

Superseding: Original Sheet No. 111

GENERAL TERMS AND CONDITIONS

(Continued)

16.7 Reimbursement

If CIPCO is required to divert gas pursuant to

an OFO which would otherwise have been delivered to a

Customer, CIPCO shall pay such Customer for such

quantity of gas at a price per Dth equal to the

average of spot market price indexes for gas

delivered to Texas Eastern Transmission Corporation

as published in Inside FERC's Gas Market Report for

the month in which such diversion occurred.

16.8 Cost Recovery

CIPCO shall be entitled to recover all costs

that it incurs in connection with the issuance,

operation, and/or termination of any OFO, including

such reimbursement costs set forth in Section 16.7,

and excluding costs recovered under Section 16.6,

through a reservation surcharge on a pro rata basis

on all Rate Schedule FTS Customers flowing gas, or

scheduled to flow gas, on CIPCO's system on the day

the OFO was issued; provided however, where an OFO

applies only to CIPCO's gathering system, any such

reimbursement shall be through a reservation

surcharge on a pro rata basis on all Rate Schedule

FGS Customers flowing gas, or scheduled to flow gas,

on CIPCO's system on the day the OFO was issued;

provided further, CIPCO shall not be entitled to

recover costs associated with an OFO that resulted

solely from CIPCO's negligent or willful

mismanagement.

16.9 Liability

Compliance with an OFO is essential to CIPCO's

ability to provide deliveries and service under all

Rate Schedules. A failure by one or more Customers

to comply with an OFO may affect CIPCO's ability to

provide such deliveries and services. Accordingly,

in the event of a Customer's non-compliance with an

OFO, and not in lieu of any other remedy available to

CIPCO at law or in equity, CIPCO shall have no

liability or responsibility for its inability to

provide deliveries or service to any Customer failing

to comply with an OFO and will be indemnified and

held harmless by the Customer(s) failing to comply

with CIPCO's OFO against any claims related to the

failure to provide deliveries and service.