FERC GAS TARIFF

Original Volume No. 1A

of

HONEOYE STORAGE CORPORATION

Filed With The

Federal Energy Regulatory Commission

Communication Concerning This Tariff

Should Be Addressed To:

Richard A. Norman
Vice President
Honeoye Storage Corporation
c/o EHA, L.L.C.
55 Union Street, 4th floor
Boston, Massachusetts 02108
(617) 367-0032
(617) 367-3796 (FAX)
e-mail: rnorman@essexhydro.com

TABLE OF CONTENTS

Original Volume No. 1A Sheet No.

PRELIMINARY STATEMENT

Honeoye Storage Corporation ("HSC" or "Seller"), a New York corporation, owns and operates a natural gas storage facility and related compression equipment and pipelines, collectively known as the Honeoye Storage Project, located in Ontario County, New York. The Honeoye Storage Project receives, injects, stores, withdraws and delivers natural gas transported in interstate commerce subject to jurisdiction of the Federal Energy Regulatory Commission. The facilities are connected to Tennessee Gas Pipeline Company ("Tennessee").

This Original Volume No. 1A of the FERC Gas Tariff of HSC contains the Rates and Charges, Rate Schedules, Forms of Service Agreements and the General Terms and Conditions applicable to open-access storage service and other services performed by HSC.

SITE MAP

CURRENTLY EFFECTIVE RATES

FIRM STORAGE SERVICE (FSS)*

  
*All quantities of natural gas are measured in dekatherms (Dth)

CURRENTLY EFFECTIVE RATES (Cont.)

INTERRUPTIBLE STORAGE SERVICE (ISS)*

FUEL USE - FSS AND ISS

Seller will bill Customer each month for gas lost or unaccounted for in Seller’s operations at the rate of one percent (1.0%) of the gas injected on Customer’s behalf in the preceding month and at the rate of one percent (1.0%) of the gas withdrawn on Customer’s behalf in the preceding month.

*All quantities of natural gas are measured in dekatherms (Dth).

RESERVED FOR FUTURE USE

RATE SCHEDULE FSS

FIRM STORAGE SERVICE

1. AVAILABILITY

This Rate Schedule is available to any person, corporation, partnership or any other party (hereinafter referred to as "Customer") other than Local Distribution Companies that are considered to be affiliates of Seller under Part 161 of the Federal Energy Regulatory Commission’s regulations, for the purchase of natural gas storage service from Honeoye Storage Corporation (hereinafter referred to a "Seller"), when:

(a) Seller has determined that it has sufficient available and uncommitted storage capacity or capacity released in accordance with Section 7 of this Rate Schedule FSS to perform service requested by Customer (Seller is not required to provide any requested services for which it does not have such available capacity); and

(b) Customer and Seller have executed a Service Agreement under this Rate Schedule.

2. APPLICABILITY AND CHARACTER OF SERVICE

This Rate Schedule shall apply to all Storage Service which is rendered by Seller for Customer pursuant to an executed Agreement under this Rate Schedule.

Storage Service rendered by Seller under this Rate Schedule shall consist of:

(a) The receipt of Gas on behalf of Customer at the Point of Injection/Withdrawal at daily quantities up to the Maximum Daily Injection Quantity plus Seller’s Injection Use;

(b) The Storage of Gas in quantities not to exceed the Maximum Storage Quantity, except as provided for in Section 6 of this Rate Schedule; and

(c) The Tender of Gas for redelivery by Seller to or for the account of Customer at the Point of Injection/Withdrawal at a quantity not to exceed Customer’s Working Storage Gas at daily quantities up to the Maximum Daily Withdrawal Quantity reduced by Seller’s Withdrawal Use.

(d) The receipt of Gas on behalf of Customer and redelivery of Gas for the account of Customer in excess of its applicable Maximum Daily Injection Quantity and Maximum Daily Withdrawal Quantity on a reasonable efforts basis by Seller when required to allow Customer full utilization of its Maximum Storage Quantity.

(e) Firm Storage Service under this Rate Schedule shall be firm up to the Maximum Storage Quantity and firm up to the Maximum Daily Withdrawal Quantity and Maximum Daily Injection Quantity on any day. The Maximum Storage Quantity, the Maximum Daily Injection Quantity and the Maximum Daily Withdrawal Quantity shall be specified in the executed Agreement. Notwithstanding the foregoing, Seller will use reasonable efforts to permit Customer to inject or withdraw Gas pursuant to Section 6 of this Rate Schedule FSS.

3. GENERAL TERMS AND CONDITIONS

The General Terms and Conditions of this Original Volume No. 1A FERC Gas Tariff are applicable to this Rate Schedule, and are specifically incorporated herein by reference.

4. RATES AND CHARGES

The amounts which shall be paid by Customer to Seller for each Month during the period of service hereunder shall include the sum of the charges due under the subsections of this Section 4 and charges under Section 5 that are applicable to Customer for such Month, computed by use of the applicable rates set forth in this Rate Schedule FSS and in the Customer’s Agreement which are effective during such Month or portions thereof. Customer’s Agreement will reflect the rates agreed to by Seller and Customer and may or may not include each of the billing components set forth below.

Each total rate computed for a specific transaction shall be rounded to the nearest one tenth of a cent. If, at initiation of service, service is provided for only a portion of a Month, any applicable reservation fee shall be prorated for the number of days that service is provided.

4.1 Unless otherwise agreed to by Seller and Customer, the following Storage Charges will apply:

(a) Reservation Charges:

(1) The FSS Deliverability Reservation Rate shall be paid each Month for each Dekatherm of Customer’s Maximum Daily Withdrawal Quantity;

(2) The FSS Capacity Reservation Rate shall be paid each Month for each Dekatherm of Customer’s Maximum Storage Quantity.

(3) If, due to Seller’s scheduling of necessary maintenance of pipeline facilities, events of force majeure, necessary maintenance of compression facilities and/or facility outages for tie-in of new facilities, Seller fails to Tender for redelivery or accept for storage injection at the Point of Injection/Withdrawal for the account of Customer during any Day the quantity of Gas that Customer has so nominated for such day up to a Customer’s Maximum Daily Injection Quantity or Maximum Daily Withdrawal Quantity, as applicable, then subject to the provisions of the General Terms and Conditions, Customer’s Monthly bill shall be reduced by an amount equal to the product of

(a):

((A x B)/C + D)/E

Where:
A = Deliverability Reservation Rate
B = Maximum Daily Withdrawal Quantity
C = Maximum Storage Quantity
D = Capacity Reservation Rate
E = The Number of Days in the Month

and

(b): the difference between such quantity of Gas nominated for injection or withdrawal up to the Maximum Daily Injection Quantity or Maximum Daily Withdrawal Quantity, as applicable, and the applicable quantity actually injected or withdrawn by Seller for the account of Customer during such Day. Such reductions of Seller’s Reservation Charges shall not be applicable if Seller and Customer agree upon and place into effect the makeup of such injection deficiency or withdrawal deficiency under mutually acceptable terms.

(b) Commodity Charge:

The Injection/Withdrawal Rate shall be paid each Month for each Dekatherm of Gas which is delivered by Seller to or for the account of Customer and each Dekatherm of Gas Customer delivers or causes to be delivered at the Point of Injection/Withdrawal during the Month. Such charges shall be applicable both on injection and on withdrawal.

4.2 Overrun Service Charge: An Overrun Service Charge shall be paid for each Dekatherm of service provided on behalf of Customer pursuant to Section 6 of this Rate Schedule. As set forth in the Customer’s Agreement, the Overrun Service Charge shall consist of the Overrun Injection Rate for each Dekatherm of Gas the Customer delivers or causes to be delivered at the Point of Injection/Withdrawal in excess of the Customer’s Maximum Daily Injection Quantity and the Overrun Withdrawal Rate for each Dekatherm of Gas which is delivered to or for the account of the Customer in excess of the Customer’s Maximum Daily Withdrawal Quantity.

4.3 Seller’s Fuel Use Charge: Seller will bill Customer each month for gas lost or unaccounted for in Seller’s operations at the rate of (1) one percent (1.0%) of the gas injected on Customer’s behalf in the preceding month, and (2) one percent (1.0%) of the gas withdrawn on Customer’s behalf in the preceding month.

4.4 Regulatory Fees and Charges. Customer shall reimburse Seller for all fees and charges, as required by the Commission or any other regulatory body, that are related to service provided under this Rate Schedule, including, but not limited to, the Commission’s Annual Charge Adjustment (ACA).

5. ADDITIONAL CHARGES

5.1 Commission and Other Regulatory Fees: Customer shall reimburse Seller for its allocable share of all fees required by the Commission or any other regulatory body which are related to service provided under this Rate Schedule including, but not limited to, filing, reporting and application fees.

5.2 Other Charges: Customer shall pay its allocable share of any other charges applicable to service hereunder authorized by the Commission or any other successor agency having jurisdiction.

6. STORAGE OVERRUN SERVICE

6.1 Customer may request Seller to inject quantities greater than Customer’s Maximum Daily Injection Quantity. If Seller has injection capacity available, Seller shall inject such quantities and Customer shall pay Seller for such injections at the Overrun Injection Charge set forth in Customer’s Agreement.

6.2 Customer may request Seller to withdraw quantities greater than Customer’s Maximum Daily Withdrawal Quantity. If Seller has withdrawal capacity available, Seller shall withdraw such quantities and Customer shall pay Seller for such withdrawals at the Overrun Withdrawal Charge set forth in Customer’s Agreement.

6.3 Customer may not inject gas into storage pursuant to this rate schedule if the quantity of Customer’s Gas in storage equals Customer’s Maximum Storage Capacity.

6.4 Customer may not withdraw gas from storage in excess of the quantity of Customer’s Gas which is actually in storage at any given time.

6.5 Seller shall have the right to interrupt all or part of the overrun quantity nominated as the operation of its storage facilities may require pursuant to Section 4 of the General Terms and Conditions of this FERC Gas Tariff in which event Seller shall notify Customer.

7. CAPACITY RELEASE

Any Customer or Replacement Customer under Rate Schedule FSS shall be entitled to release all or a portion of its capacity to Seller for resale. Additionally, Customer may release its capacity on a volumetric basis.

Any Customer or Replacement Customer releasing capacity will be designated a Releasing Customer. Any person purchasing released capacity shall be designated a Replacement Customer. Any Customer that wants to release capacity must notify Seller that it wants to release capacity and the terms and conditions of such release.

7.1(a) PROCEDURE FOR MAKING OFFER TO RELEASE. Releasing Customer shall communicate its release notice through Seller’s EBB. The Releasing Customer shall submit the following information, objectively stated and applicable to all potential Customers on a non-discriminatory basis:

(1) the pricing provisions of the offer to release; any maximum/minimum rates specified by the Releasing Customer should include all demand charges as a total number or as stated separately;

(2) the specific quantity to be released expressed in Dth; the basis for the released quantity should be per day for storage injection/withdrawal, and a per-release quantity for storage capacity and total release period quantity (Releasing Customer in establishing terms for capacity release shall not be limited to the service categories set forth in Section 9; Releasing Customer may release quantities up to the Maximum Daily Injection Quantity, Maximum Daily Withdrawal Quantity, and Maximum Storage Quantity set forth in Releasing Customer’s Agreement);

(3) the duration of release or term including any right to recall;

(4) the terms and conditions of any recall rights. Recalls shall not be for less than one (1) Day. Releasing Customer may only recall such released capacity that Replacement Customer has not filled. If releasing customer wishes to recall capacity it must provide notice to Seller no later than 9:00 a.m. Central Clock Time on the nomination Day. The Releasing Customer shall make such recall by notifying Seller in writing of such recall and by submitting a nomination change to Seller, pursuant to Section 4.1 of the General Terms and conditions of this FERC Gas Tariff;

(5) whether the release is on a permanent or temporary basis;

(6) the length of time the offer to release should be posted for bidding on Seller’s EBB;

(7) whether there are any reput rights;

(8) any other conditions or contingencies of the offer to release, including nondiscriminatory provisions necessary to evaluate bids; and the tie breaking criteria, provided, however, that bid evaluations will be limited to highest rate, net revenue and present value;

(9) the legal name of the Replacement Customer that is designated in any Pre-Arranged Release ("Designated Replacement Customer");

(10) the bid evaluation method; and

(11) for volumetric releases, any minimum volumetric commitment.

(b) Seller’s creditworthiness standards shall apply to any potential Replacement Customer and Releasing Customer shall not establish its own creditworthiness standards for bidding customer.

(c) Releasing Customer may withdraw any existing offer to release, if a valid and acceptable bid has not been received. Releasing Customer shall be subject to the provisions of Section 8 of this Rate Schedule prior to the commencement of the Agreement with Replacement Customer. Releasing Customer may withdraw its offer to release any time prior to the close of the bidding period via the EBB or Electronic Delivery Mechanism ("EDM") as approved by the Commission, where unanticipated circumstances justify such withdrawal or when no bid has been received which meets the Releasing Customer’s minimum conditions. Releasing Customer shall have the option to accept contingent bids which extend beyond the close of the bidding period. Releasing Customer cannot extend the original bid period or the pre-arranged deal Matching Period without posting a new release. Re-release of Released Capacity shall be allowed on the same terms and basis as the primary release (except for volumetric releases which may not be re-released).

(d) CAPACITY RELEASE TIMELINE. The "Capacity Release Timeline" set forth below is applicable to all parties of the Capacity Release process; however it is only applicable if: (1) all information provided by parties to the transaction is valid and Replacement Customer has been determined to be creditworthy before the capacity release bid is tendered and (2) the release contains no special terms or conditions of the release.

(i) SHORT TERM RELEASES (less than 5 months) - the following information is required at time stated on the Day before nominations are due, all listed times are Central Clock Time:

(a) Offers must tendered by 1:00 p.m.

(b) Open season ends 2:00 p.m., evaluation period begins at 2:00 p.m. during which contingency is eliminated, determination of best bid is made, and ties broken;

(c) evaluation period ends at 3:00 p.m.;

(d) match or award is communicated at 3:00 p.m.;

(e) match response by 4:00 p.m.;

(f) award posting by 5:00 p.m.;

(g) contract tendered with contact number by 6:00 p.m.; contract executed, nomination possible for next Day gas flow.

The posting of pre-arranged deals not subject to bid is due by 9:00 a.m. the day of nominations;

(ii) LONG TERM RELEASES (5 months or more) - The Capacity Release Timeline set forth above also applies to long term releases, except that offers of capacity must be posted on the EBB no later than 1:00 p.m. Central Clock Time, four (4) Business Days before capacity is awarded.

(e) COMPETITIVE BIDDING PROCEDURE. Bids may be submitted by potential Replacement Customers via the EBB during the posting period. Seller shall post the terms of each complete bid, but will not post the identity of the bidder. Posted bids will be accessible via EDM. Seller will also require all information set forth in Section 2 of the General Terms and Conditions of this FERC Gas tariff. Upon expiration of the offer, Seller shall remove such offer of release from its EBB.

Potential Replacement Customers may withdraw their posted bids at any time during the bidding period via the EBB or EDM. Bids posted by potential Replacement Customers are binding until written or electronic notice of withdrawal is received by Seller. Potential Replacement Customers cannot withdraw bids after the bidding period ends. Such potential Replacement Customers may not post another bid for the same capacity lower than their previous bid.

(f) PRE-ARRANGED RELEASE

(i) Releasing Customer shall have the right to release capacity to a Pre-Arranged Replacement Customer without posting an offer on the EBB if: (1) the Replacement Customer confirms via the EBB the terms and conditions of the Pre-Arranged Release; and (2) the release is either for a period of one year or more at the maximum rate the Releasing Customer is contractually obligated to pay and meets all other terms and conditions of the release, or the release is less than 31 Days. If Releasing Customer exercises such rights, it must notify Seller prior to the nomination of the released entitlements, and the Replacement Customer shall adhere to the contracting requirements. Seller will post the information on the EBB by 9:00 a.m. Central Clock Time the Day before the release transaction begins. The Replacement Customer shall meet any eligibility requirements under this Section 7.6.

(ii) Matching Rights. A Pre-Arranged Replacement Customer shall have the right of first refusal for a time period as negotiated by the Releasing Customer and the Pre-Arranged Replacement Customer ("Matching Period). If no Matching Period has been negotiated, the Matching Period will be deemed to be one (1) hour following the time the Pre-Arranged Replacement Customer has been notified of the winning bid. In the event a bid is received that more closely meets the criteria specified by the Releasing Customer, Seller shall provide the Pre-Arranged Replacement Customer an opportunity during the Matching Period to match or exceed the bid that more closely meets the criteria specified by the Releasing Customer. No later than 3:00 p.m. Central Clock Time of the Day prior to the Day nominations are due, the Pre-Arranged Replacement Customer shall receive notification on the EBB of the terms and conditions of the prevailing bid and shall have the Matching Period to respond via the EBB. No later than 4:00 p.m. Central Clock Time of the Day prior to the Day nominations are due, the Replacement Customer shall post on the EBB its match response. Absent a response, the capacity shall be awarded to the prevailing bidder no later than 5:00 p.m. Central Clock Time on the Day prior to the Day nominations are due.

(g) Released Capacity will be awarded no later than 5:00 p.m. Central Clock Time of the Day prior to nomination Day. The capacity will be awarded to the Replacement Customer which otherwise satisfies the requirements of this FERC Gas Tariff and also meets all of the conditions of the offer to release capacity. In the case of multiple bid winners, the highest ranking bid will receive the entire maximum amount of capacity bid. The next highest ranking bidder will receive the remainder of the offered capacity provided that the amount remaining is above the bidder's minimum acceptable quantity. Any remaining capacity will be awarded to the next highest bidder under the same provisions as above. This process will repeat until either all of the offered capacity is awarded or the remaining capacity falls below either the Releasing Customer's minimurn quantity or all of the remaining bidder's acceptable quantities. Seller shall not be required to contract with parties submitting bids that do not meet the conditions of the offer to release capacity, however, subject to approval of Releasing Customer, Seller may accept bids offering a price or term less than that set forth in the release. Bids will be evaluated by the criteria provided by the Releasing Customer. If no criteria are provided by the Releasing Customer, bids will be accepted in the order of priority based upon the highest economic value offered by the competing bids as defined in Section 10 of the General Terms and Conditions of this FERC Gas Tariff. The ultimate awarding of the capacity will be posted subsequently on Seller's EBB by 5:00 p.m. Central Clock Time on the Day before nomination Day, unless bidder was a contingent bidder and the contingency did not occur. Seller will tender a numbered Agreement to the winning bidder by l0:00 a.m. Central Clock Time on the day nominations are due, and the winning bidder shall enter into an Agreement with Seller pursuant to Section 7.2. Seller is required to meet the Capacity Release Timeline for processing capacity releases only if the Releasing Customer's best bid methodology is either: (1) highest rate, (2) highest net revenue, or (3) greatest net present value. In all cases, Replacement Customers will be subject to all requirements of this Tariff. Storage Service to the Replacement Customer may commence, prior to the posting of the winning bid, if capacity has been awarded and a contract executed.

(h) Recall Reput Rights

(i) A Releasing Customer cannot in any way modify recall rights as specified by a previous Releasing Customer, but may specify its own recall rights, subject to any recall rights specified by a previous Releasing Customer. A potential Replacement Customer is responsible for obtaining from the Releasing Customer with whom it is negotiating for released capacity any information concerning recall rights specified by a previous Releasing Customer. A Releasing Customer specifying recall conditions shall be the only party that can exercise and administer such recall rights. In the event of any conflict, the instructions and communications of the Releasing Customer specifying the recall conditions shall govern. Released capacity can only be recalled for full pipeline days and the party recalling the capacity shall be subject to Seller's nomination procedures in accordance with Section 4 of the General Terms and Conditions of this FERC Gas Tariff. If the release specifies that the Releasing Customer has reput rights and the recall ends prior to the end of the release term at the end of the recall period, capacity shall revert back to the Replacement Customer, if applicable, subject to Seller's nomination procedures.

(ii) Seller shall have no liability to any party in relying on the recall instructions and conditions specified by the Releasing Customer, except to the extent that such party establishes that Seller has incorrectly applied such instructions as a result of the negligent action or willful misconduct of Seller.

7.2 EXECUTION OF SERVICE AGREEMENT. Once the provisions of this Section 7 are satisfied, and as a condition precedent to receiving service pursuant to a capacity release, Replacement Customer shall execute a Service Agreement with Seller.

7.3 BILLING ADJUSTMENT. Releasing Customer shall remain fully obligated under the terms of its Service Agreement with Seller during any capacity release except for usage charges incurred by any Replacement Customer that has purchased capacity released by the Releasing Customer. Seller shall credit the invoice of Releasing Customer each Month for the charges and volumetric rates invoiced, by Seller to Replacement Customer provided, however, that such credit:

(a) shall not include any charges billed to the Replacement Customer under Section 5 of this Rate Schedule or Rate Schedule ISS, and

(b) shall be reduced by the amount of any marketing fee Seller is entitled to collect pursuant to Section 7.4 of this Rate Schedule.

If a Replacement Customer fails to pay all or any part of its charges under the Deliverability Reservation Rate and Capacity Reservation Rate which have been credited to Releasing Customer within fifteen (15) days of the due date, such unpaid amount, with applicable interest accruing from the date Replacement Customer's payment was due, will be charged to the Releasing Customer's next monthly bill and will be due and payable by Releasing Customer, unless Replacement Customer in good faith shall dispute the billed charges in accordance with the provisions set forth in Section 8.2 of the General Terms and Conditions of this FERC Gas Tariff. If such failure to pay continues for thirty (30) days after payment is due, and the Replacement Customer has not disputed billings in accordance with Section 8.2 of the General Terms and Conditions of this FERC Gas Tariff, then Seller may, in addition to any other remedies it may have hereunder, terminate its Agreement with the Replacement Customer, and the Replacement Customer shall be deemed to have consented to abandonment of service under the Agreement. If the Agreement with the Replacement Customer is so terminated and service abandoned, the capacity will revert to the Releasing Customer, and will be governed by the terms and conditions of its existing Agreement with Seller. If Releasing Customer pays delinquent amounts owed by Replacement Customer and Seller subsequently receives payment from Replacement Customer of some or all of such amounts, Seller will credit the amounts received from the Replacement Customer in Seller's next monthly bill to the Releasing Customer.

7.4 MARKETING FEE. Seller may negotiate with Releasing Customer to market all or a portion of the released capacity to potential Replacement Customers who, as a result of such marketing activity, bid for such capacity during the competitive bidding procedure. If Seller, contracts with a Replacement Customer found by Seller, Seller, with the agreement of Releasing Customer, shall be entitled to a marketing fee which will be negotiated between Seller and Releasing Customer. The basis and method of assessing such fee shall be subject to negotiations between Seller and Releasing Customer. Each Replacement Customer found by Seller, pursuant to Seller’s agreement with Releasing Customer concerning a marketing fee, shall submit with its bid a statement attesting to Seller’s marketing efforts, which efforts shall consist of more than the simple posting of a notice on Seller’s EBB, in connection with such Replacement Customer’s decision to purchase released capacity. Such statement shall constitute conclusive evidence of Seller’s proactive marketing effort entitling Seller to a marketing fee.

7.5 TERM. Any release under this Section 7 for service under Rate Schedule FSS shall be for a maximum term not longer than the remaining term of the underlying FSS Service Agreement. If capacity is released and the Replacement Customer takes service under Rate Schedule FSS, the minimum term shall be one month.

7.6 RELEASING CUSTOMER’S INJECTION/WITHDRAWAL CHARGES. Releasing Customers’ pricing provisions of any offer to release pursuant to Section 7.1 and 7.8 hereof must include Releasing customers’ currently effective Injection Rate, Withdrawal Rate, Overrun Injection Rate and Overrun Withdrawal Rate and Fuel Use/Loss Charge.

7.7 VOLUMETRIC RELEASE. Customer may release capacity on a volumetric basis, provided that:

(a) all requirements and conditions of the release be specified by the Releasing Customer in the release notice, including any minimum storage volume requirement, and

(b) the requirements and conditions specified by Releasing Customer must meet all of the requirements and conditions of Seller's Original Volume No. 1A FERC Gas Tariff and,

(c) Seller will bill the Volumetric Rate for Release for volumes actually injected into storage by Seller for the account of Replacement Customer or the minimurn storage volume requirement if actual injected volumes are less than the required minimum storage requirement and,

(d) Replacement Customer shall remain fully responsible for all Usage Charges incurred.

7.8 RELEASES OF 31 DAYS OR LESS OR AT THE MAXIMUM RATE THE RELEASING CUSTOMER IS OBLIGATED TO PAY. Capacity Releases and Pre-Arranged Releases for a period of 31 Days or less, or for any period of one year or more at the maximum rates the Releasing Customer is obligated to pay, need not comply with Section 7.1. Notices of releases shall be posted on Seller's EBB within forty-eight (48) hours after release transaction commences.

7.9 Prior to the commencement of service pursuant to any release request, the Replacement Customer shall submit to Seller, in accordance with Section 2.1 of the General Terms and Conditions of this FERC Gas Tariff, a check in an amount equal to the lesser of $10,000 or the aggregate reservation charges which would be due for two months of released service.

7.9 RELEASES OF 31 DAYS OR LESS AT LESS THE MAXIMUM RATE THE RELEASING CUSTOMER IS OBLIGATED TO PAY. Releases of a period of 31 Days or less at less than the maximum rate the Releasing Customer is obligated to pay may not roll-over, extend, or continue in any way without complying with Section 7.1, and may not be re-released to the same Replacement Customer without being posted for competitive bids until twenty eight (28) Days after the first release period has ended, unless the capacity is being re-released for a term of one year or more at maximum rates.

8. GAS IN STORAGE AFTER TERMINATION OF AGREEMENT. If a Customer which has not renewed its FSS Agreement for the next Storage Contract Year fails to withdraw all of its Working Storage Gas by the end of the Storage Contract Year in which such FSS Agreement terminates, then, at Seller's option, and upon forty-eight (48) hours notice, Customer will be deemed to have agreed to the Storage of such remaining Working Storage Gas under Rate Schedule ISS and shall pay a Late Withdrawal Charge of one dollar per Dth per day, or at Seller's option, Seller may retain any remaining quantities of Working Storage Gas free and clear of any adverse claims; provided however, that Seller will notify Customer in writing prior to November 1 of the Contract Year in which the term of its FSS Agreement will expire of the quantity of Storage Volumes being held by Seller for Customer's account and the above options available to Seller in the event Customer fails to withdraw all of its Working Storage Gas by the end of said Storage Year. In the event Seller is unable to withdraw Customer's properly nominated volumes, up to the Customer's Maximum Daily Withdrawal Quantity, on any Day during the last Storage Year prior to the expiration of the Agreement, then the term of the Agreement shall be extended by the number of days Seller is unable to tender quantities of Gas for redelivery.

In the event that a Customer does not renew its FSS agreement and fails to withdraw all of its Working Storage Gas as provided above then the Customer will incur a Late Withdrawal Charge or forfeit remaining quantities of Working Storage Gas. In that event, Seller will credit the Late Withdrawal Charge or the value of the gas retained by Seller to its existing customers in the manner set forth in Section 8.4 of the general terms and conditions of the tariff.

9. DEFINITIONS

9.1 The term "Maximum Daily Injection Quantity" shall mean: the quantity set forth in the Customer’s FSS Service Agreement.

9.2 The term "Maximum Daily Withdrawal Quantity" shall mean the quantity set forth in the Customer’s FSS Service Agreement:

9.3 The term "Permanent Capacity Release" shall mean the release of capacity by the Customer for the remaining term of its Agreement with Seller. If (i) the terms and conditions of the new Service Agreement with the Replacement Customer are at least as favorable to Seller as the Agreement between Seller and the Releasing Customer, and (ii) the Replacement Customer is at least as creditworthy as the Releasing Customer. Releasing Customer shall not be liable for any charges incurred by the Replacement Customer after the Permanent Capacity Release. Replacement Customer shall be subject to all terms of this FERC Gas Tariff.

9.4 The term "Storage Contract Year" shall mean the period from April 1 of a calendar year through March 31 of the following calendar year.

RESERVED FOR FUTURE USE

RATE SCHEDULE ISS

INTERRUPTIBLE STORAGE SERVICE

1. AVAILABILITY

This Rate Schedule is available to any person, corporation, partnership or any other party (hereinafter referred to as "Customer"), other than Local Distribution Companies that are considered to be affiliates of Seller under Part 161 of the Federal Energy Regulatory Commission’s regulations for the purchase of natural gas storage service from Honeoye Storage Corporation (hereinafter referred to as "Seller"), when Seller has determined on a non-discriminatory basis, that capacity is available to provide service under the Rate Schedule and when Customer and Seller have executed a Service Agreement under this Rate Schedule.

2. APPLICABILITY AND CHARACTER OF SERVICE

This Rate Schedule shall apply to all Interruptible Storage Service which is rendered by Seller for Customer pursuant to an executed Agreement under this Rate Schedule

(a) Storage Service rendered by Seller under this Rate Schedule shall consist of:

(i) The receipt of Gas on behalf of Customer at the Point of Injection/Withdrawal up to the Maximum Storage Quantity or Customer's Storage Overrun Quantity plus Seller's injection Fuel Use at daily quantities up to the Maximum Daily Injection Quantity plus Seller's Injection Use;

(ii) The Storage of Gas in quantities not to exceed the Maximum Storage Quantity or Customer’s Storage Overrun Quantity ; and

(iii) The Tender of Gas to or for the account of Customer at the Point of Injection/Withdrawal at a quantity not to exceed Customer’s Working Storage Gas or Storage Overrun Quantity reduced by Seller's withdrawal Fuel Use at daily quantities up to the Maximum Daily Withdrawal Quantity reduced by Seller's Withdrawal Use.

(b) Storage Service rendered under this Rate Schedule shall be interruptible, and shall be available only when capacity is not being used for injection, storage and withdrawal of higher priority services. Such interruptible service shall be offered in accordance with the provisions established in the General Terms and Conditions of this Tariff. Seller may, if storage capacity is required by Customers having a higher priority, require Customer to withdraw quantities held in storage by Seller for or on behalf of Customer under Rate Schedule ISS within three (3) days of the date notice is provided to Customer by Seller. Customer indemnifies and holds Seller harmless from and against any and all losses, damages or expenses of any kind which Customer may suffer or be liable for a result of any reduction or interruption in service pursuant to this Rate Schedule.

3. GENERAL TERMS AND CONDITIONS

The General Terms and Conditions of this Original Volume No. 1A FERC Gas Tariff are applicable to this Rate Schedule and are specifically incorporated herein by reference.

4. RATES AND CHARGES

The amounts which shall be paid by Customer to Seller for each Month during the period of service hereunder shall include the sum of the amounts due under the subsections of this Section 4 and charges under Section 5 that are applicable to Customer for such Month, computed by use of the applicable rates set forth in the Customer's Agreement which are effective during such Month or portions thereof. Each total rate computed for a specific transaction shall be rounded to the nearest one tenth of a cent.

4.1 Interruptible Storage Service (ISS) Injection Rate: An injection rate shall be paid for each Dekatherm which is injected for or on behalf of Customer during the month.

4.2 Interruptible Storage Service (ISS) Withdrawal Rate: A withdrawal rate shall be paid for each Dekatherm which is withdrawn for or on behalf of Customer during the month.

4. 3 Interruptible Storage Service (ISS) Inventory Rate: An Inventory Rate shall be paid for each Dekatherm of the Average Monthly Storage Volume which is stored for or on behalf of Customer during the Month.

4.4 Seller's Fuel Use Charge: Seller will bill Customer each month for gas lost or unaccounted for in Seller's operations at the rate of one percent (1%) of (i) the gas injected on Customer's behalf in the preceding month and (ii) one percent (1.0%) of the gas withdrawn on Customer’s behalf in the preceding month.

4.5 Regulatory Fees and Charges. Customer shall reimburse Seller for all fees and charges, as required by the Commission or any other regulatory body, that are related to service provided under this rate schedule, including, but not limited to, the Commission's Annual Charge Adjustment (ACA).

4.6 Overrun Storage Commodity Rate: An Overrun Storage Commodity Rate shall be paid for each Dekatherm of service provided on behalf of Customer pursuant to Section 6 of this Rate Schedule. As set forth in the Customer's Agreement, the Overrun Storage Commodity Rate shall consist of the Storage Commodity Rate for each Dekatherm of the Daily Storage Volume which is stored for or on behalf of Customer during the Month greater than the Customer's Maximum Storage Quantity.

5. ADDITIONAL CHARGES

5.1 Commission and other Regulatory Fees: Customer shall reimburse Seller for all fees required by the Commission or any other regulatory body which are related to service provided under this Rate Schedule including, but not limited to, filing, reporting and application fees.

5.2 Other Charges: Customer shall pay any other charges applicable to service hereunder authorized by the Commission or any successor agency having jurisdiction.

6. STORAGE OVERRUN SERVICE

Customer may request Seller to provide storage service under this Rate Schedule for quantities of gas in excess of Customer's Maximum Storage Quantity. Service requested under this section must be nominated separately as "overrun" by Customer. Seller may provide such Overrun Service on an interruptible basis if, in Seller's judgment, it can provide the service without adverse effect on Seller's operations or on Seller's ability to meet higher priority obligations. Customer shall pay the Overrun Storage Commodity Rate pursuant to Section 4.6 of this Rate Schedule ISS for such overrun storage service.

7. LATE WITHDRAWAL RATE

If Customer fails to withdraw all Working Storage Gas quantities held in storage by Seller for or on behalf of Customer by the end of the applicable withdrawal period set forth in Section 2 above, or by the date the ISS Agreement terminates, then Customer shall pay a Late Withdrawal Charge of $1/Dekatherm/day for all customers’ gas remaining in inventory or, at Seller’s sole option, Seller may retain such remaining quantities of Working Storage Gas free and clear of any adverse claims, unless such failure to withdraw was due to Seller's inability to withdraw the quantities nominated by Customer, in which event such applicable withdrawal period shall be extended by the number of days Seller is unable to tender quantities of Gas for redelivery.

8. The Interruptible agreement shall have a mutually agreeable term which shall not be less than one day.

9. DEFINITIONS

9.1 The term "Maximum Daily Injection Quantity" shall be mutually agreed upon and set forth in Customer’s ISS Service Agreement.

9.2 The term "Maximum Daily Withdrawal Quantity" shall be mutually agreed upon and set forth in Customer’s ISS Service Agreement.

9.3 The term "Storage Overrun Quantity" shall be mutually agreed upon and set forth in Customer’s ISS Service Agreement.

Sheet Nos. 28 through 68.

RESERVED FOR FUTURE USE

GENERAL TERMS AND CONDITIONS (Index to Provisions)

GENERAL TERMS AND CONDITIONS

1. DEFINITIONS

1.1 The term "Agreement" shall mean the Service Agreement executed by the Customer and Seller and any exhibits, attachments and/or amendments thereto.

1.2 The term "Average Monthly Storage Volume" shall mean the sum of Customer's Working Storage Gas at the end of each Day of the Month divided by number of Days in the Month.

1.3 The term "BTU" shall mean one (1) British thermal unit, the amount of heat required to raise the temperature of one (1) pound of water one degree (1) Fahrenheit at sixty degrees (60) Fahrenheit. (BTU is measured on a dry basis at 14.73 psia.)

1.4 The term "Business Day" shall mean every Monday, Tuesday, Wednesday, Thursday or Friday, excluding all federal banking holidays for transactions in the United States.

1.5 The term "Clock Time" shall mean Central Standard Time except for that period when daylight savings is in effect. During this period, Clock Time shall mean Central Daylight Time.

1.6 The term "Commission" and "FERC" shall mean the Federal Energy Regulatory Commission or any successor regulatory authority having jurisdiction.

1.7 The term "Contract Term" shall mean the period beginning on the date storage service under a storage agreement commences and ending on the day the term of the agreement terminates.

1.8 The term " Customer" shall mean any person, corporation, partnership or any other party that executes a valid Service Agreement with Honeoye Storage Corporation for the Storage of Gas, or other services under the terms and conditions of Seller's FERC Gas Tariff Original Volume No.2.

1.9 The term "Day" shall mean a period of consecutive hours, beginning at 9:00 a.m. Clock Time and ending on the following 9:00 a.m. Clock Time as adjusted, when appropriate, for changes from Standard to Daylight Savings Time and vice versa.

1.10 The term "Dekatherm" (Dth) shall mean the quantity of heat energy which is equivalent to one (1) million (1,000,000) BTU; thus the term MDth shall mean one (1) thousand Dth.

1.11 The determination of quantities deemed to be delivered for purposes of use of the term "Each Dekatherm Of Gas Which Is Delivered" shall be the pro rata allocation of the quantities of Gas nominated, after adjustments for Seller's Use and pursuant to Section 4.3 hereof, for injection into storage or for withdrawal from storage.

1.12 The term "EBB" shall mean Honeoye Storage Corporation’s electronic bulletin board.

1.13 The term "EDM" shall mean Honeoye Storage Corporation’s electronic data mail.

1.14 The term "Equivalent Quantities" shall mean a quantity of Gas containing an amount of Dths equal to the amount of Dths received by Seller for the account of Customer at the Point of Injection /Withdrawal reduced by the Dths removed for Seller's Injection and/or Withdrawal Fuel Use as attributable to the Storage of Customer's Gas.

1.15 The term "Gas" means natural gas in its natural state, produced from wells, including casinghead gas produced with crude oil, natural gas from gas wells, and residue gas resulting from processing both casinghead gas and gas well gas.

1.16 "Gas Industry Standards Board" or "GISB" shall mean that accredited organization established to set standards for certain natural gas industry business practices and procedures.

1.17 "GISB Standards" shall mean the standardized business practices, procedures and criteria which have been adopted and published by the Gas Industry Standards Board and which have been adopted by reference by the Commission.

1.18 The term "Interruptible" shall mean that the storage service is subject to interruption at any time by Seller. An interruptible Customer may be required to withdraw gas from interruptible Storage Capacity or return gas received as Storage Overrun Quantity, should such capacity or gas be required by a firm customer or by another interruptible Customer willing to pay a higher interruptible Storage rate.

1.19 The term "Maximum Storage Quantity" shall mean the greatest number of Dths that Seller is obligated to store on behalf of Customer on any Day excluding Storage Overrun Quantity, if applicable.

1.20 The term "Month" shall mean the period beginning at 9:00 a.m. Central Time on the first Day of a calendar month and ending at the same hour on the first Day of the next succeeding calendar month.

1.21 The term "OBA" shall mean a contract between two parties which specifies the procedures to manage operating variances at an interconnect.

1.22 The term "OFO" shall mean an order issued to deviate conditions which threaten or could threaten the safe operations or system integrity of Seller’s system or to maintain operations required to provide efficient and reliable firm service. Whenever Seller experiences these conditions, any pertinent order will be referred to as an OFO.

1.23 The term "Point of Injection/Withdrawal" shall mean the point of interconnection between Seller's Honeoye Storage Project and third party transporter's facilities located in Ontario County, New York or such other location as may be designated by Seller and its Customer.

1.24 The term "Psig" shall mean pounds per square inch gauge.

1.25 The term "Releasing Customer" shall mean any Customer who has agreed to release capacity under Section 7 of Rate Schedule FSS.

1.26 The term "Replacement Customer" shall mean any Customer to which capacity is released under Section 7 of Rate Schedule FSS.

1.27 The term "Seller" shall mean Honeoye Storage Corporation.

1.28 The term "Seller's Injection Use" shall mean the applicable percentage stated in Seller's Rate Schedules multiplied by the quantity of Gas injected into storage for the account of Customer.

1.29 The term "Seller's Use" shall mean the sum of the Seller's Injection Use and the Seller's Withdrawal Use.

1.30 The term "Seller's Withdrawal Use" shall mean the applicable percentage stated in Seller's Rate Schedules multiplied by the quantity of Gas withdrawn from storage for the account of Customer.

1.31 The term "Service Day" shall mean the Day during which Customer receives storage service pursuant to a nomination in accordance with Section 4 of the General Terms and Conditions of this FERC Gas Tariff.

1.32 The term "Storage" or "Storage Service" shall mean the storage of Gas.

1.33 The term "Storage Overrun Quantity" shall mean the number of Dths that Seller provides and stores on behalf of Customer on any day in excess of Customer’s Maximum Storage Quantity pursuant to Rate Schedule ISS.

1.34 The terms "Tender," "Tender Gas" and "Tender of Gas" shall mean that the delivering party is able and willing, and offers, to deliver gas to or for the account of the receiving party at the Point of Injection/Withdrawal.

1.35 The term "Transporter" means the Customer’s Transporter designated to deliver gas to the Point of Injection/Withdrawal or Customer’s Transporter designated to receive gas from the Point of Injection/Withdrawal.

1.36 The term "Usage Charges" shall mean all variable charges associated with the injection/withdrawal of Gas by Seller.

1.37 The term "Wire Transfer" shall mean payments made/effected by wire transfer (Fedwire, CHIPS, or Book Entry), or Automated Clearinghouse, or any other recognized electronic or automated payment mechanism that is agreed upon by Seller in the future.

1.38 The term "Working Storage Gas" shall mean the quantity of Gas held in storage at any given time, by Seller, for the account of Customer.

2. REQUESTS FOR SERVICE

2.1 Requests. To seek to qualify for Storage Service pursuant to Rate Schedules FSS or ISS a potential Customer shall submit a request for such service in writing to the Seller. Seller, as applicable, shall evaluate and respond to such requests as soon as is reasonably possible, and shall begin service as soon as is reasonably possible, after execution of the Agreement or upon the date set forth in the Agreement. Such a request shall be considered acceptable only if the information specified in Section 2.2 below is provided in writing, but Seller may waive all or any portion of such information in individual instances, when the information is already in possession of Seller. Buyer on a non-discriminatory basis may require that each request for service under Rate Schedule FSS by or on behalf of each proposed Customer be accompanied by refundable earnest money in the form of either wire transfer or a check payable to Honeoye Storage Company in the amount of the lesser of ten thousand ($10,000) or the aggregate reservation charges which would be due for two months of service for such requested service, which amount shall be applied, until fully used, against the first amounts due by Customer to Seller as reservation charges; provided, however, that if the request is not accepted by Seller or if service is not otherwise offered, Seller will refund earnest money thirty (30) days after notice to potential Customer that Seller is not accepting offer.

Requests for service shall be sent to:

Honeoye Storage Company
4511 Egypt Road
Canandaigua, NY 14424
Attention: Vice President of Operations

2.2 Form of Request for Storage Service

(a) Each request, to be considered as an acceptable and valid request, must furnish the portion of the information set forth below. The "Honeoye Storage Corporation Service Request Form" is set forth in this FERC Gas Tariff and may be changed from time to time and reissued by Seller.

(b) Requestor's Identification: Name, address, representative, telephone number of party requesting service.

(c) Customer's Identification: (Note: The "Customer" is the party which proposes to execute the Agreement).

(1) Name, address, representative and telephone number of Customer;

(2) A statement of whether Customer is a local distribution company, an intrastate pipeline, an interstate pipeline, marketer/broker, producer, end user or other type of entity (which shall be described);

(3) A statement of whether Customer is acting for itself or as agent for someone else (who must be named); and

(4) A statement of whether Customer is a Replacement Customer and the contract number under which Replacement Customer is requesting service.

(d) Type of Service(s) Category(ies) Requested: Specify which Volume No. 1A Rate Schedule service is desired.

(e) Quantity: (stated in Dekatherms)

(1) Maximum Storage Quantity, which shall not be less than 25,000 Dekatherms, except for volumes under Section 7 of Rate Schedule FSS.

(2) Maximum Daily Withdrawal Quantity, which shall be determined in accordance with Seller's Rate Schedules.

(3) Storage Overrun Quantity, if applicable.

(f) Term of Service:

(1) Date service is requested to commence.

(2) Date service is requested to terminate (Agreements for FSS shall terminate on March 31 and shall be for a minimum length of twelve months, unless otherwise agreed to by Seller).

(g) Point of Injection

(h) Point of Withdrawal

(i) Certified Statement: A certified statement by the Customer that it has, or will have, by the time of execution of an Agreement with Seller, title to, or the legal right to cause to be delivered to Seller, for Storage, the Gas which is to be delivered to Seller and facilities or contractual rights which will cause such Gas to be delivered to and received from Seller.

(j) Credit Evaluation:

(1) Customer should submit year end audited financial statements of Customer (if available) together with the latest quarterly report. If audited financial statements are not available, Customer should furnish unaudited financial statements. In such event, Seller may request additional credit information.

(2) Customer's Affiliates, including parent, subsidiaries of parent and of such subsidiaries, and subsidiaries of Customer.

(3) In the event proceedings have been commenced by or against such Customer for any relief under any bankruptcy or insolvency law, or any law relating to the relief of debtors, readjustment of indebtedness, reorganization, arrangement, composition or extension; or in the event a decree or order of a court having jurisdiction in the premises for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of such Customer, or of a substantial part of its property, or for the winding up or liquidation of its affairs, shall have been entered, or any substantial part of the property of such Customer shall be sequestered or attached and shall not be returned to the possession of such Customer or released from such attachment within thirty (30) Days thereafter; or in the event such Customer shall make a general assignment for the benefit of creditors or shall admit in writing its inability to pay its debts generally as they become due, or in the event that any financial institution has refused to extend credit to Customer within the past year or any rating agency has downgraded the Customer s securities or issued publicly available material giving an opinion that Customer's credit quality or standing has declined, Customer shall be required to fully disclose any and all actions regarding the above described proceedings against Customer or related parties defined in (3) above, in its request for service.

(4) Any other information requested by Seller pursuant to Section 11.5 of the General Terms and Conditions.

2.3 Subsequent Information

(a) If any of the events or actions described in 2.2j(3) above, shall be initiated or imposed during the term of service hereunder, Customer shall provide notification thereof to Seller within two (2) Business Days of any such initiated or imposed event or action. Customer shall also provide, forthwith, such additional Customer credit information as may be reasonably required by Seller, at any time during the term of service hereunder, to determine Customer's creditworthiness.

(b) After receipt of a request for Storage Service hereunder, Seller may require that Customer furnish additional information as a prerequisite to Seller offering to execute an Agreement with Customer. Such information may include proof of Customer's title to the Gas involved and/or its legal right to cause the Gas to be delivered to Seller for Storage and of Customer's contractual and/or physical ability to cause such Gas to be delivered to and received from Seller.

2.4 Request Validity. Customer's request for Storage Service shall be considered null and void if Seller had tendered an Agreement for execution to Customer and Customer fails to execute the Agreement for FSS within thirty (30) Days thereafter or within five (5) days thereafter for ISS. Seller will not execute an Agreement under these Rate Schedules FSS or ISS for which it does not have sufficient available capacity. If sufficient capacity is available, but Customer does not desire to or cannot begin Storage Service within thirty (30) days after the date the request is made pursuant to Section 2.2 of these General Terms and Conditions of this Tariff, or such other period as the parties may agree to in writing, then such request shall be considered null and void.

2.5 Customer's Performance. If a Customer that has executed an Agreement for service under Rate Schedule ISS, on the date service is to commence, fails to nominate, pursuant to Section 4.1 of these General Terms and Conditions, a quantity of Gas for Storage, or, having nominated a quantity of Gas and Seller having scheduled the quantity for Storage, pursuant to Section 4.3 of these General Terms and Conditions, fails to Tender such Gas for Storage on the date it is scheduled, the Seller may terminate Customer's Agreement and the Customer's request for service shall be deemed null and void; provided, however, that the Customer's Agreement shall not be terminated nor shall the Customer's request for service be deemed null and void if the Customer's failure to nominate or tender is caused by an event of force majeure on Seller's system, as defined in Section 9 of these General Terms and Conditions.

2.6 Complaints: In the event that a Customer or potential Customer has a complaint relative to service under this FERC Tariff, the Customer shall:

(a) Provide a description of the complaint, verbally or in writing, including the identification of the storage request (if applicable), and communicate it to:

Honeoye Storage Company
Attn: Vice President of Operations
4511 Egypt Road
Canandaigua, NY 14424
Phone: (585) 229-5161

(b) Within forty-eight (48) hours, or two Business Days, whichever is later from the day of receipt of a complaint, Seller will respond initially to the complaint and Seller shall respond in writing within thirty (30) days advising Customer or potential Customer of the disposition of the complaint.

2.7 Information: Any person may request information on the pricing or other terms of Storage Service and/or capacity availability by contacting Seller at the following:

Honeoye Storage Company
Attn: Vice President of Operations
4511 Egypt Road
Canandaigua, NY 14424
(585) 229-5161

2.8 Relationship with Marketing Affiliates:

(a) Seller is affiliated with corporations that engage in marketing or brokering as defined in Part 161 of the Federal Energy Regulatory Commission’s regulations. The names and addresses of those marketing affiliates are listed on Seller’s EBB. Seller does not share employees or officers with any of its marketing affiliates. Certain directors of Seller are officers or employees of marketing affiliates. These individuals are listed on Seller’s EBB.

(b) Seller does not share facilities with any marketing affiliate.

2.9 Electronic Bulletin Board:

(a) Seller will maintain an interactive EBB for the use of its Customers and prospective Customers interested in obtaining information about available storage service. Seller's EBB will provide all information required to be posted thereon under regulations of the FERC, together with such additional information as Seller considers appropriate.

(b) Information posted on Seller's EBB will include the following:

(1) Firm and interruptible storage service currently available from Seller.

(2) Injection and withdrawal capacity currently available.

(3) Firm and recallable capacity released by FSS Customers or Replacement Customers pursuant to Section 4 of the General Terms and Conditions and currently available for allocation.

(4) Firm capacity which is currently available or will become available by reason of the termination of an FSS service agreement

(5) Currently operative offers to purchase capacity tendered pursuant to Section 4 of the General Terms and Conditions.

(c) With respect to each category of information posted on Seller's EBB, Seller shall also include relevant information pertaining to the minimum rate at which capacity is offered to Customers and Replacement Customers, any restrictions, terms, or condition imposed on the reallocation of released capacity by the Customer or Replacement Customer releasing that capacity (including the name of any Replacement Customer designated by the Releasing Customer), and the terms and conditions upon which offers to purchase capacity have been tendered.

3. STORAGE SERVICE

3.1 Treatment of Gas. Seller may subject or permit the subjection of Gas stored hereunder to compression, cooling, cleaning, or other processes to such extent as may be required in Seller's sole opinion.

4. NOMINATIONS, SCHEDULING AND ALLOCATION

4.1

(a) Nominations. Seller will accept nominations for storage service as provided herein. A valid nomination is a data set which contains, at a minimum, the mandatory data elements included in the GISB Standards related to nominations, and any additional Seller-required data elements. All Standard and Intra-Day Nominations for service shall be made via Seller’s EDM as approved by the Commission. Seller will accept nominations via mail, fax, courier service or personal delivery. Seller will support the receipt of nominations, via the methods listed above, and EDM in a manner designed to enable Customers to submit nominations seven days a week, twenty-four hours a day.

Each nomination shall indicate whether it is being submitted as a Standard or Intra-Day Nomination. The standard quantity for nominations, for confirmations and scheduling, in the United States, shall be dekatherms per Day.

Customer may use an agent to provide all or a portion of its nomination data, provided that Seller is so advised in advance in writing. A Customer that uses an agent for such nomination purposes shall hold Seller harmless for all actions or inactions of its agent.

(b) Standard Nominations. A "Standard Nomination'' is a nomination for storage service for any Day. The Standard Nomination shall include a begin date and end date, which must be within the term of the Customer’s service agreement. Each day within a date range nomination is considered an original nomination. Subsequent nominations for one or more days within the range supersede only the days specified. The days outside the range of the subsequent nominations are unaffected. Nominations have a prospective effect only. Seller shall process all new or revised nominations that are submitted by 11:30 a.m. Central Clock Time and received by 11:45 a.m. Central Clock Time on the Day before the applicable Service Day. Customer may nominate zero (0) for a daily quantity, but in the event Customer nominates a daily quantity in excess of zero (0), such daily quantity shall not be less than five-hundred (500) Dth. Customer shall also inform Seller in advance of each Month of the desired order of priority of injections and withdrawals under each Agreement and Seller may rely thereon (or in the absence of such information, upon Seller’s judgment) if allocation under such Agreement is required.

(c) Standard Nominations Timetable. The timetable for a Standard Nomination shall be as follows on the Day before a Service Day, Central Clock Time

11:30 a.m. for nominations leaving control of Customer;

11:45 a.m. for receipt of nominations by Seller;

12:00 noon for Seller to send quick response for nominations submitted via EDM;

3:30 p.m. for Seller to receive completed confirmations from connected parties;

4:30 p.m. for Customer and Operators to receive scheduled volume information from Seller.

In addition, at the end of each Day, Seller shall provide Customer the final scheduled quantities for the just completed Day. Seller will send an end of Day Scheduled Quantity document. Recipients of the end of Day Scheduled Quantity document can waive the obligation of Seller to send the Scheduled Quantity document.

Seller, as receiver of nominations, initiates the confirmation process. The party receiving a request for confirmation or an unsolicited confirmation response may waive the obligation of the Seller to send. The sending party will adhere to nomination, confirmation and scheduling deadlines. The party receiving the communication shall have the right to waive any deadline, on a non-discriminatory basis.

(d) Other Nominations. Seller may, at its option, accept nominations which are not timely as described above. In that event, Seller shall not be required to comply with the Standard Nomination timeline set out above.

4.2

(a) Intra-Day Nominations. Any nomination submitted after the standard nomination deadline, by eligible Customers, shall be an "Intra-Day Nomination." An Intra-Day Nomination shall be effective for one (1) Day only. Intra-Day Nominations may be used to nominate new injection or withdrawals. The nomination process set forth in Section 4. l(a) shall apply to the Intra-Day nominations. An Intra-Day quantity shall be a revised daily quantity.

(1) Timetables for Intra-Day Nominations shall be as follows:

(a) Evening Nomination Cycle: shall be as follows on the Day before a Service Day, Central Clock Time:

6:00 p.m. for nominations leaving control of Customer;

6:15 p.m. for receipt of nominations by Seller,

6:30 p.m. for Seller to send quick response for nominations submitted via EDM;

9:00 p.m. for Seller to receive completed confirmations from connected parties;

10:00 p.m. for Customer and operators to receive scheduled volume information from Seller and to provide scheduled quantities to bumped parties (notice to bumped parties).

9:00 a.m. for flow of gas.

(b) Intra-Day 1 Nomination Cycle: shall be as follows on the Service Day, Central Clock Time:

10:00 a.m. for nominations leaving control of Customer;

10:15 a.m. for receipt of nominations by Seller;

10:30 a.m. for Seller to send quick response for nominations submitted via EDM;

1:00 p.m. for Seller to receive completed confirmations from connected parties;

2:00 p.m. for Customer and operators to receive scheduled volume information from Seller and to provide scheduled quantities to bumped parties (notice to bumped parties);

5:00 p.m. for flow of gas.

(c) Intra-Day 2 Nomination Cycle: shall be as follows on the Service Day, Central Clock Time:

5:00 p.m. for nominations leaving control of Customer;

5:15 p.m. for receipt of nominations by Seller;

5:30 p.m. for Seller to send quick response for nominations submitted via EDM;

8:00 p.m. for Seller to receive completed confirmations from connected parties;

9:00 p.m. for Customer and operators to receive scheduled volume information from Seller and to provide notice to bumped parties;

9:00 p.m. for flow of gas.

(d) For purposes of Section 4.2(a)(1 )(a), (b), and (c) ''provide" shall mean, for transmittals pursuant to GISB Standards l .4, receipt at the designated site, and for purposes of other forms of transmittal, it shall mean send or post.

An Intra-Day Nomination is subject to operator's confirmations and Seller's operating conditions. If operator confirmation is not received, the Intra-Day Nomination will not be accepted. Seller will not accept a reduced Intra-Day Nomination for any quantity deemed already delivered based on an average hourly flow.

(b) For purposes of providing notice of any nomination changes to a Customer and/or Customer's agent, Seller shall contact either party by telephone or other instant communication device. With respect to changes initiated by Seller, if a Customer so elects, such Customer may provide a telephone number and Seller will contact Customer at such phone number to alert Customer that a change has been made; provided that where an interruptible Customer's nomination is bumped by a firm Customer’s Intra-Day Nomination, Seller shall provide notice of such bump to the interruptible Customer in the same manner that Seller uses to notify Customers of OFOs. .

4.3 Scheduling of Storage and Allocation of Service. For each Day, Seller will schedule injections and withdrawals of Gas, on the basis of: storage nominations made by Customers (which Seller is hereby authorized to rely upon in its scheduling); storage capacity available on Seller's system in light of nominations and requests; and overall operating conditions from time to time. If, on any Day, Seller determines that the capacity of its system is insufficient to serve all storage nominations scheduled for such Day, or to accept the quantities of Gas tendered, capacity shall be allocated to provide service in the following order:

(a) In scheduling deliveries of firm storage nominations on any Day when capacity is constrained, Seller shall allocate service on a pro rata basis to those Customers nominating volumes on such Day based upon such Customer's contracted daily injection or withdrawal volumes as a fraction of the contracted daily injection or withdrawal volumes of all Customers nominating volumes on such Day.

(b) In scheduling nominated quantities for interruptible Storage Services hereunder, after providing for firm Storage Service, Seller shall utilize the priorities established in Section 10 of these General Terms and Conditions, provided however that no interruptible Customer shall have a claim of priority on any Day to quantities in excess of the lesser of (1) such interruptible Customer's Maximum Daily Injection Quantity or Maximum Daily Withdrawal Quantity as applicable or (2) such interruptible Customer's nomination.

4.4 Delivery of Gas. Seller, subject to the other provisions hereof, shall make daily delivery, to the extent practicable, of Equivalent Quantities of Gas at the Point of Injection/Withdrawal in accordance with Seller's scheduled deliveries.

4.5 Hourly Variation. Injections and withdrawals shall be made at uniform hourly rates to the extent practicable.

4.6 Limitation on obligation. Should the quantities of Gas received from Customer(s) by Seller at the Point of Injection/Withdrawal exceed the Maximum Daily Injection Quantity plus the Seller's Injection Use, Seller shall notify Customer(s) of such fact within a reasonable time after such becomes known, and Customer(s) shall seek to reduce deliveries to Seller forthwith. In the event any such excess delivery would jeopardize the safety of Seller's operations and/or its ability to meet its contract commitments to others, such decisions being solely within the judgment and discretion of Seller, Seller shall have the right to refuse to accept, without any liability to Customer, or any other person, all or such part of said excess delivery as Seller deems necessary, and shall notify Customer accordingly.

4.7 Reduction in Maximum Storage Quantity. In the event that Customer nominates or utilizes less than 50% of its Maximum Storage Quantity under Rate Schedule ISS for a period of one (l) year, Seller may reduce Customer's Maximum Storage Quantity to 125% of the average utilization during such year, which new Maximum Storage Quantity, as applicable, shall be effective on the first Day of the Month following the Month in which Seller gives Customer notice of such reduction.

5. PRESSURE AT POINT OF INJECTION/ WITHDRAWAL

5. 1 Pressure at Point of Injection/Withdrawal. Unless otherwise agreed to by the parties as set forth in the Service Agreement, Customer shall cause the Gas to be delivered at the Point of Injection/Withdrawal at a pressure sufficient to allow the Gas to enter Seller’ s system at the varying pressures that may exist in such system from time to time; provided, however, that such pressure of the Gas delivered or caused to be delivered by Customer shall not exceed the Maximum Allowable Operating Pressure ("MAOP") which Seller specifies for the Point of Injection/Withdrawal. In the event the MAOP of Seller's system, at the Point of Injection/Withdrawal hereunder, is from time to time increased or decreased, then the MAOP of the Gas delivered or caused to be delivered by Customer to Seller at the Point of Injection/Withdrawal shall be correspondingly increased or decreased upon notification by Seller to Customer.

Unless otherwise agreed to by the parties as set forth in the Service Agreement, Seller shall Tender the Gas to or for the account of Customer at the Point of Injection/Withdrawal hereunder at such pressure as may be necessary to deliver the natural gas at the prevailing line pressure of Transporter provided that Seller shall not be obligated to deliver gas at pressure in excess of 750 pounds per square inch gauge.

6. MEASUREMENT AND MEASUREMENT EQUIPMENT

6.1 Unit of Volume:

(a) The unit of volume for measurement hereunder shall be one thousand cubic foot of gas at a temperature of sixty degrees (60°) Fahrenheit and an absolute pressure of fourteen and seventy-three hundreths pounds per square inch, dry, (14.73 psia) having an average Total Heating Value per Cubic Foot of one thousand (1,000) Btus.

(b) The Total Heating Value per Cubic Foot of the gas delivered and redelivered hereunder shall be determined by a recording calorimeter of standard manufacture or other method mutually acceptable to both Seller and Transporter, on Customer’s behalf, and installed so that it may properly record the gross heat content of the gas at the Point of Injection/Withdrawal. Where a calorimeter is used, the arithmetical average of the hourly gross heat content recording each day shall be deemed to be the heat content of the gas for that day. Such Calorimeter shall be checked at least once each month to assure its proper operation and accuracy. An appropriate certified gas sample of known heat content shall be used to check the calorimeter accuracy.

6.2 Computations of volume from Meter Readings and Registrations: The volume of gas delivered or redelivered hereunder shall be determined in the manner specified in AGA Gas Measurement Committee report No. 3 ("AGA report No. 3") published in 1978, as such publication may be revised from time to time, or of other reports and publications which are mutually acceptable to Seller and Transporter, on Customer’s behalf.

6.3 Flowing Temperature: The flowing temperature of gas delivered and redelivered hereunder shall be determined by means of a standard recording thermometer or other instrument of standard manufacture accepted in the industry. The flowing temperature used in determining the flowing temperature factor for each meter chart shall be the arithmetical average of the temperature shown by the recording instrument during the period of time when gas is passing through the meter.

6.4 Specific Gravity: The specific gravity of the gas delivered and redelivered hereunder shall be determined by a recording specific gravity instrument of standard manufacture or other method mutually acceptable to Seller and Transporter, on Customer’s behalf, and installed so that it may properly record the specific gravity of the gas at the point of delivery. The arithmetical average of the hourly specific gravity recording each day shall be deemed to be the specific gravity of the gas for that day. Such instrument shall be checked by the use of an Edwards Balance, or by any other method , at intervals mutually agreed to by Seller and Transporter, on Customer’s behalf.

6.5 Supercompressibility: Adjustment for the effect of supercompressibility for gas delivered and redelivered hereunder shall be made according to the provisions of AGA Report NX-19 as such publication may be revised from time to time, or of other reports and publications which are mutually acceptable to Seller and Transporter, on Customer’s behalf, for the average conditions of pressure, flowing temperature and specific gravity at which the gas was measured during the period under consideration and with the proportionate values of carbon dioxide and nitrogen in the gas delivered and redelivered included in the computation of the applicable supercompressibility factors. Customer shall cause Transporter to exercise due diligence in obtaining initial carbon dioxide and nitrogen fraction values and to obtain subsequent value of these components quarterly or at other intervals mutually agreeable to Seller and Transporter, on Customer’s behalf.

6.6 Assumed Atmospheric Pressure: The average absolute atmospheric (barometric) pressure shall be assumed to be fourteen and four-tenths pounds per square inch (14.4 psia) irrespective of actual elevation or location of the point of delivery above sea level or variations in actual barometric pressure from time to time.

6.7 Measuring Equipment: Unless otherwise agreed among Customer, Transporter, and Seller, the gas which Customer delivers or causes Transporter to deliver to Seller for storage hereunder and which Seller redelivers to Transporter for the account of Customer shall be measured by measuring equipment which Customer shall cause Transporter to own, install and operate at the Point of Injection/Withdrawal. Customer shall cause the measuring equipment to be of one-way flow design and of a type and kind generally accepted by the natural gas industry for the measurement of natural gas in accordance with the provisions of this Article hereof at the rates of flow and pressures expected to exist at the Point of Injection/Withdrawal. When orifice meters are used, they shall be of a type specified and recommended in AGA Report No. 3 as such publication may be revised from time to time or of other reports and publications which are mutually agreeable to Seller and Transporter, on Customer’s behalf, and the construction and installation shall be in accordance with the recommendations and specifications set forth in said agreed to report.

6.8 Access to Measuring Equipment, Tests and Charts: Unless otherwise agreed among Customer, Transporter, and Seller, Customer shall cause Transporter to provide Seller with access to all measuring equipment at all reasonable hours, but the reading, calibrating and adjusting hereof and the changing of charts or such other measuring equipment shall be done by Transporter on behalf of Customer. Further, Customer shall cause Transporter to provide Seller the right to be present at the time of any installing, testing, reading, cleaning, changing, repairing, inspecting, calibrating or adjusting done in connection with the measuring equipment used in determining the volumes of deliveries and redeliveries hereunder, and to provide Seller with reasonable notice thereof in order that it may be present. The records and charts from such measuring equipment shall remain the property of Transporter but Customer shall cause Transporter to provide, upon request, to Seller such records and charts, or reproductions thereof, together with calculations therefrom for inspection and verification. Original records or charts so submitted will be returned within thirty (30) days after receipt thereof. Additionally, Customer shall cause Transporter to give Seller the option to install at any time and at its own expense, such ancillary materials and equipment which will access measurement data on a real time basis and transmit such data to its operating location.

6.9 Check Measuring Equipment: Unless otherwise agreed among Customer, Transporter, and Seller, Customer shall cause Transporter to allow Seller to install, maintain and operate, at its own expense, such check measuring equipment as it shall desire at the Point of Injection/Withdrawal, and further cause Transporter to provide a suitable site therefore and allow Seller free access to and use of the site; provided that such equipment shall be so installed, maintained and operated as not to interfere with the operation or maintenance of Transporter’s measuring equipment at the Point of Injection/Withdrawal. Customer or Transporter shall have free access to the check measuring equipment at all reasonable hours. The reading, calibrating and adjusting thereof and the changing of charts shall be done by Seller , but Customer or Transporter shall be given reasonable notice thereof. Customer shall cause Transporter to allow Seller to remove any of Seller’s equipment at any time. It is expressly agreed that Customer or Transporter shall not be responsible or liable for the care or maintenance or for damage, unless due to the negligence of Customer and/or Transporter, to or regarding such check measuring equipment installed by or on behalf of Seller.

6.10 Failure of Measuring Equipment: Seller and Customer agree that if for any reason Transporter’s measuring equipment is out of service or out of repair so that the quantity of gas delivered is not correctly indicated by the reading thereof, the gas delivered during the period such measuring equipment is out of service or out of repair shall be estimated and agreed upon on the basis of the best data available, using the first of the following methods which is feasible:

(a) by using the registration of any check meter or meters if installed and accurately registering; or

(b) by using the registration of any storage field meter(s) if installed and accurately registering; or

(c) by correcting the error if the percentage or error is ascertainable by calibration, test or mathematical calculation; or

(d) by estimating the quantity of delivery by deliveries during the preceding periods under similar conditions when the measuring equipment was registering accurately.

6.11 Reasonable care shall be exercised in the installation, maintenance and operation of the measuring equipment so as to avoid any inaccuracy in the determination of the volume of Gas injected and withdrawn. The accuracy of all measuring equipment shall be verified by operator at reasonable intervals, and if requested, in the presence of representatives of the other party, but neither Seller nor Customer shall be required to verify the accuracy of such equipment more frequently than once in any thirty (30) Day period.

If either party at any time desires a special test of any measuring equipment, it will promptly notify the other party and the parties shall then cooperate to secure a prompt verification of the accuracy of such equipment. Transportation and related expenses involved in the testing of meters shall be borne by the party incurring such expenses.

The operator, for purposes of this section, shall be the owner of the equipment referenced herein, or the agent of such owner, or such other person as the parties may agree in writing.

6.12 Correction of Measuring Equipment Errors: unless otherwise agreed among Customer, Transporter, and Seller, Seller and Customer agree that if upon any test, Transporter’s measuring equipment is found to be not more than two percent (2.0%) fast or slow, previous readings of such equipment shall be considered correct in computing the deliveries of gas, but such equipment shall be adjusted properly at once to record accurately. Seller and Customer further agree that if upon any test, Transporter’s measuring equipment shall be found to be inaccurate by any amount exceeding two percent (2.0%), then any previous readings of such equipment shall be corrected to zero error for any period which is known definitely or agreed upon, but if the period is not known definitely or agreed upon, such correction shall be for a period covering the last half of the time elapsed since the date of the last test.

6.13 The parties agree to preserve for a period of at least three (3) years or such longer period as may be required by public authority, all test data, charts, if any, and other similar records.

6.14 In accordance with the provisions of this Section 6 of the General Terms and Conditions, Seller will use the best information available to close its allocation of quantities for a service Month. For the purposes of this Section , 6, ''close" shall mean five (5) Business Days after the applicable service Month. To the extent that adjustments are made after the date of such close, such adjustments ("Prior Period Adjustments" or PPA") shall be treated under this Section 6.14. If the PPA are due to the correction of measurement data or reallocation of volumes, such adjustments should be processed within six (6) Months of the applicable service Month. If the affected party disputes the as-adjusted quantity it is entitled to rebut the basis for the PPA, but only if it does so within three (3) Months of the processing of the as-adjusted quantity. Notwithstanding the above specified deadlines for processing/rebutting PPA, such deadlines shall not apply in the case of deliberate omission or misrepresentation or mutual mistake or fact. Parties' other statutory or contractual rights shall not be diminished by this standard.

6.15 Improvements in Gas Measuring Techniques: If, at any time during the term hereof, a new method or technique is developed with respect to gas measurement or the determination of the factors used in such gas measurement, such new method or technique may be substituted upon mutual agreement of Seller and Transporter on Customer’s behalf.

7. QUALITY

7.1 Heat Content. Heat content shall mean the gross heating value per cubic foot of Gas received or delivered hereunder. Such Gas shall have a heat content not less than 967 BTU per cubic foot nor more than 1100 BTU when determined on a dry basis. Seller shall have the right to waive such BTU content limits if, in Seller's sole opinion, Seller is able to accept Gas with a BTU content outside such limits without affecting Seller's operations.

For the purpose of calculating injections and withdrawals, the heat content of the Gas so determined at each such point shall be deemed to remain constant at such point until the next determination. The unit of quantity for the purpose of determining total heating value shall be one (1) cubic foot of anhydrous Gas at a temperature of sixty degrees (60) Fahrenheit and an absolute pressure of 14.73 psia, dry.

7.2 Freedom from objectionable Matter. The Gas injected and withdrawn hereunder:

(a) shall be commercially free, at prevailing pressure and temperature in Seller’s equipment and facilities, from objectionable odors, dust or other solid or liquid matter which might interfere with its merchantability or cause injury to or interference with proper operation of the lines, regulators, meters and other equipment and facilities of Seller.

(b) shall not contain more than twenty (.20) grains of hydrogen sulfide per one hundred (100) cubic feet of Gas, as determined by methods prescribed in Standards of Gas Service, Circular of the National Bureau of Standards, No. 405, page 134 (1934 edition), and shall be considered free from hydrogen sulfide (H₂S) if a strip, of white filter paper, moistened with a solution containing five percent (5%) by weight of lead acetate, is not distinctly darker than a second paper freshly moistened with the same solution, after the first paper has been exposed to the Gas for one and one-half (1-1/2) minutes in an apparatus of approved form, through which the Gas is flowing at the rate of approximately five (5) cubic feet per hour, the Gas from the jet not impinging directly upon the test paper; or the H₂S content may be determined by an instrument of approved type and by approved methods agreeable to the parties;

(c) shall not contain more than twenty (20) grains of total sulfur (including the sulfur in any hydrogen sulfide and mercaptans) per one hundred (l00) cubic feet of Gas;

(d) shall not at any time have an oxygen content in excess of two-tenths of one percent (0.20%) by volume and every reasonable effort to keep the Gas free of oxygen;

(e) shall not contain more than four percent (4%) by volume of a combined total of carbon dioxide and nitrogen components; provided, however, that the total carbon dioxide content shall not exceed three (3%) by volume.

(f) shall have a temperature of not more than one hundred twenty degrees (120°) Fahrenheit;

(g) shall have been dehydrated for removal of entrained water present therein in a vapor state, and in no event contain more than seven (7) pounds of entrained water per million cubic feet, at a pressure base of fourteen and seventy three hundredths (14.73) pounds per square inch and a temperature of sixty degrees (60°) Fahrenheit as determined by dew-point apparatus approved by the Bureau of Mines or such other apparatus as may be mutually agreed upon.

(h) shall not contain polychlorinated biphenyls.

In the event Transporter is granted authority by the FERC to change the quality specifications set forth in its transportation tariff in a manner which materially differs from the quality specifications set forth in this tariff, then Seller agrees to waive the affected quality specifications of this tariff and to apply the approved quality specifications of the Transporter’s tariff in substitution thereof. Customer shall notify Seller, in writing, within ten (10) days of approval by the FERC of any such changes to Transporters tariff.

7.3 Failure to Meet Specifications. Should any Gas Tendered for injection or withdrawal hereunder fail at any time to conform to any of the specifications of this Article, the affected party shall notify the other party of any such failure and the affected party may at its option suspend all or a portion of the receipt of any such Gas, and shall be relieved of obligations hereunder for the duration of such time as the Gas does not meet such specifications.

7.4 Notwithstanding anything herein contained to the contrary, if the gas delivered or redelivered hereunder fails at any time to conform to any of the specifications of this Article, including, but not limited to, failure at any time to have a Total Heating Value per Cubic Foot of at least nine hundred and sixty-seven (967) Btus, the party to whom such gas is being delivered or redelivered may notify the other party of such failure and may, at its option, reject further deliveries or redeliveries until the condition is corrected. Customer therefore authorizes Seller to refuse to accept deliveries from Transporter which do not conform to the specifications of this Article unless and until said deliveries are, in Seller’s sole opinion, conformed to said standard. After receiving a notice hereunder, the party responsible for such failure shall immediately take all necessary steps to correct the condition and, upon completion thereof, shall resume deliveries and redeliveries in accordance with the terms and conditions of this Agreement. The remedies herein provided are in addition to any and all other remedies to which either party may be entitled.

7.5 Commingling. It is recognized that Gas delivered to Seller by Customer will be commingled with other Gas stored hereunder by Seller. Accordingly, the Gas of Customer shall be subject to such changes in heat content as may result from such commingling and Seller shall, notwithstanding any other provision herein, be under no obligation to withdraw for Customer's account, Gas of a heat content identical to that caused to be delivered by Customer to Seller.

8. BILLING AND PAYMENT:

8.1 Billing. On or before the ninth (9th) Business Day of each Month, Seller shall render, (for purposes of this Section 8 1, "render" shall mean (a) postmarked or (b) time stamped and electronically transmitted via EDM to the designated site, whichever is applicable) an invoice to Customer setting forth the amount due for such Month under the applicable Rate Schedule(s). Seller's invoice shall be based on actuals (if available) or best available data. Quantities at points where OBA's exist shall be invoiced based on scheduled quantities. Seller may utilize estimates of the quantity of Gas received for injection from or Tendered to or for account of Customer during a Month, in place of actual quantities when actual quantities are not reasonably available; provided that adjustments shall be made in later invoices for differences between such estimated and actual quantities. Such invoice shall include credits for capacity assignment required by Section 7 of Rate Schedule FSS, if any.

When information necessary for invoicing purposes is in the control of Customer, Customer shall furnish such information to Seller on or before the third (3rd) Day of the Month.

Both Seller and Customer have the right to examine at reasonable times, books, records and charts of the other to the extent necessary to verify the accuracy of any invoice, charge or computation made under or pursuant to any of the provisions hereof.

8.2 Payment. Customer shall pay any invoice, on or before the tenth (l0th) Day after the date of the invoice. Payments by Customer to Seller shall be made in the form of Wire Transfer directed to a bank account designated by Seller, unless otherwise agreed to by the parties. Customer shall identify the invoice number specified by Seller to which the payment relates. If Customer submits payment different from the invoiced amount, remittance detail must be provided with payment.

If rendition of an invoice by Seller is delayed after the ninth (9th) Business Day of the Month, then the time of payment shall be extended accordingly unless Customer is responsible for such delay. Should Customer fail to pay all of the amount of any invoice as herein provided when such amount is due, interest on the unpaid portion of the invoice shall accrue from the due date until the date of payment at a rate of interest equal to the prime rate plus two percent (2%) charged by FleetBoston, or any such successor bank as may result from a purchase or merger of FleetBoston, to responsible commercial and industrial borrowers, but which in no event shall be higher than the maximum rate permitted by applicable law. If such failure to pay continues, then following thirty (30) Days prior written notice from Seller of its intent to abandon service under the Agreement, Customer shall be deemed to have consented to such abandonment of service, unless within the thirty (30) Day period Customer pays to Seller the entire balance due with interest, and Seller, in addition to any other remedy it may have hereunder, may suspend further injection or withdrawal of Gas for Customer and may enter into Agreements to provide service to others using Customer's capacity and deliverability; provided, however, that if Customer in good faith shall dispute the amount of any such invoice or part thereof and shall pay to Seller such amounts not in dispute, accompanied by documentation supporting the basis for the dispute and, at any time thereafter within thirty (30) Days of a demand made by Seller, shall furnish a good and sufficient surety bond in an amount and with surety satisfactory to Seller or other assurance acceptable to Seller, guaranteeing payment to Seller of the amount ultimately found due upon such invoice after a final determination which may be reached either by agreement or judgment of the courts, as may be the case, then Seller shall not be entitled to suspend further service or to terminate or abandon service under the Agreement unless and until default be made in the conditions of such bond. The foregoing shall be in addition to any other remedies Seller may have, at law or in equity, with respect to Customer s failure to pay the amount of any invoice.

8.3 Adjustment of Invoicing Errors. Subject to the provisions of Section 6 of these General Terms and Conditions, if it shall be found that at any time or times Customer has been overcharged or undercharged and Customer shall have actually paid the invoice containing such charges, then within thirty (30) Days after the final determination thereof, either Seller shall refund the amount of any such overcharge or Customer shall pay the amount of any such undercharge. In the event an error is discovered in the amount invoiced in any invoice rendered by Seller, such error shall be adjusted within thirty (30) Days of the determination thereof, provided that claim therefor shall have been made within thirty (30) Days from the date of discovery of such error, but in any event within six (6) Months from the date of such invoice. The party receiving such request for adjustment shall have three (3) Months to rebut such claim; otherwise the invoice shall be adjusted as requested. The preceding time limits do not apply to deliberate omission or misrepresentation or mutual mistake of fact or government required rate changes. The parties' statutory or contractual rights shall not otherwise be diminished by this Section. If the parties are unable to agree on the adjustment of any claimed error, any resort by either of the parties to legal proceedings shall be commenced within fifteen (15) Months after the supposed cause of action is alleged to have arisen, or shall thereafter be forever barred.

9. FORCE MAJEURE

9.1 Definition. The term "force majeure" as used herein shall mean acts of God, strikes, lockouts, or other industrial disturbances; acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms (including but not limited to tornadoes or tornado warnings), crevasses, floods, washouts; arrests and restraints of the government, either Federal or State, civil or military or civil disturbances. Relative to Seller's service and solely to the operation of its system, force majeure shall also mean shutdowns for purposes of necessary repairs, relocation, or construction of facilities; breakage or accident to machinery, wells or lines of pipe or casings; testing (as required by governmental authority or as deemed necessary by Seller for the safe operation of the underground storage reservoir and facilities required to perform the service hereunder), the necessity of making repairs or alterations to machinery or lines of pipe; failure of wells, surface equipment or pipe lines, well or line freeze ups; accidents, breakdowns, inability to obtain necessary materials, or supplies or permits, or labor or land rights to perform or comply with any obligation or condition of this Agreement; and any other causes, whether of the kind herein enumerated or otherwise which are not reasonably in Seller's control. It is understood and agreed that the settlement of strikes or lockouts or controversies with landowners involving rights of way shall be entirely within Seller’s discretion and that the above requirement that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of strikes or lockouts or controversies with landowners involving rights of way by acceding to the demands of the opposing party when such course is inadvisable in the discretion of Seller.

9.2 Force Majeure. If by reason of force majeure either party hereto is rendered unable, wholly or in part, to carry out its obligations under this Agreement, it is agreed that on such party giving notice in full particulars of such force majeure in writing to the other party within a reasonable time after the occurrence of the cause relied on, the party giving such notice, so far as and to the extent that it is affected by such force majeure, shall not be liable in damages during the continuance of any inability so caused, but for no longer period, and such cause shall so far as possible be remedied with all reasonable dispatch. Seller shall not be liable in damages to Customer other than for acts of gross negligence or willful misconduct and then only where force majeure does not apply.

9.3 Limitations. Such force majeure affecting the performance hereunder by either Seller or Customer, however, shall not relieve such party of liability in the event of concurring negligence or a failure to use due diligence to remedy the force majeure situation and to remove the cause in an adequate manner and with all reasonable dispatch, nor shall such causes or contingencies affecting such performance relieve Customer, in whole or in part from its obligations to pay the monthly charges provided for in Section 8 of these General Terms and Conditions.

10. PRIORITY OF SERVICE REQUESTS AND SERVICE AGREEMENTS

10.1 Open Season.

(a) Notice of open season. Prior to or upon the initial availability of FSS and ISS services, Seller shall post notice of the open season on its EBB, at least one (1) day prior to the commencement of the open season. Such notice shall set forth when the open season begins and ends, where interested parties may submit requests for firm or interruptible services, the minimum rates Seller will accept for the available service, and how interested parties may obtain forms for requesting service and additional details about the open season. Upon the termination of FSS and or ISS agreements Seller shall make further postings on its EBB of the available storage services.

(b) Duration. The open season shall commence at the time and day specified and for the term indicated in the notice of open season. If, subsequent to an open season any firm capacity remains unsubscribed, Seller shall be permitted to enter into a service agreement with a qualified customer without the need to commence another open season. During this time Seller will accept requests for the service that is available.

(c) Execution of agreements. A Customer allocated service in an open season shall be required to execute service agreement(s) for firm service no later than 30 consecutive days following the close of the open season, or forfeit the service that has been allocated to it.

10.2 Firm Storage

(a) This section sets forth the procedure for allocating firm storage capacity that becomes available other than through Section 10.1, the Right of First Refusal procedure set forth in Section 10.2(b), or the capacity release provisions of Rate Schedule FSS. Firm storage capacity subject to the allocation procedure set forth herein includes any firm storage service that becomes available on Seller’s Seller s system, now or in the future, including firm storage service performed under Part 157 for which abandonment authority has been sought or obtained. In the event that firm storage capacity becomes available on Seller’s Seller s system, Seller shall post on its EBB all relevant terms and conditions pertaining to such capacity and will solicit bids for at least ten (10) business days. Seller shall evaluate and determine the best bid in a non-discriminatory manner designed to allocate the capacity to the customer who values it the most over the term selected by Seller. Notwithstanding the foregoing, nothing herein shall require Seller to provide service at any rate that does not, in Seller’s Seller s sole judgment, yield an acceptable return to Seller. Moreover, Seller shall not be required to enter into Service Agreements with terms of more than one year unless Customer has a long-term debt rating of at least Baa3 according to Moody’s Moody s Investor Service or BBB- according to Standard & Poor’s Poor s Corporation or unless all obligations to Seller are guaranteed by a person with a long term debt rating equal to or greater than that stated above. Commission’s In the event two or more bids with equal economic values are received for combined capacity in excess of the quantity of available firm capacity, the capacity will be allocated ratably on the basis of the quantities bid.

b) Right of First Refusal:

(i) Contractual Right of First Refusal at End of Contract Term. Seller may discontinue service to Customer at the end of a primary term of an FSS Agreement with a primary term beginning April 1, 2007, unless (i) Seller and Customer mutually agree to a contractual right of first refusal, which shall be negotiated on a not unduly discriminatory basis, and (ii) Customer exercises its contractual right of first refusal for the capcity covered by the FSS Agreement by matching the terms offered to Seller for such capacity by any qualified prospective successor customer during an open season conducted in accordance with the General Terms and Conditions of Seller's currently effective tariff.

(ii) Regulatory Right of First Refusal. A regulatory right of first refusal shall be available on a one-time basis to Customers holding a long term FSS Agreement with a primary term beginning date prior to April 2, 2007. Honeoye may discontinue service to such Customer at the end of such primary term unless Customer exercises its right of first refusal for the capacity covered by such FSS Agreement by matching the terms offered to Seller for such capacity by any qualified prospective successor customer during an open season, conducted in accordance with the General Terms and Conditions of Seller s currently effective tariff.

(iii) A long term FSS Agreement, as that term is used in this Section, is an FSS Agreement having a primary term of two years or more. A prospective successor customer is qualified , within the meaning of this section if such prospective successor customer meets the creditworthiness criteria set forth in the General Terms and Conditions of Seller s currently effective tariff.

(c) Exercise of Right of First Refusal

(i) Not less than three (3) months prior to the termination or expiration of an FSS Agreement subject to a negotiated right of first refusal or, if applicable, the regulatory right of first refusal, an open season will be held for the purpose of awarding the capacity that is to become available upon such FSS Agreement s termination or expiration. This open season will be conducted pursuant to the terms and conditions set forth in the General Terms and Conditions of Seller s currently effective tariff.

(ii) Bids from qualified successor customers who desire, in whole or in part, the capacity to be made available upon the expiration or termination of such FSS Agreement must be received by Seller no later than thirty (30) days after commencement of the open season. Upon expiration of the open season, Seller will select the highest acceptable bid received from a qualified successor customer and, within three (3) Business Days of such selection, communicate the terms of the highest acceptable bid to the current capacity holder, who may elect, within ten (10) Business Days or such greater time as Seller may specify, to execute a renewal FSS Agreement upon the same terms, whether for a part or the entirety of the capacity subject to the current holder s right of first refusal. The current capacity holder s right of first refusal under this Section shall attach irrespective of which party provides written notice of termination of the current capacity holder s existing Service Agreement. In determining which bid for the capacity is the highest, Seller will use the evaluation method specified in the notice of the open season posted on its Internet Web site.

(iii) If the current capacity holder does not elect to match the terms of such highest acceptable bid or the current capacity holder and Seller do not agree on terms or service pursuant to Section 8.3 below, then its FSS Agreement will expire at the conclusion of its term and Seller will be deemed to have all necessary abandonment authorization under the NGA with respect to such service. Seller may enter into a new FSS Agreement with the qualified successor customer who submitted the highest acceptable bid.

(iv) Seller shall retain the right to require a minimum rate, which shall be market-based, for bids during any such open season.

(d) If during the open season, Seller receives no bides or rejects all bids, Seller will post the capacity as unsubscribed capacity and Seller and the current capacity holder may negotiate for continuation of service under mutually satisfactory rates, terms, and conditions. During such negotiations with the current capacity holder, or in the event that the current capacity holder declines to negotiate for continuation or service, Seller may also enter into negotiations with other potential customers for services to commence upon the effective date of the termination of the current capacity holder s FSS Agreement. In no event, however, may the current capacity holder retain capacity subject to the right of first refusal at a rate lower than the highest rate contained in a bid, if any, that has been submitted for such capacity by a qualified prospective successor customer during the open season but rejected pursuant to Section 10.2(c)(ii) of the General Terms and Conditions of Seller s currently effective tariff.

(e) Priority of Firm Storage Under Agreements: All firm Storage Service Agreements under Rate Schedule FSS shall have equal priority as to service, and shall have priority over interruptible Storage Services under Rate Schedule ISS. Service under both FSS and ISS shall have priority over Overrun Service.

10.3 Interruptible and Overrun Storage

(a) Priority of Nominations For Interruptible Service: Seller, in determining the allocation of interruptible service capacity on any Day among Customers which have nominated quantities of service desired on such Day under Rate Schedule ISS, shall be assigned the order of priority of such service on the basis that the highest rate offered for such service shall be accorded the highest priority. If more than one nomination or request for interruptible storage on a Day includes an offer of the same rate, then the order of priority as among such nominations or requests shall be the same, and if the available capacity is insufficient to provide the full level of service proposed in such nominations or requests, the service provided shall be allocated among such Customers pro rata based on the quantities nominated or requested.

(b) A Customer desiring service under Rate Schedule ISS shall submit to Seller, at least one (1) business Day prior to the start of such service, the rate that such Customer is willing to pay for such service . The rate submitted by Customer pursuant to the above provision shall be used to determine priority among nominations on each Day. Once Customer's nomination is accepted, and priority is assigned thereto pursuant to this section, such priority shall not be changed by the execution of new ISS Agreements during the day for service under Rate Schedule ISS.

(c) Notwithstanding the provisions of this Section 10.3, if a Customer under Rate Schedule ISS fails to submit a timely nomination for service for a day, pursuant to these General Terms and Conditions, for such service, then such Customer’s priority for such service for that day, shall be changed to a ranking below that of all other Customers who have made timely nominations for service.

10.4 Overrun Service

All requests for overrun Service under Rate Schedules FSS or ISS shall rank in priority below requests for service which are within the Customers' respective Maximum Storage