Aggregate Balancing November 17, 2004

Current Process Multiple Contracts, Multiple Nominations, Multiple Imbalances and the potential for Multiple Cashouts & OFO Penalties.

Aggregate Balancing Aggregate Balancing is an administrative allocations tool that enables the Balancer to essentially create an “Aggregate”, and pool its gas supplies. Member Contracts Aggregate Contract

Member Contracts Aggregate Contract Gas supplies will automatically be allocated to the “member” transportation agreements tied to the Aggregate.

Aggregate Contract The Aggregate Contract carries the imbalance between nominated receipts and member deliveries. Member Contracts Aggregate Contract

Transport Volume Calculated Fuel Calculated Receipts A calculation is made to determine how much gas is needed to keep the member contract whole.

Aggregate Contract Total Calculated Receipts Becomes Delivery That calculated receipt becomes the delivery on the Aggregate contract.

Aggregate Contract Total Gas Receipts All gas receipts are nominated on the Aggregate contract. Nothing is nominated on the member contracts.

Aggregate Contract Calculated member deliveries Total Gas Receipts The imbalance between total gas receipts and calculated member deliveries is maintained on the aggregate contract. Aggregate Imbalance

Aggregate Contract Member Contracts Aggregate Contract Imbalance management responsibilities (make-up, payback, cashouts and Operational Flow Order penalties) reside on the Aggregate contract.

Service Summary Aggregate Balancing provides the capability to aggregate:  Supply Nominations  Contract Administration  Imbalances  Cashouts  OFO Penalties  Swaps

How to Request Service Forms to request service are located under the “Welcome” Tab-”Forms” on the Gas Transport Website Submit completed Request for Aggregate Balancing to Transportation Representative (“Agg Bala Request Form”) –Include completed Balancing Agency Designation for each Member Contract to be included under the Aggregate (“AgentDesign-Agg Bal”) –All Request and Agency Forms are available under Gas Transportation website Transportation Representative will provide Balancer with AP number for scheduling when the request is approved

Important Dates Approved requests to initiate service for a new Balancer that are received prior to the 15 th of a month will be eligible for service beginning the 1 st day of the subsequent month. Examples:  Request Received December 13, 2004  Service can initiate January 1, 2005  Request Received December 17, 2004  Service can initiate February 1, 2005 Once service initiates, Member contracts can be added or deleted by submitting a request 4 Business Days prior to the beginning of the effective month