Kokomo Gas and Fuel Company
(IURC No. G-13)
First Revised
Sheet No. 81
Page 1 of 2

Rate No. 81
Rate for Coal Displacement Gas Transportation Service

Applicability

This rate schedule is applicable to the transportation of natural gas for an industrial customer where gas has replaced coal as a boiler fuel for incremental use. Service under this rate schedule may be supplied to eligible customers, (i) that had a coal-burning facility that was operational on December 1, 1989, (ii) having their own gas supply, (iii) having all required regulatory approvals relating to the transportation and use of such gas, (iv) entering into a written transportation contract with the Company (v) with annual incremental usage which averages no less than 400 DTH per day, (vi) which is for the customer's boiler fuel needs which, but for the availability of this rate schedule, would continue to be met through use of coal, and (vii) who acknowledges in writing that the Company need not, and will not be required to provide system supply gas as back-up or replacement for such customer uses.

Character of Service

Transportation service under this schedule shall be Firm Service, without system supply back-up.

The customer shall provide to the Company, at least five (5) working days preceding the first day of the month, a schedule of the daily quantities of gas to be delivered to the City Gate by Panhandle Eastern Pipe Line Company, and an estimate of the total monthly usage that is anticipated by the Customer for the month in question.

All gas metered at the Customer's premises for the specified use shall be billed pursuant to this rate schedule. The Customer shall be responsible for maintaining a balance between quantities of gas received by the Company and quantities of gas used by the Customer. As soon as is practicable, the Company shall send to the customer an imbalance statement which shows the difference between the volume of gas delivered to the Company and the volume of gas used by the Customer for each month. The imbalance statement will also show the cumulative difference between receipts and usage under the Transportation Agreement since the date of initial service. For any month with a cumulative difference in excess of the greater of (i) 10,000 DTH, or (ii) 50% of the volume of gas billed for such month, the Company may apply a balancing charge of $1.00 per DTH multiplied by the excess as calculated above.

Upon termination of transportation service, customer will eliminate any final imbalance within 60 days of the date that the Company notifies the Customer of the imbalance. If at the end of such final balancing period, the Company has customer gas which the Customer has not received, the Company will retain those quantities free and clear of any adverse claims. If the customer owes the Company quantities of gas which the Customer has not delivered, the Company will charge the Customer for such volumes at the Company's currently effective sales rate under Rate No. 70.

For any month in which the Customer does not arrange to have gas transported to the Company on its behalf, but continues to use gas under this rate schedule, all volumes of gas used during such month will be billed at the Company's currently effective sales rates under Rate No. 70, plus all additional costs incurred by the Company to provide such gas service will be charges to the customer.