NNG - Tariff - Ninth Revised Sheet No. 300

Northern Natural Gas Company Ninth Revised Sheet No. 300
FERC Gas Tariff Superseding
Fifth Revised Volume No. 1 Eighth Revised Sheet No. 300

GENERAL TERMS AND CONDITIONS

53A. PERIODIC RATE ADJUSTMENT (PRA) - FUEL

1. Purpose and Applicability: This Section 53 establishes a Fuel PRA mechanism for the
purpose of deriving the Market Area and Field Area FUEL PERCENTAGES and the
UNACCOUNTED-FOR (UAF) PERCENTAGE as set forth on Tariff Sheet No. 54 and Sheet Nos. 61-64,
applicable to all Throughput Rate Schedules included in Northern's F.E.R.C. Gas Tariff,
including TF, TFX, LFT, GS-T and TI. The Market Area fuel percentages will be determined
seasonally. The Field Area fuel percentages will be determined annually.

2. Definitions.

(a) Fuel. Fuel consists of fuel burned and company used fuels: compressor, heater,
dehydrate, actuators, un-metered, blow-down and purge.

(b) Throughput. Throughput is the actual volumes received, inclusive of fuel and
unaccounted-for, from the respective receipt points on Northern's system.

(d) Summer Season. The consecutive months April through October.

(e) Annual. The consecutive months January through December.

3. The methodologies used to derive the Field Area "Field Fuel Percentage" (MIDs 1-16B),
Field Area "M/L Fuel Percentage" (MIDs 1-7 and MIDs 8-16B), Market Area "M/L Fuel
Percentage" (MID 17) and Unaccounted-For are as follows:

Field Area "Field Fuel Percentages" (MIDs 1-16B to MIDs 1-16B)
-------------------------------------------------------------

The Field Fuel Percentages are based upon the actual fuel consumed, as defined in
Section 2.(a) above, at field facilities on Northern's system. The actual fuel
consumed at these designated field facilities, as measured and defined in Northern's
measurement reporting system, is (1) aggregated by each MID, (2) summed for the
twelve-month period ending December 31, as adjusted for known and measurable changes,
and (3) divided by the total throughput applicable to Field Fuel in each MID for the
same annual period. Only those volumes which have been received upstream or at a
field fuel facility are subject to a Field Fuel Percentage.

Field Area "M/L Percentages" (MIDs 1-7 and MIDs 8-16B)
------------------------------------------------------

Northern has established two Field Area M/L Fuel Recovery Sections. Fuel Section 1
consists of MIDs 1 through 7. Fuel Section 2 consists of MIDs 8 through 16B. In
addition there is a third mainline fuel rate for the Market Area (MID 17) which is
referred to as Market MID or Fuel Section 3 for purposes herein. To calculate the
M/L Fuel Percentages, Northern determines a fuel retention percentage for each such
Fuel Section and then combines the individual fuel retention percentages for such Fuel
Section into fuel retention percentages for each MID to MID transaction, subject to
the methodology described below.

(a) The individual fuel retention percentage for each Fuel Section is derived as
follows (i) the actual fuel consumed in such Fuel Section during the twelve-month
period ending December 31 each year ("PRA Period") as adjusted for changes which
are known and measurable with reasonable accuracy, is divided by (ii) the actual
throughput for such Fuel Section during the same twelve-month period. Each
adjustment to the actual data in any PRA filing must be separately identified and
supported with detailed workpapers in such PRA filing.

(b) The actual fuel consumed for each PRA Period for each Fuel Section is the fuel
consumed in the facilities located in the geographic boundaries of such Fuel
Section.
Issued by: Mary Kay Miller, V.P. Regulatory & Government Affairs
Issued on: August 31, 2007 Effective: October 1, 2007