shall be reduced by the
amount of any such excess.
(III)
PARTY A WILL ENTER INTO GAS TRANSACTIONS
WITH PARTY B TO SUPPLY GAS AT FIXED AND FLOATING PRICES TO PARTY B, AND PARTY A
WILL ENTER INTO GAS SWAPS (INCLUDING BASIS SWAPS) WITH PARTY B TO ENABLE PARTY B
TO (A) HEDGE THE MARKET RISK ASSOCIATED WITH ITS SALES OF GAS TO ITS CUSTOMERS,
AND (B) TO SATISFY PARTY B'S OBLIGATIONS UNDER PART 12(A)(XIV). THE PARTIES
SHALL ENTER INTO ALL SUCH TRANSACTIONS ON THE TERMS SET FORTH HEREIN OR AS
OTHERWISE AGREED.
(IV)
PARTY A
WILL ENTER INTO GAS OPTIONS WITH
PARTY B ON THE TERMS SET FORTH HEREIN OR AS OTHERWISE MUTUALLY AGREED BY THE
PARTIES TO OFFSET (A) THE MARKET RISK ASSOCIATED WITH FIXED-PRICE SALES OF GAS
BY PARTY B TO ITS CUSTOMERS, AND (B) THE MARKET RISK ASSOCIATED WITH THE FIXED
COST OF STORAGE GAS PURCHASED TO MEET PARTY B'S DELIVERY AND STORAGE
OBLIGATIONS.
(B)
CONTRACT PRICE FOR GAS, GAS SWAPS AND GAS
OPTIONS.
(I)
EXCEPT WITH RESPECT TO SLEEVE
TRANSACTIONS (WHICH SHALL BE PRICED IN ACCORDANCE WITH PART 7(E)(III)) AND THOSE
CERTAIN TRANSACTIONS DESCRIBED IN PART 7(B)(II) AND PART 7(B)(III), THE CONTRACT
PRICE(S) FOR GAS PURCHASED BY PARTY B FROM PARTY A PURSUANT TO ANY TRANSACTION
SHALL BE THE SUM OF (A) THE QUOTED PRICE(S), PLUS (B) THE APPLICABLE GAS ADDER.
THE FIXED AND FLOATING PRICES FOR ANY GAS SWAPS SHALL BE THE APPLICABLE QUOTED
PRICES, PLUS A GAS ADDER, IF APPLICABLE.
PARTY A HEREBY AGREES THAT IT WILL
PROVIDE QUOTED PRICES FOR GAS IN RESPECT OF VARIOUS DELIVERY POINTS TO PARTY B,
UPON PARTY B'S REASONABLE REQUEST.
ONCE PARTY A HAS PROVIDED PARTY B WITH A
QUOTED PRICE WITH RESPECT TO A TRANSACTION AND PARTY B HAS NOT OBJECTED TO SUCH
QUOTED PRICE WHEN SUCH QUOTE IS GIVEN, THE QUOTED PRICE FOR SUCH TRANSACTION
SHALL BE FINAL AND BINDING.
(II)
FOR THE AVOIDANCE OF DOUBT, THE CONTRACT
PRICE FOR ANY LOCATIONAL BASIS SWAP, SHALL BE THE QUOTED PRICE AND SHALL NOT
INCLUDE A GAS ADDER; PROVIDED, THAT SUCH PURCHASES SHALL NOT BE CREDITED TOWARD
THE MINIMUM GAS QUANTITY FOR ANY CONTRACT YEAR.
(III)
FOR DAY-AHEAD GAS TRANSACTIONS (WHERE PARTY
A IS SELLING TO PARTY B OR PARTY B IS SELLING TO PARTY A), WHERE PARTY B'S
RELEVANT NOMINATION SCHEDULE IS DELIVERED BY PARTY B TO PARTY A PRIOR TO
8:30 A.M. EPT, THE CONTRACT PRICE FOR GAS VOLUMES DELIVERED IN ACCORDANCE WITH
SUCH NOMINATION SCHEDULE SHALL BE SHALL BE THE SUM OF (A) THE GAS DAILY
"MIDPOINT" PRICE FOR THE RELEVANT DELIVERY POINT (AS REASONABLY DETERMINED BY
PARTY A) PLUS (B) WITH RESPECT TO SALES OF GAS BY PARTY A TO PARTY B ONLY, THE
APPLICABLE GAS ADDER; PROVIDED, THAT, NOTWITHSTANDING THE FOREGOING, WHERE THE
DELIVERY POINT FOR ANY SUCH TRANSACTION IS TRANSCO ZONE 6 IN NEW YORK, THIS
PART 7(B)(III) SHALL NOT APPLY AND THE CONTRACT PRICE FOR SUCH TRANSACTION SHALL
BE THE CONTRACT PRICE SPECIFIED IN PART 7(B)(I), ABOVE.
(IV)
FOR THE