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Glossary of Terms

The following list provides only a brief definition of various terms. Please refer to the specific rate, Rider 6 and Terms and Conditions tariff sheets for in-depth descriptions.

Administrative Charge
A fixed charge covering Nicor Gas' administrative costs including billing, accounting and programming. This charge is applied to all Rider 25, Rate 74 and Rate 75 customers. The charge is $23 for a single account and $10 for each member of a group, with a minimum group charge of $33.

Company-Supplied Gas
Gas the customer purchases from Nicor Gas. This includes Requested Authorized Use, Authorized Use, and company-supplied gas under FBS.

Critical Day
Nicor Gas will declare a Critical Day when it is necessary to maintain the operational integrity of the company's system. A Critical Day can only occur between November 1 and April 30. On these days, your storage withdrawals will be limited (unless you have 100% backup service) and your use of company supplies will depend on your service selections.

Customer Select© Charge
The CSC recovers the costs from pipelines to assist in the daily balancing of gas supplies on Nicor Gas' system. The CSC is not an additional cost for Customer Select participants. Customers buying their gas from Nicor Gas pay this charge as part of their overall Gas Supply Cost (GSC). The CSC is billed to customers based on usage. The rate may change each month and it is filed with the Ilinois Commerce Comission.

Customer-Owned Gas
Any gas the customer purchases from a source other than Nicor Gas. Gas is transported through the Nicor Gas distribution system under transportation rates.

Distribution Charge
A charge covering our operating and financial costs, including payroll, taxes and other fixed costs not covered by the Monthly Customer Charge.

Efficiency Program Charge
A charge that pays for the costs related to energy efficiency programs.

Environment Cost Recovery
Recovery of the costs we incur for the environmental investigation and clean-up of former manufactured gas plant sites.

Firm Backup Service (FBS)
With this service, you can contract for an amount of company-supplied gas on a Critical Day in addition to 1.7 percent of your SBS capacity.

Franchise Cost
This charge covers our cost for municipal franchise agreements.

Governmental Agency Compensation Adjustment
This adjustment covers governmental fees and added costs, excluding franchise costs.

Maximum Daily Contract Quantity (MDCQ)
The MDCQ is the greater of the highest daily therm use from the previous year or the result of a regression analysis to a peak day on the previous year's winter use.

Monthly Customer Charge
A fixed charge covering a portion of our costs to provide gas service.

Operational Flow Order (OFO)
Nicor Gas may declare an Operational Flow Order (OFO) shortage or surplus day depending on the actions of transportation customers. Similar to a Critical Day, an OFO would be issued if a portion of the company's delivery system becomes inadequate to provide service due to an over delivery of gas supplies or an under delivery of gas supplies. In these instances, Nicor Gas will request that transporters assist in rectifying the situation by voluntarily increasing or decreasing their deliveries to the system. If voluntary action does not solve the problem, the company will impose additional restrictions on transporters.

Requested Authorized Use
Nicor Gas supplies may be requested and, if available, will be accounted for as the first gas through your meter.

Storage Banking Service (SBS)
Rate 74, 75, 76 and 77 customers can select their level of storage capacity. A selection of at least one MDCQ Day is required, and a bank of 28 MDCQ Days (31 MDCQ Days beginning June 1, 2009) is available to all customers. SBS customers will be allowed Critical Day withdrawal rights of 1.7 percent of their SBS capacity times any applicable Storage Withdrawal Factor (SWF).

Storage Withdrawals
Customer use exceeding Requested Authorized Use and customer-owned gas delivered. On a Critical Day, withdrawals will be limited to 1.7 percent of the customer's SBS capacity times any applicable Storage Withdrawal Factor (SWF).

Storage Withdrawal Factor
Cycling gas in and out of our storage fields insures the continual efficient operation of the Nicor Gas storage system. Therefore, unbundled rate transportation customers have an incentive to fill to at least 90 percent of their selected storage capacity by November 1 of each year. If a transporter does not reach this goal, Nicor Gas will proportionally reduce the transporter's storage withdrawal rights on a Critical Day or OFO Shortage Day. In other words, customers will have less than 1.7 percent of their storage capacity available on a Critical Day or OFO Shortage Day if they do not have 90 percent of their capacity filled by November 1.

Transportation Service Adjustment (TSA)
A variable per therm credit or charge to transportation customers and Customer Select customers for Hub revenues.

Transportation Service Credit (TSC)
A credit to Customer Select and Rider 25 customers based on applicable usage.