System Management Service Daily Delivery Variance Charges (DDVC)* Examples of Critical Day Impact Small Customers SMS Partially Within Firm Entitlement SMS Within Firm Entitlement SOL in Effect Critical Day in Effect SOL in Effect Punitive Daily Delivery Variance Charge Punitive/Critical Daily Delivery Variance Charge Level II Punitive Daily Delivery Variance Charge $113.00 SOL in Effect $113.00 Critical Day in Effect SOL in Effect Critical Day in Effect $113.00 Punitive/Critical DDVC Level I $113.00 $10.90 $56.50 Positive DDVC FE Positive DDVC FE Positive/Critical DDVC - $15.00 $1.00 SMS $0.0208 SMS $0.0208 5% Tolerance Sch $56.50 Positive/Critical DDVC 2% $15.00 $1.00 $1.00 SMS $0.0208 5% Tolerance 5% Tolerance SMS $0.0208 Negative DDVC Negative DDVC $0.00 $0.00 Notes: *EFFECTIVE 11-01-06 SMS $0.0208 Sch 5% Tolerance SMS $0.0208 FE 5% Tolerance 5% Tolerance SMS $0.0208 Positive/Critical DDVC 2% $15.00 FE Negative DDVC $0.00 Sch 5% Tolerance SMS $0.0208 $1.00 Sch SMS $0.0208 FE SMS $0.0208 Positive DDVC 5% Tolerance 5% Tolerance Sch Sch 5% Tolerance FE Positive/Critical DDVC 2% $15.00 $1.00 5% Tolerance Sch 5% Tolerance 5% Tolerance $56.50 Positive/Critical DDVC 3% $22.00 SMS $0.0208 5% Tolerance 5% Tolerance Sch = FE Punitive/Critical DDVC Level I Positive/Critical DDVC 2% $15.00 SMS $0.0208 SMS $0.0208 5% Tolerance Sch = FE $113.00 $10.90 Positive/Critical DDVC 3% $22.00 Positive DDVC Positive/Critical DDVC 2% $15.00 SMS $0.0208 Positive/Critical DDVC 3% $22.00 Positive DDVC Sch 5% Tolerance $1.00 Punitive/Critical DDVC Level I Positive/Critical DDVC 3% $22.00 Punitive/Critical Daily Delivery Variance Charge Level II $56.50 Positive/Critical DDVC 3% $22.00 Positive DDVC Punitive Daily Delivery Variance Charge Punitive/Critical DDVC Level I $56.50 Critical Day in Effect SOL in Effect Punitive/Critical Daily Delivery Variance Charge Level II Punitive Daily Delivery Variance Charge Punitive/Critical DDVC Level I $10.90 TI Scheduled or TF Overrun Scheduled W/O SMS Service Primary Scheduled less than MDQ with TF Overrun Scheduled Punitive/Critical Daily Delivery Variance Charge Level II Punitive Daily Delivery Variance Charge Punitive/Critical Daily Delivery Variance Charge Level II $10.90 $10.90 Critical Day in Effect Firm Entitlement Scheduled 5% Tolerance 5% Tolerance SMS $0.0208 5% Tolerance SMS $0.0208 Negative DDVC Negative DDVC $0.00 $0.00 Negative DDVC Negative DDVC Negative DDVC Negative DDVC Negative DDVC $0.00 $0.00 $0.00 $0.00 $0.00 1) Small Customers are explicitly defined in Northern’s tariff. 2) Scheduled volume in each example is represented by the bold horizontal line. 3) The 5% tolerance is equal to the greater of 5% of total volume scheduled at the delivery point or 650 MMBtu for Small Customers. Exception: Bypassing Small Customer’s tolerance is equal to the Small Customer’s MDQ. 4) The volume to which Punitive/Critical DDVC Level 1 applies is equal to the first 5% of all delivered volumes in excess of the Positive/Critical DDVC component (or 650 MMBtu for Small Customers, whichever is greater). 5) Small Customers’ Positive/Critical DDVC levels are the greater of the first 2% or 260 MMBtu and the greater of the next 3% or 390 MMBtu. 6) Small Customers and Bypassing Small Customers retain their use of tolerance and SMS regardless of what percentage of SMS Northern has posted on it’s website as available for use on an SOL or Critical day. 7) Firm Entitlement (FE) line is the sum of the legal entity’s MDQ, alternate firm scheduled, overrun scheduled, and interruptible scheduled. Revised 08-26-2011