This regulation addresses unaccounted for gas from the distribution pipeline system. It states that all lost and unaccounted for gas shall be presumed to be lost gas. Furthermore, it establishes that all expenses for lost gas in excess of the maximum allowable shall be disallowed for ratemaking purposes. The maximum allowable for a distribution system is 5.0% of the amount metered in, and the maximum allowable for a transmission system is 3.0% of the amount metered in. The competent body may approve exceptions if special facts and circumstances are presented.