Centerpoint Energy Gas Transmission Company

Sixth Revised Volume No. 1

Effective Date: 02/28/2003, Docket: RP03-239-000, Status: Effective

Original Sheet No. 499 Original Sheet No. 499 : Effective

GENERAL TERMS AND CONDITIONS

(continued)

Recovery Portion attributable to interest shall be

recalculated as appropriate to reflect the change in the

applicable amount of actual interest due on the

unamortized balance of such costs; and provided, further,

that the amount to be included for Eligible CSC arising

out of an agreement covered by Section 18.8(c)(3) shall

be governed by that section.

18.6.3 The total Annualized Recovery Portion which is to be

recovered during any given Recovery Year shall be equal

to the sum of all of the individual Annualized Recovery

Portions.

18.7 Determination of Annual Reconciliation Amounts.

18.7.1 Annual Recovery Reconciliation: By March 1 of each

Recovery Year Transporter shall calculate the difference

for the previous calendar year between the Anticipated

Recovery Amount, and the Imputed Recovery Amount.

Thereafter, in the determination of the relevant Annual

Recovery Amount, either (i) Transporter shall include a

credit for the amount, if any, by which the Imputed

Recovery Amount exceeded the Anticipated Recovery Amount

up to a point that the credit would reduce the CSC Charge

below 0¢ per Dth; or (ii) if the Imputed Recovery Amount

is less than the Anticipated Recovery Amount, Transporter

shall be permitted, at its option, to include all or any

part of the unrecovered difference in the calculation of

the Annual Recovery Amount for the relevant or any

subsequent Recovery Year until all such amounts have been

recovered up to a point that the inclusion would cause

the CSC Charge to exceed three cents (3¢) per Dth. Any

credit unable to be used with respect to any given

Recovery Year shall be carried to the next and included

(together with interest calculated in accordance with

Section 18.10) in like manner in the calculation of the

Annual Recovery Amount for the following Recovery Year.

Any unrecovered differences carried from one Recovery

Year to the next shall not be permitted to earn interest.

On or before June 1, 2002,