El Paso Natural Gas Company

Second Revised Volume No. 1A

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Effective Date: 04/01/2010, Docket: RP10-454-001, Status: Effective

Third Revised Sheet No. 287B.01 Third Revised Sheet No. 287B.01

Superseding: Second Revised Sheet No. 287B.01

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

10. IMBALANCE MANAGEMENT (continued)

10.3 Cash Out - All monthly imbalances shall be subject to the following

cash out provisions. Such cash out shall be accomplished using the

relevant Monthly Cash Out Index Price pursuant to Section 10.3(b),

provided, however, that for purposes of cash out, monthly imbalances

associated with PPMAs shall be deemed to have occurred consistent

with Section 10.2(h).

(a) Determination of Cash Out Quantities - The term "cash out"

shall refer to the valuation of an imbalance at a market-

related price pursuant to the requirements of this section.

Application of the cash out process will result in a monetary

value due to the Shipper or Transporter which will result in

reduction of the imbalance to the applicable threshold level.

(i) Transporter and Shipper shall cash out that portion of

an imbalance that exceeds the thresholds described in

Sections 10.3(a)(ii) and 10.3(a)(iii) by applying the

applicable Cash Out Index Price to the imbalance

quantity in excess of the threshold quantity. Any

remaining end-of-month imbalance will be carried forward

to be resolved in future Months as described in Sections

10.2 and 10.3.

(ii) The monthly threshold will be calculated by multiplying

the Shipper's aggregate scheduled quantity in the

applicable Month by the following percentages:

(1) The Month 1 threshold shall be 5%.

(2) The Month 2 threshold shall be 3%.

(2) The Month 3 threshold shall be 0%.

(iii) Small Quantity Monthly Imbalance: The cash out

thresholds described in Section 10.3(a)(ii) will not

apply to any TSA with an end-of-month imbalance less

than 2,000 dth, unless the Shipper specifies otherwise.

However, each January, Transporter will cash out any

monthly Small Quantity Imbalances accrued during the 12

Months ended the previous November that were not

resolved by the imbalance resolution methods described

in Section 10.2. The cash out will be priced at 100% of

the previous December System Cash Out Index price

described in Section 10.3(c)(iv).