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

Sixth Revised Sheet No. 322 Sixth Revised Sheet No. 322

Superseding: Fourth Revised Sheet No. 322

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

14. PENALTIES

14.2 Crediting of Penalties

(a) SOC and COC Daily Imbalance Charges. Should Transporter

collect SOC or COC Daily Imbalance Charges pursuant to

Section 11.1 of the GT&C, Transporter shall credit the

collected charges to all non-offending transportation

Shippers by invoice credit, if available, if not, then by

check. However, Transporter will first retain certain

amounts for service if a Shipper would have incurred a daily

unauthorized overrun penalty if not for being billed an SOC

or COC Daily Imbalance Charge pursuant to the computations

supporting the higher-of-test of footnote 7 contained on the

Statement of Rates. The amount to be retained shall be equal

to the applicable 100% load factor rate for the applicable

rate schedule multiplied by the daily unauthorized overrun

penalty quantities that were compared under the higher-of-

test. Credits to Shippers shall be made on a pro rata basis,

based on an eligible Shipper's transportation service

revenues paid each Month. A monthly credit will not be

provided to a Shipper that incurred a SOC and/or COC penalty

during a Critical Condition in that Month. The sum of the

monthly credits for a calendar year shall be made annually no

later than the March statement subsequent to the end of the

annual period.

(b) Retained Gas Crediting. In the event gas is retained

pursuant to Rate Schedule PAL, Rate Schedule ISS, or Rate

Schedule FDBS, the value of such gas, less Transporter's

costs, shall be credited annually to all firm and

interruptible Shippers by invoice credit, if available, if

not, then by check. The retained gas value will be determined

by multiplying the quantity (dth) of the gas retained by the

Monthly System Cash Out Index Price posted monthly on

Transporter's EBB for the Month in which gas was retained.

(c) Acquired Gas Crediting. In the event Shipper is required to

pay for gas that Shipper fails to redeliver to Transporter

pursuant to Rate Schedule PAL, the value of such gas, net of

Transporter's replacement gas costs, shall be credited

annually to all firm and interruptible Shippers by invoice

credit, if available, if not, then by check.