El Paso Natural Gas Company

Second Revised Volume No. 1A

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

Fifth Revised Sheet No. 341 Fifth Revised Sheet No. 341

Superseding: Fourth Revised Sheet No. 341

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

37. ARTICLE 11.2 PROVISIONS (Continued)

37.3 The applicable Article 11.2(a) rates shall be subject to inflation

escalation and will be adjusted according to the following

provisions.

(a) Annual Inflation Adjustment - Effective January 1, 1998, and

on each anniversary date thereafter, Transporter shall

increase the Operations and Maintenance (O&M) and Other Taxes

portion of the reservation and usage charges for Rate Schedule

FT-1 and the rates for Rate Schedule FT-2 in effect for the

preceding Year by 93% of the increase in the Implicit Price

Deflator ("IPD") to the Gross Domestic Product ("GDP") as

published by the Department of Commerce's Bureau of Economic

Analysis ("BEA"), or a mutually agreed similar indicator

should the GDP no longer be available on a continuing basis,

or, failing such agreement, a similar indicator as approved by

the Commission. Notwithstanding the above calculation, the

annual increase in total rates will not be less than 1% or

more than 4-1/2% of the prior Year's total rates. The

resulting rates shall become the rates for purposes of

applying the annual inflation adjustment for the succeeding

Year.

(b) For the annual inflation adjustment to be effective January 1,

1998, the most recently published final IPD prior to the

inflation adjustment filing will be compared to the IPD

reported by the BEA for the same period of the prior Year to

determine the annual change. For each rate change subject to

this provision, the most recently published final IPD prior to

the inflation adjustment filing will be compared to the prior

Year's IPD to determine the annual change. If the BEA

modifies the benchmark index for the IPD, then Transporter

will use the restated IPD reported by the BEA instead of the

IPD used by Transporter in its last inflation adjustment

filing.