El Paso Natural Gas Company

First Revised Volume No. 1-A

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Effective Date: 10/01/1993, Docket: RS92- 60-016, Status: Effective

1st Rev Sub First Revised Sheet No. 240A 1st Rev Sub First Revised Sheet No. 240A : Superseded

Superseding: Substitute Original Sheet No. 240A

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)

20.11 Resolution of Imbalances (Continued)

imbalance for each individual contract for each Shipper

by dividing the total cumulative imbalance quantities in

excess of 1,000 dth, attributable to the imbalance amount

for such contract (numerator) by Shipper's Transportation

Contract Demand multiplied by 30 days (denominator) or,

with respect to those Shippers with an executed

Transportation Service Agreement which requires the

delivery by El Paso of "Full Requirements," the average

non-coincidental three (3) day peak over the most recent

five (5) year period multiplied by 30 days

(denominator). The result of such calculation will be

included on El Paso's imbalance statement to Shipper, or

its designee, and shall serve as notification to the

Shipper of an imbalance. If an imbalance is equal to or

greater than +/-5%, the Shipper is provided additional

notice on said statement that if such imbalance continues

and becomes equal to or greater than +/-10%, the Shipper

is subject to cash-out of the imbalance pursuant to this

Section 20.11; provided, however, that in no event shall

cash-out be assessed when the amount of the imbalance

does not exceed 1,000 dth, unless the parties mutually

agree otherwise; provided, further, if it is determined

that El Paso has caused in any month an imbalance equal

to or greater than +/- 10% of the denominator determined

above, El Paso will cash-out that portion of the

imbalance at 100% of the Index Price. In addition,

cash-out of imbalances will not be mandatory if the

parties have reached written agreement on the resolution

of the imbalance provided such agreement is final prior

to the triggering of cash-out as specified in Section

20.11(c) below. Written agreements may consist of, but

are not limited to the following provisions

(i) offsetting of imbalances; (ii) extension of a payback

period within a set time period; and (iii) negotiated

price other than the cash-out prices reflected herein.

(c) Triggering of Cash-Out - Except for those contracts

without activity for a period of six (6) months, as

discussed in Section 20.11(d), any cumulative imbalance

at the end of any month that is within a tolerance level

less than +/-5% shall not be subject to this Section

20.11 during such month. Such imbalance shall be