El Paso Natural Gas Company

First Revised Volume No. 1-A

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

1st Rev Sub First Revised Sheet No. 240B 1st Rev Sub First Revised Sheet No. 240B : Superseded

Superseding: Original Sheet No. 240B

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)

20.11 Resolution of Imbalances (Continued)

forwarded to the next month's imbalance calculation. If

the cumulative imbalance for any month is equal to or

greater than +/-5%, El Paso shall notify Shipper, as

indicated in Section 20.11(b), that it is approaching a

cash-out situation for an imbalance equal to or in excess

of +/-10%. For any month that a cumulative imbalance is

equal to or in excess of +/-10%, cash-out of the

imbalance will take place provided Shipper has received a

minimum of two (2) consecutive monthly notices (minimum

of 45 days from date of first notice) alerting Shipper to

an imbalance equal to or in excess of +/-5%. El Paso

shall extend the 45-day grace period by one (1) day for

each day that El Paso is unable to receive or deliver

scheduled imbalance gas for a given contract due to

operational constraints on El Paso's system. If the

parties have not reached written agreement otherwise, the

imbalance will be reduced to +/-5% by "cash-out" the

month following the last notice, at the dollar value

calculated with the cumulative imbalance and an

established monthly price, referred to herein as the

Index Price, as determined in Section 20.11(e) below.

The Index Price shall be calculated as of the month the

imbalance first equals or exceeds the +/-10% level.

(d) Six-Month Resolution of Inactive Contracts - El Paso will

notify Shipper after three (3) consecutive months of

inactivity that at the end of any six (6) month period

that a contract between Shipper and El Paso has been

inactive and has maintained an imbalance of less than

+/-10%, for which no cash-out was applicable and before

the next invoice and balance statement date, such

imbalance shall be reduced to zero (0) by cash-out

utilizing the Index Price for the month after the end of

six (6) month period reflected in Section 20.11(e).

(e) Index Prices and Cash Out

(i) Cash-out shall be based on one of four calculated

price indices, depending on whether Shipper has one

or more of the three supply basins (i.e., San Juan,