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

Original Sheet No. 299E Original Sheet No. 299E : Superseded

GENERAL TERMS AND CONDITIONS

(Continued)

31. WASHINGTON RANCH FACILITY STRANDED INVESTMENT COST RECOVERY

(Continued)

31.4 Determination of the Reservation Surcharge and Monthly

Amortized Amount (Continued)

(b) El Paso shall adjust the Monthly Amortized Amount for

interest calculated on the unrecovered balance of

El Paso's stranded investment costs as set forth below.

Interest shall commence to accrue with respect to

El Paso's stranded investment costs effective February 1,

1993.

(i) Effective with the Settlement at Docket

No. RP92-214-000, et al., El Paso shall include the

actual accrued interest from February 1, 1993

through the effective date and estimated interest

through December 31, 1993 utilizing the actual

Interest Rate (if the actual Interest Rate is

unknown the interest rate shall be estimated),

divided by the number of months remaining in 1993 to

derive the interest adjustment to the Monthly

Amortized Amount.

(ii) Effective for the six (6) months commencing

January 1, 1994, El Paso shall reflect any

differences resulting from the use of estimated

versus actual accrued interest for the period

February 1, 1993 through December 31, 1993. Any

resulting difference shall be added to or deducted

from the estimated interest for the six (6) month

period commencing January 1, 1994. The total

interest shall be divided by six (6) to determine

the monthly interest for such Recovery Period.

(iii) At the end of each six (6) month period following

June 30, 1994 through the termination of the

Amortization Period, El Paso shall calculate an

estimate for the projected interest expense for the

next six (6) month Recovery Period. At the same

time, El Paso shall calculate the actual interest

expense that would have accrued during the previous

Recovery Period. This actual interest amount will

be compared to the previously estimated interest

amount for such period and any resulting difference

shall be added to or deducted from the next six (6)