Horizon Pipeline Company, L.L.C.

Original Volume No. 1

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Effective Date: 04/18/2002, Docket: CP00-129-001, Status: Effective

Original Sheet No. 225 Original Sheet No. 225 : Effective

GENERAL TERMS AND CONDITIONS

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33. NEGOTIATED RATES

33.1 PRECONDITIONS TO NEGOTIATED RATES

Rates to be charged by Horizon for service to any

Shipper under Rate Schedule FTS or ITS may deviate in either form

or level or both from the applicable maximum rate level in this

Tariff, subject to the following provisions:

(a) Horizon and Shipper have executed a valid

Agreement containing therein or in a related agreement a specific

mutual understanding that Negotiated Rate(s) or a Negotiated Rate

Formula will apply to service for that Shipper;

(b) At the time of execution of the Agreement (or the

amendment to an Agreement), which first provides for the

applicability to Shipper of the Negotiated Rate(s) or Negotiated

Rate Formula, service was available pursuant to the terms and

conditions (not modified by this Section 33) of Rate Schedule FTS

or ITS of this Tariff, as applicable; and

(c) No later than the Business Day on which Horizon

commences service at such Negotiated Rate(s) or Negotiated Rate

Formula (or if the day on which Horizon commences service is not a

Business Day, then no later than the next Business Day after

Horizon commences service), Horizon will file a tariff sheet

advising the Commission of such Negotiated Rate or Negotiated Rate

Formula, stating the name of Shipper, the type of service, the

Receipt and Delivery Point(s) applicable to the service, the

volume of the gas to be transported, any other charges, and

specifying either: (i) the specific Negotiated Rate included in

such Agreement; or (ii) the Negotiated Rate Formula included in

such Agreement with sufficient specificity such that the rate in

effect from time to time can be readily calculated. The tariff

sheet must also incorporate a statement that the Agreement does

not deviate from the form of Service Agreement in any material

respect.

33.2 CAPACITY ALLOCATION

To the extent the revenue level pursuant to the

Negotiated Rate(s) or Negotiated Rate Formula provided for in

Section 33.1 above should exceed the revenue level at the Recourse

Rate, the Shipper paying such Negotiated Rate(s) or rate(s) under

a Negotiated Rate Formula shall be treated, for all capacity