Panhandle Eastern Pipe Line Company, LP

THIRD REVISED VOLUME NO. 1

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Effective Date: 06/30/2004, Docket: RP04-321-000, Status: Effective

Original Sheet No. 117 Original Sheet No. 117 : Effective

RATE SCHEDULE HFT (Continued)

HOURLY FIRM TRANSPORTATION SERVICE

(a) The reservation component of the Transmission Charge

shall be the product of the Billing MDCQ and the

applicable reservation rates per Dt. as set forth on

the effective Tariff Sheet No. 17. The Billing MDCQ

shall be determined by multiplying the MDCQ by 16

hours divided by the Hourly Delivery Period as set

forth in the Service Agreement.

The reservation component shall be pro-rated for the

first and last contract Months to adjust for the

number of Days during those Months service was

available. Shipper may elect to participate in the

Customized Reservation Pattern program pursuant to

Section 3.10 herein.

(b) The commodity component of the Transmission Charge

shall be the product of the actual Quantity of Gas

delivered during the Month and the applicable

Transmission commodity rates per Dt. as set forth on

the effective Tariff Sheet No. 17.

(c) If both the Point(s) of Receipt and the Point(s) of

Delivery are located within the Field Zone, the

applicable rates shall be as set forth on the

effective Tariff Sheet No. 17 for service within the

Field Zone only; if both the Point(s) of Receipt and

Point(s) of Delivery are located within the Market

Zone, the applicable rates shall be as set forth on

the effective Tariff Sheet No. 17 for service within

the Market Zone only; if the Point(s) of Receipt and

the Point(s) of Delivery are located in different

zones, the applicable rates shall be derived by

adding the effective rates for service in the Field

Zone and the Market Zone.

3.2 Gathering Charge

If Shipper designates primary Point(s) of Receipt or

Point(s) of Delivery on the Gathering portion of

Panhandle's system or utilizes the Gathering portion of

Panhandle's system for firm service hereunder, Shipper

shall pay a Monthly Gathering Charge which shall consist

of a reservation component and a commodity component.

(a) The reservation component of the Gathering Charge

shall be the product of the Billing MDCQ and the

applicable reservation rate per Dt. as set forth on

the effective Tariff Sheet No. 17. The Billing MDCQ

shall be determined by multiplying the MDCQ by 16

hours divided by the Hourly Delivery Period as set

forth in the Service Agreement. The reservation

component shall be pro-rated for the first and last

contract Months to adjust for the number of Days

during those Months service was available.