Panhandle Eastern Pipe Line Company, LP

THIRD REVISED VOLUME NO. 1

Effective Date: 05/16/2010, Docket: RP10-611-000, Status: Effective

Second Revised Sheet No. 122 Second Revised Sheet No. 122

Superseding: First Revised Sheet No. 122

RATE SCHEDULE HFT (Continued)

HOURLY FIRM TRANSPORTATION SERVICE

3.11 Negotiated Rates

Shipper and Panhandle may agree, on a prospective basis,

to a Negotiated Rate with respect to the charges

identified in Sections 3.1, 3.2 and 3.3 herein which may

be less than, equal to or greater than the Maximum Rate;

shall not be less than the Minimum Rate; may be based on a

rate design other than straight fixed variable; and may

include a minimum quantity. Such Negotiated Rate shall be

set forth on Exhibit B of the executed Service Agreement

and on the currently effective Tariff Sheet No. 21. The

Maximum Rate shall be available to any Shipper that does

not choose a Negotiated Rate.

Shippers paying a Negotiated Rate which exceeds the

Maximum Rate will be considered to be paying the Maximum

Rate for purposes of scheduling, curtailment and

interruption, and calculating the economic value of a

request for unsubscribed firm capacity. In addition, a

Shipper that does not agree to pay any surcharges will

not be granted a scheduling preference that deems such

surcharges have been paid. Replacement Shippers are not

eligible for Negotiated Rates. Replacement Shippers may

bid or pay a rate greater than Maximum Rate if the

release of capacity is for a period of one year or less

and the release is to take effect on or before one year

from the date on which Panhandle is notified of the

release.