Panhandle Eastern Pipe Line Company, LP

THIRD REVISED VOLUME NO. 1

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

Original Sheet No. 124 Original Sheet No. 124 : Effective

RATE SCHEDULE DVS

DELIVERY VARIANCE SERVICE

1. AVAILABILITY

This Rate Schedule is available for Delivery Variance service

performed by Panhandle Eastern Pipe Line Company, LP (hereinafter

called Panhandle) for any party (hereinafter called DVS Party) which

has executed a Delivery Variance Service Agreement in the form

prescribed under Panhandle's FERC Gas Tariff for service under this

Rate Schedule and

(a) which has executed a Transportation Agreement; or

(b) which operates a Point of Delivery.

2. APPLICABILITY AND CHARACTER OF SERVICE

This Rate Schedule shall apply to the firm Delivery Variance

Service provided by Panhandle subject to the General Terms and

Conditions herein and the further provisions of the Service

Agreement. The service provided hereunder is available only to the

DVS Party at a single Point of Delivery as designated in the Service

Agreement.

Under this Rate Schedule, Panhandle shall manage delivery point

daily scheduling variances up to the Maximum Daily Variance Quantity

(MDVQ) as set forth in the Service Agreement; provided, however, the

MDVQ shall not entitle the Shipper to take Quantities of Gas in

excess of the MDCQ of the underlying Transportation Agreement(s).

The maximum MDVQ under a DVS Service Agreement shall be determined on

a case-by-case basis after evaluating Panhandle's existing firm

obligations and system requirements.

If the DVS Party is a Shipper and the daily scheduling variance

at the Point of Delivery exceeds the tolerance level, the MDVQ shall

be added to the absolute value of the Shipper's calculated tolerance

Quantity for the underlying Transportation Agreement as provided

under Section 12.11(h) of the General Terms and Conditions. Any

variance then remaining shall be subject to the daily scheduling

charge.