Panhandle Eastern Pipe Line Company, LP

THIRD REVISED VOLUME NO. 1

Effective Date: 09/13/2004, Docket: RP04-454-000, Status: Effective

First Revised Sheet No. 230 First Revised Sheet No. 230 : Effective

Superseding: Original Sheet No. 230

GENERAL TERMS AND CONDITIONS

(Continued)

7.4 Once a Service Agreement for firm Transportation or

Storage is executed, the economic value of the Service

Agreement shall be determined in accordance with Section

7.1(b). During the term of the Service Agreement any

change Shipper may make in the terms of the Service

Agreement shall not reduce such economic value of the

Service Agreement to Panhandle without Panhandle's written

consent.

7.5 Elimination of Inactive Interruptible Service Agreements

Panhandle may terminate Shippers' Service Agreements under

Rate Schedules IT, EIT, IIOS, IWS and GPS, upon thirty

(30) days prior written notice to Shippers who have not

submitted nominations to either transport, store Gas, or

park Gas under such Service Agreements within the

immediately preceding twelve (12) Months.

7.6 Contract Reduction Rights

Shipper may elect one or more of the following options to

reduce its contract quantity (MDCQ, MSQ, MDIQ, MDWQ or

MDVQ, as applicable) during the term of its Service

Agreement. Shipper's eligibility for a contract quantity

reduction option and Shipper's ability to exercise such

option is subject to the terms, conditions and procedures

specified below including those in Section 7.6(e).

(a) Regulatory Unbundling

(1) Eligibility

Shipper is a local distribution company or its

agent under the direct regulation of a state

regulatory or legislative body and Shipper is

required by a final order of that state body to

unbundle its merchant and transportation

functions. Such state body does not approve a

mechanism to provide Shipper the opportunity to

recover costs incurred by Shipper under

Shipper's Service Agreement(s).

(2) Notice and Certification

Shipper shall give Panhandle sixty (60) days

prior written notice of the anticipated

effective date of the requested contract

quantity reduction. The notice shall state the