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. 260 Original Sheet No. 260 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

(1) Excess Receipts

When actual receipts, adjusted for Fuel

Reimbursement, exceed actual deliveries, the

excess shall be applied to any prior

accumulated imbalance due Panhandle first. If

receipts still exceed deliveries, then an

imbalance due Shipper shall be carried without

charge up to the MAIQ. Any imbalance in excess

of the MAIQ shall be sold by Shipper to

Panhandle according to the following schedule:

Percentage

Imbalance Level

in Excess of MAIQ Sales Price

0% - 5% .9 x Mid-Continent Spot Price

> 5% - 10% .8 x Mid-Continent Spot Price

>10% - 15% .7 x Mid-Continent Spot Price

>15% - 20% .6 x Mid-Continent Spot Price

>20% .5 x Mid-Continent Spot Price

The percentage imbalance level shall be

calculated by dividing the imbalance in excess

of MAIQ by the actual Quantity of Gas received

during the Month unless the percentage imbalance

level would be lower if calculated using

operating data provided pursuant to Section 12.9

of these General Terms and Conditions, in which

case the percentage imbalance level shall be

calculated using such operating data.

(2) Excess Deliveries

When actual deliveries exceed actual receipts,

adjusted for Fuel Reimbursement, the excess

shall be applied to any prior accumulated

imbalance due Shipper first. If deliveries

still exceed receipts, then an imbalance due

Panhandle shall be carried without charge up to

the MAIQ. Any imbalance in excess of the MAIQ

shall be purchased by Shipper from Panhandle

according to the following schedule: