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. 262 Original Sheet No. 262 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

(1) Excess Receipts

When actual receipts, adjusted for Fuel

Reimbursement exceed actual deliveries, an

imbalance due Shipper shall be carried without

charge up to the MMIQ. Any imbalance in excess

of the MMIQ shall be sold by Shipper to Panhandle

according to the following schedule:

Percentage

Imbalance Level

in Excess of MMIQ 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

MMIQ by the actual quantity of gas received

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. Any IT or EIT excess receipts up

to the MMIQ must be nominated and scheduled to be

transported during the next Month. Any portion

of the MMIQ existing at the end of a Month which

has not been nominated and scheduled to be made

up during the next Month shall be sold by Shipper

to Panhandle at the 0-5% Percentage Imbalance

Level in Excess of MMIQ.