Panhandle Eastern Pipe Line Company, LP

THIRD REVISED VOLUME NO. 1

Effective Date: 03/07/2005, Docket: RP05-176-000, Status: Effective

First Revised Sheet No. 264 First Revised Sheet No. 264 : Effective

Superseding: Original Sheet No. 264

GENERAL TERMS AND CONDITIONS

(Continued)

For sales of excess receipts under Sections

12.11(a)(1) and 12.11(b)(1) herein and purchases of

excess deliveries under Sections 12.11(a)(2) and

12.11(b)(2), the Mid-Continent Spot Price shall be

the average of the Midcontinent, Panhandle Spot Price

for Gas delivered to Panhandle from the table "NGW's

Monthly Weighted Averages" for deliveries during the

applicable Month in which the imbalance occurred

contained in the first issue of NATURAL GAS WEEK

published the following month. If the reported price

referenced above is not published for the Month

required, Panhandle shall determine the Mid-Continent

Spot Price using another publication that publishes

the spot price for Gas.

(d) Minimization of Imbalances for Transportation

Agreements

(1) Contract Imbalance Netting

In order to minimize the quantity of excess

receipts pursuant to Sections 12.11(a)(1) and

12.11(b)(1), above and excess deliveries

pursuant to Sections 12.11(a)(2) and

12.11(b)(2), above, all of a Shipper's firm and

interruptible Transportation Agreements shall be

matched by Point(s) of Receipt and Point(s) of

Delivery. The total quantity of Gas received

and delivered under the Shipper's Transportation

Agreements within the same Operational Impact

Area, as defined in Section 12.11(d)(3) below,

shall be netted and excess receipts or excess

deliveries shall be determined only after such

netting. Such netting of contract imbalances

does not relieve the Shipper of the obligation

to pay all applicable transportation charges for

the Quantity of Gas actually delivered to

Shipper during the Month.