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. 267 Original Sheet No. 267 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

(e) All sales and purchases of excess receipts and excess

deliveries pursuant to this Section 12 shall be

deemed to take place on the first Day of the Month

following the accumulation of the applicable

imbalance. Settlement of accounts for such sales and

purchases shall be made with the Monthly bill, for

the Month in which the applicable imbalance

accumulated. Settlements of sales and purchases

shall be in the form of a credit to Shipper's bill in

the case of sales to Panhandle, and as an addition to

Shipper's bill, in the case of sales to Shipper.

(f) Prior Month Adjustments

In the event there are adjustments to Shipper's

receipts or deliveries or both applicable to a prior

Month ("Prior Month Adjustment" or "PMA") such

adjustments shall be used to mitigate any amount paid

by Shipper or amount credited by Panhandle pursuant

to Section 12.11(a) or Section 12.11(b), if

applicable to the prior Month. Otherwise, the PMA

will be accounted for as current Month volumes. The

Shipper will not be penalized in the current Month

for PMA volumes that worsen the Shipper's current

accumulated imbalance.