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. 317 Original Sheet No. 317 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

The following defines certain terms as they are used in

this Section 18.5:

(1) The "Trunkline/TLC Settlement Amount" shall mean that

portion of the refund received by Panhandle to be

credited to customers subject to the reservation and

volumetric surcharges.

(2) "Trunkline/TLC Settlement Reservation Surcharge

Credit", shall mean the currently effective surcharge

applicable to service under Rate Schedules FT, EFT,

SCT, LFT and HFT, as shown on Tariff Sheet Nos. 4, 5,

6, 15 and 17 of Third Revised Volume No. 1.

(3) "Trunkline/TLC Settlement Volumetric Surcharge Credit"

shall mean the currently effective surcharge applicable

to service under Rate Schedules FT, EFT, SCT, IT, EIT,

LFT and HFT, as shown on each of the Tariff Sheet Nos.

4, 5, 6, 7, 8, 15 and 17 of Third Revised Volume No. 1.

(4) "Levelized Interest" shall mean the interest amount

resulting from the projected amortization of the

Trunkline/TLC Settlement Amount over the Section 18.5

Recovery Period in accordance with Section 154.501(d)

of the Commission Regulations.

(d) Trunkline/TLC Settlement Reservation Surcharge Credit

Twenty percent (20%) of the total Trunkline/TLC Settlement

Amount, including Levelized Interest, shall be returned by

means of a Trunkline/TLC Settlement Reservation Surcharge

Credit. The Trunkline/TLC Settlement Reservation Surcharge

Credit applicable to service under Rate Schedule SCT shall

be converted to a Volumetric Surcharge at a 52.5% load

factor. The Trunkline/TLC Settlement Reservation Surcharge

Credit shall be stated on Tariff Sheet No. 19 of

Panhandle's FERC Gas Tariff, Third Revised Volume No. 1

and shall become a part of the stated maximum rates for

service provided under Rate Schedules FT, EFT, SCT and LFT.