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. 323 Original Sheet No. 323 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

(2) "Miscellaneous Stranded Cost Volumetric

Surcharge" shall mean the currently effective

surcharge applicable to service under Rate

Schedules IT and EIT, as shown on Tariff

Sheet Nos. 7 and 8 of Third Revised Volume

No. 1.

(3) "Section 18.7 Recovery Period" shall mean the

three (3) year period which shall commence

upon the effective date of the filing to

recover the eligible Miscellaneous Stranded

Costs.

(4) "Section 18.7 Reconciliation Recovery Period"

shall mean the twelve (12) months commencing

on the first day of the month following

Commission approval of Panhandle's

Reconciliation filing as provided for in

Section 18.7(g).

(5) "Levelized Interest" shall mean the interest

amount resulting from the projected

amortization of the Miscellaneous Stranded

Costs over the Section 18.7 Recovery Period

in accordance with Section 154.501(d) of the

Commission's Regulations.

(d) Mechanism for Recovery of Miscellaneous Stranded

Costs

Ninety percent (90%) of Panhandle's Miscellaneous

Stranded Costs, including Levelized Interest,

shall be recovered by means of the Miscellaneous

Stranded Costs Reservation Surcharge. The

Miscellaneous Stranded Costs Reservation

Surcharge applicable to service under Rate

Schedule SCT shall be converted to a Volumetric

Surcharge at a 52.5% load factor. The

Miscellaneous Stranded Costs Reservation

Surcharge shall be stated on effective Tariff

Sheet Nos. 4, 5, 6, 15 and 17 of Panhandle's FERC

Gas Tariff, Third Revised Volume No. 1 and shall

become a part of the stated rates for service

provided under such Rate Schedules.