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. 324 Original Sheet No. 324 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

Ten percent (10%) of Panhandle's Miscellaneous

Stranded Costs, including Levelized Interest, shall

be recovered by means of the Miscellaneous Stranded

Cost Volumetric Surcharge applicable to service

under Rate Schedules IT and EIT. The Miscellaneous

Stranded Cost Volumetric Surcharge shall be stated

on effective Tariff Sheet Nos. 7 and 8 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.

On or before September 1 of each year during the

Section 18.7 Recovery Period, Panhandle will file

with the Commission such updates as otherwise are

required by this Section 18.7 to the Miscellaneous

Stranded Cost Reservation Surcharge applicable to

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

HFT and the Miscellaneous Stranded Cost Volumetric

Surcharge applicable to service under Rate Schedules

IT and EIT with such updated Surcharges to be

effective on the immediately following October 1.

Panhandle will provide 30 days notice of such

changes to the Miscellaneous Stranded Cost

Reservation and Miscellaneous Stranded Cost

Volumetric Surcharge.

The provisions of this Section 18.7 shall be fully

applicable to successor, replacement and new rate

schedules.

(e) Filing Procedures for Miscellaneous Stranded Costs

The Miscellaneous Stranded Cost Reservation

Surcharge during the Section 18.7 Recovery Period

shall be designed to recover ninety percent (90%) of

the Miscellaneous Stranded Costs over three (3)

years using the applicable firm service design

determinants underlying Panhandle's then effective

rates for service under Rate Schedules FT, EFT, SCT,

LFT and HFT.

The Miscellaneous Stranded Cost Volumetric Surcharge

during the Section 18.7 Recovery Period shall be

designed to recover ten percent (10%) of the

Miscellaneous Stranded Costs over three (3) years

using the applicable interruptible service design

determinants underlying Panhandle's then effective

rates for service under Rate Schedules IT and EIT.