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. 333 Original Sheet No. 333 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

24.3 Computation of Current Fuel Reimbursement Percentage

The current Fuel Reimbursement Percentage shall be

determined on the basis of (1) the estimated Quantities of

Gas delivered to Panhandle for the account of Shippers

under Rate Schedules FT, EFT, SCT, IT, EIT, IOS, WS, PS,

FS, IIOS, IWS, LFT and HFT and (2) the projected

Quantities of Gas that shall be required for fuel usage and

the lost and unaccounted for Gas.

24.4 Computation of the Annual Fuel Reimbursement Surcharge

(a) The Annual Fuel Reimbursement Surcharge shall be

computed by dividing the balance four (4) Months prior

to November 1 of the Deferred Fuel Reimbursement

Account by Panhandle's estimated Quantities of Gas for

Transportation and Storage under Rate Schedules FT,

EFT, SCT, IT, EIT, IOS, WS, PS, FS, IIOS, IWS, LFT and HFT

for the Recovery Period.

(b) The Recovery Period for the Annual Fuel Reimbursement

Surcharge shall be the 12 billing Months beginning

November 1.

(c) Panhandle shall maintain a Deferred Fuel Reimbursement

Account with appropriate subaccounts, beginning with

the effective date of this Section 24. For each

billing Month, the applicable subaccounts shall be

increased or decreased for a positive or negative

change in Fuel Reimbursement for the billing Month.

(d) A change in Fuel Reimbursement for each billing Month

shall be the difference between (1) the applicable

currently effective Fuel Reimbursement percentage for

the billing Month multiplied by Panhandle's

Transportation Quantity received and Storage Quantities

injected and withdrawn during the billing Month and

(2) the actual Quantities of Gas expended for fuel

usage and lost and unaccounted for Gas during the

billing Month.