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. 545 Original Sheet No. 545 : Effective

RATE SCHEDULE IT (Continued)

INTERRUPTIBLE TRANSPORTATION SERVICE

FORM OF TRANSPORTATION AGREEMENT

ARTICLE 3 - RATES AND CHARGES

For the services provided or contracted for hereunder, Shipper

agrees to pay Panhandle the then-effective, applicable rates and

charges under Panhandle's Rate Schedule IT filed with the Commission,

as such rates and charges and Rate Schedule IT may hereafter be

modified, supplemented, superseded, or replaced generally or as to

the service hereunder. Panhandle reserves the right from time to

time to unilaterally file and to make effective any such changes in

the terms or rate levels under Rate Schedule IT and the applicability

thereof, the General Terms and Conditions or any other provisions of

Panhandle's Tariff, subject to the applicable provisions of the

Natural Gas Act and the Commission's Regulations thereunder.

From time to time Panhandle and Shipper may agree in writing,

on a level of discount of the otherwise applicable rates and charges

hereunder, pursuant to the effective applicable provisions of Rate

Schedule IT and subject to the Regulations and Orders of the

Commission. For example, Panhandle and Shipper may agree that a

specified discounted rate shall apply: (a) only to certain

Quantities under this Agreement; (b) only if specified Quantity

levels are actually achieved or only with respect to Quantities below

a specified level; (c) only during specified time periods; (d) only

to specified Points of Receipt, Points of Delivery, mainline

segments, transportation paths or defined geographical areas; (e)

only to production reserves committed by the Shipper; (f) in a

specified relationship to the Quantities actually transported (i.e.,

that the rates shall be adjusted in a specified relationship to

Quantities actually transported); or (g) based on published index

prices for specific receipt or delivery points or other agreed upon

pricing reference points for price determination (Such discounted

rate may be based on the published index price point differential or

arrived at by formula. Any service agreement containing an index

based discount will identify what rate component is discounted.);

provided, however, that any such discounted rate set forth above

shall be between the Maximum Rate and Minimum Rate applicable to the

service provided under this Agreement. In addition, the discount

agreement may include a provision that if one rate component which

was at or below the applicable Maximum Rate at the time the discount

agreement was executed subsequently exceeds the applicable Maximum

Rate due to a change in Panhandle's Maximum Rates so that such rate

component must be adjusted downward to equal the new applicable

Maximum Rate, then other rate components may be adjusted upward to

achieve the agreed overall rate, so long as none of the resulting

rate components exceed the Maximum Rate applicable to that rate

component. Such changes to rate components shall be applied

prospectively, commencing with the date a Commission order accepts

revised tariff sheets. However, nothing contained herein shall be