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. 638 Original Sheet No. 638 : Effective

RATE SCHEDULE FS (Continued)

FLEXIBLE STORAGE SERVICE

FORM OF STORAGE AGREEMENT

agreement between Panhandle and the owner or operator of the storage

facility, in addition to the restrictions and limitations of this

agreement and Rate Schedule FS.

ARTICLE 2

BILLING AND PAYMENT

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 FS filed with the Commission,

as such rates and charges and Rate Schedule FS 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modified, supplemented, superseded, or replaced generally or as to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 FS 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 FS 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) in a

specified relationship to the Quantities actually injected, withdrawn

or stored (i.e., that the rates shall be adjusted in a specified

relationship to Quantities actually injected, withdrawn or stored);

or (e) 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. To the extent the firm

capacity charge or deliverability charge is discounted, the index

price differential rate formula shall be calculated to state a rate

per unit of MSQ and/or MDWQ, as applicable.); 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