Venice Gathering System, L. L. C.

Original Volume No. 1

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Effective Date: 01/01/1998, Docket: CP97-533-002, Status: Effective

Original Sheet No. 11 Original Sheet No. 11 : Effective

RATE SCHEDULE FTS-1

FIRM TRANSPORTATION SERVICE

(Continued)

3.5 Discounted Rates

VGS may from time to time and at any time charge any

Shipper for service under this Rate Schedule a Reservation

Charge predicated upon a Reservation Rate that is less than

the Maximum Reservation Rate set forth from time to time on

the currently effective Sheet No. 4 of this FERC Gas Tariff.

VGS shall file with the FERC any and all reports as required

by the FERC's regulations setting forth the applicable

discounted Reservation Rates and Shippers affected along

with any other information that may be required.

3.6 Negotiated Rates

Shipper and VGS may agree to a Negotiated Rate with

respect to the charges identified in Subsections 3.1 and 3.2

herein that may be less than, equal to or greater than the

Maximum Rate; shall not be less than the Minimum Rate; may

be based on rate design other than straight fixed variable;

and may include a minimum quantity, production dedication or

other form of consideration. Such Negotiated Rate shall be

set forth on Exhibit C of the executed Service Agreement and

shall be filed with the FERC. The Maximum Rate shall be

available to any Shipper that does not choose a Negotiated

Rate.

Shippers paying a Negotiated Rate that exceeds the

Maximum Rate will be considered to be paying the Maximum

Rate for purposes of scheduling, curtailment and

interruption, and calculating the economic value of a

request for unsubscribed firm capacity. Replacement

Shippers may not bid or pay a rate greater than the Maximum

Rate and are not eligible for Negotiated Rates for the Firm

Service Agreement.