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. 19 Original Sheet No. 19 : Effective

RATE SCHEDULE FTS-2

FIRM TRANSPORTATION SERVICE

(Continued)

3.4 Discounted Rates

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

Shipper for service under this Rate Schedule a Usage Rate

predicated upon a Usage Rate that is less than the Maximum

Usage 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

Usage Rates and Shippers affected along with any other

information that may be required.

3.5 Negotiated Rates

Shipper and VGS may agree to a Negotiated Rate with

respect to the charges identified in Subsection 3.1 herein

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

Rate; shall not be less than the Minimum Rate; 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.