Venice Gathering System, L. L. C.

Original Volume No. 1

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Effective Date: 06/01/2002, Docket: RP00-536-001, Status: Effective

First Revised Sheet No. 214 First Revised Sheet No. 214 : Effective

Superseding: Original Sheet No. 214

GENERAL TERMS AND CONDITIONS

(Continued)

29. DESCRIPTIVE HEADINGS

29.1 Descriptive Headings

The descriptive headings of the provisions used in this FERC

Gas Tariff, these General Terms and Conditions, or in any Service

Agreement executed for service under a Rate Schedule contained in

this FERC Gas Tariff are formulated and used for convenience only

and shall not be deemed to affect the meaning or construction of

any such provision.

30. CREDITING OF PENALTY AND CASH-OUT REVENUES

The purpose of this provision is to provide the method by which

VGS will return penalty revenues and/or cash-out revenues, as

defined herein, to Shippers beginning with calendar year 2001.

30.1 Definitions: the following terms shall have the designated

meaning:

"Penalty Revenues" shall mean the total revenues collected

VGS during a calendar year pursuant to the provisions of

VGS' FERC Gas Tariff where (1) a penalty is allowed under

VGS tariff, or (2) is imposed upon VGS by an upstream or

downstream pipeline, net of VGS' administrative costs.

"Cash-Out Differentials" shall mean the net revenues

collected by VGS, less administrative costs, during a

calendar year pursuant to the tiered cash-out schedule in

Section 11.4 when any Shipper's imbalance equals or exceeds

the five percent imbalance tolerance level.