Tennessee Gas Pipeline Company

FIFTH REVISED VOLUME NO. 1

Effective Date: 07/01/2005, Docket: RP05-525-000, Status: Effective

Second Revised Sheet No. 410 Second Revised Sheet No. 410 : Effective

Superseding: First Revised Sheet No. 410

GENERAL TERMS AND CONDITIONS (continued)

Ci = Costs that occur in the year i

I1992 = Index Value for 1992

Ii = Index Value for year i

For purposes of the foregoing equation, the Index Value for 1992 shall

equal the GNP Implicit Price Deflator for 1992. The Index value for the

year i is the GNP Implicit Price Deflator for the year in which the

expenditure occurs.

5.3 Transporter shall credit to the Recoverable Cost/Revenue Account the full

amount of revenues attributable to the PCB Adjustment applicable to

services where Transporter collects a non-discounted rate. Revenues

collected by Transporter under a discounted firm service rate shall apply

to a combination of Transporter's base tariff rate and the PCB Adjustment.

For purposes of determining the amount deemed collected by the PCB

Adjustment applicable to discounted firm service, the PCB Adjustment shall

be treated as a pro rata portion of the base tariff rate such that the

portion of the PCB Adjustment collected shall be calculated by multiplying

the PCB Adjustment by the ratio of (a) the applicable base tariff rate

plus the PCB Adjustment minus the discount amount to (b) the base tariff

rate plus the PCB Adjustment. For purposes of these calculations, the

base tariff rate shall equal Transporter's applicable, finally approved

base tariff rate and the discount amount shall equal the difference

between the final maximum reservation rate, or volumetric rate in the case

of firm services subject to a one-part rate, (including all adjustments)

and the rate collected. Prior to the time Transporter's rates become

final, Transporter shall make preliminary calculations of the amount

deemed collected by the PCB Adjustment applicable to discounted firm

service by utilizing Transporter's filed rates for all applicable rate

components. Such preliminary amounts shall be included in the Recoverable

Cost/Revenue Account. After all rate components necessary to perform the

calculation become final, Transporter shall adjust the amounts recorded in

the Recoverable Cost/Revenue Account for the applicable period, including

carrying charges, to reflect the final rates not subject to refund.