Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 04/01/2009, Docket: RP00-426-042, Status: Effective

Original Sheet No. 85B Original Sheet No. 85B

 

Overrun Rate to Eligible Secondary Delivery Points:

$0.0803 per MMBtu, plus applicable ACA surcharge

 

The Negotiated Overrun Rates are limited to total gas quantities up to 15% of the Firm Transportation Contract

Demand.

 

Fuel Use, Loss and Unaccounted for:

0.10% per MMBtu (Beginning on the Effective Date through the date when the Texas Gas/Southwestern FT Agreement No.

27434 becomes effective)

 

Beginning the later of April 1, 2009, or the date when the Texas Gas/Southwestern FT Agreement No. 27434 becomes

effective, Southwestern shall pay Texas Gas' effective maximum fuel use, loss and unaccounted for percentage, not to

exceed 0.25% per MMBtu.

 

Beginning the later of April 1, 2010, or the date when the contract demand under the Texas Gas/Southwestern FT

Agreement No. 27434 is increased to 300,000 MMBtu/d, Southwestern shall pay Texas Gas' effective maximum fuel use,

loss and unaccounted for percentage, not to exceed 0.30% per MMBtu.

 

Facilities Surcharge: To the extent that (i) the Expansion Project is completed using an 18 inch pipeline to cross the Little Red River in

White County, Arkansas, (the "18 Inch Crossing") and (ii) Texas Gas receives authority from the Federal Energy

Regulatory Commission to install, and is using its Commercially Reasonable Efforts (as defined in the MFN Contract)

to install a 36 inch pipeline in addition to the 18 Inch Crossing under or across the Little Red River in White

County, Arkansas, (the "36 Inch Crossing Facilities", jointly with the 18 Inch Crossing, the "Crossing Facilities"),

Southwestern will pay a daily demand rate surcharge of $0.05 per MMBtu (the "Facilities Surcharge") in order for

Texas Gas to recover commercially reasonable actual cost for pipe materials necessary for the 18" pipeline

installation and all labor, equipment, and materials necessary for new 36" horizontal directional drill,

installation (except for cost to purchase and pull the pipe), associated gas loss resulting from the decommissioning

of the 18" pipeline facilities (collectively, the "Construction Costs"); provided, however, that (a) the Facilities

Surcharge shall cease to apply once the aggregate Facilities Surcharges paid by Southwestern equal the Final

Construction costs and (b) in no event shall the aggregate Facilities Surcharges paid by Southwestern equal the Final

Construction Costs and (b) in no event shall the aggregate Facilities Surcharges paid by Southwestern exceed $9.3

million (the "Facilities Surcharge Cap"). Construction Costs shall not include internal administrative costs of

Texas gas or its parent or affiliates, such as any labor, administrative, support or other services provided directly

by Texas Gas or any parent or affiliate thereof or interest or a return on any amounts paid or borrowed by Texas Gas

or any parent or affiliate thereof or ad valorem, property, income or other taxes or costs that have been or are

subject to reimbursement from other shippers ("Recovered Costs"). Recovered Costs shall include revenues received

from third parties for transportation or other services provided by Texas Gas if (a) such revenues are based upon the

payment of third parties of the Construction Costs of Texas Gas, whether derived from Facility Surcharges or other

charges that are similar in nature and intent of the Facility Surcharges or (b) such revenues are the result of any

increase in the rate level reflected in any agreements between such third parties and Texas Gas as of December 7,

2008. The Facilities Surcharge shall not be subject to adjustment under the most Favored Nations Provision of this

Agreement.

Continued On Sheet No. 85C