Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 09/15/2008, Docket: RP08-392-000, Status: Effective

Original Sheet No. 3200 Original Sheet No. 3200 GENERAL TERMS AND CONDITIONS Section 2020. Construction of New Facilities Texas Gas shall not be required to construct facilities (except, and limited to, minor taps) to perform transportation service under any Rate Schedule in the event capacity necessary to render the requested service does not exist at the time the request is made; provided, however, Texas Gas may, at its option, add facilities or expand capacity to provide such transportation service. 20.1 Delivery Facilities and Construction of Laterals Texas Gas' policy with respect to the financing or construction of laterals or delivery facilities is set forth below: (a) Texas Gas will pay for all or part of the cost of the modification or construction of facilities required at delivery point(s) to effectuate the delivery of natural gas hereunder, when the construction or modification of such facilities is economically beneficial to Texas Gas. For purposes of determining whether a project is economically beneficial to Texas Gas, Texas Gas will evaluate each prospective project based upon the incremental cost of service of the facilities to be constructed by Texas Gas, and the incremental revenues which Texas Gas estimates will be generated as a result of constructing and/or modifying such facilities. In estimating the incremental revenues to be generated, Texas Gas will calculate the revenues based upon the actual transportation rates the Customer will pay, exclusive of any surcharges, and the projected incremental quantities which will result from the project. Texas Gas will consider quantities to be incremental if any of the following criteria are met: (i) the quantities which will be transported through the contemplated delivery facilities are in excess of the quantities which could be transported through existing metering facilities, considering both the capacity of the existing metering facilities and the currently effective priorities of service through such meters; or (ii) the quantities which will be transported are to a new end-use customer or market, or to a customer or market which has not been served for the twelve months prior to the date of request for the meter facilities additions. In calculating the incremental cost of service of the facilities to be constructed, Texas Gas shall utilize the methodologies for calculating cost of service which underlies its currently effective transportation rates.