Transwestern Pipeline Company, LLC

Third Revised Volume No. 1

Effective Date: 11/01/2004, Docket: RP05- 14-000, Status: Effective

Original Sheet No. 44 Original Sheet No. 44 : Effective

RATE SCHEDULE FTS-1

Firm Transportation Service

(continued)

In estimating the revenues to be generated, Transporter will consider the existence

of capacity limitations downstream of the proposed new facilities, the marketability

of gas which may flow through said facilities, the interruptible versus firm nature

of the transportation service for the gas, and other similar factors which determine

whether gas will actually be transported through said facilities. Based on these

criteria, the economic value of a project shall be determined using a discounted

cash flow rate of return methodology with the minimum acceptable rate of return to

be published on Transporter's Electronic Bulletin Board, as amended from

time-to-time.

(d) Transporter shall not construct or modify any facilities hereunder which will result

in an increase or decrease in Transporter's mainline capacity, or which may

compromise the operational integrity of Transporter's pipeline system. For those

facilities which Transporter agrees to construct, Transporter will construct those

facilities (1) pursuant to the authorization granted in Subpart F of Part 157 of the

Regulations of the Federal Energy Regulatory Commission or (2) where the prior

authorization of the Federal Energy Regulatory Commission is not required to

construct such facilities. Transporter will own and operate all facilities

constructed hereunder. To the extent Shipper's reimbursement of Transporter's costs

incurred to construct new facilities hereunder qualifies as a contribution in aid of

construction under the Tax Reform Act of 1986, Pub. L. No. 99-514 (1986), as amended

from time-to-time, Shipper shall also reimburse Transporter for Federal income taxes

incurred by Transporter as a direct result of such contributions in aid of

construction by Shipper.

(e) Transporter shall have the right at any time during a calendar year to terminate,

prospectively for the remainder of that calendar year, the reimbursement program

described in Paragraph (c) above for new projects.