Tres Palacios Gas Storage LLC

Original Volume No. 1

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Effective Date: 08/01/2008, Docket: RP08-424-000, Status: Effective

Original Sheet No. 143 Original Sheet No. 143

GENERAL TERMS AND CONDITIONS

(Continued)

14.2 Application of Payments for Released Capacity.

Payments to TRES PALACIOS by a Replacement Customer for released

capacity shall be applied as follows: (i) TRES PALACIOS shall

retain amounts equal to the Replacement Customer's usage charges;

(ii) TRES PALACIOS will credit the balance to reservation charges

due from the Replacement Customer; and (iii) TRES PALACIOS shall

remit the remaining balance, if any, or shall charge any balance

due, to the Replacement Customer, in accordance with Section 4.10

of the General Terms and Conditions of this FERC Gas Tariff. If

any balance due from the Replacement Customer remains unpaid, the

outstanding balance will then be billed to the Releasing Customer,

provided that the Releasing Customer is only liable to the extent

of the reservation charges specified in the applicable Storage

Service Agreement and corresponding Rate Schedule.

14.3 Payment. Customer shall pay TRES PALACIOS by wire

transfer the full amount reflected on the invoice within fifteen

(15) days of the date of the invoice. If the fifteenth (15th) day

shall fall upon a weekend or legal holiday, then such payment

shall be made on the last regular Business Day prior to such

fifteenth (15th) day. Party making payment should submit

supporting documentation; party receiving payment should apply

payment per supporting documentation provided by the paying party;

and if payment differs from invoiced amount, remittance detail

should be provided with the payment except when payment is made by

electronic funds transfer (EFT), in which case, the remittance

detail is due within two Business Days of the payment due date.

14.4 Billing Error. If an error is discovered in any

billing, such error shall be adjusted within thirty (30) days of

the determination thereof. If a dispute arises as to the amount

payable in any invoice rendered hereunder, Customer shall

nevertheless pay when due the amount not in dispute under such

invoice. Such payment shall not be deemed to be a waiver of the

right by Customer to recoup any overpayment, nor shall acceptance

of any payment be deemed to be a waiver of the right by Customer

to recoup any overpayment, nor shall acceptance of any payment be

deemed to be a waiver by TRES PALACIOS of any underpayment. In

the event Customer fails to forward the entire undisputed amount

due to TRES PALACIOS when same is due, interest on the unpaid

portion shall accrue at the same rate of interest and in the same

manner as prescribed for pipeline refunds as set forth in Section

154.501(d) of the Commission's regulations under the Natural Gas

Act from the date such payment is due until the same is paid. If

Customer's failure to pay the undisputed portion of any invoice

rendered hereunder continues beyond thirty (30) days after the due

date of such invoice, then TRES PALACIOS, in addition to all other

legal remedies available to it, shall have the right and option to

suspend further deliveries of Gas until such default shall have

been cured. If Customer's failure to pay the undisputed portion

of any invoice rendered hereunder continues beyond sixty (60) days

after the due date of such invoice, then TRES PALACIOS, in

addition to all other legal remedies available to it, shall have

the right and option to terminate service hereunder.