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. 154 Original Sheet No. 154

GENERAL TERMS AND CONDITIONS

(Continued)

28.3 Customer shall not be obligated to pay TRES

PALACIOS reservation charges for any suspended services during any

period of suspension pursuant to Section 28.2.

29. POLICY WITH RESPECT TO FEES AND CONSTRUCTION OF NEW

FACILITIES

29.1 Except as provided in Section 29.2 herein, Customer

shall reimburse TRES PALACIOS (a) for the costs of any facilities

installed by TRES PALACIOS with Customer's consent to receive,

measure, store or deliver Gas for Customer's account and (b) for

any and all filings and approval fees required in connection with

Customer's Storage Service Agreement that TRES PALACIOS is

obligated to pay to the Commission or any other governmental

authority having jurisdiction. Any reimbursement due TRES

PALACIOS by Customer pursuant to this Section 29.1 shall be due

and payable to TRES PALACIOS within ten (10) days of receipt by

Customer of TRES PALACIOS' invoice(s) for same; provided, however,

that subject to TRES PALACIOS' consent, such reimbursement, plus

carrying charges thereon, may be amortized over a mutually

agreeable period not to extend beyond the primary contract term of

the Storage Service Agreement between TRES PALACIOS and Customer.

Carrying charges shall be computed utilizing interest factors

acceptable to both TRES PALACIOS and Customer.

29.2 TRES PALACIOS may waive from time to time, at its

discretion, all or a portion of the facility cost reimbursement

requirement set forth in Section 29.1 for Rate Schedules FSS,

NNSS, FP and FL if Customer provides TRES PALACIOS adequate

assurances to make construction of the facilities economical to

TRES PALACIOS. All requests for waiver shall be handled by TRES

PALACIOS in a manner which is not unduly discriminatory. For

purposes of determining whether a project is economical, TRES

PALACIOS will evaluate projects on the basis of various economic

criteria, which will include the estimated cost of the facilities,

operating and maintenance as well as administrative and general

expenses attributable to the facilities, the revenues TRES

PALACIOS estimates will be generated as a result of such

construction, and the availability of capital funds on terms and

conditions acceptable to TRES PALACIOS. In estimating the revenues

to be generated, TRES PALACIOS will evaluate the existence of

capacity limitations downstream of the facilities, the

marketability of the capacity, the Interruptible versus the firm

nature of the service, and other similar factors which impact

whether the available capacity will actually be utilized.

30. OFF-SYSTEM CAPACITY

TRES PALACIOS may, from time to time, acquire transportation

and/or storage capacity on a third-party pipeline system. TRES

PALACIOS will only provide transportation and storage services for

others using such capacity pursuant to its open access FERC Gas

Tariff subject to its rates approved by the Federal Energy

Regulatory Commission, and the "shipper must hold title" policy is

waived to permit such use.