Canyon Creek Compression Company

Third Revised Volume No. 1

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Effective Date: 07/23/2001, Docket: RP01-460-000, Status: Effective

Original Sheet No. 195 Original Sheet No. 195 : Effective

GENERAL TERMS AND CONDITIONS

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35. NEGOTIATED RATES

35.1 PRECONDITIONS TO NEGOTIATED RATES

Rates to be charged by Canyon for service to any Shipper

under Rate Schedule FCS or ICS may deviate in either form or level or

both from the applicable maximum and/or minimum rate level in this

Tariff, subject to the following provisions:

(a) Canyon and Shipper have executed a valid

Agreement containing therein or in a related agreement a specific

mutual understanding that Negotiated Rate(s) or a Negotiated Rate

Formula will apply to service for that Shipper;

(b) At the time of execution of the Agreement (or

the amendment to an Agreement), which first provides for the

applicability to Shipper of the Negotiated Rate(s) or Negotiated Rate

Formula, service was available pursuant to the terms and conditions

(not modified by this Section 35) of Rate Schedule FCS or ICS of this

Tariff, as applicable; and

(c) No later than the Business Day on which Canyon

commences service at such Negotiated Rate(s) or Negotiated Rate

Formula (or if the day on which Canyon commences service is not a

Business Day, then no later than the next Business Day after Canyon

commences service), Canyon will file a tariff sheet advising the

Commission of such Negotiated Rate or Negotiated Rate Formula, stating

the name of Shipper, the type of service, the Receipt and Delivery

Point(s) applicable to the service, the volume of the gas to be

transported, any other charges, and specifying either: (i) the

specific Negotiated Rate included in such Agreement; or (ii) the

Negotiated Rate Formula included in such Agreement with sufficient

specificity such that the rate in effect from time to time can be

readily calculated. The tariff sheet must also incorporate a statement

that the Agreement does not deviate from the form of Service Agreement

in any material respect.

35.2 CAPACITY ALLOCATION

(a) To the extent the revenue level pursuant to the

Negotiated Rate(s) or Negotiated Rate Formula provided for in

Section 35.1 above should exceed the revenue level at the Recourse

Rate, the Shipper paying such Negotiated Rate(s) or rate(s) under

a Negotiated Rate Formula shall be treated, for all capacity