Texas Eastern Transmission, L P

Seventh Revised Volume No. 1

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Effective Date: 11/16/2009, Docket: RP10-53-000, Status: Effective

Third Revised Sheet No. 516 Third Revised Sheet No. 516

Superseding: Sub First Revised Sheet No. 516

GENERAL TERMS AND CONDITIONS

(Continued)

(B) Upon notification by Pipeline that a Customer has failed to satisfy the credit criteria

or subsequently during the term of the service agreement no longer satisfies the credit

criteria, such Customer may still obtain credit approval by Pipeline if it pays any

outstanding balances due Pipeline for service rendered or has complied with Section

10.6 of the General Terms and Conditions with regard to such balances and elects to

provide one of the following forms of security:

(1) an advance deposit;

(2) a standby irrevocable letter of credit, acceptable to Pipeline, issued by a

financial institution that satisfies Pipeline's credit appraisal;

(3) security interest in collateral found to be satisfactory to Pipeline; or

(4) a guarantee, acceptable to Pipeline, by another person or entity which satisfies

Pipeline's credit appraisal.

Pipeline shall provide such Customer with a written statement supporting Pipeline's

request for the security amount requested at the time such security is requested. If

Pipeline rejects the security provided by Customer in accordance with Section

3.3(B)(2)-(4) above, Pipeline shall re-issue its request for the security and include a

written explanation for the rejection of the security previously provided by Customer.

For a new Customer, such security shall be calculated as follows:

(i) For firm transportation or storage service, an amount equal to the three (3)

highest Months' worth of reservation charges at the applicable maximum Recourse

Rate during a contract year;

(ii) For interruptible transportation or storage service, an amount equal to fifteen

(15) Days of usage per Month for three (3) Months multiplied by the arithmetic

average of the applicable commodity rate(s), multiplied by Customer's Maximum

Daily Quantity;

(iii) For Park and Loan service, the applicable maximum Park and Loan Daily Charge

multiplied by Customer's Maximum Park Quantity or Maximum Loan Quantity, as

applicable, plus the value of any quantity to be loaned to Customer;

(iv) For Capacity Release Umbrella agreements, Pipeline will accept any collateral

amount submitted by Customer in relation to the request for the capacity release

umbrella agreement; however, Customer will be required to comply with all of

Pipeline's credit requirements at such time as Customer submits a bid to acquire

released capacity pursuant to Section 3.14 of the General Terms and Conditions

of this FERC Gas Tariff;

(v) For other agreements (e.g., Market Balancing Aggregation, Operational Balancing

Agreement, Transportation Aggregation Balancing Service), an estimated imbalance

quantity of 5,000 Dth per Month for three (3) Months multiplied by the average

of Pipeline's cashout prices for all Zones for the latest three (3) Months.

For an existing Customer, such security shall be equal to the highest three (3) Months

of activity (based on usage of in-kind and loan agreements and the billed amounts,

including cashout amounts, for all other agreements) for all of Customer's active

service agreements during the previous twelve (12) Months. For the purposes of this

section, the term "in-kind agreement" does not include fuel reimbursement.

With respect to a request for new service or a request resulting in a Billing

Amendment, the security required by Pipeline pursuant to this Section 3.3(B) must be

received by Pipeline within ten (10) Business Days of Pipeline's written notification

to Customer, otherwise, such request will be deemed to be null and void. With respect

to an existing service agreement, Customer must tender (i) an advance payment equal to

the highest Month of activity (based on usage of in-kind and loan agreements and the

billed amounts, including cashout amounts, for all other agreements) for all of

Customer's active service agreements during the previous twelve (12) Months within five

(5) Business Days of Pipeline's notification, and (ii) the security required by this

Section 3.3(B) within thirty (30) Days of Pipeline's notification. If such advance

payment or security is not received within the specified time period(s), then Pipeline

may immediately suspend service, and may terminate Customer's service agreement(s) upon

thirty (30) Days' notice to Customer and the Commission.