Texas Eastern Transmission, L P

Seventh Revised Volume No. 1

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

Fourth Revised Sheet No. 591 Fourth Revised Sheet No. 591

Superseding: Third Revised Sheet No. 591

GENERAL TERMS AND CONDITIONS

(Continued)

with no payment required from Pipeline and without recourse from any

party. At Pipeline's discretion, Pipeline has the option of either

retaining the Gas for its own use or for disposing of it in accordance

with procedures contained in Section 8.7 of the General Terms and

Conditions.

(2) If Pipeline desires to retain the Gas for its own use, it shall be valued,

for accounting purposes, at zero cost.

(D) [Reserved for Future Use]

8.7 Disposition of Excess Quantities

If Pipeline desires to auction at any time the net excess quantities purchased under

Section 8.5 of the General Terms and Conditions or the quantities of unclaimed Suspense

Gas and Gas not withdrawn pursuant to Section 2.2 of Rate Schedule ISS-1 and retained

under Section 8.6 of the General Terms and Conditions or the net quantities available

to Pipeline as a result of over-realization of in-kind compensation pursuant to Section

15.6 of the General Terms and Conditions or the Quantity of Gas retained under Section

7.5 of Rate Schedule PAL, Pipeline shall post a notice of such auction on the LINK®

System at least three (3) Business Days prior to the date on which bids will be

accepted. Such notice shall specify the Quantity of Gas to be auctioned, the date on

which the bids will be accepted, and the evaluation method that will be used to

determine the highest bid. Pipeline shall accept bids only during the time period from

7:00 a.m. until 11:00 a.m. CT on the Business Day that bids are due. Prior to 4:00

p.m. CT of the same day, Pipeline shall notify the Customer submitting the highest bid;

provided, however, Pipeline reserves the right to reject all bids. When the Gas is

purchased at auction, Customer must provide identification of the existing

transportation service agreement with Pipeline under which Customer shall nominate,

transport and deliver all Gas by the end of the Month following the Month in which the

Gas is purchased. Customer agrees to pay the applicable transportation rate and a

charge equivalent to the maximum ISS-1 Space Charge on the average daily balance for

each Month applicable to the period beginning when the bid was accepted at auction and

ending when the Quantity of Gas is delivered. Customer further agrees that the Gas is

subject to Section 8.5, prospectively from the date of Customer's purchase pursuant to

this Section 8.7, at the Point(s) of Delivery, net of the accumulated equivalent ISS-1

Space Charge and subject to all penalties contained in Pipeline's FERC Gas Tariff. All

auction proceeds shall be handled in accordance with Section 15.6.

8.8 Operational Balancing Agreements

(A) Any imbalances arising under any transportation agreement between Customer and

Pipeline that are attributable to variances (1) between actual receipts of

Natural Gas and scheduled and confirmed receipts of Natural Gas at Point(s)