Texas Eastern Transmission, L P

Seventh Revised Volume No. 1

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

Third Revised Sheet No. 629 Third Revised Sheet No. 629

Superseding: Second Revised Sheet No. 629

GENERAL TERMS AND CONDITIONS

(Continued)

(D) Surcharge Adjustment:

(1) Applicable Shrinkage Deferred Account

Pipeline shall record in the Applicable Shrinkage Deferred Account the net

monetary value of all transactions involving Gas differences as a result

of the operation of this Section 15, the imbalance resolution procedures

of Sections 3.14(G)(4) and 8 of the General Terms and Conditions, and

Sections 7.6 and 8.1 of Rate Schedule PAL, as well as other requirements

for Pipeline's purchase of Gas due to unanticipated events which threaten

the operational integrity of Pipeline's system.

The Applicable Shrinkage Deferred Account shall be accumulated in twelve-

month accumulation periods, September-August, except for the initial

accumulation period which will begin on the effective date of this Section

15.6 and extend through the following August and shall include any balance

carried forward from the prior periods. Such balance carried forward from

prior periods shall include the effect of Pipeline's entry to the PGA

account for the value of Gas differences which were accrued in Pipeline's

ASA Deferred Account under Section 37 of the General Terms and Conditions

of its FERC Gas Tariff, Fifth Revised Volume No. 1 but were not amortized

because of the implementation of its Sixth Revised Volume No. 1 pursuant

to Order No. 636.

(2) Disposition of Gas Differences

At Pipeline's discretion Quantities of Gas required to support under-

realization of in-kind compensation may be obtained by Pipeline from Gas

available as a result of the operation of the imbalance resolution

procedures contained in Section 8 of the General Terms and Conditions, may

be obtained by Pipeline by means of purchase arrangements available to

Pipeline, or may be obtained by Pipeline from other sources. At

Pipeline's discretion Quantities of Gas available to Pipeline as a result

of over-realization of in-kind compensation may be utilized for any system

Gas needs or may be disposed of in accordance with the provisions of

Section 8.7 of these General Terms and Conditions.

(3) ASA Usage Surcharge

The net monetary value recorded in the Applicable Shrinkage Deferred

Account at the end of each accumulation period shall be used to develop an

ASA Usage Surcharge which shall be applicable to all Usage Charge

determinants for ASA Rate Schedules for each projected annual period

beginning December 1 of each year. The ASA Usage Surcharge for ASA Rate

Schedules