Transcolorado Gas Transmission Company LLC

Second Revised Volume No. 1

Effective Date: 12/28/2007, Docket: RP08-167-000, Status: Effective

Original Sheet No. 130 Original Sheet No. 130 : Effective

RATE SCHEDULE PALS

8.4 (a) In the event that Shipper still has gas parked at the end of

its contract term or because of failure to comply with the notice pursuant to

Sections 3 and 8.2 above, the remaining balance shall be forfeited to

TransColorado, free and clear of any adverse claims.

(b) Conversely, if the Shipper has not redelivered gas which was

loaned by TransColorado by the end of its contract term or within the

timeframe specified in the notice in Sections 3 and 8.2 above, the Shipper

must purchase the unreturned balance at 150% of the highest index price from

Inside FERC's Gas Market Report first of the month index for El Paso Natural

Gas, San Juan Basin, as published by McGraw-Hill Companies during the term of

the loan. In the event that the information used to determine the Monthly

Index Price for the term of the loan is not available, then the Shipper must

purchase the unreturned balance at 150% of the highest of the Midpoint prices

for New Mexico San Juan Basin, El Paso, Non-Bondad, for each week (or the

superseding reference if the publication titling is revised), as publishued in

Gas Daily, as published by Financial Times Energy during the term of the loan.

The amounts collected are subject to crediting in accordance with Section

12.10 of the General Terms and Conditions of this Tariff.

be implemented by TransColorado on a non-discriminatory basis.

8.5 In circumstances where Shipper is unable to eliminate its PALS RO

balance because TransColorado is unable to accept the PALS RO nomination,

Shipper shall take any action to reduce the balance which TransColorado can

accommodate and Shipper shall be granted additional time to eliminate its PALS

RO balance corresponding to the time TransColorado was unable to accept the

PALS RO nomination. Shipper shall not incur any penalty or daily fees as to

that portion of the balance resulting from TransColorado's inability to accept

the PALS RO nomination. Such extension shall only apply in instances where a

Shipper's inability to eliminate the PALS RO balance is attributable to

TransColorado's inability to accept and confirm PALS RO nominations. Shipper

remains responsible to nominate the appropriate level of transportation to

meet TransColorado's notification requirements.

9. GENERAL TERMS AND CONDITIONS

The applicable General Terms and Conditions of this Tariff are hereby

made a part of this Rate Schedule. To the extent that the General Terms and

Conditions are inconsistent with the provisions of this Rate Schedule, the

provisions of this Rate Schedule shall govern.