West Texas Gas, Inc.

First Revised Volume No. 1

Effective Date: 05/01/1998, Docket: RP98- 25-005, Status: Effective

Original Sheet No. 23B Original Sheet No. 23B : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

19.6 Annual Purchased Gas Cost Reconciliation (Continued)

pursuant to paragraph (b) above:

(1) Adjustments to a prior month's actual cost of gas purchased;

(2) Adjustments to a prior month's revenue due to a revision

to that month's sales level; and

(3) Interest, calculated at the rate set out in Section

154.501(d)(1) of the Commission's regulations, charged on any

under-recovery of gas costs or credited against any over-

recovery of gas costs, from the date payments are received until

the date upon which refunds are made to customers (in the case

of over-recovery) or until payment in full is received by Seller

(in the case of under-recovery of gas costs). Interest shall

be compounded monthly.

(d) Seller shall make refunds or submit invoices to each Buyer

served under Rate Schedules FS-1 and IS-1 for any over-recovery

or under-recovery of gas costs based on the balance in the deferred

account maintained pursuant to paragraph (b) above. Interest shall

continue to accrue on any unpaid or uncredited balances at the rate

stated in paragraph (c)(3) above. Except as provided in paragraph

(f) below, refunds or payments of any unrecovered purchased gas

costs shall be due no later than 60 days following the filing of

Seller's report.

(e) Each Buyer's share of Seller's purchased gas costs in any

month shall be equal to a fraction, the numerator of which is the

total volumes of Seller's sales to Buyer under Rate Schedules FS-1

and IS-1 during the month, and the denominator of which is the total

sales volumes to all Buyers served under such rate schedules during

that month.

(f) In the event the annual reconciliation of Seller's purchased gas

costs results in a positive balance due Seller in excess of $15,000,

then Buyer shall have the option to pay Seller in up to three monthly

installments, with the first payment due no later than 60 days

following the filing of Seller's annual report. Interest shall

continue to accrue on any unamortized balance as specified above.