West Texas Gas, Inc.

First Revised Volume No. 1

Effective Date: 10/01/1996, Docket: RP96-377-000, Status: Effective

Original Sheet No. 32H Original Sheet No. 32H : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

19.5. Annual PGA filing (Continued):

(d) Computing the surcharge rate. Seller shall compute

a surcharge rate to amortize a surcharge balance determined under

paragraph (e) of this section. To compute a surcharge rate, the

surcharge balance shall be divided by Seller's estimated

sales volumes for the 12 month period beginning on the annual PGA

effective date. The resulting surcharge rate will be in effect

for the 12-month period beginning on the annual PGA effective

date.

(e) Surcharge balance. Subject to the conditions in

paragraph (f) of this section and Subpart D of Part 154, the balance

for determining the surcharge includes:

(1) The balance accumulated in the current deferral

subaccount of Account No. 191 during the deferral period, as

determined in paragraph (g) of this section; and

(2) Any other costs the Commission allows Seller to

include in the surcharge balance.

(f) Unpaid accrual restrictions. (1) In each annual PGA

filing, Seller shall include a listing of each unpaid accrual

of purchased gas costs which remains unpaid for three or more

years from the month the cost was originally recognized in the

pipeline's books and records. Seller shall include a

specific description of the circumstances which resulted in each

unpaid accrual listed. Seller shall obtain the Commission's

approval to continue the recognition of the unpaid accruals as a

purchased gas cost.