West Texas Gas, Inc.

First Revised Volume No. 1

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

Original Sheet No. 32O Original Sheet No. 32O : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

19.5(i) Annual PGA Filing (Continued):

(ii) If the balance is a debit balance or Seller

elects not to make a cash disbursement under Paragraph 19.5

(i)(3)(i) of this section, transfer the amounts to the

current deferral subaccount balance determined under

Paragraphs 19.5(e) and (g).

(4) Refund report. When Seller files its annual PGA

filing, it shall also file a report with the Commission

showing all computations of the refunds, revenue credits, and

associated carrying charges disbursed in cash during the

applicable deferral period.

(j) Exchange transactions and transportation imbalances -

(1) General rule. Seller shall assign a cost to its exchange

transactions and transportation imbalances by:

(i) Adjusting the purchased quantities for each month of a

deferral period by adding the exchange-in quantities for the

month and subtracting the exchange-out quantities for the

month; and

(ii) Adjusting the purchased gas costs for each month of a

deferral period by adding the costs assigned to the month's

exchange-in quantities and subtracting the costs assigned to

the month's exchange-out quantities.

(2) Assigning costs. For purposes of assigning costs to

the monthly exchange-in or exchange-out quantities, Seller

shall use the weighted average cost of gas (WACOG) for the monthly

cost of gas purchased, as that term is defined in Paragraph

19.2(j) hereof, exclusive of gas costs described in Paragraph

19.2(j) (7) and (11).