Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

Effective Date: 09/14/1997, Docket: RP97-291-004, Status: Effective

Third Revised Sheet No. 76 Third Revised Sheet No. 76 : Superseded

Superseding: Second Revised Sheet No. 76

RATE SCHEDULE PS (Continued)

PEAKING STORAGE SERVICE

4.9 Negotiated Rates

Shipper and Panhandle may agree, on a prospective basis,

to a Negotiated Rate with respect to the charges

identified in Sections 4.1, 4.2, 4.3 and 4.4 herein which

may be less than, equal to or greater than the Maximum

Rate; shall not be less than the Minimum Rate; may be

based on a rate design other than straight fixed variable;

and may include a minimum quantity. Such Negotiated Rate

shall be set forth on Exhibit A of the executed Service

Agreement and on the currently effective Tariff Sheet

No. 27. The Maximum Rate shall be available to any

Shipper that does not choose a Negotiated Rate.

Shippers paying a Negotiated Rate which exceeds the

Maximum Rate will be considered to be paying the Maximum

Rate for purposes of scheduling, curtailment and

interruption, and calculating the economic value of a

request for unsubscribed firm capacity. In addition,

a Shipper that does not agree to pay any surcharges will

not be granted a scheduling preference that deems such

surcharges have been paid. Replacement Shippers may not

bid or pay a rate greater than the Maximum Rate and are

not eligible for Negotiated Rates.

In the event that capacity subject to a Negotiated Rate

which is based on a rate design other than straight fixed

variable is released, Shipper and Panhandle may agree on

billing adjustments to the Releasing Shipper that may vary

from or are in addition to those set forth in Section 15.6

of the General Terms and Conditions in order to establish

the basis of accounting for revenues from a Replacement

Shipper as a means of preserving the economic bases of

the Negotiated Rate. Such payment obligation and

crediting mechanism for capacity release shall be set

forth on Exhibit A of the executed Service Agreement.

Nothing in this Section 4.9 shall authorize Panhandle or

Shipper to negotiate terms and conditions of service.

5. MONTHLY BILL

The Monthly Bill for service under this Rate Schedule shall be

equal to the capacity charge, the deliverability charge, the

injection charge, the withdrawal charge, any applicable overrun

charges plus all applicable surcharges.