Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

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Effective Date: 01/23/1999, Docket: RP99-192-000, Status: Effective

Fourth Revised Sheet No. 92 Fourth Revised Sheet No. 92 : Superseded

Superseding: Third Revised Sheet No. 92

RATE SCHEDULE FS (Continued)

FLEXIBLE STORAGE SERVICE

3.8 Fuel Reimbursement

Shipper shall reimburse Panhandle in kind for fuel usage

and lost or unaccounted for Gas pursuant to the terms and

conditions of the Service Agreement and as stated on the

effective Tariff Sheet No. 14 for service hereunder. If

the Stored Volume of the Shipper is not reduced to 20% of

Maximum Stored Quantity or less prior to the end of the

withdrawal period of any Contract Year as specified in

the Service Agreement, then Panhandle shall retain .25% of

the excess Stored Volume over 20% of the Maximum Stored

Quantity to compensate for additional compressor fuel

required.

3.9 Negotiated Rates

Shipper and Panhandle may agree, on a prospective basis,

to a Negotiated Rate with respect to the charges

identified in Sections 3.1, 3.2, 3.3 and 3.4 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 3.9 shall authorize

Panhandle or Shipper to negotiate terms and conditions of

service.