Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

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Effective Date: 02/01/2002, Docket: RP00-395-003, Status: Effective

Original Sheet No. 272E Original Sheet No. 272E : Superseded

GENERAL TERMS AND CONDITIONS

(Continued)

(ii) for an OFO requiring Shipper(s) to eliminate

Unauthorized Overruns, Shipper shall pay for all

Quantities taken in excess of the reduced daily

tolerance of zero, the greater of (a) two (2) times

the highest daily price published in Gas Daily, Daily

Price Survey, Citygates - Chicago LDCs or Citygates -

Mich.-Mich Con, whichever is greater, for the day

(Saturday and Sunday shall be the preceding Friday

price) that Unauthorized Overrun Penalties are

incurred, or (b) the following:

Overrun Rate

0% - 5% $ 15.00 per Dt.

> 5% - 10% $ 25.00 per Dt.

>10% - 15% $ 50.00 per Dt.

>15% - 50% $100.00 per Dt.

>50% $200.00 per Dt.

The above overrun tiers shall be determined by comparing

the aggregate amount of contract entitlement nominated to

a Point of Delivery with the aggregated amount of Gas

flowing through such Point of Delivery. It shall be the

responsibility of the meter operator at a Point of

Delivery to provide in writing to Panhandle an allocation

by contract of the gas flowing through such meter.

If a Shipper takes Quantities of Gas in excess of MDCQ

which cause a Shipper to incur a penalty under this

Section 12.17(f)(ii), such Quantities of Gas will not be

considered in any calculation of an otherwise applicable

penalty pursuant to Section 12.17(f)(i).

For purposes of calculating the Unauthorized Overrun

Penalty under this Section 12.17, a Shipper shall be

permitted to aggregate the MDCQs of its firm

Transportation Agreements at a designated Point of

Delivery. For purposes of aggregation under this

Section 12.17(f), Shipper shall have scheduled

quantities under the firm Transportation Agreements to

be aggregated to no other Point of Delivery.

(iii) for any other OFO, Shipper shall, for all Quantities

tendered or taken in violation of the OFO, pay two (2)

times the greater of the highest daily price published

in Gas Daily, Daily Price Survey, Citygates - Chicago

LDCs or Citygates - Mich.-Mich Con for the day (Saturday

and Sunday shall be the preceding Friday price) that OFO

penalties are incurred.

(g) Indemnification

Compliance with an OFO and the other terms and conditions

of Panhandle's FERC Gas Tariff is essential to Panhandle's

ability to provide deliveries and services under all rate