Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

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Effective Date: 07/01/1996, Docket: RP96-259-000, Status: Effective

First Revised Sheet No. 298 First Revised Sheet No. 298 : Superseded

Superseding: Orignal Sheet No. 298

GENERAL TERMS AND CONDITIONS

(Continued)

(d) Determination of Second Supplemental TOP Volumetric

Surcharge

Subject to the provisions of Section 18.4(b), the

Second Supplemental TOP Volumetric Surcharge for the

Section 18.4 Recovery Period shall be based on the

Total Second Supplemental Surcharge Amount including

the levelized interest amount divided by the most

recent twelve months of throughput data available at

the time of filing.

(e) Billing and Payment

Panhandle shall render bills to Shipper for the

Second Supplemental TOP Volumetric Surcharge in

accordance with the applicable Rate Schedules

referenced in Section 18.4(c) above.

(f) Recovery of Panhandle's Second Supplemental

Take-or-Pay Settlement Costs

In addition to the other charges calculated pursuant

to this Section 18.4, in the event that Shipper or any

customer of Shipper, whether direct or indirect, or

any state agency participating in the proceedings

initiated by the filing of this Section 18.4 shall

select to challenge the prudence of Panhandle's Second

Supplemental Take-or-Pay Settlement Costs and shall be

unsuccessful in its prosecution of such challenge,

Panhandle shall be permitted to direct bill to the

Shipper affected by such challenge up to 100% of such

customer's full proportionate share of Panhandle's

Second Supplemental Take-or-Pay Settlement Costs to

reflect the challenging party's or parties' cost

responsibility, resulting from such prudence litigation.

Invoices for such direct bills, including carrying

charges calculated in accordance with Section 154.501(d)

of the Commission's Regulations, shall be issued within

thirty (30) Days of the Commission's determination of

any such prudence challenge and shall be due and payable

within twenty (20) Days of the issuance of such invoice.