Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

Effective Date: 05/25/1996, Docket: RP96-214-000, Status: Effective

Third Revised Sheet No. 302 Third Revised Sheet No. 302 : Superseded

Superseding: Substitute First Revised Sheet No. 302

GENERAL TERMS AND CONDITIONS

(Continued)

(3) Carrying charges on unpaid principal amounts for

those Buyers or Shippers electing to extend their

payments hereunder shall be determined using the

methods specified in Section 154.501(d) of the

Commission's Regulations.

(4) Notwithstanding an election by a Buyer or a Shipper

pursuant to 18.5(e)(2) hereof, if Buyer's or

Shipper's contract terminates during the period in

which such payments are to be made, Seller shall

invoice Buyer or Shipper for the then current unpaid

balance due and all of such amounts shall become due

and payable not later than one day prior to the

expiration of Buyer's or Shipper's contract.

Upon receipt of such invoice, Buyer or Shipper may

elect to continue making payments according to its

prior elections by continuing to do so. Such action

shall constitute Buyer's or Shipper's irrevocable

agreement to pay such sums without condition or

qualification.

(5) For purposes of 18.5(e)(4), the term "without

condition or qualification" shall mean Buyer's or

Shipper's irrevocable disavowal of any attempt to

avoid payment of the remaining balance and applicable

carrying charges, after ceasing the contractual

relationship and to continue to make payments

pursuant to the payment schedule. The term amounts

to an irrevocable promise to pay the full Settlement

Direct Bill Surcharge Amount.

(f) Settlement Demand (or Reservation) Surcharge

(1) Applicability

This Section 18.5(f) is applicable to Shippers served

under Panhandle's Rate Schedules FT, EFT, SCT and LFT

and to Shippers served under Panhandle's FERC Gas

Tariff Original Volume No. 2, except that it shall