Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

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Effective Date: 01/25/1996, Docket: RP95-397-000, Status: Effective

First Revised Sheet No. 321J First Revised Sheet No. 321J : Superseded

Superseding: Sub Original Sheet No. 321J

GENERAL TERMS AND CONDITIONS

(Continued)

(4) Levelized Interest - The interest amount

resulting from the projected amortization of

the Unrecovered PGA Costs over the Section

18.12 Recovery Period in accordance with

Section 154.67(c) of the Commission's

Regulations.

(c) Mechanism for Recovery of Unrecovered PGA Costs

Ninety percent of Panhandle's Unrecovered PGA

Costs, including Levelized Interest, shall be

recovered by means of a Reservation Surcharge

applicable to service under Rate Schedules FT,

EFT, SCT and LFT. The Reservation Surcharge

applicable to service under Rate Schedule SCT

shall be converted to a Volumetric Surcharge at a

52.5% load factor rate. The Reservation

Surcharge shall be stated on effective Tariff

Sheet Nos. 4, 5, 6 and 15 of Panhandle's FERC Gas

Tariff, First Revised Volume No. 1 and shall

become a part of the stated rates for service

provided under such Rate Schedules.

Ten percent of Panhandle's Unrecovered PGA Costs,

including Levelized Interest, shall be recovered

by means of a Volumetric Surcharge applicable to

interruptible service under Rate Schedules IT and

EIT. The Volumetric Surcharge shall be stated in

Tariff Sheet Nos. 7 and 8 of Panhandle's FERC Gas

Tariff, First Revised Volume No. 1 and shall

become part of the stated rates for service

provided under such Rate Schedules.

On or before June 1 of each year during the Section

18.12 Recovery Period, Panhandle will file with the

Commission such updates as otherwise are required by

this Section 18.12 to the Reservation Surcharge

applicable to service under Rate Schedules FT, EFT,

SCT and LFT and the Volumetric Surcharge applicable

to service under Rate Schedules IT and EIT with such

updated Surcharges to be effective on the

immediately following July 1. Panhandle will

provide 30 days notice of such changes to the

Reservation and Volumetric Surcharge.

The provisions of this Section 18.12 shall be

fully applicable to successor, replacement and

new rate schedules.