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

Fourth Revised Sheet No. 329 Fourth Revised Sheet No. 329 : Superseded

Superseding: Third Revised Sheet No. 329

GENERAL TERMS AND CONDITIONS

(Continued)

25. FLOW THROUGH OF CASH-OUT REVENUES AND PENALTIES IN EXCESS OF

COSTS

25.1 Flow Through of Cash-Out Revenues in Excess of Costs

(a) This Section 25.1 of the General Terms and Conditions

sets forth the procedures under which Panhandle will

flow through to Shippers or carry forward, for each

annual billing period any excess of revenues received

over costs incurred under the cash-out provisions in

Sections 12.11(a) and 12.11(b).

(b) The annual rate adjustment period applicable to this

Section 25.1 shall be the twelve month period commencing

each May 1, and ending the following April 30.

(c) The net revenues received pursuant to the provisions of

Section 25.1(a) shall be the amount collected for the twelve

(12) month period ending three months prior to May 1. If

the revenues received exceed the costs incurred, then

Panhandle will calculate a Reservation Charge credit that

will reduce the maximum Reservation Charge applicable to

Rate Schedules FT, EFT, SCT, LFT and HFT and a Commodity

Charge credit that will reduce the maximum Commodity

Charge applicable to Rate Schedules IT and EIT for a 12

month period which shall commence May 1.

(d) If the revenues received are less than the costs incurred,

then Panhandle shall carry forward the net underrecoveries

to the subsequent annual billing period and may offset

such net underrecoveries against any future net

overrecoveries that may occur in a subsequent annual

billing period.