Panhandle Eastern Pipe Line Company

First Revised Volume No. 1

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

Fourth Revised Sheet No. 330 Fourth Revised Sheet No. 330 : Superseded

Superseding: Third Revised Sheet No. 330

GENERAL TERMS AND CONDITIONS

(Continued)

(e) Panhandle will calculate the Reservation Charge Credit by

dividing the net revenues calculated above by the sum of

(1) MDCQ under Rate Schedules FT, EFT, SCT, LFT and HFT in

effect at the end of each annual billing period and (2)

the equivalent of MDCQ applicable to the actual IT and EIT

volumes for the annual billing period calculated at a 100%

load factor rate. The Reservation Charge Credit

applicable to service under Rate Schedule SCT shall be

converted to a volumetric credit at a 52.5% load factor

rate. The Commodity Charge Credit applicable to services

under Rate Schedules IT and EIT shall be the Reservation

Charge Credit converted to a volumetric credit at a 100%

load factor rate. The Reservation Charge Credit shall be

computed to the nearest cent. No Reservation Charge

Credit shall be made unless the change in rates is at

least one (1) cent. The Commodity Charge Credit shall be

computed to the nearest one hundredth of a cent. No

Commodity Charge Credit shall be made unless the change in

rates is at least .01 cents.

(f) If the computations in Section 25.1(e) above do not

produce a credit large enough to effect a change in rates,

the net revenues for the annual billing period will be

carried over to the next annual billing period and shall

accrue interest in a manner consistent with Section

154.501(d) of the Commission's Regulations.

25.2 Flow Through of Penalties in Excess of Costs

(a) This Section 25.2 of the General Terms and Conditions sets

forth the procedures under which Panhandle will flow

through to firm Shippers any penalties in excess of costs

collected pursuant to Sections 9.5(b), 12.11(g), 12.11(h),

12.16, 12.17 and 27.4(b) of the General Terms and

Conditions, Section 3.6(c) of Rate Schedules EFT, SCT and

HFT, Section 3.6 of Rate Schedule EIT, Sections 3.6(d) and

(e) of Rate Schedule LFT and Section 4(a) of Rate Schedule

GDS. Panhandle will reduce such penalties for reasonable

incremental out-of-pocket costs incurred as a direct

result of the Shipper's conduct which was penalized

pursuant to these Sections.

(b) The crediting period applicable to this Section 25.2 shall

be monthly.