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

Original Sheet No. 712 Original Sheet No. 712 : Superseded

RATE SCHEDULE DVS (Continued)

DELILVERY VARIANCE SERVICE

FORM OF SERVICE AGREEMENT

levels are actually achieved or only with respect to Quantities below

a specified level; (c) only during specified time periods; (d) only

to specified Point(s) of Delivery, mainline segments, transportation

paths or defined geographical areas; or (e) in a specified

relationship to the Quantities actually delivered (i.e., that the

rates shall be adjusted in a specified relationship to Quantities

actually delivered at the specified Point of Delivery); provided,

however, that any such discounted rate set forth above shall be

between the Maximum Rate and Minimum Rate applicable to the service

provided under this Agreement. In addition, the discount agreement

may include a provision that if one rate component which was at or

below the applicable Maximum Rate at the time the discount agreement

was executed subsequently exceeds the applicable Maximum Rate due to

a change in Panhandle's Maximum Rates so that such rate component

must be adjusted downward to equal the new applicable Maximum Rate,

then other rate components may be adjusted upward to achieve the

agreed overall rate, so long as none of the resulting rate components

exceed the Maximum Rate applicable to that rate component. Such

changes to rate components shall be applied prospectively, commencing

with the date a Commission order accepts revised tariff sheets.

However, nothing contained herein shall be construed to alter a

refund obligation under applicable law for any period during which

rates which had been charged under a discount agreement exceeded

rates which ultimately are found to be just and reasonable. Any

discount(s) shall be effective only on a prospective basis and as

specified in the written agreement between Panhandle and DVS Party.

From time to time Panhandle and Shipper may agree to a

Negotiated Rate for a specified term for service hereunder.

Provisions governing such Negotiated Rate and term shall be set forth

on Exhibit A hereto.

ARTICLE 4 - FUEL REIMBURSEMENT

In addition to collection of the rates and charges provided for

in Article 3, Panhandle shall retain the percentage provided pursuant

to Rate Schedule DVS of the Quantity of Gas applied to the Delivery

Variance Service each Day, for reimbursement in kind from DVS Party

for fuel usage and unaccounted-for line loss.

ARTICLE 5 - GENERAL TERMS AND CONDITIONS

This Agreement and all terms for service hereunder are subject

to the further provisions of Rate Schedule DVS and the General Terms

and Conditions of Panhandle's Tariff, as such may be modified,

supplemented, superseded or replaced generally or as to the service

hereunder. Panhandle reserves the right from time to time to

unilaterally file and to make effective any such changes in the

provisions of Rate Schedule DVS and/or the General Terms and

Conditions, subject to the applicable provisions of the Natural Gas

Act and the Commission's Regulations thereunder. Such Rate Schedule

and General Terms and Conditions, as may be changed from time to

time, are by this reference incorporated in their entirety into this

Agreement and made an integral part hereof.