Reliant Energy Gas Transmission Company

Fifth Revised Volume No. 1

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Effective Date: 06/01/2002, Docket: RP00-482-003, Status: Effective

First Revised Sheet No. 349A First Revised Sheet No. 349A : Effective

Superseding: Original Sheet No. 349A

GENERAL TERMS AND CONDITIONS

(continued)

12.5 Discounts.

(a) If Transporter agrees to a discounted rate under Transporter's Rate

Schedules, the following terms may be agreed to without constituting a

material deviation from Transporter's applicable pro forma Service

Agreement; provided, however, any such rate or component thereof shall

not be less than Transporter's applicable minimum rate, nor greater

than Transporter's applicable maximum rate, unless in accordance with

Transporter's Negotiated Rate authority. Such rate may apply:

(i) to specified quantities under Shipper's Service Agreement(s);

(ii) to quantities above or below a certain level or all quantities

if quantities exceed a certain level;

(iii) in a specified relationship to quantities actually transported

(i.e., that the rates shall be adjusted in a specified

relationship to the quantities actually transported);

(iv) during specified periods of the year or over specifically

defined periods of time;

(v) to specified receipt points, delivery points, zones, Pooling

Areas, transportation routes, markets or other defined

geographical areas; and/or

(vi) to production reserves committed by Shipper.

(b) (i) Expedited discount retention rights, as defined herein, shall

apply to firm discounted rate (not Negotiated Rates) agreements

that are executed and effective after the effective date of the

implementation of expedited discount retention rights under

Transporter's Tariff. A Shipper may elect to enter into a

discounted rate agreement without expedited discount retention

rights.

(ii) A firm Shipper choosing to exercise its segmentation, capacity

release or flexible point rights with whom Transporter has

agreed to a discounted rate (not a Negotiated Rate) limited to

specific Receipt and Delivery Point combinations, may request to

retain its discounted rate at a Receipt and Delivery Point

combination not expressly provided for in its discounted rate

agreement pursuant to the procedures set forth herein. A

rebuttable presumption shall exist that such discounted rate

should be retained if Transporter is granting discounts (not

Negotiated Rates) to other transactions at such combination of

points, unless Transporter determines that the requested