Reliant Energy Gas Transmission Company

Fifth Revised Volume No. 1

Effective Date: 12/01/2002, Docket: RP03- 60-000, Status: Effective

First Revised Sheet No. 460 First Revised Sheet No. 460 : Effective

Superseding: Original Sheet No. 460

GENERAL TERMS AND CONDITIONS

(continued)

31. PENALTY REVENUE CREDITING.

31.1 General: The Shipper Penalty Revenue Credit(s) to be made by

Transporter shall be calculated in accordance with this section.

31.2 Definitions: The definitions of terms applicable to this section

are as follows:

Penalty Base Period shall mean the twelve Months (or part thereof)

ended the previous July 31.

Total Penalty Revenues shall mean the revenues (penalty revenues),

less the costs incurred by Transporter in relation to the actions

of the Shipper(s) necessitating a penalty (penalty costs),

recovered or collected during the Penalty Base Period pursuant to

the imposition of (a) Excess Contract Quantities Charges (Rate

Schedule FT, Section 5.2(b)); Rate Schedule HFT, Section 4.2(b);

Rate Schedule IT, Section 5.2(a), Rate Schedule PS, Section 3, and

Rate Schedule PHS, Section 5.2(a)); (b) Excess Service Charges

(Rate Schedule FSS, Section 5.2(b); Rate Schedule ISS, Section

5.2); (c) Cycling Penalties (Rate Schedule FSS, Section 5.2(c));

(d) Unauthorized Service Fees (Rate Schedule NNTS, Section 6.2);

(e) Failure to Return Advance Delivery Gas Charges (Rate Schedule

SBS, Section 5.2(a), Rate Schedule PHS, Section 5.2(b)); (f)

Deficient Injection Charge (Rate Schedule RSS, Section 7.4); (g)

Unauthorized Gas Charge (General Terms and Conditions, Section

5.8); and (h) charges for failure to comply with an Operational

Flow Order (OFO) (General Terms and Conditions, Section 20).

Shipper Penalty Revenue Credit shall mean the credit amount,

stated in dollars, to be received, unless otherwise agreed, by a

Shipper with a firm contract in effect during the Penalty Base

Period which shall be determined by allocating the Total Penalty

Revenues among the firm Shippers in proportion to firm reservation

or demand revenues paid by such Shippers.