*Reliant Energy Gas Transmission Company*

*Fourth Revised Volume No. 1*

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Effective Date: 11/01/1998, Docket: RP96-200-035, Status: Effective

**Substitute Seventh Revised Sheet No. 7E **Substitute Seventh Revised Sheet No. 7E : Effective

Superseding: Sixth Revised Sheet No.7E

Statement of Negotiated Rates

Contract Rate Contract

Shipper Name Number Schedule Demand Receipt Point(s) Delivery Point(s) Rate

------------- -------- -------- -------- ---------------- ----------------- ----

Union Pacific Fuels, Inc. 1002198 FT 50,000 UPRC @ Carthage - Line ST-1A TGT @ Perryville See Formula below

Trunkline @ Richland

SONAT @ Perryville

ANR @ Perryville

TET @ West Monroe

Tennessee 100 @ Perryville

Tennessee 800 @ Perryville

Formula Rates for Services up to Contract Demand:

The formula rate shall be based on the index prices ("Index Prices") for spot gas delivered to the pipelines at the areas indicated, as published in the first

issue of the Month of Inside FERC's Gas Market Report (Index Prices (1), (2), and (4)) and the Gas Daily Price Guide (Index Price (3)) for the Service Month.

If the information or publication ceases to be published, the parties shall select another mutually agreeable Index Price

The unit rate per Dth of Contract Demand shall be obtained by dividing by 2 the sum of Price A and Price B, each of which is calculated as follows.

Price A: Index Spread A shall be (a) the difference between the Index Prices specified in (1) and (2) below, less (b) the Compressor Fuel Value.

The Compressor Fuel Value for Index Spread A shall be calculated by multiplying the applicable Compressor Fuel percentage, as authorized and in effect from

time to time by Transporter's Tariff, times the Index Price set forth in (1) below.

(1) NorAm Gas Transmission (East)

(2) Texas Gas Transmission, Zone 1

If Index Spread A is less than or equal to $0.08, Price A shall be $0.05. If Index Spread A is greater than $0.08, or less than or equal to $0.155, then

Price A shall be (a) the difference between Index Spread A and $0.08, multiplied by (b) Eighty Percent (80%), plus $0.05. If Index Spread A is greater

than $0.155, then Price A shall be (a) the difference between Index Spread A and $0.155 multiplied by (b) Fifty Percent (50%), plus $0.11.

Price B: Index Spread B shall be (a) the difference between the Index Prices specified in (3) and (4) below, less (b) the Compressor Fuel Value. The

Compressor Fuel Value for Index Spread B shall be calculated by multiplying the applicable Compressor Fuel percentage, as authorized and in effect from

time to time by Transporter's Tariff, times the Index Price set forth in (3) below.

(3) Carthage Hub

(4) Texas Gas Transmission, Zone 1

If Index Spread B is less than or equal to $0.08, Price B shall be $0.0525. If Index Spread B is greater than $0.08, or less than or equal to $0.1519,

then Price B shall be (a) the difference between Index Spread B and $0.08, multiplied by (b) Eighty Percent (80%), plus $0.0525. If Index Spread B is

greater than $0.1519, then Price B shall be (a) the difference between Index Spread B and $0.1519 multiplied by (b) Fifty Percent (50%), plus $0.11.

In any event, however, the unit rate per Dth of Contract Demand in any Month shall never be below Transporter's then effective minimum Tariff rate. Unless Transporter

agrees otherwise, the rate for any authorized overrun quantities shall be the greater of the applicable maximum Tariff rate or the applicable formula unit rate.