TransColorado Gas Transmission Company

Original Volume No. 1

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Effective Date: 08/01/2001, Docket: RP01-478-000, Status: Effective

Second Revised Sheet Nof. 263 Second Revised Sheet Nof. 263 : Superseded

Superseding: First Revised Sheet No. 263

GENERAL TERMS AND CONDITIONS

23. NEGOTIATED RATES (Continued)

23.5 Transportation Service Agreements Subject to the Right of

First Refusal. The right of first refusal provided with respect to

certain Shipper's firm service agreements, as described in Section 7 of

the General Terms and Conditions, shall not apply to firm service

agreements with negotiated rates, unless otherwise agreed to in writing by

TransColorado.

23.6 Capacity Release. TransColorado and Shipper may, in

connection with their agreement to a Negotiated Rate under a firm

transportation rate schedule, agree upon payment obligations and crediting

mechanisms in the event of a capacity release that vary from or are in

addition to those set forth in Section 6 of this Tariff. This provision

does not allow TransColorado and Shipper to negotiate the terms and

conditions of service.

23.7 Capacity Scheduling. For purposes of allocating capacity

under Section 8 of these General Terms and Conditions, a Shipper paying a

negotiated rate that exceeds the maximum rate for that service will be

considered to have paid the maximum rate for such service.

23.8 Accounting for Costs and Revenues. Allocation of costs to,

and recording of revenues from service at negotiated rates(s) or rate

formula(s) will follow TransColorado's normal practices associated with

transportation services provided under this tariff. If TransColorado

institutes any revenue tracker or other device to flow through to its

shippers the impact of interruptible or other transportation transactions,

the treatment of such tracker of revenues from nonconforming negotiated

rate(s) or rate formula(s) shall be specified in the applicable tariff

provision.

23.9 Section 4(e) Rate Case Tracking. TransColorado will

separately record the volume transported, billing determinants, rate

components, surcharges and the revenue associated with its negotiated-rate

transactions so that this information can be separately identified, and

separately totaled as part of Statements G, I, and J in any applicable

rate case filing under Section 4(e) of the Natural Gas Act,15 U.S.C. &

Section 717(c). TransColorado's recovery of surcharges, such as ACA and

GRI, will comport with existing practices.

23.10 Rate Treatment. TransColorado shall have the right to seek in

future general rate proceedings discount-type adjustments in the design of

its rates related to negotiated-rate agreements that were converted from

pre-existing discount adjustments to negotiated-rate agreements, provided