TransColorado Gas Transmission Company

Original Volume No. 1

Effective Date: 12/01/2003, Docket: RP00-459-002, Status: Effective

Second Revised Sheet No. 266 Second Revised Sheet No. 266 : Superseded

Superseding: First Revised Sheet No. 266

GENERAL TERMS AND CONDITIONS

26. SEGMENTATION - (Continued)

Agreement to new primary points if the Shipper (or in the case of a

release, the Original Shipper) and TransColorado agree to amend the

Agreement to change the primary Receipt or Delivery Points accordingly.

The new primary points must be within the original primary path of the

Agreement and may not create stranded capacity on TransColorado.

TransColorado shall not be obligated to reserve firm capacity to reinstate

the former primary points upon expiration of the segmentation or the

capacity release.

(g) Discounts for segmented transportation may be granted

according to the procedures set out in Section 9.7 of these General Terms

and Conditions.

(h) To the extent segmentation results in an increase of a

Shipper's or Replacement Shipper's firm contract rights and TransColorado

schedules and confirms that increase in firm contract rights, the Shipper

or Replacement Shipper that caused such increase in firm contract rights

overlap will be subject to the applicable overrun charge pursuant to each

rate schedule in Original Volume No. 1. If a capacity release occurs

during the day and the releasing Shipper has already submitted a

nomination, the original Shipper may incur the applicable overrun charge.

(i) TransColorado reserves the right to evaluate and disallow

segmentation on its system on a case-by-case basis for those situations

that are not operationally feasible and not already described in this

Section 26. Disallowance of segmentation requests will be made on a non-

discriminatory basis. TransColorado will post on its Internet web site

within 10 business days, the explanation for any disallowance of

segmentation not specifically described in this Tariff.

27. INCIDENTAL PURCHASE AND SALE

TransColorado is not providing a supply service under any Rate

Schedule of this tariff, but may buy and sell gas in connection with the

provision of transportation services. Without limitation of the

foregoing, TransColorado may buy and sell gas to the extent necessary to

maintain system pressure, to manage system integrity, to maintain line

pack and provide additional line pack for new facilities, to implement the

cashout imbalance procedures under Section 12.6, and to perform other

functions of TransColorado in connection with transportation services.

Nothing herein shall impose on TransColorado any obligation to provide a

supply function to any of its Shippers.