Transwestern Pipeline Company

Second Revised Volume No. 1

Effective Date: 02/01/1993, Docket: RS92- 87-003, Status: Effective

1st Revised Sheet No. 12 1st Revised Sheet No. 12 : Effective

Superseding: Original Sheet No. 12

RATE SCHEDULE FTS-1

Firm Transportation Service

(continued)

In estimating the revenues to be generated, Transporter will consider

the existence of capacity limitations downstream of the proposed new

facilities, the marketability of gas which may flow through said

facilities, the interruptible versus firm nature of the

transportation service for the gas, and other similar factors which

determine whether gas will actually be transported through said

facilities. Based on these criteria, the economic value of a project

shall be determined using a discounted cash flow rate of return

methodology with the minimum acceptable rate of return to be

published on Transporter's Electronic Bulletin Board, as amended from

time-to-time.

(d) Transporter shall not construct or modify any facilities hereunder

which will result in an increase or decrease in Transporter's

mainline capacity, or which may compromise the operational integrity

of Transporter's pipeline system. For those facilities which

Transporter agrees to construct, Transporter will construct those

facilities (1) pursuant to the authorization granted in Subpart F of

Part 157 of the Regulations of the Federal Energy Regulatory

Commission or (2) where the prior authorization of the Federal

Energy Regulatory Commission is not required to construct such

facilities. Transporter will own and operate all facilities

constructed hereunder. To the extent Shipper's reimbursement of

Transporter's costs incurred to construct new facilities hereunder

qualifies as a contribution in aid of construction under the Tax

Reform Act of 1986, Pub. L. No. 99-514 (1986), as amended from

time-to-time, Shipper shall also reimburse Transporter for Federal

income taxes incurred by Transporter as a direct result of such

contributions in aid of construction by Shipper.

(e) Transporter shall have the right at any time during a calendar year

to terminate, prospectively for the remainder of that calendar year,

the reimbursement program described in Paragraph (c) above for new

projects.