Valero Interstate Transmission Company

First Revised Volume No. 1

Effective Date: 10/01/1993, Docket: TM94-1-56-000, Status: Effective

2nd Revised Sheet No. 70 2nd Revised Sheet No. 70 : Superseded

Superseding: 1st Revised Sheet No. 70

GENERAL TERMS AND CONDITIONS

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(continued)

12. ANNUAL CHARGE ADJUSTMENT CLAUSE (ACA)

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12.1 Purpose

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Annual charges are assessed against gas pipelines by the Federal

Energy Regulatory Commission (FERC) under Part 382 of the

Commission's Regulations prior to each fiscal year in order to

cover the cost of operation of the FERC. For the purpose of

recovering annual charges, assessed Vitco by the FERC, this

Section established pursuant to section 154.38 (d)(6) of the

Commission's Regulations an ACA unit rate to be applicable to

quantities transported under Vitco's Rate Schedules FTS-1-T,

FTS-1-GT and ITS-1. This ACA unit rate is in addition to any

amounts otherwise payable to Vitco under said Rate Schedules.

Vitco does not intend to recover any annual charges recorded in

FERC Account No. 928 in a Natural Gas Act Section 4 rate case.

12.2 Basis of the Annual Charge Adjustment

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The Rate Schedules FTS-1-T, FTS-1-GT and ITS-1 specified in

paragraph 12.1 shall include an increment for an Annual Charge

Adjustment (ACA) for the fiscal year ending September 30. Such

increment shall be the unit charge, adjusted to Vitco's pressure

base and heating value, if required, which has been established

by the Federal Energy Regulatory Commission. The Annual Charge

Adjustment is $.0023 per MMBtu ($.0026 per Mcf at 14.73 psia).

12.3 Filing Procedure

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The Annual Charge Adjustment shall be filed by Vitco at least 30

days prior to the proposed effective date unless, for good cause

shown, lesser periods are allowed by valid Commission Order.