Valero Interstate Transmission Company

First Revised Volume No. 2

Effective Date: 11/01/1991, Docket: GT91- 42-000, Status: Effective

Original Sheet No. 8 Original Sheet No. 8 : Superseded

PURCHASED GAS ADJUSTMENT CLAUSE

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A. STATEMENT OF RATE

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(1) For all gas delivered each month under Rate Schedule S-3,

the rates shall be set out on Sheet No. 6 hereto.

(2) Throughout this notice of change in rate, the following

abbreviated references are used:

a. Valero Interstate Transmission Company shall be referred

to as "Vitco";

b. Each sale for resale customer under Rate Schedules S-3

shall be referred to as "buyer";

c. Producers, pipelines or marketers that sell gas to Vitco

under contracts shall be referred to as "Vendors";

d. The Federal Energy Regulatory Commission shall be

referred to as "FERC" or "Commission".

B. PURCHASED GAS COST RATE ADJUSTMENT ("PGA")

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(1) The rates and charges otherwise computed under Rate Schedule

S-3 set forth on Sheet No. 6 hereof may be adjusted upward and

shall be adjusted downward in accordance with the schedule and

procedures set out in paragraph B(2) to reflect changes in

Vitco's average cost of purchased gas under Vendor's contracts

applicable to each Buyer under Rate Schedule S-3; provided that

no adjustment shall be made unless the change in Vitco's average

cost of purchased gas equals or exceeds one mill ($0.001) per

MMBtu. The definition of terms used in describing the PGA

provisions, unless otherwise indicated, shall be those contained

in Section 154.302 of the Commission's Regulations.