Valero Interstate Transmission Company

First Revised Volume No. 2

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

Original Sheet No. 10 Original Sheet No. 10 : Superseded

PURCHASED GAS ADJUSTMENT CLAUSE

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(continued)

(c.) MMBtu Sales Quantity to be used in computing Vitco's

Purchased Gas Cost under the unit-of-sales methodology,

shall be the quantity of sales in MMBtu to Buyer and

shrinkage, under Vitco's gas processing contract

attributable to Vendors' gas, estimated for the PGA

Period under Rate Schedule S-3.

(d.) Vitco's Purchased Gas Cost per MMBtu at the Effective

Date shall be computed by first multiplying (1) the total

volumes of gas purchased from each Vendor applicable to

Rate Schedule S-3, as determined under paragraph 4(b) by;

(2) the effective rates of each Vendor determined under

paragraph 4(a). The total projected gas acquisition cost

shall then be divided by the MMBtu sales quantity volumes

as calculated in paragraph 4(c). The result is the average

purchased gas cost per MMBtu under Vitco's elected unit-of-

sales methodology and is shown on Sheet 6 hereof as the base

cost of gas plus the cumulative adjustment.

(e.) The Current Change in Vitco's Purchase Gas Cost: shall

be computed by subtracting (1) Vitco's Purchased Gas Cost

per MMBtu, reflected in the previous scheduled or Interim

PGA filing from (2) Vitco's Purchased Gas Cost per MMBtu at

the Effective Date, as defined in paragraph 4(d). Vitco has

elected the unit-of-sales methodology which shall be

consistently used for computing the current adjustment and

for determining the monthly deferrals to Account No. 191.

(5) Unrecovered Purchased Gas Cost Account

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(a.) Beginning with the effective date of this Purchased Gas Cost

Adjustment Clause, Vitco shall maintain for this tariff an

Unrecovered Purchased Gas Cost Account No. 191 with

appropriate subaccounts to record (1) monthly deferrals of

under- or over recovered gas costs as determined in

paragraph 5(b); (2) refunds received from Vitco's Vendors

under contracts applicable to Buyer during the period of

effectiveness of this Purchased Gas Adjustment Clause and

applicable to this rate schedule pursuant to paragraph 5(c);

(3) carrying charges computed pursuant to paragraph 5(d);

(4) amortization of unrecovered purchased gas cost pursuant

to paragraph 5(e) and; (5) any other amounts permitted under

Section 154.305(g) of the Commissions Regulations.