Valero Interstate Transmission Company

First Revised Volume No. 2

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

Original Sheet No. 14 Original Sheet No. 14 : Superseded

PURCHASED GAS ADJUSTMENT CLAUSE

-------------------------------

(continued)

C. INTERIM PURCHASED GAS COST RATE ADJUSTMENT

------------------------------------------

(1) Filing and Effective Date

-----------------------------

In addition to an annual, quarterly, or fully supported

out-of-cycle PGA filing, Vitco may at any time file an Interim

Adjustment to its tariff rate(s) by filing a Revised Tariff

Sheet No. 6 to reflect known and measurable changes in

Vitco's cost of purchased gas reflected in its last effective

PGA filing. The Revised Tariff Sheet No. 6 will provide a

minimum of one (1) day notice to all affected customers, the

FERC, and state commissions having an interest, and will

become effective on the date which Vitco specifies in the

filing or the second day after the date of filing with the

FERC, whichever is later. Objections to Vitco's purchasing

practices reflected in an Interim Adjustment filing may be

raised at the time of Vitco's next annual PGA filing by all

affected customers, the FERC, and state commissions having an

interest; provided, however, that mathematical, typographical,

or accounting errors that affect the correct computation of a

rate adjustment in an interim adjustment filing may be

challenged at the time of filing.

(2) Calculation of the Interim Adjustment

-----------------------------------------

The Interim Adjustment shall be calculated using the same

methodology used to compute the change in Vitco's Purchased

Gas Cost in Paragraph B(4)(e) herein; provided that the

average cost of gas underlying an interim adjustment may not

exceed the projected average cost of gas established by

Vitco's last scheduled PGA filing or a fully supported

out-of-cycle PGA filing. The Interim Adjustment filing shall

be based upon Vitco's estimates through the remainder of the

current PGA period used to establish the current average

cost of gas and shall contain the information required by

Section 154.309(c)(2) of the FERC regulations.