Valero Interstate Transmission Company

First Revised Volume No. 2

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

2nd Revised Sheet No. 21 2nd Revised Sheet No. 21 : Superseded

Superseding: 1st Revised Sheet No. 21

ANNUAL CHARGE ADJUSTMENT CLAUSE (ACA)

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A. 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 the operation of the FERC. For the purpose of

recovering annual charges, assessed Vitco by the FERC, this Section

establishes pursuant to Section 154.38 (d)(6) of the Commission's

Regulations an ACA unit rate to be applicable to quantities sold or

transported under Vitco's Rate Schedule S-3. This ACA unit rate is

in addition to any amounts otherwise payable to Vitco under said

Rate Schedule. Vitco does not intend to recover any annual charges

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

rate case.

B. Basis of the Annual Charge Adjustment

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The Rate Schedule S-3 specified in paragraph A hereof 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).

C. 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.