Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 09/15/2008, Docket: RP08-392-000, Status: Effective

Original Sheet No. 3203 Original Sheet No. 3203 GENERAL TERMS AND CONDITIONS Section 20 (Cont'd) For the purposes of determining whether a project is economically beneficial to Transporter, Transporter will evaluate projects on the basis of the amount of reserves and deliverability characteristics of the gas supply to be attached, the cost of the facilities, operating, and maintenance, as well as administrative and general expenses attributable to the facilities, and the revenues Transporter estimates will be generated as a result of the attachment of the gas supplies and the availability of capital funds on terms and conditions acceptable to the Transporter. In estimating the incremental revenues to be generated, Transporter will evaluate the existence of capacity limitations downstream of the facilities, the marketability of the gas supplies, the location of the markets for the gas supplies, the interruptible versus the firm nature of the transportation service from the attached gas supplies, and other similar factors which impact whether the available deliverability from the attached gas supplies will actually be transported. Transporter may seek to include the unreimbursed facility costs in its general system rates in a subsequent rate filing which shall report (1) the location of each facility built without reimbursement, (2) the cost of that facility, and (3) the date the facility was placed into service. Transporter will own and operate all facilities constructed herein. Transporter shall have the right at any time to terminate installation of new facilities described in this section on a nondiscriminatory basis. 20.3 Texas Gas shall install, own, operate, and maintain such equipment unless otherwise agreed to in writing by Texas Gas and Customer. Unless otherwise agreed, Customer shall reimburse or cause Texas Gas to be reimbursed for the cost of such facilities. Such costs include, but are not limited to, operating and maintenance expenses, administrative and general expenses, gross-up for state and federal income taxes, taxes other than income taxes, depreciation costs and the time value of money. All such facilities owned and operated by Texas Gas must include any rights-of-way necessary to access facilities for inspection and maintenance. Any such facilities constructed by Customer or Customer's agent must be in accordance with Texas Gas' specifications. Texas Gas must approve design drawings and bills of materials, and construction shall be subject to approval by Texas Gas' inspectors. If Customer constructs facilities, Customer shall coordinate the construction of such facilities with Texas Gas so that Texas Gas may reasonably have inspectors at the site during construction. Customer assumes full responsibility and liability and agrees to hold Texas Gas harmless from any liability of any nature arising from the installation of such facilities by Customer or Customer's agent.