Loading...
HomeMy WebLinkAboutOrdinance No. 2008-24 (Title: An ordinance approving a settlement agreement between the Gulf Coast Coalition of Cities and CenterPoint Energy Entex and exercising the city's original jurisdiction by adopting tariffs that reflect gas rate adjustments consistent with the settlement agreement.) ORDINANCE NO.2008-24 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD, TEXAS, ("CITY") APPROVING A SETTLEMENT AGREEMENT BETWEEN THE GULF COAST COALITION OF CITIES AND CENTERPOINT ENERGY ENTEX ("CENTERPOINT" OR "THE COMPANY") REGARDING THE COMPANY'S STATEMENT OF INTENT TO CHANGE GAS RATES IN ALL CITIES EXERCISING ORIGINAL JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE SETTLEMENT AGREEMENT AND FINDING THE RATES TO BE SET BY THE ATTACHED TARIFFS TO BE JUST AND REASONABLE; ADOPTING A SAVINGS CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; DECLARING AN EFFECTIVE DATE; REPEALING ANY PRIOR ORDINANCES INCONSISTENT WITH THIS ORDINANCE AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND LEGAL COUNSEL. WHEREAS, the City of Friendswood, Texas ("City") is a gas utility customer of CenterPoint Energy Entex, Texas Coast Division ("CenterPoint" or "the Company"), and a, regulatory authority with an interest in the rates and charges of CenterPoint; and WHEREAS, on or about March 6, 2008, CenterPoint, pursuant to Gas Utility Regulatory Act § 104.102, filed with the City a Statement of Intent to increase system-wide gas rates by approximately $7.36 million, such increase to be effective in all municipalities exercising original jurisdiction within its Texas Coast Division service area effective on April 10, 2008; and WHEREAS, the City took action to suspend the April 10, 2008 effective date and to coordinate a response to CenterPoints' filing with 14 other similarly situated municipalities through the Gulf Coast Coalition of Cities ("GCCC") (such participating cities are referred to herein as "GCCC"); and WHEREAS, CenterPoint has agreed to extend the April 10, 2008 effective date such that the City has a reasonable amount of time to take action on this matter; and WHEREAS, the GCCC desires to avoid the litigation expense that would result from a lengthy contested rate case proceeding before the RRC and through the appellate process; and WHEREAS, GCCC members authorized its attorneys and experts to formulate and review reasonable settlement positions to resolve the pending rate increase request; and WHEREAS, GCCC attorneys met numerous times with the Company to negotiate a Settlement Agreement resolving the issues raised in the Company's Statement of Intent filing; and WHEREAS, the GCCC attorneys and experts believe existing rates are unreasonable and should be changed; and WHEREAS, the GCCC attorneys and experts recommend GCCC members approve the negotiated Settlement Agreement and attached tariffs; and WHEREAS, the attached tariffs provide for an expedited rate review process as a substitute to the current GRIP process instituted by the Legislature; and WHEREAS, the attached tariffs implementing new rates are consistent with the Settlement Agreement and are just,reasonable, and in the public interest; and WHEREAS, it is the intention of the parties that GCCC receive the benefit of any Settlement Agreement that CenterPoint enters into with other entities arising out of its Statement of Intent or any associated appeals of a decision entered by the Railroad Commission regarding the Company's request to increase rates; and WHEREAS,the Settlement Agreement as a whole is in the public interest. Ord.2008-24 2 NOW, THEREFORE,BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FRIENDSWOOD,TEXAS: f Section 1. That the findings set forth in this Ordinance are hereby in all things approved. ` Section 2. That the City Council finds that the Settlement Agreement, which is attached hereto and incorporated herein as Attachment A, is in the public interest and is hereby endorsed in all respects. Section 3. That existing rates for natural gas service provided by CenterPoint are unreasonable and new tariffs, which are attached hereto and incorporated herein as Attachment B, are just and reasonable and are hereby adopted. Section 4. That to the extent any resolution or ordinance previously, adopted by the I Council is inconsistent with this Ordinance, it is hereby repealed. i Section 5. That the meeting at which this Ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Section 6. That if any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance and the remaining provisions of the Ordinance shall be interpreted ) as if the offending section or clause never existed. Section 7. That if GCCC determines that the overall rates, revenues, terms and conditions, or benefits resulting from a Final Order or any benefit resulting from a subsequent Settlement Agreement approved in any proceeding addressing the issues raised in CenterPoints' Statement of Intent would be more beneficial to GCCC than the terms of the attached Settlement Agreement, then the more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to GCCC. Ord.2008-24 3 Section 8. That this Ordinance shall become effective from and after its passage with rates authorized by attached Tariffs to be effective for customer bills delivered on or after August 1, 2008. Section 9. That a copy of this Ordinance shall be sent to the Company, care of Denise i Hardcastle at CenterPoint Energy, P. O. Box 2628, Houston, Texas 77252-2628 and to Thomas i Brocato, legal counsel to GCCC, at Lloyd Gosselink, P.O. Box 1725, Austin, Texas 78767-1725. Section 10. In the event any clause phrase,provision, sentence,or part of this Ordinance or the application of the same to any person or circumstances shall for any reason be adjudged invalid or held unconstitutional by a court of competent jurisdiction, it shall not affect, impair, or invalidate this Ordinance as a whole or any part or provision hereof other than the part declared to be invalid or unconstitutional; and the City Council of the City of Friendswood, Texas, declares i that it would have passed each and every part of the same notwithstanding the omission of any such part thus declared to be invalid or unconstitutional,whether there be one or more parts. i i PASSED AND APPROVED on first reading this 213`day of July,2008. PASSED,APPROVED, and ADOPTED on second and final reading this 4 th day of August,2008. David J. H. Smith Mayor ATTEST FRIEMQ O* �$ A. OO u o D oris McKenzie, T C City Secretary dp4TA 00 � Ord.2008-24 4 Attachment A (Ord. 2008-24) ATTACHMENT A Attorney Client Privilege Attorney Work Product STATEMENT OF INTENT FILED BY CENTERPOINT ENERGY RESOURCES CORP.D/B/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS ON MARCH 6,2008 SETTLEMENT AGREEMENT This Settlement Agreement is entered into by and between CenterPoint Energy Resources Corp. d(b/a CenterPoint Energy Entex and CenterPoint Energy Texas Gas ("CenterPoint") and the Gulf Coast Coalition of Cities("GCCC") whose members include the Cities of Alvin, Clear Lake Shores, Dickinson, Friendswood, Kemah, Lake Jackson, La Marque, Mont Belvieu, Morgan's Point, Rosenberg, Santa Fe, Seabrook, Sugarland, Taylor Lake Village, Texas City collectively"GCCC Cities"). WHEREAS, this Settlement Agreement resolves all issues relating to the CenterPoint Statement of Intent filed with the GCCC Cities on March 6, 2008, in a manner that CenterPoint and GCCC (collectively"the Signatories') believe is consistent with the public interest, and the Signatories represent diverse interests; —< WHEREAS, the Signatories believe that a fully contested hearing in the case would be e time-consuming and entail substantial additional expense for all parties and that the public interest will be served by adoption of an ordinance consistent with the Settlement Agreement; NOW, THEREFORE, in consideration of the mutual agreements and covenants established herein, the Signatories, through their undersigned representatives, agree to and recommend for approval by the GCCC Cities the following Settlement Terms as a means of fully resolving all issues raised in the March 6, 2008 Statement of Intent filed by CenterPoint on behalf of its Texas Coast Division: SettlenientTenns 1. CenterPoint and the GCCC Cities agree to the rates,terms and conditions reflected in the tariffs attached to this Settlement Agreement as Exhibit A. Said tariffs should allow CenterPoint an additional $3.38 million in annual revenue by implementation of rates shown in the proof of revenues attached as Exhibit _. CenterPoint and the GCCC Cities further agree that the rates, terms and conditions reflected in Exhibit A to this Settlement Agreement comply with the rate-setting requirements of Chapter 104 of the Texas Utilities Code. The gas rates, terms and conditions established by this Settlement Agreement shall be effective for bills rendered on or after August 1,2008. 2. Included as part of Exhibit A is a Cost of Service Adjustment ("COSA") tariff (Rate Schedule No. COSA-2) that provides for an annual rate adjustment to reflect changes in . operating and maintenance expense, depreciation expense, other taxes expense, and revenues as well as changes in capital investment and associated changes in gross revenue related taxes. W:L-Maeuments and SettingAnhob)4neskto&ttachment a1CP•GCCC Settlement Agreement(final).doc 3. With respect to the COSA rate schedule, CenterPoint and GCCC agree that in the event the parties are unable to reach agreement on the appropriate COSA Adjustment calculated under the COSA and the GCCC Cities deny the proposed COSA Adjustment, CenterPoint shall have the option of appealing that denial to the Railroad Commission of Texas ("Commission"). CenterPoint and GCCC further agree that in the event of an appeal,the GCCC Cities will have standing to intervene in an appeal at the Commission and is authorized to receive reimbursement of its reasonable and necessary rate case expenses associated with participation in the appeal as if the rate-setting provisions of Sections 103.022 and 103.023 of the Texas Utility Code applied. The Signatories further agree that the rate-setting provisions of Chapters 103 and 104 of the Texas Utility Code shall apply to a determination of the appropriate COSA adjustment. 4. CenterPoint agrees that it will make no filings on behalf of its Texas Coast Division under the provisions of Tex.Util. Code Ann. § 104.301 while the Schedule No. COSA-2 is in effect. In the event that a regulatory authority fails to act or enters an adverse decision regarding the proposed annual adjustment under Schedule COSA-2,the Railroad Commission of Texas shall, pursuant to the provisions of the Texas Utilities Code, have exclusive appellate jurisdiction to review the action or inaction of the regulatory authority exercising exclusive original jurisdiction over the COSA request. In addition, the Signatories agree that this Settlement Agreement shall not be construed as a waiver of the GCCC Cities' right to initiate a show cause proceeding or the Company's right to file a Statement of Intent under the provisions of the Texas Utilities Code. 5. It is the intention of the Signatories that the GCCC Cities receive the benefit of any Settlement Agreement that CenterPoint enters into with other entities arising out of GUD No. 9791 (consolidated cases) or any associated appeals from GUD No.9791. CenterPoint therefore agrees that if the rates,revenues, terms and conditions, or benefits accruing to the settling entity would be more beneficial to the GCCC Cities than the terms of this Settlement Agreement, as determined by the GCCC Cities, such more favorable rates,revenues,terms and conditions or benefits shall additionally accrue to the GCCC Cities. If the Final Order in GUD No. 9791 or orders resulting from any associated appeals are determined by GCCC Cities to result in overall rates, revenues, terms and conditions, and benefits that are more beneficial than the terms of this Settlement Agreement, the GCCC Cities may choose rates, revenues, terms and conditions, and benefits consistent with the Final Order or orders of any associated appeals in place of the Settlement Agreement. 6. CenterPoint agrees to reimburse the GCCC Cities for their previously incurred reasonable rate case expenses associated with CenterPoint's 2008 Statement of Intent filed in its Texas Coast Division within thirty(30) days of the date of the last GCCC City has taken action on this Settlement Agreement, and any additional reasonable rate case expenses incurred through the date of the last GCCC City ordinance approving the Settlement Agreement. The Signatories agree that CenterPoint is entitled to recover its reasonable .rate case expenses associated with CenterPoint's 2008 Statement of Intent filing with the GCCC Cities, as well as those expenses of the GCCC Cities associated with CenterPoint's 2008 Statement of Intent, as an expense to be included in the first COSA filed in 2009, and that such amount shall not be included in the calculation of the 5% band limiting the amount of any COSA Adjustment. GCCC Cities shall not be \P.CADocuments and SettingsWtaby\DesLtop\attachment a\CP•t3CCC Settlement Agreement(Snal).doc responsible for any other rate case expenses associated with CenterPoinfs 2008 Statement of Intent or GUD Docket No. 9791. 7. CenterPoint and the GCCC Cities agree that within a reasonable time period the GCCC Cities shall adopt ordinances approving the Settlement.Agreement and establish rates and services for the GCCC Cities consistent with those set forth in Exhibit A to this Settlement Agreement. The Signatories agree to make good faith efforts to encourage each GCCC City to adopt an ordinance approving the Settlement Agreement within a reasonable time period. 8. The Signatories agree that the terms of the Settlement Agreement are interdependent and indivisible, and that if any GCCC City enters an order that is inconsistent with this Settlement Agreement,then any Signatory may withdraw with regard to such GCCC City without being deemed to have waived any procedural right or to have taken any substantive position on any fact or issue by virtue of that Signatory's entry into the Settlement Agreement or its subsequent withdrawal. 9. The Signatories agree that all negotiations, discussion, and conferences related to the Settlement Agreement are privileged, inadmissible, and not relevant to prove any issues associated with the March 6, 2008 Statement of Intent filed by CenterPoint on behalf of its Texas Coast Division pursuant to Texas law. I 10. The Signatories agree that neither this Settlement Agreement nor any oral or written statements made dining the course of settlement negotiations may be used for any purpose other than as necessary to support the entry by the GCCC Cities of an order implementing this Settlement Agreement. i 11. The Signatories agree that this Settlement Agreement is binding on each Signatory only for the purpose of settling the issues set forth herein and for no other purposes, and, except to the extent the Settlement Agreement governs a Signatory's rights and obligations for future periods, this Settlement Agreement shall not be binding or precedential upon a Signatory outside this proceeding, 12.The Signatories agree that this Settlement Agreement may be executed in multiple counterparts and may be filed with facsimile signatures. Agreed to this 3rd day of July,2008, CENTERPOINT ENERGY RESOURCES,INC. By: Richard A.Zapalac Regional Vice President Gas Operations GULF COAST COALITION OF CITIES w:CADocuments and StWngsWsaby\Desktoptsaachment a\CP-accc settlement Agreement(final).doc By: Thomas Brocato Attorney for Gulf Coast Coalition of Cities _i i W.C'Mmuments end SettingstnhabylDesLtoplattachment MC&ICCC Settlement Agreement(Enal).doc Attachment B —� -- (Ord. 2008-24) — . rvro ConterPoint Energy Entex Texas Coast Division Rate Design Line Commercial l No. Parlicutars Tol,@I Residential Small Lame I 1 Settlement $46.794.609 542,357,682 $3.262.575 51,1741352 2 Current Margin Received $1,98_0,726 3 Transferred to Residential $__,_.___ $ -,L772,3� 4 Total Rate Design Cost of Service $46.794.609 $41.585,294 $3.262,575 $1.946,740 5 Less: 6 Houston Prompt Payment S 17,430 $ 14.904 S 795 S 1,731 7 Houston Division Margin a Customer Charge $ 430.612 $ 351.036 $ 31,216 $ 48,360 9 Distribution Charge $ 113,266 $ 38,356 S 15,318 S 5959 10 Total-Customers on Houston Rates in Texas Coast $ 561,308 S 404,296 S 47.329 $ 109,683 11 Net Cost of Service to be Collected from TxCont $46,233.301 $41.180,998 S3,215,246 $1.837,057 12 Net Customer Charge Cost of Serv)ce 38,884.759 36,819,931 1,790,468 274,351 13 Number Bls 2.797,536 2,644,860 146,160 6,516 14 15 Design Customer Charge 13.00 13.00 13.00 16 Customer Charge Revenue $36.367.968 S34.383,160 $ 1,900,090 S 84,708 17 Net Distribution Charge Revenue Required 5.9.865.333 $ 6.797,818 S-1.315.166 S1,75?.,349 _ 18 UlQck 6illiny Dglgrminanls 19 Block 1 0.491,220 8,626,800 20 Block 2 12.253,800 12.718.773 21 Block 3 _ - 5,549.851 22 Total Billing Determinants ,93_892,530 -18.745.020 26,896,424 23 Block Rates 24 Block 1: all Ccf $ 0.07240 25 26 Block 1: 0-150Ccf S 0.08500 27 Block 2: 151+Ccf $ 0.06230 28 Block 1: 0-1500 Ccf S 0.08440 29 Block 2: 1501-10.000 Ccf S 0.05880 30 Block 3: 10,001 Ccf S 0,04980 31 Distribution Charge Revenue 32 Block 1 6,797,819 551,754 728,102 33 Block 2 - 763.412 747,864 34 Block 3 276,383 35 Total Distribution Charge Revenue 9,865.334 6.797,819 1,315,166 1,752,349 36 Total Revenue-Design- 46.794.610 41,585.795 3,262.675 1.946,740 37 Miscellaneous Gas Service Revenue 2,641.980 1,802.920 837_060 __2,000 TOTAL S49A36.590 $43.3BB.215 S 4.099.635 S7,948,740 38 Current Revenue(Note 1) $n6,05@,Q76 541213,081 $3 113,067, $1 931,18; 39 Increase S_3y.378.51A S 3.114384 $ _106,572 S i'1.558 No es t See GCCC 3.12U.On the CD supplied to GCCC,there is a file called: TxCoasl Reblit-for filing Adjusted rov Feb 28 2008.xis On the tab"Margin"which Is in this file(without links)shows the calculation of non gas margin. Note that gas cost and revenue related taxes are subtracted from revenue to compute non gas margin. To the non-gas margin amount,forfeited discounts and miseellaneous service charges are added to arrive at the total current revenue listed above. CenterPoint Energy Entex Texas Coast Divislon Margin Based on Twelve Months ended September 2007 Data �J (A) (B) (C) (D) (E) Ln Small Large No. Residential Commercial Commercial Industrial Total 1 Total Adjusted Revenues $132,355,023 $23,862,520 $20,125,922 $7,147,290 $183,490,755 2 Total Adjusted Gas Cost 91,136,464 20,090,328 18,187,652 6,477,592 135,892,036 3 Total Adj.Gross Reclepts Taxes 3,907,568 777,825 626,713 132,222 5,444,328 4 Total Adjusted Margin $37,310,991 $2,994,367 $1,311,557 $537,476 $42,154,391 CENTERPOINT ENERGY RESOURCES CORP. DB/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET TAX ADJUSTMENT RATE SCHEDULE NO. TA-6 The Customers shall reimburse the Company for the Customers' proportionate part of any tax, charge,impost, assessment or fee(except state, county,city, and special district ad valorem taxes and income taxes) levied upon the Company with respect to the Gas Service provided to Customers by Company and any associated facilities involved in the performance of such Gas Service(hereinafter referred to as "the Tax").If the law,rule,regulation, ordinance,or agreement levying the Tax specifies a method of collection from Customers, then the method so specified shall be utilized provided such method results in the collection of taxes from the Customers equal to the taxes levied on the Company. If no method of collection is specified, then the Company shall collect an amount calculated as a percentage of the Customers' bills applicable directly to those Customers located solely within the jurisdiction imposing the tax and/or within the jurisdiction where the tax is applicable. The percentage shall be determined so that the collection from Customers within the Company's Texas Coast Division is equal to the taxes levied on the Company. The initial Tax Adjustment Rate shall be based on the Taxes that are levied upon the Company on the effective date of this Rate Schedule. The Company will initiate a new or changed Tax Adjustment Rate beginning with the billing cycle immediately following the effective date of the new or changed Tax as specified by the applicable law,rule, regulation, ordinance, or agreement, provided that the Company has the customer billing data necessary to bill and collect the Tax.If at any time there is a significant change which will cause an unreasonable over or under collection of the Tax, the Company will adjust the Tax Adjustment Rate so that such over or under collection will be minimized. The Tax Adjustment Rate (calculated on a per Ccf or per Mcf basis, as appropriate) shall be reported to the applicable governmental authority by the last business day of the month in which the Tax Adjustment Rate became effective. CENTERPOINT ENERGY RESOURCES CORP. D/B/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET FRANCHISE FEE ADJUSTMENT RATE SCHEDULE NO.FFA-1 Application Applicable to Customers inside the corporate limits of an incorporated municipality that imposes a municipal franchise fee upon Company for the Gas Service provided to Customer. Monthly Adjustment Company will adjust Customer's bill each month in an amount equal to the municipal franchise fees payable for the Gas Service provided to Customer by Company. Municipal franchise fees are determined by each municipality's franchise ordinance. Each municipality's franchise ordinance will specify the percentage and applicability of franchise fees. �V} CENTERPOINT ENERGY RESOURCES CORP. DBIA CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET GENERAL SERVICE-SMALL RATE SCHEDULE NO.GSS-2073 i i APPLICATION OF SCHEDULE This schedule is applicable to natural gas service to any customer engaging in any business, professional or institutional activity, for all uses of gas, including cooking, heating,refrigeration, water heating, air conditioning, and power. This schedule is applicable to any general service customer for commercial uses and industrial uses,except standby service,whose average monthly usage for the prior calendar year is 150,000 cubic feet or less. Natural gas supplied hereunder is for the individual use of the customer at one point of delivery and shall not be resold or shared with others. MONTHLY RATE For bills rendered on and after the effective date of this rate schedule,the monthly rate for each customer receiving service under this rate schedule shall be the sum of the following: (a) The Base Rate consisting of I (1) Customer Charge—$13.00; I (2) Commodity Charge— First 150 Ccf $0.0850 Over 150 Ccf $0.0623 (b) Tax Adjustment—The Tax Adjustment will be calculated and adjusted periodically as defined in the Company's Tax Adjustment Rate Schedule and Franchise Fee Adjustment Rate Schedule, (c) Gas Cost Adjustment—The applicable Purchased Gas Adjustment(PGA)Rate—as calculated on a per Ccf basis and adjusted periodically under the applicable Purchased Gas Adjustment (PGA) Rate Schedule—for all gas used. RULES AND REGULATIONS Service under this schedule shall be furnished in accordance with the Company's General Rules and Regulations,as such rules may be amended from time to time. A copy of the Company's General Rules and Regulations may be obtained from Company's office located at 1111 Louisiana Street,Houston,Texas. CENTERPOINT ENERGY RESOURCES CORP. DBIA CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATESHEET SCHEDULE OF MISCELLANEOUS SERVICE CHARGES RATE SCHEDULE NO.MISC-8 GAS SERVICE 1. institution of service to residential or general service $40 After-hours surcharge for each after-hours service call $47 2. Restore service after termination for non-payment,cut-off by customer or agent or for convenience $40 of customer After-hours surcharge for each after-hours service call $47 3. Turning off service to active meter—account not finalled(per trip) $20 After-hours surcharge for each after-hours service call $47 4. Special meter test at customer's request(see General Rules and Regulations for special situations) $15 5. Change customer meter $55 6. Change residential meter location: Minimum charge $350 Additional meters in manifold each $55 (Plus cost of materials) 7. Tap Charge N.C.` `J 8. Installation of remote read device where company cannot get access to read meter $180 9. Disconnect service at main $300 (Plus other related costs) 10. Restore service at main after termination for non-payment $300 (Plus cost of materials) 11. Temporary transfer of individually metered multi-family service from vacating tenant to apartment N.C. complex owner. (Applicable to read and transfer transactions only. Precedent written agreement required.) *Except where Company is required to pay tap charge to pipeline supplier to serve the consumer,the consumer shall reimburse Company. OTHER CHARGES 12. Collection call-trip charge $20 13. Returned check $20 CENTERPOINT ENERGY RESOURCES CORP. DIRIA CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET SCHEDULE OF MISCELLANEOUS SERVICE CHARGES RATE SCHEDULE NO,MISC-S DEPOSITS Up to the maximum amount allowed under the Railroad Commission of Texas Quality of Service Rule §7.45(5)(C)(ii)(the"one-sixth rule'). If therein no billing history on the customer's account,then the one-sixth rule will be applied to the customer's account based on similarly-situated customers located in the geographic area. TAX ADJUSTMENT The Tax Adjustment will be calculated and adjusted periodically as defined in the Company's Tax Adjustment Rate Schedule and Franchise Fee Adjustment Rate Schedule. I CENTERPOINT ENERGY RESOURCES CORP. D/RIA CENTERPOINT ENERGY ENTEX _ AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET PURCHASED GAS ADJUSTMENT RATE SCHEDULE NO.PGA-6 1. PURCHASED GAS ADJUSTMENT(PGA)APPLICABILITY The Monthly Rate contained in the Company's total billing to residential and general service customers shall include the cost of natural gas purchased for resale hereunder. 2. RATE CALCULATION The Purchased Gas Adjustment (PGA) Rate shall be calculated according to the following formula and included in the Monthly Rate: PGA Rate(per Mcf sold)_[(G'R)-DA]rounded to the nearest$$0.0001 PGA Rate(per Ccf sold)=PGA Rate(per Mcf sold) 10 Definitions: G= The Company's best estimate of the cost of natural gas(per Mcf)to be purchased for resale hereunder during the period that the PGA Rate is to be effective. The cost of natural gas shall include the cost of gas supplies purchased for resale hereunder, upstream transportation charges, storage charges,the cost of gas withdrawn from storage less the cost of gas injected into storage,any transaction-related fees,gains or losses and other transaction costs associated with the use of various financial instruments used by the Company to stabilize prices. R= Ratio derived by dividing the actual Mcf purchased for the customers billed hereunder for the twelve months ended the preceding August by the actual Mcf sold to the customers billed hereunder during the same period. DA= Surcharge or surcred%calculated on a per Mcf basis,relating to Deferred Purchased Gas Cost Accounts,as defined below. 3. PGA FILINGS PGA filings shall be filed with the Railroad Commission of Texas(the"Regulatory Authority")by the last business day of the month immediately preceding the month the proposed new PGA factor will be implemented. The PGA filing shall include a calculation of the estimated PGA Rate together with supporting documents. Each such tentative PGA Rate shall become effective for bills rendered on and after the first day of the calendar month and shall continue to be in effect until the next filing,unless after the PGA filing,the Regulatory Authority takes action to disapprove or modify such PGA rate. In the event that the Regulatory Authority takes such action,then the PGA rate shall be in effect on an interim basis pending the final decision of the Regulatory Authority,and any person designated by the Regulatory Authority shall have the right and power to order the filing of any reasonable additional information. Any adjustment to the PGA Rate relating to a prior period shall be made prospectively. 4. DEFERRED PURCHASED GAS COST ACCOUNTS The Company shall establish and maintain Deferred Gas Cost Account(s)in which shall be recorded: (a) the balance of over or under recoveries of the cost of gas purchased for resale hereunder,determined for the period ending on the last day prior to the effective day of this revised Purchased Gas Adjustment rate schedule,including subsequent corrections and amendments thereto;and(b)any over or under recovery of the cost of gas purchased for resale hereunder resulting from the operation of the PGA procedure commencing with the first day of this revised purchased gas cost adjustment. Such ongoing over or under } CENTERPOINT ENERGY RESOURCES CORP. D/ /A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COASTDIVISION RATE SHEET PURCHASED GAS ADJUSTMENT RATE SCHEDULE NO.PGA-6 recovery shall include; (a)gas cost revenue recovery amounts for the revenue month; (b) the cost of gas purchased for resale hereunder for the same month as the revenue month;and(c)carrying charge or credit amounts calculated based on the arithmetic average of the beginning and ending month balance of under or over recovery for the revenue-cost month times the rate of interest applicable to customer deposits. I I Exhibit A Page 6 of 13 DRAFT JUNE 19,2008 CENTERPOINT ENERGY RESOURCES CORP. DB/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET COST OF SERVICE ADJUSTMENT RATE SCHEDULE NO.COSA-2 A. APPLICABILITY This Cost of Service Adjustment Clause applies to the Residential Service, General Service- Small, and General Service-Large Volume rate schedules of CenterPoint Energy Texas Gas currently in force in the Company's Texas Coast Division service area. All rate calculations under this tariff shall be made on a Texas Coast Division system wide basis. If,through the implementation of the provisions of this mechanism,it is determined that rates should be decreased or increased,then rates will he adjusted accordingly in the manner set forth herein. The rate adjustments implemented under this mechanism will reflect annual changes in the Company's cost of service and rate base as computed herein. This Rate Schedule No. COSA-2 is authorized for an initial implementation period of three (3) years commencing with the Company's filing under this rate schedule for the calendar year 2008,effective August 1, 2009, and ending with the implementation of the rate adjustment, if any, for the calendar year 2010, effective August 1, 2011; and shall automatically renew for successive three year periods unless either the Company or the regulatory authority having original jurisdiction gives written notice to the contrary to the other by February 1, 2011,oq February 1,of the third filing year of any succeeding three year renewal period. B. E Fri ECTIVE DATE Rate adjustments shall be made in accordance with the procedures described below on an annual basis. The Company shall make its annual filing no later than May 1, with the rate adjustments to be effective with the bills rendered on or after August 1st of each year. The first filing pursuant to this Rider shall be no later than May 1, 2009,and shall be based on the financial results for the calendar year ending December 31,2008. C. COMPONE NITS OF THE RATE ADJUSTMENT Calculation of the rate adjustment will be based on calendar year operating expenses, return on investment, and Texas Franchise Tax.The calendar year operating expenses shall be those reported to the Railroad Commission of Texas in the annual report of the Company..The rate adjustment shall be included in the monthly customer charge of the Residential Service, General Service- Small, and General Service-Large Volume rate schedules. Company shall file with each regulatory authority having original jurisdiction over the Company's rates the schedules specified below, by FERC Account, for the prior calendar year period. The schedules will be based upon the Company's audited financial data,as adjusted,and provided in a format that will allow for the same analysis as that undertaken of a Company Statement of Intent filing. Sample schedules are attached as Exhibit A to this tariff and shall include the following information-. CA Operating Expenses - Operating expenses will be determined by the ending amounts for the applicable calendar year. The applicable expenses are: Depreciation and Amortization Expense(Account Nos.403-407)* Taxes Other Than FIT(Account No.408)** Operation and Maintenance Expenses(Account Nos.870-894) Customer Related Expenses(Account Nos.901-916) Administrative&General Expenses(Account Nos.920-932) Interest on Customer Deposits(Account No.431) Based on the last approved depreciation methods and lives. ................_. .. ........ �, _, ........:........ Exhibit A , Page 7 of 13 DRAFT JUNE 19,2008 1 CENTERPOINT E NERGY RESOURCES CORP. DBIA CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET COST OF SERVICE ADJUSTMENT RATE SCHEDULE NO.COSA-2 i **Excluding City Franchise Fees,Gross Receipts,and any other revenue-based tax.Rate adjustments due to changes in revenue-based taxes will be governed by the Company's Tax Adjustment and Municipal Franchise Fee Rate Schedules. This information will be presented with supporting calculations. The Company shall provide additional information for all operating expenses upon request by the regulatory authority during the ninety(90) day review period specified in Section D. C.2 Return on Investment- The return on investment is the pre-tax rate of return(11.8%u)multiplied by the rate base balance for the applicable calendar year. The rate base balance is composed of. Net Utility Plant in Service* Plus: Storage Gas** Plus: i Other Rate Base Items:** I Materials and Supplies Inventories Prepayments Cash Working Capital Less: Customer Deposits(AccountNo.235) Customer Advances(Account No.252) Deferred Federal Income Taxes * Net Utility Plant in Service as shown by FERC account adjusted to exclude asset retirement obligation amounts. Gross utility plant in service and accumulated depreciation by account will be shown separately by month so that an annual average utility plant in service can be calculated. ** These iterns will reflect the 13 month average materials and supplies inventories, storage gas inventories,and prepayments. The Company shall perform a lead/lag study for the initial filing under this tariff and at least once every three(3)years thereafter. Supporting information for all rate base items shall be provided to the regulatory authority during the ninety(90)day review period specified in Section D upon request to the Company. C.3 Texas Franchise Tax - The Texas Franchise Tax will be the calendar year-end amount as I recorded in FERC Account No.409. Exhibit A Page 8 of 13 DRAFT JUNE 19,2008 CENTERPOINT ENERGY RESOURCES CORP. D/B/A CENTERPOINT ENERGY ENTEX J AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET COST OF SERVICE ADJUSTMENT RATE SCHEDULE NO.COSA-2 CA Cost of Service Adjustment The amount to be collected through the Cost of Service Adjustment will be the sum of the amounts from Sections C.1, C.2, and C.3, less the calendar year actual non-gas revenue and other revenue (i.e., transportation revenue and service charges), adjusted for the revised Texas Franchise Tax described in Chapter 171 of the Texas Tax Code. The formula to calculate the Cost of Service Adjustment is: (C.1 Operating Expenses +C.2 Return on Investment+ C3 Texas Franchise Tax- Actual non-Gas and Other Revenues)_(I -Texas Franchise Tax statutory rate)* s Currently,the Texas Franchise Tax statutory rate is 1%. C.5 Cost of Service Adjustment Rate The Cost of Service Adjustment as calculated in Section CA will be allocated among the customer classes in the same manner as the cost of service was allocated among classes of customers in the Company's latest effective rates for the Texas Coast Division. The cost of service adjustment for each customer class will then be converted into a per-customer per-month amount to produce the Cost of Service Adjustment Rate. The per customer adjustment will be the Cost of Service Adjustment as allocated to that class,divided by the average number of gas sales customers in each class for the Texas Coast Division as reported in the Company's annual report to the Railroad Commission of Texas.The Cost of Service Adjustment Rate will be this per customer adjustment amount divided by 12 to produce a monthly adjustment amount, either an increase or decrease, which will be included in the Residential Service, General Service - Small, and General Service-Large Volume customer charges.Any change in the Cost of Service Adjustment shall not exceed an amount equal to five percent(551o) of the Customer Charge effective for service in the Texas Coast Division at the end of the calendar year immediately preceding the year in which the Cost of Service Adjustment is made, provided that the costs for the Company to perform a lead-lag study,provide public notice and reimburse City rate case expenses as required herein, up to an amount not to exceed$250,000, shall not be included in calculating the(5%)limitation. In order to meet Generally Accepted Accounting Principles and U.S.Securities and Exchange Commission reporting requirements, the Company shall record its best estimate of the total amount to be collected through the Cost of Service Adjustment so as to reflect in its books and records a fair representation of actual earnings for that year.Such estimate shall not be included in the computation of the Cast of Service Adjustment. C.6 Attestation A sworn statement shall be filed by the Company's Chief Accounting Officer of CenterPoint Energy Texas Gas Operations, affirming that the filed schedules are in compliance with the provisions of this tariff and are true and correct to the best of his/her knowledge,information,and belief. No testimony shall be filed. C.7 Proof of Revenues The Company shall also provide a schedule demonstrating the"proof of revenues"relied upon to calculate the proposed cost of service adjustment rate. The proposed rates shall conform as closely as practicable to the revenue allocation principles in effect prior to the adjustment.. • �� 1J Exhibit A Page 9 of 13 DRAFT JUNE 19,2008 , CENTERPOINT ENERGY RESOURCES CORP. DB1A CENTERPOINT ENERGY ENTEX i AND CENTERPOINT ENERGY TEXAS GAS Il TEXAS COAST DIVISION RATESHEET COST OF SERVICE ADJUSTMENT RATE SCHEDULE NO.COSA-2 C.8 Notice Notice of the annual Cost of Service Adjustment shall be published in the Houston Chronicle in a form similar to that required under Section 104.103, THX. Urrt,. CODE ANN. no later than forty-five (45) days after the Company makes its annual filing pursuant to this rate schedule with the regulatory authority.The notice to customers shall include the following information: a) a description of the proposed revision of rates and schedules; b) the effect the proposed revision of rates is expected to have on the rates applicable to each customer class and on an average bill for each affected customer class; c) the service area or areas in which the proposed rate adjustment would apply; d) the date the proposed rate adjustment was filed with the regulatory authority;and e) the Company's address, telephone number, and website where information concerning the proposed cost of service adjustment may be obtained. i D. REGULATORY REVIEW OF ANNUAL RATE ADJUSTMENT The regulatory authority with original jurisdiction will have a period of not less than ninety(90) days within which to review the proposed annual rate adjustment. During the review period, Company shall provide additional information and supporting documents as requested by the regulatory authority and such information shall be provided within ten(10)working days of the original request. The rate adjustment shall take effect with the bills rendered on or after August 1st of each year.This Cost of Service Adjustment Rate Schedule does not limit the legal rights and duties of the regulatory authority. The Company's annual rate adjustment will be made in accordance with all applicable laws. If at the end of the ninety (90) day review period,the Company and the regulatory authority with original jurisdiction have not reached agreement on i the proposed Cost of Service Adjustment Rate,the regulatory authority may take action to deny such adjustment, and the Company shall have the right to appeal the regulatory authority's action.Upon the filing of any appeal the Company shall have the right to implement the proposed Cost of Service Adjustment Rate,subject to refund. To defray the cost, if any, of regulatory authorities conducting a review of Company's annual rate adjustment, Company shall reimburse the regulatory authorities for their reasonable expenses for such review in an aggregate amount not to exceed$100,000. Any reimbursement contemplated hereunder shall be deemed a reasonable and necessary operating expense of the Company in the year in which the reimbursement is made. If more than one regulatory authority should request reimbursement in any year, each regulatory authority shall receive the lesser of its reasonable and necessary expenses for conducting its review or an amount equal to$100,000 multiplied by the fraction of which the numerator is the total number of customers subject to the original jurisdiction of the regulatory authority seeking reimbursement and the denominator of which is the total number of customers subject to the jurisdiction of all regulatory authorities seeking reimbursement for review of an annual rate adjustment. A regulatory authority seeking reimbursement under this provision, shall submit its request for reimbursement to Company no later than September 1st of the year in which the adjustment is made and Company shall reimburse Exhibit A Page 10 of 13 DRAFT JUNE 19,2008 CENTERPOINT ENERGY RESOURCES CORP. DBIA CENTERPOINT ENERGY ENTEX J AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET COST Or SERVICE ADJUSTMENT RATE SCHEDULE NO.COSA-2 regulatory authorities in accordance with this provision on or before September I Sth,of the year the adjustment is made. 1 CenterPolnt Energy Texas Coast Division Cost of Service Adjustment For the Period Ended (A) (B) LINE NO. DESCRIPTION AMOUNT i 1 Operating Expenses 2 Return On Investment 3 Texas Margin Tax 4 Sub-total $ 5 Less:Actual Non-Gas Revenues 6 Sub-total $ 7 Texas Margin Tax Adjustment Factor 0.99 8 Cost of Service Adjustment (Line 6+Line 7) $ - 9 Number of Gas Sales Customers-avg Cost of Service Adjustment per Customer-Annual 10 (line 8+line 9) Cost of Service Adjustment Rate 11 (Line 10 12) Schedule 1 CenterPoint Energy Texas Coast Division Cost of Service Adjustment Clause Return on Investment-Revenue Requirement For the Year Ended (A) (B) Line No. Description 1 Total Net Plant Add: Working Capital 2 Cash Working Capital 3 Materials and Supplies 4 Storage Gas 6 Prepayments 6 Total Working Capital $ Less: 7 Customer Deposits and Advances 8 Accumulated Deferred Income Taxes 9 Total Rate Base $ - 10 Pre-Tax Rate of Return 11 Return On Investment-Revenue Requirement $ Schedule 2 i CenterPoint Energy Texas Coast Division For the Year Ended I Cost of Service Adjustment (A) (B) Ln. No. Description Test Year i i Operating Revenues 1 Gas Sales 2 Other Revenues 3 Total Operating Revenues $ Operating Revenue Deductions Operating Expenses I 4 Gas Purchases 5 Distribution Operations Expense 6 Distribution Maintenance Expense 7 Customer Accounts Expense 8 Customer Information Expense 9 Sales Expenses 10 Administrative&General Expense 11 Total Operating Expense $ 12 Depreciation Expense 13 Taxes Other than Income Total Operating Revenue 14 Deductions $ 15 Net Operating Income 16 Before FIT $ - r Schedule 4 CenterPaint Energy Texas Coast Division Cost of Service Adjustment Texas Margin Tax For The Year Ended Line (A) (B) No. 1 Gross Revenues 2 Cost of Gas 3 Gross Receipts 4 $ - 5 Texas Margin Tax Percentage 1% 6 Texas Margin Tax Percentage $ - Schedule 5 CENTERPOINT ENERGY RESOURCES CORP. DBIA CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATESHEET RESIDENTIAL SERVICE i RATE SCHEDULE NO.R-2073 APPLICATION OF SCHEDULE This schedule is applicable to any customer to whom service is supplied in a single private dwelling unit and its appurtenances,the major use of which is for household appliances,and for the personal comfort and convenience of those residing therein. Natural gas supplied hereunder is for the individual use of the customer at one point of delivery and shall not be resold or shared with others. MONTHLY RATE For bills rendered on and after the effective date of this rate schedule,the monthly rate for each customer receiving service under this rate schedule shall be the sum of the following: (a) The Base Rate consisting of: (1) Customer Charge— $13.00; (2) Commodity Charge— All Ccf $0.0724 (b) Tax Adjustment—The Tax Adjustment will be calculated and adjusted periodically as defined in the Company's Tax Adjustment Rate Schedule and Franchise Fee Adjustment Rate Schedule. (c) Gas Cost Adjustment—The applicable Purchased Gas Adjustment(PGA)Rate—as calculated on a per Cef basis and adjusted periodically under the applicable Purchased Gas Adjustment (PGA) Rate Schedule—for all gas used. RULES AND REGULATIONS i Service under this schedule shall be furnished in accordance with the Company's General Rules and Regulations,as such rules may be amended from time to time. A copy of the Company's General Rules and Regulations may be obtained from Company's office located at 1111 Louisiana Street,Houston,Texas. CENTERPOINT ENERGY RESOURCES CORP. DB/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION w. ' RATESHEET GENERAL SERVICE-LARGE VOLUME RATE SCHEDULE NO.GSLV-604 AVAILABILITY This schedule is available at points on existing facilities of adequate capacity and suitable pressure in the area designated in the Rate Book of CENTERPOINT ENERGY RESOURCES CORP., DB/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS(hereinafter called"Company"). APPLICATION OF SCHEDULE This schedule is applicable to any general service customer for commercial uses and industrial uses whose average monthly usage for the prior calendar year is more than 150,000 cubic feet. Gas supplied hereunder is for the individual use of the Consumer at one point of delivery and shall not be resold or shared with others. If the Consumer has a written contract with Company,the terms and provision of such contract shall be controlling. MONTHLY RATE For bills rendered on and after the effective date of this rate schedule,the monthly rate for each customer receiving service under this rate schedule shall be the sum of the following: (a) The Base Rate consisting of (1) Customer Charge— $13.00; (2) Commodity Charge— First 1,500 Ccf $0.0844 1,500-10,000 Ccf $0.0588 Over 10,000 Ccf $0.0498 (b) Tax Adjustment—The Tax Adjustment will be calculated and adjusted periodically as defined in the Company's Tax Adjustment Rate Schedule and Franchise Fee Adjustment Rate Schedule. (c) Gas Cost Adjustment—The applicable Purchased Gas Adjustment(PGA)Rate—as calculated on a per Mcf basis and adjusted periodically under the applicable Purchased Gas Adjustment (PGA) Rate Schedule—for all gas used. WRITTEN CONTRACT In order to receive a delivery from Company of more than 25 Mcf during any one day,the Consumer must execute a written contract with Company on Company's form of contract covering the sale of gas by Company to it. In the case of existing Consumers,the maximum gas usage during any one day shall be obtained from the'records of the Company,except in cases where the existing Consumer will be purchasing increased volumes of gas from Company because of expansions or for any other reasons,in which event the Company may estimate usage by such Consumer. Also in the case of new Consumers,the Company may estimate usage by the Consumer. Any such estimates made by Company shall be binding on Consumer in determining whether or not a contract is required. Such written contract shall be executed by Consumer upon request of Company and Company shall not be obligated to serve any such Consumer more than 25 Mcf during any one day until such mitten contract is executed and delivered by Consumer. CENTERPOINT ENERGY RESOURCES CORP. DB/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATESHEET GENERAL SERVICE-LARGE VOLUME RATE SCHEDULE NO.GSLV-604 MEASUREMENT The term"cubic foot of gas" for the purpose of measurement of the gas delivered and for all other purposes is the amount of gas necessary to fill a cubic foot of space when the gas is at an absolute pressure of 14.65 pounds per square inch and at a base temperature of sixty(60)degrees Fahrenheit. The term"Mcf'shall mean 1,000 cubic feet of gas. The Sales Unit shall be one Mcf, Assumed Atmospheric Pressure - The average atmospheric pressure shall be assumed to be fourteen and seven- tenths(14.7)pounds per square inch, irrespective of actual elevation or location of the point of delivery above sea level or variation in such atmospheric pressure from time to time. Orifice Meters-When orifice meters are used for the measurement of gas, such orifice meters shall be constructed and installed, and the computations of volume made, in accordance with the provisions of Gas Measurement Committee Report No.3 of the American Gas Association as revised September, 1969("A.G.A.Report No.3),with any subsequent amendments or revisions which may be mutually acceptable. The temperature of the gas shall be determined by a recording thermometer so installed that it may record the temperature of the gas flowing through the meter or meters. The average of the record to the nearest one(1)degree Fahrenheit, obtained while gas is being delivered, shall be the applicable flowing gas temperature for the period under consideration. The specific gravity of the gas shall be determined by a recording gravitometer owned and operated by the pipeline company from whom Company purchases its gas, so installed that it may record the specific gravity of the gas flowing through the meter or meters;provided,however,that the results of spot tests made by the pipeline company with a standard type specific gravity instrument shall be used at locations where the pipeline company does not have a recording gravitometer in service. if the recording gravitometer is used,the average of the record to the nearest one-thousandth(0.001),obtained while gas is being delivered,shall be the applicable specific gravity of the gas for the period under consideration. If the spot test method is used,the specific gravity of the gas delivered hereunder shall be determined once monthly,the result obtained,to the nearest one-thousandth(0.00I),to be applicable during the succeeding billing month. Adjustment for the effect of supercompressibility shall be made according to the provisions of A.G.A.Report No.3, hereinabove identified,for the average conditions of pressure,flowing temperature and specific gravity at which the gas was measured during the period under consideration, and with the proportionate value of each carbon dioxide and nitrogen in the gas delivered included in the computation of the applicable supercompressibility factors. Company shall obtain appropriate carbon dioxide and nitrogen fraction values as may be required from time to time. Positive Displacement Meters and Turbine Meters- When positive displacement meters and/or turbine meters are used for the measurement of gas, the flowing temperature of the gas metered shall be assumed to be sixty (60) degrees Fahrenheit, and no correction shall be made for any variation therefrom;provided however, that company shall have the option of installing a recording thermometer,and if company exercises such option,corrections shall be made for each degree variation in the applicable flowing temperature for the period under consideration. The volumes of gas determined shall be adjusted for the effect of supercompressibility as follows: CENTERPOINT ENERGY RESOURCES CORP. DB/A CENTERPOINT ENERGY ENTEX AND CENTERPOINT ENERGY TEXAS GAS TEXAS COAST DIVISION RATE SHEET GENERAL SERVICE-LARGE VOLUME RATE SCHEDULE NO.GSLV-604 (A) When the flowing temperature of gas is assumed to be sixty (60) degrees Fahrenheit, the supercompressibility factor shall be the square of the factor,Fpv,computed in accordance with the principles of the A.G.A.Report No.3,hereinabove identified,for a pure hydrocarbon gas of six-tenths(0.6)specific gravity and for the average pressure at which the gas was measured. (B) When the flowing gas temperature is recorded and applied according to the option above, the supercompressibility.factor shall be the square of the factor,Fpv, computed in accordance with the principles of the American Gas Association Gas Measurement Committee Report No. 3, hereinabove identified,for a pure hydrocarbon gas of six-tenths(0.6)specific gravity and for the average conditions of pressure and flowing temperature,at which the gas was measured. SUPPLY INTERRUPTIONS Total or partial interruption of gas deliveries due to acts of God,the elements,requirements for residential and other uses declared superior to Consumers by law,or to other causes or contingencies beyond the control of Company or not proximately caused by Company's negligence,shall not be the basis for claims-delivery and receipt of gas to be resumed whenever any such cause or confingency shall end. CHARGES FOR UNAUTHORIZED OVER-RUN GAS Any gas taken during any day by Consumer which exceeds the maximum daily quantity specified in Consumer's contract with Company shall be considered to be unauthorized over-run gas. Any gas taken by Consumer after the effective hour of an order calling for a complete curtailment of all gas deliveries, and prior to the authorized resumption of natural gas service,hereunder shall be considered to be unauthorized over-run gas. Any gas taken by Consumer after the effective hour of an order calling for a partial curtailment,and prior to the authorized resumption of natural gas service, which exceeds the stated amount of gas deliveries Consumer may take during such partial curtailment,shall be considered to be unauthorized over-run gas. Company shall bill, and Consumer shall pay for unauthorized over-run gas at the rate of$10.00 per Mcf, in addition to the Monthly Rate specified herein for such gas. The payment of such additional charge for unauthorized over-run gas shall not,under any circumstances, be considered as giving the Consumer the right to take unauthorized over-run gas, nor shall such payment be considered to exclude or limit any other remedies available to Company against the Consumer for exceeding the maximum daily quantity specified in Consumer's contract with Company, or for failure to comply with curtailment orders issued by Company hereunder. The additional amount specified above charged for unauthorized over-run gas shall be adjusted,either plus or minus, to conform to the change made by Company's supplier in its rate schedule under which Company purchases its gas supply for resale under this schedule. RULES AND REGULATIONS Service under this schedule shall be furnished in accordance with the Company's General Rules and Regulations,as such rules may be amended from time to time. A copy of the Company's General Rules and Regulations may be obtained from Company's office located at 1111 Louisiana Street,Houston,Texas.