Dominion South Pipeline Co., LP

Original Volume No. 1

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Effective Date: 12/16/2005, Docket: CP05- 77-001, Status: Effective

Original Sheet No. 1076 Original Sheet No. 1076 : Effective

GENERAL TERMS AND CONDITIONS

ALLOCATION OF AVAILABLE FIRM CAPACITY

26.4 Evaluation Criteria and Award of Capacity

A. Pipeline may establish a reserve rate or formula that shall establish the minimum

rate or value that Pipeline would accept for capacity being posted, and that may

vary over the term for which the posted capacity is available. The reserve rate or

formula shall not exceed the applicable maximum rate, and shall be established prior

to posting capacity for the bid. Pipeline shall not be required to disclose the

reserve rate or formula at the time of posting, but shall record and maintain such

reserve rate or formula for a period of three years for validation purposes. In the

event that a participating bidder challenges in writing Pipeline's failure to award

the capacity to it, Pipeline will reveal the reserve rate to the FERC office of

Administrative Dispute Resolution, or another mutually agreeable neutral third

party, on a confidential basis to confirm that the capacity was awarded in

accordance with the Tariff.

B. Pipeline may establish objective and non-discriminatory factors determined by

Pipeline to be relevant to the granting of the request, including the treatment of

contingent bids, which shall be considered in evaluating bids for capacity. Notice

of any such factors to be considered shall be posted on the Website at the time

Pipeline posts the notice of available capacity under this Section 26.

C. Pipeline shall have the right to reject any bid that: (1) does not meet the minimum

requirements or conditions specified in the posting, (2) if accepted, may

detrimentally impact the operational integrity of Pipeline's system, (3) is for less

than the Pipeline's Recourse Rate applicable to the service, (4)contains terms and

conditions inconsistent with those contained in this Tariff, (5) is made by an

ineligible bidder, (6) includes conditions or contingencies not specifically allowed

in the posting, or (7) purports to alter the bidder's obligation to pay all

applicable usage charges, surcharges, and any other applicable charges and

penalties.

D. To the extent that a bidder offers to pay rates in excess of any then-applicable

maximum rate component, Pipeline shall consider that bid to be equivalent to the

applicable maximum rate component for purposes of awarding capacity. Pipeline shall

evaluate valid bids based on one of the following methods, as identified in the

posted notice:

1. The highest net present value of the reservation charges or other source of

guaranteed revenue to be received by Pipeline over the term of service; or,

2. The highest reservation charge bid, or other source of guaranteed revenue,

provided that such bid meets Pipeline's stated terms. A bid may be higher than

the Recourse Rate, but Pipeline shall not consider that portion of such bid in

its bid evaluation process.

3. An alternate objective method chosen by Pipeline, posted at least three days

before the capacity is posted for bid. Such method must be applicable to all

bidders, and not unduly discriminatory. The method shall be objectively

stated, with sufficient specificity to reasonably determine and apply the

method or formula to be used and to rank all bids received, utilizing the

elements contained in the bid.

E. Pipeline shall award the capacity to the qualifying bidder(s), if any, that

produce(s) the best bid result as determined in accordance with this Section

26, provided, however, that where Pipeline agrees to a discounted rate,

Pipeline shall not be required to offer a term greater than one month unless

the discounted rate exceeds Pipeline's reserve rate or formula.