Eastern Shore Natural Gas Company

Second Revised Volume No. 1

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Effective Date: 02/01/1998, Docket: CP96-128-009, Status: Effective

First Revised Sheet No. 129 First Revised Sheet No. 129 : Effective

Superseding: Original Sheet No. 129

EASTERN SHORE NATURAL GAS COMPANY

GENERAL TERMS AND CONDITIONS

(Continued)

14. Procedures for Allocating Available Firm Capacity

(a) In the event firm capacity on Seller's system becomes

available other than through the applicable provisions of

Section 13 and Section 29 of these General Terms and

Conditions, Seller shall post on its EBB all relevant

terms and conditions pertaining to such capacity and will

solicit bids for at least the following periods:

(1) One (1) Business Day for firm capacity which will be

available for one (1) Month or less;

(2) Five (5) Business Days for firm capacity which will

be available for more than one (1) Month but less

than twelve (12) Months; and

(3) Fifteen (15) Business Days for firm capacity which

will be available for twelve (12) Months or longer.

(b) The Best Bid relating to each Service Agreement shall be

determined by Seller through the non-discriminatory

application of the following criteria:

(1) The bid with the highest net present value of

reservation charges and/or other guaranteed revenue

stream.

(2) In the event Seller receives two (2) or more bids of

equal net present value, then the Best Bid shall be

the bid with the shortest term. If two (2) or more

bids are tied, Seller will select the Best Bid based

on the first in time to submit said bid.

(c) In the event a potential Buyer's bid is accepted, and

such potential Buyer otherwise meets all qualifications

for service under such Rate Schedule, Seller shall submit

a Service Agreement to Buyer which sets forth the terms

and conditions consistent with such Best Bid. Buyer shall

execute the Service Agreement and return to Seller within

thirty (30) calendar days following the date that Seller

tenders the Service Agreement to Buyer.

(d) Notwithstanding the above, Seller shall not be obligated

to accept any bid or execute any Service Agreement(s) at

a rate less than the maximum rate allowable under the

applicable Rate Schedule(s).