Mobile Bay Pipeline Company

Second Revised Volume No. 1

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Effective Date: 06/01/1997, Docket: RP97-361-000, Status: Effective

Second Revised Sheet No. 242 Second Revised Sheet No. 242 : Effective

Superseding: Superseding First Revised Sheet No. 242

GENERAL TERMS AND CONDITIONS

(Continued)

minimum conditions, Transporter shall rank

the bids and award the capacity, best bid

firs, until all offered capacity is

awarded.

Electronic System the winning bid(s) and

the winning bidder'(s) name. The best bid

information shall remain on the Customer

Electronic System for ninety (90) days.

Capacity Release historical data shall be

made available on a consistent basis from

Transporter; which shall provide for

retrieval of open and closed offers during

the FERC archival period. Once a service

agreement is executed, service to the

Replacement Customer may begin regardless

of whether the winning bid has been posted

on the Customer Electronic System.

standard for determining the "best bid", which

standard shall be posted on the Customer

Electronic System. Any economic standard for

determining the "best bid" specified by a

Releasing Customer must be objectively stated,

applicable to all Potential Customers, and non-

discriminatory. Releasing Customer shall

indemnify and hold Transporter harmless from and

against all demands, claims, causes of action

and/or damages suffered or incurred by

Transporter arising out of or related to any

determination of a "best bid" pursuant to any

economic standard specified, supplied, approved

or provided by Releasing Customer. In the event

the Releasing Customer does not specify a

standard to be applied in determining the "best

bid", Transporter will select the "best bid"

based on the bid which generates the highest

present value. The present value will be

calculated using the following formula:

PV = CF1 + CF2 +

etc.

_________ _________

(1 + i) (1-.5) (1 + i)

(2-.5)

bid and CF2 is the cash flow in year two of the

bid. The calculation is made for each year of

the bid. Transporter will use a discount rate

equivalent to a fifteen percent (15%) pre-tax

rate of return.