Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 11/01/2004, Docket: RP04-619-000, Status: Effective

Second Revised Sheet No. 149 Second Revised Sheet No. 149 : Effective

Superseding: First Revised Sheet No. 149

GENERAL TERMS AND CONDITIONS

(Continued)

15. CAPACITY RELEASE PROGRAM (Continued)

15.5 Bidding for Transportation Rights. (Continued)

(d) NAESB 5.3.13: "Bids should be binding until written or

electronic notice of withdrawal is received by the capacity

release service provider." NAESB 5.3.15:"Bids cannot be

withdrawn after the bid period ends." Transporter will post

notice of such withdrawal on its Designated Site, to the

extent that the bid has already been posted pursuant to

Section 15.5(c), as soon as possible but in no event more

than one Business Day following Transporter's receipt of

Bidder's notice of withdrawal. Any Bidder which withdraws a

bid pursuant to this Section 15.5 (d) may, at any time

during the Bidding Period, submit one or more subsequent

bids in accordance with this Section 15.5 for the same

Release Request; provided, however, that Bidder may not

submit a subsequent bid without first withdrawing an

existing bid, and provided further that any subsequent bid

submitted must contain a total value that is equal to or

higher than the total value of any previous bid which Bidder

has submitted for the same Release Request.

15.6 Determination of Successful Bidder.

(a) NAESB 5.3.3: "For the capacity release business process

timing model, only the following methodologies are required

to be supported by capacity release service providers and

provided to releasing shippers as choices from which they

may select and, once chosen, should be used in determining

the awards from the bid(s) submitted. They are: 1) highest

rate, 2) net revenue and 3) present value. Other choices of

bid evaluation methodology (including other releasing

shipper defined evaluation methodologies) can be accorded

similar timeline evaluation treatment at the discretion of

the capacity release service provider. However, the

capacity release service provider is not required to offer

other choices or similar timeline treatment for other

choices, nor, is the capacity release service provider held

to the timeline should the releasing shipper elect another

method of evaluation."