Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 04/20/2009, Docket: RP09-466-000, Status: Effective

Second Revised Sheet No. 209 Second Revised Sheet No. 209

Superseding: First Revised Sheet No. 209

. GENERAL TERMS AND CONDITIONS .

(Continued)

27. AVAILABLE CAPACITY (Continued)

27.3 Bidding. (Continued)

(d) Withdrawal of Bid. A bidder may withdraw its bid at any

time prior to close of the bid period; provided, however,

that if the bidder is a pre-arranged Shipper, it may not

withdraw its bid. A bidder that withdraws its bid may not

then submit another bid with a lower economic value for the

same capacity.

(e) Creditworthiness. All bidders must comply with Section 29

of the General Terms and Conditions of this tariff. Bidders

must submit a request for pre-qualification for credit in

order to expedite the award process. If, on or before the

bid close date, a bidder fails to pre-qualify for a credit

limit equal to or greater than the economic value of its

bid, Transporter may disregard such bid and, subject to

Section 27.6, choose the bid with the next highest economic

value submitted by a creditworthy bidder.

27.4 Awarding.

(a) As soon as reasonably practical, but no later than five (5)

business days following the bid close date, Transporter will

evaluate the bids received and determine the winning bid,

subject (where applicable) to Section 27.4(d), Section 27.5

and Section 27.6.

(b) Bids will be evaluated based on one of the following

criteria for determining the economic value, as specified by

Transporter in its posting: 1) Reservation Rate; 2) Total

Reservation Revenues; or 3) Net Present Value. The net

present value shall be computed from the daily reservation

revenues to be received over the term of the Transportation

Service Agreement, using the discounted cash flow rate of

return methodology, with the rate of discounting, as updated

from time to time, in accordance with 18 CFR 154.501(d).