Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 06/01/2002, Docket: RP02-248-001, Status: Effective

Sub Original Sheet No. 210 Sub Original Sheet No. 210 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

27. AVAILABLE CAPACITY (Continued)

27.4 Awarding. (Continued)

with the highest economic value, regardless of whether such

bid is a Recourse Rate, a discounted Recourse Rate or a

Negotiated Rate bid; provided that the bid with the highest

value is at a rate that meets or exceeds the lowest rate

that Transporter is willing to accept for the capacity, and

further provided that a bid with a negotiated rate that

exceeds the maximum rate will be considered to be a maximum

rate bid for evaluation and award purposes. If Transporter

has indicated in its posting that it is willing to accept

negotiated rate bids, such bids will be evaluated in

accordance with the criteria specified in Transporter's

posting and described in Section 23.3 of the General Terms

and Conditions.

(d) Transporter will break ties and determine the winning bid(s)

by providing each of the tying bidders an opportunity to

improve their bids by submitting closed bids via facsimile

within 24 hours of notification by Transporter. If a tie

still exists, Transporter will allocate the available

capacity on a pro rata basis to each tying bidder that has

indicated in its bid a willingness to accept a proportionate

share of such capacity. A bid to pay the maximum rate as it

may vary from time to time for a given term will be deemed

superior to a bid to pay a specified dollar rate which is

equal to the Maximum Base Tariff Rate.

(e) If the best bid is a contingent bid, Transporter will notify

the bidder making the best bid within three (3) business

days following the bid close date. That bidder will have

twenty-four (24) hours following such notification to

satisfy or waive the contingency, or Transporter may

disregard such bid.