North Baja Pipeline, LLC

Original Volume No. 1

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Effective Date: 08/12/2002, Docket: RP02-363-000, Status: Effective

Original Sheet No. 120 Original Sheet No. 120 : Effective

GENERAL TERMS AND CONDITIONS OF SERVICE

(Continued)

9. OPEN SEASON PROCEDURES (Continued)

9.1 Open Seasons for Existing Capacity (Continued)

(d) Valuation of Bids (Continued)

If the economic values of separate bids are equal, then

service shall be offered to such requestors on a pro-rata

basis. The NPV is the discounted cash flow of the bid

according to the following formula, net of revenues lost or

affected by the request for service:

n

(1 + i) -1

Present Value per = P * R * __________

n

i (1 + i)

where:

P = percent of the rate or charge that the Shipper

is willing to pay.

R = rate or charge calculated as: the applicable

maximum authorized reservation charge(s) per Dth

in effect at the time of the bid for service.

i = FERC's annual interest rate divided by 12.

n = number of months for which the bidder wishes to

contract.

The NPV formula will be affected by the term and rate

requested. In the event NBP intends to entertain bids for

service under index-based or other Negotiated Rate Formulae,

the future value of which cannot be determined at the time

of the bidding, NBP shall estimate the future revenues to be

received under the Negotiated Rate Formula using currently

available data.

(Continued)