Gas Transmission Northwest Corp.

Third Revised Volume No. 1-A

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Effective Date: 01/01/2007, Docket: RP06-407-008, Status: Pending

Substitute Second Revised Sheet No. 129 Substitute Second Revised Sheet No. 129 : Pending

Superseding: First Revised Sheet No. 129

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

 

18. OPERATING PROVISIONS (Continued)

 

18.1 Firm Service (Continued)

 

(e) Valuation of Bids

 

Unless otherwise specified in its open season posting, when

evaluating bids for long-term firm capacity with terms of less

than three years, the bid(s) with the greatest economic value

will be the bid(s) with the highest net present value ("NPV")

based on (1) the reservation charge and any proposed usage

charge revenues guaranteed by a minimum volume commitment or

otherwise that requestor(s) would pay at the rates the

requestor(s) has bid, and (2) the term of service specified in

the request. 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

requests 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 periods for which the bidder wishes

to contract.

 

The NPV formula will be affected by the term and rate

requested. In the event GTN 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, GTN shall estimate the future revenues to be

received under the Negotiated Rate Formula using currently

available data.

 

(Continued)