Southern Natural Gas Company

Seventh Revised Volume No. 1

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Effective Date: 10/01/2003, Docket: RP03-576-000, Status: Effective

Third Revised Sheet No. 101A Third Revised Sheet No. 101A : Effective

Superseding: 2nd Sub. First Revised Sheet No. 101A

GENERAL TERMS AND CONDITIONS

(Continued)

Section 2.1(b)(continued)

(ii) If COMPANY receives two (2) or more requests for service that produce

comparable net present values, then available capacity will be allocated to

the comparable requests on a pro rata basis. A party must specify in its

request whether it is willing to accept capacity on a pro rata basis

pursuant to this Section. If any party declines to accept prorated

capacity, such party's request shall be null and void and COMPANY shall be

entitled to reallocate the available capacity among the other comparable

requests.

(iii) Capacity on Southern's system will be posted on SoNet Premier pursuant to

Section 284.13(d)(1) of the Commission's Regulations as it becomes

available. COMPANY must hold an open season at any time that a shipper

makes a written request for available capacity, unless COMPANY has already

held an open season for the available capacity within the previous twelve

(12) months and the written request specifies a bid that is less than the

reserve price that was established in the open season. COMPANY shall post

the terms of the open season and the available capacity under the open

season. For open seasons conducted under this Section, such open season

shall be held for a minimum of three (3) business days for service terms of

less than one year, a minimum of ten (10) business days for service terms of

more than one year and a minimum of three (3) business days for requests for

an amendment to primary Receipt Points or Delivery Points. During any such

open season, COMPANY will allocate the capacity subject to the open season

as provided in Section 2.1(b)(i) above. At the time of posting, COMPANY

will identify the criteria to be used in calculating the Net Present Value,

including, but not limited to, the weighing of each criteria, the method of

calculating Net Present Value, and the discount factor to be used. COMPANY

may elect to set a reserve price(s) for bids; provided, however, if COMPANY

elects to do so it will (i) set such reserve price(s) at the time of posting

and (ii) be able to demonstrate under reasonable means that it established

such reserve price(s) at the time of posting. Delivery Point changes

requested under Section 6.4 will be awarded according to this Section

2.1(b)(iii). In evaluating bids associated with the open season, any

request for a change in primary Delivery Points under Section 6.4 of these

General Terms and Conditions will be considered to have a net present value

of zero (0) when comparing requests for service, awarding capacity, and

meeting the reserve price unless the SHIPPER has agreed in conjunction with

its request to increase its TD or extend the term of its firm contract in

which case COMPANY may consider the terms of such TD increase or contract

extension when evaluating the net present value.