Central Kentucky Transmission Company

Original Volume No. 1

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Effective Date: 05/01/2006, Docket: CP05- 48-002, Status: Effective

Original Sheet No. 56 Original Sheet No. 56 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

4. AUCTIONS OF AVAILABLE FIRM SERVICE

This Section governs the manner in which requests for firm services shall be

accommodated by Transporter when capacity is or becomes available, unless

otherwise indicated in the applicable Rate Schedule. This Section applies to

existing firm capacity that may become available and not to new pipeline

capacity. Additional provisions governing auctions of service under

specific Rate Schedules are set forth in individual Rate Schedules in this

Tariff.

4.1 Circumstances Under Which Capacity Becomes Available.

(a) Termination of Short-Term Service Agreements. Upon the

termination of any firm Service Agreement having a term of less than one

year, the capacity associated with such terminated Service Agreement shall

be made available for bidding under the procedures described at Section 4.2

below, provided that: (i) the capacity is not previously committed under

the terms of this Tariff and (ii) facility capacity remains available.

(b) Continuing Service Under Certain Long-Term Agreements.

Transporter shall notify Shipper in writing of the upcoming expiration or

termination of any firm Service Agreement with a term of 12 or more

consecutive months of service at the applicable Recourse Rate for that

service or any firm multi-year seasonal Service Agreement at the applicable

Recourse Rate for that service (a long-term Service Agreement), and will

provide such notice at least 30 days before Shipper is obligated to notify

Transporter of its intent to exercise its right of first refusal or other

service continuation rights under the Service Agreement as described in

paragraph (c)(2) below. Upon completion of the term of any long-term

Service Agreement, Shipper shall have the right to continue receiving

service under that long-term Service Agreement if that Service Agreement is

at the Recourse Rate and (i) otherwise extends beyond that term according

to its terms, or (ii) does not provide for pregranted abandonment and

Shipper executes a new long-term Service Agreement at the Recourse Rate. If

the above requirements are not satisfied at the termination date of the

primary term of a long-term Service Agreement, service under that long-term

Service Agreement shall be subject to the termination and right of first

refusal provisions set forth at paragraph (c) below.