Central Kentucky Transmission Company

Original Volume No. 1

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

Original Sheet No. 62 Original Sheet No. 62 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

adjusted from time to time by Transporter. Transporter shall have the right

to reject any bids that: (i) are for a rate that is less than the minimum

rate stated in Transporter's posting of that capacity; (ii) do not satisfy

any of the other terms specified in the posting; or (iii) include conditions

or provisions that Transporter determines, in its reasonable discretion, to

be unacceptable.

(1) Transporter shall assess the bids to assure that capacity is

available.

(2) Transporter shall evaluate bids based upon their net present

value as set forth below, taking into account the price and term

offered. Transporter shall use the current Commission-approved

interest rate in calculating the net present value of bids. Capacity

shall be awarded, as set forth in paragraph (d) below, based on the

acceptable highest value of the bids offered to Transporter calculated

in accordance with this Section. Transporter shall publish the winning

bids on its EBB.

(d) Awarding Capacity; Pro Rata Awards To Equal Bidders. Consistent

with the bid assessment criteria set forth in paragraph (c) immediately

above, Transporter shall award capacity: (i) first to an existing capacity

holder that exercises a right of first refusal to match the highest value

bid; and (ii) then to the bidder submitting the highest value bid or if two

or more bidders submit equal acceptable highest value bids then pro rata to

all bidders that submitted equivalent highest value bids based upon daily

quantities requested.

(e) Binding Nature of Bids. All bids are binding; provided, however,

that a bidder may decline to accept a pro rata allocation of capacity

resulting in an award of less than the full capacity requested if such

Shipper notifies Transporter of that decision through Transporter's EBB

within one hour of Transporter's notice to that Shipper of the pro rata

allocation. Otherwise, if a successful bidder fails to execute a Service

Agreement within 15 days after such Service Agreement is tendered by

Transporter, (or such later date established by Transporter through notice

to Shipper), Transporter will then award the capacity to the next

acceptable bidder on the basis of the highest net present value, as

described in this Section. Shippers failing to return such Service