Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 09/15/2008, Docket: RP08-392-000, Status: Effective

Original Sheet No. 2806 Original Sheet No. 2806 GENERAL TERMS AND CONDITIONS Section 16 (Cont'd) (f) Methodology Used to Determine "Best Bid" (i) The "best bid" shall be determined in accordance with the bid evaluation method specified by the Releasing Customer pursuant to Section 16.4 (a)(xi). The "best bid" may be determined as that bid which generates (1) the highest rate, (2) the maximum net revenue, or (3) the highest present value. If multiple bids meeting minimum conditions have been submitted, bids shall be awarded, best bid first, until all offered capacity is awarded. (ii) If the Releasing customer chooses not to determine the methodology to be used to award the "best bid," the following methodology shall be used by Pipeline to determine the "best bid:" Best bid will be determined based on what will yield to the Releasing Customer the highest net present value, using a 10% discount factor, of the reservation charge (reservation charge x CD) the Replacement Customer is willing to pay for the term bid. If several bids yield the same net present value, the capacity will be awarded to the bid which yields to the Releasing Customer the highest net present value over the shortest period of time. After this process, if there are still several bids that yield the same net present value, then the capacity will be awarded to the bid submitted first in time. When determining the best bid, any marketing fee to be retained by Pipeline will be subtracted from the affected bid when comparing it to other bids where no marketing fee is involved. (g) Other Information Posted to Internet Website (i) Offers to purchase capacity will be posted by Pipeline to its Internet Website, upon the receipt of such information from interested parties. (ii) Pipeline will post on its Internet Website its available firm and interruptible capacity and the terms and conditions applicable to it. Pipeline will maintain on its Internet Website pipeline capacity information including, but not limited to, the availability of capacity at receipt points and on supply laterals, on Texas Gas' mainline system, at delivery points, and in storage for no-notice storage withdrawals/injections. (iii) Pipeline will post critical system-wide notices in a separate category from notices that are not critical.