Tuscarora Gas Transmission Company

First Revised Volume No. 1

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Effective Date: 07/01/2009, Docket: RP09-8-002, Status: Effective

Substitute Original Sheet No. 70 Substitute Original Sheet No. 70

Superseding: Original Sheet No. 70

GENERAL TERMS AND CONDITIONS

3. REQUESTS FOR SERVICE/CREDIT EVALUATIONS (Continued)

3.2 Available Capacity. (Continued)

(c)Valuation of Bids. (Continued)

PD = shipper's probability of default for the applicable bid term

relative to a BBB rated shipper. The numeric value of PD

is a non-creditworthy shipper's probability of default for

the applicable bid term minus the probability of default of

a BBB rated shipper for the applicable bid term.

i = FERC's annual interest rate divided by 12.

n = number of periods for which the bidder wishes to contract.

The NPV formula applicable to the non-creditworthy shippers will be

affected by the term and rate requested and Shipper's probability of

default.

As part of an open season posting, Transporter will provide a

probability of default table. Transporter will use Standard & Poor's

most recent fifteen-year "Cumulative Average Default Rates By Rating

Modifier" table, as extrapolated to reflect the maximum bid term to

be used for evaluation purposes, to quantify a non-creditworthy

Shipper's probability of default. The probability of default table

will define a bidder's probability of default based upon 1) the

applicable bid term and 2) the credit rating of the shipper. In

order to increase the NPV of its bid, a non-creditworthy Shipper may

elect to post additional collateral, prior to the end of the bid

period, in an amount equal to the difference in dollars between bid

NPVs calculated using 1) the probability of default associated with

the bidding Shipper's actual long-term unsecured debt rating and

applicable bid term and 2) the probability of default associated

with a BBB rating and the same bid term ("NPV Difference"). A non-

creditworthy shipper's actual collateral requirement shall equal

three (3) months worth of reservation charges or the NPV Difference,

whichever is greater. Shipper credit ratings will be determined

consistent with Section 3 of these General Terms and Conditions.

The specific bid evaluation methodology to be used, including, where

applicable, the data to be used for evaluation of Negotiated Rate

Formula bids, will be included as part of Transporter's open season

posting under Section 3.2 with sufficient specificity to allow a

prospective shipper to calculate the value of its bid and duplicate

Transporter's results.

(continued)