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. 168 Substitute Original Sheet No. 168

Superseding: Original Sheet No. 168

GENERAL TERMS AND CONDITIONS

27. PREGRANTED ABANDONMENT & THE RIGHT OF FIRST REFUSAL (Continued)

27.5 Right of First Refusal. (Continued)

(l) Expansion Project Open Seasons. When an expansion open season bidding

process results in a fully-subscribed construction project, the sizing

of which would be affected by an original capacity holder's plans

regarding continuation of service, Transporter may issue a separate

notice prior to construction that requires affected original capacity

holders to elect either to terminate or not to terminate their

respective service agreements as set forth below. Transporter shall

issue such a separate service continuation notice only to original

capacity holders whose service agreements will expire within the

thirty-six (36) months following issuance of the separate notice.

At the time Transporter commences a capacity rationalization process in

association with a fully-subscribed expansion project, Transporter may

issue a service continuation notice under which an affected original

capacity holder will have until the end of the rationalization period,

which shall be no less than 30 days after the issuance of the service

continuation notice, to elect to (1) discontinue service at the

expiration of its service agreement or (2) extend the full MTQ of its

service agreement by matching the applicable term and rate, up to the

maximum historical rate that applies to the original capacity holder,

of the accepted expansion bid(s) as follows:

When the pool of original capacity subject to matching is less than the

capacity of the fully-subscribed construction project, an original

capacity holder may be required, in order to retain its capacity, to

extend its contract term by matching (1) the minimum acceptable term

identified in the expansion open-season posting, (2) the minimum

expansion term accepted by Transporter, or (3) fifteen (15) years,

whichever is least. The rate that an original capacity holder must

match to retain its capacity shall be the original capacity holder's

maximum applicable historical rate.

When the pool of original capacity subject to matching is greater than

the capacity of the fully-subscribed construction project, an original

capacity holder may be required, in order to retain its capacity, to

extend its contract by matching, on a proportional basis relative to

all capacity subject to matching, the NPV of the expansion project.

For purposes of calculating the expansion project NPV, it will be

assumed that all expansion shippers are paying the maximum historical

rate that applies to an original capacity holder. The match

requirement shall be capped at the original capacity holder's

applicable MTQ x the applicable maximum historical rate x fifteen (15)

years. The total NPV that an affected original capacity holder may be

required to match shall be calculated as follows: