Ozark Gas Transmission, L. L. C.

Original Volume No. 1

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Effective Date: 11/01/1998, Docket: CP98-266-002, Status: Effective

Original Sheet No. 42 Original Sheet No. 42 : Effective

RATE SCHEDULE ITS (continued)

(d) For the purposes of determining whether a project to

transport gas is economically beneficial to

Transporter, Transporter shall evaluate each

prospective project based upon the incremental cost

of the construction and operation of the facilities

to be constructed by Transporter, and the

incremental revenues that Transporter estimates will

be generated as a result of constructing and/or

modifying such facilities. In estimating the

revenues to be generated, Transporter will calculate

the revenues based upon the applicable

transportation rates, exclusive of any ACA and/or

GRI charges, and the projected incremental volumes

expected to be transported. Transporter will

consider volumes to be incremental if the volumes

that will be transported would not otherwise flow

through Transporter's system.

(e) In situations where Shipper is required to pay for

the total cost of the new facilities, Shipper's

payment for the cost of the new facilities shall

include the full cost of the facilities, the tax

burden created by the payment, as well as the

tax-on-tax effect generated by such payment. The

allowance for income tax reimbursement shall be

computed by taking into consideration three

elements: (1) the current taxes on the

"contribution in aid of construction" ("CIAC"), less

(2) the present value (computed using a discount

rate equal to Transporter's overall rate of return)

of future tax deductions for depreciation that will

be available from the constructed facilities, plus

(3) the tax-on-tax effect of the first two elements,

all of which should be computed through use of tax

rates that are in effect when the contributions are

received, i.e., Tax Reimbursement = (Tax Rate

x(CIAC-Present Value of Tax Depreciation)) x (1 +

(Tax Rate/(1-Tax Rate))).

The present value of the tax benefit provided by the

future depreciation of plant shall be determined by

Transporter.

(f) Transporter shall bill Shipper for reimbursement of

additional facilities in accordance with Section 6

of Transporter's General Terms and Conditions.

(g) All facilities installed by Transporter under this

Section 2.4 shall be owned and operated by

Transporter.