Kinder Morgan Interstate Gas Transmission LLC

Fourth Revised Volume No. 1-B

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Effective Date: 05/01/2002, Docket: RP02-202-000, Status: Effective

First Revised Sheet No. 36 First Revised Sheet No. 36 : Effective

Superseding: Original Sheet No. 36

 

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

 

When any Shipper bids the maximum rate, such Shipper is only

required to bid up to the maximum rate for its requested receipt

and delivery points, not the maximum rate which may apply to

different receipt and delivery points which could be charged for

such service.

 

Multiple bids (defined as different bids made for different

portions of the total capacity) will be permitted.

 

18.4 BEST OFFER

 

Transporter will determine which bid constitutes the best offer by

determining the highest economic unit value (per Dth of capacity)

to Transporter. A calculation based on the formula and interest

rate set forth in Section 23.10 will be used to determine the

highest economic unit value. The comparative economic unit value

of each bid will be determined by calculating the Net Present

Value (NPV) of the reservation charges or other form of revenue

guarantee of each offer over either the term of the offer or five

(5) years, whichever is less, and then dividing by the quantity of

the respective bid. However, if the bid is at maximum rate and

the term is more than five (5) years, the entire term will be

considered in determining the economic unit value. For a

Shipper's bid with a reservation rate or other form of revenue

guarantee which exceeds the maximum Recourse Rate during all or

any portion of the bid term, the NPV calculated for the bid may

not exceed the NPV calculated assuming that the maximum Recourse

Rate shall be in effect during the full term of the bid.

 

In the event equivalent offers are submitted, the capacity will be

made available on a pro rata basis to the equal bidders. Should

any of the equal bidders veto their pro rata allocation of the

capacity, Transporter will then conduct a lottery to select the

winning bidder, who will then, if the bid is not matched under

Section 18.5 below, be allotted its requested capacity. The

remainder of said capacity, if any, will be available to the other

equal bidder(s) on a pro rata basis, which will again trigger the

veto/lottery selection process.

 

Transporter will post the name of the winning bidder of the

capacity for a period of no less than five (5) business days.