Kinder Morgan Interstate Gas Transmission LLC

Fourth Revised Volume No. 1-B

Effective Date: 12/28/1999, Docket: GT00- 19-000, Status: Effective

Original Sheet No. 53A Original Sheet No. 53A : Effective

GENERAL TERMS AND CONDITIONS - continued

====================================================================

EXAMPLE (6) The assumptions remain the same as in Example (5),

except that we assume that Bids (c) and (d) were never

made.

Winning Qualified Bids: Bid (b) receives 60,000. Bid (e) receives

30,000. Bid (f) receives 10,000.

Explanation: There are two combinations of Qualified Bids with the

Winning Bid Value:

Combination 1 Combination 2

----------------- -----------------

Bid (a): 60,000 Bid (b): 60,000

Bid (e): 30,000 Bid (e): 30,000

Bid (f): 10,000 Bid (f): 10,000

(Pro rata allocation pursuant to Section 23.10(d)(2) between Bids

(a), (b) and (e) doesn't work, because only Bid (e) has a low enough

Minimum Bid Volume to accept 100/150 capacity allocation and Bid (e)

alone cannot create the Winning Bid Value). Under Section

23.10(d)(3)(A), we compare Combinations 1 and 2 for the highest

individual Maximum Bid Volumes, and find them all equal. Under

Section 23.10(d)(3)(B), the tie breaker goes to the Winning Bid Value

combination containing the Qualified Bid having the highest Maximum

Bid Volume and the lowest Minimum Bid Volume. In this case, Bid (b)

has the same (highest) Maximum Bid Volume as Bid (a) but a lower

Minimum Bid Volume. Therefore, Combination 2 wins.

====================================================================