K O Transmission Company

Original Volume No. 1

Effective Date: 04/01/2009, Docket: RP09-394-000, Status: Effective

Second Revised Sheet No. 42 Second Revised Sheet No. 42

Superseding: First Revised Sheet No. 42

GENERAL TERMS AND CONDITIONS (continued)

3. Auctions of Available Firm Service (con’t.)

3.2 below, and (ii) executing a new Service Agreement incorporating the new rate

and term. This right of first refusal shall be deemed to be assigned where a

Shipper holding such a right permanently releases and assigns all or a portion

of the capacity under that Service Agreement, regardless of the duration of that

permanent release. Moreover, a Shipper releasing and assigning all or a portion

of the capacity may structure the release so as to transfer the right of first

refusal for the duration of the release, even if that release and assignment is

subject to a recall by Shipper that would terminate that release and assignment.

If Shipper intends to exercise its right of first refusal as described above,

Shipper shall notify Transporter in writing via fax or e-mail of that intent not

less than three (3) months before the termination date of its Service Agreement.

In the event that Shipper provides Transporter with a three (3) month notice of

intent to exercise its right of first refusal, Transporter shall promptly post

on its website the information described in Section 3.2 below. For no more than

sixty (60) days prior to the termination of such Service Agreement, and for no

more than thirty (30) days thereafter, Transporter shall accept bids from any

prospective Shipper, including prospective Shippers that have already submitted

requests for service for all or a portion of the service rights under the

existing Shipper's long-term Service Agreement.

If Transporter receives an offer for all or a portion of the service rights

under Shipper's long-term Service Agreement, Transporter, within five (5) days

after the last day for receiving offers, shall notify Shipper of the offer

having the greatest economic value to Transporter. For purposes of comparing

the respective values of offers under this Section, Transporter shall evaluate

all bids in accordance with the criteria set forth in Section 3.2(c) below. If

Shipper elects to match the offer, Shipper shall notify Transporter of such

election in writing via fax or e-mail within fifteen (15) days after receiving

Transporter's notice and shall execute a new Service Agreement matching the

offer prior to the termination of the existing long-term Service Agreement. If

no offers are received, Shipper may continue to receive service on a

month-to-month basis or for such other term agreed to by Transporter and

Shipper, and at the applicable maximum rate or at a lower rate agreed to by

Transporter and Shipper. Shipper continuing on that basis retains its right of

first refusal. If no acceptable offers satisfying Transporter's stated minimum

terms are