K O Transmission Company

Original Volume No. 1

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

Second Revised Sheet No. 45 Second Revised Sheet No. 45

Superseding: First Revised Sheet No. 45

GENERAL TERMS AND CONDITIONS (continued)

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

surcharges and any other applicable charges, as they may be adjusted from time

to time by Transporter. Transporter shall reserve the right to reject any bids

that: (i) are at a rate that is less than the minimum rate stated in

Transporter's posting of that capacity; (ii) do not satisfy any of the other

terms specified in the posting; or (iii) include conditions or provisions that

Transporter determines, in its reasonable discretion, to be unacceptable.

(c)

Assessing Bids and Awarding Capacity. Transporter shall assess the bids to

assure that capacity is available to serve the precise delivery point(s)

requested. If capacity is not available, Transporter shall reject the bids and

advise Shipper.

Transporter shall evaluate bids based upon their net present value as set forth

below, taking into account the price and term offered. Transporter shall use the

current Commission-approved interest rate in calculating the net present value

of bids. Capacity shall be awarded, as set forth below, based on the acceptable

highest value of the bids offered to Transporter calculated in accordance with

this Section. Transporter shall report the winning bids on its website.

(d)

Award between Equal Bidders. Consistent with the bid assessment criteria set

forth immediately above, Transporter shall award capacity: (i) first to an

existing capacity holder that exercises a right of first refusal to match the

highest value bid, and (ii) then to the bidder submitting the highest value bid

or if two or more bidders submit equal acceptable highest value bids then to the

bidder submitting that highest value bid first in time, as determined by the

receipt time and date noted by Transporter with that first in time assignment

to the Bidder having first transmitted the bid to Transporter via fax, e-mail or

internet bidding software, as determined by the date and time electronic stamp.

(e)

Binding Nature of Bids; All bids are binding. If a successful bidder fails to

execute a Service Agreement within fifteen (15) days after such