K O Transmission Company

Original Volume No. 1

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Effective Date: 04/22/1996, Docket: CP95-149-001, Status: Effective

Original Sheet No. 046 Original Sheet No. 046 : Effective

GENERAL TERMS AND CONDITIONS (continued)

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

Service Agreement is tendered by Transporter, the bid shall

be void. Transporter shall then award the capacity to the

next acceptable bidder on the basis of the highest net

present value, as described in this Section. If

Transporter finds no other bid acceptable, the capacity

shall be posted again and thereby made available for a new

round of bids.

(f)

Adjustment to Bid Rate. When the bid rate by a Bidder is

at the maximum base reservation charge, that bid rate shall

be subject to adjustment in accordance with the procedures

of this Tariff and of the Commission, unless otherwise

clearly stated in the Service Agreement. When the rate bid

by a bidder is lower than the maximum base reservation

charge, that bid rate shall be subject to adjustment in

accordance with the procedures of this Tariff and of the

Commission by an amount proportionate to the increase or

decrease in the maximum base reservation charge, unless

otherwise clearly stated in the Service Agreement.