K O Transmission Company

Original Volume No. 1

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

Third Revised Sheet No. 95 Third Revised Sheet No. 95

Superseding: Second Revised Sheet No. 95

GENERAL TERMS AND CONDITIONS (continued)

12. Nominating, Scheduling and Monitoring (con't.)

12.3 Allocation

(a)

For transportation capacity at delivery and receipt points under Rate Schedules

FTS and ITS, Transporter shall (i) allocate capacity sequentially among the Rate

Schedule priority groupings set forth below, and (ii) allocate among Shippers

paying the same rate within those Rate Schedule priority groupings, in the order

and manner set forth below:

(i)

Rate Schedule FTS

For deliveries to primary and secondary receipt and delivery points under the

FTS Rate Schedule, Transporter shall allocate capacity among those Shippers on a

pro rata basis, based upon those Shippers' respective levels of Transportation

Demand.

(ii)

Rate Schedule ITS and Overrun Quantities under Rate Schedule FTS

(1) Where Shippers have nominated deliveries commencing on the first Day of the

Month of quantities under the ITS Rate Schedule or overrun quantities under the

FTS Rate Schedule, Transporter shall award capacity to the Shippers paying the

highest rate. Among Shippers paying the same rate, Transporter shall allocate

capacity first to those Shippers flowing gas on a pro rata basis, based upon

each such Shipper's respective confirmed nominations on the due date for

nominations.

Transporter shall award capacity first to the Shippers paying the applicable

maximum rate under Rate Schedule ITS. In situations where Shippers are paying

less than the applicable maximum rate, Transporter shall allocate the remaining

capacity based on the rate paid from the highest rate to the lowest rate. Among

Shippers paying the same rate, Transporter shall allocate capacity:

a) first to those Shippers flowing gas during the previous month (on a pro rata

basis based on each Shipper's quantities flowing on the fourth business day

preceding the first day of that month, up to but not exceeding such flowing

quantities); and

b) second to those Shippers who were not flowing gas during the previous month

(on a pro rata basis based on nominated quantities for service during the

upcoming month, up to but not exceeding nominated quantities).

(2) Where Shippers have requested deliveries in excess of available capacity

and commencing other than on the first Day of the Month of quantities under the

ITS Rate Schedule or overrun quantities under the FTS Rate Schedule, Transporter

shall allocate any available capacity on the basis of the highest rate. Where

requested deliveries at the same highest rate exceed available capacity,

Transporter shall allocate capacity first to those Shippers flowing gas on a pro

rata basis, based upon respective confirmed nominations; and second to all

remaining Shippers based upon the order in which Transporter received

nominations from those Shippers (equally to any Shippers submitting nominations

on the same day).