Saltville Gas Storage Company L.L.C.

Original Volume No. 1

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Effective Date: 03/01/2009, Docket: RP08-479-002, Status: Pending

Sub Second Revised Sheet No. 111C Sub Second Revised Sheet No. 111C

Superseding: First Revised Sheet No. 111C

GENERAL TERMS AND CONDITIONS

(Continued)

3. CONTRACTING FOR SERVICE (continued)

3.8 Allocation of Available Firm Storage Capacity. (continued)

(h) Determination of Best Bid.

(1) At the close of the bidding period for any open season

held pursuant to this Section 3.8, Saltville shall

select from among all valid bids the "best bid," as

determined pursuant to this Section 3.8(h) and, if

applicable, Section 3.8(i); provided, however, that

(1) the Maximum Storage Quantity shall be no less than

5 times and no greater than 25 times the MDWQ, and (2)

the Maximum Daily Injection Quantity shall be no lower

than 40% and no greater than 100% of the MDWQ.

Saltville shall review all bids received from bidders

that have not been rejected by Saltville pursuant to

Section 3.8(g) above, to determine which bid is the

"best bid." For purposes of this Section 3.8, the

"best bid" shall be the bid which yields to Saltville

the highest net present value. Net present value

shall be calculated on the basis of the quantity, rate

and term reflected in the bid, as adjusted by the

discount factor, as of the date of the bid evaluation,

calculated in accordance with Section 154.501(d) of

the Commission's regulations, except that under a

negotiated rate agreement with a minimum quantity, the

net present value evaluation shall also include the

fixed cost component of the usage revenue at the

minimum quantity. In determining the highest net

present value in connection with a Customer paying a

negotiated rate higher than the maximum recourse rate,

such negotiated rate Customer paying a rate higher

than the maximum recourse rate will be deemed to be

paying a rate equal to the maximum recourse rate.

(2) In determining the "best bid," any request to add or

change a Receipt Point and/or a Delivery Point will be

considered to have a net present value of zero (0)

when comparing such requests to other requests for

service and awarding capacity unless the Customer has

agreed in conjunction with its request to (i) increase

its MSQ, MDIQ and/or MDWQ, (ii) increase the rate

Customer is currently paying to Saltville, if such

rate is less than the applicable maximum rate, and/or

(iii) extend the term of its firm service agreement in

which case Saltville shall consider the terms of such

MSQ, MDIQ and/or MDWQ increase, rate increase and/or

contract extension when calculating the net present

value. In the event that a request to add or change a

Receipt Point and/or a Delivery Point results in a

bid(s) that yields a net present value that is greater

than zero ("Positive NPV Bid"), Saltville shall award

the capacity to the bid which yields to Saltville the

highest net present value. In the event that no

Positive NPV Bid(s) is received by Saltville or point

capacity remains after Saltville has awarded capacity

to or among the Positive NPV Bid(s), Saltville shall

award the remaining point capacity to the firm

Customer whose request to change its primary point(s)

was received first-in-time by Saltville.