Texas Eastern Transmission, L P

Seventh Revised Volume No. 1

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Effective Date: 11/16/2009, Docket: RP10-53-000, Status: Effective

Third Revised Sheet No. 519 Third Revised Sheet No. 519

Superseding: Second Revised Sheet No. 519

GENERAL TERMS AND CONDITIONS

(Continued)

3.11 Allocation of Available Firm Capacity

(A) Firm capacity that is or becomes available on Pipeline's system from time to

time shall be allocated pursuant to the procedures set forth in this Section

3.11.

(1) Subject to all requirements for requests for firm service in this Section

3 of the General Terms and Conditions, firm capacity will be allocated to

that request(s) generating the highest net present value to Pipeline. Net

present value will be determined based on the discounted cash flow of

revenues to Pipeline produced, lost, or affected by the request(s) for

service. In determining the highest net present value, Pipeline will

consider objective criteria only. Such criteria may include, without

limitation, the maximum contract quantity requested, the term of the

service requested, the date on which the requested service would commence,

and such other objective criteria available based on the requests for

service received by Pipeline. The net present value evaluation shall

include only revenues generated by the reservation rate component 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. In making the

determination of net present value, Pipeline shall apply the rate, as of

the date of the review, stated in accordance with Section 154.501(d) of

the Commission's regulations, to all bids.

(2) For requests for firm service with a term of less than 90 Days for which

Pipeline determines capacity is available to satisfy any such request,

Pipeline shall have the right, but shall not be obligated, to post on its

LINK® system notice of request(s) for service received and prescribe a

period of time ("open season") for receiving additional requests to be

evaluated contemporaneously.

(3) For requests for firm service with a term equal to or greater than ninety

(90) Days for which capacity is available to satisfy any such request,

Pipeline shall conduct an open season for the purpose of receiving

additional requests to be evaluated contemporaneously.

(4) To the maximum extent possible, Pipeline will attempt to structure any

such open season posting pursuant to this Section 3.11(A) so as not to

identify specifically the Customer or potential Customer submitting the

request and/or the specific location of the market(s) to be served. Any

open season pursuant to this Section 3.11(A) will be conducted to

determine which Customer or potential Customer bid produces the highest

net present value for the posted capacity. In the event Pipeline receives

a request for firm service for a term of less than 90 Days and elects to

award available capacity without conducting an open season, such request

shall be deemed to have the highest net present value for purposes of this

Section 3.11(A).