National Fuel Gas Supply Corporation

Fourth Revised Volume No. 1

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Effective Date: 10/14/2004, Docket: RP04-591-000, Status: Effective

Third Revised Sheet No. 363 Third Revised Sheet No. 363 : Effective

Superseding: Second Revised Sheet No. 363

GENERAL TERMS AND CONDITIONS

10. CAPACITY RELEASE (Cont'd.)

10.5 Determination of Best Bid

(a) Upon the conclusion of the posting period, Transporter shall

determine the "best bid" for the capacity described in an

Existing Shipper's Notice by applying the standard described

by the Existing Shipper pursuant to Section 10.2(a)(x) hereof,

or, if no standard was so described, Transporter shall make

such determinations according to which bid would generate the

revenue stream with the greatest net present value, without

assuming any throughput, applying as the discount rate the

rate under Section 154.501 of the Commission's regulations.

Transporter is required to meet the capacity release timelines

for processing capacity reallocations only if the Existing

Shipper's best bid methodology is either (i) highest rate,

(ii) net revenue, including the default standard provided by

this Section 10.5(a), or (iii) present value.

(b) Unless its bid is matched by a Prearranged Shipper, the

released capacity shall be awarded to the Potential Shipper

submitting the "best bid". If more than one Potential Shipper

submits bids that each qualifies as a "best bid", the released

capacity will be awarded to the Potential Shipper who

submitted the "best bid" first in time, unless a different

tie-breaking method is specified by the Existing Shipper.

(c) Any contingencies in bids must be satisfied during the

evaluation period specified in Section 10.3(c). If there have

been multiple bids meeting minimum conditions, Transporter

will award the bids, best bid first, until all the offered

capacity is awarded.