National Fuel Gas Supply Corporation

Third Revised Volume No. 1

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Effective Date: 04/01/1997, Docket: RP97- 1-004, Status: Effective

1st Rev. Sub Original Sheet No. 157 1st Rev. Sub Original Sheet No. 157 : Effective

Superseding: Sub. Original Sheet No. 157

GENERAL TERMS AND CONDITIONS

10. CAPACITY REALLOCATION (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) Where the Existing Shipper's Notice proposes and aggregate

release transaction involving capacities on upstream or

downstream pipelines, Transporter shall consult with the

other pipelines involved in the proposed release transaction

following the conclusion of the posting periods of all

involved pipelines, and collectively determine the best bid

among bidders meeting the requirements of all involved

pipelines in accordance with the standard described by the

Existing Shipper pursuant to Section 10.2(a)(x) hereof.

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

released capacity shall be allocated 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 allocated to the

Potential Customer who submitted the "best bid" first in

time, unless a different tie-breaking method is specified by

the Existing Shipper.