High Island Offshore System, L.L.C.

Third Revised Volume No. 1

 Contents / Previous / Next / Main Tariff Index

Effective Date: 04/07/1999, Docket: GT99- 17-000, Status: Effective

Original Sheet No. 136 Original Sheet No. 136 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

17.7(b) "Best Bid" or "Better Offer". The "best bid" or

"better offer" shall be (1) determined in

accordance with the bid evaluation method specified

by the Releasing Shipper pursuant to subsection

17.4, or (2) in the event the Releasing Shipper

elects not to submit a bid evaluation method, the

"best bid" or "better offer" shall be selected from

among the Qualified Bid(s) received during the bid

period, including any extension thereof, in

accordance with the following procedures:

(i) HIOS shall calculate the Net Present Value of all

Qualified Bids and applicable Prearranged

Transactions by applying the proposed reservation

charge to the amount of capacity proposed to be

taken for the proposed duration of the capacity

release transaction, and discounting the resultant

dollar figure to present value on the basis of the

Federal Energy Regulatory Commission interest rate

described in 18 CFR Section 154.67(c)(2)(iii)(A)

that is in effect on the date that the calculation

is made for all competing Qualified Bids and

Prearranged Transactions. This calculation is

expressed in the following formula: