Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 07/01/1995, Docket: RP95-303-000, Status: Effective

First Revised Sheet No. 214 First Revised Sheet No. 214 : Superseded

Superseding: Substitute Original Sheet No. 214

GENERAL TERMS AND CONDITIONS

6. RIGHT OF FIRST REFUSAL AT EXPIRATION OF AGREEMENTS (Cont'd)

The best bid shall be that bid which WNG determines, after

consideration of the elements of the bid, including but not limited

to, term, quantity, and rate(s) , provides the greatest economic

value, after discounting for net present value. WNG will evaluate

the net present value of any bid using a discount rate equal to the

interest rate applicable to pipeline refunds pursuant to Section

154.67 of the Commission's regulations or successor regulation. A

bid to pay the maximum rate for a given term will be deemed

superior to a bid to pay a specified dollar rate, which is equal to

the currently effective maximum rate, for the same term, if other

elements of the bids are the same. The maximum term to be utilized

in determining the net present value of bids will be 20 years. In

the event of a tie, the best bid first received by WNG will be the

best bid.

Within 5 business days following the bid closing date, WNG will

evaluate the bids received. WNG will not disclose the identity of

the bidder making the best bid. If the best bid is a contingent

bid, WNG will notify the bidder making the best bid within 5

business days following the bid closing date. That bidder will

have 5 business days following such notification to satisfy or

waive the contingency or WNG may disregard such bid.

WNG will notify the existing capacity holder of the best bid or

that no bids were received within 5 business days after resolution

of any contingencies and determining the best bid. The existing

capacity holder will have a right of first refusal to match the

best bid received for such capacity within 30 days after receiving

the notification of the best bid. The existing capacity holder's

right of first refusal will expire if it fails to match the best

bid and WNG executes a service agreement with the bidder making the

best bid.

6.3 Prepayment

To ensure that competing bids are bona fide, the bidding party must

tender a prepayment and meet the credit-worthiness requirements,

both as set forth in Article 8.