Williams Natural Gas Company

Second Revised Volume No. 1

Effective Date: 10/01/1993, Docket: RS92- 12-003, Status: Effective

Original Sheet No. 215 Original Sheet No. 215 : Superseded

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, rate(s) and system operating impact,

provides the greatest overall economic benefit, 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

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 5 business 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.