K N Wattenberg Transmission LLC

First Revised Volume No. 1

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Effective Date: 12/05/1998, Docket: RP99-141-000, Status: Effective

First Revised Sheet No. 81 First Revised Sheet No. 81 : Effective

Superseding: Original Sheet No. 81

 

 

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

 

28.4 BEST OFFER

 

Transporter will determine which bid constitutes the best offer

by determining the highest economic unit value (per Dth of

capacity) to Transporter. A calculation based on the formula

and interest rate set forth in Section. 31.2 will be used to

determine the highest economic unit value. The comparative

economic unit value of each bid will be determined by

calculating the Net Present Value (NPV) of the reservation

charges or other form of revenue guarantee of each offer over

either the term of the offer or five (5) years, whichever is

less, and then dividing by the quantity of the respective bid.

However, if the bid is at maximum rate and the term is more than

five (5) years, the entire term will be considered in

determining the economic unit value. For a Shipper's bid with a

reservation rate or other form of revenue guarantee which

exceeds the maximum Recourse Rate during all or any portion of

the bid term, the NPV calculated for the bid may not exceed the

NPV calculated assuming that the maximum Recourse Rate shall be

in effect during the full term of the bid.

 

In the event equivalent offers are submitted, the capacity will

be made available on a pro rata basis to the equal bidders.

Should any one of the equal bidders veto their pro rata

allocation of the capacity, Transporter will then conduct a

lottery to select the winning bidder, who will then, if the bid

is not matched under Section 28.5 below, be allotted its

requested capacity. The remainder of said capacity, if any,

will be available to the other equal bidder(s) on a pro rata

basis, which will again trigger the veto/lottery selection

process.

 

Transporter will post the name of the winning bidder of the

capacity for a period of no less than five (5) work days.