TransColorado Gas Transmission Company

Original Volume No. 1

Effective Date: 05/15/2000, Docket: GT00- 25-000, Status: Effective

First Revised Sheet No. 227B First Revised Sheet No. 227B : Superseded

Superseding: Original Sheet No. 227B

GENERAL TERMS AND CONDITIONS

6. CAPACITY RELEASE BY FIRM SHIPPERS (Continued)

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EXAMPLE (5) Assume:

Capacity Release Request = 100,000/day for 5 years.

Qualified Bids:

Maximum Bid Unit Bid Minimum

Volume Term Value Bid Volume

----------- ------- -------- ----------

Bid (a) 60,000/day 5 years $.18 60,000

Bid (b) 60,000/day 5 years $.18 50,000

Bid (c) 70,000/day 5 years $.18 65,000

Bid (d) 50,000/day 5 years $.18 15,000

Bid (e) 30,000/day 5 years $.18 10,000

Bid (f) 40,000/day 5 years $.17 0

Winning Qualified Bids: Bid (c) receives 70,000. Bid (d) receives 30,000.

Explanation: Again, there are many combinations of Bids (a), (b), (c),

(d) and (e) with the same Winning Bid Value. Pro rata allocation won't

work, because each Bid would receive 100/270 of the capacity; only Bids

(d) and (e) have low enough Minimum Bid Volumes for a pro rata allocation,

and the sum of Bid (d)'s and Bid (e)'s Maximum Bid Volumes is less than

100,000. Under Section 6.10(d)(iii)(1)), we then look to the combinations

of Bid(s) (a), (b), (c), (d) and (e) to identify the Bid with the highest

Maximum Bid Volume. This is Bid (c). We allocate the highest volume to

Bid (c) consistent with creating the Winning Bid Value, so 70,000 is

allocated to (c). This leaves 30,000 to be allocated. Bids(a) and (b)

have the next highest Maximum Bid Volume (60,000), but the Minimum Bid

Volumes of Bids (a) and (b) are each too high to receive the remaining

capacity. The next highest available Maximum Bid Volume is in Bid (d),

which is allocated the remaining capacity of 30,000.

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