Ozark Gas Transmission System

First Revised Volume No. 1

Effective Date: 09/01/1997, Docket: RP97-429-000, Status: Effective

Original Sheet No. 106A Original Sheet No. 106A : Superseded

RATE SCHEDULE FTS

FIRM TRANSPORTATION SERVICE

(Continued)

18.2 When new and/or expanded facilities, other than those

specified in Section 18.1 above, are required to

accommodate the delivery of gas under this FTS Rate

Schedule and Transporter determines that installation

of such facilities will be economically beneficial to

Transporter or provide increased business opportunities

for Transporter and will not impair service to any

Shipper or threaten the integrity of Transporter's

system, Transporter shall construct such facilities.

18.3 In situations where Shipper is required to pay for the

total cost of the new facilities, Shipper's payment for

the cost of the new facilities shall include the full

cost of the facilities, the tax burden created by the

payment, as well as the tax-on-tax effect generated by

such payment. The allowance for income tax

reimbursement shall be computed by taking into

consideration three elements: (1) the current taxes on

the "contribution in aid of construction" (CIAC), less

(2) the present value (computed using a discount rate

equal to Transporter's overall rate of return) of

future tax deductions for depreciation that will be

available from the constructed facilities, plus (3) the

tax-on-tax effect of the first two elements, all of

which should be computed through use of tax rates that

are in effect when the contributions are received,

i.e., Tax Reimbursement = (Tax Rate x (CIAC-Present

Value of Tax Depreciation)) x (1 +(Tax Rate/(1-Tax

Rate))). The present value of the tax benefit provided

by the future depreciation of plant shall be determined

by Transporter.

18.4 Transporter shall bill Shipper for reimbursement of

additional facilities in accordance with Section 6 of

Transporter's General Terms and Conditions. All

facilities installed by Transporter under this Section

18 shall be owned and operated by Transporter.