Ozark Gas Transmission System

First Revised Volume No. 1

Effective Date: 10/01/1991, Docket: RP91-208-002, Status: Effective

Original Sheet No. 120B Original Sheet No. 120B : Superseded

RATE SCHEDULE ITS

INTERRUPTIBLE TRANSPORTATION SERVICE

(Continued)

d. For the purposes of determining whether a project to

transport gas is economically beneficial to

Transporter, Transporter shall evaluate each

prospective project based upon the incremental cost

of the construction and operation of the facilities

to be constructed by Transporter, and the

incremental revenues that Transporter estimates will

be generated as a result of constructing and/or

modifying such facilities. In estimating the

revenues to be generated, Transporter will calculate

the revenues based upon the applicable transportation

rates, exclusive of any ACA and/or GRI charges,

and the projected incremental volumes expected to be

transported. Transporter will consider volumes to

be incremental if the volumes that will be

transported would not otherwise flow through

Transporter's system.

e. 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.