Alabama-Tennessee Natural Gas Company

Second Revised Volume No. 1

Effective Date: 06/01/1997, Docket: RP97-165-001, Status: Effective

First Revised Sheet No. 97 First Revised Sheet No. 97 : Superseded

Superseding: ORIGINAL SHEET NO. 97

GENERAL TERMS AND CONDITIONS (continued)

Method is specified in the Release Request or in the

event of a firm contract nearing expiration,

Transporter shall determine the bid or bids having the

highest PV based on the following formula:

PV = (Bid Rate) x (Bid MDQ) x 1-(1/((1+i) ))

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where

Bid Rate = the reservation charge which the Bidder

has agreed to pay; for volumetric bids

the rate is calculated by multiplying

the bid rate by 30.4167.

Bid MDQ = the MDQ stated in the Bid.

i = Interest rate per month, which shall be

the interest rate as calculated under

18 C.F. R. 154.67 (c)(2)(iii); and

N = the lesser of (i) the term proposed by

the Bidder or (ii) 120 months.

(d) If a Release Request includes a Prearranged Replacement

Shipper, then the released transportation rights shall

be awarded to the Prearranged Replacement Shipper (a)

if its bid either is equal to or is higher than the bid

with the highest value under the bid evaluation

methodology specified by the Releasing Shipper as

provided herein or, if no such standard is specified,

is equal to or is higher than the bid with the highest

NR of the bids submitted by all other Bidders in

accordance with the NR method herein, or (b) if the

Prearranged Replacement Shipper exercises its right of

first refusal and agrees to match any bid having a

higher value, as applicable, within the time period

provided under Section 3.14.