K N Interstate Gas Transmission Co.

First Revised Volume No. 1-D

Effective Date: 12/02/1994, Docket: RP95- 35-000, Status: Effective

Original Sheet No. 28 Original Sheet No. 28 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

Multiple bids (defined as different bids made for different

portions of the total capacity) will be permitted.

18.4 BEST OFFER

Transporter will determine which bid constitutes the best offer by

determining the highest economic unit value (per Mcf of capacity)

to Transporter. A calculation based on the formula and interest

rate set forth in Section 23.5 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 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.

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 18.5 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 gas

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