K N Interstate Gas Transmission Co.

First Revised Volume No. 1-D

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

Original Sheet No. 42 Original Sheet No. 42 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

Transporter will contract with the person who made the better

offer. In all situations, including those where Shipper specified

criteria are used, Transporter will evaluate and rank the bids.

Capacity will be awarded once the winning bid is determined.

Capacity not taken by the winning bidder will be offered to the

next highest bidder.

* According to the following formula:

t = 0

Where

NPV = net present value of the bid

R = Reservation charge (potential replacement Shipper's bid

reservation charge) stated on a daily basis

Bid MDTQ = Amount of capacity bid on in MMBtu/d

i = Discount (interest) rate stated on a daily basis

n = Number of days from begin release date to the end of the

period covered by the bid.

If no interest rate is specified by the releasing Shipper, the

latest Wall Street Journal prime rate will be used.

23.6 ABILITY TO WITHDRAW CAPACITY POSTING OR CAPACITY BID AND ABILITY

TO MAKE CONDITIONED BID.

a. ABILITY TO WITHDRAW RELEASED CAPACITY POSTING. Releasing

Shipper may withdraw the capacity release any time before

the end of the bid period.