K N Interstate Gas Transmission Co.

Third Revised Volume No. 1-B

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Effective Date: 08/01/1996, Docket: RP96-296-000, Status: Effective

Original Sheet No. 49 Original Sheet No. 49 : Superseded

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

Where

NPV = net present value of the bid

R = Reservation charge (potential replacement

Shipper's bid reservation charge) state 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.

If no interest rate is specified by the releasing

Shipper, the latest Wall Street Journal prime rate

will be used.

The economic value of a bid shall be defined as the

total net present value of the reservation charge bid,

not to exceed a term of twenty(20) years. Transporter

will give any replacement Shipper found by the

releasing Shipper (if any) an opportunity to match any

better offer by the close of business on the next

business day following the close of the bid period

(match day). All offers must be received by 5:00

PM CT on the last day of the bid period and on match

day. If the replacement Shipper matches the better

offer, Transporter will contract with the replacement

Shipper found by the releasing customer. If the

better offer is not matched, 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.

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.