K N Interstate Gas Transmission Co.

Second Revised Volume No. 1-B

Effective Date: 11/01/1994, Docket: RP94-397-000, Status: Effective

First Revised Sheet No. 34 First Revised Sheet No. 34 : Superseded

Superseding: Original Sheet No. 34

GENERAL TERMS AND CONDITIONS FOR SERVICES - continued

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.

18.5 MATCH

The original firm Shipper shall have the option to execute a firm

service agreement which exactly matches the rate and term of the

bid constituting the highest economic unit value to Transporter,

except that the original firm Shipper need not match a contract

term of more than ten (10) years. The original firm Shipper need

only match the quantity bid if the quantity bid is less than the

quantity offered under Section 18.1 above. Transporter will notify

the original firm Shipper