Gas Transmission Northwest Corp.

Third Revised Volume No. 1-A

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Effective Date: 01/01/2007, Docket: RP06-407-005, Status: Pending

Second Revised Sheet No. 129 Second Revised Sheet No. 129 : Pending

Superseding: First Revised Sheet No. 129






18.1 Firm Service (Continued)


(e) Valuation of Bids


Unless otherwise specified in its open season posting, the

bid(s) with the greatest economic value will be the bid(s)

with the highest net present value ("NPV") based on (1) the

reservation charge and any proposed usage charge revenues

guaranteed by a minimum volume commitment or otherwise that

requestor(s) would pay at the rates the requestor(s) has bid,

(2) the term of service specified in the request, and (3)

Shipper's probability of default for the applicable bid term.

If the economic values of separate bids are equal, then

service shall be offered to such requestors on a pro-rata

basis. The NPV is the discounted cash flow of the bid

according to the following formula, net of revenues lost or

affected by the requests for service:


(1 + i) - 1

Present Value per = P * R * (1-PD) * ____________


i (1 + i)

where: P = percent of the rate or charge that the

Shipper is willing to pay.


R = Rate or charge calculated as: The applicable

maximum authorized reservation charge(s) per

Dth in effect at the time of the bid for



PD = Shipper's probability of default for the

applicable bid term.


i = FERC's annual interest rate divided by 12.


n = number of periods for which the bidder wishes

to contract.


The NPV formula will be affected by the rate requested, the

applicable bid term, and Shipper's probability of default. In

the event GTN intends to entertain bids for service under

index-based or other Negotiated Rate Formulae, the future value

of which cannot be determined at the time of the bidding, GTN