K N Wattenberg Transmission LLC
First Revised Volume No. 1
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Effective Date: 06/01/1999, Docket: RP99-288-000, Status: Effective
Original Sheet No. 89A Original Sheet No. 89A : Effective
GENERAL TERMS AND CONDITIONS FOR SERVICES - continued
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EXAMPLE (5) Assume:
Capacity Release Request = 100,000/day for 5 years
Qualified Bids:
Maximum Bid Unit Bid Minimum
Volume Term Value Bid Volume
----------- ------- -------- ----------
Bid (a) 60,000/day 5 years $.18 60,000
Bid (b) 60,000/day 5 years $.18 50,000
Bid (c) 70,000/day 5 years $.18 65,000
Bid (d) 50,000/day 5 years $.18 15,000
Bid (e) 30,000/day 5 years $.18 10,000
Bid (f) 40,000/day 5 years $.17 0
Winning Qualified Bids: Bid (c) receives 70,000. Bid (d) receives
30,000.
Explanation: Again, there are many combinations of Bids (a), (b),
(c), (d) and (e) with the same Winning Bid Value. Pro rata
allocation won't work, because each Bid would receive 100/270 of the
capacity; only Bids (d) and (e) have low enough Minimum Bid Volumes
for a pro rata allocation, and the sum of Bid (d)'s and Bid (e)'s
Maximum Bid Volumes is less than 100,000. Under Section
31.10(d)(3)(A), we then look to the combinations of Bid(s) (a), (b),
(c), (d) and (e) to identify the Bid with the highest Maximum Bid
Volume. This is Bid (c). We allocate the highest volume to
Bid (c) consistent with creating the Winning Bid Value, so 70,000 is
allocated to (c). This leaves 30,000 to be allocated. Bids(a) and
(b) have the next highest Maximum Bid Volume (60,000), but the
Minimum Bid Volumes of Bids (a) and (b) are each too high to receive
the remaining capacity. The next highest available Maximum Bid
Volume is in Bid (d), which is allocated the remaining capacity of
30,000.
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