TSP SPECIAL CONSTRUCTION

Rates and charges for TSP Special Construction will be based on the costs incurred by the Company and may include (A) non-recurring type charges, (B) recurring type charges, (C) termination liabilities, (D) underutilization liabilities, or (E) combinations thereof.

1          Basis for Cost Computation:  TSP Special Construction costs may include one or more of the following items to the extent that they are applicable:

(A)       Cost installed of the facilities to be provided, including estimated cost for rearrangements of existing facilities.  Cost installed includes the cost of:

(1)        equipment and materials provided or used,

(2)        engineering, labor and supervision (including necessary overtime),

(3)        transportation,

(4)        rights-of-way, and,

(5)        express shipping of equipment and other expedite charges deemed necessary by the Company,

(B)       Cost of maintenance,

(C)       Depreciation on the estimated cost installed of any facilities provided, based on the anticipated useful service life of the facilities with an appropriate allowance for the estimated net salvage,

(D)       Administration, taxes and uncollectible revenue on the basis of reasonable average costs for these items,

(E)       License preparation, processing and related fees,

(F)       Tariff preparation, processing and related fees,

(G)       Any other identifiable costs related to the facilities provided, and,

(H)       An amount for return and contingencies,

2          Termination Liability:  To the extent that there is no other requirement for use by the Company, a termination liability may apply for facilities specially constructed at the request of the customer to meet its requirements.

1          The termination liability period is the estimated service life of the facilities provided.

2          The amounts of the maximum termination liability is equal to the estimated amounts for:

(A)       Cost installed of the facilities provided including estimated costs for rearrangements of existing facilities and/or construction of new facilities as appropriate, less net salvage.  Cost installed includes the cost of:

(1)        equipment and materials provided or used,

(2)        engineering, labor and supervision,

(3)        transportation, and,

(4)        rights-of-way

(B)       License preparation, processing, and related fees,

(C)       Tariff preparation, processing, and related fees, and,

(D)       Any other identifiable costs related to the specially constructed or rearranged facilities.

3          The applicable termination liability charge is calculated by multiplying the sum of the amounts determined as set forth in 2.2 preceding by a factor related to the unexpired period of liability and the discount rates for return and contingencies. The amount determined in 2.2 (A) preceding shall be adjusted to reflect the predetermined estimated net salvage, including any reuse of the facilities provided.  This product is adjusted to reflect applicable taxes.