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FERC GAS TARIFF
ORIGINAL VOLUME No. 1
OF
DISCOVERY GAS TRANSMISSION LLC
FILED WITH
FEDERAL ENERGY REGULATORY COMMISSION
Communications concerning this tariff
should be addressed to:
Mr. Kevin Rehm
Vice President
Discovery Gas Transmission LLC
P. O. Box 1396
Houston, TX 77251-1396
2800 Post Oak Blvd.
Houston, TX 77056
Telephone: 713-215-2694
Facsimile: 713-215-3050
Electronic Mail: Kevin.Rehm@Williams.com
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TABLE OF CONTENTS
ORIGINAL VOLUME NO. 1
Description Sheet No.
Preliminary Statement 10
System Map 11
Statement of Transportation Rates 20
Rate Schedules:
FT-1 Firm Transportation Service 30
FT-2 Firm Transportation Service 40
IT Interruptible Transportation Service 50
General Terms and Conditions 100
Forms:
FT-1 Transportation Service 200
FT-2 Transportation Service 220
IT Transportation Service 240
Capacity Release 260
Request for Service 270
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Sheet Nos. 2 through 9 are reserved for future use.
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PRELIMINARY STATEMENT
Discovery Gas Transmission LLC (Discovery) is a Limited Liability Company,
organized under the laws of the State of Delaware, engaged in the business of
transporting Natural Gas and Condensates in interstate commerce under
authorization granted by and subject to the jurisdiction of the Federal Energy
Regulatory Commission. Discovery owns and operates an offshore Natural Gas
transmission pipeline located in the Federal Domain, Offshore Louisiana, with
a terminus onshore in the vicinity of Larose, Louisiana.
The Transportation of Natural Gas is and will be undertaken by Discovery only
under written agreement(s) acceptable to Discovery upon consideration of
existing commitments, operating conditions and any other factors deemed
pertinent by Discovery.
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SYSTEM MAP
This sheet to be replaced by System Map.
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Sheet Nos. 12 through 19 are reserved for future use.
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STATEMENT OF TRANSPORTATION RATES
(Rates per Dt)
Rate Schedule Maximum Rate Minimum Rate
FT-1 Rate Schedule: 4/
FT-1 (Mainline)
Monthly Reservation Rate $5.2590 $0.24333
Daily Reservation Rate 1/ $0.1729 $0.00800
FT-1 (Market Expansion)
Monthly Reservation Rate $3.3945 $0.24333
Daily Reservation Rate 1/ $0.1116 $0.00800
FT-2 Rate Schedule: 4/
FT-2 (Mainline)
Usage Rate $0.1729 $0.00800
FT-2 (Market Expansion)
Usage Rate $0.1116 $0.00800
IT Rate Schedule: 4/
IT (Mainline)
Usage Rate $0.1729 $0.00800
IT (Market Expansion)
Usage Rate $0.1116 $0.00800
Gathering Charge applied to
volumes transported through
Gathering Facilities 4/ $0.0430 $0.00200
Fuel, Lost and Unaccounted for Gas 0.0% of Gas Receipts
Additional Surcharges Applicable to All Mainline Transportation Service:
Annual Charge Adjustment (ACA) Surcharge 2/ $0.0017
Hurricane Mitigation & Reliability Enhancement (HMRE) Surcharge $0.0500
Market Outlet (MO) Surcharge 3/ $0.0100
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FOOTNOTES
1/ Section 154.107(f) of the Commission's Regulations requires a total
rate. For this purpose only, a Daily Reservation Charge which equals
the Monthly Reservation Charge divided by 30.4167 (365 days/12 months)
is reflected.
For capacity release transactions at maximum rate, the Monthly
Reservation Charge is divided by the number of Days in the applicable
Month. For less than maximum rate transactions only, converting Daily
rate to Monthly rate is accomplished by multiplying the Daily rate times
number of Days in rate period, dividing the result by number of Months
in rate period and taking the remainder out to 5 decimal places and
rounding up or down to the fourth decimal place. Converting a Monthly
rate to a Daily rate is accomplished by multiplying the Monthly rate by
the number of Months in rate period; dividing the result by number of
Days in rate period and taking the remainder out to 5 decimal places and
rounding up or down to the fourth decimal place.
2/ For the period during which this ACA Surcharge is effective, it is
Transporter's intent not to seek recovery of any annual charges assessed
pursuant to Part 382 of the Commission's Regulations and Commission
Order No. 472, except as permitted under this ACA Surcharge. This ACA
Surcharge is in addition to any amounts otherwise payable to Transporter
under its Rate Schedules.
3/ Commencing on April 1, 2008, the MO Surcharge shall be assessed and
paid through a volumetric surcharge applicable to any Mainline
transportation service provided to a Shipper charged a discount or
negotiated rate pursuant to this FERC Gas Tariff under a Service
Agreement executed on or before December 31, 2007, but not to any
Shipper that receives transportation service through both the Mainline
Facilities and the Expansion Facilities under a Service Agreement
pursuant to Rate Schedule FT-2 executed on or before December 31, 2005.
In no event shall the sum of a discount rate and the MO Surcharge
exceed the otherwise applicable maximum tariff rate. The MO Surcharge
shall expire on April 1, 2013.
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FOOTNOTES
4/ Pursuant to "Order Approving Settlement and Severing Party", issued by
the Commission on February 5, 2008, in Docket No. RP08-70, ExxonMobil
Gas & Power Marketing Company, A Division Of Exxon Mobil Corporation
will be offered service up to the following maximum rates (in addition
to the ACA Surcharge or any charge for Fuel, Lost and Unaccounted for
Gas):
Rate Schedule Maximum Rate
FT-1 (Mainline)
Monthly Reservation Rate $4.77240
Daily Reservation Rate (see Footnote 1)/ $0.15690
FT-1 (Market Expansion)
Monthly Reservation Rate $2.48200
Daily Reservation Rate (see Footnote 1)/ $0.08160
FT-2 (Mainline)
Usage Rate $0.15690
FT-2 (Market Expansion)
Usage Rate $0.08160
IT (Mainline)
Usage Rate $0.15690
IT (Market Expansion)
Usage Rate $0.08160
Gathering Charge applied to volumes transported
Through Gathering Facilities $0.03900
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Elements of
Negotiated Rate Transactions
Shipper Applicable Negotiated Term of Contracted Primary Primary
Name Rate Rate Agreement Capacity Delivery Receipt
Schedule Dt/d Point Point
National FT-1 $/Dt 4,13 10-01-08 100,000 Transco Tennessee
Energy & to Texas Eastern Old Lady Lake
Trade, LP Monthly Evergreen14 Bridgeline (Meter #23026)
Larose Larose
Gulf South
Energy IT $0.12/Dt 05-10-07 N/A All ST 46
Partners, Ltd. 5 to Larose
06-09-07 2
Texas FT-1 $0.01/Dt 04-01-07 N/A TETCO TETCO
Eastern to Larose (MTR#07009)
Transmission, 09-30-07 7
LP1
Mariner FT-2 $0.126/Dt 04-10-07 1,712 TETCO ST308
Energy, Inc 5 to Bridgeline
End of Lease 6 Larose
Gulf South
Chevron USA FT-1 $/Dt8 09-01-07 100,000 Bridgeline Tennessee
Inc 5 to Larose Old Lady Lake
12-31-10 (Meter #23026)
Minerals FT-19 $0.13/Dt11,12 11-01-07 35,000 TETCO All 3
Management to Bridgeline
Service1 10-31-08 10 LaRose
Gulf South
1 If a cash-out refund is due and payable to Shipper during any year pursuant to
Transporter's FERC Gas Tariff, Shipper will be deemed to have immediately assigned its
right to the refund amount to the Transporter.
2 Month to month evergreen until terminated by either party with 30 days' prior written
notice.
3 Any gas received at TETCO Mtr 07009 and redelivered to the TETCO delivery point will be
transported at Discovery's minimum IT rate which is currently $0.008/Dt.
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4 The negotiated rate is a usage rate. Transporter shall have the right to terminate the
negotiated rate on one-day's notice if Shipper fails to transport at least 66% of its MDQ
on average during each calendar quarter. For any refund due and payable to Shipper for
any period pursuant to Transporter's FERC Gas Tariff, Shipper shall be deemed to have
immediately assigned its right to the refund amount to the Transporter.
5 For any refund due and payable to Shipper for any period pursuant to Transporter's FERC
Gas Tariff, Shipper shall be deemed to have immediately assigned its right to the refund
amount to the Transporter.
6 Effective for the life of the lease on G22759- South Timbalier 288.
7 Year to year evergreen until terminated by either party with 3 months' prior written
notice.
8 This is a usage rate equal to the applicable maximum daily reservation rates. No
reservation rate will apply. All other applicable rates and charges required or permitted
by the FERC are unaffected by this negotiated rate.
9 Amendment to existing non-conforming service agreement, effective 11-01-07.
10 Year to year evergreen until terminated by either party with 30 days' prior written
notice.
11 The negotiated rate is a usage rate.
12 In the event the Commission directs Transporter to redesign its rates prior to, or during
the effective period of this Negotiated Rate, or requires the collections of costs or
charges through the Negotiated Rate that are not now a component of such rate, the
parties agree to renegotiate the Negotiated Rate to take into account such actions. Such
renegotiated rate shall reflect the economic positions of the parties.
13 The Negotiated Rates are:
Rates Period Receipt Point Delivery Point
$0.10/Dt April 01- Oct 31 Tennessee Transco
$0.14/Dt Nov 01- Mar 31 Tennessee Transco
$0.03/Dt Agreement term Tennessee Gulf South
$0.05/Dt Agreement term Tennessee All other
$0.09/Dt Nov 01- Mar 31 Larose Transco
$0.05/Dt April 01- Oct 31 Larose Transco
14 Month to month evergreen until terminated by either party with 10 days' prior written
notice.
Note: Pursuant to Section 12.2 of the General Terms and Conditions, the Right of First Refusal
provision does not apply to any transportation agreements for firm service listed above.
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List of
Non-Conforming Agreements
The Mineral Management Services Rate Schedule FT-1 Agreement,
dated as of November 1, 2006, as amended November 1, 2007.
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Sheet Nos. 24 through 29 are reserved for future use.
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FT-1 RATE SCHEDULE
FIRM TRANSPORTATION SERVICE
1. AVAILABILITY
This FT-1 Rate Schedule is available to any Shipper for Firm
Transportation of Gas by Discovery Gas Transmission LLC (Transporter)
under the authority and provisions of Part 284 of the Federal Energy
Regulatory Commission's (Commission) regulations, provided that:
a. Transporter determines that it has sufficient System Capacity to
render the Firm Transportation service and is able to provide said
Transportation;
b. Any construction, acquisition, or expansion of facilities
necessary to commence and provide the Firm Transportation service
has been completed;
c. Any Shipper requesting Firm Transportation service under Section
311 of the Natural Gas Policy Act (NGPA) has provided written
certification, including sufficient information to verify that the
requested service qualifies under Section 311 of the NGPA, and
certifications have been received from the qualifying local
distribution companies or intrastate pipelines in accordance with
Section 4 of the General Terms and Conditions;
d. Shipper satisfies the creditworthiness criteria of Section 10 of
the General Terms and Conditions; and
e. Shipper executes the FT-1 Firm Service Agreement in the form
contained in this FERC Gas Tariff for service under this Rate
Schedule within ten (10) Business Days after it is provided to
Shipper.
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2. APPLICABILITY AND CHARACTER OF SERVICE
a. Transportation service hereunder, through all or any portion of
the Mainline Facilities or Expansion Facilities, as appropriate,
on Transporter's System, will be Firm, subject to the availability
of capacity, to the provisions of an Effective FT-1 Firm Service
Agreement, and to the General Terms and Conditions.
b. Transportation service hereunder will consist of the acceptance by
Transporter of Gas tendered for the account of Shipper for
Transportation from the Primary Receipt Point(s) specified in an
Effective FT-1 Firm Service Agreement, or Alternate Receipt
Point(s) as nominated by Shipper, the Transportation of that Gas
through the Mainline Facilities or Expansion Facilities, as
appropriate, on Transporter's System, and the delivery of that
Gas, after appropriate reductions for Fuel, Lost and Unaccounted
for Gas, for the account of Shipper at the Primary Delivery
Point(s) specified in an Effective FT-1 Firm Service Agreement or
Alternate Delivery Point(s) on the Mainline Facilities or
Expansion Facilities as nominated by Shipper.
c. Transportation service provided under this Rate Schedule is
limited to Shipper's MDRQ-Mainline and MDRQ-Expansion and to the
MDQs for each Primary Receipt and Delivery Point specified in an
Effective FT-1 Firm Service Agreement, and Transporter shall not
be obligated to provide Transportation service hereunder in excess
of the MDRQ-Mainline and MDRQ-Expansion and the MDQs so specified.
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3. RATES AND CHARGES
The applicable charges for Transportation services provided under this FT-
1 Rate Schedule are set forth in the currently effective Sheet No. 20 of
this FERC Gas Tariff or in Exhibit D to the FT-1 Service Agreement, in the
case of Negotiated Rates. For all Transportation service rendered under
this Rate Schedule, Shipper shall pay Transporter each Month the sum of
the reservation charge, ACA, HMRE and MO surcharges, and any other charges
authorized under the provisions of this FERC Gas Tariff, as follows:
a. Reservation Charge - The sum of:
i. An amount determined as the product of:
A. The Shipper's MDRQ-Mainline specified in Exhibit B of an
Effective FT-1 Service Agreement; and
B. The reservation rate(s) per Dt for FT-1 (Mainline) set
forth from time to time on the currently effective Sheet No.20
of this FERC Gas Tariff, Original Volume 1, or superseding
tariff plus
ii. An amount determined as the product of:
A. The Shippers MDRQ-Expansion specified in Exhibit B of an
Effective FT-1 Service Agreement; and
B. The reservation rate(s) per Dt for FT-1 (Expansion) set
forth from time to time on the currently effective Sheet No.
20 of this FERC Gas Tariff, Original Volume 1, or superseding
tariff.
b. ACA, HMRE and MO Surcharges - An amount determined as the product
of:
i. The total quantity of Gas in Dts received by Transporter for
the account of Shipper during the previous Month; and
ii. The ACA, HMRE and MO surcharges per Dt set forth from time to
time on the currently effective Sheet No. 20 of this FERC Gas
Tariff, Original Volume No. 1, or superseding tariff.
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c. Gathering Charge - If Shipper designates a Receipt Point(s)
identified as a Gathering Receipt Point on Exhibit A to the FT-1
Service Agreement, then, in addition to the charges above, Shipper
shall pay an amount determined as the product of:
i. The Shipper's MDRQ-Mainline and/or MDRQ-Expansion specified in
Exhibit B of an Effective FT-1 Service Agreement; and
ii. The Gathering charge per Dt set forth from time to time on the
currently effective Sheet No. 20 of this FERC Gas Tariff,
Original Volume No. 1, or superseding tariff.
d. Any charges authorized from time to time under the provisions of
this FERC Gas Tariff.
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Transporter may at any time and from time to time charge any Shipper for
service under this Rate Schedule, a reservation charge predicated upon a
reservation rate that is less than the maximum reservation rate set
forth from time to time on the currently effective Sheet No. 20 of this
FERC Gas Tariff; provided, that the reservation rate may not be less
than the effective minimum reservation rate.
Transporter shall file any and all reports required by the Commission's
regulations setting forth the applicable discounted reservation rates
and Shippers affected, along with any other required information.
4. FUEL, LOST AND UNACCOUNTED FOR GAS
In addition to the charges stated herein, each Shipper under this Rate
Schedule will be assessed its proportionate share of Fuel, Lost and
Unaccounted for Gas resulting from System operations. Each Shipper's
deliveries from the System will be reduced by zero per cent (0.0%) from
its total receipts into Transporter's System until July 1, 2009.
Transporter will calculate the actual amount of Fuel, Lost and
Unaccounted for Gas experienced during each calendar Year and file any
revisions to the reduction percentage to more closely approximate the
actual amount of Fuel, Lost and Unaccounted for Gas experienced by the
System and to reflect differences between projections and actual fuel
and losses from the previous calendar Year. The revised percentage of
reduction will be filed to become effective on July 1 of each Year.
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5. APPLICABILITY OF GENERAL TERMS AND CONDITIONS
Unless otherwise expressly indicated in this Rate Schedule or in an
Effective FT-1 Firm Service Agreement, all of the General Terms and
Conditions contained in this FERC Gas Tariff, including any future
modifications, additions or deletions, from and after their effective
dates, are applicable to Firm Transportation service rendered under this
Rate Schedule and, by this reference, are incorporated and hereby made a
part of this Rate Schedule.
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Sheet Nos. 35 through 39 are reserved for future use.
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FT-2 RATE SCHEDULE
FIRM TRANSPORTATION SERVICE
1. AVAILABILITY
This FT-2 Rate Schedule is available to any Shipper for Firm
Transportation by Discovery Gas Transmission LLC (Transporter) of Gas
produced from Committed Production under the authority and provisions of
Part 284 of the Federal Energy Regulatory Commission's (Commission)
regulations, provided that:
a. Transporter determines that it has sufficient System Capacity to
render the Firm Transportation service and is able to provide said
Transportation;
b. Any construction, acquisition, or expansion of facilities
necessary to commence and provide the Firm Transportation service
has been completed;
c. Any Shipper requesting Firm Transportation service under Section
311 of the Natural Gas Policy Act (NGPA) has provided written
certification, including sufficient information to verify that the
requested service qualifies under Section 311 of the NGPA, and
certifications have been received from the qualifying local
distribution companies or intrastate pipelines in accordance with
Section 4 of the General Terms and Conditions;
d. Shipper satisfies the creditworthiness criteria of Section 10 of
the General Terms and Conditions;
e. Shipper executes the FT-2 Firm Service Agreement in the form
contained in this FERC Gas Tariff for service under this Rate
Schedule within ten (10) Business Days after it is provided to
Shipper; and
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f. Shipper has committed the Committed Production to Transporter for
Transportation under this Rate Schedule and satisfactorily submits
documentation establishing P-50 reserves of the Committed
Production within eighteen (18) Months after committing the
Committed Production. Shipper's MDVQ-Mainline and MDVQ-Expansion
established in accordance with Subsection 2.a. of this FT-2 Rate
Schedule for service, based on Shipper's good faith estimate
before the Committed Production is documented, will not be
increased as a result of such documentation unless firm capacity
is available at that time.
g. A Shipper with an Effective FT-2 Service Agreement may request an
increase of its MDVQ-Mainline or MDVQ-Expansion if the estimated
or proven amount of its Committed Production increases as the
result of documentation, or drilling additional wells or acquiring
additional Gas production rights in the blocks, lands and leases
dedicated to Transporter and described in Shipper's Effective FT-2
Service Agreement. Shipper must submit a written request for an
increase of its MDVQ-Mainline or MDVQ-Expansion in accordance with
Section 4 of Transporter's FERC Gas Tariff, and capacity will be
awarded in accordance with Section 2 of Transporter's FERC Gas
Tariff.
2. APPLICABILITY AND CHARACTER OF SERVICE
a. Transportation under this Rate Schedule is limited to Committed
Production as described in Shipper's Effective FT-2 Service
Agreement and is further limited to the MDVQ-Mainline or MDVQ-
Expansion, as defined in this Subsection 2.a.
Shipper's MDVQ-Mainline and MDVQ-Expansion for Transportation
service provided before Shipper satisfactorily documents the
Committed Production will be an amount equal to Shipper's good
faith estimate of the Committed Production divided by two thousand
nine hundred and twenty (2920). This amount will be prorated,
based on the number of Days the FT-2 service is in effect prior to
the recalculation date, which will be January 1 of each Year.
Thereafter, the MDVQ-Mainline and MDVQ-Expansion will be
determined by subtracting the quantities of Gas shipped during the
previous Contract Year from the Committed Production
================================================================================
and dividing the result by two thousand nine hundred and twenty
(2920).
b. Transportation service hereunder, through all or any portion of
the Mainline Facilities or Expansion Facilities, as appropriate,
on Transporter's System, will be Firm, subject to the availability
of capacity, to the provisions of an Effective FT-2 Firm Service
Agreement, and to the General Terms and Conditions.
c. Transportation service hereunder will consist of the acceptance by
Transporter of Gas tendered for the account of Shipper for
Transportation from the Primary Receipt Point(s) specified in an
Effective FT-2 Firm Service Agreement, the Transportation of that
Gas through the Mainline Facilities or Expansion Facilities, as
appropriate, on Transporter's System, and the delivery of that
Gas, after appropriate reductions for Fuel, Lost and Unaccounted
for Gas, for the account of Shipper at the Primary Delivery
Point(s) specified in an Effective FT-2 Firm Service Agreement or
Alternate Delivery Point(s) on the Mainline Facilities or
Expansion Facilities, as appropriate, as nominated by Shipper.
d. Transporter shall not be obligated to provide Transportation
service hereunder in excess of the MDVQ-Mainline and MDVQ-
Expansion, as determined for each Contract Year in accordance with
Subsection 2.a.
e. Shipper shall submit documentation to Transporter in accordance
with Subsection 1.f. of this FT-2 Rate Schedule, proving the P-50
reserves of the Committed Production. If, in Transporter's
reasonable judgment, the documentation submitted by Shipper fails
to establish the P-50 reserves of the Committed Production,
Transporter and Shipper will review the data underlying the
documentation and attempt to reach agreement. If Transporter and
Shipper are unable to reach such agreement, Transporter and
Shipper will agree upon a qualified third-party expert whose good
faith determination shall establish the P-50 reserves of the
Committed Production and shall be binding upon Transporter and
Shipper. Transporter and Shipper will share equally the costs of
the qualified third-party expert agreed to by Transporter and
Shipper.
f. If, after the commencement of production from Committed
Production, Shipper fails to ship at least fifty per cent (50%) of
its MDVQ-Mainline or MDVQ-Expansion during any consecutive twelve
(12) Month period, Transporter shall have the right to reduce
Shipper's MDVQ-Mainline or MDVQ-Expansion for the following
Contract Year.
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The reduced MDVQ-Mainline or MDVQ-Expansion will be one hundred fifty per
cent (150%) of the Gas shipped through the Mainline Facilities or the
Expansion Facilities, respectively, during said twelve (12) Month period.
Shipper will have the opportunity to retain Firm service under Shipper's
FT-1 Rate Schedule equal to the reduction under Transporter's right of
first refusal procedures, as set forth in Section 12 of the General Terms
and Conditions.
3. RATES AND CHARGES
The applicable charges for Transportation services provided under this FT-
2 Rate Schedule are set forth in the currently effective Sheet No. 20 of
this FERC Gas Tariff or in Exhibit E to the FT-2 Service Agreement, in the
case of Negotiated Rates. For all Transportation service rendered under
this Rate Schedule, Shipper shall pay Transporter each Month the sum of
the Usage charge, the ACA, HMRE and MO surcharges, and any other charges
authorized under the provisions of this FERC Gas Tariff, as follows:
a. Usage Charge - The sum of:
i. An amount determined as the product of:
A. The total quantity of Gas in Dts received by
Transporter for the account of Shipper during the
previous Month for service through the Mainline
Facilities; and
B. The usage rate(s) per Dt for FT-2 (Mainline) set forth
from time to time on the currently effective Sheet No.
20 of this FERC Gas Tariff, Original Volume No. 1, or
superseding tariff; plus
ii. An amount determined as the product of:
A. The total quantity of Gas in Dts delivered by
Transporter for the account of Shipper during the
previous Month for service through the Expansion
Facilities; and
B. The usage rate(s) per Dt for FT-2 (Market Expansion)
set forth from time to time on the currently effective
Sheet No. 20 of this FERC Gas Tariff, Original Volume
No. 1, or superseding tariff.
================================================================================
b. ACA, HMRE and MO Surcharges - An amount determined as the product
of:
i. The total quantity of Gas in Dts received by Transporter
for the account of Shipper during the previous Month; and
ii. The ACA, HMRE and MO surcharges per Dt set forth on the
currently effective Sheet No. 20 of this FERC Gas Tariff,
Original Volume No. 1, or superseding tariff.
c. Gathering Charge - If Shipper designates a Receipt Point(s)
identified as a Gathering Receipt Point on Exhibit A to the FT-2
Service Agreement, then, in addition to the charges above,
Shipper shall pay an amount determined as the product of:
i. The total quantity of Gas in Dts received by Transporter
for the account of Shipper during the previous Month; and
ii. The Gathering Charge per Dt set forth from time to time on
the currently effective Sheet No. 20 of this FERC Gas
Tariff, Original Volume No. 1, or superseding tariff.
d. Any charges authorized from time to time under the provisions of
this FERC Gas Tariff.
================================================================================
Transporter may at any time and from time to time charge any Shipper for
service under this Rate Schedule, a usage charge predicated on a usage
rate that is less than the maximum usage rate set forth from time to
time on the currently effective Sheet No. 20 of this FERC Gas Tariff;
provided, that the usage rate may not be less than the effective minimum
usage rate.
Transporter shall file any and all reports required by the Commission's
regulations setting forth the applicable discounted usage rates and
Shippers affected, along with any other required information.
4. FUEL, LOST AND UNACCOUNTED FOR GAS
In addition to the charges stated herein, each Shipper under this Rate
Schedule will be assessed its proportionate share of Fuel, Lost and
Unaccounted for Gas resulting from System operations. Each Shipper's
deliveries from the System will be reduced by zero per cent (0.0%) from
its total receipts into the System until July 1, 2009. Transporter will
calculate the actual amount of Fuel, Lost and Unaccounted for Gas
experienced during each calendar Year and file any revisions to the
reduction percentage to more closely approximate the actual amount of
Fuel, Lost and Unaccounted for Gas experienced by the System and to
reflect differences between projections and actual fuel and losses from
the previous calendar Year. The revised percentage of reduction will be
filed to become effective on July 1 of each Year.
================================================================================
5. APPLICATION OF GENERAL TERMS AND CONDITIONS
Unless otherwise expressly indicated in this Rate Schedule or in an
Effective FT-2 Firm Service Agreement, all of the General Terms and
Conditions contained in this FERC Gas Tariff, including any future
modifications, additions or deletions, from and after their effective
dates, are applicable to Firm Transportation service rendered under this
Rate Schedule and, by this reference, are incorporated and hereby made a
part of this Rate Schedule.
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Sheet Nos. 46 through 49 are reserved for future use.
================================================================================
IT RATE SCHEDULE
INTERRUPTIBLE TRANSPORTATION SERVICE
1. AVAILABILITY
This IT Rate Schedule is available to any Shipper for Interruptible
Transportation of Gas by Discovery Gas Transmission LLC (Transporter)
under the authority and provisions of Part 284 of the Federal Energy
Regulatory Commission's (Commission) Regulations, provided that:
a. Transporter determines that it has available System Capacity to
render the Interruptible Transportation service and is able to
provide said Transportation;
b. Any construction, acquisition, or expansion of facilities
necessary to commence and provide the Interruptible Transportation
service has been completed;
c. Any Shipper requesting Interruptible Transportation service under
Section 311 of the Natural Gas Policy Act (NGPA) has provided
written certification, including sufficient information to verify
that the requested service qualifies under Section 311 of the
NGPA, and certifications have been received from the qualifying
local distribution companies or intrastate pipelines in accordance
with Section 4 of the General Terms and Conditions;
d. Shipper satisfies the creditworthiness criteria of Section 10 of
the General Terms and Conditions; and
e. Shipper executes an IT Service Agreement in the form contained in
this FERC Gas Tariff for service under this Rate Schedule within
ten (10) Business Days after it is provided to Shipper.
================================================================================
2. APPLICABILITY AND CHARACTER OF SERVICE
a. Transportation service hereunder, through all or any portion of
Transporter's System, will be Interruptible, subject to the
availability of capacity and Transporter's operating conditions
and System requirements, to the provisions of an Effective IT
Service Agreement and to the General Terms and Conditions.
b. Transportation service hereunder shall consist of the acceptance
by Transporter of Gas tendered for the account of Shipper for
Transportation from the Receipt Point(s) specified in an Effective
IT Service Agreement, the Transportation of that Gas through the
Mainline Facilities or Expansion Facilities, as appropriate, on
Transporter's System, and the delivery of that Gas, after
appropriate reductions for Fuel, Lost and Unaccounted for Gas, for
the account of Shipper at the Delivery Point(s) specified in an
Effective IT Service Agreement.
c. Transportation service provided under this Rate Schedule is
limited to Shipper's MDTQ-Mainline and MDTQ-Expansion specified in
an Effective IT Service Agreement and Transporter shall not be
obligated to provide Transportation service hereunder in excess of
the MDTQ-Mainline or MDTQ-Expansion so specified.
d. Transportation service under this IT Rate Schedule is subject to
interruption on any Day if Transporter receives nominations for
Transportation service in excess of Transporter's Available
Capacity. In such event, FT-1 and FT-2 service will be scheduled
first, followed by IT service, in the manner set forth in Section
6 of the General Terms and Conditions.
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3. RATES AND CHARGES
The applicable charges for Transportation services provided under this IT
Rate Schedule are set forth in the currently effective Sheet No. 20 of
this FERC Gas Tariff or in Exhibit D to the IT Service Agreement, in the
case of Negotiated Rates. For all Transportation service rendered under
this Rate Schedule, Shipper shall pay Transporter each Month the sum of
the usage charge, ACA, HMRE and MO surcharges and any other charges,
authorized under the provisions of this FERC Gas Tariff, as follows:
a. Usage Charge - The sum of:
i. An amount determined as the product of:
A. The total quantity of Gas in Dts received by
Transporter for the account of Shipper during the
previous Month for service through the Mainline
Facilities; and
B. The usage rate per Dt for IT (Mainline) set forth from
time to time on the currently effective Sheet No. 20
of this FERC Gas Tariff, Original Volume No. 1, or
superseding tariff; plus
ii. An amount determined as the product of:
A. The total quantity of Gas in Dts delivered by
Transporter for the account of Shipper during the
previous Month for service through the Expansion
Facilities; and
B. The usage rate per Dt for IT (Market Expansion) set
forth from time to time on the currently effective
Sheet No. 20 of this FERC Gas Tariff, Original Volume
No. 1, or superseding tariff.
b. ACA, HMRE and MO Surcharges - An amount determined as the product of:
i. The total quantity of Gas in Dts received by Transporter for
the account of Shipper during the previous Month; and
ii. The ACA, HMRE and MO surcharges per Dt set forth from time to
time on the currently effective Sheet No. 20 of this FERC Gas
Tariff, Original Volume No. 1, or superseding tariff.
================================================================================
c. Gathering Charge - If Shipper designates a Receipt Point(s)
identified as a Gathering Receipt Point on Exhibit A to the IT
Service Agreement, then, in addition to the charges above,
Shipper shall pay an amount determined as the product of:
i. The total quantity of Gas in Dts received by Transporter
for the account of Shipper during the previous month; and
ii. The Gathering Charge set forth on the currently effective
Tariff Sheet No. 20 of this FERC Gas Tariff, Original
Volume No. 1, or superseding tariff.
d. Any charges authorized from time to time under the provisions of
this FERC Gas Tariff.
================================================================================
Transporter may from time to time and at any time charge any Shipper for
service under this Rate Schedule, a usage charge predicated upon a usage
rate that is less than the effective maximum usage rate set forth from
time to time on the currently effective Sheet No. 20 of this FERC Gas
Tariff; provided, that the usage rate may not be less than the effective
minimum usage rate.
Transporter will file any and all reports as required by the
Commission's regulations setting forth the applicable discounted usage
rates and Shippers affected, along with any other required information.
4. FUEL, LOST AND UNACCOUNTED FOR GAS
In addition to the charges stated herein, each Shipper under this Rate
Schedule will be assessed its proportionate share of Fuel, Lost and
Unaccounted for Gas resulting from System operations. Each Shipper's
deliveries from the System will be reduced by zero per cent (0.0%) from
its total receipts into the System until July 1, 2009. Transporter will
calculate the actual amount of Fuel, Lost and Unaccounted for Gas
experienced during each calendar Year and file any revisions to the
reduction percentage to more closely approximate the actual amount of
Fuel, Lost and Unaccounted for Gas experienced by the System and to
reflect any differences between projections and actual fuel and losses
for the previous calendar Year. The revised percentage of reduction
will be filed to become effective on July 1 of each Year.
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5. APPLICABILITY OF GENERAL TERMS AND CONDITIONS
Unless otherwise expressly indicated in this Rate Schedule or in an
Effective IT Service Agreement, all of the General Terms and Conditions
contained in this FERC Gas Tariff, including any future modifications,
additions or deletions, from and after their effective dates, are
applicable to Interruptible Transportation service rendered under this
Rate Schedule and, by this reference, are incorporated and hereby made a
part of this Rate Schedule.
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Sheet Nos. 55 through 99 are reserved for future use.
================================================================================
GENERAL TERMS AND CONDITIONS
Table of Contents
SECTION DESCRIPTION SHEET NO.
1 Definitions 103
2 Operating Provisions for Firm Service 113
3 Operating Provisions for Interruptible
Service 118
4 Requests for Service 120
5 Nomination Procedures 121
6 Scheduling and Curtailment 127
7 Operational Flow Orders 135
8 Allocation of Measured Gas Quantities 138
9 Resolution of Imbalances 142
10 Billing and Payment 147
11 Capacity Release 151
12 Pregranted Abandonment 167
13 Gas Quality 171
14 Measurement 173
15 Properties and Facilities 178
16 Rate Filings 181
17 Contemporaneous Communication of Information 182
18 Standards of Conduct; Complaint Procedures 185
================================================================================
Table of Contents
SECTION DESCRIPTION SHEET NO.
19 [Reserved for Future Use] 186
20 Liability and Warranty 187
21 Force Majeure 189
22 Assignment 193
23 Waiver 194
24 Descriptive Headings 195
25 NAESB Standards 196
26 Discounting 197
27 Limited Section 4 Hurricane Mitigation and
Reliability Enhancement Surcharge 198
28 [Reserved for Future Use] 199
29 Negotiated Rates 199
================================================================================
Sheet No. 102 is reserved for future use.
================================================================================
GENERAL TERMS AND CONDITIONS
1. DEFINITIONS
1.1 ALTERNATE DELIVERY POINT(S) - All Delivery Points on the Mainline
Facilities or Expansion Facilities, as appropriate, on Transporter's
System that are not designated as Primary Delivery Points in an
Effective Firm Service Agreement where quantities of Gas may be
delivered by Transporter for the account of Shipper, under an Effective
Firm Service Agreement, as nominated by Shipper.
1.2 ALTERNATE RECEIPT POINT(S) - All Receipt Points on the Mainline
Facilities or Expansion Facilities, as appropriate, on Transporter's
System that are not designated as Primary Receipt Points in an Effective
FT-1 Firm Service Agreement where quantities of Gas may be received by
Transporter for the account of Shipper, under an Effective FT-1 Firm
Service Agreement, as nominated by Shipper.
1.3 AVAILABLE CAPACITY - The capacity in the Mainline Facilities or
Expansion Facilities, as appropriate, on Transporter's System that is
not subscribed or scheduled for service under the terms of Transporter's
Rate Schedules.
1.4 BTU - A British Thermal Unit; equal to the quantity of heat required to
raise the temperature of one (1) pound avoirdupois of pure water from
fifty-eight and five- tenths degrees Fahrenheit (58.5øF) to fifty-nine
and five-tenths degrees Fahrenheit (59.5øF) at a constant pressure of
fourteen and seventy-three hundredths pounds per square inch (14.73
PSIA). The standard Btu is the International Btu, which is also called
the Btu(IT). MMBtu shall mean one million (1,000,000) Btus.
1.5 BUSINESS DAY - Monday through Friday, excluding Federal Banking
Holidays.
1.6 CENTRAL CLOCK TIME - Time in U.S. Central Time Zone, as adjusted for
Daylight Savings Time and Standard Time. As used herein, Central Time
means Central Clock Time.
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1.7 COMMISSION - The Federal Energy Regulatory Commission or any federal
commission, agency or other governmental body or bodies succeeding to,
lawfully exercising or superseding any powers that are exercisable by
the Federal Energy Regulatory Commission.
1.8 COMMITTED PRODUCTION - Shipper's working interest share of all Gas
production that is now or hereafter owned by Shipper, its successors and
permitted assigns in the Gas production from the blocks, lands, and
leases described in a Shipper's Effective FT-2 Service Agreement.
1.9 CONDENSATE - Those hydrocarbon liquids at Receipt Point pressure and
temperature produced in association with Natural Gas and transported
through the System; provided, however, that such term does not include
crude oil.
1.10 CONTRACT YEAR - A Year that commences on the first Day of the term of an
Effective Service Agreement and ends on the same calendar date of the
next succeeding Year, unless otherwise provided in an Effective Service
Agreement.
1.11 DAY - A period of consecutive hours beginning and ending at 9:00 a.m.
Central Clock Time. The date of a day is that of its beginning.
1.12 DEKATHERM (Dt) - The standard unit for purposes of nominations,
scheduling, invoicing and balancing. One Dekatherm is equivalent to one
MMBtu.
1.13 DELIVERY POINT(S) - Any point(s) on Transporter's System where
quantities of Gas may be delivered by Transporter for the account of
Shipper under an Effective Service Agreement.
================================================================================
1.14 EFFECTIVE AGREEMENT - An agreement that has been signed by Shipper or
Operator and Transporter and has not terminated under the provisions of
the agreement or through the exercise of any rights under this FERC Gas
Tariff.
1.15 EXPANSION FACILITIES - Facilities of Transporter certificated by the
FERC in FERC Docket No. CP03-342-000, et al. including but not limited
to pipelines and delivery points to Columbia Gulf Transmission Company,
Tennessee Gas Pipeline Company, and Transcontinental Gas Pipe Line
Company.
1.16 EQUIVALENT QUANTITIES - An amount equal to the sum of the quantities of
Gas, expressed in Dts, received by Transporter from Shipper at the
Receipt Points during a given Month, reduced by Fuel, Lost and
Unaccounted for Gas.
1.17 FIRM SERVICE - A service that is not subject to interruption except as
otherwise provided in the applicable Rate Schedule, the applicable
Transportation Service Agreement, or the General Terms and Conditions of
Transporter's FERC Gas Tariff.
1.18 FUEL, LOST AND UNACCOUNTED FOR GAS - The difference between the sum of
all volumes received into the System during an accounting period and the
sum of all volumes delivered from the System during the same period
(including but not limited to Gas used for fuel by or for the benefit of
Transporter, such as for compressor operation, Gas vented, leakage or
other actual losses; discrepancies due to meter inaccuracies, variations
of temperature, pressure, composition, and other variants; and
reductions as a result of retrograde condensation).
1.19 GAS OR NATURAL GAS - Hydrocarbon natural gas in a gaseous state,
including oil well gas produced with crude oil, gas from gas wells, and
residue gas from processing either oil well gas or gas well gas, or
both.
1.20 GATHERING - The receipt and transportation by Transporter of Gas through
any of the following of Transporter's facilities: (i) the 20-inch
lateral extending from the main trunk eastward to Grand Isle South
Addition Block 115; (ii) the 18-inch lateral extending from the main
trunk westward to South Timbalier Block 200; (iii) the 12-inch lateral
extending from the main trunk westward to South Timbalier 37; and (iv)
the 12-inch lateral extending from the main trunk westward to South
Timbalier 308.
================================================================================
1.21 GROSS HEATING VALUE - The number of Btus produced by the complete
combustion in air, at a constant pressure, of the amount of Gas that
would occupy a volume of one (1) cubic foot at a temperature of sixty
degrees Fahrenheit (60F), if saturated with water vapor and under
pressure equivalent to that of thirty (30) inches of mercury at thirty-
two degrees Fahrenheit (32F), and under standard gravitational force
with air of the same temperature and pressure as the Gas when the
products of combustion are cooled to the initial temperature of the Gas
and air and when the water formed by combustion is condensed to the
liquid state. The gross heating value of the Gas thus obtained will be
expressed on the measurement basis set forth in this FERC Gas Tariff
(14.73 PSIA) and will be adjusted from a saturated basis to the actual
water content of the Gas actually delivered, provided, however, that if
the Gas as delivered contains seven (7) pounds of water or less per
million (1,000,000) cubic feet, such Gas will be deemed to be dry.
1.22 INTEREST RATE - The interest rate determined by the Commission in
accordance with Section 154.501(d)(1) of the Commission's regulations.
1.23 INTERRUPTIBLE SERVICE - A service that is subject to interruption when
and to the extent Transporter determines that capacity is not available
in its existing System, and as provided in the IT Rate Schedule, the IT
Service Agreement, or the General Terms and Conditions of Transporter's
FERC Gas Tariff.
1.24 INTRADAY NOMINATION - An intraday nomination is a nomination submitted
after the nomination deadline whose effective time is no earlier than
the beginning of the Gas Day and runs through the end of that Gas Day.
An Intraday Nomination will span one Day only.
1.25 MAINLINE FACILITIES - Facilities of Transporter existing prior to the
date that service through the Expansion Facilities commenced, including
without limitation Transporter's 30-inch offshore mainline to the Larose
Processing Plant, 4 associated gathering laterals, the 20-inch pipeline
to Texas Eastern Transmission, LP and the 30-inch pipeline to Bridgeline
Gas Distribution LLC.
1.26 MAXIMUM DAILY QUANTITY (MDQ) - The maximum daily quantity of Gas
Transporter will receive or deliver at each Receipt or Delivery Point in
accordance with the terms of an Effective Service Agreement.
1.27 MAXIMUM DAILY RESERVATION QUANTITY-EXPANSION (MDRQ-Expansion) - The
maximum quantity of Gas Transporter is obligated to receive through the
Expansion Facilities for the account of Shipper, as stated in an
Effective FT-1 Firm Service Agreement between Shipper and Transporter.
================================================================================
1.28 MAXIMUM DAILY RESERVATION QUANTITY-MAINLINE (MDRQ-Mainline)- The
maximum quantity of Gas Transporter is obligated to receive through the
Mainline Facilities for the account of Shipper, as stated in an
Effective FT-1 Firm Service Agreement between Shipper and Transporter.
1.29 MAXIMUM DAILY TRANSPORTATION QUANTITY-EXPANSION (MDTQ-Expansion) - The
maximum quantity of Gas Transporter is obligated to receive through the
Expansion Facilities for the account of Shipper, as stated in an
Effective IT Service Agreement between Shipper and Transporter.
1.30 MAXIMUM DAILY TRANSPORTATION QUANTITY-MAINLINE (MDTQ-Mainline) - The
maximum quantity of Gas Transporter is obligated to receive through the
Mainline Facilities for the account of Shipper, as stated in an
Effective IT Service Agreement between Shipper and Transporter.
1.31 MAXIMUM DAILY VOLUMETRIC QUANTITY-EXPANSION (MDVQ-Expansion) - The
maximum quantity of Gas Transporter is obligated to receive through the
Expansion Facilities for the account of Shipper, as stated in an
Effective FT-2 Service Agreement between Shipper and Transporter.
1.32 MAXIMUM DAILY VOLUMETRIC QUANTITY-MAINLINE (MDVQ-Mainline) - The maximum
quantity of Gas Transporter is obligated to receive through the Mainline
Facilities for the account of Shipper, as stated in an Effective FT-2
Service Agreement between Shipper and Transporter.
1.33 MCF - 1,000 standard cubic feet of Natural Gas.
1.34 MMCF - 1,000,000 standard cubic feet of Natural Gas.
1.35 MONTH - The period beginning on the first Day of a calendar Month and
ending on the first Day of the succeeding calendar Month.
1.36 NAESB - North American Energy Standards Board
1.37 NAESB Standards - Any and all such standards issued by NAESB and
adopted by the Commission.
================================================================================
1.38 NEGOTIATED RATE - Any rate, rate formula, or rate design negotiated by
Transporter and a Shipper that may be less than, equal to, or more than
the maximum, Commission-approved tariff rate for such service, but not
less than the minimum rate, and for which there is a recourse rate on
file. The negotiated rate, rate, design, or rate formula will be stated
in an exhibit to Shipper's service agreement.
1.39 OPERATIONAL BALANCING AGREEMENT (OBA) - A contract between two parties
which specifies the procedures to manage operating variances at an
interconnect.
1.40 OPERATOR - Any individual, firm, or corporation, or its agent, assignee,
or legal representative, who operates Gas production, processing or
upstream or downstream pipeline facilities that are directly connected
to Transporter's System, and who is responsible for the confirmation,
scheduling, receipt or delivery, and the allocation of Gas through such
interconnecting facility.
1.41 PREDETERMINED ALLOCATION - The distribution of quantities of Gas
measured at Receipt Point(s) and/or Delivery Point(s) among Shipper(s)
based on a methodology agreed to by the Operator(s) and Transporter
prior to the commencement of Gas flow.
================================================================================
1.42 PREPAYMENT - With respect to requests for capacity or service,
"Prepayment" means that amount of money that must be submitted by a
Shipper along with a request for Transportation service or capacity.
Such amount will be credited to Shipper's invoice for services provided
by Transporter, or forfeited by Shipper if it fails to enter into a
Service Agreement with Transporter in accordance with the terms of
Transporter's FERC Gas Tariff. With respect to creditworthiness,
"Prepayment" means the advance payment for Transportation services
rendered by Transporter.
1.43 PRIMARY DELIVERY POINT(S) - The Delivery Points on the Mainline
Facilities or Expansion Facilities, as appropriate, on Transporter's
System where quantities of Gas may be delivered by Transporter for the
account of Shipper, as described in an Effective Firm Service Agreement
between Shipper and Transporter.
1.44 PRIMARY PATH - Shipper's reserved right to capacity between a Primary
Receipt Point and a Primary Delivery Point as such points are defined in
an Effective Firm Transportation Agreement up to the lesser of the MDQ
at the Primary Receipt Point or the MDQ at the Primary Delivery Point.
1.45 PRIMARY RECEIPT POINT(S) - The Receipt Points on the Mainline Facilities
or Expansion Facilities, as appropriate, on Transporter's System where
quantities of Gas may be received by Transporter for the account of
Shipper, as described in an Effective Firm Service Agreement between
Shipper and Transporter.
1.46 PRO RATA SHARE - The ratio of a Firm Shipper's entitlements under an
Effective Firm Service Agreement to the entitlements of all Firm
Shippers; and the ratio of an Interruptible Shipper's nominations to all
Interruptible nominations with the same priority.
================================================================================
1.47 PSIA - Pounds per square inch absolute.
1.48 PSIG - Pounds per square inch gauge.
1.49 RATE SCHEDULE - The terms and conditions applicable to a specific
service offered by Transporter.
1.50 RECEIPT POINT(S) - Any point(s) on Transporter's System where quantities
of Gas may be received by Transporter for the account of Shipper under
an Effective Service Agreement.
1.51 RELEASED CAPACITY - Capacity reserved under the terms of an Effective
FT-1 Service Agreement that a Releasing Shipper or Secondary Releasing
Shipper seeks to permanently or temporarily release to a Replacement
Shipper.
1.52 RELEASING SHIPPER - A Shipper who releases all or part of its rights to
capacity reserved under the terms of an Effective FT-1 Service Agreement
on a permanent or temporary basis.
1.53 REPLACEMENT SHIPPER - A Shipper who acquires all or part of the rights
to capacity held by a Releasing Shipper under the terms of an Effective
FT-1 Service Agreement on a permanent or temporary basis.
1.54 SCHEDULED QUANTITY - The quantity of Natural Gas a Shipper nominates for
receipt by Transporter at a Receipt Point and for redelivery by
Transporter for Shipper at a Delivery Point, and that the Operator of
the connecting facility confirms, and that Transporter schedules for
Transportation between the Receipt Point and the Delivery Point.
1.55 SECONDARY RELEASING SHIPPER - A Replacement Shipper who releases all or
part of its right to capacity acquired from a Releasing Shipper.
================================================================================
1.56 SERVICE AGREEMENT - The document that sets forth the agreement of
Transporter and a Shipper with respect to a particular service,
substantially in the form included in Transporter's FERC Gas Tariff.
1.57 SHIPPER - Any individual, firm, corporation, agent, assignee, or legal
representative so designated to deliver Gas to Transporter for
Transportation and to receive the Gas from Transporter after it has been
transported under the terms of an Effective Service Agreement.
1.58 STANDARD CUBIC FOOT (SCF) - The quantity of Natural Gas necessary to
fill a cubic foot of space at a temperature of 60 degrees Fahrenheit
(60F) and at a pressure of 14.73 PSIA.
1.59 SYSTEM - The pipeline system and appurtenances thereto that are owned,
leased, or operated in whole or in part by Transporter, including any
facilities added thereto, for the Transportation of Gas.
1.60 SYSTEM CAPACITY - The quantitative ability of Transporter's existing
System to provide immediate maximum Gas Transportation service on the
Mainline Facilities or Expansion Facilities, as appropriate. The
ability of Transporter's System to provide maximum Gas Transportation
service may be limited by changes in prevailing operating pressures,
temperatures, Gas flow rates and Gas flow directions within any
portion(s) of Transporter's System, including any Receipt Point(s) or
Delivery Point(s); physical capacity limitations of regulators, valves,
pipelines or pipeline segments, measuring facilities or appurtenances to
Transporter's System; and necessary testing, maintenance, repair,
overhaul, alteration, modification, replacement, enlargement, or
construction of pipelines, metering, regulating, and other transmission
facilities and equipment appurtenant to Transporter's System.
================================================================================
1.61 TRANSPORTATION - Forward haul, exchange, backhaul, displacement, or
other methods of transportation.
1.62 TRANSPORTER - Discovery Gas Transmission LLC.
1.63 YEAR - A period of three hundred sixty-five (365) consecutive Days;
provided, however, that any such year containing the date of February 29
will consist of three hundred sixty-six (366) consecutive Days.
================================================================================
2. OPERATING PROVISIONS FOR FIRM SERVICE
2.1 AVAILABILITY OF FIRM SERVICE - Firm service under this FERC Gas Tariff
will be provided when, and to the extent that, Transporter determines
capacity is available in the Mainline Facilities or Expansion
Facilities, as appropriate, in its existing System that is not subject
to a superior claim by another Shipper and it is operationally feasible.
If operating conditions ever limit Transporter's ability to provide Firm
service, service will be provided on the basis described in Section 6 of
the General Terms and Conditions.
2.2 EXISTING, UNCOMMITTED CAPACITY - Existing, uncommitted Firm capacity
will be posted on Transporter's Internet web site (web site). Requests
for posted capacity must be made by providing Transporter the specific
information in, and in the form prescribed by, Section 4 of the General
Terms and Conditions. Each request must be accompanied by a Prepayment
of Ten Thousand Dollars ($10,000), and will be considered incomplete
unless the Prepayment is included. Transporter will evaluate all
complete requests in the order received and will notify Shipper in
writing of the acceptance of a complete request. Transporter shall not
be required to accept a request for Firm service at a rate that is less
than its currently effective maximum rate. Request for Service forms
will be supplied to any potential Shipper upon request, and are
available at Transporter's offices during normal business hours, or
electronically on the web site by following the procedures of Section 17
of the General Terms and Conditions.
================================================================================
2.3 NEW CAPACITY - In the event new capacity becomes available due to the
construction or acquisition of facilities or the expansion of existing
facilities, pursuant to authorization under Section 7 of the Natural Gas
Act and the Commission's regulations, Transporter shall hold an open
season with a minimum duration of ten (10) calendar Days during which
potential Shippers may submit requests for Firm service in accordance
with the provisions of the open season notice. Each request for Firm
service must be made by submitting a completed Request for Service form
and a Prepayment in the amount of Ten Thousand Dollars ($10,000).
Request for Service forms will be supplied to any potential Shipper upon
request, and are available at Transporter's offices during normal
business hours, or electronically on the Internet web site (web site) by
following the procedures of Section 17 of the General Terms and
Conditions.
If at the end of the open season there is insufficient capacity to fill
all valid requests, then each valid request will be assigned a value
determined by multiplying the rate, not to exceed the maximum rate, the
term, and the quantity requested. Requests for a term of more than one
(1) Month that vary in rate or term will be assigned a total present
value based on the Commission's current Interest Rate. If requests for
service providing the same value exceed the Available Capacity, then the
Available Capacity will be prorated among those requests. Shippers that
stipulated in their requests that they would not accept less than the
amount requested will not be included in the pro rata allocation.
Transporter shall not be required to consider requests for service or
award capacity if the rate stipulated in a request for service is less
than Transporter's maximum rate.
================================================================================
2.4 PRIORITY OF SERVICE - The Firm Transportation of Gas at Receipt and
Delivery Points will have the following priority for service under an
Effective Firm Service Agreement:
a. Receipt Point Priority - The receipt of Gas from Primary and
Alternate Receipt Points will be on a Firm basis except as
provided in Sections 6 and 21 of the General Terms and Conditions.
The receipt of Gas from Alternate Receipt Points will be
subordinate to the receipt of Gas from Primary Receipt Points and
superior to the receipt of Gas for Interruptible Transportation
service.
b. Delivery Point Priority - The delivery of Gas to Primary and
Alternate Delivery Points will be on a Firm basis except as
provided in Sections 6 and 21 of the General Terms and Conditions.
The delivery of Gas to Alternate Delivery Points will be
subordinate to the delivery of Gas to Primary Delivery Points and
superior to the delivery of Gas for Interruptible Transportation
service.
2.5 RECEIPT AND DELIVERY POINT DESIGNATIONS - Each Receipt Point and each
Delivery Point specified in an Effective Firm Service Agreement will be
designated Primary Receipt Points and Primary Delivery Points for Firm
Transportation service. Each Shipper's MDRQ-Mainline and MDRQ-Expansion
or MDVQ-Mainline and MDVQ-Expansion must be allocated among the Primary
Receipt Points and Primary Delivery Points such that the MDRQ-Mainline
and MDRQ-Expansion or the MDVQ-Mainline and MDVQ-Expansion equals both
the sum of the MDQs for Primary Receipt Points and the sum of the MDQs
for Primary Delivery Points. A Shipper may amend its FT-1 Service
Agreement to add, delete, or modify Primary Receipt or Delivery Point
MDQs, or its FT-2 Service Agreement to add, delete, or modify Primary
Delivery Point MDQs, provided Firm capacity is available. In such
event, the MDQs must be reallocated as necessary so that the sum of the
MDQs for Primary Receipt Points and the sum of the MDQs for Primary
Delivery Points in the amended Firm Service Agreement do not exceed the
MDRQ-Mainline and MDRQ-Expansion or the MDVQ-Mainline and MDVQ-
Expansion. Transporter reserves the right to limit the number of such
amendments per Service Agreement to five (5) per Month in order to avoid
administrative burdens.
================================================================================
2.6 MODIFICATION OF PRIMARY RECEIPT POINTS - A Shipper with an Effective FT-
1 Service Agreement may change its Primary Receipt Point on a temporary
basis by designating any downstream Receipt Point within its Primary
Path as its Primary Receipt Point for up to ninety (90) Days without
losing its right to return to its permanent Primary Receipt Point. Use
of such point is subject to availability and all other terms of
Shipper's Effective FT-1 Service Agreement, the FT-1 Rate Schedule, and
Transporter's General Terms and Conditions. The availability of
capacity at Shipper's permanent Primary Receipt Point will be subject to
such right. Any other Shipper that wishes to use that point will be
informed that another Shipper has the right to return to the Receipt
Point.
2.7 ALTERNATE POINTS - All System points on the Mainline Facilities or
Expansion Facilities, as appropriate, where capacity exists in excess of
capacity allocated to provide Primary Receipt Point or Primary Delivery
Point Firm Transportation service will be available to FT-1 Shippers as
Alternate Receipt or Delivery Points. All System points on the Mainline
Facilities or Expansion Facilities, as appropriate, where capacity
exists in excess of capacity allocated to provide Primary Delivery Point
Firm Transportation service will be available to FT-2 Shippers as
Alternate Delivery Points. Alternate Delivery Point(s), at which
Transporter may deliver Gas for the account of Shipper, shall include
all Delivery Points located on the Mainline Facilities or the Expansion
Facilities, as the case may be, subject to the availability of firm
capacity to such Delivery Points and Shipper's MDVQ-Mainline or MDVQ-
Expansion, respectively.
Any discounted reservation rate for Firm Transportation service between
Primary Receipt and Delivery Points will not automatically transfer to
service using Alternate Receipt or Delivery Points, unless Transporter
directs Shipper to use an Alternate point for operational reasons
pursuant to Subsection 7.2 of the General Terms and Conditions.
================================================================================
2.8 REQUEST INVALIDATION - Requests for service submitted by potential
Shippers after the initial in-service date of Transporter's System will
be deemed invalid if service is requested to commence more than ninety
(90) Days after a request for service is submitted, unless new or
additional facilities are required to provide the service. If new or
additional facilities are required to provide the service, requests for
service using said facilities may not specify a service commencement
date more than thirty (30) Days after the in-service date of the new
facilities.
2.9 REQUESTS FOR OPERATING DATA - Upon request by Transporter, Shipper shall
submit estimates of daily, monthly and annual quantities of Gas to be
transported, including peak day requirements, together with the
estimated amounts thereof applicable to each Primary Receipt Point and
Primary Delivery Point. Transporter will use such information and
operating data to determine its System's Available Capacity, to evaluate
potential System Capacity needs, to plan its maintenance and repair
operations, and to assure adequate service to its Shippers.
2.10 ADDITIONAL FACILITIES - Transporter shall not be required to construct
additional facilities, modify or expand facilities, or acquire
facilities to provide Firm Transportation service.
2.11 FUTURE EMERGENCY SERVICE - If, within five years from the date of a Rate
Schedule FT-2 Service Agreement between Transporter and a Shipper (the
"Funding Shipper") that reimburses Transporter for the costs of the
facilities installed during 2005 following Hurricane Katrina to create
additional capacity by reversing flow on the Expansion Facilities to
receive gas from the delivery point at Tennessee Gas Pipeline Company,
Transporter decides (in its sole discretion) to use the same facilities
during a future emergency, the Funding Shipper shall have a higher
priority in the allocation of such capacity but only to the extent that
all other aspects of the Funding Shipper's bid for the capacity are
equal to the competing bids as measured pursuant to Transporter's FERC
Gas Tariff.
================================================================================
3. OPERATING PROVISIONS FOR INTERRUPTIBLE SERVICE
3.1 AVAILABILITY OF INTERRUPTIBLE SERVICE - Interruptible service under this
FERC Gas Tariff will be provided when, and to the extent that,
Transporter determines capacity is available in its existing System that
is not subject to a superior claim by another Shipper or another class
of service. Available Interruptible capacity will be allocated by
Transporter in accordance with Subsection 3.2.
3.2 PRIORITY OF SERVICE - Interruptible Transportation services will be
subordinate to Firm Transportation services provided by Transporter.
Transporter will allocate available Interruptible capacity on a daily
basis to Shippers nominating service under the IT Rate Schedule on the
basis of rate. Capacity at each rate level will be allocated on a pro
rata basis.
3.3 SHIPPER REQUESTS FOR INTERRUPTIBLE SERVICE - Requests for Interruptible
service hereunder must be made by providing the specific information in,
and in the form prescribed by, Section 4 of the General Terms and
Conditions. Request for Service forms will be supplied to any potential
Shipper upon request, and are available at Transporter's offices during
normal business hours or electronically on Transporter's Internet web
site (web site) by following the procedures in Section 17 of the General
Terms and Conditions.
3.4 REQUESTS FOR OPERATING DATA - Upon request of Transporter, Shipper shall
submit estimates of daily, monthly and annual quantities of Gas to be
transported, including peak day requirements, together with the
estimated amounts thereof applicable to each Receipt Point and Delivery
Point. Transporter will use such information and operating data to
determine its System's Available Capacity, to evaluate potential System
Capacity needs, to plan its maintenance and repair operations, and to
assure adequate service to its Shippers.
================================================================================
3.5 RECEIPT AND DELIVERY POINTS - Each Receipt Point and each Delivery Point
on Transporter's System is available for Interruptible Transportation
service, subject to the prior allocation of capacity at such points to
Firm Transportation services, up to the MDTQ-Mainline and MDTQ-Expansion
set forth in a Shipper's Effective IT Service Agreement with
Transporter.
3.6 INTERRUPTION OF SERVICE - Transporter retains all rights at any and all
times during the term of an Effective IT Service Agreement to decrease
or temporarily suspend receipt and/or delivery of Gas if the capacity is
required for a higher priority service or Shipper. If Transporter
exercises such right, Shipper shall hold Transporter harmless from any
loss, claim, damage or expense that such Shipper or other party may
incur by reason of such decrease or suspension.
3.7 FAILURE TO USE SERVICE - If Shipper fails to nominate service within
twelve (12) Months after the execution of an IT Service Agreement or
during any consecutive twelve (12) Month period, Transporter may
terminate the IT Service Agreement on thirty (30) Days prior written
notice.
3.8 ADDITIONAL FACILITIES - Transporter shall not be required to construct,
modify, expand, or acquire facilities to provide Interruptible
Transportation service.
3.9 LIMITATION - Transporter reserves the right to limit each Shipper to one
(1) IT Service Agreement.
================================================================================
4. REQUESTS FOR SERVICE
4.1 REQUEST FOR SERVICE FORM - Each Shipper requesting Firm or Interruptible
Transportation service hereunder shall provide the information specified
in the Request for Service form, the form of which is included in this
FERC Gas Tariff in the "Forms" section. Each request must be
accompanied by a Prepayment of Ten Thousand Dollars ($10,000).
4.2 INCOMPLETE SERVICE FORMS - Request for Service forms received by
Transporter that do not include the Prepayment required by Subsection
4.1., or do not contain all the requested information, including credit
information sufficient to demonstrate that a Shipper will be able to
meet its financial obligations under the requested Service Agreement,
will be considered incomplete. Transporter will notify Shipper of any
deficiencies and Shipper's request for service will not be considered
until all of the required information is provided to Transporter. The
request for service will be deemed invalid if Shipper fails to provide
the required information within ten (10) Business Days after
notification by Transporter that the request is incomplete.
================================================================================
5. NOMINATION PROCEDURES
5.1 REQUIRED INFORMATION - For each Day on which Shipper desires
Transportation service under any Service Agreement, Shipper shall submit
to Transporter the daily quantity of Gas, expressed in Dts, that it has
available for Transportation at each Receipt Point and the quantity of
Gas Shipper desires to have delivered at each Delivery Point. Shipper's
Receipt Point nominations, minus Lost and Unaccounted for Gas, must
equal its Delivery Point nominations on each Day. Shipper may submit
either a written or an electronic nomination in the format set forth in
the NAESB Standards. Once submitted, nominations, except for Intraday
Nominations, will remain in effect for the specified period of time
unless a prospective written or electronic nomination change is received
from Shipper. Each Shipper nomination must include the information
required by the NAESB Standards.
When a nomination for a date range is received, each Day within that
range is considered an original nomination. When a subsequent nomination
is received for one or more Days within that range, the previous
nomination is superseded by the subsequent nomination only to the extent
of the Days specified. The Days of the previous nomination outside the
range of the subsequent nomination are unaffected. Nominations have a
prospective effect only.
================================================================================
5.2 NOMINATION DEADLINES -
a. The Timely Nomination Cycle - The standard nominations timeline is
as follows: 11:30 a.m. for nominations leaving control of the
nominating party; 11:45 a.m. for receipt of nominations by
Transporter (including from Title Transfer Tracking Service
Providers (TTTSPs)); noon to send Quick Response; 3:30 p.m. for
receipt of completed confirmations by Transporter from upstream
and downstream connected parties; 4:30 p.m. for receipt of
scheduled quantities by Shipper and point Operator (Central Clock
Time on the Day prior to flow).
b. Intraday Nominations - A Shipper may submit and Transporter will
accept Intraday nominations, provided: (i) such nominations are
within Shipper's total MDRQ-Mainline, MDRQ-Expansion, MDVQ-
Mainline and MDVQ-Expansion or MDTQ-Mainline and MDTQ-Expansion
and (ii) such nominations can be confirmed. Intraday Nominations
may be used to start service, to request increases or decreases in
nominated quantities, to nominate new supply or market, or to
reflect changes in the specified Receipt and Delivery Points.
Intraday Nominations will be effective only for a single Gas Day,
and, therefore, will not remain in effect for prospective Days.
To the extent a Shipper submits an Intraday Nomination (including
nominations received after the standard nomination deadline) which
specifies an effective term of longer than one Gas Day,
Transporter will make the nomination effective only for the first
Gas Day of the specified effective period.
Intraday Nominations may be submitted to Transporter at any time,
and will be scheduled in accordance with Section 6.3 of this FERC
Gas Tariff. Except as provided in iii. below, Intraday Nominations
for firm transportation services will be given priority over
scheduled and flowing interruptible transportation services.
================================================================================
Intraday Nominations will be scheduled in one of three "Cycles"
and will be processed according to the following timelines:
i. The Evening Nomination Cycle: 6:00 p.m. for nominations
leaving control of the nominating party; 6:15 p.m. for
receipt of nominations by Transporter (including from
TTTSPs); 6:30 p.m. to send Quick Response; 9:00 p.m. for
receipt of completed confirmations by Transporter from
upstream and downstream connected parties; 10:00 p.m. for
Transporter to provide scheduled quantities to affected
Shippers and point Operators, and to provide scheduled
quantities to bumped parties (notice to bumped parties),
(Central Clock Time on the Day prior to flow).
Scheduled quantities resulting from an Evening Nomination
that does not cause another Shipper to receive notice that
it is being bumped should be effective at 9:00 a.m. on the
Gas Day; and when an Evening Nomination causes another
Shipper to receive notice that it is being bumped, the
scheduled quantities should be effective at 9:00 a.m. on the
Gas Day.
ii. The Intraday 1 Nomination Cycle: 10:00 a.m. for nominations
leaving control of the nominating party; 10:15 a.m. for
receipt of nominations by Transporter (including from
TTTSPs); 10:30 a.m. to send Quick Response; 1:00 p.m. for
receipt of completed confirmations by Transporter from
upstream and downstream connected parties; 2:00 p.m. for
Transporter to provide scheduled quantities to affected
Shippers and point Operators, and to provide scheduled
quantities to bumped parties (notice to bumped parties),
(Central Clock Time on Gas Day). Scheduled quantities
resulting from Intraday 1 Nominations should be effective at
5:00 p.m. on the Gas Day.
================================================================================
iii. The Intraday 2 Nomination Cycle: 5:00 p.m. for nominations leaving
control of the nominating party; 5:15 p.m. for receipt of
nominations by Transporter (including from TTTSPs); 5:30 p.m. to
send Quick Response; 8:00 p.m. for receipt of completed
confirmations by Transporter from upstream and downstream
connected parties; 9:00 p.m. for Transporter to provide scheduled
quantities to affected Shippers and point Operators (Central Clock
Time on the Gas Day).
Scheduled quantities resulting from Intraday 2 Nominations should
be effective at 9:00 p.m. on the Gas Day. Bumping is not allowed
during the Intraday 2 Nomination Cycle.
iv. For purposes of Section 5.2 b(i), b(ii), and b(iii) of the FERC
Gas Tariff, "provide" shall mean, for transmittals pursuant to
standards 1.4.x (NAESB standards relating to nomination datasets),
receipt at the designated site, and for purposes of other forms of
transmittal, it shall mean send or post.
c. Quick Response - Transporter will send a Quick Response, as
defined by NAESB, to Shipper for each nomination received. Such
Quick Response will serve only as notification of the receipt and
validation of nomination information in accordance with NAESB
Standards, but will not indicate whether the nomination will be
confirmed or scheduled pursuant to Subsections 6.2 and 6.3 of this
FERC Gas Tariff.
For standard nominations, the Quick Response will be sent to the
nominating party by 12:00 p.m. Central Clock Time on the Day the
nomination is received. For Intraday Nominations, the Quick
Response will be sent according to the following schedule: Batch 1
Nomination Cycle - 6:30 p.m. Central Clock Time on the Day prior
to flow; Batch 2 Nomination Cycle - 10:30 a.m. Central Clock Time
on the Gas Day; Batch 3 Nomination Cycle - 5:30 p.m. Central Clock
Time on the Gas Day.
d. Notification to Bumped Shippers - Transporter will notify
individual Shippers of bumped quantities by telephone or facsimile
in accordance with the timelines for Batch 1 and Batch 2
Nomination Cycles.
e. Waiver of Penalties - To the extent that a Shipper is bumped as a
result of an Intraday nomination by a Shipper with a higher
priority of service, Transporter will waive any applicable
penalties incurred by Shipper solely as a result of the Intraday
bump, and only for the Day on which Shipper is bumped.
================================================================================
5.3 REQUIRED NOMINATION CHANGES - Transporter may require revised
nominations or prospective nomination changes by Shipper if the daily
flows under a particular Service Agreement differ from confirmed
nominations, or if an imbalance has occurred due to operational reasons.
When a Shipper receives notice requiring a revised nomination or
prospective nomination change, Shipper shall submit a nomination in
accordance with Subsection 5.1 and with the revisions specified by
Transporter. Shipper shall be responsible for informing its upstream
and downstream parties of the changes.
5.4 DELEGATION OF NOMINATION AUTHORITY TO AGENT - A Shipper may delegate to
any third party the responsibility for submitting nominations and
receiving confirmations or performing other administrative duties under
any Effective Agreement, subject to the following conditions:
a. Any designation of a third party as agent, or any change in such
designation, must be provided in writing to Transporter at least
two (2) Business Days prior to the requested effective date of the
designation.
b. The written designation must specify any limits on the authority
of the Agent, including any time limit for the designation.
Transporter may reject any Shipper's request to delegate
responsibilities if the limitations on the designation would
impose undue administrative burdens on Transporter.
c. Transporter will rely on communications from a Shipper's agent for
all nomination purposes except to the extent the designation is
expressly limited. Communications by Transporter to such Agent
will be deemed notice to Shipper.
================================================================================
d. Any third party may administer multiple Service Agreements as the
agent for one or more Shippers, but the agent must make
nominations and otherwise administer and account separately for
each Service Agreement.
5.5 SHIPPER PRIORITIZATION OF NOMINATED QUANTITIES - If Shipper elects to
nominate quantities of Gas to be received by Transporter from one or
more upstream parties at one or more Receipt Points for delivery by
Transporter to one or more downstream parties at one or more Delivery
Points for the account of Shipper, Shipper shall provide the priority,
method, and extent to which each nominated receipt quantity from a
particular upstream party at a particular Receipt Point should be
reduced in the event that any downstream Operator verifies and confirms
deliveries that are less than the Shipper's nominated deliveries, or in
the event that, due to Transporter's allocation of Available Capacity
for Transportation services, all nominated receipts cannot be scheduled.
Likewise, if Shipper elects to nominate quantities of Gas to be
delivered by Transporter to one or more downstream parties at one or
more Delivery Points for the account of Shipper, Shipper shall provide
the priority, method, and extent to which each nominated delivery
quantity to a particular downstream party at a particular Delivery Point
should be reduced in the event that any upstream Operator verifies and
confirms receipts that are less than the Shipper's nominated receipts,
or in the event that, due to Transporter's allocation of Available
Capacity for Transportation services, all nominated deliveries cannot be
scheduled.
Shipper prioritization of nominated quantities must be consistent with
the terms of this FERC Gas Tariff and such prioritization will be
honored to the extent that Transporter reasonably determines such
prioritization is operationally feasible and the conditions of
Subsection 8.4 have been met.
================================================================================
6. SCHEDULING AND CURTAILMENT
6.1 ALLOCATION OF AVAILABLE CAPACITY - Each Day, upon consideration of
prevailing operating conditions, scheduled or unscheduled maintenance or
repairs, and similar conditions, Transporter will allocate Available
Capacity in sequence on the basis of Receipt Point priorities, followed
by mainline segment capacity priorities, and finally by Delivery Point
priorities, in the following manner:
a. Receipt Point capacity will be allocated to Firm Shippers who have
designated the nominated Receipt Point on the Mainline Facilities
or the Expansion Facilities, as appropriate, as a Primary Receipt
Point in an Effective FT-1 or FT-2 Service Agreement, followed by
allocation to Shippers who have nominated the Receipt Point on the
Mainline Facilities or the Expansion Facilities, as appropriate,
as an Alternate Receipt Point under an Effective FT-1 Service
Agreement. Any remaining Receipt Point capacity on the Mainline
Facilities or the Expansion Facilities, as appropriate, will be
allocated to Interruptible Shippers on the basis of rate, with the
Shipper paying the highest rate, up to the maximum rate, scheduled
first. Shippers having the same level of priority as stated
herein will be scheduled on a pro rata basis. In the case of a
Negotiated Rate for Interruptible Service that exceeds the
maximum, Commission-approved tariff rate, the Negotiated Rate will
be deemed to equal the maximum rate for the purposes of this
section. A Negotiated Rate that is less than the maximum rate
will be considered in the same manner as recourse rates.
================================================================================
b. Capacity on the Mainline Facilities and the Expansion Facilities,
respectively, will be allocated in the following sequence, from
highest priority to lowest priority: Primary Firm Receipt Points
to Primary Firm Delivery Points, Primary Firm Receipt Points to
Alternate Firm Delivery Points, Alternate Firm Receipt Points to
Primary Firm Delivery Points, Alternate Firm Receipt Points to
Alternate Firm Delivery Points, and Interruptible Receipt Points
to Interruptible Delivery Points.
c. Delivery Point capacity will be allocated first to Firm Shippers
who have designated the nominated Delivery Point on the Mainline
Facilities or the Expansion Facilities, as appropriate, as a
Primary Delivery Point in an Effective FT-1 or FT-2 Service
Agreement, followed by allocation to Shippers who have nominated
the Delivery Point on the Mainline Facilities or the Expansion
Facilities, as appropriate, as an Alternate Delivery Point.
Any remaining Delivery Point capacity on the Mainline Facilities
or the Expansion Facilities will be allocated to Interruptible
Shippers on the basis of rate, with the Interruptible Shipper
paying the highest rate, up to the maximum rate, scheduled first.
Shippers having the same level of priority as stated herein will
be scheduled on a pro rata basis. In the case of a Negotiated
Rate for Interruptible Service that exceeds the maximum,
Commission-approved tariff rate, the Negotiated Rate will be
deemed to equal the maximum rate for the purposes of this section.
A Negotiated Rate that is less than the maximum rate will be
considered in the same manner as recourse rates.
================================================================================
6.2 CONFIRMATION OF NOMINATED QUANTITIES - Nominations made in accordance
with Section 5 of the General Terms and Conditions will not be effective
until Transporter has confirmed the nominated receipts with upstream
Operators and the nominated deliveries with downstream Operators.
Shipper must advise Transporter of the appropriate contact persons for
upstream and downstream Operators who have the authority to verify and
confirm nominated Gas quantities. Prior to scheduling nominated
quantities for Transportation service requested by Shippers, Transporter
will contact the appropriate Operators at the designated Receipt and
Delivery Points in order to confirm the nominated quantities.
Transporter may reject, in whole or in part, any nominated quantities
where the daily quantities of Gas Shipper desires to be transported, the
upstream shipper name(s) and contract number(s), or the downstream
shipper name(s) and contract number(s) fail to conform to the
information provided by the designated Operators at the Receipt and
Delivery Points. If all information conforms except for the daily
quantities of Gas Shipper desires to have Transporter receive or
deliver, Transporter will schedule and confirm the nomination at the
lower of the daily quantities nominated by Shipper and the daily
quantities the Operators can confirm for scheduling at the designated
Receipt and Delivery Points. Transporter will provide notification of
Shipper's confirmed Transportation quantities either by telephone,
facsimile, or electronically. Shipper shall be responsible for
informing its upstream and downstream parties of any differences between
confirmed quantities and nominated quantities.
For Standard Nominations, Transporter will receive completed
confirmation from upstream and downstream operators by 3:30 p.m. Central
Clock Time on the Day prior to flow.
For Intraday Nominations, Transporter will receive completed
confirmations from upstream and downstream operators according to the
following schedule: Batch 1 Nomination Cycle - 9:00 p.m. Central Clock
Time on the Day prior to flow; Batch 2 Nomination Cycle - 1:00 p.m.
Central Clock Time on the Gas Day; Batch 3 Nomination Cycle - 8:00 p.m.
Central Clock Time on the Gas Day.
================================================================================
6.3 SCHEDULING NOMINATED QUANTITIES - Promptly upon the close of the
nomination deadline for each nomination cycle, Transporter will evaluate
all timely nominations and the Available Capacity of its System.
Transporter will schedule nominated quantities of Gas to the extent
capacity is available in accordance with Subsection 6.1 and to the
extent nominations can be confirmed in accordance with Subsection 6.2.
Transporter shall not be required to schedule quantities of Gas at any
Receipt or Delivery Point where the cumulative daily nominated
quantities at such Receipt or Delivery Point are below the quantities
required to meet the measurement standards as prescribed in API Manual
of Petroleum Measurement Standards, Chapter 14, Section 3, Latest
Edition. Transporter will first schedule nominated quantities under Firm
Service Agreements followed by nominated quantities under Interruptible
Service Agreements, in the following manner:
a. Firm Transportation service from Primary Receipt Points to Primary
Delivery Points;
b. Firm Transportation service from Primary Receipt Points to
Alternate Delivery Points;
c. Firm Transportation service from Alternate Receipt Points
downstream of the Primary Receipt Points to Primary Delivery
Points;
d. Firm Transportation service from Alternate Receipt Points upstream
of the Primary Receipt Points to Primary Delivery Points;
e. Firm Transportation service from Alternate Receipt Points
downstream of the Primary Receipt Points to Alternate Delivery
Points;
f. Firm Transportation service from Alternate Receipt Points upstream
of the Primary Receipt Points to Alternate Delivery Points;
g. IT Transportation service from Receipt Points to Delivery Points
on the basis of rate paid.
================================================================================
Following scheduling of confirmed standard nominations, Transporter will
furnish a report to the Shipper and point operator for receipt by 4:30
p.m. Central Clock Time the Day before the effective date of the
requested service showing the scheduled receipt and delivery quantities
by contract number, Receipt Point and Delivery Point. Following
scheduling of confirmed Intraday Nominations, Transporter will furnish a
report to the Shipper and point operator showing the scheduled receipt
and delivery quantities by contract number and receipt/delivery point
according to the following schedule: Batch 1 Nomination Cycle - 10:00
p.m. Central Clock Time on the Day prior to flow; Batch 2 Nomination
Cycle - 2:00 p.m. Central Clock Time on the Gas Day; Batch 3 Nomination
Cycle - 9:00 p.m. Central Clock Time on the Gas Day. At the end of each
Gas Day, Transporter will provide the final scheduled quantities for the
just completed Gas Day. For written nominations, such communication may
be made by facsimile or other acceptable means of electronic
correspondence. For electronic nominations, Transporter will send a
report in accordance with the NAESB standards.
================================================================================
6.4 CHANGES IN DAILY SCHEDULED QUANTITIES - After Shipper has submitted a
standard nomination and Transporter has confirmed and scheduled the
quantities of Gas to be transported, such quantities will remain
scheduled until the ending date specified in the nomination unless:
a. A prospective nomination is received from Shipper requesting a
change in previously confirmed and scheduled quantities; or
b. A prospective nomination is required by Transporter in accordance
with Subsection 5.3 of the General Terms and Conditions; or
c. Transportation service is curtailed or interrupted in order to
provide service for a higher priority service or Shipper; or
d. The designated contact persons with upstream and downstream
Operators who have the authority to verify and confirm nominated
Gas quantities or require a reduction of the confirmed and
scheduled quantities; or
e. Receipts or deliveries at a particular Receipt Point or Delivery
Point are outside the established tolerance levels specified in an
Effective OBA; or
f. Adjustments of receipts or deliveries at a particular Receipt
Point or Delivery Point are required as specified in an OFO; or
g. Capacity used in providing service is inadequate as a result of a
force majeure event, overbooking of capacity, or an operational
limiting event.
h. Other reasons required or permitted under this FERC Gas Tariff.
================================================================================
6.5 CURTAILMENT - If, at any time, Transporter determines, that because of
operating or other conditions affecting its System the capacity of all
or part of its System on the Mainline Facilities or Expansion
Facilities, as appropriate, is insufficient to serve all Transportation
quantities confirmed and scheduled on a Day, Transportation services
will be curtailed on all or part of the System on the Mainline
Facilities or Expansion Facilities, as appropriate, where capacity is
insufficient as follows:
a. IT Transportation service to Delivery Points from Receipt Points
on the basis of rate paid, with the lowest rate curtailed first.
b. Firm Transportation service.
In the case of a Negotiated Rate for Interruptible Service that exceeds
the maximum, Commission-approved tariff rate, the Negotiated Rate will
be deemed to equal the maximum rate for the purposes of this section. A
Negotiated Rate that is less than the maximum rate will be considered in
the same manner as recourse rates.
Pro rata curtailments of Gas quantities will be based on the ratio of
each Shipper's confirmed and scheduled Transportation quantities to the
total confirmed and scheduled quantities by all Shippers at the same
priority multiplied by the amount of Available Capacity.
If capacity is limited on only part of Transporter's System, including
any Delivery and/or Receipt Point(s), Transporter's curtailment orders
pursuant to Subsection 6.8 will be limited to the Transportation
services confirmed and scheduled for such part(s) of Transporter's
System.
================================================================================
6.6 NOTICE OF CURTAILMENT - Transporter will post notices of curtailment on
its web site, and, if necessary, notify all affected shippers as soon as
practicable, and in a manner that is reasonable under existing
conditions, that a period of curtailment exists. Such notice will set
forth any limits on receipts or deliveries and the anticipated duration
of such curtailment period. Upon notice of curtailment, Shipper shall
adjust its receipts and/or deliveries of Gas as specified by Transporter
within the time period specified by Transporter. Shipper compliance
will be a change in Gas flow to the level specified by Transporter and
will be evidenced by the confirmation of a flow rate change by an
upstream or downstream Operator or the confirmation of the flow rate
change by Transporter.
6.7 CURTAILMENT PENALTIES - Failure of any Shipper to adjust its receipts
and/or deliveries within the time and in the manner specified by
Transporter will result in the imposition of curtailment penalties. All
Gas received or delivered for the account of Shipper after notification
of a curtailment under Subsection 6.6 that deviates from the quantities
set by Transporter in the notice of curtailment will be assessed a
penalty of Twenty-Five Dollars ($25.00) per Dt. The imposition of a
curtailment penalty will not relieve Shipper of its obligations to
resolve any imbalance created during a period of curtailment. Although
a notice of curtailment must result in an immediate change in Gas flow,
Transporter will not assess penalties unless notice of curtailment is
given at least twelve (12) hours before the curtailment is required.
Net penalty revenues will be applied to Transporter's Fuel, Lost and
Unaccounted for Gas account.
6.8 EMERGENCY PROCEDURES - Variations in the curtailment procedures set
forth in Subsection 6.5 may be permitted by Transporter when necessary
to respond to emergency situations (including environmental emergencies)
where supplemental deliveries are required to forestall injury to life
or property.
================================================================================
7. OPERATIONAL FLOW ORDER (OFO)
7.1 APPLICABILITY - An Operational Flow Order (OFO) is an order issued to
alleviate conditions, inter alia, which threaten or could threaten the
safe operations or system integrity of Transporter's system or to
maintain operations required to provide efficient and reliable firm
service. Whenever Transporter experiences these conditions, any
pertinent order will be referred to as an Operational Flow Order.
Transporter will determine, in its reasonable judgment, the
circumstances that will result in the issuance of an OFO.
Circumstances that may prompt an OFO cannot be quantified in advance
because the need to issue an OFO will depend on quantities of Gas
confirmed and scheduled, the point(s) where actual receipts or
deliveries deviate from confirmed and scheduled quantities, whether an
OBA governs the allocation at the point(s), and the relationship of
these individual factors to general System operations on any given Day.
Generally, an OFO may be issued if there is a significant decrease or
increase in line pressure or if a curtailment order fails to reduce gas
flow in the event there is insufficient capacity to handle all confirmed
and scheduled nominations.
OFOs will identify the situation to be addressed and will identify
specific actions to be taken by Shipper, stated in terms of an hourly
Gas flow level, and the probable duration of an OFO. Transporter will
provide periodic reports on Transporter's Internet Web Site (web site)
as to any changes in the condition that prompted the OFO and probable
duration of the OFO. OFOs affecting multiple Shippers on all or any
portion of Transporter's System will be posted on the web site. The OFO
will be posted within one (1) hour of its issuance and will be effective
within four (4) hours of issuance. To the extent an OFO is only
applicable to specific Shippers, Transporter may notify such Shippers by
telephone or facsimile, but the OFO will be effective as to such
Shippers when posted on Transporter's web site. Shipper must make a
contact person available on a twenty-four (24) hour basis to receive OFO
notices, and provide all necessary information to Transporter.
Transporter will use reasonable efforts to give actual notice to that
person, as time permits.
================================================================================
7.2 COMPLIANCE WITH OPERATIONAL FLOW ORDERS - OFOs issued to alleviate
conditions that threaten the operational integrity of Transporter's
System will require compliance within four (4) hours of issuance, or
such other time specified in the OFO. Any Shipper receiving an OFO must
undertake such of the following actions as are necessary to comply with
such order:
a. Commence or increase tenders of Gas into Transporter's System by a
specified quantity at specified Receipt Points or shift tenders of
Gas, in whole or in part, to different specified Receipt Points;
b. Cease or reduce tenders of Gas into Transporter's System by a
specified quantity at specified Receipt Points;
c. Commence or increase takes of Gas from Transporter's System by a
specified quantity at specified Delivery Points or shift takes of
Gas, in whole or in part, from different Delivery Points;
d. Cease or reduce takes of Gas from Transporter's System by a
specified quantity at specified Delivery Points.
7.3 PENALTIES - If Shipper is notified by Transporter of an OFO and fails to
comply with such OFO during the effective period of the OFO, Shipper
shall be subject to a penalty for quantities received and/or delivered
in excess of the quantities specified by Transporter in such OFO. If
Shipper complies by adjusting its tenders or takes within the time
period specified in an OFO, Shipper shall not be subject to the penalty
set forth in this Subsection 7.3. Shipper compliance will be a change
in Gas flow to the level specified by Transporter and will be evidenced
by the confirmation of a flow rate change from an upstream or downstream
Operator or the confirmation of a flow rate change by Transporter.
Transporter will use reasonable efforts to assist any Shipper in
complying with an OFO.
================================================================================
Penalties for failure to comply with an OFO will be assessed according
to the following schedule.
------------------------------------------------------------------
100% Compliance $ 0.00/dt
Less than 100% and Greater than 99% $ 10.00/dt
Less than 99% and Greater than 98% $ 20.00/dt
Less than 98% $ 50.00/dt
------------------------------------------------------------------
Transporter will refund or carry forward, for each calendar Year, any
difference between the penalty revenues received by Transporter and the costs
incurred by Transporter as a result of failures of Shippers to comply with
OFOs. To the extent the difference between costs and revenues in respect of
such OFO penalties during any calendar Year is less than Four Hundred
Thousand Dollars ($400,000), Transporter shall carry forward the difference
to the next calendar Year. To the extent the difference is greater than Four
Hundred Thousand Dollars ($400,000), Transporter shall refund or invoice each
System Shipper in proportion to such Shipper's use of the System during such
calendar Year within one hundred twenty (120) Days after the end of the
calendar Year. Any such difference, whether a positive or negative, shall
include interest at the rate set forth in section 154.501 of the Commission's
regulations.
================================================================================
7.4 IMMINENT OPERATIONAL FLOW ORDERS - If Transporter determines that
operational circumstances exist such that the issuance of an OFO is
imminent, but that corrective actions could mitigate such circumstances,
Transporter will notify affected Shippers of a potential OFO.
Transporter will postpone the issuance of an OFO, if feasible, and allow
affected Shippers the opportunity to take corrective actions, provided
the affected Shippers advise Transporter of their proposed corrective
actions and Transporter agrees to such actions. Failure to implement
corrective measures by such Shippers may ultimately result in the
issuance of an OFO.
7.5 IMBALANCES RESULTING FROM OPERATIONAL FLOW ORDERS - To the extent any
monthly imbalance or portion thereof is a direct result of Shipper's
inability to balance receipts and deliveries during the Month due to the
issuance of an OFO, Shipper will have until the end of the next calendar
Month to reconcile that portion of the imbalance attributable to its
compliance with the OFO. Any imbalance remaining at the end of the
extended period will be subject to the imbalance resolution procedures
set forth in Section 9 of this FERC Gas Tariff.
7.6 REPORTS FOLLOWING OFOS - In the event Transporter issues an OFO, it will
file a report on the OFO within 60 days. The report will include a
timeline of the actions taken to notify customers of the possibility of
an OFO, the intermediate steps taken by the pipeline to avoid or reduce
the impact of an OFO, the steps taken by the pipeline and shippers to
end the OFO, and the end of the OFO. The report will include the amount
of penalties that were assessed, if any, and the expenses incurred to
avoid or correct the OFO conditions.
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8. ALLOCATION OF MEASURED GAS QUANTITIES
8.1 ALLOCATION OF MEASURED RECEIPTS AND DELIVERIES - Promptly at the end of
each Month, Transporter will allocate the daily quantity of Gas measured
at each Receipt Point and each Delivery Point for the account of Shipper
under each Service Agreement. To the extent possible, all quantities of
Gas measured at each Receipt Point and each Delivery Point will be
allocated on the basis of Shipper's confirmed nominations. In the event
the quantities of Gas measured at any Receipt Point or any Delivery
Point do not equal the confirmed nominations for such point, the
quantities of Gas measured at the Receipt Point or the Delivery Point
will be allocated in accordance with the following methods and in the
following order: (1) under the provisions of an Operational Balancing
Agreement, (2) on the basis of a Predetermined Allocation, or (3) pro
rata to Firm Shippers, or (4) pro rata to Interruptible Shippers on the
basis of confirmed nominations.
8.2 OPERATIONAL BALANCING AGREEMENTS - Transporter is willing to negotiate
an Operational Balancing Agreement (OBA) with any Operator for the
purpose of minimizing operational imbalances and/or resolving other
matters with respect to the receipt of Gas into, or the delivery of Gas
from, Transporter's System. The OBA must specify the Gas custody
transfer procedures to be followed by Transporter and the Operator for
the confirmation of nominated quantities and allocation of quantities of
Gas measured at the point(s) of interconnection between Transporter and
the Operator. The OBA will provide that any variance between quantities
of Gas measured and confirmed nominations for any Day will be promptly
resolved in-kind or on a cash basis. To facilitate the determination of
variances on a timely basis, Transporter and the Operator will agree on
necessary measurement, allocation, and accounting procedures, and set
forth such procedures in the OBA. Transporter will post on its Internet
web site (web site) the Receipt Points and Delivery Points where an OBA
is in effect.
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8.3 ELIGIBILITY FOR AN OPERATIONAL BALANCING AGREEMENT -
Transporter will negotiate and execute an OBA on a non- discriminatory
basis with any Operator, provided that Transporter shall not be
obligated to negotiate and execute an OBA with any Operator that:
a. Is not creditworthy as determined pursuant to Section 10 of the
General Terms and Conditions;
b. Does not maintain, or have available, dispatching operations that
are staffed on a continuous basis;
c. Does not have electronic flow measurement equipment to which
Transporter has access at the interconnect point(s) for which an
OBA is proposed;
d. Would subject Transporter to an increase in operating costs to
operate electronic flow measurement or flow control equipment; or
e. Does not commit to timely and final determination of variances
based on prompt in-kind or cash resolution.
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8.4 PREDETERMINED ALLOCATIONS - Transporter is willing to negotiate and
establish a Predetermined Allocation methodology with any Operator for
the purpose of allocating quantities of Gas measured at any Receipt
Point or any Delivery Point in the event the quantities of Gas measured
do not equal the confirmed nominations for such point. Unless otherwise
agreed, all Predetermined Allocation methods established between
Transporter and Operator must be agreed to in writing or by electronic
communication following the NAESB Standards before the first Day of the
allocation period in which the Predetermined Allocation method is to be
effective.
The Predetermined Allocation method must specify how the Gas measured at
a Receipt Point or Delivery Point is to be allocated for the account of
Shipper. The Predetermined Allocation method will either be ranked, pro
rata, percentage, or swing, as such terms are defined in the NAESB
standards. The Predetermined Allocation methods are available at any
point except those covered by an OBA.
If Operator and Transporter cannot agree upon an allocation method, pro
rata based upon confirmed nominations will be used as the default
method. The party responsible for custody transfer (the party
performing the measurement function) shall provide the allocation.
To the extent Operator submits a Predetermined Allocation method by
electronic communication, Transporter shall send a Quick Response, as
such term has been defined by NAESB, confirming the receipt of
Operator's selection of a Predetermined Allocation method.
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8.5 ALLOCATION ADJUSTMENTS - The time limitation for disputes of allocations
is six (6) Months from the date of the initial Month-end allocation with
a three (3)-Month rebuttal period, in accordance with NAESB Standard
2.3.26. This standard shall not apply in the case of deliberate
omission or misrepresentation or mutual mistake of fact. Parties' other
statutory or contractual rights shall not otherwise be diminished by
this standard. In no event will any changes be made after twenty-four
(24) months from the date of the initial Month-end allocation, unless
the parties mutually agree.
8.6 OPERATIONAL INTEGRITY LIMITATION - Nothing in this Section 8 or in any
Effective OBA shall limit Transporter's right to take action as may be
required to adjust receipts and deliveries under any Service Agreement
to alleviate operating conditions that threaten the operational
integrity of Transporter's System. Such adjustments will be made only
in emergency situations where prompt action is required and Transporter
determines, in its reasonable judgment, that Operational Flow Orders are
inadequate. Transporter will notify affected Shippers of any emergency
adjustments of receipts and deliveries.
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9. RESOLUTION OF IMBALANCES
9.1 RESPONSIBILITY FOR BALANCING - In addition to delivering and receiving
volumes of Gas in conformance with nominations, Shippers are responsible
for conforming their takes at Delivery Points with their deliveries to
Transporter at Receipt Points each Day. Transporter has no obligation
to deliver for the account of Shipper greater quantities of Gas than
Transporter has received for the account of Shipper or to accept for the
account of Shipper greater quantities of Gas than are being delivered
for the account of Shipper on any Day.
9.2 MONTHLY IMBALANCES - At the end of each Month, to the extent receipts
(after appropriate reductions for Fuel, Lost and Unaccounted for Gas) do
not equal deliveries under an Effective Service Agreement on a Dt basis,
the procedures described in Sections 9.3 and 9.4 will apply.
9.3 IMBALANCE TRADING - Following the issuance of actual imbalance data for
a Month, a Shipper or its agent may trade imbalances with other
Shippers, subject to the conditions of this section. A Shipper that
desires to trade imbalances with other Shippers may post a notice on
Transporter's internet web site by requesting such posting by 9:00 a.m.
on the calendar Day following the Day on which the actual imbalance data
is issued. Shippers must notify Transporter of any trades Shipper has
made with other Shippers by 5:00 p.m. on that Day. Transporter will
recognize a trade of imbalances only if each party to the trade timely
notifies Transporter of the trade, the identity of the Shipper(s) with
whom the trade was made, the relevant Transporter Service Agreement
numbers for each Shipper involved in the trade, the volumes traded, and
Transporter is able to confirm that the information results in a match
and the trade is permitted hereunder. Trading will be limited to
imbalances occurring between the same receipt and delivery points.
Transporter will cash out any imbalances that have not been traded by
the time specified for notifying Transporter of such trading within two
Business Days thereafter, as provided in section 9.4.
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9.4 CASHOUT PROCEDURES
a. The imbalance statement will be rendered prior to or with the
invoice. Rendered is defined as postmarked, time-stamped, and
delivered to the designated site. Imbalances under each of
Shipper's Effective Service Agreements will be separately cashed
out according to the following schedule:
OVERAGE- UNDERAGE -
TRANSPORTER PAYS SHIPPER PAYS
IMBALANCE LEVEL SHIPPER TRANSPORTER
--------------- -------------------- -----------------
0% to 5% 100% x Index 100% x Index
5% to 10% 90% x Index 110% x Index
10% to 15% 80% x Index 120% x Index
15% to 20% 70% x Index 130% x Index
Greater than 20% 60% x Index 140% x Index
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If deliveries for a Shipper's account exceed receipts for
Shipper's account under a Service Agreement, the Underage Index
will apply. If receipts for a Shipper's account exceed deliveries
for a Shipper's account under a Service Agreement, the Overage
Index will apply. Cashouts will occur at the Delivery Points on a
Shipper Agreement.
b. The monthly imbalance under each Service Agreement will be the
difference between total receipts, minus reductions for Fuel, Lost
and Unaccounted for Gas, and total deliveries. The imbalance
level will be determined by dividing the imbalance quantity by the
total quantity of Gas received for Shipper's account during the
relevant Month under each Service Agreement. Transporter shall
cash out Shipper's entire Overage or Underage imbalance quantity
at a price equal to the product of the index percentage
corresponding to the Overage or Underage Imbalance Level, as
appropriate, and the imbalance quantity. For purposes of
calculating imbalances and determining the imbalance level,
imbalances will be aggregated for a Shipper (and its affiliates)
which has (have) multiple Service Agreements and the Overage or
Underage Imbalance Level for such Shipper(s) will be the
aggregated imbalance quantity divided by the total quantity of gas
received for Shipper(s)'s account(s) during the relevant month
under all of the Service Agreements of the Shipper (and its
affiliates).
c. The Overage Index Price is the arithmetic average of the lowest
price posted in the table "Natural Gas Weekly Spot Prices"
published by Energy Intelligence Natural Gas Week for sales during
the Month the imbalance occurred, under the column "$/MMBtu" for
(i) "Gulf Coast", "Col. Gulf - Erath"; (ii) "Gulf Coast", "Tenn
500 So La Z1"; and (iii) "Gulf Coast", "Tetco ELA".
d. The Underage Index Price is the arithmetic average of the highest
price posted in the table "Natural Gas Weekly Spot Prices"
published by Energy Intelligence Natural Gas Week for sales during
the Month the imbalance occurred, under the column "$/MMBtu" for
(i) "Gulf Coast", "Col. Gulf - Erath"; (ii) "Gulf Coast", "Tenn
500 So La Z1"; and (iii) "Gulf Coast", "Tetco ELA".
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e. If Energy Intelligence Natural Gas Week fails to publish any
particular posting specified in Subsections 9.3.c. and 9.3.d., the
methodology described for establishing a cashout price will
continue to be used if at least two weeks of postings under the
"$/MMBtu" column are published during the relevant Month for at
least one of the listed pipeline locations. If Energy
Intelligence Natural Gas Week ceases publication of the index
prescribed in Subsections 9.3.c. and 9.3.d., Transporter will file
a substitute index with the Commission within thirty (30) Days
after the prescribed index becomes unavailable, and the substitute
index will be used for all cashouts effective as of the date the
prescribed index is unavailable for establishing a cashout price.
9.5 MANAGING IMBALANCES - Transporter shall endeavor to provide operational
data to Shipper on its Internet web site (web site) within five (5) Days
after the Day of Gas flow in an effort to assist Shipper in managing any
imbalances that may occur between Gas receipts and deliveries and
between nominations and actuals. In determining the cashout price
applicable under Subsection 9.3 above, Transporter will utilize the
operational data posted on its web site as of the end of the Month or
actual flow volumes (or, if actual flow volumes are not available at the
time of billing, the reasonable estimates), whichever results in a lower
imbalance level, for the purpose of selecting the appropriate index
price percentage.
9.6 PRIOR-PERIOD ADJUSTMENTS - Any imbalances for a Month that are booked
after the Transportation for that Month has been billed as a result of
receiving actual or corrected flow information will be cashed out at one
hundred per cent (100%) of the Overage or Underage Index in effect
during the Month the imbalance occurred, as appropriate.
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9.7 PURCHASE AND SALE OF GAS - Transporter is not providing a supply service
under any Rate Schedule of this FERC Gas Tariff. Without limitation of
the foregoing, Transporter may buy and sell Gas to the extent necessary
to maintain System pressure, to implement the cashout procedures under
this Section 9, and to perform other functions in connection with
providing Transportation service. Nothing herein will be deemed to
impose on Transporter any obligation to provide a sale and purchase
service to any of its Shippers.
9.8 OPERATIONAL FLOW ORDERS - Imbalances due to compliance with OFOs are
subject to Subsection 7.5 of this FERC Gas Tariff.
9.9 CASHOUT REVENUES - Transporter will refund or carry forward, for each
calendar Year, any difference between the revenues received by
Transporter and the costs incurred by Transporter as a result of cashing
out Shipper and Operator imbalances. To the extent the difference
between costs and revenues in respect of such cashouts during any
calendar Year is less than Four Hundred Thousand Dollars ($400,000),
Transporter shall carry forward the difference to the next calendar
Year. To the extent the difference is greater than Four Hundred
Thousand Dollars ($400,000), Transporter shall refund or invoice each
System Shipper in proportion to such Shipper's use of the System during
such calendar Year within one hundred twenty (120) Days after the end of
the calendar Year. Any such difference, whether a positive or negative,
shall include interest at the rate set forth in section 154.501 of the
Commission's regulations. Notwithstanding any other provision of this
FERC Gas Tariff, Transporter shall retain all cash-out revenues
allocated to any Shipper that has been granted a rate less than the
applicable maximum tariff rate.
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9.10 UNAUTHORIZED OR UNCLAIMED GAS - Unauthorized Gas means Gas received into
Transporter's System for which a nomination has not been submitted, or
which has not been confirmed and scheduled by Transporter. Transporter
will post a notice on its Internet web site (web site) that unauthorized
Gas has been received, the point of receipt, and the approximate date(s)
of receipt. The party responsible for the delivery of unauthorized Gas
into Transporter's System shall have thirty (30) Days to submit a valid
claim for such Gas, submit records from independent parties verifying
its ownership of such Gas, and make arrangements with Transporter for
the Transportation of the Gas under the terms of an IT Service
Agreement. The party claiming Gas must indemnify Transporter against
any adverse claims to such Gas. Unauthorized Gas will be subject to a
scheduling penalty of Ten Dollars ($10.00) per Dt, which penalty shall
be waived by Transporter if such Unauthorized Gas does not cause an
operational problem on the System. If unauthorized Gas is delivered
into Transporter's System while an OFO or curtailment order is in effect
on a System-wide basis or for the Receipt Point where the gas was
delivered into the System, the unauthorized Gas will be subject to an
OFO penalty or curtailment penalty, as appropriate, in addition to all
other applicable charges and penalties. Gas left unclaimed for more
than thirty (30) Days will become the property of Transporter. Failure
to claim unauthorized Gas will not relieve the party responsible for
injecting said Gas from paying OFO, curtailment, or scheduling penalties
if the ownership of the Gas can be substantiated by Transporter.
9.11 UNAUTHORIZED GAS REVENUES - Transporter will refund or carry forward,
for each calendar Year, any difference between the penalty revenues
received by Transporter and the costs incurred by Transporter as a
result of Unauthorized Gas. To the extent the difference between costs
and revenues in respect of such Unauthorized Gas penalties during any
calendar Year is less than Four Hundred Thousand Dollars ($400,000),
Transporter shall carry forward the difference to the next calendar
Year. To the extent, the difference is greater than Four Hundred
Thousand Dollars ($400,000), Transporter shall refund or invoice each
System Shipper in proportion to such Shipper's use of the System during
such calendar Year within one hundred twenty (120) Days after the end of
the calendar Year. Any such difference, whether a positive or negative,
shall include interest at the rate set forth in section 154.501 of the
Commission's regulations.
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10. BILLING AND PAYMENT
10.1 BILLING - Transporter will render its bill on or before the ninth (9th)
Business Day of each Month for the charges incurred by each Shipper
during the previous Month computed in accordance with the Shipper's
applicable Rate Schedule.
Transporter will render a written invoice to Shipper, unless Shipper
requests that Transporter render an invoice using electronic medium
pursuant to the NAESB Standards. Both written and electronic invoices
will use the descriptions and charge codes set forth in the NAESB
Standards. Transportation invoices will specify all rate components.
Required invoice backup data will accompany or precede the invoice.
10.2 PAYMENTS - Shipper agrees to make payment to Transporter for
Transportation services or any other charges within ten (10) Days from
the date of invoice. Such payment shall include supporting
documentation including identification of invoice number(s) being paid.
Unless another suitable method of payment is agreed to by Transporter,
Shipper shall make payment by Automated Clearinghouse transfer or
Federal Reserve wire transfer to the bank designated by Transporter from
time to time on its invoice. Shipper making payment should submit
supporting documentation; party receiving payment (Transporter) should
apply payment per supporting documentation provided by the paying party;
and if payment differs from invoiced amount, remittance detail should be
provided with the payment except when payment is made by electronic
funds transfer (EFT), in which case, the remittance detail is due
within two Business Days of the payment due date. Should Shipper fail
to pay all of the amount of any bill for Transportation service or any
additional charges hereunder when such amount is due, interest on the
unpaid portion will accrue at an interest rate equal to the Commission's
stated Interest Rate in effect for the time the obligation to pay
interest is incurred, from the date due until the date payment is
received by Transporter.
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If failure to pay for Transportation services or any additional charges
continues for thirty (30) Days after such payment is due, in addition to
any other remedy, Transporter may, without liability, suspend further
services until any overdue amount is paid. However, if Shipper, in good
faith, shall dispute the amount of any such bill, or part thereof, and
pay Transporter in a timely manner such amounts as it concedes to be
correct and at any time thereafter within thirty (30) Days of a demand
made by Transporter, shall furnish a good and sufficient surety bond, in
amount and with sureties satisfactory to Transporter, conditioned upon
the payment of any amounts ultimately found due upon such bills
(including accrued interest at the stated Interest Rate) after final
determination, which may be reached either by agreement or judgment of
the courts as may be the case, Transporter shall not suspend further
services unless and until default be made in the conditions of such
bond.
10.3 ADJUSTMENT OF BILLING ERRORS - The prior period adjustment time limit is
six (6) Months from the date of the initial transportation invoice with
a three (3)-Month rebuttal period, excluding government-required rate
changes in accordance with NAESB Standard 3.3.15. This standard shall
not apply in the case of deliberate omission or misrepresentation or
mutual mistake of fact. Parties' other statutory or contractual rights
shall not otherwise be diminished by this standard. In no event will
any changes be made after twenty-four (24) Months from the date of the
initial transportation invoice, unless the parties mutually agree.
10.4 FEES - Shipper shall reimburse Transporter for all fees required by the
Commission or any regulatory body that are attributable to service
provided under an Effective Service Agreement, including, but not
limited to, filing, reporting and application fees.
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10.5 CREDITWORTHINESS OF SHIPPER - Transporter shall not be required to
perform Transportation service under this FERC Gas Tariff or any
Effective Service Agreement on behalf of any Shipper who is or who has
become insolvent or who, at Transporter's request, fails within a
reasonable period to demonstrate creditworthiness. Shipper's
creditworthiness will be determined based upon (i) a current credit
rating of investment grade, defined as a rating of at least "BBB-" or
higher by Standard & Poor's or a rating of at least "Baa3" or higher by
Moody's Investors Service, Inc. or (ii) by the evaluation of the
Shipper's latest overall financial condition, including, but not limited
to working capital, cash flow analysis, debt levels, and profitability
trends.
At Transporter's request, Shipper shall provide Transporter the
following information in order for Transporter to analyze Shipper's
creditworthiness: Shipper's latest audited financial statements,
including income and cash flow statements; annual report, if applicable;
Form 10-K; a list of affiliates, parent companies, or subsidiaries;
three credit and trade references; and credit bureau reports and
information as to pending litigation, collection actions, or judgments
that could cause a substantial deterioration in financial condition.
For purposes of this FERC Gas Tariff, the insolvency of a Shipper will
be evidenced by:
a. The filing by such Shipper, or parent entity thereof, of a
voluntary petition in bankruptcy; or
b. The entry of a decree or order by a court having jurisdiction in
the premises adjudging the Shipper as bankrupt or insolvent. An
exception can be made for a Shipper who is a debtor in possession
operating under Chapter XI of the Federal Bankruptcy Act, but only
with adequate assurances that billing hereunder will be paid
promptly as a cost of administration under the federal court's
jurisdiction; or
================================================================================
c. The approving as properly filed of a petition seeking
reorganization, arrangement, adjustment or composition of, or in
respect of, the Shipper under the Federal Bankruptcy Act or any
other applicable federal or state law; or
d. The appointing of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Shipper or of any
substantial part of the Shipper's property; or
e. The ordering of the liquidation of Shipper's affairs, with said
order or decree continuing unstayed and in effect for a period of
sixty (60) consecutive Days.
10.7 STATEMENT OF ACCOUNT - Transporter will provide Shipper with a detailed
Statement of Account in accordance with the NAESB Standards. The
Statement of Account will report outstanding balances by invoice and
will indicate any payments which have been applied to prior period
adjustments.
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11. CAPACITY RELEASE
11.1 ELIGIBILITY - Any Shipper with an Effective Firm Service Agreement under
Transporter's FT-1 Rate Schedule is eligible to release all or part of
its capacity to a Replacement Shipper on a permanent or temporary basis,
subject to the provisions of this Section 11.
In the event that long-term (more than one year)released capacity is
subject to a Negotiated Rate, all transactions subject to this section
will be capped at the maximum, Commission-approved tariff rate for all
purposes except the obligation of the Shipper to pay Transporter the
difference between the rate bid and paid by a replacement shipper and
the Negotiated Rate.
11.2 TYPES AND CONDITIONS OF RELEASES -
a. Permanent Release - A Releasing Shipper may release all or part of
its Firm capacity under an Effective FT-1 Service Agreement, for
the remaining primary term of the Agreement. The Replacement
Shipper may contract for the Primary Receipt and Delivery Point(s)
specifically set forth in a Releasing Shipper's Effective FT-1
Service Agreement, or for other Primary Receipt and Delivery
Point(s) up to the Released Capacity subject to available capacity
and any restrictions on changes of Primary Receipt and Delivery
Point(s) imposed by the Releasing Shipper or Transporter. A
permanent release operates as an assignment of capacity and all of
the terms and conditions applicable to Firm Transportation
service, including the requirements related to creditworthiness,
must be met by the Replacement Shipper prior to the effective date
of the assignment. The Replacement Shipper shall execute an FT-1
Service Agreement for the released capacity at the rate bid by the
Replacement Shipper and accepted by the Releasing
================================================================================
Shipper and for the primary term set forth in the Releasing
Shipper's Effective FT-1 Service Agreement with Transporter. The
Releasing Shipper will be obligated to pay the difference, if any,
between the accepted bid and the applicable rate for the remainder
of the term of the Releasing Shipper's FT-1 Service Agreement.
Said amount will be billed to the Releasing Shipper within thirty
(30) Days after the Replacement Shipper executes an FT-1 Service
Agreement with Transporter for the Released Capacity. In the
event there is a discount agreement in effect between Transporter
and the Releasing Shipper for service utilizing all or any portion
of the permanently released capacity, Transporter will enter into
a discount agreement with the permanent Replacement Shipper for
the same time period, volumes, Receipt Point(s), Delivery Point(s)
and discount, subject to any terms contained in Releasing
Shipper's discount agreement, on the same basis as with the
Releasing Shipper.
b. Temporary Release - A Releasing Shipper may temporarily release
all or part of its FT-1 capacity for a specified term. The
Replacement Shipper must execute a Confirmation Letter, in the
form attached to the Service Agreement for Capacity Release
Transactions, as set forth in the "Forms" section of this FERC Gas
Tariff. Such Confirmation Letter will be for the Released
Capacity at the rate bid by the Replacement Shipper and accepted
by the Releasing Shipper and for the term bid by the Replacement
Shipper.
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The Releasing Shipper will remain obligated to pay the difference,
if any, between the accepted bid and the applicable rate for the
term of the release.
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A Releasing Shipper may temporarily release all or part of its FT-1
capacity, subject to recall, on the occurrence of the condition(s)
specified in the Offer to Release Capacity and as follows:
i. A Releasing Shipper may, to the extent permitted as a condition of
the capacity release, recall released capacity (scheduled or
unscheduled) at the Timely Nomination cycle and the Evening
Nomination Cycle, and recall unscheduled released capacity at the
Intra-Day 1 and Intra-Day 2 Nomination cycles by providing notice
to the Transporter by the following times for each cycle: 8 a.m.
CCT for the Timely Nomination cycle; 5:00 p.m. CCT for the
Evening Nomination cycle; 8 a.m. CCT for the Intra-Day 1
Nomination Cycle, and 3:00 p.m. CCT for the Intra-Day 2 Nomination
Cycle. Notification to the replacement shippers provided by
Transporter within one hour of receipt of recall notification.
ii. A Releasing Shipper must define the condition(s) under which the
Released Capacity will or may be recalled. Such recall
condition(s) must not be inconsistent with the terms and
conditions of the Releasing Shipper's FT-1 Service Agreement or
with the provisions of this FERC Gas Tariff. The recall
conditions specified by the Releasing Shipper must be non-
discriminatory and identifiable events.
iii. Transporter has the right to rely on Releasing Shipper's notice
and Releasing Shipper shall defend and indemnify Transporter
against any claims, losses, liabilities or expenses resulting from
claims by any Replacement Shipper that capacity was not recalled
in accordance with the recall rights specified by the Releasing
Shipper in its Offer to Release Capacity.
iv. If Releasing Shipper has recalled capacity in accordance with its
recall rights and time remains in the term of the release, the
capacity shall revert to the Replacement Shipper in accordance
with the reput methods and rights negotiated between the Releasing
Shipper and the Replacement Shipper.
================================================================================
c. Secondary Release of Capacity - Following execution of a
Confirmation Letter pursuant to the Form of Service Agreement for
Capacity Release Transactions, a Replacement Shipper may
subsequently release the capacity it has acquired in accordance
with the terms of this Section 11. A Replacement Shipper cannot
release greater capacity rights than acquired from the Releasing
Shipper. To the extent the subject capacity is recallable in
accordance with this Subsection 11.2, any subsequent release of
the capacity shall also be subject to the recall conditions
contained in the original release. Any subsequent Replacement
Shipper under a Secondary Release shall be required to execute a
Confirmation Letter for the released capacity at the rate bid by
the Replacement Shipper and accepted by the Releasing Shipper and
for the term bid by the Replacement Shipper.
d. Prearranged Releases
i. Prearranged Releases Subject to Bidding - A Releasing Shipper
may arrange for its own Replacement Shipper. The prearranged
Replacement Shipper must meet all of the requirements
established for bidders pursuant to this Section 11.
For long-term (more than one year) prearranged releases where
the Prearranged Replacement Shipper has not agreed to the
maximum Commission approved-tariff rate, term, and release
quantities, the offer to release capacity will be posted in
accordance with Subsection 11.5. If Transporter does not
receive a better bid by the bid deadline, the prearranged bid
will be deemed the best bid, and a Confirmation Letter must
be executed by the prearranged Replacement Shipper in
accordance with this Section 11. If Transporter receives a
better bid by the bid deadline, the prearranged Replacement
Shipper shall have one (1) Business Day to match the terms of
the better bid.
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If the prearranged Replacement Shipper matches the better bid, the
capacity will be awarded to the prearranged Replacement Shipper
and a Confirmation Letter must be executed by the prearranged
Replacement Shipper. If the rearranged Replacement Shipper fails
to match the best bid, the capacity will be awarded to the party
making the best bid in accordance with the terms specified in
Subsection 11.7.
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Except as provided for in Section 11.2.d.ii, for short-term
(one year or less) prearranged capacity releases, the offer
to release capacity will be posted in accordance with
Subsection 11.5. If Transporter does not receive a better
bid by the bid deadline, the prearranged bid will be deemed
the best bid, and a Confirmation Letter must be executed by
the prearranged Replacement Shipper in accordance with this
Section 11. If Transporter receives a better bid by the bid
deadline, the prearranged Replacement Shipper shall have one
(1) Business Day to match the terms of the better bid. If
the prearranged Replacement Shipper matches the better bid,
the capacity will be awarded to the prearranged Replacement
Shipper and a Confirmation Letter must be executed by the
prearranged Replacement Shipper. If the prearranged
Replacement Shipper fails to match the best bid, the capacity
will be awarded to the party making the best bid in
accordance with the terms specified in Subsection 11.7.
Bids for released capacity may not exceed the maximum rate
for the applicable rate schedules, except when the release is
for a term of one year or less, and/or a release to an asset
manager or a marketer participating in a state-approved
retail access program; and provided further, that the release
must take effect on or before one year from the date the
pipeline is notified of the release.
ii. Prearranged Releases Not Subject to Bidding - A Releasing
Shipper may release its FT-1 capacity to a prearranged
Replacement Shipper without prior bidding for the Released
Capacity in the following instances: 1) releases for thirty-
one (31) Days or less (subject to the limitations of this
Subsection); 2) long-term (more than one year) releases at
the maximum rate; 3) any release to an asset manager as
defined by Section 284.8(h) of the Commission's regulations;
and 4) any release to a marketer participating in a state-
approved retail access program as defined by Section
284.8(h) of the Commission's regulations. The Releasing
Shipper and its prearranged Replacement Shipper shall notify
Transporter of the terms of the prearranged release.
Transporter will post on its Internet web site (web site) an
announcement of the release within forty-eight (48) hours
after the commencement of the Transportation transaction
using the Released Capacity. The prearranged
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Replacement Shipper must comply with the prequalification
requirements applicable to the bid process and the
creditworthiness requirements of this Section 11. The prearranged
Replacement Shipper shall also execute a Confirmation Letter for
the released capacity at the rate and for the term specified in
the aforementioned notice to Transporter.
Once the term of a prearranged release of thirty-one (31) Days or
less has expired, the Releasing Shipper cannot roll over or extend
the release period, or re-release its capacity to the same
Replacement Shipper under this provision until twenty-eight (28)
Days or more have elapsed since the termination of the prior
release. However, the Releasing Shipper may release the capacity
to the same Replacement Shipper if 1) the capacity is posted for
bidding under the provisions of Subsection 11.2.e.i or 2) the
release was to an asset manager or marketer participating in a
state-mandated retail access program.
Pre-arranged capacity releases that are not subject to bidding may
not exceed the maximum rate for the applicable rate schedules,
except when the release is for a term of one year or less, and/or
a release to an asset manager or a marketer participating in a
state-approved retail access program; and provided further, that
the release must take effect on or before one year from the due
date the pipeline is notified of the release.
11.3 TERM OF RELEASE - The minimum term for any release, whether permanent,
temporary, or secondary is one (1) Day. The maximum term for any
release will be the remaining primary term in the Releasing Shipper's
Effective FT-1 Service Agreement.
As used in Subsection 11.4, a "month" is not a calendar month. A
"month" is a period of time beginning on a numbered Day in one calendar
month and continuing through the previous numbered Day in the following
calendar month.
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11.4 TIMETABLE FOR RELEASE EVENTS - The Capacity Release Timetable is
applicable to all parties in the capacity release process provided that
1) all information provided by the parties is valid and the Replacement
Shipper has been determined to be creditworthy before the capacity
release bid is tendered, and 2) there are no special terms or conditions
of the release. All times are Central Clock Time.
a. For Short-Term Releases (one year or less):
* offers must be tendered by 12:00 p.m. on a Business Day;
* open season ends no later than 1:00 p.m. on a Business Day
(evaluation period begins at 1:00 p.m. during which
contingency is eliminated, determination of best bid is made,
and ties are broken);
* evaluation period ends at 2:00 p.m.;
* match or award is communicated by 2:00 p.m.;
* match response by 2:30 p.m.;
* award posting by 3:00 p.m.;
* contract tendered with contract #, when applicable, within
one hour of award posting; contract executed; nomination
possible beginning at the next available nomination cycle for
the effective date of the contract. (Central Clock Time)
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b. For Long-Term Releases (more than one year):
* offers must be tendered by 12:00 p.m. four (4) Business Days
before award;
* open season ends no later than 1:00 p.m. on the Day before
nominations are due (open season is three (3) Business Days);
* evaluation period begins at 1:00 p.m. during which
contingency is eliminated, determination of best bid is made,
and ties are broken;
* evaluation period ends and award posting if no match required
at 2:00 p.m.;
* match or award is communicated by 2:00 p.m.;
* match response by 2:30 p.m.;
* award posting by 3:00 p.m.;
* contract tendered with contract #, when applicable, within
one hour of award posting; contract executed; nomination
possible beginning at the next available nomination cycle for
the effective date of the contract. (Central Clock Time)
Non-Biddable releases are releases for 31 days or less (subject to the
rollover limitations of Subsection 11.2.d) and releases for more than
one year or more at the maximum rate. All other releases shall be
biddable. For Non-Biddable releases, the Replacement Shipper must
notify Transporter of a Non-Biddable release at least one hour prior to
the nomination deadline for each of the four nomination cycles.
Posting of the Non-Biddable release shall be in accordance with the
following timeline:
Timely Nomination Cycle: Posting on Non-Biddable release due by 10:30
A.M.;
Evening Nomination Cycle: Posting of Non-Biddable release due by 5:00
P.M.;
Intraday 1 Nomination Cycle: Posting of Non-Biddable release due by
9:00 A.M.;
Intraday 2 Nomination Cycle: Posting of Non-Biddable release due by
4:00 P.M..
Transporter shall tender a contract within one hour of the posting of
the Non-Biddable release. Replacement Shipper may nominate at the next
available nomination cycle for the effective date of the contract.
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11.5 OFFERS TO RELEASE CAPACITY - Offers to release capacity must be
submitted in accordance with the schedule set forth in Subsection 11.4.
Such offers must be in writing and on the release form available from
Transporter (hereinafter called the Releasing Shipper's Offer) or
provided electronically. Transporter shall post the Releasing Shipper's
offer to release capacity on its Internet web site (web site). The
posting of the offer will also include the maximum Commission-approved
tariff reservation rate applicable to the capacity, the date and time by
which bids must be submitted in accordance with the capacity release
timetable, and the date and time the offer is posted. A Releasing
Shipper may withdraw an offer to release capacity at any time until
Transporter receives a bid for the capacity that meets the Releasing
Shipper's minimum bid specifications. Likewise, a bidder may withdraw
its bid prior to the close of the bidding period, but may not rebid on
the same capacity at a lower rate. All offers will be considered
binding until written or electronic notice of withdrawal is received by
Transporter. Transporter shall post all withdrawals of offers or bids
on its Internet web site (web site).
Any shipper offering to release all or part of its capacity shall
provide the information required by the NAESB Standards. In addition,
the Releasing Shipper's Offer must state whether the proposed release is
to an asset manager as part of an asset management arrangement as
defined in Section 284.8(h)(3) of the Commission's regulations or to a
marketer participating in a state-mandated retail access program as
defined in Section 284.8(h)(4) of the Commission's regulations and, if
the proposed release is part of an asset management arrangement, the
volumetric level of the asset manager's delivery or purchase obligation
and the time period during which that obligation is in effect.
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11.6 SUBMISSION OF BIDS - During the open season and bid submittal periods,
all valid bids (excluding bidder's name) will be posted. All bids will
be binding until written or electronic notice of withdrawal is received
by Transporter. A bid may be withdrawn prior to the close of the
bidding period, but the withdrawing bidder may not rebid on the same
capacity at a lower rate. Invalid bids will not be posted. There will
be no extensions of the original bid period or the prearranged deal
match period.
Prior to bidding on any offer to release capacity, a bidder must
prequalify by satisfying the creditworthiness requirements in Subsection
11.10. All bids for capacity shall be transmitted via mail, telefax, or
electronically to Transporter. Transporter shall date and time stamp
all written bids as they are received. A separate bid is required for
each offer to release capacity. The price bid on any offer to release
capacity must be submitted on a reservation rate basis or on a
volumetric basis. Any volumetric bids should only relate to the
reservation rate, since any volumetric charges will be directly billed
by Transporter to the Replacement Shipper and will not be considered in
the determination of the best bid. All bids on temporary releases of
capacity must be for the specified Receipt and Delivery Points set forth
in the Releasing Shipper's offer. Any prequalified bidder submitting a
bid for all or part of any released capacity shall provide the
information required by the NAESB Standards. Transporter shall post all
bids for capacity on its Internet web site (web site).
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11.7 DETERMINATION OF BEST BID - At the close of the bid period, Transporter
will review each bid to determine whether a bid will be deemed eligible
for consideration as the best bid. Any bid deemed ineligible will be
eliminated from consideration. Bids will be deemed ineligible if:
a. Bidder has not prequalified in accordance with Subsection 11.10.
b. Bidder has not submitted its bid prior to the deadline posted by
Transporter on its Internet web site (web site).
c. The bid for Released Capacity does not meet the minimum criteria
established in the Releasing Shipper's Offer.
As specified in the Releasing Shipper's Offer, each bid deemed eligible
for consideration will be evaluated using one of the following methods:
highest rate, net revenue, or present value. If the Releasing Shipper
elects to accept volumetric bids, the Releasing Shipper must have also
specified the method to rank competing volumetric and reservation charge
bids.
Transporter will evaluate and rank all bids and will award bids, best
bid first, until all offered capacity is awarded. Each bid will be
subject to the rights of a prearranged bidder to match the bid in
accordance with Subsection 11.2.
If no bids meet the minimum requirements of the Releasing Shipper's
Offer, Transporter shall calculate the best bid pursuant to this Section
11 or the criteria set forth in the Releasing Shipper's Offer and make
the best bid available to the Releasing Shipper, who will have the
option to refuse or accept such bid.
In the event of a tie among bidders for the best bid that does not
involve a prearranged release, capacity will be awarded on a pro rata
basis if the Releasing Shipper fails to specify a tie breaker.
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11.8 AWARD OF CAPACITY AND POSTING OF BIDS - Upon determination and
acceptance of the best bid(s), the winning Replacement Shipper(s) will
be notified by Transporter in writing or electronically. Transporter
shall post notice on Transporter's Internet web site (web site) that the
capacity has been awarded. The notice will include the Replacement
Shipper's name(s), the rate, reservation quantity, and term of the best
bid. Transporter's Confirmation Letter, incorporating the terms of the
accepted bid, shall be executed by the Replacement Shipper, and returned
to Transporter prior to or concurrently with a nomination for the flow
of Gas utilizing the Released Capacity.
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11.9 CREDITING OF REVENUE FOR TEMPORARY RELEASES - The Replacement Shipper
shall pay a reservation charge and any usage charge for use of the
released capacity. A Replacement Shipper will be billed by Transporter
and shall make payments to Transporter in accordance with the terms of
the Service Agreement for Capacity Release Transactions and the
applicable Confirmation Letter. For capacity releases other than a
permanent release, Transporter shall bill the Releasing Shipper its
reservation charge and reflect a credit of the reservation charge billed
to the Replacement Shipper. The Releasing Shipper will receive all
revenue generated by a temporary Replacement Shipper's payment of
reservation charges for the released capacity. In the event the
Releasing Shipper receives Transportation service at a discounted rate
that is less than the rate paid by the Replacement Shipper, the
Releasing Shipper, at its option, will be entitled to receive an
additional credit or a refund of the difference. However, the Releasing
Shipper shall remain liable for the reservation charge and Transporter
will bill the Releasing Shipper for any reservation charges not paid by
the Replacement Shipper and any associated interest on late payments
during the next billing cycle. The Replacement Shipper shall be
obligated to pay Transporter any usage rate and all associated
volumetric surcharges applicable to the quantities Transporter
transports under the Replacement Shipper's FT-1 Service Agreement, and
any penalties and cashout charges assessed in connection with the
Replacement Shipper's use of the Released Capacity. Transporter will
retain the usage charge, associated volumetric surcharges, and any
penalty and cashout charges.
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11.10 PREQUALIFICATION OF CREDITWORTHINESS - All parties desiring to bid on
Firm capacity offered by a Releasing Shipper and all prearranged
Replacement Shippers must meet Transporter's creditworthiness
requirements prior to bidding on capacity. A bidder's creditworthiness
will be assessed in accordance with the terms of Section 10 of the
General Terms and Conditions, which may require up to five (5) Business
Days to complete. If a bidder does not qualify under Transporter's
creditworthiness standards, the bidder shall either provide a letter of
credit in a satisfactory form and from a financial institution
acceptable to Transporter, a guaranty from a party satisfying
Transporter's creditworthiness standards, or a cash deposit equal to
the lesser of (i) the maximum charges (including reservation charge,
usage charge and surcharges) payable for the term of the release, or
(ii) the maximum charges (including reservation charge, usage charge
and surcharges) payable for the first three (3) full Months of the
release. A party that does not qualify as a creditworthy bidder is
ineligible to bid on capacity. After Transporter has determined a
bidder creditworthy and eligible to bid, Transporter will issue a
bidder prequalification number to the bidder. Once a bidder is issued
a bidder prequalification number, it is not necessary for that bidder
to resubmit credit information for prequalification except as requested
by Transporter. In the case of releases not subject to bidding, the
prearranged Replacement Shipper must prequalify at least five (5)
Business Days prior to Transporter's nomination deadline for
Transportation using the Released Capacity. In all other respects, the
terms and conditions applicable to bidders also apply to the
prearranged Replacement Shippers who have not otherwise complied with
the above requirements.
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11.11 RESPONSIBILITIES OF RELEASING SHIPPERS - The Releasing Shipper shall
remain fully liable under its Effective Firm Service Agreement with
Transporter for the payment of all reservation charges each Month for
the full reservation quantity, whether or not such quantity has been
released. A Shipper may release all or part of its FT-1 capacity on a
permanent or temporary basis. The Releasing Shipper will remain
obligated to pay the difference, if any, between the accepted bid and
the applicable rate for the remainder of the term of its Effective
Service Agreement.
11.12 RESPONSIBILITIES OF REPLACEMENT SHIPPERS - A Replacement Shipper
awarded capacity under a permanent release shall execute a separate FT-
1 Service Agreement with Transporter for the released capacity at the
rate bid by the Replacement Shipper and accepted by the Releasing
Shipper up to the maximum Commission-approved tariff rate and for the
primary term of the Releasing Shipper's Effective FT-1 Service
Agreement with Transporter. The Replacement Shipper shall sign and
return the FT-1 Service Agreement to Transporter within ten (10)
Business Days after it is provided to the Replacement Shipper.
A Replacement Shipper who is awarded Firm capacity pursuant to a
temporary release shall execute a Confirmation Letter for the released
capacity at the rate and for the term bid by the Replacement Shipper.
A Replacement Shipper who is awarded recallable Firm capacity shall
execute a Confirmation Letter for the released capacity, subject to the
right of recall, at the rate and for the term bid by the Replacement
Shipper.
Any rate paid by a Replacement Shipper in any capacity release
transaction which is not subject to the maximum rate cap is deemed to
be a final rate and is not subject to refund.
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11.13 MARKETING FEES - Transporter may negotiate with a Releasing Shipper and
receive a mutually agreeable fee for taking action to market Releasing
Shipper's Firm FT- 1 capacity so long as such actions constitute more
than merely posting the Releasing Shipper's offer. Transporter and the
Releasing Shipper will negotiate the level of activity to be undertaken
by Transporter to market the capacity and the fee to be paid by the
Releasing Shipper to Transporter for such activity.
11.14 OFFERS TO PURCHASE FIRM CAPACITY - Transporter agrees to post on its
Internet web site (web site), offers to purchase Firm capacity. Each
offer will remain on Transporter's web site for a minimum of five (5)
Business Days before it is removed, unless the party offering to
purchase capacity notifies Transporter prior to the expiration of such
period that it wishes to extend the posting for an additional five (5)
Business Days.
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12. PREGRANTED ABANDONMENT AND RIGHT OF FIRST REFUSAL
12.1 PREGRANTED ABANDONMENT - Transporter's obligation to provide services to
Shipper under any Effective Service Agreement will expire and such
service will be automatically abandoned at the end of the term specified
in such Service Agreement, unless the Service Agreement is subject to a
right of first refusal.
12.2 APPLICABILITY OF RIGHT OF FIRST REFUSAL -
A shipper receiving Firm Transportation service under an Effective FT-1
Service Agreement may exercise its right of first refusal in order to
retain firm transportation service at the expiration of the primary term
under the following conditions: (a) the Effective Service Agreement is
at the maximum tariff rate and for a term of twelve (12) or more Months
of consecutive service, or (b) the Effective Service Agreement was
entered into prior to February 9, 2000, at less than the maximum tariff
rate for a term of one (1) Year or more, or (c) the Effective Service
Agreement is at a Negotiated Rate and was entered into prior to February
9, 2000, for a term of one (1) Year or more. The right of first refusal
will not apply to Firm Service Agreements at a discounted rate or
Negotiated Rate, or with a term of less than twelve (12) consecutive
Months of service, during any extension or roll-over term unless the
Service Agreement is re-executed at the maximum tariff rate.
Any Shipper receiving Firm Transportation service under an Effective FT-
2 Service Agreement may retain Firm service under an FT-1 Service
Agreement by exercising its right of first refusal with respect to the
quantity of Gas by which its FT-2 Service Agreement has been reduced for
each Contract Year, subject to the same conditions set forth herein with
respect to shippers receiving Firm Transportation under FT-1 Service
Agreements.
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12.3 RIGHT OF FIRST REFUSAL PROCEDURES
a. Shipper Notification - Transporter will notify shipper in writing
at least ninety (90) Days prior to the expiration of the term of
an Effective FT-1 Service Agreement or the end of a Contract Year
under an FT-2 Service Agreement. Shipper must notify Transporter
in writing at least seventy-five (75) Days prior to the expiration
of the term whether it wishes to retain the option to exercise its
right of first refusal for all or a specified portion of the
capacity. If Shipper has notified Transporter of its intent to
exercise such right, Transporter shall then notify Shipper of the
best acceptable bid received by Transporter on (1) Business Day
after the bid deadline Day for capacity posted under the
procedures of this Section 12. Shipper shall then have the right
to retain service under the expiring FT-1 Service Agreement, or to
================================================================================
retain the right to Firm capacity subject to reduction under the
FT-2 Rate Schedule, by matching the best acceptable bid received
by Transporter for the posted capacity and executing an FT-1
Service Agreement for such capacity.
b. Posting of Capacity Subject to Right of First Refusal - Seventy
(70) Days prior to the expiration of the term of an FT-1 Service
Agreement or the reduction of the MDVQ-Mainline or MDVQ-Expansion
under an FT-2 Service Agreement subject to a right of first
refusal, Transporter shall post on its Internet web site (web
site) the capacity that will become available upon the expiration
or reduction date of such Service Agreement and whether such
capacity is subject to an existing Shipper's right of first
refusal. The capacity will be posted until forty-five (45) Days
prior to Transporter's nomination deadline for the first Day of
the Month after the expiration of the term or reduction of the
MDVQ-Mainline or MDVQ-Expansion. The posting will include the
Primary Receipt and Delivery Points, the available MDRQ-Mainline
or MDRQ-Expansion and the MDQ for each Primary Point, the date the
term of the FT-1 Service Agreement will expire, or the date the
reduction of the MDVQ-Mainline or MDVQ-Expansion under the FT-2
Service Agreement will become effective, and the applicable
maximum rate.
c. Bidding on Capacity Subject to the Right of First Refusal - Upon
posting of capacity subject to an existing Shipper's right of
first refusal, potential Shippers must submit bids in writing for
all or part of the capacity. To be eligible to bid on the
capacity, a potential Shipper must submit a Request for Service
form and demonstrate that it meets Transporter's creditworthiness
requirements. Each bid must contain (i) the potential Shipper's
name, (ii) the rate the potential Shipper is offering to pay,
(iii) the term of FT-1 service the potential Shipper desires, and
(iv) the amount of capacity for which the potential Shipper is
bidding. Bids must be received by Transporter by the bid deadline
date,
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which will be 8:00 a.m. Central Time forty-five (45) Days prior to
the deadline for nominating Transportation utilizing the capacity.
A potential Shipper must submit, along with its bid, a Prepayment
of Ten Thousand Dollars ($10,000). All bids will be binding on
the bidding party. Transporter will post the relevant terms of
all eligible bids, other than the bidder names, one (1) Business
Day after each bid is received by Transporter.
d. Determination of the Best Bid - Transporter will review all bids
for the posted capacity. The best bid will be the bid with the
longest term at the maximum rate. If there is a tie, the
potential Shipper submitting the earliest bid will be deemed to
have submitted the best bid. Transporter will consider, but will
not be required to accept, a bid that requests a rate that is less
than Transporter's maximum rate for the requested service.
Transporter will evaluate the bids based on the present value of
the revenue that would be generated by an FT-1 Service Agreement
at the rate and for the term bid by each potential Shipper using
the Commission's currently posted Interest Rate. In the event
that a bid is a Negotiated Rate, the evaluation process will only
consider the revenues generated by the reservation rate component
or other guaranteed revenue stream included in the bid, up to the
maximum, Commission- approved tariff rate. Bids at less than the
maximum tariff rate will be considered in the same manner as the
recourse rate for such service.
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e. Matching the Best Bid - Transporter shall notify Shipper of the
best bid(s) Transporter is willing to accept one (1) Business Day
after the bid deadline. Shipper shall then have five (5) Business
Days to match the rate, up to the Commission- approved maximum
tariff rate, term and quantity of Gas contained in the best bid(s)
as determined in Section 12.3.d in order to retain service under
the expiring FT-1 Service Agreement or to obtain FT-1 capacity
equal to the reduction in the MDVQ-Mainline or MDVQ-Expansion
under an FT-2 Service Agreement. If Shipper matches the best bid
within the allotted time, Transporter will provide Shipper a new
FT-1 Service Agreement that reflects the terms of the best bid.
Shipper shall execute and return the new FT-1 Service Agreement
within ten Business (10) Days after it is provided by Transporter.
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f. Failure to Match the Best Bid - If Shipper fails to match the best
bid within the time allowed by Transporter, Shipper's existing FT-
1 Service Agreement will be automatically abandoned at the end of
the term set forth on the FT-1 Service Agreement, or the quantity
of the reduction under the FT-2 Service Agreement will be
automatically abandoned at the end of the applicable Contract
Year. Transporter will enter into a new FT-1 Service Agreement
with the potential Shipper(s) offering the best acceptable bid(s).
The potential Shipper(s) must execute an FT-1 Service Agreement
reflecting the terms of its bid(s) within ten Business (10) Days
after it is provided by Transporter. If the potential Shipper
fails to execute and return the FT-1 Service Agreement within the
specified time, the potential Shipper shall forfeit any rights it
may have had to the requested service and Transporter shall retain
the Prepayment submitted by such potential Shipper(s). The
capacity and service will then be offered to the potential Shipper
with the next best acceptable bid for a period of one (1) Business
Day and the original Shipper will have the opportunity to match
such bid for a period of one (1) Business Day.
g. Capacity for Which No Acceptable Bids are Received - If
Transporter fails to receive acceptable bids for all of the posted
capacity, then Transporter and Shipper shall negotiate a rate and
term for the amount of capacity Shipper desires to retain, as set
forth in Shipper's notification to Transporter under Subsection
12.3.a. above. If Shipper and Transporter fail to negotiate
acceptable terms of a new FT-1 Service Agreement within ten (10)
Business Days, then the service for the affected capacity will be
automatically abandoned effective as of the date of the expiration
of the term of the original FT-1 Service Agreement between Shipper
and Transporter, or the date of reduction under a FT-2 Service
Agreement.
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13. GAS QUALITY
13.1 SPECIFICATIONS - Except to the extent permitted by the Transporter on a
not unduly discriminatory basis, all Gas received by Transporter from
Shipper shall conform to the following quality specifications:
a. Heating Value. The Gas shall have a heating value of not less
than nine hundred seventy Btus per standard cubic foot (970
Btus/SCF) at 14.73 PSIA.
b. Water Vapor. The Gas shall not contain more than seven pounds of
water per million standard cubic feet (7 lbs/MMcf).
c. Oxygen. The Gas shall not contain more than two-tenths of one per
cent (0.2%) by volume of oxygen.
d. Carbon Dioxide and Nitrogen. The Gas shall not contain more than
two per cent (2%) of carbon dioxide nor more than three per cent
(3%) by volume of a combined total of carbon dioxide and nitrogen.
e. Hydrogen Sulfide. The Gas shall not contain more than one-quarter
grain of hydrogen sulfide per one hundred standard cubic feet (1/4
gr/100 SCF).
f. Mercaptans. The Gas shall not contain more than one-quarter grain
of mercaptans per one hundred standard cubic feet (1/4 gr/100
SCF).
g. Total Sulfur. The Gas shall not contain more than five grains of
total sulfur per one hundred standard cubic feet (5 grs/100 SCF).
h. Dust, Gums and Solid Matter. The Gas shall be commercially free
from dust, gums, gum-forming constituents, and other solid matter.
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i. Liquid Hydrocarbons. The Gas shall be free of hydrocarbons in
liquid form at the temperature and pressure at which the Gas is
received.
j. Liquid Water. The Gas shall be free of water in liquid form at
the temperature and pressure at which the Gas is received.
k. Temperature. The Gas shall not have a temperature of more than
one hundred degrees Fahrenheit (100øF).
13.2 REFUSAL TO ACCEPT - If the Gas tendered for Transportation by Shipper
shall fail at any time to conform to any of the quality specifications
set forth above, Transporter may refuse to accept further quantities of
Gas pending correction by Shipper.
13.3 COMMINGLING - Gas and/or Condensate received from each Shipper will be
commingled with the Gas and/or Condensate of other Shippers in the
system. Accordingly, the Gas of Shipper shall be subject to such
changes in heating value and other specifications as may result from
such commingling.
13.4 LIQUID HYDROCARBONS - All Gas must be dehydrated and separated prior to
being injected into Transporter's system. Gas that meets Transporter's
quality specifications, and any Condensate that is acceptable to
Transporter and for which a separate condensate Transportation agreement
has been executed, shall be separately metered and then injected into
Transporter's System.
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14. MEASUREMENT
14.1 PROCEDURES - All metering and testing equipment must be installed,
maintained, and calibrated in accordance with the specifications and
procedures of API Manual of Petroleum Measurement Standards, Chapter 14
- Section 3, Latest Edition and Chapter 21 - Section 1, Latest Edition.
14.2 UNIT OF VOLUMETRIC MEASUREMENT - The unit of volume for all purposes
hereunder shall be one standard cubic foot (1 SCF) as defined in Section
1 of the General Terms and Conditions. Correction for the deviation of
the Gas from Boyle's Law at the pressures, temperatures and relative
densities under which the Gas is received or delivered hereunder will be
according to API Manual of Petroleum Measurement Standards Chapter 14 -
Section 2/AGA Report No. 8.
14.3 ATMOSPHERIC PRESSURE - Atmospheric pressure will be assumed to be
fourteen and seven-tenths pounds per square inch absolute (14.7 PSIA)
regardless of the actual elevation or location of the Receipt or
Delivery Point(s) above sea level or variations of the actual
atmospheric pressure at which the Gas is measured.
14.4 RELATIVE DENSITY (SPECIFIC GRAVITY) - Relative density will be
determined by chromatographic analysis of samples collected by means of
a continuous sampling device, by an on-line gas chromatograph or by
other industry-accepted instrument that is mutually agreed upon.
14.5 HEATING VALUE - Heating value will be determined by chromatographic
analysis of samples collected by means of a continuous sampling device,
by an on-line gas chromatograph or by other industry-accepted instrument
that is mutually agreed upon.
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14.6 METERING FACILITIES - Upon agreement with Transporter, either
Transporter or an interconnecting Operator may install, own, maintain
and operate metering facilities properly equipped with orifice meters,
electronic flow computers, and other necessary measuring equipment
required to measure quantities of Gas received into or delivered from
Transporter's System. Such metering facilities will be located at or
near the Receipt or Delivery Point(s).
14.7 CHECK METERS - Either Transporter or the interconnecting Operator may,
at its option and expense, install and operate check meter(s) to check
the other party's meters.
14.8 ACCESS TO METERING FACILITIES - Either Transporter or the
interconnecting Operator shall have access at all reasonable times to
the other party's metering and regulating facilities for inspection and
checking, but the reading, calibration and adjustment thereof shall be
done only by the Operator of such metering and regulating facilities.
14.9 CALIBRATION AND TESTING - At least once each Month, either Transporter
or the interconnecting Operator will calibrate its meters and measuring
equipment and if so requested, in the presence of representatives of the
other party, and the parties shall jointly observe any adjustments that
are made to the meters or measuring equipment should adjustments be
necessary. Likewise, any calibration and adjustment of the other
party's check meters will be jointly observed by representatives of both
parties. Each party shall give to the other party notice of the time of
all tests of meters at least ten (10) Days in advance of the test so
that the other party may conveniently have its representatives present.
If the required notice of a meter test has been given and the party
receiving such notice is not present or represented at the time set, the
other party may proceed with the test and any necessary adjustment.
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14.10 ORIFICE METERS - Orifice meters and electronic flow computers will be
installed and Gas quantities measured in accordance with the standards
prescribed in API Manual of Petroleum Measurement Standards, Chapter 14
- Section 3 and Chapter 21 - Section 1.
14.11 NEW MEASUREMENT TECHNIQUES - If at any time a new method or technique
is developed with respect to Gas measurement or the determination of
the factors used in such Gas measurement, such new method or technique
may be substituted by mutual agreement between Transporter and the
interconnecting Operator.
14.12 CORRECTION OF METERING ERRORS -
a. If during any test of the measurement equipment, an adjustment or
calibration error is found that results in an incremental
adjustment to the calculated flow rate, through the meter tube, in
excess of one per cent (1%) of the adjusted flow rate (using the
adjusted flow rate as the per cent error equation denominator),
then the previous recordings of such equipment will be corrected
to zero (0) error for any period during which the error existed
that is either known definitely or mutually agreed to, or if such
time is not ascertainable, then back one-half (1/2) the time
elapsed since the date of the last calibration, not to exceed
sixteen (16) Days.
b. If during any test of the measuring equipment, an adjustment or
calibration error is found that results in an incremental
adjustment to the calculated flow rate, through the meter tube,
that does not exceed one per cent (1%) of the adjusted flow rate
(using the adjusted flow rate as the per cent error equation
denominator) then the previous recordings will be considered to be
accurate for quantity determination purposes, but such equipment
will be adjusted to record accurately.
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14.13 FAILURE OF METERING EQUIPMENT - If, for any reason, meters are out of
service or out of repair so that the amount of Gas received or
delivered cannot be ascertained or computed from the reading thereof,
the Gas received or delivered through the period such meters are out of
service or out of repair will be determined and agreed upon by
Transporter and the interconnecting Operator upon the basis of the data
available, using the first of the following methods that is feasible:
a. By using the registration of any check meter(s), if installed and
accurately registering;
b. By using the registration of telemetry equipment connected to
Transporter's or Operator's metering facilities, if installed and
accurately registering;
c. By correcting the error if the percentage of error is
ascertainable by calibration, test or mathematical calculation;
d. By determining the quantity of receipts or deliveries during the
preceding periods under similar conditions when the meter was
registering accurately.
14.14 PRESERVATION OF MEASUREMENT RECORDS - Upon request of either
Transporter or the Operator, each party will submit to the other party
records from its measuring equipment, together with calculations
therefrom, for the other party's inspection, verification and copying,
if desired, subject to return within thirty (30) Days after the receipt
thereof. Transporter, however, shall only be required for the purposes
hereof, to retain the records referred to herein for a period of two
(2) Years from the date of preparation of said records, or such other
period as shall be required by the Commission.
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14.15 PRIOR PERIOD ADJUSTMENTS - The cutoff for the closing of measurement is
five (5) Business Days after the business Month. Prior period meter
adjustments will be treated by taking the adjustment back to the
production Month. A meter adjustment becomes a prior period adjustment
after the fifth Business Day following the business Month. Missing or
late measurement data will be estimated by the measuring party, with
the actual data then treated as a prior period adjustment.
Measurement data corrections will be processed within six (6) Months of
the production Month, with a three (3) Month rebuttal period, in
accordance with NAESB Standard 2.3.14. This standard shall not apply
in the case of deliberate omission or misrepresentation or mutual
mistake of fact. Parties' other statutory or contractual rights shall
not otherwise be diminished by this standard. In no event will any
changes be made after twenty-four (24) Months from the production
Month, unless the parties mutually agree.
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15. PROPERTIES AND FACILITIES -
15.1 MAINTENANCE AND OPERATION RESPONSIBILITIES - Transporter shall only be
responsible for the maintenance and operation of its own System and
shall not be responsible for the maintenance or operation of any other
properties or facilities connected in any way with the Transportation of
Gas undertaken by Transporter.
15.2 ALTERATIONS AND REPAIRS - Transporter shall have the right to interrupt
the Transportation of Gas when necessary to test, alter, modify, enlarge
or repair any facility or property comprising a part of, or appurtenant
to, its System, or otherwise related to the operation thereof.
Transporter shall endeavor to cause a minimum of inconvenience and,
except in cases of emergency, shall give advance notice of its intention
to interrupt the Transportation of Gas and of the expected magnitude of
such interruption.
15.3 CONSTRUCTION POLICY - It will be Transporter's policy to agree to
interconnect its System with any other pipeline facilities or with
supply or delivery facilities on a not unduly discriminatory basis, upon
a reasonable request and subject to the conditions set forth in this
Section 15. Transporter's agreement to such connections will be
dependent upon the operational and economic impact of the proposed
connections on Transporter's System and on its ability to provide
reliable service to its existing Shippers.
15.4 CONSTRUCTION OF NEW FACILITIES - Unless otherwise agreed, Transporter
will construct, install, own, maintain and operate any additions or
expansions to its existing System as it is configured on the date the
Commission issues a certificate of public convenience and necessity for
the initial construction of the Discovery Gas Transmission LLC pipeline.
Unless otherwise agreed, the
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party or parties requesting additional facilities, including but not
limited to lateral lines, and any pipeline interconnects, shall pay all
costs for the construction and installation, including all costs
involved in the filing of applications, pursuing approvals and obtaining
all licenses and permits (including environmental) required for
construction of facilities or implementation of services, and any
amounts necessary to reimburse any costs, including any income taxes
that may be incurred by Transporter as a result of construction
contributions.
15.5 RESPONSIBILITIES OF INTERCONNECTING PARTY - Unless otherwise agreed by
Transporter, a party requesting the addition of facilities to connect
Gas supply or delivery facilities or a party requesting an
interconnection with existing or proposed pipeline facilities will be
responsible for installing, maintaining, and operating the necessary
metering and regulating facilities, including emergency flow control
equipment, all of which must be acceptable to Transporter. Metering and
regulating facilities are to be installed at a location which, in
Transporter's reasonable judgment, is practical, convenient and readily
accessible. The interconnecting party shall provide the exhibits
necessary to support any needed Commission filings, or permits required
by any other governmental agency. The interconnecting party must
execute an interconnection agreement with Transporter prior to the
commencement of any construction or service.
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15.6 LIQUIDS HANDLING - In order to properly apportion the liquid
hydrocarbons injected by Shippers into Transporter's System, no liquid
hydrocarbons may be removed from Transporter's System unless all such
liquid hydrocarbons are reinjected. Therefore, any downstream facility
that seeks an interconnection with Transporter at any point where
Transporter's System contains liquid hydrocarbons or Condensates must
agree to provide liquids handling and separation facilities at the point
of interconnection and to reinject into Transporter's System all liquid
hydrocarbons and Condensates attributable to such System. The
interconnecting party's facilities, and the operation thereof, must meet
industry standards and be subject to Transporter's approval.
15.7 QUALITY CONTROL AND ELECTRONIC COMMUNICATION EQUIPMENT - Transporter
shall have the right to collect from the Operator of any interconnecting
facilities the cost of any Gas analysis, quality control and/or
electronic communication equipment that Transporter, in its reasonable
discretion, determines is required at any Receipt or Delivery Point(s)
to monitor the quality and quantity of Gas received or delivered by
Transporter.
15.8 INSTALLATION OF FLOW CONTROL EQUIPMENT - Transporter may construct,
install, and operate flow control equipment, telemetry equipment or
electronic flow computers, at any location on its System, whenever
Transporter determines, in its reasonable judgment, that such equipment
will contribute to the safe, reliable, efficient and orderly operational
integrity of its System.
15.9 REGULATORY PRECEDENCE - Nothing in this Section 15 shall require
Transporter to file, or not to file, an application for a certificate of
public convenience and necessity under Section 7(c) of the Natural Gas
Act or to construct, or not to construct, authorized facilities under
the terms of its blanket Transportation certificate. Transporter
reserves the right to seek a waiver of the policy set forth herein, for
good cause shown, during any proceeding before the Commission.
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16. RATE FILING
16.1 RATE FILINGS - Transporter reserves the right to file revisions,
additions, deletions, or changes to its rates, rate schedules, forms of
Service Agreements, or General Terms and Conditions, at any time and for
any reason, and to place such revisions, additions, deletions, or
changes into effect, subject to receiving the necessary approvals or
authority. Shipper shall have the right to protest such filings in any
forum provided by the Commission for such action.
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17. CONTEMPORANEOUS COMMUNICATION OF INFORMATION
17.1 INFORMATION AVAILABLE - Transporter will maintain all information
required pursuant to Section 250.16 of the Commission's Regulations and
NAESB Standard 4.3.6, plus additional information Transporter determines
to be beneficial to its Shippers and potential Shippers. Such
information will include, but not be limited to:
a. Availability and pricing of Transportation services;
b. All uncommitted capacity on Transporter's System available for
Firm and Interruptible Transportation services, including Firm
capacity becoming available but subject to an existing Firm
Shipper's right of first refusal;
c. Operational Flow Orders indicating the events or conditions
threatening the operational integrity of Transporter's System or
limiting Transporter's ability to provide efficient and reliable
Transportation services, anticipated duration of the OFO and
affected segments of Transporter's System, and specific actions
required by Shippers necessary to comply with an OFO.
d. All information related to capacity release, including offers to
release capacity, bids for Released Capacity, posting of winning
and losing bids, and offers to purchase capacity;
e. A listing of each Receipt and Delivery Point, and whether the
allocation method to be applied at a particular point is covered
by an OBA or a Predetermined Allocation, and any changes in the
allocation method at a particular point;
f. Transporter's marketing affiliate log;
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g. Any information related to Transportation of Natural Gas on
Transporter's System provided to a marketing affiliate on a
contemporaneous basis by posting such information for electronic
access;
h. Transporter's log of waivers of discretionary Tariff provisions;
i. Other information of major importance regarding Transporter's
Transportation services;
j. Transporter's Index of Firm Customers;
k. Transporter's FERC Gas Tariff.
Each Month, Transporter will review and purge outdated information from
its Internet web site (web site).
17.2 ELECTRONIC ACCESS OF INFORMATION - Transporter will provide twenty-four
(24) hour electronic access to the information described in Subsection
17.1 through Transporter's Internet web site (web site). Information is
available at no charge by Transporter to the user and may be accessed on
Transporter's web site using a personal computer with a modem.
Information on the web site may be downloaded by a user. The documents
identified in NAESB Standard 4.3.6 are available in hyper- text mark-up
language (HTML) format.
Transporter will support third-party VAN connections with the same
information handling and response priority as for persons using standard
Internet services. All third-party value added network (VAN) charges
will be the responsibility of the third-party. Transporter will charge
an initial set-up fee of two hundred dollars ($200.00).
Upon written request, Transporter will furnish, within seven (7)
calendar days, a cross-reference table for numeric designations in
electronic format. The party requesting this information agrees to pay
Transporter thirty dollars ($30.00) for the cost of shipping and
handling.
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17.3 TRADITIONAL ACCESS OF INFORMATION - Information described in Subsection
17.1 will be available for public inspection at Transporter's offices
during normal business hours. Upon written request, Transporter will
mail copies of this information to interested persons within seven (7)
Days. The party requesting information agrees to pay Fifty Dollars
($50.00) for the cost of providing the requested information.
17.4 ARCHIVED INFORMATION - Transporter will archive daily back-up records of
the information displayed on its Internet web site (web site) and
maintain such records for a period of three (3) Years. Parties
interested in reviewing historical information must identify and request
in writing the daily back-up information they are interested in
reviewing. Upon receiving a written request, Transporter will collect
the daily back-up information requested and make it available to the
requesting party, either electronically or in hard-copy form within
seven (7) Days. The party requesting information agrees to pay Fifty
Dollars ($50.00) for the cost of gathering the requested information and
making the information available, whether such information is provided
in hard-copy or electronic format.
17.5 MAINTENANCE OF Internet web site (web site) - Information maintained on
Transporter's Internet web site (web site) is divided into several
documents in order to provide separate access to particular topics of
interest. Transporter will take necessary steps to ensure ease of use
of the web site and that it operates in a manner which facilitates the
dissemination of available information.
17.6 MAILING LIST - Transporter will maintain a mailing list to communicate
to Shippers and potential Shippers any information of major importance
regarding Transporter's Transportation services. The mailing list will
include all current Shippers, all persons who have pending requests for
Transportation or for information regarding Transporter's Transportation
services, and other persons who Transporter determines may be interested
in such information.
17.7 ANNOUNCEMENTS - Any information Transporter determines to be of major
importance regarding its Transportation services will be mailed to all
persons on Transporter's current mailing list.
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18. STANDARDS OF CONDUCT; COMPLAINT PROCEDURES
18.1 INFORMATIONAL POSTINGS - Transporter shall post on its Internet Web Site
its procedures for implementation of and compliance with and information
required by the Commission's Standards of Conduct. Such information
will include organizational charts (including a listing of Transporter's
energy affiliates), information on shared facilities and shared
operating personnel, rate discounts granted and notice of waivers and/or
exercises of discretion in the application of Transporter's Tariff
provisions, and will be updated as required by the Commission.
18.2 SHIPPER COMPLAINTS - Any Shipper or potential Shipper (hereafter
Complainant) who believes that Transporter has unduly discriminated
against that Complainant, may file a complaint with Transporter. All
complaints must be in writing and be sent to Transporter. Such
complaint must list all alleged discriminatory practices or unfair
treatment and provide all evidence supporting the allegations.
18.3 TRANSPORTER INVESTIGATION - Upon receipt of a written complaint,
Transporter shall date-stamp such complaint and acknowledge receipt of
the complaint by letter within two (2) Business Days. Transporter will
promptly begin to review and attempt to resolve the complaint.
18.4 DISCUSSION OF COMPLAINTS - Transporter will make available a
representative to discuss the allegations with the Complainant at
Transporter's offices during normal business hours within five (5)
Business Days of receipt of a complaint. The purpose of such a meeting
is to attempt to informally resolve any problems and/or continue the
gathering of facts and information concerning the alleged undue
discrimination or unfair treatment.
18.5 RESPONSE TO COMPLAINTS - Transporter will provide a written response to
all complaints within thirty (30) Days of the receipt of the written
complaint as described in Subsection 18.2. It is Transporter's policy
to comply with all applicable regulations while continuing to work with
its customers to resolve any concerns regarding its Transportation
services. Transporter's goal is to resolve all complaints on an
informal basis knowing that most problems are based on
misunderstandings, rather than any willful violation of the Commission's
regulations.
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19. [Reserved for Future Use]
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20. LIABILITY AND WARRANTY
20.1 POSSESSION AND CONTROL - Transporter will be deemed to be in control and
possession of the Gas transported hereunder only when and to the extent
that such Gas is in and is being handled by the facilities owned, leased
or operated by or for Transporter as set forth herein for the
performance of Transporter's obligations under any Effective Service
Agreement. Shipper will be deemed to be in control and possession of
the Gas prior to its receipt by Transporter at the Receipt Point and
after delivery by Transporter at the Delivery Point. The party in
control and possession of the Gas will be responsible for and shall
indemnify the other party with respect to any losses, injuries, claims,
liabilities or damages caused thereby and occurring while the Gas is in
its possession.
20.2 LIMITATION OF LIABILITY - Neither party to any Effective Agreement
entered into under the terms of this FERC Gas Tariff shall be liable to
the other party for any indirect, special, consequential, or punitive
damages, including lost profits, whether asserted under tort, contract,
or other theories of law.
20.3 WARRANTY AND TITLE - Shipper hereby warrants it will have good title or
the good right to receive or deliver Gas, and that such Gas will be free
and clear of all liens and adverse claims; and Transporter and Shipper
each agree, with respect to the Gas received or delivered by it, to
indemnify the other against all suits, actions, debts, accounts,
damages, costs (including attorneys' fees), losses, and expenses arising
from or out of any adverse claims of any and all persons to or against
said Gas.
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20.4 STANDARD OF PERFORMANCE - Transporter shall operate its pipeline System
as a prudent pipeline operator would and in such capacity shall have
full operational control of all components of its pipeline System.
Pursuant to this standard, Transporter may use commingled supplies of
Natural Gas and Condensates of all Shippers in providing services to
other Shippers, but such use of commingled supplies of Natural Gas and
Condensates will not relieve Transporter of its obligations to provide
service in accordance with the terms of its Rate Schedules, General
Terms and Conditions and Effective Service Agreements. This standard
does not, however, cause Transporter to be responsible and/or liable for
the actions of any third party.
20.5 OFF-SYSTEM CAPACITY - Transporter has, and may in the future, enter into
agreements with other interstate and intrastate pipeline companies and
other entities for the use of off-system capacity, including, but not
limited to, capacity as part of its Expansion Facilities and capacity
related to the Commission's authorizations granted in Docket Nos. CP06-
425 and CP06-426. In the event that Transporter leases or acquires off-
system capacity, Transporter will use such capacity for operational
reasons or to render service for its Shippers. In the event that
Transporter uses off-system capacity to render service for its Shippers,
it will render service to Shippers on the leased or acquired capacity
pursuant to Transporter's approved FERC Gas Tariff including its
authorized rate schedules and applicable rates, as such tariff, rate
schedules and approved rates may change from time to time. To the
extent transportation service is provided under Transporter's negotiated
rate authority, Transporter shall adhere to the associated requirements
therein. For purposes of transactions entered into subject to this
Section 20.5, the "Shipper-Must-Have-Title" requirement is waived.
20.6 PROCESSING RIGHTS - Where the Shipper has rights to process the Gas
requested to be received, transported and delivered by Transporter, the
"Shipper-Must-Have-Title" requirement is waived.
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21. FORCE MAJEURE
21.1 EFFECT OF FORCE MAJEURE - If either Transporter or Shipper is rendered
unable, wholly or in part, by an event of force majeure to perform its
obligations under any Effective Agreement, other than the obligation to
make payments then or thereafter due, it is agreed that performance of
the respective obligations of the parties thereto to receive and deliver
Gas, so far as they are affected by a force majeure event, will be
suspended from the inception of any such inability until it is
corrected, but for no longer period. The party claiming such inability
shall give notice to the other party as soon as practicable after the
occurrence of the force majeure event. If such notice is first given
orally, it must be confirmed in writing within five (5) Days, giving
full particulars. The party claiming such inability shall promptly
correct such inability to the extent it may be corrected through the
exercise of reasonable diligence.
21.2 SUSPENSION OF RESERVATION CHARGES - If Transporter is rendered unable,
wholly or in part, by an event of force majeure to perform its Firm
Transportation obligations under any Effective FT-1 Service Agreement,
Shipper shall be relieved of its obligation to make payments for
reservation charges under such FT-1 Service Agreement applicable to that
portion of the FT-1 Transportation service that is affected by an event
of force majeure, from the inception of Transporter's inability to
perform its Firm Transportation obligations until the inability is
corrected, but for no longer period. Shipper shall remain obligated to
make payments for all or any portion of reservation charges applicable
to service made available under an Effective FT-1 Service Agreement when
Transporter is capable, wholly or in part, of performing its service
obligations and Transporter's ability to perform such obligations is not
affected by an event of force majeure.
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21.3 TERM EXTENSION - The term of any Effective Agreement will not be
extended beyond its normal termination date by any periods of time
during which performance is suspended due to an event of force majeure.
21.4 LIABILITY - Neither party shall be liable to the other for any
consequential or financial losses or damages, regardless of the nature
thereof and howsoever occurring, whether such losses or damages be
direct or indirect, immediate or remote, by reason of, caused by,
arising out of, or in any way attributable to the suspension of
performance of any obligation of either party when such suspension
occurs because a party is rendered unable, wholly or in part, by an
event of force majeure, to perform its obligations.
21.5 NATURE OF FORCE MAJEURE - The term "force majeure" as used herein shall
mean, cover and include the following:
a. Acts of God including, without limitation, epidemics, landslides,
hurricanes, floods, washouts, lightning, earthquakes, storm
warnings, perils of the sea, extreme heat or extreme cold, any
other adverse weather conditions, and threats of any of the
foregoing, and whether preceded by, concurrent with, or followed
by acts or omissions of any human agency, whether foreseeable or
not, which may directly or indirectly contribute to or result in
either party's inability to perform its obligations.
b. Acts of Government including, without limitation, laws, orders,
rules, decrees, judgments, judicial actions, regulations, acts of
arrest or restraint, and any threats of any of the foregoing, by
any government (de jure or de facto), or any agency, subdivision,
or instrumentality thereof, having, claiming or asserting
authority or jurisdiction over the severance, production,
gathering, Transportation, handling, sale, receipt or delivery
================================================================================
under any Effective Agreement or over materials, equipment,
supplies or personnel necessary to the severance, production,
gathering, Transportation, handling, sale, receipt or delivery
under any Effective Agreement when any such Act of Government
directly or indirectly contributes to or results in either party's
inability to perform its obligations.
c. Acts of Civil Disorder including, without limitation, acts of
sabotage, acts of the public enemy, acts of war (declared or
undeclared), blockades, insurrections, riots, mass protests or
demonstrations, and threats of any of the foregoing, and police
action in connection with or in reaction to any such Acts of Civil
Disorder, when any such Acts of Civil Disorder directly or
indirectly contribute to or result in either party's inability to
perform its obligations.
d. Acts of Industrial Disorder including, without limitation,
strikes, lockouts, picketing, and threats of any of the foregoing,
when any such Acts of Industrial Disorder directly or indirectly
contribute to or result in either party's inability to perform its
obligations, provided, however, that the settlement of any labor
dispute to prevent or end any such Acts of Industrial Disorder
shall be within the sole discretion of the party to any Effective
Agreement involved in such labor dispute, and the above
requirement that any inability shall be corrected with reasonable
diligence, shall not apply to labor disputes.
e. Failure of facilities including, without limitation, freezing of
lines of pipe, failures resulting from fires, washouts, mechanical
breakdowns of, malfunctions of, or necessities for making repairs
or alterations to furnaces, reactors, plant installations,
machinery, lines of pipe, pumps,
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compressors, valves, gauges or any of the equipment therein or
thereon, when any such failure of facilities, directly or
indirectly, contributes to or results in either party's inability
to perform its obligations, and regardless of whether such failure
of facilities may have resulted from fault, negligence, omission,
or inadvertence, directly or indirectly, of either party hereto,
or by any person acting on its behalf or under its direction.
f. Inability to obtain or acquire at reasonable cost grants,
servitudes, rights of way, permits, licenses, or any other
authorizations from third parties or agencies (private or
governmental) or inability to obtain or acquire at reasonable cost
necessary materials and supplies to construct, maintain and
operate any facilities required for the performance of any
obligations under any Effective Agreement when any such inability,
directly or indirectly, contributes to or results in either
party's inability to perform its obligations.
g. Any occurrence, condition, situation, or threat thereof, not
covered by Subsections 21.5.a. through 21.5.f., which renders
either party unable to perform its obligation, provided such
occurrence, condition, situation, or threat thereof, is not under
or within the control of the party claiming such inability, and
provided such party could not have prevented such occurrence,
condition, situation, or threat thereof, by the exercise of
reasonable diligence.
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22. ASSIGNMENT
22.1 ASSIGNMENT - Neither party shall assign a Service Agreement or any
portion of its rights to Transportation thereunder except as expressly
stated in this Section 22. All covenants, stipulations, terms,
conditions, obligations, and provisions of an Effective Service
Agreement will extend to, be binding upon, and inure to the benefit of
the respective successors, permitted assigns, and legal representatives
of the parties. The permitted assignments of a Service Agreement or
rights thereunder include:
a. Any person that succeeds by purchase, merger, or consolidation to
the interests or properties of Transporter or Shipper affecting
the disposition of Gas in whole or substantial portion, shall be
subject to the rights and obligations of its predecessors under
the Effective Service Agreement and the assignor agrees to bind
its successor, transferee or permitted assignee to the terms and
conditions of the Effective Service Agreement.
b. Either Transporter or Shipper may assign or pledge an Effective
Service Agreement under the provisions of any mortgage, deed of
trust, indenture, bank credit agreement, assignment, receivable
sale, or similar instrument that it has executed or may execute
hereafter.
c. Transporter or Shipper may assign an Effective Service Agreement
to an affiliate.
d. Shipper may release FT-1 capacity on a permanent or temporary
basis in accordance with the provisions of Section 11 of the
General Terms and Conditions.
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23. WAIVER
23.1 DISCRETIONARY WAIVER - Transporter may waive any of its rights hereunder
or any obligations of Shipper as to any specific default that has
already occurred, or case-by-case in advance as to any specific,
temporary operational problem, on a basis that is not unduly
discriminatory.
23.2 NON-WAIVER - Notwithstanding the foregoing, no waiver by either
Transporter or Shipper of any one or more defaults by the other in
performance of any of the provisions of an Effective Service Agreement
shall operate or be construed as a waiver of any other existing or
future default or defaults, whether of a like or of a different
character.
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24. DESCRIPTIVE HEADINGS
24.1 DESCRIPTIVE HEADINGS - The descriptive headings of the provisions used
in this FERC Gas Tariff, these General Terms and Conditions, or in any
Effective Service Agreement for service under a Rate Schedule contained
in this FERC Gas Tariff are formulated and used for convenience only and
shall not be deemed to affect the meaning or construction of any such
provision.
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25. NAESB STANDARDS - To the extent required by the Commission, Transporter
complies with the Business Practice and Electronic Communication
Standards promulgated by the North American Energy Standards Board. In
addition, Transporter has adopted and will use the NAESB Model Trading
Partner Agreement.
The following standards are incorporated herein by reference:
25.1 Additional Standards (version 1.7): 0.1.1, 0.1.2, 0.3.1 through 0.3.10
25.2 Nominations Related Standards (version 1.7): 1.1.1 through 1.1.5,
1.1.9, 1.1.12, 1.1.14 through 1.1.18, 1.1.22, 1.2.1 through 1.2.6, 1.2.8
through 1.2.19, 1.3.1, 1.3.2(vi), 1.3.3 through 1.3.9, 1.3.11, 1.3.13
through 1.3.16, 1.3.19 through 1.3.46, 1.3.51, 1.3.75.
25.3 Flowing Gas Related Standards (version 1.7): 2.1.1 through 2.1.6,
2.2.1, 2.2.3 through 2.2.5, 2.3.1 through 2.3.23, 2.3.25 through 2.3.31,
2.3.45 through 2.3.50, 2.3.54 through 2.3.64.
25.4 Invoicing Related Standards (version 1.7): 3.1.1, 3.1.2, 3.2.1, 3.3.1
through 3.3.22, 3.3.25, 3.3.26.
25.5 Electronic Delivery Mechanism Standards (version 1.7; Recommendation
R03035A; 2004 Annual Plan Item 2 FERC Order 2004 and 2005 Annual Plan
Item 8 (May 3, 2005) (Affiliate Order standards)): 4.1.2 through 4.1.4,
4.1.6, 4.1.7, 4.1.9, 4.1.10, 4.1.12, 4.1.13, 4.1.15 through 4.1.21,
4.1.29, 4.1.30, 4.1.40, 4.2.1 through 4.2.9, 4.2.14, 4.2.15, 4.3.1
through 4.3.3, 4.3.5, 4.3.7, 4.3.8, 4.3.10 through 4.3.18, 4.3.20,
4.3.22 through 4.3.38, 4.3.40, 4.3.41, 4.3.45, 4.3.73, 4.3.87, 4.3.89
through 4.3.92.
25.6 Capacity Release Related Standards (version 1.7): 5.1.2, 5.1.3, 5.2.1
through 5.2.3, 5.3.1, 5.3.3 through 5.3.5, 5.3.7, 5.3.8, 5.3.9, 5.3.13
through 5.3.30, 5.3.35 through 5.3.42, 5.3.44 through 5.3.47, 5.3.49
through 5.3.60.
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26. DISCOUNTING
26.1 Transporter may at any time, and in its sole discretion, selectively discount the rate applicable to
any Shipper under the FT-1, FT-2 and IT Rate Schedules set forth in this Tariff. Discounts will be
applied only to the Reservation Rate for FT-1 service and to the Usage Rate for FT-2 and IT service.
Such discounted rate(s) shall not be less than the Minimum Rate for the applicable service as set forth
in the currently effective Statement of Transportation Rates of this Tariff. Such discounts shall not
constitute material deviations from Transporter's pro forma Service Agreement.
Among other methods, a discounted rate may be based on published index prices for specific receipt
and/or delivery points or other agreed upon published pricing reference points (such discount rate may
be based upon the differential between published prices or arrived at by formula).
Any agreement containing such discounted rate shall specify the rate component(s) to be discounted
(i.e., Reservation Rate or Usage Rate or both). To the extent the Reservation Rate is discounted, the
index price differential rate formula shall be calculated to state a rate per MDRQ. Furthermore, such
discount shall not change the underlying rate design or include any minimum bill or minimum take
provisions that has the effect of guaranteeing revenue.
In addition, the discount agreement may include a provision that if one rate component, which was at or
below the applicable maximum rate at the time the discount agreement was executed, subsequently exceeds
the applicable maximum rate or is less than the applicable minimum rate due to a change in
Transporter's maximum (minimum) rates so that such rate component must be adjusted downward (upward) to
equal the new applicable maximum (minimum) rate, then other rate components may be adjusted upward
(downward) to achieve the agreed overall rate, so long as the net of the resulting rate components do
not exceed the maximum rate or are not less than the minimum rate applicable to that rate component.
Such changes to rate components shall be applied prospectively, commencing with the date a Commission
order accepts revised tariff sheets. Nothing contained herein shall be construed to alter a refund
obligation under applicable law for any period during which rates that had been charged under a
discount agreement exceeded rates which ultimately are found to be just and reasonable.
A discount agreement may also include a provision that (i) if the agreed-to rate would otherwise exceed
the applicable maximum rate, the excess will be kept track of by Transporter and charged Shipper at a
later time when the discount rate is below the applicable maximum rate, (ii) if Shipper agrees to pay
more than the discount rate in order not be interrupted, the additional amount paid will be kept track
of by Transporter and deducted from the discounted rate otherwise charged Shipper at a later time when
Shipper would not be interrupted, and (iii) to the extent Transporter makes a payment to Shipper (for
example, but not limited to contributions in aid of construction and refunds of net cash-out revenue),
Transporter may increase the discount rate otherwise charged Shipper at a later time. In all cases,
Shipper will not be charged a rate exceeding the applicable maximum rate or below the applicable
minimum rate.
A discount rate may apply:
(a) only to specified quantities under Shipper's Service Agreement(s);
(b) only if specified quantities are achieved with respect to quantities below or above a
specified level (with maximum rates applicable to volumes above specified quantities or to all
quantities if specified quantities are never achieved);
================================================================================
(c) only in a specified relationship to quantities actually transported (i.e., that the rates
shall be adjusted in a specified relationship to the quantities actually transported);
(d) only during specified periods of the year or over specifically-defined periods of time;
(e) only to specified Receipt Points or Delivery Points, markets, or other defined geographical
areas; and/or
(f) only to production reserves committed by Shipper for transportation by Transporter.
================================================================================
27. LIMITED SECTION 4 HURRICANE MITIGATION AND RELIABILITY ENHANCEMENT
SURCHARGE ("HMRE SURCHARGE")
27.1 PURPOSE AND APPLICABILITY - Transporter shall have the right to
seek recovery, through a limited Natural Gas Act Section 4 filing,
all capital costs and related operation and maintenance
expenditures, as defined in Section 27.2, made by Transporter in
connection with efforts to mitigate the cost of damage to
facilities caused by hurricanes (or other natural disasters
including but not limited to tornados, rogue waves, erosion and
mudslides (hereinafter, "Natural Disasters")), to maintain system
reliability during and immediately after hurricanes (or other
Natural Disasters), to repair and remediate facilities damaged by
hurricanes (or other Natural Disasters) and to enhance overall
system reliability. The HMRE Surcharge shall be collected through
a volumetric surcharge applicable to all transportation service
provided pursuant to Transporter's Rate Schedules FT-1, FT-2 and
IT (and any other transportation service provided by Transporter)
through the Mainline Facilities. The HMRE Surcharge shall apply
to, and be paid in addition to, the rates applicable to such
transportation service qualifying for any rate discount or
provided under any negotiated rate agreement.
27.2 DEFINITION OF QUALIFYING EXPENDITURES - Capital expenditures and
operation and maintenance expenditures ("Qualifying HMRE
Expenditures") that qualify for inclusion in the HMRE Surcharge
shall include:
a. Property damage insurance purchase costs in excess of
$509,575;
b. Deductible (uncovered) amounts on any such property damage
insurance claim;
c. Smart pigging operations and related pipeline modifications
(including but not limited to cleaning and sizing pigs; the
installation and use of pig launchers and receivers not
already installed at certain points along the System; the
removal of any restrictions or obstructions that would
impede the pig, such as the installation or removal of
certain valves, dents or bends in the pipeline; any digs
necessary to analyze anomaly readings and backfills; and any
repair or replacements required);
================================================================================
d. Construction modifications and repairs of pipeline shore
approaches, levee crossings and other water/land interfaces
including pipeline modifications, burials and matting
(including but not limited to the removal of restrictions or
obstructions; recoating, repairing, relocating or replacing
lines of pipe or equipment; improvements of fencing and
physical barriers; engineering support; and activities
required by governmental agencies with jurisdictional
authority over facilities or activities of the System and
rights-of-way); and
e. Post-hurricane (or Natural Disaster) inspections not covered
by insurance (including but not limited to inspections from
helicopters, remote-operated vehicles and dive boats; sonar
surveys and hydrostatic testing or other assessments;
engineering support; and additional inspections required by
governmental agencies with jurisdictional authority over
portions or activities of the System and rights-of-way).
27.3 EFFECTIVE DATE AND FILING OF HMRE SURCHARGE -
a. The effective HMRE Surcharge shall be shown on Transporter's
Tariff Sheet No. 20. The effective date of each HMRE
Surcharge shall be January 1 of each year.
b. Subsequent to the initial filing implementing Transporter's
HMRE Surcharge, Transporter shall file with the Commission
(at least thirty (30) days prior to the effective date of
the new HMRE Surcharge but no later than November 15) and
post, as defined by Section 154.2(d) of the Commission's
Regulations, the HMRE Surcharge with supporting
documentation. With respect to the adjustment described
herein, such filing shall be in lieu of any other rate
change filing required by the Commission's Regulations
under the Natural Gas Act and shall not be suspended beyond
the next December 31. With each such filing, Transporter
shall include a detailed written description of all
Qualifying HMRE Expenditures in its filing (except for any
expenditure carried forward from a prior filing), with an
explanation of how each such expenditure qualifies for
inclusion in the HMRE Surcharge in accordance with Sections
27.1 and 27.2 above. Subject to approval by the Commission,
Transporter may seek confidential treatment of any portion
of the filing.
================================================================================
c. Shippers shall have the right to challenge Transporter's
HMRE Surcharge filings only with respect to: (1) whether
the expenditures included are Qualifying HMRE Expenditures;
(2) whether the Qualifying HMRE Expenditures were prudently
incurred; and (3) whether the HMRE Surcharge is properly
calculated.
27.4 CALCULATION OF THE HMRE SURCHARGE -
a. Transporter shall establish and maintain an HMRE Deferred
Cost Account with its initial balance equal to the sum of
the Qualifying HMRE Expenditures for the twelve-month
period ending September 30, 2007. For each billing month
thereafter and to ensure a true-up of the Qualifying HMRE
Expenditures, the HMRE Deferred Cost Account shall be (1)
debited by the actual Qualifying HMRE Expenditures incurred
after September 30, 2007, (2) credited by the HMRE
Surcharge amounts collected by Transporter, and (3) debited
or credited, as appropriate, by the carrying charges on the
balance in the HMRE Deferred Cost Account, calculated in
accord with Section 154.501 of the Commission's
Regulations.
b. Any capital costs that are Qualifying HMRE Expenditures
shall be recovered as expenses through the HMRE Deferred
Cost Account without any associated return (other than
carrying charges as provided for in Section 27.4.a above),
depreciation or taxes.
c. The subsequent HMRE Surcharges, to be effective January 1
of each year, shall equal (1) the balance in the HMRE
Deferred Cost Account (including carrying charges) as of
the prior September 30, divided by (2) projected
transportation throughput on Transporter's Mainline
Facilities for the period January 1 through December 31.
d. The HMRE Surcharge shall not exceed $0.05 per Dt. However,
the $0.05 per Dt cap will not serve to limit the recovery
of any Qualifying HMRE Expenditures credited to the HMRE
Deferred Cost Account.
================================================================================
28. [Reserved for Future Use]
29. NEGOTIATED RATES
Transporter and Shipper may mutually agree on a Negotiated Rate
(including but not limited to surcharges, credits or refunds or return
of refunds or credits).
29.1 CAPACITY RELEASE
The Capacity Release provisions contained within this FERC Gas Tariff
shall not apply to a Shipper receiving firm transportation service with
a Negotiated Rate that does not include a reservation rate.
29.2 RECORD KEEPING
Transporter will maintain separate records of Negotiated Rate
transactions for each billing period. These records shall include the
quantities transported, the billing determinants, the rates charged and
the revenue received associated with such transactions. Transporter will
separately identify such transactions in Statement G, I and J (or their
equivalent) filed in any general rate proceeding.
29.3 FILING REQUIREMENT
Transporter will file no later than the Business Day service commences
under a Negotiated Rate Service Agreement, or if the day on which
service commences is not a Business Day, then no later than the next
Business Day after service commences, a tariff sheet reflecting the
shipper's exact legal name, applicable rate schedule, Negotiated Rate or
underlying formula, the term of the Negotiated Rate Service Agreement,
quantities to be transported, primary points of receipt and delivery to
which Negotiated Rate applies and other terms or consideration. Unless
expressly noted, Negotiated Rate Service Agreements will not deviate in
any material respect from the form of Service Agreements.
================================================================================
29.4 EFFECT OF NEGOTIATED RATE
By agreeing to a Negotiated Rate, Shipper acknowledges that the
otherwise generally applicable maximum recourse rate shall not apply or
be available to Shipper for service under the applicable Service
Agreement during the period for which the Negotiated Rate is effective,
notwithstanding any adjustment to such generally applicable maximum
recourse rate which may become effective during the period for which
the Negotiated Rate is effective. If, at any time during the period for
which the Negotiated Rate is effective, Transporter is collecting its
effective maximum recourse rate subject to refund under Section 4 of
the Natural Gas Act, Transporter shall have no refund obligation to
Shipper even if the final maximum recourse rate is reduced to a level
below the Negotiated Rate.
29.5 LIMITATIONS
This Section 29 does not authorize the negotiation of terms and
conditions of service.
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-1 RATE SCHEDULE
THIS AGREEMENT is made this ____ day of __________, ____, between
Discovery Gas Transmission LLC, a Delaware limited liability company,
hereinafter referred to as "Transporter", and _________________________, a
__________________________, hereinafter referred to as "Shipper".
ARTICLE I
1. GAS TO BE TRANSPORTED
1.1 Subject to the terms and provisions of this Service Agreement and
Transporter's FT-1 Rate Schedule, Transporter agrees to accept such
quantities of Gas as Shipper may cause to be tendered to Transporter at:
(i) the Primary Receipt Point(s), designated pursuant to Subsection 2.1
of Article II, (ii) any Primary Receipt Point(s) for quantities in
excess of the MDQs for each Primary Receipt Point set forth in Exhibit A
on the same priority basis as an Alternate Receipt Point, or (iii) any
Alternate Receipt Point(s) nominated by Shipper, on any Day during the
term of this Service Agreement; provided, however, that Transporter
shall only be obligated to accept on any Day for Transportation
hereunder that quantity of Gas Transporter determines it has Available
Capacity to receive, transport, and deliver, and provided further that
in no event shall Transporter be obligated to transport Gas on any Day
in excess of the MDQs for any Primary Receipt Point or in excess of the
MDRQ-Mainline or MDRQ-Expansion, as appropriate, set forth in Exhibit B.
1.2 If on any Day Transporter should determine that the remaining
Transportation capacity of the Mainline Facilities or Expansion
Facilities, as appropriate, on its System, after it has transported Gas
for Shippers with superior rights to Transportation, is insufficient to
transport all
================================================================================
quantities of Gas under similar Transportation agreements entitled to
similar Transportation services, Transporter shall allocate the
available Transportation capacity on the basis set forth in Section 6 of
the General Terms and Conditions incorporated by reference in
Transporter's FT- 1 Rate Schedule.
1.3 Subject to the terms and provisions of this Service Agreement and
Transporter's FT-1 Rate Schedule, Transporter shall deliver for the
account of Shipper and Shipper shall accept at: (i) the Primary Delivery
Point(s) referenced in Subsection 2.2 of Article II, (ii) any Primary
Delivery Point(s) for quantities in excess of the MDQs for each Primary
Delivery Point set forth in Exhibit B on the same priority basis as an
Alternate Delivery Point, or (iii) any Alternate Delivery Point(s)
nominated by Shipper, an Equivalent Quantity of Gas, less appropriate
reductions for Fuel, Lost and Unaccounted for Gas, to the total quantity
of Gas received by Transporter for the account of Shipper at the Primary
and Alternate Receipt Point(s) for Transportation hereunder; provided,
however, that in no event shall Transporter be obligated to deliver Gas
on any Day in excess of the MDQs for any Primary Delivery Point set
forth in Exhibit B or in excess of Shipper's MDRQ-Mainline or MDRQ-
Expansion, as appropriate, set forth in Exhibit B.
ARTICLE II
2. RECEIPT POINT(S), DELIVERY POINT(S) AND PRESSURES
2.1 The Primary Receipt Point(s) at which Shipper shall cause Gas to be
tendered to Transporter for Transportation hereunder are described in
Exhibit A to this Service Agreement. Other pertinent factors applicable
to the Primary Receipt Point(s) are also set forth in Exhibit A.
Alternate Receipt Point(s), at which Shipper may cause Gas to be
tendered to Transporter for Transportation hereunder, shall include all
Receipt Points along the Mainline Facilities or Expansion Facilities, as
appropriate, of Transporter's System, subject to the availability of
capacity at such Receipt Points.
================================================================================
2.2 The Primary Delivery Point(s) at which Transporter shall deliver
Equivalent Quantities of Gas transported hereunder, after appropriate
reductions for Fuel, Lost and Unaccounted for Gas, are described in
Exhibit B to this Service Agreement. Other pertinent factors applicable
to the Primary Delivery Point(s) are also set forth in Exhibit B.
Alternate Delivery Point(s), at which Transporter may deliver Gas for
the account of Shipper, shall include all Delivery Points along the
Mainline Facilities or Expansion Facilities, as appropriate, of
Transporter's System, subject to the availability of capacity at such
Delivery Points.
2.3 Shipper shall cause Gas to be delivered to Transporter at Receipt
Point(s) at a pressure sufficient to allow the Gas to enter
Transporter's System as such pressure may vary from time to time and
place to place. Transporter shall not be required to compress Gas in
order to receive Gas into the Mainline Facilities or Expansion
Facilities, as appropriate, of its System.
2.4 Transporter shall deliver Gas at each Delivery Point for the account of
Shipper at the pressure which shall be available from time to time in
the Mainline Facilities or Expansion Facilities, as appropriate, of
Transporter's System.
ARTICLE III
3. RATE(S), FT-1 RATE SCHEDULE AND GENERAL TERMS AND CONDITIONS
3.1 Unless Shipper and Transporter have agreed to a Negotiated Rate as set
forth in Exhibit D, Shipper shall pay Transporter for services rendered
hereunder in accordance with Transporter's FT-1 Rate Schedule, or
superseding rate schedule(s), on file with and subject to the
jurisdiction of the Commission and lawfully in effect from time to time.
The following are the charges set forth in such FT-1 Rate Schedule which
apply to service rendered under this Service Agreement:
(List applicable charges by reference to Section 3 of FT-1 Rate
Schedule)
================================================================================
3.2 Transporter shall have the right, from time to time, to file and to seek
Commission approval, pursuant to Section 4 of the Natural Gas Act, or
other relevant authority to change any rates, charges or provisions set
forth in its FT-1 Rate Schedule or its General Terms and Conditions.
Transporter shall place such changes in effect in accordance with
Section 4(c) of the Natural Gas Act and this Service Agreement shall be
deemed to include such changes which become effective by operation of
law or by Commission order, without prejudice to Shipper's right to
protest the same.
3.3 This Service Agreement in all respects is subject to the provisions of
Transporter's FT-1 Rate Schedule, or superseding rate schedule(s), and
applicable provisions of the General Terms and Conditions included by
reference in such FT-1 Rate Schedule filed by Transporter with the
Commission, all of which are by reference made a part hereof.
3.4 Any changes or additions to this Service Agreement are set forth in
Exhibit C.
ARTICLE IV
4. REGULATORY REQUIREMENTS AND CONDITIONS PRECEDENT
4.1 The Transportation arrangements provided for in this Service Agreement
are subject to the provisions of Part 284 of the Commission's
regulations, as amended from time to time.
4.2 Transportation of Gas provided for under the terms and provisions of
this Service Agreement shall not commence until the following conditions
have been met:
a. Any construction, acquisition, or expansion of facilities
necessary to commence Transportation has been completed;
================================================================================
b. Any certificate or regulatory authorization for the use of
facilities necessary to commence Transportation has been obtained;
c. Any force majeure event preventing Transporter from performing its
obligations under this Service Agreement has been remedied; and
d. Shipper satisfies Transporter's creditworthiness criteria in
accordance with Section 10 of the General Terms and Conditions of
Transporter's FERC Gas Tariff.
ARTICLE V
5. TERM
5.1 This Service Agreement shall be effective ______________.
5.2 After this Service Agreement becomes effective, it shall continue in
full force and effect until ________________.
ARTICLE VI
6. CANCELLATION OF PRIOR CONTRACTS
6.1 When this Service Agreement becomes effective, it supersedes and cancels
as of the effective date hereof the following Service Agreements between
the parties hereto for the Transportation of Gas by Transporter for
Shipper:
_________________________
_________________________
================================================================================
ARTICLE VII
7. NOTICES
7.1 Any formal notice, request or demand that either party gives to the
other regarding this Service Agreement shall be in writing and shall be
mailed by first class, registered or certified mail, or be delivered in
hand, to the following address of the other party:
Transporter: Discovery Gas Transmission LLC
______________________________
______________________________
______________________________
Shipper: ______________________________
______________________________
______________________________
______________________________
or to such other address as either party may designate by formal written
notice. Routine communications may be sent by ordinary mail or by
facsimile. Operational communications by telephone, facsimile or other
mutually agreeable means will be considered as duly delivered without
further written confirmation, unless specifically required otherwise by
Transporter's FERC Gas Tariff.
7.2 Written nominations to schedule Transportation service hereunder shall
be directed to Transporter's gas control department at the following
facsimile number:
Discovery Gas Transmission LLC
Gas Control Dispatching Department
Telephone No.: ___________________
Facsimile No.: ___________________
================================================================================
7.3 Electronic transfer payments to Transporter shall be accompanied with
the instructions "To Credit the Account of Discovery Gas Transmission
LLC" and shall be sent to the following bank and account number:
(This Subsection 7.3 is to be completed indicating the Bank Name, Bank
Address and Account Number)
7.4 Remittance detail supporting electronic transfer payments to Transporter
and any notice, request or demand regarding statements, bills or
payments shall be mailed to the following address:
Discovery Gas Transmission LLC
______________________________
______________________________
______________________________
______________________________
ARTICLE VIII
8. MISCELLANEOUS
8.1 Transporter and Shipper expressly agree that the laws of the State of
Louisiana shall govern the validity, construction, interpretation and
effect of this Service Agreement and of the General Terms and Conditions
incorporated by reference in Transporter's FT-1 Rate Schedule.
8.2 Unless otherwise provided by the terms of a separate written agreement,
all substances, whether or not of commercial value, including all liquid
hydrocarbons or Condensates of whatever nature, that Transporter
recovers in the course of transporting the quantities of Gas
================================================================================
tendered hereunder by Shipper shall be Transporter's sole property and
Transporter shall not be obligated to account to Shipper for any value,
whether or not realized by Transporter, that may attach or be said to
attach to such substances.
8.3 Exhibits A, B, C and D attached to this Service Agreement, are hereby
incorporated by reference as part of this Service Agreement. The
parties may amend Exhibits A, B, C and D by mutual agreement, which
amendments shall be reflected in a revised Exhibit A, B, C or D and
shall be incorporated by reference as part of this Service Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Service
Agreement in duplicate originals on the Day and Year first written
above.
Discovery Gas Transmission LLC
By: _______________________
(Name)
Title: _______________________
______________________________
(Shipper)
By: _______________________
(Name)
Title: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-1 RATE SCHEDULE
EXHIBIT A
To The FT-1
Transportation Service Agreement
Dated _________________
Between Discovery Gas Transmission LLC
And ___________________
Receipt Maximum
Pressure(s) Daily Quantity
Primary Receipt Points (PSIG)* (Dt)** (%)
Mainline
Texas Eastern __________ _______________ _____
________________________ __________ _______________ _____
________________________ __________ _______________ _____
Expansion
Larose Processing Plant __________ _______________ _____
_________________________ __________ _______________ _____
_________________________ __________ _______________ _____
*Necessary pressure to receive Gas into the Mainline Facilities or Expansion
Facilities, as appropriate, of Transporter's System, not in excess of.
**Discovery's obligation to deliver Gas on the Mainline Facilities or receive
Gas on the Expansion Facilities for a Shipper is net of any shrinkage of the
Shipper's Gas as a result of the processing performed on the Gas prior to its
delivery by Discovery.
Effective Date of this Exhibit A: _____________________
Supersedes Exhibit A Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _________________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-1 RATE SCHEDULE
EXHIBIT B
To The FT-1
Transportation Service Agreement
Dated ________________
Between Discovery Gas Transmission LLC
And __________________
Delivery Maximum
Pressure(s) Daily Quantity
Primary Delivery Points (PSIG)* (Dt)** (%)
Mainline
Texas Eastern __________ __________ _____
Bridgeline __________ __________ _____
Gulf South __________ __________ _____
Larose Processing Plant __________ __________ _____
____________________ __________ __________ _____
Expansion
Columbia Gulf __________ __________ _____
Tennessee __________ __________ _____
Transco *** __________ __________ _____
____________________ __________ __________ _____
Shipper's Maximum Daily Reservation Quantity (MDRQ-Mainline): _______
*Necessary pressure to deliver Gas from the Mainline Facilities or Expansion
Facilities, as appropriate, on Transporter's System, not in excess of.
**Discovery's obligation to deliver Gas on the Mainline Facilities for a
Shipper is net of any shrinkage of the Shipper's Gas as a result of the
processing performed on the Gas prior to its delivery by Discovery.
***Subject to Transporter's lease of capacity from Texas Eastern
Transmission, LP
Effective Date of this Exhibit B: _____________________
Supersedes Exhibit B Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: ____________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-1 RATE SCHEDULE
EXHIBIT C
To The FT-1
Transportation Service Agreement
Dated _______________
Between Discovery Gas Transmission LLC
And _________________
Other Operating Provisions
Additional or Substitute Provisions
Effective Date of this Exhibit C: _____________________
Supersedes Exhibit C Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-1 RATE SCHEDULE
EXHIBIT D
To The FT-1
Transportation Service Agreement
Dated _______________
Between Discovery Gas Transmission LLC
And _________________
Negotiated Rate
Effective Period
Effective Date of this Exhibit D: _____________________
Supersedes Exhibit D Effective: _____________________
_____________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
Sheet Nos. 212 through 219 are reserved for future use.
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
THIS AGREEMENT is made this ____ day of __________, ____, between
Discovery Gas Transmission LLC, a Delaware limited liability company,
hereinafter referred to as "Transporter", and ___________________________, a
__________________________, hereinafter referred to as "Shipper".
ARTICLE I
1. GAS TO BE TRANSPORTED
1.1 Subject to the terms and provisions of this Service Agreement and
Transporter's FT-2 Rate Schedule, Transporter agrees to accept such
quantities of Gas as Shipper may cause to be tendered to Transporter at:
(i) the Primary Receipt Point(s), designated pursuant to Subsection 2.1
of Article II, or (ii) any Primary Receipt Point(s) for quantities in
excess of the MDQs for each Primary Receipt Point set forth in Exhibit A
on the same priority basis as an Alternate Receipt Point on any Day
during the term of this Service Agreement; provided, however, that
Transporter shall only be obligated to accept on any Day for
Transportation hereunder that quantity of Gas Transporter determines it
has Available Capacity to receive, transport, and deliver and provided
further that in no event shall Transporter be obligated to transport Gas
on any Day in excess of the MDQs for any Primary Receipt Point or in
excess of the MDVQ-Mainline or MDVQ-Expansion set forth in Exhibit B.
1.2 If on any Day Transporter should determine that the remaining
Transportation capacity of the Mainline Facilities or Expansion
Facilities, as appropriate, on its System, after it has transported Gas
for Shippers with superior rights to Transportation, is insufficient to
transport all quantities of Gas under similar Transportation agreements
================================================================================
entitled to similar Transportation services, Transporter shall allocate
the Available Capacity on the basis set forth in Section 6 of the
General Terms and Conditions incorporated by reference in Transporter's
FT-2 Rate Schedule.
1.3 Subject to the terms and provisions of this Service Agreement and
Transporter's FT-2 Rate Schedule, Transporter shall deliver for the
account of Shipper and Shipper shall accept at: (i) the Primary Delivery
Point(s) referenced in Subsection 2.2 of Article II, (ii) any Primary
Delivery Point(s) for quantities in excess of the Maximum Daily
Quantities for each Primary Delivery Point set forth in Exhibit B on the
same priority basis as an Alternate Delivery Point, or (iii) any
Alternate Delivery Point(s) nominated by Shipper, an Equivalent Quantity
of Gas, less appropriate reductions for Fuel, Lost and Unaccounted for
Gas, to the total quantity of Gas received by Transporter for the
account of Shipper at the Primary Receipt Point(s) for Transportation
hereunder; provided, however, that in no event shall Transporter be
obligated to deliver Gas on any Day in excess of the MDQs for any
Primary Delivery Point set forth in Exhibit B or in excess of Shipper's
MDVQ-Mainline or MDVQ-Expansion set forth in Exhibit B.
ARTICLE II
2. RECEIPT POINT(S), DELIVERY POINT(S) AND PRESSURES
2.1 The Primary Receipt Point(s) at which Shipper shall cause Gas to be
tendered to Transporter for Transportation hereunder are described in
Exhibit A to this Service Agreement. Other pertinent factors applicable
to the Primary Receipt Point(s) are also set forth in Exhibit A.
2.2 The Primary Delivery Point(s) at which Transporter shall deliver
Equivalent Quantities of Gas transported hereunder, after appropriate
reductions for Fuel, Lost and Unaccounted for Gas, are described in
Exhibit B to this
================================================================================
Service Agreement. Other pertinent factors applicable to the Primary
Delivery Point(s) are also set forth in Exhibit B. Alternate Delivery
Point(s), at which Transporter may deliver Gas for the account of
Shipper, shall include all Delivery Points located on the Mainline
Facilities or the Expansion Facilities, as the case may be, subject to
the availability of firm capacity to such Delivery Points and Shipper's
MDVQ-Mainline or MDVQ-Expansion, respectively.
2.3 Shipper shall cause Gas to be delivered to Transporter at Receipt
Point(s) at a pressure sufficient to allow the Gas to enter the Mainline
Facilities or Expansion Facilities, as appropriate, on Transporter's
System as such pressure may vary from time to time and place to place.
Transporter shall not be required to compress Gas in order to receive
Gas into its System.
2.4 Transporter shall deliver Gas at each Delivery Point for the account of
Shipper at the pressure which shall be available from time to time in
the Mainline Facilities or Expansion Facilities, as appropriate, on
Transporter's System.
ARTICLE III
3. RATE(S), FT-2 RATE SCHEDULE AND GENERAL TERMS AND CONDITIONS
3.1 Unless Shipper and Transporter have agreed to a Negotiated Rate as set
forth in Exhibit E, Shipper shall pay Transporter for services rendered
hereunder in accordance with Transporter's FT-2 Rate Schedule, or
superseding Rate Schedule(s), on file with and subject to the
jurisdiction of the Commission and lawfully in effect from time to time.
The following are the charges set forth in such FT-2 Rate Schedule which
apply to service rendered under this Service Agreement:
(List applicable charges by reference to Section 3 of FT-2 Rate
Schedule)
3.2 Transporter shall have the right, from time to time, to file and to seek
Commission approval, pursuant to Section 4 of the Natural Gas Act or
other relevant authority, to change any rates, charges or provisions set
forth in its
================================================================================
FT-2 Rate Schedule or its General Terms and Conditions. Transporter
shall place such changes in effect in accordance with Section 4(c) of
the Natural Gas Act and this Service Agreement shall be deemed to
include such changes which become effective by operation of law or by
Commission Order, without prejudice to Shipper's right to protest same.
3.3 This Service Agreement in all respects is subject to the provisions of
Transporter's FT-2 Rate Schedule, or superseding Rate Schedule(s), and
applicable provisions of the General Terms and Conditions included by
reference in such FT-2 Rate Schedule filed by Transporter with the
Commission, all of which are by reference made a part hereof.
3.4 Any changes or additions to this Service Agreement are set forth in
Exhibit C.
3.5 Total Committed Production to this Service Agreement is set forth in
Exhibit D.
ARTICLE IV
4. REGULATORY REQUIREMENTS AND CONDITIONS PRECEDENT
The Transportation arrangements provided for in this Service Agreement
are subject to the provisions of Part 284 of the Commission's
regulations, as amended from time to time.
4.2 Transportation of Gas provided for under the terms and provisions of
this Service Agreement shall not commence until the following conditions
have been met:
a. Any construction, acquisition, or expansion of facilities
necessary to commence Transportation has been completed;
b. Any certificate or regulatory authorization for the use of
facilities necessary to commence Transportation has been obtained;
================================================================================
c. Any force majeure event preventing Transporter from performing its
obligations under this Service Agreement has been remedied; and
d. Shipper satisfies the creditworthiness criteria in accordance with
Section 10 of the General Terms and Conditions of Transporter's
FERC Gas Tariff.
ARTICLE V
5. TERM
5.1 This Service Agreement shall be effective ______________.
5.2 After this Service Agreement becomes effective, it shall continue in
full force and effect until ________________.
ARTICLE VI
6. CANCELLATION OF PRIOR CONTRACTS
6.1 When this Service Agreement becomes effective, it supersedes and cancels
as of the effective date hereof the following Service Agreements between
the parties hereto for the Transportation of Gas by Transporter for
Shipper:
_______________________
_______________________
================================================================================
Sheet No. 224A is reserved for future use.
================================================================================
ARTICLE VII
7. NOTICES
7.1 Any formal notice, request or demand that either party gives to the
other regarding this Service Agreement shall be in writing and shall be
mailed by first class, registered or certified mail, or delivered in
hand to the following address of the other party:
Transporter: Discovery Gas Transmission LLC
________________________________
________________________________
________________________________
Shipper: ________________________________
________________________________
________________________________
________________________________
or to such other address as either party shall designate by formal
written notice. Routine communications may be mailed by ordinary mail
or sent by facsimile. Operational communications by telephone,
facsimile or other mutually agreeable means shall be considered as duly
delivered without further written confirmation, unless specifically
required otherwise by Transporter's FERC Gas Tariff.
7.2 Written nominations to schedule Transportation service hereunder shall
be directed to Transporter's gas control department at the following
facsimile number:
================================================================================
Discovery Gas Transmission LLC
Gas Control Dispatching Department
Telephone No.: ___________________
Facsimile No.: ___________________
7.3 Electronic transfer payments to Transporter shall be accompanied with
the instructions "To Credit the Account of Discovery Gas Transmission
LLC" and shall be sent to the following bank and account number:
(This Subsection 7.3 is to be completed indicating the Bank Name, Bank
Address and Account Number)
7.4 Remittance detail supporting electronic transfer payments to Transporter
and any notice, request or demand regarding statements, bills or
payments shall be mailed to the following address:
Discovery Gas Transmission LLC
______________________________
______________________________
______________________________
ARTICLE VIII
8. MISCELLANEOUS
8.1 Transporter and Shipper expressly agree that the laws of the State of
Louisiana shall govern the validity, construction, interpretation and
effect of this Service Agreement and of the General Terms and Conditions
incorporated by reference in Transporter's FT-2 Rate Schedule.
================================================================================
8.2 Unless otherwise provided by the terms of a separate written agreement,
all substances, whether or not of commercial value, including all liquid
hydrocarbons or Condensates, of whatever nature, that Transporter
recovers in the course of transporting the quantities of Gas tendered
hereunder by Shipper shall be Transporter's sole property and
Transporter shall not be obligated to account to Shipper for any value,
whether or not realized by Transporter, that may attach or be said to
attach to such substances.
8.3 Exhibits A, B, C, D and E attached to this Service Agreement, are hereby
incorporated by reference as part of this Service Agreement. The
parties may amend Exhibits A, B, C, D and E by mutual agreement, which
amendments shall be reflected in a revised Exhibit A, B, C, D or E and
shall be incorporated by reference as part of this Service Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Service
Agreement in duplicate originals on the Day and Year first written
above.
Discovery Gas Transmission LLC
By: ______________________
(Name)
Title: _______________________
_____________________________
(Shipper)
By: _______________________
(Name)
Title: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
EXHIBIT A
To The FT-2
Transportation Service Agreement
Dated _________________
Between Discovery Gas Transmission LLC
And ___________________
Receipt Maximum
Pressure(s) Daily Quantity
Primary Receipt Points (PSIG)* (Dt)** (%)
Mainline
Texas Eastern __________ _______________ _____
_________________________ __________ _______________ _____
_________________________ __________ _______________ _____
Expansion
Larose Processing Plant __________ _______________ _____
_________________________ __________ _______________ _____
_________________________ __________ _______________ _____
*Necessary pressure to receive Gas into the Mainline Facilities or Expansion
Facilities, as appropriate, on Transporter's System, not in excess of.
**Discovery's obligation to deliver Gas on the Mainline Facilities or receive
Gas on the Expansion Facilities for a Shipper is net of any shrinkage of the
Shipper's Gas as a result of the processing performed on the Gas prior to its
delivery or receipt by Discovery.
Effective Date of this Exhibit A: _____________________
Supersedes Exhibit A Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
EXHIBIT B
To The FT-2
Transportation Service Agreement
Dated ________________
Between Discovery Gas Transmission LLC
And __________________
Delivery Maximum
Pressure(s) Daily Volume
(PSIG)* Quantity-Mainline** (%)
Primary Delivery Points
Mainline
Texas Eastern __________ __________ ____
Bridgeline __________ __________ ____
Gulf South __________ __________ ____
Larose Processing Plant __________ __________ ____
_______________________ __________ __________ ____
_______________________ __________ __________ ____
Delivery Maximum
Pressure(s) Daily Volume
(PSIG)* Quantity-Expansion** (%)
Expansion
Columbia Gulf __________ __________ ____
Tennessee __________ __________ ____
Transco*** __________ __________ ____
_______________________ __________ __________ ____
_______________________ __________ __________ ____
Shipper's Maximum Daily Volumetric Quantity (MDVQ-Mainline): __________
Shipper's Maximum Daily Volumetric Quantity (MDVQ-Expansion): __________
* Necessary pressure to deliver Gas from the Mainline Facilities or Expansion
Facilities, as appropriate, on Transporter's System, not in excess of.
** Discovery's obligation to deliver Gas on the Mainline Facilities or receive
Gas on the Expansion Facilities for a Shipper is net of any shrinkage of the
Shipper's Gas as a result of the processing performed on the Gas prior to its
delivery or receipt by Discovery.
*** Subject to Transporter's lease of capacity from Texas Eastern
Transmission, LP.
================================================================================
FORM OF SEVICE AGREEMENT
APPICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
EXHIBIT B (Continued)
Effective Date of this Exhibit B: _______________
Supersedes Exhibit B Effective: _______________
_______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _________________________ By: ________________________
(Name) (Name)
Title: _______________________ Title: ______________________
Date: ________________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
EXHIBIT C
To The FT-2
Transportation Service Agreement
Dated _______________
Between Discovery Gas Transmission LLC
And _________________
Other Operating Provisions
Additional or Substitute Provisions
Effective Date of this Exhibit C: _____________________
Supersedes Exhibit C Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
EXHIBIT D
To The FT-2
Transportation Service Agreement
Dated _______________
Between Discovery Gas Transmission LLC
And _________________
Committed Production:
_________________
_________________
_________________
_________________
Effective Date of this Exhibit D: _____________________
Supersedes Exhibit D Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO FIRM TRANSPORTATION
SERVICE UNDER FT-2 RATE SCHEDULE
EXHIBIT E
To The FT-2
Transportation Service Agreement
Dated _______________
Between Discovery Gas Transmission LLC
And _________________
Negotiated Rate
Effective Period
Effective Date of this Exhibit E: _____________________
Supersedes Exhibit E Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
Sheet Nos. 233 through 239 are reserved for future use.
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO INTERRUPTIBLE TRANSPORTATION
SERVICE UNDER IT RATE SCHEDULE
THIS AGREEMENT is made this ____ day of __________, ____, between
Discovery Gas Transmission LLC, a Delaware limited liability company,
hereinafter referred to as "Transporter", and ________________________, a
_____________________________, ereinafter referred to as "Shipper."
ARTICLE I
1. GAS TO BE TRANSPORTED
1.1 Subject to the terms and provisions of this Service Agreement and
Transporter's IT Rate Schedule, Transporter agrees to accept such
quantities of Gas as Shipper may cause to be tendered to Transporter at
the Receipt Point(s), designated pursuant to Subsection 2.1 of Article
II, on any Day during the term of this Service Agreement; provided,
however, that Transporter shall only be obligated to accept on any Day
for Transportation hereunder that quantity of Gas Transporter determines
it has Available Capacity to receive, transport, and deliver and
provided further that in no event shall Transporter be obligated to
accept Gas on any Day in excess of the MDTQ-Mainline or MDTQ-Expansion
set forth in Exhibit B.
1.2 If on any Day Transporter should determine that the remaining
Transportation capacity on the Mainline Facilities or Expansion
Facilities, as appropriate, of its System, after it has transported Gas
for Shippers with superior rights to Transportation, is insufficient to
transport all quantities of Gas under similar Transportation agreements
entitled to similar Transportation services, Transporter shall allocate
the Available Capacity on the basis set forth in Section 6 of the
General Terms and Conditions incorporated by reference in Transporter's
IT Rate Schedule.
================================================================================
1.3 Subject to the terms and provisions of this Service Agreement and
Transporter's IT Rate Schedule, Transporter shall deliver for the
account of Shipper and Shipper shall accept at the Delivery Point(s)
referenced in Subsection 2.2 of Article II, an Equivalent Quantity of
Gas, less appropriate reductions for Fuel, Lost and Unaccounted for Gas,
to the quantity of Gas received by Transporter from Shipper at the
Receipt Points(s) for Transportation hereunder; provided, however, that
in no event shall Transporter be obligated to deliver Gas on any Day in
excess of the MDTQ-Mainline or MDTQ-Expansion set forth in Exhibit B.
ARTICLE II
2. RECEIPT POINT(S), DELIVERY POINT(S) AND PRESSURES
2.1 The Receipt Point(s) at which Shipper shall cause Gas to be tendered to
Transporter for Transportation hereunder are described in Exhibit A to
this Service Agreement. Other pertinent factors applicable to the
Receipt Point(s) are also set forth in Exhibit A.
2.2 The Delivery Point(s) at which Transporter shall deliver Equivalent
Quantities of Gas transported hereunder, after appropriate reductions
for Fuel, Lost and Unaccounted for Gas, are described in Exhibit B to
this Service Agreement. Other pertinent factors applicable to the
Delivery Point(s) are also set forth in Exhibit B.
2.3 Shipper shall cause Gas to be delivered to Transporter at Receipt
Point(s) at a pressure sufficient to allow the Gas to enter the Mainline
Facilities or Expansion Facilities, as appropriate, on Transporter's
System as such pressure may vary from time to time and place to place.
Transporter shall not be required to compress Gas in order to receive
Gas into the Mainline Facilities or Expansion Facilities, as
appropriate, of its System.
2.4 Transporter shall deliver Gas at each Delivery Point for the account of
Shipper at the pressure which shall be available from time to time in
the Mainline Facilities or Expansion Facilities, as appropriate, on
Transporter's System.
================================================================================
ARTICLE III
3. RATE(S), IT RATE SCHEDULE AND GENERAL TERMS AND CONDITIONS
3.1 Unless Shipper and Transporter have agreed to a Negotiated Rate as set
forth in Exhibit D, Shipper shall pay Transporter for services rendered
hereunder in accordance with Transporter's IT Rate Schedule, or
superseding rate schedule(s), on file with and subject to the
jurisdiction of the Commission and lawfully in effect from time to time.
The following are the charges set forth in such IT Rate Schedule which
apply to service rendered under this Service Agreement:
(List applicable charges by reference to Section 3 of IT Rate Schedule)
3.2 Transporter shall have the right, from time to time, to file and to seek
Commission approval, pursuant to Section 4 of the Natural Gas Act or
other relevant authority, to change any rates, charges or provisions set
forth in its IT Rate Schedule or its General Terms and Conditions.
Transporter shall place such changes in effect in accordance with
Section 4(c) of the Natural Gas Act and this Service Agreement shall be
deemed to include such changes which become effective by operation of
law or by Commission Order, without prejudice to Shipper's right to
protest same.
3.3 This Service Agreement in all respects is subject to the provisions of
Transporter's IT Rate Schedule, or superseding rate schedule(s), and
applicable provisions of the General Terms and Conditions included by
reference in such IT Rate Schedule filed by Transporter with the
Commission, all of which are by reference made a part hereof.
3.4 Any changes or additions to this Service Agreement are set forth in
Exhibit C.
================================================================================
ARTICLE IV
4. REGULATORY REQUIREMENTS AND CONDITIONS PRECEDENT
4.1 The Transportation arrangements provided for in this Service Agreement
are subject to the provisions of Part 284 of the Commission's
regulations, as amended from time to time.
4.2 Transportation of Gas provided for under the terms and provisions of
this Service Agreement shall not commence until the following conditions
have been met:
a. Any construction, acquisition, or expansion of facilities
necessary to commence Transportation has been completed;
b. Any certificate or regulatory authorization for the use of
facilities necessary to commence Transportation has been obtained;
c. Any force majeure event preventing Transporter from performing its
obligations under this Service Agreement has been remedied; and
d. Shipper satisfies the creditworthiness criteria in accordance with
Section 10 of the General Terms and Conditions of Transporter's
FERC Gas Tariff.
ARTICLE V
5. TERM
5.1 This Service Agreement shall be effective ______________.
5.2 After this Service Agreement becomes effective, it shall continue in
full force and effect until ________________.
================================================================================
ARTICLE VI
6. CANCELLATION OF PRIOR CONTRACTS
6.1 When this Service Agreement becomes effective, it supersedes and cancels
as of the effective date hereof the following Service Agreements between
the parties hereto for the Transportation of Gas by Transporter for
Shipper:
_________________________
_________________________
ARTICLE VII
7. NOTICES
7.1 Any formal notice, request or demand that either party gives to the
other regarding this Service Agreement shall be in writing and shall be
mailed by first class, registered or certified mail, or be delivered in
hand to the following address of the other party:
Transporter: Discovery Gas Transmission LLC
________________________________
________________________________
________________________________
Shipper: ________________________________
________________________________
________________________________
________________________________
================================================================================
or to such other address either party shall designate by formal written
notice. Routine communications may be mailed by ordinary mail or be
sent by facsimile. Operational communications by telephone, facsimile
or other mutually agreeable means shall be considered as duly delivered
without further written confirmation unless otherwise specifically
required by Transporter's FERC Gas Tariff.
7.2 Written nominations to schedule Transportation service hereunder shall
be directed to Transporter's gas control department at the following
facsimile numbers:
Discovery Gas Transmission LLC
Gas Control Dispatching Department
Telephone No.: ___________________
Facsimile No.: ___________________
7.3 Electronic transfer payments to Transporter shall be accompanied with
the instructions "To Credit the Account of Discovery Gas Transmission
LLC" and shall be sent to the following bank and account number:
(This Subsection 7.3 is to be completed indicating the Bank Name, Bank
Address and Account Number)
7.4 Remittance detail supporting electronic transfer payments to Transporter
and any notice, request or demand regarding statements, bills or
payments shall be mailed to the following address:
Discovery Gas Transmission LLC
______________________________
______________________________
______________________________
================================================================================
ARTICLE VIII
8. MISCELLANEOUS
8.1 Transporter and Shipper expressly agree that the laws of the State of
Louisiana shall govern the validity, construction, interpretation and
effect of this Service Agreement and of the General Terms and Conditions
incorporated by reference in Transporter's IT Rate Schedule.
8.2 Unless otherwise provided in a separate written agreement, all
substances, whether or not of commercial value, including all liquid
hydrocarbons and Condensates of whatever nature, that Transporter
recovers in the course of transporting the quantities of Gas tendered
hereunder by Shipper shall be Transporter's sole property and
Transporter shall not be obligated to account to Shipper for any value,
whether or not realized by Transporter, that may attach or be said to
attach to such substances.
8.3 Exhibits A, B, C and D attached to this Service Agreement, are hereby
incorporated by reference as part of this Service Agreement. The
parties may amend Exhibits A, B, C and D by mutual agreement, which
amendments shall be reflected in a revised Exhibit A, B, C or D and
shall be incorporated by reference as part of this Service Agreement.
================================================================================
IN WITNESS WHEREOF, the parties hereto have executed this Service
Agreement in duplicate originals on the Day and Year first written above.
Discovery Gas Transmission LLC
By: _______________________
(Name)
Title: _______________________
______________________________
(Shipper)
By: _______________________
(Name)
Title: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO INTERRUPTIBLE TRANSPORTATION
SERVICE UNDER IT RATE SCHEDULE
EXHIBIT A
To The Interruptible
Transportation Service Agreement
Dated _________________
Between Discovery Gas Transmission LLC
And ___________________
Receipt Maximum
Pressure(s) Daily Quantity
Receipt Points (PSIG)* (Dt)** (%)
Mainline
Texas Eastern __________ _______________ _____
_________________________ __________ _______________ _____
_________________________ __________ _______________ _____
Expansion
Larose Processing Plant __________ _______________ _____
_________________________ __________ _______________ _____
_________________________ __________ _______________ _____
*Necessary pressure to receive Gas into the Mainline Facilities or Expansion
Facilities, as appropriate, on Transporter's System, not in excess of.
**Discovery's obligation to deliver Gas on the Mainline Facilities or receive
Gas on the Expansion Facilities for a Shipper is net of any shrinkage of the
Shipper's Gas as a result of the processing performed on the Gas prior to its
delivery or receipt by Discovery.
Effective Date of this Exhibit A: _____________________
Supersedes Exhibit A Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO INTERRUPTIBLE TRANSPORTATION
SERVICE UNDER IT RATE SCHEDULE
EXHIBIT B
To The Interruptible
Transportation Service Agreement
Dated _________________
Between Discovery Gas Transmission LLC
And ___________________
Delivery Maximum
Pressure(s) Daily Quantity
Delivery Points (PSIG)* (Dt)** (%)
Mainline
Texas Eastern __________ __________ ____
Bridgeline __________ __________ ____
Gulf South __________ __________ ____
Larose Processing Plant __________ __________ ____
______________________ __________ __________ ____
______________________ __________ __________ ____
Expansion
Columbia Gulf __________ __________ ____
Tennessee __________ __________ ____
Transco*** __________ __________ ____
______________________ __________ __________ ____
______________________ __________ __________ ____
Shipper's Maximum Daily Transportation Quantity (MDTQ-Mainline): _________
Shipper's Maximum Daily Transportation Quantity (MDTQ-Expansion): ________
*Necessary pressure to deliver Gas from the Mainline Facilities or Expansion
Facilities, as appropriate, on Transporter's System, not in excess of.
** Discovery's obligation to deliver Gas on the Mainline Facilities or receive
Gas on the Expansion Facilities for a Shipper is net of any shrinkage of the
Shipper's Gas as a result of the processing performed on the Gas prior to its
delivery or receipt by Discovery.
*** Subject to Transporter's lease of capacity from Texas Eastern
Transmission, LP.
================================================================================
FORM OF SEVICE AGREEMENT
APPICABLE TO INTERRUPTIBLE TRANSPORTATION
SERVICE UNDER IT RATE SCHEDULE
EXHIBIT B (Continued)
Effective Date of this Exhibit B: _______________
Supersedes Exhibit B Effective: _______________
_______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _________________________ By: ________________________
(Name) (Name)
Title: _______________________ Title: ______________________
Date: ________________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO INTERRUPTIBLE TRANSPORTATION
SERVICE UNDER IT RATE SCHEDULE
EXHIBIT C
To The Interruptible
Transportation Service Agreement
Dated ________________
Between Discovery Gas Transmission LLC
And __________________
Other Operating Provisions
Additional or Substitute Provisions
Effective Date of this Exhibit C: _____________________
Supersedes Exhibit C Effective: _____________________
______________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO INTERRUPTIBLE TRANSPORTATION
SERVICE UNDER IT RATE SCHEDULE
EXHIBIT D
To The Interruptible
Transportation Service Agreement
Dated ________________
Between Discovery Gas Transmission LLC
And __________________
Negotiated Rate
Effective Period
Effective Date of this Exhibit D: _____________________
Supersedes Exhibit D Effective: _____________________
___________________________ Discovery Gas Transmission LLC
(Shipper)
By: _______________________ By: _______________________
(Name) (Name)
Title: _______________________ Title: _______________________
Date: _______________________ Date: _______________________
================================================================================
Sheet Nos. 252 through 259 are reserved for future use.
================================================================================
FORM OF SERVICE AGREEMENT
FOR CAPACITY RELEASE TRANSACTIONS
This Agreement is made this ______ day of_________, ______, between
Discovery Gas Transmission LLC, a Delaware limited liability company,
hereinafter referred to as "Transporter", and ___________________________, a
__________ hereinafter referred to as "Replacement Shipper".
PURPOSE
The purpose of this Agreement is to set forth the terms and conditions
for prequalification as a bidder and Replacement Shipper under the provisions
of Transporter's capacity release program, as described in Section 11 of the
General Terms and Conditions of Transporter's FERC Gas Tariff, as it may be
amended from time to time. Prequalification will permit Replacement Shipper
to become an eligible bidder for Released Capacity posted on Transporter's
Internet web site (web site). Prequalification will further permit an
eligible bidder awarded capacity under the capacity release program to
nominate and receive Firm Transportation service as described in such award
upon the execution of a Confirmation Letter.
CONFIRMATION LETTER
Upon the award of capacity to Replacement Shipper under Transporter's
capacity release program, Transporter will provide Replacement Shipper a
Confirmation Letter incorporating the terms of an accepted bid for capacity.
Replacement Shipper shall execute and return the Confirmation Letter to
Transporter prior to or concurrently with Shipper's nomination using the
Released Capacity. Nominations must conform to Transporter's nomination
procedures. Transporter and Replacement Shipper agree that their respective
signatures on such Confirmation Letter transmitted by facsimile or other
similar technology will be deemed valid "signed writings". Upon execution,
Replacement Shipper will be permitted to nominate Transportation service on
the Mainline Facilities or Expansion Facilities, as appropriate, in accordance
with Transporter's FERC Gas Tariff coextensive with the rights acquired from
the Releasing Shipper.
================================================================================
CONDITIONS OF SERVICE
Firm Transportation service provided pursuant to an award of temporary
Firm Transportation service under Transporter's capacity release program is
subject to the terms and conditions of Transporter's FERC Gas Tariff,
including the General Terms and Conditions, the FT-1 Rate Schedule and rates,
and the FT-1 Service Agreement. Transporter has the unilateral right to file
revisions to these documents at any time and to implement such changes
pursuant to the regulations and orders of the appropriate regulatory
authority, and Replacement Shipper has the right to protest such filings.
Replacement Shipper must comply with Transporter's creditworthiness and
credit appraisal provisions in Subsections 10.5 and 10.6 of the General Terms
and Conditions prior to being placed on Transporter's approved list of
eligible bidders for Released Capacity. Failure to maintain compliance will
result in the removal of Replacement Shipper from the list of eligible bidders
until such time as Replacement Shipper is in compliance with the requirements
of these provisions. Further, service provided pursuant to an award of
Released Capacity is subject to suspension under the terms of Subsection 10.5
if Replacement Shipper fails to meet the requirements of Subsections 10.5 and
10.6.
TERM
This Service Agreement is effective as of the first date written above,
and will continue in effect for a period of one (1) Year, and Month to Month
thereafter until terminated. This Service Agreement may be terminated by
Transporter or Replacement Shipper at any time upon ten (10) Days' prior
written notice. However, termination will not relieve either party of the
obligation to perform the terms of this Service Agreement as to any
transactions that were commenced prior to termination.
================================================================================
NOTICES
Any formal notice, request, or demand that either party gives to the
other regarding this Service Agreement must be in writing and be mailed by
first class, registered or certified mail, or be delivered in hand, to the
following address of the other party, or to such other address as either may
designate by formal written notice. Routine communications may be mailed by
ordinary mail. Operational communications by telephone, facsimile, Internet
web site (web site), or other mutually agreeable means will be considered as
duly delivered without further written confirmation, unless specifically
required otherwise by Transporter's FERC Gas Tariff.
Transporter: Discovery Gas Transmission LLC
______________________________
______________________________
______________________________
Replacement Shipper: ______________________________
______________________________
______________________________
______________________________
Written nominations to schedule Transportation service hereunder shall
be directed to Transporter's Gas Control Department at the following facsimile
numbers:
Discovery Gas Transmission LLC
Gas Control Dispatching Department
Telephone No.: ___________________
Facsimile No.: ___________________
================================================================================
Electronic transfer payments to Transporter shall be accompanied with
the instructions "To Credit the Account of Discovery Gas Transmission LLC" and
shall be sent to the following bank and account number:
(This section is to be completed indicating the Bank Name, Bank Address
and Account Number)
Remittance detail supporting electronic transfer payments to Transporter
and any notice, request or demand regarding statements, bills or payments
shall be mailed to the following address:
Discovery Gas Transmission LLC
______________________________
______________________________
______________________________
MISCELLANEOUS
This Service Agreement in all respects is subject to the provisions of
Transporter's FT-1 Rate Schedule, or superseding rate schedule(s), and
applicable provisions of the General Terms and Conditions included by
reference in such FT-1 Rate Schedule filed by Transporter with the Commission,
all of which are by reference made a part hereof.
================================================================================
IN WITNESS WHEREOF, the parties hereto have executed this Service
Agreement in duplicate originals on the Day and Year first written above.
Discovery Gas Transmission LLC
By: _______________________
(Name)
Title: _______________________
______________________________
(Shipper)
By: _______________________
(Name)
Title: _______________________
================================================================================
FORM OF SERVICE AGREEMENT
APPLICABLE TO CAPACITY RELEASE TRANSACTIONS
CONFIRMATION LETTER
1. Shipper's Name: ________________________________________
2. Releasing Shipper's FT-1 Service Agreement Number: ______
3. Commencement Date: _________ Termination Date: _________
4. Reservation Quantity: ________ Dt/d
Maximum Daily
Reservation Quantity
(MDRQ-Mainline)
5. Primary Receipt Point(s): Dt
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
Maximum Daily
Reservation Quantity
(MDRQ-Mainline)
6. Primary Delivery Point(s): Dt
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
Maximum Daily
Reservation Quantity
(MDRQ-Expansion)
7. Primary Receipt Point(s): Dt
_
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
____________________ ____________________
_
================================================================================
Maximum Daily
Reservation Quantity
(MDRQ-Expansion)
8. Primary Delivery Point(s): Dt
______________________________ __________
______________________________ __________
______________________________ __________
9. Reservation Rate $ __________/Dt
Authorized Signature of Shipper:
___________________________________
Name: ____________________________
Title: ____________________________
Telephone: (_____) ________________
Facsimile: (_____) _______________
================================================================================
Sheet Nos. 266 through 269 are reserved for future use.
================================================================================
DISCOVERY GAS TRANSMISSION LLC
REQUEST FOR SERVICE
SHIPPER INFORMATION
1. Shipper's Name: _______________________________________
(legal name of signatory party)
State of Incorporation: _______________________________
(if applicable)
(Or) Other Legal Description: _________________________
(e.g., partnership)
Shipper is: (check one)
_____ LDC/Distributor _____ Intrastate Pipeline
_____ Producer_____ Interstate Pipeline
_____ End User_____ Marketer
_____ Other: __________________________________________
Is Shipper affiliated with Discovery Gas Transmission LLC
(Discovery)?
______ Yes ______ No
If yes, list type and extent of affiliation.
_______________________________________________________
2. Requesting Party's Name (if different from Shipper):
___________________________
Is Requesting Party affiliated with Discovery?
_____ Yes_____ No
If yes, list type and extent of affiliation.
_______________________________________________________
================================================================================
Is the supplier of Gas to be transported in any
transaction associated with this request affiliated with
Discovery?
______ Yes ______ No ______ Unknown
If yes, list the name of Gas supplier and the extent of
affiliation.
_______________________________________________________
Is the Gas for which Transportation service is requested,
being marketed by a Discovery affiliate?
______ Yes ______ No
If yes, list the name of Marketer and the extent of
affiliation.
_______________________________________________________
If Gas is being marketed by a Discovery affiliate, does
the cost of Gas to the affiliate exceed the sales price
received by the marketing affiliate?
______ Yes ______ No ______ Unknown
If yes, by how much? _________________________________
================================================================================
3. Shipper Contacts:
Scheduling &
Notices Invoicing Nominations
Name: ____________ ____________ ____________
Title: ____________ ____________ ____________
Street ____________ ____________ ____________
Address: ____________ ____________ ____________
Mailing ____________ ____________ ____________
Address: ____________ ____________ ____________
Telephone: ____________ ____________ ____________
Facsimile: ____________ ____________ ____________
24-Hour Contact: ____________ Telephone: ____________
SERVICE INFORMATION
4. Request is for:
_____ New Service
_____ Amended Service under Agreement No. _____________
5. Service Authority:
_____ NGPA Section 311 Service
_____ NGA Section 7(c) Blanket Authority (Part 284)
6. Service Type:
_____ Firm Service (FT-1 Rate Schedule)
_____ Firm Service (FT-2 Rate Schedule)
_____ Interruptible Service (IT Rate Schedule)
================================================================================
7. Rate Offered:
----- FT-1 Reservation Rate - Mainline
----- FT-1 Reservation Rate - Expansion
----- FT-2 Volumetric Rate - Mainline
----- FT-2 Volumetric Rate - Expansion
----- IT Usage Rate - Mainline
----- IT Usage Rate - Expansion
8. Primary Term:
Commencement Date: _______ Termination Date: _______
Secondary Term (limited to IT agreements):
_____ Month to Month, upon termination of primary term
subject to thirty (30) Days' prior written notice by
either party.
_____ Year to Year, upon termination of primary term
subject to thirty (30) Days' prior written notice by
either party.
_____ Other: ________________________________________
upon termination of primary term subject to thirty (30)
Days' prior written notice by either party.
9. Transportation Quantities:
(Estimate of Committed Production for FT-2 service)
FT-1 Service
Maximum Daily Reservation Quantity (MDRQ-Mainline) ______ Dt
Maximum Daily Reservation Quantity (MDRQ-Expansion) ______ Dt
FT-2 Service
Estimate of Committed Production for Each Lease ______ Dt
Maximum Daily Volumetric Quantity - Mainline ______ Dt
Maximum Daily Volumetric Quantity - Expansion ______ Dt
IT Service
Maximum Daily Transportation Quantity - Mainline ______ Dt
Maximum Daily Transportation Quantity - Expansion ______ Dt
10. Estimated Transportation
Quantity Over Primary Term ______ Dt
================================================================================
11. List all appropriate codes for each producing area where
the Gas fields or wells producing the Gas to be
transported are located.
_______________________________________________________
12. List all appropriate state codes for each location of the
ultimate delivery points of the Gas.
_______________________________________________________
RECEIPT/DELIVERY POINTS
Maximum Daily Quantity
13. Receipt Point(s): Dt
Mainline __________
Expansion __________
For FT-2 service, specify the leases from which gas will
be committed:
__________________________________
__________________________________
__________________________________
__________________________________
================================================================================
Maximum Daily Quantity
14. Delivery Point(s): Dt
Mainline
Expansion
"ON BEHALF OF" ENTITY INFORMATION
15. Service pursuant to Section 311(a) of the NGPA will be
"On Behalf Of"
(Legal name) ____________________________, which is an:
______ LDC ______ Intrastate
16. The named "on behalf of" entity will:
______ have physical custody of and transport the Gas
______ hold title to the Gas
Discovery must receive a written acknowledgment from each
"on behalf of" entity confirming that it is a local
distribution company or an intrastate pipeline, as
defined in the NGPA, and that it will have either
physical custody of and transport the Gas or will hold
title to the Gas.
If Transportation service is being provided "on behalf
of" more than one entity, list additional "on behalf of"
entities indicating the type of entity and whether it
will either have physical custody of and transport
(Transport) the Gas or hold title (Title) to the Gas.
================================================================================
Additional Entity Type Type of Custody
"On Behalf Of" Entities LDC Intrastate Transport Title
___________________ ______ ______ ______ ______
___________________ ______ ______ ______ ______
___________________ ______ ______ ______ ______
17. Send completed requests to:
By Mail: By Overnight Mail or Courier:
________________________ _________________________
________________________ _________________________
________________________ _________________________
Attn: Manager - T & E Attn: Manager - T & E
Telephone No.: (___) ___-____
Facsimile No.: (___) ___-____
SHIPPER AUTHORIZATIONS
Shipper hereby agrees to abide by the terms of
Discovery's FERC Gas Tariff. Shipper further agrees that
Discovery may make an inquiry into Shipper's
creditworthiness and obtain adequate assurances of
Shipper's solvency and ability to fulfill its payment
obligations. Shipper agrees to supply Discovery with
credit information as described in Section 10 of
Discovery's General Terms and Conditions.
Shipper's Authorized Signature
Name: ______________________________
Title: ______________________________
Date: ______________________________
================================================================================
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