Algonquin Gas Transmission, LLC

Fifth Revised Volume No. 1

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Effective Date: 11/30/2009, Docket: RP10-77-000, Status: Effective

Fourth Revised Sheet No. 513 Fourth Revised Sheet No. 513

Superseding: Third Revised Sheet No. 513

 

GENERAL TERMS AND CONDITIONS

(continued)

 

2. REQUEST FOR TRANSPORTATION SERVICE (continued)

 

(b) Bidders who desire service to be provided in whole or in part by the capacity

posted pursuant to this Section 2.5 must submit bids for such capacity online via

the LINK® System. To be a valid bid, a bid must comply with the bid requirements

set forth in Section 2.5(c).

 

(c) To be a valid bid, the bidder must provide all information and data required by

Sections 2.1 and 3 of these General Terms and Conditions. Algonquin reserves the

right to reject any bid (i) at less than maximum rate,(ii) that may adversely

affect the operational integrity of Algonquin's system,(iii) that seeks to change

a Point or Points of Delivery specified in an executed Service Agreement at which

the MHTQ equals the applicable MDTQ multiplied by 0.6, (iv) that does not satisfy

all the terms of the applicable posting and/ or (v) that contains terms and

conditions other than those provided for in Algonquin's FERC Gas Tariff. If

Algonquin rejects any request for available capacity posted pursuant to this

Section 2.5, Algonquin will notify the bidder via e-mail of its reason(s) for such

rejection.

 

(d) At the close of the bidding period for any open season held pursuant to this

Section 2.5, Algonquin shall select from among all valid bids the "best bid," as

determined pursuant to this Section 2.5(d) and, if applicable, Section 2.5(e).

Algonquin shall review all bids received from bidders that have not been rejected

by Algonquin pursuant to Section 2.5(c) above, to determine which bid is the "best

bid." For purposes of this Section 2.5, the "best bid" shall be the bid which

yields to Algonquin the highest net present value. Net present value shall be

calculated on the basis of the present value of the Reservation Charge per unit to

Algonquin except that under a Negotiated Rate agreement with a minimum quantity,

the net present value evaluation shall also include the fixed cost component of

the usage revenue at the minimum quantity. In making the determination of net

present value Algonquin shall apply the rate, as of the date of the review, stated

in accordance with Section 154.501(d) of the Commission's Regulations, to all

bids. In determining the highest net present value in connection with a Customer

paying a Negotiated Rate higher than the maximum Recourse Rate, such Negotiated

Rate Customer paying a rate higher than the maximum Recourse Rate will be deemed

to be paying a rate equal to the maximum Recourse Rate.

 

In determining the "best bid," any request to add or change a Point of Receipt

and/or Point of Delivery will be considered to have a net present value of zero (0)

when comparing such requests to other requests for service and awarding capacity

unless the Customer has agreed in conjunction with its request to (i) increase its

MDTQ, (ii) increase the rate Customer is currently paying to Algonquin, if such

rate is less than the applicable maximum rate, and/or (iii) extend the term of its

firm service agreement in which case Algonquin shall consider the terms of such

MDTQ increase, rate increase and/or contract extension when calculating the net

present value. In the event that a request to add or change a Point of Receipt

and/or a Point of Delivery results in a bid(s) that yields a net present value that

is greater than zero ("Positive NPV Bid"), Algonquin shall award the capacity to

the bid which yields to Algonquin the highest net present value. In the event that

no Positive NPV Bid(s) is received by Algonquin or point capacity remains after

Algonquin has awarded capacity to or among the Positive NPV Bid(s), Algonquin shall

award the remaining point capacity to the firm Customer whose request to change its

primary point(s) was received first-in-time by Algonquin.

 

(e) The Risk of Default Factor shall be one (1) minus the differential between (i) the

bidder's probability of default which is calculated by extrapolating to the

maximum bid term to be used for bid evaluation purposes, using Standard & Poor's

("S&P") most recent "Cumulative Average Default Rates by Rating Modifier" table

("S&P Table"), and (ii) the indicated probability of default for a bidder with a

credit rating at or above the credit ratings listed in Section 2.5(e)(1) for a

like term. In addition, the Risk of Default Factor shall only be applied to