Kinder Morgan Illinois Pipeline LLC

Original Volume No. 1

 Contents / Previous / Next / Main Tariff Index

 

 

Effective Date: 12/01/2007, Docket: RP08- 34-000, Status: Effective

Original Sheet No. 156 Original Sheet No. 156 : Effective

 

 

GENERAL TERMS AND CONDITIONS

----------------------------

 

12. EVALUATION OF CREDIT

 

12.1 In evaluating requests for service and for certain other

purposes under this Tariff, including Sections 2.7 and 12.2 of these

General Terms and Conditions, KMIP will perform a credit appraisal

of Shipper.

 

(a) Acceptance of a Shipper's request for service and

the continuation of service are contingent upon the Shipper

satisfying creditworthiness requirement on an on-going basis. KMIP's

credit appraisal procedures involve the establishment of dollar

credit limits on a standardized, nondiscriminatory basis. To the

extent that a Shipper's accounts with KMIP do not exceed such limit,

and Shipper has met all creditworthiness requirements as determined

in periodic credit reviews by KMIP, which reviews may be conducted on

at least an annual basis, new credit appraisals may be required when

an existing Agreement is amended or a request for a new Agreement is

made, subject to the provisions of Section 2.7 and 12.2 of these

General Terms and Conditions. To determine creditworthiness, a credit

appraisal shall be performed in accordance with the following

criteria:

 

(1) KMIP shall apply consistent evaluation

practices to all similarly situated Shippers to determine the

Shipper's financial ability to perform the payment of obligations due

to KMIP over the term of the requested or existing Agreement(s). The

creditworthiness requirements of this Section 12 shall apply to any

assignment (in whole or in part) of any Agreement or any release of

an Agreement.

 

(2) A Shipper will be deemed creditworthy if (i)

its long-term unsecured debt securities are rated at least BBB- by

Standard & Poor's Corporation ("S&P") and at least Baa3 by Moody's

Investor Service ("Moody's") (provided, however, that if the

Shipper's rating is at BBB- or Baa3 and the short-term or long-term

outlook is Negative, KMIP may require further analysis as discussed

below); and (ii) the sum of reservation fees, commodity fees and any

other associated fees and charges for the contract term is less than

15% of Shipper's tangible net worth. In the event Shipper is rated

by both S&P and Moody's, the lower rating applies. For the purposes

of this Section, the term "tangible net worth" shall mean for a

corporation the sum of the capital stock, paid-in capital in excess

of par or stated value, and other free and clear equity reserve

accounts less goodwill, patents, unamortized loan costs or