Kinder Morgan Illinois Pipeline LLC

Original Volume No. 1

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

Original Sheet No. 161 Original Sheet No. 161 : Effective

 

 

GENERAL TERMS AND CONDITIONS

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(i) payment in advance for all fees and

charges for three (3) Months of service except to the extent otherwise

agreed;

 

(ii) a standby irrevocable letter of credit

covering all fees and charges for three (3) Months of service drawn

upon a bank acceptable to KMIP except to the extent otherwise agreed;

 

(iii) security interest covering all fees and

charges for three (3) Months of service in collateral provided by the

Shipper found to be satisfactory to KMIP except to the extent

otherwise agreed; or

 

(iv) guarantee of all fees and charges for

three (3) Months of service by a person or another entity which does

satisfy the credit appraisal, except to the extent otherwise agreed.

 

(2) Nothing herein shall be read to preclude KMIP

from requiring, and enforcing for the term of the initial contracts, a

greater amount of security in agreements supporting an application for

a certificate to construct new or expanded facilities, including any

replacement contract entered into upon a permanent release of capacity

under such an initial contract, any assignment of such an initial

contract or any resale of capacity subject to such an initial contract

in the event of a default.

 

(c) Where a Shipper selects the prepayment option under

Section 12.1(b) of these General Terms and Conditions, the prepayment

amounts shall be deposited in an interest-bearing escrow account if

such an account has been established by Shipper which meets the

criteria set out in this paragraph. The costs of establishing and

maintaining the escrow account shall be borne by Shipper. The escrow

bank must be rated at least AA or better and shall not be affiliated

with Shipper. The escrow arrangement shall provide for the prepayment

amounts to be applied against the Shipper's obligation under its

service agreement(s) with KMIP and shall grant KMIP a security

interest in such amounts as an assurance of future performance. The

escrow agreement shall specify the permitted investments of escrowed

funds so as to protect principal, and shall include only such

investment options as corporations typically use for short-term

deposit of their funds. Such escrow account shall at all times

maintain the amount of prepayments required under Section 12.1(b) of

these General Terms and Conditions. If KMIP is required to draw down

the funds in escrow, it will notify the Shipper and Shipper must

replenish such funds within three (3) Business Days after such notice.