Liberty Gas Storage, LLC

Original Volume No. 1

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Effective Date: 04/15/2007, Docket: RP07-357-000, Status: Effective

Original Sheet No. 104 Original Sheet No. 104 : Effective

 

GENERAL TERMS AND CONDITIONS

(b) Duration. The open season shall commence at the time and day specified

and for the term indicated in the notice of open season. During this time

Liberty will accept requests for the firm and secondary firm service to be

available in its facilities.

(c) During an open season, Liberty will accept requests for firm

storage or secondary firm storage service(s) from potential Customers.

Capacity will be allocated to those prospective Customers offering to pay the

highest market-based rates. More specifically, capacity will be allocated to

those prospective Customers offering to pay the highest value to Liberty over

the term of each agreement. Liberty reserves the right to give first priority

to bids where: (i) the reservation charges meet or exceed a threshold value;

(ii) the injection capacity of the bid does not exceed one-half (1/2) of the

withdrawal capacity; and (iii) the withdrawal capacity is limited so as not to

exceed a rate that would allow the prospective Customer to withdraw its Gas in

less than twelve (12) Days. If, upon allocation of capacity to those Customers

meeting these criteria, capacity remains, Liberty may, in its sole discretion,

allocate capacity to prospective Customers offering bids meeting other

criteria. Present value of the reservation charges shall be calculated in

accordance with the following formula:

PV= 1 - (1 + i)-n x (R) x (V)

i

Where: i = The prime rate as published by the Wall Street Journal on the

first day of the open season plus five percent (5%) (or 500 basis points), the

sum of which is then divided by twelve (12).

n = The term of the agreement, in Months.

R = the reservation charge(s) bid

V = MSQ (Volume stated in Dth)

For example, a bid of $0.30/Dth/mo (storage reservation charge) with a MSQ of

100,000 Dth for 5 years (60 Months) and using a 7% prime rate yields a present

value of $1,348,651.15.

(d) During the allocation process conducted as part of an open season,

should requests for firm storage or secondary firm storage service exceed

available capacity, capacity will first be allocated to the highest present

value bids received for firm storage service. When remaining unallocated

capacity is not sufficient to meet the next highest present value bidder's

capacity requirements for firm storage service, that next highest bidder has

the option of declining the remaining capacity. Liberty will then

offer the remaining capacity to the next highest bidder, until all the

remaining capacity is allocated.

(e) Should the next highest present value bid in Section 3.1(c) above be

submitted by two or more prospective Customers (e.g., tied bids) and there is

insufficient remaining capacity available to serve such prospective Customers,

then capacity will be allocated to the prospective Customers on a pro rata

basis.