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. 115 Original Sheet No. 115 : Effective

 

GENERAL TERMS AND CONDITIONS

4.7 Best Bid. When Liberty makes awards of capacity for which there have

been multiple bids meeting minimum conditions, Liberty shall award the bids,

best bid first, until all offered capacity is awarded. The capacity being

awarded represents the Maximum Daily Injection Quantity, Maximum Daily

Withdrawal Quantity, or Maximum Storage Quantity. These quantities are

separate parts of the capacity and are awarded until one of the quantities is

fully awarded, at which point all capacity is deemed to be fully awarded.

Liberty shall evaluate and determine the best bid among those otherwise

consistent with any terms and conditions specified by the Releasing Customer as

follows:

(a) Liberty shall apply the standard or criteria for such determination

specified by the Releasing Customer, including the standard to be used for

breaking ties. Any standard or criteria so specified must be objective,

economic, not unduly discriminatory, not contrary to applicable provisions of

this FERC Gas Tariff, applicable to all potential Replacement Customers and

require Liberty in applying such standard to exercise no more than a

ministerial function. The Releasing Customer shall indemnify and hold Liberty

harmless from and against all demands, losses, claims, expenses, causes of

action and/or damages suffered or incurred by Liberty arising out of or related

to any determination of a “best bid” pursuant to a standard specified,

supplied, approved or provided by Releasing Customer.

(b) In default of Releasing Customer specifying a bid evaluation standard,

Liberty shall determine the bid or bids generating the highest net present

value, using a 10% discount factor, based on the rate bid (reservation or

demand component), the applicable quantity(ies) and term or period bid upon.

In default of Releasing Customer specifying a method to break ties priority

will be given first to the bid with the shortest term, and next to the bid

submitted first in time.

4.8 Qualification of Prospective Replacement Customer. A prospective

Replacement Customer must be on Liberty's approved bidders list before bids may

be posted on the Internet Web Site, must satisfy all requirements of the

applicable Rate Schedule and the General Terms and Conditions of this FERC Gas

Tariff and must have executed a Capacity Release Umbrella Agreement. To be on

the approved bidders list, the prospective Replacement Customer must satisfy

Liberty's credit requirements as outlined in Section 3 of the General Terms and

Conditions, and provide the information required by Section 3 of the General

Terms and Conditions. Such credit appraisal shall be reevaluated and updated

every three (3) months. The prospective Replacement Customer shall remain on

the approved bidders list until such prospective Replacement Customer (i)

notifies Liberty to the contrary, (ii) no longer meets the credit

qualifications established in Section 3 of the General Terms and Conditions, or

(iii) is suspended from the approved bidders list in the event, and for such

time as, such Replacement or Prearranged Customer fails to pay part or all of

the amount of any bill for service in accordance with Section 14 of the General

Terms and Conditions. Liberty will apply its creditworthiness criteria to

assess the submission. Liberty will waive the creditworthiness requirement on

an non-discriminatory basis for Replacement Customers and permit them to submit

bids, if the Releasing Customer provides Liberty with a guarantee or other form

of credit assurance in form and substance satisfactory to Liberty of all

financial obligations of the Replacement Customer with respect to the capacity

being released by Releasing Customer prior to the commencement of service to the

Replacement Customer.

4.9 Nominations. Following its selection, and prior to the flow of Gas,

the Replacement Customer shall be permitted to submit nominations pursuant to

the terms and conditions of the applicable Rate Schedule and the General Terms

and Conditions of this FERC Gas Tariff.