Carolina Gas Transmission Corporation

Original Volume No. 1

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Effective Date: 08/06/2007, Docket: RP07-519-000, Status: Effective

First Revised Sheet No. 124 First Revised Sheet No. 124 : Effective

Superseding: Original Sheet No. 124

(2) For service that required or will require

construction of facilities by Pipeline, the amount of

collateral will be reasonable in light of the risks

of the project, provided that the amount of

collateral cannot exceed Shipper’s share of the cost

of the facilities. Collateral for facilities

construction must be provided prior to the start of

construction. The outstanding amount of collateral

for facilities construction will be reduced as

Shipper pays off its obligation.

 

(c) Forms of Collateral.

 

(1) The following are acceptable forms of collateral:

 

(i) Letter of Credit. An unconditional irrevocable

standby letter of credit for the full value of

the collateral requirement is generally

acceptable subject to the following. The

letter of credit shall provide that it will

renew automatically except on at least 30 days

prior notice from the issuing bank, or such

terms to which Pipeline reasonably may agree.

If the letter of credit amount falls below the

collateral amount required because of a claim

for payment, such letter of credit amount must

be replenished to the required level within ten

(10) Business Days; otherwise, Pipeline will

declare Shipper to be in default under its

related Service Agreements. If actual

obligations exceed those anticipated, Shipper

must obtain a substitute letter of credit that

equals the actual Pipeline obligations. The

form, substance, and provider of the letter of

credit shall be acceptable to Pipeline. The

letter of credit shall state the full names of

the "Issuer", "Account Party", and

"Beneficiary" (Pipeline), and the dollar amount

available for drawings, and shall specify that

funds shall be disbursed on presentation of the

drawing certificate. The bank issuing the

letter of credit must have a minimum Senior

Unsecured Debt rating of an "A minus" by

Standard & Poor’s or Fitch’s, or "A3" by

Moody’s. All costs associated with obtaining a

letter of credit are Shipper’s responsibility.