Southern Star Central Gas Pipeline, Inc.
Original Volume No. 1
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Effective Date: 05/01/2003, Docket: RP03-352-000, Status: Effective
Original Sheet No. 303 Original Sheet No. 303 : Effective
GENERAL TERMS AND CONDITIONS
31. Negotiated Rates
31.1 Availability: Southern Star and Shipper may mutually agree to
negotiate rates under any Part 284 Rate Schedule that expressly
provides for a negotiated rate and references this Section 31.
Southern Star's maximum effective rate (maximum base rate plus all
applicable surcharges) for service under any such rate schedule is
available as a recourse rate for any Shipper that does not desire
to negotiate a rate hereunder.
31.2 Definition: Negotiated rates shall be mutually agreed and set
forth in writing. A negotiated rate is a rate (i)which is greater
than the maximum rate, or (ii)which is less than the minimum rate,
or (iii)which is determined from a formula where the rate arrived
at could be above or below the maximum rate, or (iv)which uses a
rate design other than the one used to establish the applicable
recourse rate (e.g., straight fixed variable). A negotiated rate
which involves a volumetric or usage rate may include a minimum
31.3 Capacity Allocation: In evaluating bids for firm service, in any
capacity auction or in otherwise allocating capacity among
competing requests for firm service where one or more bids uses a
negotiated rate or negotiated rate formula, Southern Star will
consider, in assigning value to such bid(s), only reservation or
demand charge revenue or other revenue which is guaranteed to be
received by Southern Star. Guaranteed revenue shall mean a
volumetric or usage rate bid along with a minimum quantity
commitment. For capacity evaluation purposes, the net present
value of any such bid for firm service shall be capped by the net
present value of the maximum applicable reservation rate for such
service over the contract term bid. In performing a net present
value evaluation of a negotiated rate bid proposing a volumetric
or usage rate along with a minimum throughput commitment, Southern
Star shall consider only the fixed costs proposed to be recovered
through the volumetric or usage rate bid, in addition to any
reservation rate included in the bid.
31.4 Capacity Release:
(a) A negotiated rate shall not apply as a price cap for
capacity release transactions under Section 11 of the
General Terms and Conditions.
(b) Southern Star and a Releasing Shipper may, in connection
with their agreement to a negotiated rate hereunder, agree
upon payment obligations and credit mechanisms that vary
from or are in addition to those set forth in Section 11.7
of the General Terms and Conditions.