Columbia Gas Transmission LLC

Third Revised Volume No. 1

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Effective Date: 03/03/2009, Docket: RP09-340-000, Status: Effective

Original Sheet No. 279 Original Sheet No. 279

 

GENERAL TERMS AND CONDITIONS (Cont'd)

 

(c) Termination of Long-Term Service Agreements; Exercise of Right of First Refusal.

 

(1)(a) If Shipper's long-term Service Agreement is at the applicable Recourse Rate for that

service and does not extend according to its terms or otherwise continue as described at Section 4.1(b)

above, or Shipper declines to extend the contract under the provisions described at Section 4.1(b)

above, Shipper may continue service upon termination of that Service Agreement by (i) agreeing to match

the highest value bid offered to Transporter for Shipper's firm service, or any portion (volume but not

geographic portion) thereof, through the bidding process described at Section 4.2 below, and

(ii) executing a new Service Agreement incorporating the new rate and term. This right of first

refusal shall apply only to (1) firm Service Agreements with a term of 12 or more consecutive months of

service at the applicable Recourse Rate for that service, or (2) firm multi-year seasonal Service

Agreements at the applicable Recourse Rate for that service. Discounted long-term Service Agreements in

effect as of the effective date of Order No. 637 (March 27, 2000) are grandfathered in that a right of

first refusal shall apply only at the expiration of such Service Agreements; provided, a right of first

refusal shall not apply to any new Service Agreement entered into, unless it has (1) a term of 12 or

more consecutive months of service and is at the applicable Recourse Rate for that service, or (2) is a

firm multi-year seasonal Service Agreement at the applicable Recourse Rate for that service. A "firm

multi-year seasonal Service Agreement" as used in this Section 4 is a firm Service Agreement that has a

multi-year term but does not provide for 12 consecutive months of service.

 

(b) Notwithstanding the provisions of Section 4.1(c)(1)(a), Columbia and its Shippers may

mutually agree, on a not unduly discriminatory basis, to include in discount rate or negotiated rate

firm Service Agreements that bear either a multi-year seasonal term or a term of 12 or more consecutive

months of service, a contractual right of first refusal equivalent to the right of first refusal set

forth from time to time in this Section 4.

 

 

(c) A Shipper with a firm Service Agreement having multiple primary receipt and delivery

points subject to a right of first refusal may exercise its right of first refusal with respect to the

Service Agreement's Transportation Demand at only certain primary receipt and delivery point

combinations in such Service Agreement and in the same rate zone, subject to satisfaction of

Transporter's operational considerations based on pipeline configuration and design. GTC Section 12

addresses the adjustment to maximum daily delivery obligations (MDDOs) when a Shipper reduces its

Service Agreement's Transportation Demand through the exercise of a right of first refusal. The

highest rate that Shipper must match through the bidding process at Section 4.2 below if it wishes to

continue such service is the Recourse Rate. This right of first refusal shall be deemed to be assigned

where a Shipper holding such a right permanently releases and assigns all or a portion (volume but not

geographic portion) of the capacity under that Service Agreement, regardless of the duration of that

permanent release. Moreover, a Shipper releasing and assigning all or a portion (volume but not

geographic portion) of the capacity may structure the release so as to transfer the right of first

refusal for the duration of the release, even if that release and assignment is subject to a recall by

Shipper that would terminate that release and assignment.