Dominion Cove Point LNG, LP

Original Volume No. 1

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Effective Date: 09/10/2003, Docket: RP03-564-001, Status: Effective

First Revised Sheet No. 213 First Revised Sheet No. 213 : Effective

Superseding: Original Sheet No. 213

GENERAL TERMS AND CONDITIONS

(Continued)

 

 

4. BIDDING FOR AVAILABLE FIRM SERVICE

 

(a) EBB Posting Procedure. As capacity becomes available on Operator's system for firm

services, such capacity shall be posted by Operator on its EBB for a period of thirty

(30) days. Operator's posting shall include the following information regarding the

available capacity: (i) daily and other applicable quantity of service available;

(ii) receipt and delivery points; (iii) term (up to a maximum primary term of twenty

(20) years with extensions from year to year thereafter unless canceled by either

party by providing six (6) months prior notice to the other party); (iv) maximum

effective Reservation charge as set forth in the Currently Effective Rate Sheets of

this Tariff; (v) the minimum Effective Reservation charge as set forth in the

Currently Effective Rate Sheets of this Tariff(including any adjustments thereto) as

provided under the applicable Rate Schedule; (vi) any other applicable charges or

surcharges; (vii) any applicable restrictions; and (viii) the date when bids are due

to Operator. Operator shall not impose a minimum rate for purposes of bidding for

available firm service. The due date set by Operator for bids shall be at least

thirty (30) days and no more than forty-five (45) days after the first posting date.

 

(b) Bidding Procedure. Potential Buyers may submit one bid for all or any portion of the

capacity or term of service made available by Operator. A Bidder shall submit its bid

electronically through Operator's EBB, specifying the monthly reservation charge (or

other firm or demand charge(s), if applicable, herein referred to collectively as the

"Reservation Charge") it is bidding for the service. Bidder also shall provide to

Operator a valid request for service fully complying with Section 3 (Requests for

Service) of the General Terms and Conditions. The price bid for the monthly

Reservation Charge shall be expressed per Dth and shall be expressed to the nearest

thousandth of one dollar ($0.000). Bids for service may exceed the then effective

Maximum Base Reservation Charge for the applicable service set forth in this Tariff,

and include other forms of revenue guarantees. In addition to the bid price, Bidders

shall pay all applicable commodity charges, demand and commodity surcharges and any

other applicable charges, as may be adjusted from time to time by Operator. Operator

shall have the right to reject any bids, on a non-discriminatory basis, that: (i) are

for a rate that is less than the maximum Reservation Charge or not above the minimum

Reservation Charge as set forth in the Currently Effective Rate Sheets of this Tariff

for service under Operator's applicable Rate Schedule; or (ii) include conditions or

provisions that impede Operator's ability to operate its system in conformity with the

provisions of this Tariff.

 

(c) Assessing Bids and Awarding Capacity. Operator shall evaluate bids based upon their

net present value (NPV) as set forth below, taking into account the price and primary

term offered. The NPV shall include only revenues generated by the reservation

charge, or other form of revenue guarantee. For purposes of this section, "revenue

guarantee" shall include, but not be limited to, revenue based on any minimum

throughput commitment proposed by the Bidder. For Bidders proposing a reservation

charge or other form of revenue guarantee which exceeds the maximum applicable

reservation charge during all or any portion of the term proposed by the Bidder, the

NPV calculated for the bid may not exceed a NPV that is calculated assuming that the

maximum applicable reservation charge shall be in effect during the full term proposed

by the Bidder, in place of the reservation charge or other revenue guarantee proposed

by the Bidder. Operator shall use the current Commission-approved interest rate in

calculating the net present value of bids. Capacity shall be awarded based on the

acceptable highest value of the bids offered to Operator calculated in accordance with

this Section. Operator shall post the winning bids on its EBB.

 

(d) Pro Rata Awards to Equal Bidders. If two or more bidders, including the current

holder of the capacity subject to bid, submit acceptable highest value bids of equal

value, as calculated pursuant to paragraph (c) above, Operator shall award the

capacity first to the current holder of the capacity. If the current holder of the

capacity (i) is not among the bidders submitting equivalent highest value bids, (ii)

does not require all of the capacity subject to bid; or (iii) fails to execute a

Service Agreement after being awarded the capacity, any available capacity shall be

awarded on a pro rata basis to all bidders that submitted equivalent highest value

bids.