Dominion Cove Point LNG, LP

Original Volume No. 1

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Effective Date: 08/01/2003, Docket: RP03-545-004, Status: Effective

Third Sub. Second Revised Sheet No. 240 Third Sub. Second Revised Sheet No. 240 : Effective

Superseding: First Revised Sheet No. 240

GENERAL TERMS AND CONDITIONS

(Continued)

10. RELEASE AND ASSIGNMENT OF SERVICE RIGHTS

 

(a) Availability.

 

(1) This Section 10 is available to all holders of firm capacity rights for service from Operator

("Releasing Customers"), authorized by Part 284 of the Commission's regulations, including storage

or peaking quantities.

 

(2) Releases under Rate Schedules FPS-1, FPS-2, FPS-3, and LTD-1 with Elected FTS Service will not

include an automatic release under the associated FTS contract. Instead, the capacity under Rate

Schedule FTS must be released separately. Therefore, a Replacement Customer's contract under Rate

Schedule FPS-1, FPS-2, FPS-3 or LTD-1 will not contain an Elected FTS Service option.

 

(3) Customer's may release capacity under this section only to the extent that the Releasing Customer

pays separate reservation and commodity charges for such entitlements, as applicable.

 

(4) Eligible Bidders.

(i) Any party desiring to submit a bid under this Section must first pre-qualify by demonstrating

that it meets the creditworthiness standards of Section 3 and Section 6 of the General Terms

and Conditions of Operator's Tariff. Upon a Releasing Customer's request, Operator will waive

this pre-qualification requirement on a non-discriminatory basis. Depending on whether the

Releasing Customer waives the requirement, the following conditions apply:

 

a. In the event that the requirement for pre-qualification applies, the Replacement Customer

must satisfy the creditworthiness provisions, including the posting of collateral, prior to

the awarding of the bid. All collateral posted must include the necessary instructions for

Operator to effectuate the release of the collateral, as provided in Section 10(c)(7), below.

For cash forms of collateral, bidders must provide all information necessary for Operator to

return cash collateral by wire transfer. For non-cash forms of collateral, bidders must

provide all information necessary for Operator to return relevant documents via overnight

delivery.

 

b. In the event the Releasing Customer waives the pre-qualification requirement for a

Replacement Customer that does not meet the creditworthiness standards of Section 3 and

Section 6 of the General Terms and Conditions, the Releasing Customer may either:

 

* require the Replacement Customer to satisfy the creditworthiness provisions, including

posting of collateral, prior to service being provided to the Replacement Customer, or

* prior to the commencement of service to the Replacement Customer, assume liability for the

commodity charges or post a bond or other form of credit assurance for the commodity

charges with respect to the capacity being released by Releasing Customer either for the

entire duration of the release or until such time as the Replacement Customer satisfies the

collateral requirements.

 

(ii) Not withstanding the creditworthiness provisions of Section 6(e), in no event shall Operator

require collateral to be posted based on a period corresponding to a time period longer than

the duration of the release.

 

(iii) An agent may be used to bid for capacity; however, potential bidders who desire to act as

agent must disclose the identity of the principals on whose behalf they will participate under

this Section, and provide proof of their authority to act on behalf of their principal(s).

 

(iv) Upon satisfying the conditions above, potential bidders must enter into a Service Agreement

in the form of Service Agreement applicable to capacity release as contained in this Tariff.

 

(v) Upon pre-qualification and execution of a Bid for Capacity Release agreement, the bidder will

be on Operator's approved bidder list, and will be eligible to post bids on Operator's EBB.

A bidder will remain on Operator's approved bidder list until such bidder: (1) notifies

Operator to the contrary, (2) in Operator's sole judgment no longer meets the credit

qualifications of Section 3 and Section 6, above, or (3) is suspended for failure to pay part

or all of the amount of any bill for service from Operator. Bids will legally bind the

bidder to the terms of the bid if Operator chooses such bid as the "best bid," as provided in

Section 10(c), below.

 

(vi) Operator's affiliates may bid for capacity on equal terms with all other Customers.