Dominion Cove Point LNG, LP

Original Volume No. 1

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Effective Date: 03/01/2009, Docket: RP09-293-000, Status: Effective

Third Revised Sheet No. 246 Third Revised Sheet No. 246

Superseding: Second Revised Sheet No. 246

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

10. RELEASE AND ASSIGNMENT OF SERVICE RIGHTS (Continued)

 

(d) Contracting.

 

(1) Operator must contract directly with the bidders who make the best bids, as

determined above. Subject to agreement by the winning bidders to pay at least the

maximum applicable usage and fuel charges, Operator must accept the bids and

contract to provide the released capacity to the winning bidders, by executing the

winning bidders' Bid agreements upon award of the winning bids. Such executed Bid

agreement shall become an Exhibit to the Bid for Capacity Release agreement between

each winning bidder, as Replacement Customer, and Operator. Replacement Customer,

like any other Customer, shall be subject to all applicable provisions of

Operator's FERC Gas Tariff.

 

(2) Unless Operator expressly agrees otherwise, Releasing Customer's Service Agreement

with Operator shall remain in effect until the normal expiration of the contract

term, notwithstanding any capacity release transaction.

 

(i) Releasing Customer shall remain liable on its contract with Operator, and

shall pay all applicable reservation charges, and related surcharges and

interest, for released capacity, directly to Operator; provided, however,

that Operator and Customer may, in connection with their agreement to a

Negotiated Rate, agree upon Releasing Customer payment obligations and

procedures and crediting mechanisms in the event of a capacity release that

varies from or has term in addition to those set forth herein. The

provisions of this Section 10.(d).(ii).(a) do not authorize Operator to

negotiate terms and conditions of service. In the case of permanent

releases, Operator will not unreasonably refuse to relieve Releasing

Customer from liability under its Service Agreement.

 

(ii) Unless otherwise agreed under Section 10.(e).(3) below, Releasing Customer

will receive a contingent credit for reservation charges and associated

surcharges actually paid to and received by Operator, attributable to

capacity rights released by Releasing Customer.

 

a. Operator will grant Releasing Customer a contingent credit for the

reservation charges and reservation-related surcharges attributable to

capacity rights released by such customer. In the event Operator is not

paid the applicable reservation charges for the released capacity,

Operator shall have the right to reverse such contingent credit and to

charge applicable interest to Releasing Customer.

 

b. Operator will fully credit Releasing Customer for Reservation Charges

and reservation-related surcharges paid by the Replacement Customer,

even if such revenues exceed the rate contractually payable by Releasing

Customer for the released capacity.

 

c. Reservation Charge credits to Releasing Customer will be reduced by any

marketing fees applicable to releases in which Operator actively markets

the capacity, as negotiated between Operator and Releasing Customer.

 

d. In the event of partial payments by Replacement Customer, funds will

first be used to pay reservation charges and related surcharges, whether

owed to Operator or to Releasing Customer.