Crossroads Pipeline Company

First Revised Volume No. 1

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Effective Date: 11/01/2001, Docket: RP02- 14-000, Status: Effective

Original Sheet No. 63 Original Sheet No. 63 : Superseded

 

GENERAL TERMS AND CONDITIONS

(Continued)

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

(1) 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 firm Service Agreements with a term of 12 or more consecutive

months of service, 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 a term of 12 or more consecutive months of service, and is at the applicable Recourse Rate for

that service. 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. Section 12

(Maximum Daily Delivery Obligation at Delivery Points and Maximum Daily Quantity at Receipt Points)

of the General Terms and Conditions 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 and longest term that Shipper must match through the

bidding process at Section 4.2 below if it wishes to continue such service are the Recourse Rate and

five years, respectively. 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.

(2) If Shipper intends to exercise its right of first refusal as described at paragraph

(1) above, Shipper shall notify Transporter through Transporter's EBB of that intent at least six

months before the termination date of its Service Agreement.

(3) In the event that Shipper provides Transporter with a six-month notice of intent to

exercise its right of first refusal, Transporter shall promptly post on its EBB the information

described in Section 4.2 below, Transporter shall begin accepting bids from any prospective Shipper,

for all or a portion (volume but not geographic portion) of the service rights under the existing

Shipper's long-term Service Agreement, at least five months prior to the termination of such Service

Agreement, and for the posting time periods set forth in Section 4.2(a) below.