Crossroads Pipeline Company
First Revised Volume No. 1
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Effective Date: 09/10/2007, Docket: RP07-567-000, Status: Effective
Second Revised Sheet No. 71 Second Revised Sheet No. 71 : Effective
Superseding: First Revised Sheet No. 71
GENERAL TERMS AND CONDITIONS
(Continued)
(b) Criteria for Creditworthiness Determination
(1) Acceptance of a Shipper’s request for service and the
continuance of service are contingent upon the Shipper satisfying, on
an on-going basis, a credit appraisal by Transporter.
(2) Transporter shall apply consistent evaluation practices to
all similarly situated Shippers to determine the Shipper’s financial
ability to satisfy the payment obligations due to Transporter over the
term of the requested Service Agreement.
(3) A Shipper will be deemed creditworthy if
(i) its long-term unsecured debt securities are rated at
least BBB by Standard & Poor’s Corporation (“S&P”) or Baa2
by Moody’s Investor Service (“Moody’s”); and
(ii) Shipper’s short–term and long-term outlook opinion is
Stable or Positive from S&P or Moody’s; and
(iii) the net present value of the sum of reservation fees,
utilization fees, and any other associated fees for the contract
term is less than 3% of Shipper’s tangible net worth. As used
herein, “tangible net worth” shall be the sum of the capital
stock, paid-in capital in excess of par or stated value, and
other free and clear equity reserve accounts less goodwill,
patents, unamortized loan costs or restructuring costs and other
intangible assets. If Shipper is rated by multiple agencies,
the lower rating applies. A Shipper that is not rated by S&P or
Moody’s may use its parent’s rating if a guarantee acceptable to
Transporter is provided. If the Shipper has multiple Service
Agreements with Transporter, then the total of all those Service
Agreements shall be considered in determining creditworthiness.
Transporter reserves the right to determine in its reasonable
discretion, that a Shipper who requests new service is not
creditworthy to receive that service on the basis that Shipper has
outstanding payments due on invoices rendered by Transporter on
current or past Service Agreements and Shipper has defaulted on those
payments per the terms of the General Terms and Conditions; provided,
however, this provision shall not affect amounts disputed by Shipper
in good faith. This Section shall apply solely to the Shipper that is
the contract holder.