Crossroads Pipeline Company
Original Volume No. 1
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Effective Date: 12/02/1999, Docket: RP00- 59-000, Status: Effective
Third Revised Sheet No. 66 Third Revised Sheet No. 66 : Effective
Superseding: Second Revised Sheet No. 66
32.8 Determination of the Best Bid
(a) All bids must reflect the number of decimal places included in Crossroads'
tariffed rates, and should be adjusted (as set forth in Section 32.8(d)
herein) to reflect a standard calculation of daily and monthly rates. The
releasing shipper may specify whether bids should be expressed in dollars
and cents or in percentages of Crossroads' tariffed rates. All maximum or
minimum rates set forth in the offer of release should include the
reservation rate and all applicable demand surcharges, either as a total
number or expressed separately.
(b) Crossroads will account for volumetric and reservation components of rates.
(c) Quantities in offers and bids should be set forth numerically. The release
quantity should be expressed numerically in daily and total figures for
(d) For less than maximum rate transactions only, converting daily rate to
monthly rate is accomplished by multiplying the daily rate times number of
days in rate period, dividing the result by number of months in rate
period and taking the remainder out to 5 decimal places and rounding up or
down to the transporter's specified decimal place. Converting a monthly
rate to a daily rate is accomplished by multiplying the monthly rate by
number of months in rate period, dividing the result by number of days in
rate period and taking the remainder out to 5 decimal places and rounding
up or down to the transporter's specified decimal place.
(e) The releasing shipper may define in the notice of release the criteria for
determining the best bid.
(f) If the notice of release does not specify the criteria for determining the
best bid, Crossroads will determine the best bid by Economic Value. The
Economic Value of a bid shall be defined as the net present value of the
reservation bid for the release of transportation capacity. The net
present value shall be computed from the monthly demand and capacity
charge or reservation revenues to be received over the term of the
release contract, except that under a Negotiated Rate agreement with a
minimum quantity, the net present value evaluation shall also include
the fixed cost component of the usage revenue at the minimum quantity.
In making the determination of net present value, Crossroads will use
the discounted cash flow rate of return methodology, with the rate
of discounting to be published on Crossroads' EBB, as amended from
time to time.
(g) In the event of identical best bids, the first bid received shall be the
winning bid. In the event of identical bids received simultaneously,
Crossroads will award the capacity pro rata among the bidders submitting
identical best bids. If multiple bids meeting the minimum criteria set
forth in the offer of release are received, Crossroads will award the
capacity, best bid first, until all offered capacity has been awarded.