East Tennessee Natural Gas, LLC

Third Revised Volume No. 1

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Effective Date: 01/01/2009, Docket: RP09-76-000, Status: Effective

Third Revised Sheet No. 365 Third Revised Sheet No. 365

Superseding: Second Revised Sheet No. 365

 

GENERAL TERMS AND CONDITIONS (Continued)

 

 

18.7 Determination of Successful Bidder for Storage Rights

 

(a) Bid Evaluation Methodologies: The Releasing Shipper shall specify in the

Release Request one of the following bid evaluation methodologies: (i)

highest rate, (ii) net revenue, or (iii) present value. A Release Request

submitted specifying one of these methods shall be accorded the timeline

treatment described in Section 18.6. Releasing Shipper may choose another

bid evaluation method; however, such request shall be accorded the timeline

treatment described in Section 18.6. Transporter shall apply the method

chosen to determine the successful Bidder. Transporter shall reject any

bid that does not meet the minimum bid rate(s), minimum quantities or

minimum term specified in the Release Request. Transporter's application

of Releasing Shipper's bid evaluation method shall result in as many

winning Bidders as mandated thereby; provided that the volumes released to

each successful Bidder shall be no less than one Dekatherm. If the

Releasing Shipper desires to award to more than one winner, the Releasing

Shipper should allow for the acceptance of partial Maximum Daily LNGS

Quantity and Winter Season LNGS Quantity bids.

 

(b) If the present value method is chosen, then Transporter shall determine the

bid or bids having the highest present value in the same manner set forth

in Section 17.7(b) of the General Terms and Conditions, except that Bid

Maximum Daily LNGS Quantities shall be substituted for Bid Quantity in the

formula provided.

 

(c) If the net revenue method is chosen, then Transporter shall determine the

bid or bids having the highest present value in the same manner set forth

in Section 17.7(c) of the General Terms and Conditions, except that Bid

Maximum Daily LNGS Quantities shall be substituted for Bid Quantity in the

formula provided.

 

(d) The awarding of the released LNGS service, including the award of such

rights to a Pre-arranged Bidder, shall be done pursuant to the procedures

established in Section 17.7 of Transporter's General Terms and Conditions

for the awarding of released transportation rights.

 

(e) NAESB WGQ Standard 5.3.9 states: If the transportation service provider

requires amendments for each release, the transportation service provider

should automate the process of amending contracts and this may be the

subject of a global agreement between the parties. Therefore, pursuant to

this NAESB WGQ standard, prior to the commencement of service pursuant to a

temporary release, Transporter shall prepare and transmit to the successful

Bidder an Exhibit "R-1" to its Released Storage Service Agreement stating

the Released Maximum Daily LNGS Quantity and Winter Season LNGS Quantity,

rates, term, governing rate schedule, and any special terms and conditions

for each awarded release. A Replacement Shipper that subsequently obtains

additional storage rights by successfully bidding on a subsequent Release

Request is not required to execute an additional Released Storage Service

Agreement; rather, each such additional successful bid shall be the subject

of an additional exhibit (designated sequentially "Exhibit R-2", "Exhibit

R-3", etc.) to be added to such Replacement Shipper's Released Storage

Service Agreement. Transporter shall prepare all exhibits for Replacement

Shippers based on the information in the applicable Release Request and the

successful bid, and each such exhibit shall be deemed incorporated in the

agreement to which it relates and shall thereby amend such agreement

effective upon commencement of service to the Replacement Shipper. Such

exhibits shall not require execution by the Replacement Shipper to become

effective. East Tennessee will notify the Releasing Shipper with recall

rights of the name of new Replacement Shippers who subsequently obtain all

or a portion of such capacity after the exhibit to Replacement Shipper's

Released Storage Service Agreement is prepared.