Florida Gas Transmission Company, LLC

Fourth Revised Volume No. 1

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Effective Date: 09/01/2006, Docket: RP06-463-000, Status: Effective

Original Sheet No. 262 Original Sheet No. 262 : Effective

 

 

GENERAL TERMS AND CONDITIONS

(continued)

 

 

16. CREDITWORTHINESS

 

(a) Transporter shall not be required to (i) execute a transportation service agreement

providing for service under the applicable Rate Schedule for any Shipper who fails to

meet Transporter's standards for creditworthiness, or (ii) initiate service for a

Shipper who fails to meet Transporter's standards for creditworthiness, or (iii)

continue transportation service for any Shipper who is or has become insolvent or who,

at Transporter's request, fails within a reasonable period to demonstrate

creditworthiness pursuant to Transporter's standards.

 

For purposes herein, the determination of Shipper's creditworthiness shall be based

upon: (i) a credit rating of investment grade, defined as a rating of at least "BBB-"

by Standard & Poor's Corporation, or a rating of at least "Baa3" by Moody's Investors

Service, Inc. or (ii) if Shipper is not rated by Standard & Poor's or Moody's rate

methodology, criteria and ratios which are generally acceptable in the natural gas

industry. In the event that Transporter determines that Shipper does not have an

acceptable rating as set forth above, Shipper may, at its own expense, obtain a private

rating from Standard & Poor's or Moody's, or as an alternative, request that an

independent accountant or an independent financial consultant, mutually acceptable to

Shipper and Transporter, prepare an equivalent evaluation based on the financial rating

methodology, criteria and ratios generally acceptable in the natural gas industry as

published by the above rating agencies from time to time.

 

(b) To permit Transporter to conduct a creditworthiness review, a Shipper shall, upon

request by Transporter, render to Transporter: (i) complete and current financial

statements, including annual reports, 10K reports or other filings with regulatory

agencies, prepared in accordance with generally accepted accounting principles, or for

nonU.S.-based Shippers, prepared in accordance with equivalent principles; (ii) a list

of corporate affiliates, parent companies and subsidiaries; and (iii) any credit reports

from credit reporting agencies which are available. In addition to the establishment of

creditworthiness: (i) Shipper must not be operating under any chapter of the bankruptcy

laws and must not be subject to liquidation or debt reduction procedures under state

laws such as an assignment for the benefit of creditors, or any informal creditors'

committee agreement; an exception can be made for a Shipper who is a debtor in

possession operating under Chapter XI of the Federal Bankruptcy Act, but only with