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. 531 Original Sheet No. 531 : Effective

 

FORM OF SERVICE AGREEMENT

Applicable to Agreements Executed After April 1, 2002

Firm Transportation Service - Market Area (continued)

FTS-2

 

[In the event of agreement or settlement related to an expansion of Transporter's system:]

 

4.3 Notwithstanding Section 4.1 above, as of the in-service date and during the primary

 

term of this Agreement, Shipper shall pay Transporter, for all services rendered hereunder, the

 

lower of: (1) the rates established under Transporter's Rate Schedule FTS-2 (inclusive of all

 

applicable surcharges), as filed with and approved by the FERC and as said Rate Schedule may

 

hereafter be legally amended or superseded, or (2) the Final Rate Cap as determined below:

 

(a) The Base Rate Cap shall be as follows: $ ________/MMBtu/d

 

(b) The Base Rate Cap assumes the levelized rate methodology through March 31, 2005,

 

and thereafter, the traditional cost of service methodology. For purposes of this

 

section with respect to this Agreement, a "levelized rate" shall mean a rate

 

designed by adjusting the annual depreciation expense such that it results in a

 

levelized annual cost of service .

 

(c) The Base Rate Cap is stated in nominal dollars, and shall exclude all applicable

 

surcharges and fuel.

 

(d) [If an escalator is agreed to:] Beginning on _____, and annually thereafter

 

("Escalation Date"), the Base Rate Cap then in effect shall be escalated in

 

accordance with the following formula; provided that in no event shall the Base

 

Rate Cap, as it may be escalated pursuant to this subsection (d), exceed

 

$0.___ per MMBtu. On each Escalation Date, the Base Rate Cap to be effective for

 

the subsequent twelve (12) month period shall be the sum of: (i) 0.70 multiplied by

 

the Prior Base Rate Cap, which is defined herein as the Base Rate Cap that was

 

effective for the twelve (12) month period immediately preceding the Escalation

 

Date, and (ii) 0.30 multiplied by the Prior Base Rate Cap, which product shall be

 

escalated (but not decreased) by multiplying it by a fraction, wherein the

 

numerator shall be the GNP Implicit Price Deflator, as set forth in the most recent

 

publication of Survey of Current Business published by the U.S. Department of

 

Commerce ("GNP Deflator") (or any substitute index that the parties mutually agree

 

to in writing), for the most recent calendar quarter published in the Survey of

 

Current Business as of the Escalation Date ("Numerator Calendar Quarter"), and the

 

denominator shall be the GNP Deflator for the calendar quarter preceding the

 

Numerator Calendar Quarter by one calendar year.