Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 06/28/2010, Docket: RP10-817-000, Status: Effective

First Revised Sheet No. 215 First Revised Sheet No. 215

Superseding: Original Sheet No. 215

 

. GENERAL TERMS AND CONDITIONS .

(Continued)

 

29. ESTABLISHMENT AND MAINTENANCE OF CREDIT

 

Transporter will not be required (a) to execute a Transportation Service

Agreement under the applicable rate schedule on behalf of a Shipper that

fails to meet Transporter's standards for creditworthiness; (b) to

initiate or continue service to a Shipper that fails to meet

Transporter's standards for creditworthiness; or (c) to continue service

to a Shipper that fails to pay Transporter for Transportation service as

provided in Shipper's Transportation Service Agreement.

 

Transporter will apply consistent evaluation practices to all similarly-

situated Shippers to determine each Shipper's ability to satisfy its

payment obligations to Transporter over the term of its Transportation

Service Agreement.

 

29.1 Establishment of Credit.

 

For purposes herein, the determination of Shipper's

creditworthiness will be based upon the level of service requested

by Shipper and: (a) to the extent rated by the following agencies,

a credit rating (Shipper's senior unsecured debt rating if

available, otherwise Shipper's issuer rating) of investment grade

from each, where a minimum investment grade rating is defined as a

rating of "BBB-" by Standard & Poor's Rating Services ("Standard &

Poor's"), a rating of "Baa3" by Moody's Investors Service, Inc.

("Moody's"), a rating of "BBB-" by Fitch Ratings ("Fitch"), and,

if at the minimum investment grade rating, a Short-Term and Long-

Term Outlook or Credit Watch of Stable or Positive from that

agency; or, for Canadian Shippers not rated by Standard & Poor's,

Moody's and Fitch, a senior unsecured debt rating of at least

"BBB(low)" by Dominion Bond Rating Service ("Dominion") and, if

rated at "BBB(low)", a Short-Term and Long-Term Outlook or Credit

Watch of Stable or Positive; or (b) if Shipper does not have a

senior unsecured rating or issuer rating from Standard & Poor's,

Moody's or Fitch (or from Dominion, if a Canadian Shipper), an

equivalent rating of investment grade as determined by Transporter

based on the financial rating methodology, criteria and ratios for

the industry of the Shipper as published by the above rating

agencies from time to time or other financial analysis criteria

and ratios generally acceptable in the natural gas industry,

including but not limited to Standard and Poor's, Moody's or

Fitch's opinions, watch alerts or rating actions; or (c) approval

by Transporter's lenders.

 

A Shipper or prospective Shipper seeking an equivalent rating of

investment grade pursuant to subsection (b) will, upon request by

Transporter, render to Transporter documentation required by

Transporter to determine Shipper's creditworthiness, including but

not limited to complete audited financial statements prepared in

accordance with generally accepted accounting principles. In the

event Transporter determines that Shipper does not have an

equivalent rating of investment grade, Shipper may, at its own

expense, obtain a private rating from Standard & Poor's, Moody's,

Fitch or Dominion Bond Rating Service.