Millennium Pipeline Company, L. L. C.

Original Volume No. 1

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Effective Date: 11/01/2009, Docket: RP10-17-000, Status: Effective

First Revised Sheet No. 71 First Revised Sheet No. 71

Superseding: Original Sheet No. 71

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

(c) Transporter may require adequate assurance of payment for any service under this

Tariff requested by an insolvent or uncreditworthy Shipper. Such a Shipper may receive or

continue to receive service if it provides adequate assurance of payment for service. Adequate

credit assurance will be calculated as follows: (i) For firm service, including service under

Rate Schedules FT-1, FT-2, BH-1 and HT-1, the credit assurance elected must equal the value of one

(1) month of demand charges under Shipper's Service Agreement(s) with Transporter, to be provided

within five (5) business days from the day Transporter notifies the Shipper that Shipper did not

qualify for or has lost its creditworthiness status, and an additional two (2) months of demand

charges to be provided within thirty (30) days from the day Transporter notified the Shipper that

the Shipper has not qualified for or has lost its creditworthiness status; (ii) for all other

services provided pursuant to the Tariff, the credit assurance elected must equal the value of one

(1) month of the highest usage under Shipper's Service Agreement(s) with Transporter, to be

provided within five (5) business days from the day Transporter notifies the Shipper that Shipper

did not qualify for or has lost its creditworthiness status, and an additional two (2) highest

months of estimated usage during the term of the Service Agreement(s)to be provided within thirty

(30) days from the day Transporter notified the Shipper that the Shipper has not qualified for or

has lost its creditworthiness status. For a new Shipper, adequate credit assurance under this

subparagraph (ii) will be based on the three (3) highest months of estimated usage during the term

of the Service Agreement and for an existing Shipper, adequate credit assurance will be based upon

the highest three (3) months of activity for all of Shipper's active Service Agreements during the

previous twelve months.

 

In addition, for PALS lending services, Transporter has the right to seek additional security to

cover the value of any quantity of loaned gas in Dths, valued at the Spot Market Price. Such

determination will be based upon the weekly prices that are available at the time creditworthiness

is being determined. Furthermore, Transporter has the right to seek security to cover the

estimated value of a future monthly gas loan for non-creditworthy Shippers as follows: For a non-

creditworthy new Shipper, a security amount equal to such Shipper's gas loan quantity in Dths

multiplied by the Gas Loan Rate as described below. The term "Gas Loan Rate" equals the average of

the NYMEX future prices for the available gas loan period as such prices close on the day the Gas

Loan Rate is determined.

 

Transporter has the right to seek additional security to cover the value of any imbalance owed

Transporter by a non-creditworthy Shipper. Transporter will value the imbalances at the Spot

Market Price. Furthermore, Transporter has the right to seek security to cover the estimated value

of a future monthly imbalance for non-creditworthy Shippers as follows:

 

For a non-creditworthy new Shipper, a security amount equal to 10% of such Shipper's estimated

monthly usage multiplied by the Estimated Imbalance Rate as described below. For a non-

creditworthy existing Shipper, a security amount equal to such Shipper's largest monthly imbalance

owed to Transporter over the most recent 12 month period multiplied by the Estimated Imbalance

Rate. The term "Estimated Imbalance Rate" equals the average of the NYMEX future prices for the

available 12 month period as such prices close on the day the Estimated Imbalance Rate is

determined.

 

Adequate assurance of payment may include:

(1) a cash deposit with Transporter held for security, provided that such deposit may

be applied by Transporter to satisfy a delinquent account;

 

(2) an irrevocable letter of credit from a financial institution deemed acceptable in

Transporter's sole and reasonable discretion;

 

(3) a guarantee that is both from a creditworthy entity and in a form deemed acceptable in

Transporter's reasonable discretion; or

 

(4) a grant to Transporter of a security interest in collateral, the value of which is

mutually agreed upon by Transporter and Shipper.

 

Unless otherwise agreed, the credit assurances must at all times maintain a value specified above

equal to the highest estimated charges during the term of the Service Agreement. Any deposit

held by Transporter pursuant to this Section 3.9(c) will accrue interest on that deposit at the

Federal Funds Rate. Upon Shipper's request, Transporter will remit the balance of such interest

to Shipper within thirty days provided, however, that Transporter will not be required to remit

interest to Shipper more often than every thirty days.