Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 04/17/2010, Docket: RP10-502-000, Status: Effective

Fifth Revised Sheet No. 213 Fifth Revised Sheet No. 213

Superseding: Fourth Revised Sheet No. 213

 

GENERAL TERMS AND CONDITIONS

 

 

4. FACILITIES

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Northern shall not be required to provide any requested service under

any Rate Schedules which would require the construction or

acquisition by Northern of any new facilities. Northern may

condition any such construction, acquisition, or expansion on

Shipper/Purchaser agreeing to reimburse Northern for all costs

incurred, including any taxes incurred by Northern as a result of

such reimbursement. An economic feasibility test will be performed

to determine when Northern may charge Shipper/Purchaser such costs.

Such test shall reflect the cost of the facility to be constructed,

the incremental cost related to such facilities and the revenues

which Northern estimates to be generated attributable to the

facilities, all of which will be based on a discounted cash flow rate

of return methodology. All new facilities (whether built by

Shipper/Purchaser or Northern) shall be in conformance with the

regulations set forth in 49 CFR Part 192 and shall be subject to

inspection and prior approval by Northern. Nothing in this Section 4

shall require Northern to file an application for a certificate of

public convenience and necessity under Section 7(c) of the Natural

Gas Act, nor prevent Northern from contesting an application for

service filed pursuant to Section 7(a) of the Natural Gas Act.

Northern reserves the right to seek a waiver of the policy set forth

in this Section 4 for good cause shown, during any proceeding before

the Commission instituted under Section 7 of the Natural Gas Act.

 

In order to maintain and expand firm entitlement and utilization of

Northern's system, Northern may negotiate firm transportation or storage

contracts with shippers whereby Northern could make a contribution in aid of

construction (CIAC) to the shipper. The shipper would use such funds to

assist in the development of natural gas facilities. Such

contributions must pass an economic feasibility test similar to the one

described in the preceding paragraph. For any newly agreed to CIAC,

Northern will post on its website for a period of thirty (30) days (1) the

amount of the CIAC, (2) the name of the customer receiving the CIAC, and (3)

the economic feasibility of the CIAC. Such CIAC's are includible in

Northern's jurisdictional rate base and amortizable to cost of service

ratably over the term of the related contract. All CIACs entered into

pursuant to this provision shall be subject to review and challenge by the

Commission and all parties in a general rate case requesting inclusion of

such costs.

 

5. TAX REIMBURSEMENT

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To the extent that any reimbursement to Northern by Shipper/Purchaser

is deemed taxable income to Northern pursuant to Section 824 of the

Tax Reform Act of 1986, P.L. 99-514, or any successor thereto,

Shipper/Purchaser shall reimburse Northern for the tax impact as

part of the actual costs incurred.