Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 02/25/2006, Docket: RP06-185-000, Status: Effective

Fourth Revised Sheet No. 228 Fourth Revised Sheet No. 228 : Effective

Superseding: Substitute Third Revised Sheet No. 228

GENERAL TERMS AND CONDITIONS

 

In the event of a receipt point supply shortfall, the following compensation provision will

apply: the Shipper(s) who were responsible for the supply shortfall which

triggered the temporary supply interruption will compensate the other Shipper(s) who

were not responsible for the temporary supply interruption but were curtailed during

the interruption up to the level of each responsible Shipper's takes. The measure of

compensation for curtailed gas in a temporary supply interruption will be a rate of two

hundred seventy-five percent (275%) of the daily arithmetic average of the three (3)

price discovery points of Panhandle, Tx. - Okla, Northern (demarc) and Northern

(Ventura) as reported in the publication "Gas Daily" under its Daily Price Survey column,

per MMBtu, for the day(s) of interruption. This provision for compensation is

considered a liquidated damages clause and, therefore, shall be the only measure of

compensation for parties who did not receive their scheduled quantity during the

curtailment.

 

2. Receipt Point Supply Excess

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If Northern experiences overdeliveries of quantities of gas into Northern's system

which affect the operating integrity of its system, Northern shall have the right

after providing as much advance notice as possible, to curtail receipts in the affected

area until Northern is able to identify the Shipper(s) who are tendering volumes in

excess of the volumes nominated and scheduled. Curtailment will be effected in the

following sequence after Northern has made a diligent effort to identify the

overdelivering source:

 

a) If the overdelivering source is known, Northern will require the Shipper to reduce its

deliveries to Northern.

 

b) If the overdelivering source is unknown, the smallest affected area at the receipt point

will be localized and curtailed in the following sequence:

 

1) Interruptible throughput will be curtailed on the basis of lowest TI price first.

 

2) LFT service with Limited Days remaining for the month.

a. lowest price will be limited first;

b. greater number of remaining Limited Days second;

c. and then pro rata.

 

3) Firm service, including LFT with no Limited Days remaining for the month, at primary

or alternate points will be curtailed pro rata.

 

Receipt point volumes which are independently verifiable by Northern will not be subject to

the receipt point supply excess provisions.

 

C. Capacity

 

1. Receipt Point Capacity Constraint

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In the event of a receipt point capacity constraint, the smallest affected area at the

receipt point will be localized and associated deliveries will be curtailed in the

following sequence:

 

(i) Interruptible throughput will be curtailed on the basis of the lowest TI price

first;

 

(ii) LFT service with Limited Days remaining for the month.

a. lowest price will be limited first;

b. greater number of remaining Limited Days second;

c. and then pro rata.

 

(iii) Firm service, including LFT with no Limited Days remaining for the month, at primary

or alternate points will be curtailed pro rata.

 

Corresponding markets will be curtailed in the same sequence described in

paragraphs (i)-(iii) immediately above.