Northern Natural Gas Company

Fifth Revised Volume No. 1

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

First Revised Sheet No. 230 First Revised Sheet No. 230 : Effective

Superseding: Original Sheet No. 230

GENERAL TERMS AND CONDITIONS

 

E. Contracts to Divert Supply During A Curtailment

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Northern will make its website available for "Curtailment Supply Wanted"

and "Curtailment Supply Available" so that firm Shippers can enter into

voluntary contractual arrangements to provide for supply in the event of

a curtailment. Under such an arrangement, a curtailment supplier will,

during the period of curtailment, divert its supply by limiting its

takes up to the quantity specified in the contract within four hours of

the emergency curtailment announcement. Contract parties who do not

receive gas under said contract during a curtailment must pursue

whatever remedies they have for breach of contract.

 

F. Curtailment Compensation Plan

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In the event a firm Shipper, who has not entered into a contract to have

its supply diverted, as described in Section 19.E. above, has its supply

diverted during a curtailment, or is not permitted to use or schedule

capacity up to its initial pro rata curtailment share of capacity during

the curtailment due to an emergency exemption, the following

compensation procedure will be followed:

 

1. In the event that scheduled and confirmed flowing gas supplies are

diverted from a firm shipper, the measure of daily compensation for

supply shall 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

Summary column per MMBtu, for the day(s) of curtailment, plus one

hundred percent (100%) of all daily transportation demand charges.

 

In the event a Shipper is unable to use or schedule its capacity up

to its initial pro rata curtailment share of capacity during the

curtailment due to an emergency exemption, the measure of daily

compensation is one hundred percent (100%) of all daily

transportation demand charges for the difference between the

Shipper's initial pro rata curtailment share of capacity and the

adjusted level of pro rata curtailment capacity.

 

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 and/or were not able to use their capacity up to their

initial pro rata curtailment share of capacity. Northern will take

all reasonable steps to collect such compensation from the parties

receiving gas above their scheduled quantity or capacity above their

initial pro rata share during the curtailment and will pay any

amounts collected under this provision to the parties who did not

receive their scheduled quantity or their initial pro rata

curtailment share of capacity during the curtailment. However, in

the event Northern is unable to collect such compensation from the

responsible parties after taking all reasonable steps, Northern

shall not be liable for payment to the parties entitled to such

compensation.

 

2. In no event will Shippers involved in a dispute as to the diversion

of their gas during a curtailment seek to hold Northern liable for

direct or consequential damages resulting from the diversion of gas.

Further, it is clearly understood that Northern will act merely as a

conduit with respect to any role it may have in the collection of

monies as payment for diverted gas.