Northern Natural Gas Company

Fifth Revised Volume No. 1

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

Fourth Revised Sheet No. 269B Fourth Revised Sheet No. 269B

Superseding: Third Revised Sheet No. 268B

 

GENERAL TERMS AND CONDITIONS

 

J. Imbalance Statements.

 

The Imbalance statements shall be made available to the Shipper on the

9th business day of each month.

 

Upon termination of the Throughput Service Agreement, any remaining imbalances

shall be cashed out/in within thirty (30) days from the date of termination.

 

K. Imbalance Value Reconciliation

 

For the production period commencing January 1, 2005, Northern will record the

effects of Storage Encroachment Price Risk (SPR) previously called the System

Levelized Account (SLA) on a monthly basis. Such effect shall be separately

recorded by Cash and Liability or Asset, including the value from tiering the

MIP, and revenues and expenses related to the sale or purchase of gas volumes,

including the costs and revenues of managing operational storage purchase and

sales obligations through the use of derivative instruments. Regardless of any

accounting rule or principle that may apply, the changes in fair value of

derivative instruments, if used to manage the SPR, may be included in the cost of

service for ratemaking purposes, subject to all parties' rights to challenge

on any grounds other than such accounting principles.

 

L. Imbalance Trading. Imbalance trading activity shall follow the steps outlined

below. All imbalance trading will be on a volumetric basis.

 

(i) Effective February 1, 2005, by the ninth (9th) business day of the month

following the month the imbalance occurred, Northern will automatically post

on its website Shipper's volumetric imbalances (netted by legal entity) by

type of imbalance. Northern will also post customer-provided information

regarding their desire to trade, the volumes and price at which they want to

trade and any other comments.

 

(ii) A Shipper may negotiate with other Shippers, or Shipper's agent, to trade

the existing imbalances. An agent is allowed to trade imbalances on behalf

of more than one shipper at the same time. Imbalances can be traded as long

as they affect the same operational impact area, either "Market Area,"

"Field Area" or "Gulf Coast," consistent with the definition of the "Market

Area," "Field Area" and Gulf Coast," as set forth in Section 32 C. above.

There is no requirement that imbalances for trading must be incurred on the

same day.

 

(iii) All Shippers will have until the close of the 17th business day of the

month following the month the imbalance occurred to complete volumetric

imbalance trading elected in (i) above.

 

(iv) Shippers must notify Northern at or prior to the close of the 17th business

day via fax or e-mail of the volumes traded and the trading partners (all

Shippers in the trade must notify Northern of the intent and the amount

traded).

 

(v) Imbalance trades will be executed at no additional cost to the Shipper.

 

(vi) After the close of the 17th business day of the month following the month

the imbalance occurred, Northern will calculate Shipper's final imbalance

for the prior month's gas flow. Any residual imbalances net of trading and

not resolved by other methods in accordance with the terms of this tariff

will be cashed-in/out at the weekly high/low price for the production

month.

 

(vii) Any discrepancies between trading Shippers' imbalance trade notifications

to Northern will result in the trade not being confirmed and the volume

remaining as an imbalance to both Shippers, which will be subject to

resolution using cash-in/out. However, an initiating Shipper may cure any

defect in its imbalance trade notification so long as the Shipper does so

prior to the receipt of the trade confirmation. Imbalance trades can only

be withdrawn by the initiating trader and only prior to the confirming

trader's confirmation of the trade. Imbalance trades are considered final

when confirmed by the confirming trader and effectuated by Northern.