Northern Natural Gas Company

Fifth Revised Volume No. 1

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

Seventh Revised Sheet No. 285 Seventh Revised Sheet No. 285

Superseding: Substitute Sixth Revised Sheet No. 285

 

GENERAL TERMS AND CONDITIONS

 

gas industry. If Northern determines that Shipper does not have an

acceptable rating as set forth above, Shipper may, at its own expense, obtain

a private rating from Standard & Poor's, Moody's, Fitch, or Dominion, or, as

an alternative, request that an independent certified public accountant,

mutually acceptable to Shipper and Northern, prepare an equivalent evaluation

based on the financial analysis criteria and ratios which are generally

acceptable in the natural gas industry. In addition, to establish

creditworthiness Shipper must confirm in writing that Shipper is not

operating under any chapter of the bankruptcy laws and is not subject to

liquidation or debt reduction procedures under state laws, such as an

assignment for the benefit of creditors, or any informal creditors' committee

agreement. Northern's creditworthiness provisions shall not supersede

applicable bankruptcy laws. Northern will provide Shipper written notice of

the reasons it has been deemed non-creditworthy at the same time that

Northern provides the notification to Shipper that it has been deemed

non-creditworthy.

 

If a Shipper otherwise fails to establish or maintain creditworthiness

as provided herein, Shipper may still receive service under the

applicable Rate Schedule provided it furnishes and maintains for the

term of:

 

(a) any Firm Service Agreement:

 

(i) a written guarantee in a form satisfactory to Northern from a

third party which is creditworthy as determined above;

 

(ii) an irrevocable standby letter of credit from a financial institution

acceptable to Northern in an amount not to exceed a rolling 3 months

(or, at Shipper's option, the highest 3 months) of reservation

charges under the contract plus an amount equal to the highest

monthly imbalance volume owed by shipper during the previous

12 months, valued at up to the highest basis adjusted NYMEX futures

price in the next 12 month period;

 

(iii) cash in the amount not to exceed a rolling 3 months (or, at Shipper's

option, the highest 3 months) of reservation charges under the

contract plus an amount equal to the highest monthly imbalance volume

owed by the shipper during the previous 12 months valued at up to the

highest basis adjusted NYMEX futures price in the next 12 month

period; or

 

(iv) other security acceptable to Northern.

 

In the event Northern constructs new lateral facilities to

accommodate a Shipper, Northern may require additional Security in an

amount up to the Shipper's proportionate share in the cost of the

facilities. In the event a Shipper defaults and its service is

terminated, Northern shall mitigate damages from the default and

reduce the Security retained from the defaulting Shipper through

methods such as netting the difference between the highest net

present value of any replacement contract entered into for the

terminated capacity and the net present value of the remaining term

of the defaulting Shipper's contract at the time of the default; or