Northern Natural Gas Company
Fifth Revised Volume No. 1
Contents / Previous / Next / Main Tariff Index
Effective Date: 04/17/2010, Docket: RP10-502-000, Status: Effective
Fourth Revised Sheet No. 285A Fourth Revised Sheet No. 285A
Superseding: Substitute Third Revised Sheet No. 285A
GENERAL TERMS AND CONDITIONS
(b) any Interruptible 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 3 months of estimated service charges, including the
value of gas related to gas loaned under deferred delivery rate schedules, plus an amount
equal to the highest monthly volume of imbalance 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;
(iii) cash in an amount not to exceed 3 months of estimated service charges, including the value
of gas related to gas loaned under deferred delivery rate schedules, plus an amount equal
to the highest monthly volume of imbalance 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.
Security, as set forth in (a) and (b) above, is hereinafter referred to as "Security."
For purposes of cash Security under either (a) (iii) or (b) (iii) above, Shipper may designate
an interest-bearing escrow account to be established and owned by Northern. Shipper shall be
entitled to receive the interest on the cash Security held in the account.
For purposes of "Security" under this Section 46, the value of gas shall be based on an amount
up to the highest of 1) the basis adjusted NYMEX futures price or the posted Midpoint Price for
"Northern, demarc" as published in the Daily Price Survey of the "Gas Daily," whichever is
applicable for the withdrawal period, 2) the average monthly basis adjusted NYMEX futures price
during the next 12 calendar month period, or 3) the basis adjusted NYMEX futures price for the
period of injection. In addition, the value of gas that may be included in Security shall be
limited to: (i) the outstanding value of any gas loaned to a Shipper, and/or (ii) the value of
the gas to be loaned for the upcoming month. This means that the Shipper shall provide such
Security to Northern for the value of gas that has already been loaned and/or one month's value of
storage gas to be loaned.
If the value of either imbalance gas or storage gas loaned to Shipper decreases after Security has
been provided, Shipper may agree that Northern may continue to hold such Security. Additionally,
security levels shall not be revised more than weekly
To permit Northern to conduct a creditworthiness review, a Shipper shall, upon request by
Northern, render to Northern: (i) a completed credit application, and (ii) complete financial
statements prepared in accordance with generally accepted accounting principles or, for
non-U.S.-based Shippers, prepared in accordance with equivalent principles. Upon requesting
transportation service, Northern may require a Shipper to submit a completed credit application
unless it has previously submitted such to Northern within the last twelve (12) months. If a
Shipper elects to provide an irrevocable standby letter of credit or cash Security, the
completed credit application and financial statement requirement is waived by Northern.
Northern shall have the right to review a Shipper's creditworthiness on an ongoing basis and
Shipper shall provide, upon Northern's request, updated financial statements periodically in order
to determine the continuing creditworthiness of a Shipper. Shipper shall have at least 3 business
days to respond to Northern's request for financial statements. Upon review of the Shipper's
financial statements, Northern shall determine if the Shipper is creditworthy. If the Shipper is
determined to be non-creditworthy, Northern may require Security as set forth herein. Shipper
shall have at least 5 business days from Northern's written request to pay Northern for one month
of service in advance. Shipper shall have at least 30 days to provide the next three (3) months
of Security to continue service. If the Shipper fails to provide the required Security within
these time periods, Northern may suspend service immediately. In addition, Northern will provide
at least 30 days written notice to Shipper and the Commission that it will terminate service
if the Shipper fails to provide the required Security.