Northern Natural Gas Company

Fifth Revised Volume No. 1

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

Second Revised Sheet No. 285B Second Revised Sheet No. 285B

Superseding: Substitute First Revised Sheet No. 285B

 

GENERAL TERMS AND CONDITIONS

 

Provided, however, Northern may limit a non-creditworthy Shipper's activity that would

create or increase Northern's credit exposure to Shipper related to storage gas loans.

Upon Shipper's providing financial assurance in a form acceptable to Northern in an

amount equal to the outstanding value of any storage gas loaned to the Shipper and the

value of any storage gas to be loaned, the Shipper may create or increase a storage

loaned gas balance, up to the dollar value provided. The requirements set forth in the

paragraph above shall continue to apply to suspensions and terminations of all service.

 

Shipper shall have the right to request that its credit status be reevaluated

by Northern at any time. If the Security requirements are terminated and the

Shipper previously had provided Northern cash Security, the Shipper may elect

to have the security returned.

 

Northern may determine that a Shipper is no longer creditworthy if, in the

reasonable opinion of Northern, a Shipper (or its guarantor) suffers a

material adverse change (i.e., default on indebtedness, restatement of

financials, non-payment) in its financial condition such that Shipper's

ability to perform its obligations to Northern is materially impaired. If

Shipper is no longer creditworthy, Northern may require financial statements

and, when applicable, Security as set forth herein. Shipper shall have the

right to demonstrate that the material adverse change has been remedied and

request that Northern reevaluate the Shipper's creditworthiness to determine

whether the Security requirements can be terminated.

 

If Shipper is unable to maintain creditworthiness and has not provided

Security, any executed service agreement(s) may be terminated or suspended as

set forth herein. Shipper is not responsible for reservation charges while

service is suspended. If Shipper has defaulted under an agreement then, after

providing 5 days written notice to Shipper to cure such default and Shipper's

failure to cure such default, Northern shall net and/or setoff, as allowed by

law, all positions (transportation, storage, imbalances, SBA, rate refunds,

etc.) prior to settling outstanding account balances with the Shipper. For

purposes of netting and/or setoff of obligations, gas balances shall first be

dollar-valued based on the posted Midpoint Price for "Northern demarc" as

published in "Gas Daily" for the most recent date available at the time the

setoff occurs. Further, gas volumes loaned by Northern to Shipper and gas

volumes held by Northern on behalf of the Shipper shall be considered mutual

debts owed. Northern shall have the right to assert any liens or other

interests, consistent with applicable law, against any gas remaining on its

system.

 

Northern will also consider a Small Customer's past payment record

with Northern. Specifically, if a Small Customer is current with its

payments to Northern, and has not been delinquent in paying its bills

to Northern over the past twelve months (with good faith billing

disputes excepted), the Small Customer shall be deemed to have met the

creditworthiness standard with respect to new or existing

transportation and storage contracts with Northern. For other

Shippers, Northern shall consider such Shipper's past payment history

as one of the factors in determining such Shipper's creditworthiness.