Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 11/07/2005, Docket: RP06- 14-000, Status: Effective

Third Revised Sheet No. 301B Third Revised Sheet No. 301B : Effective

Superseding: Second Revised Sheet No. 301B

GENERAL TERMS AND CONDITIONS

 

4. True-up Mechanism

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(i) Mainline

 

Docket Nos. RP97-275-002 and TM97-2-59-000 provided that during any period, or any portion

of any period, that the Mainline fuel retention percentages are derived by using the PRA

Settlement Averaging Methodology, Northern shall true-up the Mainline fuel on a MID to MID

basis. However, pursuant to the Settlement in Docket Nos. RP98-203, et al., the MID-to-MID

true-up has been converted to a Fuel Section true-up in the Field Area. The Field Area

contains two (2) Fuel Sections consisting of MIDs 1-7 and MIDs 8-16b. Therefore, for the

period commencing June 1, 1999, Northern will true-up mainline fuel as follows:

 

Northern shall compare the fuel retained for the applicable winter or summer season or

annual time period with the actual fuel consumed for the same period for each of the two

(2) Field Area sections and the Market Area MID derived fuel percentages to determine the

Fuel Adjustment Amount for each fuel percentage. The actual fuel consumed shall be

calculated using the same rules and procedures utilized in calculating the Field Area ML

Fuel Percentages. The Fuel Adjustment Amount will be divided by the applicable Field

section or Market MID throughput to determine each Fuel Adjustment Percent to be

added to each Mainline Field section or Market MID fuel retention percentage for the

applicable winter or summer season or annual period beginning the following winter or

summer season or annual period. Under-retainage will result in a positive Fuel

Adjustment Amount. Over-retainage will result in a negative Fuel Adjustment Amount. For

purposes of determining the Adjustment Amount for years subsequent to the initial year

the Adjustment Amount for the prior year is first added to the actual fuel retained for

the prior year. To determine the Adjustment Amount for the subsequent year, the balance

of the fuel retained will be compared to the fuel consumed. A zero percentage will be

used for any section or MID fuel percentage that is derived to be less than zero.

 

(ii) Field

 

Northern shall compare the volume of Field fuel retained for the most recent twelve (12)

months ended December 31 with the volume of Field fuel consumed for the same period on a

MID-by-MID basis to determine the Fuel Adjustment Amounts on a MID-by-MID basis. Each

MID's Fuel Adjustment Amount will be divided by the applicable MID throughput to

determine the Fuel Adjustment Percent to be added to each Field MID fuel retention

percentage for the period beginning the subsequent April 1. To the extent a Field MID

retention percentage is zero, a Fuel Adjustment Amount will not be applicable to that MID

retention factor. Under-retainage will result in a positive MID Fuel Adjustment Amount.

Over-retainage will result in a negative MID Fuel Adjustment Amount. For purposes of

determining the Adjustment Amounts for years subsequent to the initial year of the PRA,

the applicable MID Adjustment Amount for the prior year is first added to the applicable

MID actual fuel retained for the prior year. To determine the Adjustment Amounts for the

subsequent year, the balance of the applicable MID fuel retained will be compared to the

applicable MID fuel consumed. A zero percentage will be used for any MID fuel percentage

that is derived to be less than zero.

 

(iii) FDD Storage

 

Northern shall annually compare the volume of FDD Storage fuel retained for the most

recent twelve (12) months ended December 31 with the volume of actual FDD Storage fuel for

the same period to determine the Adjustment Amount. The FDD Storage Adjustment Amount

will be divided by the applicable injection volumes to determine the FDD Storage

Adjustment Percent to be added to the FDD Storage retention percentage for the period

beginning the subsequent April 1. Under-retainage will result in a positive Adjustment

Amount. Over-retainage will result in a negative Adjustment Amount. For purposes of

determining the Adjustment Amount for years subsequent to the initial year, the Adjustment

Amount for the prior year is first added to the actual FDD Storage fuel retained for the

prior year. To determine the Adjustment Amount for the subsequent year, the balance of

the FDD Storage fuel retained will be compared to the actual FDD Storage fuel.