Northern Natural Gas Company

Fifth Revised Volume No. 1

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Effective Date: 05/15/2005, Docket: RP05-271-000, Status: Effective

Tenth Revised Sheet No. 303 Tenth Revised Sheet No. 303 : Effective

Superseding: Ninth Revised Sheet No. 303

 

 

 

 

 

 

54. DISCOUNTING

 

A. ORDER OF DISCOUNTING

 

Subject to the tariff limitations pursuant to the applicable minimum and

maximum rates, the discounting of rates shall be done in the following

order:

 

1. Base Tariff rate.

 

2. Carlton Surcharge, as provided in Section 29(c)4 of these General Terms

and Conditions.

 

 

B. TYPES OF DISCOUNTS

 

From time to time Shipper and Northern may agree in writing on a level

of discount of the otherwise applicable rates and charges in addition to

a basic discount from the stated maximum rates. For example, Northern

may provide a specific discounted rate:

 

(1) to certain specified quantities under the Service Agreement;

(2) if specified quantity levels are actually achieved or with respect

to quantities below a specified level;

(3) to production reserves committed by the Shipper;

(4) during specified time periods;

(5) to points of receipt, points of delivery, supply areas,

transportation paths or defined geographical areas; or

(6) in a specified relationship to the quantities actually transported

(i.e., that the rates shall be adjusted in a specified relationship

to quantities actually transported);

(7) to provide that if one rate component which was equal to or within

the applicable maximum and minimum rate at the time the discount

agreement was executed subsequently exceeds the applicable maximum

rate or is below the applicable minimum rate due to a change in

Northern's maximum rates and/or minimum rates, so that such rate

component must be adjusted downward or upward to equal the new

applicable maximum or minimum rate, then other rate components may

be adjusted upward or downward to achieve the agreed-upon overall

rate, so long as none of the resulting rate components exceed the

maximum rate or are below the minimum rate applicable to the rate

component. Such changes to rate components shall be applied

prospectively, commencing with the date a Commission order accepts

revised tariff sheets. However, nothing contained herein shall be

construed to alter a refund obligation under applicable law for any

period during which rates which had been charged under a discount

agreement exceeded rates which ultimately are found to be just and

reasonable; or

(8) based on a formula including, but not limited to, published index

prices for specific receipt or delivery points or other agreed-upon

pricing reference points for price determination. Any service

agreement containing such a discount will identify what rate

component (i.e. reservation charge or usage charge or both) is

discounted and any formula will produce a reservation rate per unit

of contract demand.

(9) that provides for increasing (or decreasing) a discounted rate for

service under one rate schedule to make up for a decrease (or

increase) in the maximum rate for a separate service provided under

another rate schedule.

 

In all circumstances the discounted rate shall be between the maximum

rate and the minimum rate applicable to the service provided.