Northern Natural Gas Company

Fifth Revised Volume No. 1

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

Fourth Revised Sheet No. 306 Fourth Revised Sheet No. 306

Superseding: Third Revised Sheet No. 306

 

57. PENALTY AND DDVC REVENUE CREDITING MECHANISM

 

1. Crediting Mechanism

 

a. In March of each year, Northern will credit all penalty and DDVC revenues collected

that exceed the representative level of penalty revenue reflected in the design of the

currently effective base tariff rates, including interest per the Commission's

regulations, during the prior contract year (November through October) to shippers as

described below. Northern will add the credit to shippers' April invoices. If a

shipper is no longer a customer of Northern, then the shipper will receive payment by

check. Northern will not issue a check for shipper credits totaling less than $50 for

the year.

 

 

2. Allocation Method

 

a. Daily Delivery Variance Charges and Curtailment Penalty. DDVC charges (positive,

negative, punitive & critical) collected pursuant to Section 48, penalties collected

pursuant to Section 19.A.2, and Section 19.A.5 of the GENERAL TERMS AND CONDITIONS of

this Tariff will be credited to firm and interruptible shippers as follows: Shippers

who are subject to daily delivery variance charges (Shippers who take the swing at

delivery points on Northern's system) will receive an allocated portion of the DDVC

dollars collected. Northern will prorate the DDVC dollars based on a weighted value

equal to the total annual scheduled volume at the delivery points that are subject to

DDVCs where each shipper takes the swing, multiplied by a percent equal to 100% minus

the percent of the total DDVC dollars paid by each shipper for the year. Volumes at

pooling points and points subject to Operator Balancing Agreements are not subject to

DDVCs.

 

b. Receipt Point and Supply Shortfall and Excess Penalties. Receipt Point and Supply

Shortfall and Excess penalties collected pursuant to Section 31 of the GENERAL TERMS

AND CONDITIONS of this Tariff will be credited to firm and interruptible shippers as

follows: Shippers that operate contiguous, onshore receipt points that do not have an

Operator Balancing Agreement (OBA) will receive a credit. Northern will prorate the

receipt point penalty dollars based on a weighted value equal to the total annual

scheduled volume at the receipt points operated by the shipper, multiplied by a

percent equal to 100% minus the percent of the total receipt point and supply

shortfall penalty dollars paid by each shipper.

 

c. Carlton Penalty. Penalties collected pursuant to Section 29(c) of the GENERAL TERMS

AND CONDITIONS of this Tariff will be credited to Carlton Sourcers as follows: each

will receive an allocated portion of the Carlton Penalty dollars collected. Northern

will prorate the Carlton Penalty dollars based on a weighting value equal to the total

Carlton Resolution flow obligation of the Carlton Resolution shipper multiplied by a

percentage equal to 100% minus the percent of the total Carlton Resolution penalty

dollars paid by the shipper for the year.

 

d. Unauthorized Gas. The value of unauthorized gas remaining in Northern's system will

be credited to firm and interruptible shippers in accordance with the following:

 

i. The value of unauthorized gas remaining in Northern's system under Section 34 of

the GENERAL TERMS AND CONDITIONS of this Tariff will be credited to firm and

interruptible shippers, prorated according to each shipper's total deliveries for

the month in which the gas was determined to be Unauthorized Gas.

 

ii. The value of gas invoiced to the shipper in excess of 100% of the

index price, or the value of the gas remaining in Northern's system under Section

9 of the PDD Rate Schedule and Sections 4 (paragraph c) and 5 of the IDD Rate

Schedule will be credited to firm deferred delivery shippers, according to each

FDD shipper's total cycle quantity.

 

iii. The value of unauthorized gas remaining in Northern's system will be determined by

multiplying the applicable Monthly Index Price (MIP), as set forth in Section

32.C., for the applicable month, by the total quantity of gas remaining in the

system.

 

e. PDD Rollover Charge. Rollover Charges collected pursuant to Rate Schedule PDD will be

credited to the preferred deferred delivery shippers according to each PDD shipper's

total cycle quantity.