Gas Transmission Northwest Corp.
Third Revised Volume No. 1-A
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Effective Date: 01/01/2007, Docket: RP06-407-008, Status: Pending
Original Sheet No. 129A Original Sheet No. 129A : Pending
TRANSPORTATION GENERAL TERMS AND CONDITIONS
18. OPERATING PROVISIONS (Continued)
18.1 Firm Service (Continued)
(e) Valuation of Bids (Continued)
Unless otherwise specified in its open season posting, when
evaluating bids for long-term firm capacity with terms of three
years or more, the bid(s) with the highest net present value
("NPV") will additionally take into account a third factor:
Shipper's probability of default for the applicable bid term.
The NPV is the discounted cash flow of the bid according to the
following formula, net of revenues lost or affected by the
requests for service:
(1 + i) - 1
Present Value per = P * R * (1-PD) * ____________
i (1 + i)
where: P = percent of the rate or charge that the
Shipper is willing to pay.
R = Rate or charge calculated as: The applicable
maximum authorized reservation charge(s) per
Dth in effect at the time of the bid for
PD = Shipper's probability of default for the
applicable bid term.
i = FERC's annual interest rate divided by 12.
n = number of periods for which the bidder wishes
The NPV formula will be affected by the term and rate
requested and Shipper's probability of default.