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

Substitute Second Revised Sheet No. 130 Substitute Second Revised Sheet No. 130 : Pending

Superseding: First Revised Sheet No. 130

TRANSPORTATION GENERAL TERMS AND CONDITIONS

(Continued)

 

18. OPERATING PROVISIONS (Continued)

 

18.1 Firm Service (Continued)

 

(e) Valuation of Bids (Continued)

 

As part of an open season posting, GTN will provide a

probability of default table. GTN will use Standard & Poor's

most recent fifteen-year "Cumulative Average Default Rates By

Rating Modifier" table, as extrapolated to reflect the maximum

bid term to be used for evaluation purposes, to quantify

Shipper's probability of default. The probability of default

table will define a bidder's probability of default based upon

1) the applicable bid term and 2) the credit rating of the

shipper. In order to increase the NPV of its bid, a Shipper

may elect to post additional collateral in one-year

increments, thereby reducing, by a like number of years, the

time horizon (years) used to define Shipper's probability of

default. Shipper credit ratings will be determined consistent

with Paragraph 18.3 of these General Terms and Conditions.

 

The specific bid evaluation methodology to be used, including,

where appropriate, the data to be used for evaluation of

Negotiated Rate Formula bids, will be included as part of

GTN's open season posting under Paragraph 18.1(c) with

sufficient specificity to allow a prospective shipper to

calculate the value of its bid and duplicate GTN's results.

 

Irrespective of whether a bid(s) has the highest NPV of the

bids received, GTN may reject bids for service that (i) may

detrimentally impact the operational integrity of

Transporter's system; (ii) do not satisfy all the terms of the

specified posting; or (iii) contain terms and conditions other

than those set forth in GTN's FERC Gas Tariff.

 

If the NPV of any Negotiated Rate revenues would exceed the

NPV of the revenue stream produced by paying the Maximum Rate

over the same period of time, then the Shipper bidding the

Negotiated Rate shall be considered to be paying the Maximum

Rate for purposes of determining the bid with the greatest

economic value.

(Continued)