Pine Prairie Energy Center, LLC

Original Volume No. 1

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Effective Date: 09/01/2007, Docket: RP07-563-000, Status: Effective

Original Sheet No. 159 Original Sheet No. 159 : Effective

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

31. CREDITWORTHINESS - FINANCIAL ASSURANCES

 

31.1 "Acceptable Credit Rating" means a Credit Rating no

lower than BBB- from Standard and Poor's Corporation or Baa3 from

Moody's Investor Services, Inc.

 

31.2 "Credit Rating" means the rating given to Customer's

unsecured long term debt by Standard and Poor's Corporation or

Moody's Investor Services, Inc.

 

31.3 "Material Adverse Change" means the failure of

Customer at any time to satisfy the requirements pertaining to

creditworthiness set forth in Section 3.3, to maintain an

Acceptable Credit Rating or to maintain or reinstate one of the

forms of Financial Assurances specified in Section 31.7 within

five (5) days after written notice from PPEC.

 

31.4 "Financial Assurances" means one or more of the

forms of security set forth in Sections 31.7(a), 31.7(b), 31.7(c)

and 31.7(d), in accordance with and in an amount as set forth in

Section 31.7.

 

31.5 If Customer suffers a Material Adverse Change, then

Customer shall provide PPEC with one or more of the forms of

Financial Assurances as set forth in this Section 31. Customer

shall provide such Financial Assurances within five (5) Business

Days of written notice from PPEC in an amount equal to one month

of firm service reservation charges, one month of Interruptible

service charges calculated on a one hundred percent load factor

basis and/or the market value of Customer's loaned gas, each

determined in the manner described in Section 31.7 below, as

applicable. Customer shall fully comply with Financial Assurances

provisions of Section 31.7 of these General Terms and Conditions

within 30 days of written notice from PPEC.

 

31.6 If prior to initiation of service Customer does not

have an Acceptable Credit Rating, then, as a condition of PPEC

initiating service, Customer shall provide PPEC with one or more

of the forms of Financial Assurances provided in this Section 31.

 

31.7 A Customer that does not have, or at any time fails

to maintain, an Acceptable Credit Rating shall provide to PPEC, to

secure its obligation to PPEC pursuant to each of Customer's

Storage Service Agreements, one or more of the following forms of

Financial Assurances:

 

(a) An irrevocable Letter of Credit, subject to the

following:

 

(1) each Letter of Credit shall be in effect for the

lesser of one (1) year or for the Term of the

transaction plus 120 days. If the Term of the

transaction plus 120 days is greater than one (1)

year, Customer shall ensure that its obligation

to PPEC is secured continuously, and accordingly

shall provide PPEC with