Portland Natural Gas Transmission System

Second Revised Volume No. 1

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Effective Date: 09/01/2006, Docket: RP06-449-000, Status: Effective

Original Sheet No. 315 Original Sheet No. 315 : Effective

 

GENERAL TERMS AND CONDITIONS (Continued)

 

unsecured debt securities are rated A or better by Standard & Poor's

Corporation, A or better by Dominion Bond Rating Service or A2 or better by

Moody's Investor Service, Inc.; and with an expiration date not earlier than

one (1) Year from the date of issuance; and

 

(b) be held by Transporter as security for payment of all amounts

due under the Gas Transportation Contract, and shall be drawn upon by

Transporter, upon Transporter's determination that either:

 

(1) Shipper has breached its obligations under the Gas

Transportation Contract and Shipper has failed to cure within five (5) days of

Transporter giving notice of said breach; or

 

(2) if such letter of credit expires prior to the expiration

date of the Gas Transportation Contract, and Shipper does not provide a

replacement letter of credit meeting the requirements of this Section 3 at

least thirty (30) days prior to the expiration of the issued letter of credit.

 

3.7 Shipper Insolvency or Failure to Demonstrate Creditworthiness.

 

(a) Transporter shall not be required to perform or to continue

service for or on behalf of any Shipper which is or has become insolvent or

who, at Transporter's request, fails within five (5) Days to demonstrate

creditworthiness as defined in Section 3.5 herein. In the event a Shipper

which has previously qualified as creditworthy becomes insolvent or can no

longer demonstrate creditworthiness, Transporter shall provide service under

the applicable Rate Schedule for such Shipper if Shipper prepays for such

service or furnishes good and sufficient security, as determined by

Transporter in its reasonable discretion, in an amount equal to:

 

(1) the usage charges applicable to the proposed service for

a three-Month period; plus

 

(2) the sum of the Monthly reservation charges (if any)

applicable to the proposed service for a three-Month period.

 

In the event that usage charges are prepaid, Transporter shall

upon termination of service refund to Shipper any amount exceeding an amount

equal to the applicable usage rate multiplied by the Scheduled Quantity, less

any applicable penalties.