Tennessee Gas Pipeline Company
FIFTH REVISED VOLUME NO. 1
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Effective Date: 02/16/2003, Docket: GT02- 35-007, Status: Effective
4th Sub Ninth Revised Sheet No. 405A 4th Sub Ninth Revised Sheet No. 405A : Effective
Superseding: Seventh Revised Sheet No. 405A
GENERAL TERMS AND CONDITIONS (continued)
4.6 Transporter reserves the right to determine in its reasonable discretion, that a
Shipper who requests new service is not creditworthy to receive such service on
the basis that Shipper has outstanding payments due on invoices rendered by
Transporter on current or past service agreements and Shipper has defaulted on
such payments per the terms of Article VI of the General Terms and Conditions;
provided, however, this provision shall not affect amounts disputed by Shipper
in good faith. This Section 4.6 shall apply solely to the Shipper that is the
4.7 If a Shipper has multiple contracts with Transporter and defaults on one
contract, Transporter may deem a default by Shipper on that one contract as a
loss of creditworthiness on any other contract the Shipper has with
Transporter; provided, however, this provision shall not affect amounts
disputed by Shipper in good faith. This Section 4.7 shall apply solely to the
Shipper that is the contract holder.
4.8 In accordance with Article III, Sections 11.11(j) and 12.11(d) of Transporter's
General Terms and Conditions, in the event a Releasing Shipper does not
permanently release a contract to a Replacement Shipper, Transporter may
invoice the Releasing Shipper upon the Replacement Shipper's default on a
payment obligation to Transporter in accordance with Article VI of these
General Terms and Conditions for an amount up to the amount of the Releasing
Shipper's reservation charge plus interest calculated from the date the unpaid
amount was due from Replacement Shipper, net of any security held for
Replacement Shipper. Releasing Shipper shall submit the payment to Transporter
within ten (10) days of receipt of the invoice.
4.9 In the event Transporter constructs new facilities to accommodate a Shipper and
that Shipper is deemed uncreditworthy by Transporter, Transporter may require
an irrevocable letter of credit, or other mutually agreeable form of credit,
from Shipper in an amount up to the cost of the facilities until Transporter
has been reimbursed for the cost of the facilities. Such credit assurance may
be requested at any time prior to in-service of the facilities. To the extent
mutually agreed to as a condition of the construction, Transporter may invoke
such credit assurance requirement after the facilities are placed in-service.
In the event facilities are constructed to accommodate more than one Shipper,
the letter of credit or other mutually agreeable form of credit for each non-
creditworthy Shipper will be limited to the cost of facilities allocable to
such Shipper. The facilities under this Section 4.9 shall include those
facilities constructed in accordance with Article XVII of the General Terms and
Conditions for Shipper. This requirement is in addition to and shall not
supersede or replace any other rights that Transporter may have regarding the
construction and reimbursement of facilities.
In the event Shipper defaults and Transporter terminates service to Shipper,
Transporter shall draw upon and retain such collateral as necessary to reimburse
Transporter for the unamortized cost of the facilities constructed for Shipper.
The capacity underlying any terminated agreement shall be made available
pursuant to Section 5 of this Article XXVIII. Within 60 days of the capacity
being made available, to the extent such capacity has been awarded, the
collateral retained by Transporter from the original Shipper shall be reduced to
an amount equal to the net present value of that portion of the future
reservation charge revenues of the original Shipper that would have been
attributed to the cost of such facility less the net present value of that
portion of the future reservation charge revenues of the newly awarded Shipper
that may be attributed to the cost of such facility.
4.10 Transporter intends that this Section 4 shall be read in harmony, and not in
conflict, with the Bankruptcy Code.
4.11 In the event Transporter has terminated service to Shipper as a result of loss
of creditworthiness or default by Shipper, Transporter shall have the right to
assert any liens or other interests, consistent with applicable law, against any
gas Shipper may have remaining on Transporter's system.