Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 04/01/2009, Docket: RP09-7-001, Status: Suspended

Substitute Second Revised Sheet No. 2102 Substitute Second Revised Sheet No. 2102

Superseding: Original Sheet No. 2102

 

GENERAL TERMS AND CONDITIONS

Section 9

(Cont'd)

 

9.2.7 Fuel Savings Sharing Mechanism

 

(a) Capital Investments. In the years 2008 and 2009, Texas Gas shall

install capital projects with a total cost between 2.5 and 6

million dollars that are expected to reduce the amount of fuel

consumed on its system in exchange for a share of system-wide fuel

savings. The costs for such capital projects shall establish

Texas Gas' "Total Capital Investments." For purposes of this

Section 9.2.7, Total Capital Investments shall be limited to the

capital dollars expended and shall not include return, taxes,

depreciation, maintenance, operations, or any other costs or

expenses incurred by Texas Gas with respect to these expenditures.

In addition, Texas Gas shall not be permitted to include Total

Capital Investments in its rates in any future rate proceedings;

such requirement shall survive the expiration of this Section

9.2.7.

 

(b) Calculations. "Fuel Savings Value" shall mean (i) the balance of

the Fuel Sharing Deferred Account for the applicable annual period

("Fuel Sharing Deferred Account Balance"), multiplied by (ii) the

weighted average of the monthly NYMEX close for the annual period.

The annual period shall commence on September 1, with the first

annual period commencing on September 1, 2008, and shall end on

August 31.

 

Example: (Fuel Sharing Deferred Account Balance * Average NYMEX) =

Fuel Savings Value

 

"In-Kind Fuel Savings" shall mean the Fuel Savings Value for the

applicable annual period divided by the weighted average of the

monthly NYMEX close for the annual period.

 

Example: Fuel Savings Value / Average NYMEX = In-Kind Fuel Savings

[MMBtu]

 

(c) Sharing Mechanism. Commencing with the 2009 fuel tracker, if the

Fuel Savings Value for the applicable annual period is positive,

Texas Gas will (i) convert the Fuel Savings Value into the In-Kind

Fuel Savings on an MMBtu basis, and (ii) apply twenty percent (20%)

of the In-Kind Fuel Savings to the FAP. Once Texas Gas recovers its

Total Capital Investments, Texas Gas then will apply fifty percent

(50%) of the In-Kind Fuel Savings to the FAP.

 

(d) Effective Dates. This Section 16.7 shall be effective on an

experimental basis from September 1, 2008 until September 30, 2011.

This Section 16.7 shall automatically expire on September 30, 2011.