Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 06/08/2009, Docket: RP09-583-000, Status: Effective

First Revised Sheet No. 2106 First Revised Sheet No. 2106

Superseding: Original Sheet No. 2106

 

GENERAL TERMS AND CONDITIONS

Section 9

(Cont'd)

 

 

In addition, the discount agreement may include a provision that if one

rate component which was at or below the applicable Maximum Rate at the

time the discount agreement was executed subsequently exceeds the

applicable Maximum Rate due to a change in Transporter's Maximum Rates

so that such rate component must be adjusted downward to equal the new

applicable Maximum Rate, then other rate components may be adjusted

upward to achieve the agreed overall rate, as long as none of the

resulting rate components exceed the Maximum Rate applicable to that

rate component. Such changes to rate components shall be applied

prospectively, commencing with the date a Commission Order accepts

revised tariff sheet rates. However, nothing contained herein shall be

construed to alter a refund obligation under applicable law for any

period during which rates that had been charged under a discount

agreement exceeded rates, which ultimately are found to be just and

reasonable.

 

9.5 Negotiated Rates

 

9.5.1 Availability: Texas Gas and Customer may mutually agree to negotiate rates

under any Part 284 Rate Schedule. Texas Gas' maximum effective rate

(maximum base rate plus all applicable surcharges) for service under any

such rate schedule is available as a recourse rate for any Customer that

does not desire to negotiate a rate hereunder.

 

9.5.2 Definition: Negotiated rates shall be mutually agreed and set forth in

writing. A negotiated rate is a rate which is greater than the maximum

rate, or which is less than the minimum rate, or which is determined from a

formula where the rate arrived at could be above or below the maximum rate,

or which uses a rate design other than the one used to establish the

applicable recourse rate (e.g., straight fixed variable). A negotiated

rate may include a minimum quantity.

 

9.5.3 Capacity Allocation: In evaluating bids for firm service, in any capacity

auction or in otherwise allocating capacity among competing requests for

firm service where one or more bids uses a negotiated rate or negotiated

rate formula, Texas Gas will consider, in assigning value to such bid(s),

only reservation or demand charge revenue or other revenue which is

guaranteed to be received by Texas Gas. Guaranteed revenue shall mean a

volumetric or usage rate bid along with a minimum quantity commitment.

For capacity evaluation purposes, the net present value of any such bid

for firm service shall be capped by the net present value of the maximum

applicable reservation rate for such service over the contract term bid.

In performing a net present value evaluation of a negotiated rate bid

proposing a volumetric or usage rate along with a minimum throughput

commitment, Texas Gas shall consider only the fixed costs proposed to be

recovered through the volumetric or usage rate bid, in addition to any

reservation rate included in the bid.