Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 03/08/2010, Docket: RP10-366-000, Status: Effective

Second Revised Sheet No. 2300 Second Revised Sheet No. 2300

Superseding: First Revised Sheet No. 2300

 

GENERAL TERMS AND CONDITIONS

Section 11

 

11. BIDDING AND AUCTION PROCEDURES

 

Any party who desires to participate in an auction or bidding process hereunder

must meet the credit / security requirements of Section 5 of these General Terms

and Conditions prior to participation in such process. Any entity desiring to seek

pre-approval of the credit requirements shall provide Texas Gas with the

information set forth in Section 5. A party who meets the credit requirements of

Section 5 will be placed on the "Pre-approved Bidders List" and will be eligible to

participate in auctions and bidding under this Section 11. Credit pre-approvals

are valid for a period of six (6) months. Customer may be required to update

credit information periodically in order to remain on the Pre-approved Bidders List

and will be notified by Pipeline when this is necessary.

 

Bidding and auctions for all firm transportation services shall be conducted

pursuant to Section 11.1 below, except that bidding and auctions for storage

service subject to market based rates shall be conducted exclusively pursuant to

Section 11.2.

 

11.1 Firm Transportation Capacity Posting and Bidding

 

(a) The auction process for firm transportation capacity, including

cost-based storage, shall be initiated pursuant to a Request for

Service as set forth in Section 8 hereof or pursuant to an Internet

notice posted by Texas Gas on its Internet Website stating its

desire to receive bids for capacity in accordance with this Section

11. The specifics of the capacity auction will be posted and bid as

provided herein.

 

(b) Texas Gas will post a notice announcing the date of any auction

("Auction Notice") for firm transportation capacity at least 24

hours prior to the beginning of the auction bidding period. This

notice will outline the auction start time(s) and all steps

necessary to participate/bid in the auction. If a Customer requests

capacity pursuant to a Request for Service at a rate less than the

maximum rate, the parties shall agree on the minimum acceptable rate

for the capacity before the auction will be posted. If the parties

are unable to agree on a minimum acceptable rate, the Request for

Service will be deemed invalid and removed from the Queue. If Texas

Gas initiates the auction, Texas Gas will specify the rate

schedule(s) and minimum term, if applicable; Texas Gas may further

establish a minimum acceptable rate which shall not be greater than

the maximum applicable rate or less than the minimum applicable

rate. Such Auction Notice shall include, but is not limited to, the

following information:

 

(i) the quantity of capacity available for auction;

(ii) the requested / offered primary receipt point(s), delivery

point(s), and, if applicable, supply laterals and segments

(collectively, "Requested Points") for an auction initiated

by a Request for Service;

(iii) the term for the initial bid, when applicable;

(iv) the minimum term, if any, for a Texas Gas initiated auction;

(v) the minimum acceptable bid, if any;

(vi) the method of NPV calculation (i.e. per MMBtu or aggregate);

and

(vii) the beginning and ending dates for the bidding period, which

period shall be for a minimum of:

 

1) one (1) Business Day for service offering(s) of less

than 1 year; or

 

2) five (5) Business Days for service offering(s) with a

term of 1 year or more.