Texas Gas Transmission, LLC

Third Revised Volume No. 1

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Effective Date: 09/15/2008, Docket: RP08-392-000, Status: Effective

Original Sheet No. 2602 Original Sheet No. 2602 GENERAL TERMS AND CONDITIONS Section 14 (Cont'd) (h) In the event Texas Gas is utilizing its upstream capacity in other pipelines to transport gas for a Customer, the cash-out provisions, if any, of those upstream pipelines shall be applicable to such upstream transportation rather than Texas Gas' cash-out provisions. (i) Subject to the provisions of Section 14(h) above, Customers shall resolve their monthly transportation imbalances within the 0% to 2% Net Imbalance Percentage range and may elect to resolve their monthly transportation imbalances within the 2% to 5% Net Imbalance Percentage range through in-kind replacement. All transportation imbalances in excess of the 0% to 5% Net Imbalance Percentage must be cashed out at the appropriate percentages in 14(d) and (e) above. Customers using in-kind replacement for imbalance resolution have thirty (30) days from date of notification by Transporter to nominate and resolve their imbalances. Imbalances not resolved within this thirty (30) day period are subject to cash-out at the 5% to 10% Net Imbalance Percentage for determining the Cash-Out Index Price. The cash-out index price to be used for cash-out shall be the greater of the month in which the imbalance occurred or the month in which the imbalance is cashed out. If Customer makes a good faith effort throughout the 30 days provided for in-kind replacement of imbalance volumes, but is unable to fulfill its in-kind make-up obligations solely as a result of Texas Gas' inability to take or deliver such make-up gas, then Texas Gas will cash-out Customer's imbalance at 100% monthly average index. (j) Customers must make an election to utilize the in-kind replacement option for resolving net transportation imbalances from two to five percent within the guidelines of Section 14(i) above. Once elected, Customer must utilize this election for the entire election period. Elections will be allowed effective November 1 and May 1 of each year. (k) Subject to the provisions of Section 14(h) above, Customers may resolve their monthly transportation imbalances by trading their imbalance with another Customer within the same OIA. If customer authorization exists, Texas Gas will post imbalances available for trades on its Internet Website on or before the ninth business day of the month. New authorizations to Post Imbalances received at Texas Gas by 11:45 a.m. will be posted by 8:00 a.m. the next business day (Central Clock Time). Customers trading offsetting imbalances must provide Texas Gas a notice and confirmation of their agreement to trade imbalances in writing and signed by both Customers. Texas Gas will provide customers the ability to authorize imbalance posting and trading until at least the close of the seventeenth business day of the month. Customers must make-up in-kind or cash out all monthly transportation imbalances not resolved through trading in accordance with Section 15 of these General Terms and Conditions. (l) Imbalances accrued by a Processor under its Liquefiables Transportation Agreement during a month shall be resolved by Texas Gas and the Processor pursuant to the provisions of this Section 14.