Transcontinental Gas Pipe Line Company, LLC

Fourth Revised Volume No. 1

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Effective Date: 12/31/2008, Docket: RP09-158-000, Status: Effective

Original Sheet No. 468 Original Sheet No. 468

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

 

48. RIGHT OF FIRST REFUSAL PROCEDURES

 

48.3 Seller shall evaluate and determine the best bid relating to each service agreement in accordance

with one of the following two methods, with the specific method identified in its notice for bid

solicitation:

(a) Highest net present value of reservation charges, or

(b) Highest rate bid, provided such bid meets Seller's minimum stated term.

 

For purposes of determining (i) the highest bid under Section 48.3(a) and (b) and (ii) the bid

Buyer may elect to match pursuant to Section 48.4, Seller will utilize the reservation rates bid,

not to exceed Seller's applicable maximum reservation rates. In the event Seller receives two or

more bids of equal value, then under method (a) the best bid shall be the bid with the shortest

term and under method (b) the best bid shall be the bid with the longest term. If, after

performing the aforementioned calculations, two or more bids are tied, a random and blind

selection process will be used to select the best bid.

 

48.4 Buyer shall have the right to continue to receive service by notifying Seller in writing within

fifteen (15) business days of receiving Seller's notification of the best bid, that Buyer agrees

to match the best bid. The evaluation method used to determine whether Buyer's bid matches the

best bid shall be the same method used to determine the best bid pursuant to Section 48.3 above.

In the event Buyer matches the best bid, Buyer and Seller shall, prior to the expiration of the

service agreement, execute a new service agreement setting forth terms and conditions of the

matching bid. Such service agreement shall be effective as of the day following the expiration

of the expiring service agreement.

 

48.5 If Buyer elects not to match the best bid, then such election shall constitute an irrevocable

waiver of Buyer's right of first refusal and Seller shall execute a service agreement with Buyer

submitting the best bid and shall provide such service pursuant to the terms and conditions

contained in the best bid.

 

48.6 Notwithstanding the above, Seller shall not be obligated to accept any bid or execute any service

agreement at a rate less than the maximum rate allowable under such Rate Schedule. Seller shall

notify Buyer in writing if no bids are received during the bidding period, or if Seller does not

accept any bids. Buyer and Seller shall have fifteen (15) business days following the date of

Seller's notification to Buyer to reach a binding written commitment regarding the rate and term

of continued service to Buyer. In that binding written commitment, Buyer shall be entitled to

continue to receive service at the maximum rate and at a term selected by Buyer, or Buyer and

Seller may agree upon a negotiated rate or a rate between the maximum and minimum allowable

rates, as well as other mutually agreeable terms and conditions for continued service. In no

event shall Buyer and Seller agree upon a rate which is less than any bid received by Seller

pursuant to this Section 48 and rejected by Seller. If Buyer and Seller reach a binding written

commitment for continued service, Buyer must execute a new service agreement prior to the

expiration of the term of the existing service agreement (or within 30 days following the date

that Seller tenders the new service agreement to Buyer if the new service agreement is tendered

by Seller on or after the expiration date of the existing agreement). If Buyer and Seller fail

to reach a binding written commitment within fifteen (15) business days following the date of

Seller's notification as provided herein, then Buyer's right of first refusal shall terminate and

Seller will post the available firm capacity in accordance with Section 49 of the General Terms

and Conditions.

 

48.7 In the event a Buyer or Seller provides notice to terminate service under a service agreement and

Buyer does not notify Seller in accordance with Section 48.1(b) that Buyer may desire to continue

to receive all or a portion of its service entitlement under such service agreement, then Buyer

shall have forfeited its right of first refusal provided herein.

 

48.8 The provisions of this Section 48 shall not apply to releases of capacity under Section 42 of the

General Terms and Conditions unless that release is a permanent release for the remaining term of

the Service Agreement and that Service Agreement is eligible for right of first refusal provided

for herein.