Transcontinental Gas Pipe Line Company, LLC
Fourth Revised Volume No. 1
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Effective Date: 10/01/2009, Docket: RP09-971-000, Status: Effective
First Revised Sheet No. 478 First Revised Sheet No. 478
Superseding: Original Sheet No. 478
GENERAL TERMS AND CONDITIONS
53. NEGOTIATED RATES (Continued)
53.3 Best Bid for Available Firm Capacity. For purposes of Section 49.2 of the General
Terms and Conditions, for negotiated rate bids proposing a reservation rate or other
form of revenue guarantee which exceeds the maximum applicable reservation rate, the
net present value calculated for the bid may not exceed a net present value that is
calculated assuming that the maximum applicable reservation rate shall be in effect
during the full term proposed in the bid, in place of the reservation rate(s) or other
revenue guarantee(s) proposed in the bid. As used in Section 49.2 and in this Section
53.3 "revenue guarantee" shall mean a volumetric or usage rate bid along with a
minimum throughput commitment. In performing a net present value evaluation of a
negotiated rate bid proposing a volumetric or usage rate along with a minimum
throughput commitment, Seller 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.
53.4 Capacity Release. A negotiated rate shall not apply as a price cap for capacity
release transactions under Section 42 of the General Terms and Conditions. Capacity
release bids must conform to Section 42.7 (d) of the General Terms and Conditions.
53.5 Rate Treatment. Seller shall have the right to seek in future general rate
proceedings discount-type adjustments in the design of its rates related to negotiated
rate agreements that were converted from pre-existing discount agreements to
negotiated rate agreements, provided that the type of pre-existing service is not
altered as a result of the conversion to a negotiated rate. In those situations,
Seller may seek a discount-type adjustment based upon the greater of: (a) the
negotiated rate revenues received or (b) the discounted rate revenues which otherwise
would have been received.
53.6 Limitations. This Section 53 does not authorize Seller to negotiate terms and
conditions of service.
54. PENALTY REVENUE SHARING
Subject to the further provisions of this Section 54, Seller shall distribute annually all
penalty revenue collected, net of costs, during each annual period, excluding cash out
penalty revenue, to firm and interruptible transportation and storage Buyers. "Net of costs"
means the costs resulting from the transactions that gave rise to the penalty amounts, which
are defined in Section 6.1 of Rate Schedule EESWS, Section 3.2(d) of Rate Schedule ISS,
Section 7.2 of Rate Schedule PAL, and Section 18.6 of the General Terms and Conditions
respectively. Each annual period shall consist of a twelve (12) month period ending July 31.
For each month during each annual period, Seller shall determine the Buyers that have not
incurred in that month any of the penalties subject to distribution pursuant to this Section
and, therefore, are eligible to share in the penalty revenue collected in that month.
Eligible Buyers will share in all penalty revenue collected during that month based on each
respective eligible Buyer's actual fixed cost contribution as a percentage of the total fixed
cost contribution of all eligible Buyers (exclusive of the fixed cost contribution pertaining
to service purchased by Seller from third parties) during that month. The fixed cost
contribution for any capacity release transaction not subject to the maximum rate ceiling
shall be capped at the fixed cost portion of the maximum tariff rate that applies to the
original Shipper's contract.
Following each annual period, Seller shall post on its EBB the penalty revenue collected and
file a report with the Federal Energy Regulatory Commission and serve on Buyers and
interested State Commissions. If the penalty revenue collected during an annual period does
not exceed $100,000, Seller shall not distribute the penalty revenue to the eligible Buyers,
as determined above, but shall retain the penalty revenue for distribution to the eligible
Buyers following the end of the annual period during which the cumulative undistributed
penalty revenue collected exceeds $100,000. Any penalty revenue collected and retained by
Seller shall accrue interest calculated pursuant to Section 154.501(d) of the Commission's