Transwestern Pipeline Company, LLC

Third Revised Volume No. 1

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Effective Date: 10/23/2006, Docket: RP06-604-000, Status: Effective

First Revised Sheet No. 115 First Revised Sheet No. 115 : Effective

Superseding: Original Sheet No. 115

 

GENERAL TERMS AND CONDITIONS

(continued)

 

8. INSTALLATION OF FACILITIES

 

8.1 Transporter shall have no obligation to modify its existing facilities or construct new

facilities in order to receive or deliver Shipper's gas under any Rate Schedule.

 

8.2 Subject to the conditions of Section 8.4 below and upon execution of an agreement

mutually agreeable to Shipper and Transporter, Transporter will construct or modify those

facilities, reasonably necessary to provide transportation services to Shipper hereunder,

that interconnect with facilities which either cross or are adjacent to Transporter's

existing facilities, if Shipper reimburses Transporter for the cost of said facilities.

 

8.3 Subject to the conditions of Sections 8.4 and 8.5 below, and on a not unduly

discriminatory basis, Transporter may pay for all or part of the cost incurred by

Transporter for the modification or construction of taps, valves, measurement equipment,

laterals, or other facilities required at receipt or delivery point(s) to effectuate the

receipt or delivery of natural gas hereunder, when the construction or modification of

such facilities is economically beneficial to Transporter.

 

For the purposes of determining whether a gas supply project is economically beneficial

to Transporter, Transporter will evaluate each prospective project, on a not unduly

discriminatory basis, based upon the amount of the reserves and deliverability

characteristics of the gas supply to be attached, the cost of the facilities to be

constructed by Transporter, the incremental operating and maintenance expenses which

would be attributable to the facilities, and the revenues which Transporter estimates

will be generated as a result of constructing and/or modifying such facilities.

 

For the purposes of determining whether a project to deliver gas is economically

beneficial to Transporter, Transporter will evaluate each prospective project, on a not

unduly discriminatory basis, based upon the cost of the facilities to be constructed by

Transporter, the incremental operating and maintenance expenses which would be

attributable to the facilities, and the revenues which Transporter estimates will be

generated as a result of constructing and/or modifying such facilities.

 

In estimating the revenues to be generated, Transporter will consider the existence of

capacity limitations downstream of the proposed new facilities, the marketability of gas

which may flow through said facilities, the interruptible versus firm nature of the

transportation service for the gas, and other similar factors which determine whether gas

will actually be transported through said facilities.

 

8.4 Transporter shall not construct or modify any facilities hereunder which will result in

an increase or decrease in Transporter's mainline capacity, or which may compromise the

operational integrity of Transporter's pipeline system. For those facilities which

Transporter agrees to construct, Transporter will construct those facilities (1) pursuant

to the authorization granted in Subpart F of Part 157 of the Commission's Regulations or

(2) where the prior authorization of the Commission is not required to construct such

facilities. Transporter will own and operate all facilities constructed hereunder. To

the extent Shipper's reimbursement of Transporter's costs incurred to construct new

facilities hereunder qualifies as a contribution in aid of construction under the Tax

Reform Act of 1986, Pub. L. No. 99-514 (1986), as amended from time-to-time, Shipper

shall also reimburse Transporter for Federal income taxes incurred by Transporter as a

direct result of such contributions in aid of construction by Shipper.

 

8.5 Transporter shall have the right at any time during a calendar year to terminate,

prospectively for the remainder of that calendar year, the reimbursement program

described in Section 8.3 above for new projects.