Transwestern Pipeline Company, LLC

Third Revised Volume No. 1

 Contents / Previous / Next / Main Tariff Index

Effective Date: 09/20/2008, Docket: RP08-515-000, Status: Effective

First Revised Sheet No. 122A First Revised Sheet No. 122A

Superseding: Original Sheet No. 122A

GENERAL TERMS AND CONDITIONS

(continued)

13.5 Except as provided in Section 13.6 below, if a Shipper otherwise fails to establish or

maintain creditworthiness as provided herein, Shipper may still receive service under

the Service Agreement provided the Shipper maintains collateral for the term of the

Service Agreement in the form of (1) a written guarantee in a form satisfactory to

Transporter from a party which is creditworthy as determined above, (2) an irrevocable

standby letter of credit, (3) a pre-payment, or (4) other security acceptable to

Transporter. Such collateral shall be in an amount equal to the three highest months of

reservation charges for firm Shippers or estimated usage charges for interruptible

service during the term of the Service Agreement. Upon notification by Transporter,

Shipper shall have five (5) business days within which to provide partial collateral

equal to one month's service and must satisfy the entire collateral requirement within

thirty (30) days.

13.6 This Section 13.6 applies to Shippers participating in an expansion project.

If Shipper is unable, at any time during the term of Shipper's Service Agreement, to

establish and/or maintain creditworthiness in accordance with Section 13.3 above, then,

within ten (10) days of Shipper's receipt of Transporter's notice by Internet e-mail or

direct notification to Shipper's Internet URL address, whichever is chosen by Shipper,

that Shipper has failed to maintain creditworthiness, Shipper shall either: (a)

provide one of the following forms of credit support (each hereinafter referred to as

"Credit Support"): (i) an irrevocable letter of credit issued by a bank acceptable to

Transporter, and containing terms acceptable to Transporter, or (ii) a cash prepayment;

or (b) provide to Transporter a guaranty in a form acceptable to Transporter of

Shipper's obligations under Shipper's Service Agreement, executed by an entity that

satisfies such creditworthiness standard.

The amount of any Credit Support to be provided by Shipper shall be determined based on

(a) Shipper's proportionate share (based on MAXDTQ) of the cost of the expansion

project, with such amount decreased by a percentage equal to one (1) divided by the

number of years in Shipper's Service Agreement each year during the term of Shipper's

Service Agreement, less (b) the present value of reservation revenue that would be

collected if the capacity were resold for the remainder of the term, as determined by

the higher of: (i) the average reservation rate for capacity awarded over the prior

twelve (12) month period utilizing the Capacity Release, ROFR or Bid Solicitation

mechanisms for the applicable path(s)for terms of longer than twelve (12) months, or

(ii) such other mutually agreed upon mitigation value.

With respect to Rate Schedule FTS-5 Shippers, the amount of any Credit Support to be

provided by Shipper shall be determined based on (a) Shipper's proportionate share

(based on MAXDTQ) of the cost of the Phoenix Expansion Project, with such amount

decreased by a percentage equal to one (1) divided by the number of years in Shipper's

Service Agreement each year during the term of Shipper's Service Agreement (six point

seven (6.7) percent each year during the term of fifteen (15) year service agreements),

less (b) the present value of the reservation revenue that would be collected if the

capacity were resold for the remainder of the term, as determined by the higher of: (i)

the average reservation rate for capacity awarded over the prior twelve (12) month

period utilizing the Capacity Release, ROFR or Bid Solicitation mechanisms for

quantities Received from San Juan and Delivered to West of Thoreau East of California

and for terms of longer than twelve (12) months, (ii) the average reservation rate for

capacity awarded over the prior twelve (12) month period utilizing the Capacity

Release, ROFR or Bid Solicitation mechanisms for quantities Received from East of

Thoreau and Delivered to West of Thoreau East of California and for terms of longer

than twelve (12) months, (iii) the current tariff reservation rate for quantities

Received from West of Thoreau and Delivered to West of Thoreau East of California, or

(iv) such other mutually agreed upon mitigation value.