Tuscarora Gas Transmission Company

First Revised Volume No. 1

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Effective Date: 07/01/2009, Docket: RP09-8-002, Status: Effective

Substitute Original Sheet No. 72 Substitute Original Sheet No. 72

Superseding: Original Sheet No. 72

 

GENERAL TERMS AND CONDITIONS

 

3. REQUESTS FOR SERVICE/CREDIT EVALUATIONS (Continued)

 

3.4 Credit Evaluation. (Continued)

 

If Shipper's credit standing ceases to meet Transporter's credit

requirements during the period of service, then Transporter has the

right to require credit alternatives as specified herein. Upon

notification by Transporter that Shipper no longer meets Transporter's

creditworthiness standards, Shipper must, within five (5) business

days, pay for one month of service in advance to continue service.

Shipper must, within thirty (30) days, provide Shipper's choice of one

of the credit alternatives specified in Section 3.5(b) of these General

Terms and Conditions. Transporter may deny subsequent requests to

substitute credit assurances on a not unduly discriminatory basis and

will provide Shipper with a written explanation of any denial of a

request to substitute credit assurances. If Shipper fails to provide

one of the credit alternatives within these time periods, Transporter

may suspend service immediately (Shippers are not responsible for

reservation charges after service is suspended) and may provide

simultaneous written notice to Shipper, the Commission, and any

replacement Shipper(s) that service will be terminated in thirty (30)

days. In addition, Transporter may exercise any other remedy available

to it hereunder, at law or in equity.

 

Transporter will set credit limits at 10% of a Shipper's Tangible Net

Worth; defined as Shipper's total assets, less liabilities, less

intangible assets, less off-balance sheet items. Transporter may

extend additional credit on a not unduly discriminatory basis based

upon Transporter's evaluation of the following types of information:

S&P and Moody's opinions, watch alerts, and rating actions; Shipper's

payment history, balance sheets, income statements, cash flow

statements, and auditors notes, in addition to key ratios and trends

regarding liquidity, asset management, debt management, debt coverage,

capital structure, operational efficiency, and profitability. If

Shipper provides a guarantee, Transporter will set a credit limit for

the shipper based upon a credit appraisal of the guarantor. Credit

limits may be modified by Transporter when Shipper's financial

conditions change. If Shipper's credit limit is insufficient to cover

that portion of Shipper's total contractual obligation for the 2-year

period ending 2 years from the date of the evaluation, Transporter

shall be entitled to require, on a not unduly discriminatory basis,

credit alternatives as described herein. Shipper's total contractual

obligation is the present value of all firm contracts, plus the amount

necessary to collateralize all of Shipper's interruptible agreements.