Vector Pipeline L.P.
Original Volume No. 1
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Effective Date: 12/01/2003, Docket: RP03-489-001, Status: Effective
Substitute First Revised Sheet No. 168 Substitute First Revised Sheet No. 168 : Superseded
Superseding: Original Sheet No. 168
STATEMENT OF NEGOTIATED RATES
(Rates per Dth/d)
Shipper Rate Term of Contract
Identification Schedule Contract Demand
(Dth/d) Receipt Points Delivery Points Rate
Union Gas Limited1/ (FT-1) 2/ 80,000 Alliance Pipeline L.P. Vector Pipeline Limited 4/
1. This contract does not deviate in any material aspect from the form of service agreement.
2. The primary term of this Firm Transportation Contract is from March 20, 2000 (the date the agreement was made and entered into) until the fifteenth
(15th) anniversary of the Commissioning Date. For purposes of this agreement, "Commissioning Date" is defined as the date when all facilities of both
Union Gas Limited and Vector Pipeline L.P. have been completed, tested, and available for service, and permission to commence service has been granted
by both FERC and the National Energy Board respectively. The term of the agreement may be extended by Union Gas Limited for periods of a minimum of
3. "Vector Pipeline L.P." is the United States portion of the Vector Pipeline. "Vector Pipeline Limited Partnership" is the Canadian portion of the
4. Union Gas Limited will pay a capped negotiated rate consisting of a Negotiated Reservation Charge and a Usage Charge.
The Negotiated Rate Reservation Charge shall be calculated using the same components as comprise Vector Pipeline L.P.'s Recourse Reservation Charge,
with the following modifications, elements, and components: (i) an imputed capital structure consisting of 55% debt and 45% equity; (ii) a weighted
average cost of debt; (iii) an assumed annual Operation and Maintenance expense adjusted for inflation and the addition of new facilities; (iv) a
return on equity of 11.5% subject to an incentive adjustment; (v) normalized income taxes; (vi) a depreciation rate based on reverse
sum-of-the-year's-digits methodology using a twenty-year term; and (vii) a rate base that includes capital costs, line pack, credit for Account No. 82,
and all other traditional rate base items, including AFUDC.
The Usage Charge will recover all costs that vary with quantities actually shipped. Fuel and Lost and Unaccounted for Gas will be recovered on an
actual tracked basis. The Usage Charge is expected to be minimal.
Notwithstanding the Negotiated Rate Reservation Charge and Usage Charge methodologies outlined above, the total Negotiated rate is capped at $0.237 per
Dth (on a 100% load factor basis) for Contracted Capacity for delivery in the United States, or $0.250 per Dth (on a 100% load factor basis) less any
tolls charged by Vector Pipeline Limited Partnership for Contracted Capacity for delivery to Vector Pipeline Limited Partnership for redelivery in
Canada. The cap does not apply to all generally applicable FERC approved charges such as the Annual Charge Adjustment, Fuel, and Lost and Unaccounted