Ozark Gas Transmission, L. L. C.

Original Volume No. 1

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Effective Date: 11/01/1998, Docket: CP98-266-002, Status: Effective

Original Sheet No. 15 Original Sheet No. 15 : Effective

 

 

RATE SCHEDULE FTS (continued)

 

construct such facilities, provided, however, that

Transporter shall not be required to install any

facilities extending beyond Transporter's existing

rights-of-way.

 

(b) Except where (i) Transporter and Shipper mutually

agree to share in the cost, or (ii) Transporter

agrees to pay for the entire cost, Shipper shall pay

for any facilities required to accommodate the

receipt of gas under this Rate Schedule FTS.

Transporter's determination to pay all or a portion

of such costs shall be based on its evaluation as to

whether such facilities will be economically

beneficial to Transporter.

 

(c) For the purposes of determining whether a project to

transport gas is economically beneficial to

Transporter, Transporter shall evaluate each

prospective project based upon the incremental cost

of the construction and operation of the facilities

to be constructed by Transporter, and the

incremental revenues that Transporter estimates will

be generated as a result of constructing and/or

modifying such facilities. In estimating the

revenues to be generated, Transporter will calculate

the revenues based upon the applicable

transportation rates, exclusive of any Annual Charge

Adjustment ("ACA") and/or Gas Research Institute

("GRI") charges, and the projected incremental

volumes expected to be transported. Transporter

will consider volumes to be incremental if the

volumes that will be transported would not otherwise

flow through Transporter's system.

 

(d) In situations where Shipper is required to pay the

total cost of the new facilities, Shipper's payment

of the cost of the new facilities shall include the

full cost of the facilities, the tax burden created

by the payment, as well as the tax-on-tax effect

generated by such payment. The allowance for income

tax reimbursement shall be computed by taking into

consideration three elements: (1) the current taxes

on the "contribution in aid of construction"

("CIAC"), less (2) the present value (computed using

a discount rate equal to Transporter's overall rate

of return) of future tax deductions for depreciation

that will be available from the constructed

facilities, plus (3) the tax-on-tax effect of the

first two elements, all of which should be computed

through use of tax rates that are in effect when the

contributions are received, i.e., Tax