Questar Southern Trails Pipeline Company

Original Volume No. 1

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Effective Date: 06/01/2002, Docket: RP02-318-000, Status: Effective

Original Sheet No. 98 Original Sheet No. 98 : Effective

 

GENERAL TERMS AND CONDITIONS

 

make full payment to Southern Trails for the additional

facilities, except as may otherwise be provided in the

Shipper's transportation service agreement.

 

Shipper's payment to Southern Trails shall include the

full cost of the facility, the tax burden created by the

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

payment. Reimbursement for federal income taxes on Shipper's

payment will be computed by first determining the tax-on-tax

effect, and then deducting the present value of the future tax

benefit provided by the future depreciation of plant involved

in the payment.

 

The tax-on-tax effect will be determined by the product

of (a) the dollar amount qualifying as a contribution in aid

of construction under the Tax Reform Act of 1986 and (b) the

"tax rate" divided by one minus the tax rate: i.e.

 

Tax Rate

1-Tax Rate

 

The present value of the tax benefit provided by the

future depreciation of plant shall be calculated by Southern

Trails according to the present value formula shown in 6 to

these General Terms and Conditions. Shipper shall have no

ownership interest in the additional facilities installed by

Southern Trails. Southern Trails may require the Shipper to

pay additional costs, including the tax burden created by the

value of the facilities constructed by the Shipper or third

parties as well as the tax-on-tax effect generated by such

payment.

 

24.2 Limitations. This 24 pertains to facilities at

receipt and delivery points only. It is not intended to limit

any party's ownership, operation, installation or payment for

facilities upstream of a receipt point or downstream of a

delivery point. It is the Shipper's responsibility to assure

that all facilities installed and owned by Shipper or any

other party upstream of a receipt point or downstream of a

delivery point comply with all applicable governmental

regulations and design requirements for their intended use

(i.e., pressure, control, etc.).

 

25. SYSTEM OPERATION

 

Southern Trails may take such action as reasonably

necessary to prevent damage to or material deterioration of