Oktex Pipeline Company

Original Volume No. 1

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Effective Date: 05/01/2001, Docket: RP01-403-000, Status: Effective

Third Revised Sheet No. 40 Third Revised Sheet No. 40 : Effective

Superseding: Second Revised Sheet No. 40

XXXII. PROCEDURES FOR AVOIDANCE OF PREGRANTED ABANDONMENT

1. To the extent a Shipper satisfies the bid matching requirements of

this Article XXXII or Transporter and Shipper reach agreement as contemplated

by Section 7 of Article XXXII, such Customer may retain its capacity and

continue to receive firm service under a long-term firm service agreement

under Schedule FTS at its previously agreed rates. If Shipper does not

satisfy the bid matching requirements of this Article XXXII or Transporter and

Shipper do not reach agreement as contemplated by Section 7 of Article XXXII,

Shipper shall no longer have, as the effective date of Transporter's notice of

termination and Transporter shall have all necessary abandonment

authorizations under the Natural Gas Act. This Article XXXII is not

applicable and Shipper shall have no rights hereunder to the extent the

long-term service agreement is terminated by Shipper during the restructuring

proceedings.

Short-term service agreements under an Rate Schedule FTS are not

subject to the abandonment of this Article XXXII. Upon termination of a

short-term service agreement, Transporter shall have all necessary

abandonment authorization under the Natural Gas Act.

 

2. Transporter shall give Shipper notice of termination of the long-term

service agreement at least ninety (90) but no more than one hundred twenty

(120) days prior to the termination date of such agreement. When Transporter

provides a notice of termination of a long-term service agreement under Rate

Schedule FTS, within ten (10) days of the issuance by Transporter of such

notice of termination, Transporter shall post on

its IPP the following information:

 

(a) Points of Receipt and Points of Delivery,

(b) the specific quantity available under the terminated contract,

(c) the date of expiration,

(d) the current maximum rate applicable to the terminated service.

 

3. The deadline for the submission of bids from potential shippers, who

desire service to be provided in whole or in part by the capacity to be made

available upon termination of a long-term service agreement, shall be the last

day of the month following the month in which Transporter posts an applicable

notice pursuant to Section 2 of this Article XXXII. To be a valid bid, a bid

must comply with the bud requirements set forth in Section 4 of this Article

XXXII. At the close of such bidding period, Transporter shall select

among the valid bids the "best bid", as determined pursuant to Section 5 of

this Article XXXII, and shall relay the relevant terms of such "best bid" to

the Shipper whose long-term service agreement is being terminated by

Transporter. If Shipper elects to match, as determined by Section 6 of this

Article XXXII, the "best bid", the Shipper shall be entitled to retain its

capacity and continue to receive firm service under a long-term firm service

agreement which reflects the matching of the relevant terms of the "best

bid." If Shipper does not match the "best bid", then Shipper's existing

long-term service agreement shall terminate and Transporter shall have all

necessary abandonment authorization under the Natural Gas Act. In the event

there is no "best bid" for Shipper to match, Section 7 of the Article XXXII

shall determine whether Shipper shall be entitled to retain its capacity and

continue to receive service.

4. To be a valid bid, the potential customer must provide all information

in the format contained in the applicable Section 2.2 of FTS Rate Schedule of

Transporter's Tariff, Original volume No. 1. In addition, the potential

shipper must pay Transporter a bona fide prepayment equal to the lesser of ten

thousand dollars ($10,000.00) or one (1) month's prepayment of the Monthly

Demand Charge determined based on the potential shipper's requested price and

the desired contractual quantity. If such potential shipper's bid is

accepted by Transporter and is not matched by the existing Shipper then, upon

commencement of service, the bona fide prepayment shall be credited to such

potential shipper's initial invoice for such service rendered. If potential

shipper's bid is matched or if the potential shipper fails to satisfy all of

Transporter's tariff provisions governing Shipper eligibility, Transporter

will refund the potential shipper's bona fide prepayment. The bona fide

prepayment will not be refunded if the bid is withdrawn by the potential

shipper. Transporter may reject all bids which would require Transporter to

discount below a rate and discount term agreeable to Transporter, such

rejections shall be made in a nondiscriminatory manner.