K O Transmission Company
Original Volume No. 1
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Effective Date: 12/01/2005, Docket: RP05-473-001, Status: Effective
Third Revised Sheet No. 139 Third Revised Sheet No. 139 : Effective
Superseding: Second Revised Sheet No. 139
27. Creditworthiness of Shipper
27.1 Subject to the provisions immediately below, Transporter shall not
be required to perform or to continue to perform service on behalf of any Shipper
that (i) is or has become insolvent, (ii) has applied for bankruptcy under Chapter
11 of the Bankruptcy Code or is subject to similar proceedings under State or
Federal law, or (iii) fails, in Transporter's reasonable judgment, to demonstrate
minimal creditworthiness for all or any part of the service requested, based upon
Transporter's consideration of available credit data concerning Shipper and
its past payment history, financial statements and credit reports.
27.2 Transporter may require adequate assurance of payment for any service under this
Tariff requested by an insolvent or uncreditworthy Shipper. Such Shipper may
receive or continue to receive service if it provides adequate assurance of
payment for service within ten (10) working days after the date of written demand
by Transporter. Adequate assurance of payment may include:
(a) a deposit with Transporter of an amount equal to two (2) months of total charges
for the service, as set forth in the applicable Service Agreement, provided
that such deposit may be applied by the Transporter to satisfy a deliquent
(b) advance payment for service at the time service is scheduled;
(c) an irrevocable letter of credit from a creditworthy financial institution,
(d) a guarantee from a creditworthy entity; or,
(e) a surety bond from an acceptable, creditworthy insurance company.
27.3 Transporter may at any time re-evaluate the creditworthiness of Shipper and demand
adequate assurance of payment or additional adequate assurances of payment if
Transporter determines that Shipper has in any respect become uncreditworthy.
Circumstances under which Transporter may re-evaluate Shipper's creditworthiness
include, but are not limited to, a filing by Shipper for bankruptcy or a submission
to bankruptcy or similar federal or state proceedings, an adverse change in
Shipper's payment practices, a reorganization of Shipper's business structure,
an assignment of Shipper's contracts, or a request by Shipper for increased service.
27.4 If Transporter requests additional information to be used for credit evaluation after
the initiation of service, Transporter contemporaneous with the request, shall
provide its reason(s) for requesting the additional information to the Shipper and
designate to whom the response should be sent. Transporer and Shipper may
mutually agree to waive the requirements of this standard.
Upon receipt of either an initial or follow-up request from Transporter for
information to be used for creditworthiness evaluation, Shipper's authorized
representative(s) should acknowledge receipt of Transporter's request. Transporter
and Shipper may mutually agree to waive the requirements of this standard.