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

account;

(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.