Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

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Effective Date: 04/18/2008, Docket: RP08-319-000, Status: Effective

Original Sheet No. 35B.06 Original Sheet No. 35B.06 : Pending

 

FOOTNOTES APPLICABLE TO SHEET NO. 35B.02

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3/ Negotiated Rates and Eligible Transportation Quantities. (Con't)

 

(6) Forward Spread Rate Option.

 

(a)Agreement of the Parties Required. With regard to any one or more of the respective Index Rate components in the Negotiated Reservation Rate formulas

set forth in Footnote 3 (1)-(4) above, Natural and Shipper may from time to time agree to utilize an alternate index rate component which is based upon

a locked-in forward basis spread (a "Locked-In Rate Component") in lieu of such otherwise applicable Index Rate component, in order to determine the

Negotiated Reservation Rate for the relevant Service. In order to utilize a Locked-In Rate Component for a particular Service, Natural and Shipper

must, at their respective sole discretion and without obligation, agree in writing (including but not limited to electronic email exchanges) to: (i)

the relevant delivery zone basis to be utilized ("Delivery Basis"); (ii) the relevant receipt zone basis to be utilized ("Receipt Basis"); (iii) the

amount of capacity from the relevant Service to which such rate component will apply ("Applicable Capacity"); and (iv) the term for which such rate

component will be applicable for the relevant Service, which term may be one or more complete months within the then-remaining term of this Agreement

("Applicable Term"). In the event that Natural or Shipper (the "Triggering Party") desires to utilize the Forward Spread Rate Option, then such

Triggering Party shall notify the other party in writing of the desired Applicable Term and Applicable Capacity, as well as the best available market

quotes on the corresponding Delivery Basis and Receipt Basis. Natural and Shipper shall then have twenty-four (24) hours to agree in writing to the

Receipt Basis, Delivery Basis, Applicable Term and Applicable Capacity. If such agreement is timely reached, then the Forward Spread rate Option shall

apply in accordance with such agreement, regardless of whether the agreed spread is subsequently executed. If such agreement is not timely reached,

then the Forward Spread Rate Option shall not apply for the desired Applicable Term and Applicable Capacity.

 

(b)Locked-In Rate Component. The applicable Locked-In Rate Component will be determined by the following formula: (1) the Delivery Basis; minus (ii) the

Receipt Basis; minus (iii) Fuel/GLU; minus (iv) the applicable minimum gas commodity rate in Natural's tariff; minus (v) the Annual Charge Adjustment

surcharge (ACA). "Fuel/GLU" will be determined by the following formula: [((i) the relevant NYMEX Henry Hub natural gas futures contract price for

the Applicable Term, as if hedged; plus (ii) the Receipt Basis]; times (iii) the result of [(1/(1-applicable Receipt Zone Fuel/GLU percentage stated in

Natural's tariff))-1].

 

(c)Effect on Negotiated Reservation Rates. Any Locked-In Rate Component which may be agreed upon by Natural and Shipper shall apply in lieu of the

otherwise applicable Index Rate component in the formula used for determining the relevant Negotiated Reservation Rate set forth in Footnote 3 (1)-(4)

above. All other provisions of such formula and of Footnote 3 (1)-(4) above shall continue to apply during the Applicable Term, including without

limitation the applicable stated minimum reservation rate and the applicable Negotiated Reservation Rate Credit. The Locked-In Rate Component shall

apply only to the Applicable Capacity and for the Applicable Term related to the relevant Service. If the Applicable Capacity is less than the

relevant Service MDQ set forth in Footnote 3 (1)-(4) above, then during the Applicable Term, the relevant Negotiated Reservation Rate formula shall

apply as written in Footnote 3 (1)-(4) above to the amount of Service MDQ capacity to which the Locked-In Rate Component does not apply. Natural and

Shipper may agree, at their respective sole discretion and without obligation, to utilize a Locked-In Rate Component for any one or more of the

Services described in Footnote 3 (1)-(4) above during the same time period or for overlapping time periods.