Natural Gas Pipeline Company Of America

Seventh Revised Volume No. 1

 Contents / Previous / Next / Main Tariff Index

 

 

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

Original Sheet No. 398 Original Sheet No. 398 : Pending

 

 

GENERAL TERMS AND CONDITIONS

----------------------------

 

16.EVALUATION OF CREDIT

 

In evaluating requests for service and for certain other

purposes under this Tariff, including Section 5.12 of these General

Terms and Conditions, Natural will perform a credit appraisal of

Shipper.

 

(a) Acceptance of a Shipper's request for service and the

continuation of service are contingent upon the Shipper satisfying

creditworthiness requirement on an on-going basis. To determine

creditworthiness, a credit appraisal shall be performed in accordance

with the following criteria:

 

Natural shall apply consistent evaluation practices to

all similarly situated Shippers to determine the Shipper's financial

ability to perform the payment obligations due to Natural over the term

of the requested or existing service agreement.

 

A Shipper will be deemed creditworthy if (i) its long-

term unsecured debt securities are rated at least BBB- by Standard &

Poor's Corporation ("S&P") and at least Baa3 by Moody's Investor Service

("Moody's") (provided, however, that if the Shipper's rating is at BBB-

or Baa3 and the short-term or long-term outlook is Negative, Natural may

require further analysis as discussed below); and (ii) the sum of

reservation fees, commodity fees and any other associated fees and

charges for the contract term is less than 15% of Shipper's tangible net

worth. For the purposes of this Section 16, the term "tangible net

worth" shall mean for a corporation the sum of the capital stock, paid-

in capital in excess of par or stated value, and other free and clear

equity reserve accounts less goodwill, patents, unamortized loan costs

or restructuring costs, and other intangible assets. Only actual

tangible assets are included in Natural's assessment of

creditworthiness. In comparing the overall value of a Shipper's

contract to tangible net worth for credit evaluation purposes, Natural

will compare the net present value of the demand or reservation charge

obligations under such contracts to Shipper's current tangible net

worth. If a Shipper has multiple service agreements with Natural, then

the total potential fees and charges of all such service agreements

shall be considered in determining creditworthiness.

 

If Shipper does not meet the criteria described above,

then Shipper may request that Natural evaluate its creditworthiness

based upon the level of service requested relative to the Shipper's

current and future ability to meet its obligations. Such credit

appraisal shall be based upon Natural's evaluation of the following

information and credit criteria: