Saltville Gas Storage Company L.L.C.

Original Volume No. 1

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Effective Date: 03/01/2009, Docket: RP08-479-002, Status: Pending

Original Sheet No. 111C.01a Original Sheet No. 111C.01a

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

3. CONTRACTING FOR SERVICE (continued)

 

3.8 Allocation of Available Firm Storage Capacity. (continued)

 

contemporaneously with submitting its bid in the open

season, provided that such bidder cannot increase the

net present value of the bid to greater than the net

present value of the same bid if the bidder had posted

the collateral described in Section 3.8(i)(1).

 

(3) The following rules will apply to ratings for purposes

of evaluating multiple bids as part of the NPV bid

evaluation process:

(i) Substitute Ratings. Saltville will substitute

the credit rating of a bidder's guarantor or

parent company, whichever is higher, provided

that such guarantor or parent company has

provided a guarantee for all of the obligations

under the specific service agreement at issue

and satisfies the requirements of Section

3.4(b)(4).

(ii) Equivalent Ratings. For any bidder that does

not have, or whose parent company or guarantor

does not have, a credit rating from one or more

of the credit rating agencies noted above,

Saltville will assign an equivalent rating using

a credit scoring methodology, applied on a non-

discriminatory basis, provided such parent

company or guarantor has provided a guarantee

for all of the obligations under the specific

service agreement at issue.

 

(4) Releasing customers who propose to release capacity

for a term of more than one year will have the option

of specifying, pursuant to the capacity release

procedures in Section 4, that the same NPV and Risk of

Default processes as set forth herein will be used by

Saltville when evaluating bids by replacement

customers for such released capacity. If a releasing

customer makes such an election, Saltville will follow

the time line for non-standard capacity release bid

evaluation.

 

(5) All credit ratings shall be determined as of the last

day of the Open Season for the capacity at issue, and

in the event a bidder is rated by two or more rating

agencies and there is a split rating between rating

agencies, the lowest rating applies.

 

(6) For any bid submitted with a term of fifteen (15)

years or longer, Saltville will apply the 15-year Risk

of Default factor from the S&P Table.

 

(7) It is a condition of any capacity award under the

foregoing bid evaluation process that the winning

bidder post any collateral indicated on its bid form

within five (5) business days of the notice of award,

and Saltville shall have the right to reject and/or

terminate any award for failure of a bidder to do so.

If a bidder fails to post such collateral, Saltville