Pine Needle LNG Company, LLC

Original Volume No. 1

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Effective Date: 08/22/2005, Docket: RP05-516-000, Status: Effective

Third Revised Sheet No. 81 Third Revised Sheet No. 81 : Effective

Superseding: Second Revised Sheet No. 81

GENERAL TERMS AND CONDITIONS

(Continued)

 

 

 

23. RIGHT OF FIRST REFUSAL PROCEDURES (Continued)

 

23.3 Pine Needle shall evaluate and determine the best bid relating to each service

agreement in accordance with one of the following two methods, with the specific

method identified in its notice for bid solicitation:

 

(a) Highest net present value of demand charges, or

(b) Highest rate bid, provided such bid meets Pine Needle's minimum stated term.

 

For purposes of determining the highest bid under Section 23.3(a) and (b), which is

the bid Customer may elect to match pursuant to Section 23.4, Pine Needle will utilize

the reservation rates bid, not to exceed Pine Needle's applicable maximum reservation

rates. In the event Pine Needle receives two or more bids of equal value, then under

method (a) the best bid shall be the bid with the shortest term and under method (b)

the best bid shall be the bid with the longest term. If, after performing the

aforementioned calculations, two or more bids are tied, a random and blind selection

process will be used to select the best bid.

 

23.4 Customer shall have the right to continue to receive service by notifying Pine Needle

in writing within fifteen (15) business days of receiving Pine Needle's notification

of the best bid, that Customer agrees to match the best bid. In such event, Customer

and Pine Needle shall, prior to the expiration of the service agreement, execute a new

service agreement setting forth terms and conditions of the best bid. Such service

agreement shall be effective as of the day following the expiration of the expiring

service agreement.

 

23.5 If Customer elects not to match the best bid, then such election shall constitute an

irrevocable waiver of Customer's right of first refusal and Pine Needle shall execute

a service agreement with Customer submitting the best bid and shall provide such

service pursuant to the terms and conditions contained in the best bid.

 

23.6 Notwithstanding the above, Pine Needle shall not be obligated to accept any bid or

execute any service agreement at a rate less than the maximum rate allowable under

Rate Schedule LNG-1. Pine Needle shall notify Customer in writing if no bids are

received during the bidding period, or if Pine Needle does not accept any bids.

Customer and Pine Needle shall have fifteen (15) business days following the date of

Pine Needle's notification to Customer to reach a binding written commitment regarding

the rate and term of continued service to Customer. In that binding written

commitment, Customer shall be entitled to continue to receive service at the maximum

rate and at a term selected by Customer, or Customer and Pine Needle may agree upon a

rate between the maximum and minimum allowable rates or a negotiated rate, as well as

other mutually agreeable terms and conditions for continued service. In no event

shall Customer and Pine Needle agree upon a rate which is less than any bid received

by Pine Needle pursuant to this Section and rejected by Pine Needle. If Customer and

Pine Needle reach a binding written commitment for continued service, Customer must

execute a new service agreement prior to the expiration of the term of the existing

service agreement (or within 30 days following the date that Pine Needle tenders the

new service agreement to Customer if the new service agreement is tendered by Pine

Needle on or after the expiration date of the existing agreement). If Customer and

Pine Needle fail to reach a binding written commitment within fifteen (15) business

days following the date of Pine Needle's notification as provided herein, then

Customer's right of first refusal shall terminate and Pine Needle will post the

available firm capacity in accordance with Section 24 of the General Terms and

Conditions.