Maritimes & Northeast Pipeline, L.L.C.

First Revised Volume No. 1

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Effective Date: 09/01/2007, Docket: RP07-558-000, Status: Effective

Third Revised Sheet No. 260A Third Revised Sheet No. 260A : Effective

Superseding: Sub Second Revised Sheet No. 260A

 

GENERAL TERMS AND CONDITIONS

(continued)

 

10. ACTION ALERTS AND OPERATIONAL FLOW ORDERS (continued)

 

10.6 Action Alerts: In the event that, in Pipeline's judgment, action is required to

avoid a system integrity issue, Pipeline may issue Action Alerts. Action Alerts

will be noticed in accordance with the procedures set forth in Section 10.5

above. Action Alerts can be issued to effect any of the following:

(a) curtailment of interruptible services;

(b) restrictions of deliveries to specific Receipt or Delivery Point(s) covered

by an Operational Balancing Agreement based on the aggregate daily quantity

scheduled for receipt and/or delivery at the affected locations;

(c) forced balancing such that point operators will be required to assure that

nominations equal flows or that Receipts and Deliveries fall within the

tolerance level designated in the Action Alert; and/or

(d) any action required to maintain the integrity of Pipeline's System in order

to avoid operational conditions that would require the issuance of an OFO.

 

10.7 Operational Flow Orders: In the event that (i) Customer(s) does not respond to

an Action Alert, (ii) the actions taken thereunder are insufficient to correct

the system emergency for which the Action Alert was issued, or (iii) there is

insufficient time to carry out the procedures hereunder with respect to a

particular system emergency, Pipeline may periodically take unilateral action,

including the curtailment of firm service, to maintain the operational integrity

of Pipeline's system (or any portion thereof). For purposes of this Section

10.7, the operational integrity of Pipeline's system shall encompass the

integrity of the physical system and the preservation of physical assets and

their performance, the overall operating performance of the entire physical

system as an entity (or any portion thereof), and the maintenance (on a reliable

and operationally sound basis) of total system deliverability and the quality of

gas delivered. Notice of an Operational Flow Order will be provided pursuant to

and in accordance with Section 10.5 above.

 

10.8 Penalties: To the extent Pipeline issues an Action Alert or Operational Flow

Order and Customer(s) does not comply with such order, Pipeline will assess, and

Customer will be obligated to pay Pipeline a penalty as follows:

(a) Action Alert penalty for each Dekatherm of Gas by which Customer deviated

from the requirements of the Action Alert equal to the product of 150% times

the Platts Gas Daily "Daily Price Survey" High Common price for "Dracut,

Mass." for each Day that said Action Alert is in effect.

(b) Operational Flow Order penalty for each Dekatherm of Gas by which Customer

deviated from the requirements of the Operational Flow Order equal to the

product of 300% times the Platts Gas Daily "Daily Price Survey" High Common

price for "Dracut, Mass." for each Day that said Operational Flow Order is in

effect.

 

Any penalty revenue collected by Pipeline pursuant to this Section 10.8 will be

credited, net of costs, to those Customers that did not incur penalties pursuant

to this Section 10.8 in the Month for which penalty revenues were received ("Non-

Offending Customer"), based on the ratio of the actual volumes taken by the Non-

Offending Customer to the actual volumes taken by all Non-Offending Customers.

Such credits shall be calculated for each Month of the twelve (12) Month period

ending July 31 of each year, and will be included on the Non-Offending Customers'

invoice for the Month of October. Penalties will not apply to Customers who stay

within the tolerance specified in the Action Alert or OFO.

 

10.9 Liability of Pipeline: Pipeline shall not be liable for any costs incurred by

Customer in complying with an OFO or Action Alert. Pipeline shall not be

responsible for any damages that result from any interruption in Customer's

service that is a result of Customer's failure to comply promptly and fully with

an OFO or Action Alert, and the non-complying Customer shall indemnify Pipeline