Arlington Storage Company, LLC
Original Volume No. 1
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Effective Date: 08/24/2009, Docket: RP09-872-001, Status: Effective
Substitute Original Sheet No. 155 Substitute Original Sheet No. 155
Superseding: Original Sheet No. 155
GENERAL TERMS AND CONDITIONS
31. Creditworthiness - Financial Assurances
31.1 "Acceptable Credit Rating" means a Credit Rating for which Customer's Unsecured
Collateral Limit is greater than Customer's Credit Exposure.
31.2 "Credit Rating" means the rating given to Customer's unsecured long term debt by
Standard and Poor's Corporation ("S&P") or Moody's Investor Services, Inc.
("Moody's "). If both S&P and Moody's have issued a Credit Rating to Customer,
the lower rating shall apply for purposes of this FERC Gas Tariff.
31.3 "Credit Exposure" means an amount equal to: (1) in the case of Firm Storage
Services to be provided by ASC using existing facilities, reservation charges
payable at the rate specified in Customer's bid for service or Storage Service
Agreement for a period of three (3) Months or the duration of the Customer's
bid or Storage Service Agreement, whichever is shorter; (2) in the case of
Interruptible services to be provided by ASC using existing facilities, the
Interruptible charge(s) calculated on a one hundred percent (100%) load factor
basis payable for a period of three (3) Months or the duration of the Customer's
Storage Service Agreement, whichever is shorter; or (3) for service that requires
ASC to construct new facilities, an amount determined by ASC prior to the start
of construction that is reasonable in light of the risks of the construction
project, not to exceed Customer's proportional share of the cost of the facilities
to be constructed (which amount shall be reduced as Customer pays off the obligation
for construction of new facilities); plus, for each of (1), (2) and (3), the Market
Value of Loaned Gas.
31.4 "Market Value of Loaned Gas" means the Customer's Loan Balance for service under Rate
Schedules FL and IL, if any, multiplied by the sum of the NYMEX Henry Hub Swap and
the NYMEX Tennessee Zone 6 Basis Swap, as posted on the www.nymex.com web
site, for the period under which the loaned gas is scheduled to be returned pursuant
to the Customer's Storage Service Agreement(s). ASC shall calculate Customer's Market
Value of Loaned Gas on a daily basis.
31.5 "Unsecured Collateral Limit" means the maximum amount of credit ASC will extend
to a Customer, without Customer providing Financial Assurances pursuant to this
Section 31, based upon the Customer's Credit Rating, as provided in the table below:
Moody's Aaa $25,000,000
S&P AA+ to AA-
Moody's Aa1 to Aa3
S&P A+ to A-
Moody's A1 to A3
S&P BBB+ to BBB-
Moody's Baa1 to Baa3 $1,000,000
S&P BB+ and lower
Moody's Ba1 and lower $0
31.6 "Material Adverse Change" means the failure of Customer at any time to satisfy
the requirements pertaining to creditworthiness set forth in Section 3.3(g),
to maintain an Acceptable Credit Rating or to maintain or reinstate one of the
forms of Financial Assurances specified in Section 31.10.
31.7 "Financial Assurances" means one or more of the forms of security set forth in
Sections 31.10(a), 31.10(b), 31.10(c) and 31.10(d), in accordance with and in
an amount as set forth in Section 31.10.