White River Hub, LLC

Original Volume No. 1

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Effective Date: 11/01/2008, Docket: RP08-645-000, Status: Effective

Original Sheet No. 93 Original Sheet No. 93

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

8. CREDITWORTHINESS

 

8.1 In evaluating requests for service and for other purposes under

this Tariff, White River will perform a credit appraisal of Shipper.

 

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

continuation of service to a Shipper are contingent upon the Shipper

complying with creditworthiness requirements of this Section 8 on an on-going

basis. To determine creditworthiness, a credit appraisal shall be performed

in accordance with the following criteria:

 

(i) White River shall apply consistent evaluation

practices to all similarly situated Shippers in determining any Shipper's

financial ability to perform its obligations to White River over the term of

the requested or existing Service Agreement.

 

(ii) A Shipper will be deemed creditworthy if:

 

(1) 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, White River may require further analysis as discussed below);

and

 

(2) the sum of reservation fees, usage fees and any

other associated fees and charges for the contract term, on a Net present

Value basis, is less than 15% of Shipper's tangible net worth. If a Shipper

has multiple service agreements with White River, then the total potential

fees and charges of all such service agreements shall be considered in

determining creditworthiness.

 

(iii) As used in the prior paragraph, the term "tangible

net worth" means the excess of assets over liabilities from an accounting

standpoint, which is also known as "capital." For example, in the case of a

corporation, tangible net worth is represented by the capital stock, paid-in

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

reserve accounts, if any. White River defines tangible net worth for a

corporation as 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 White River's

assessment of creditworthiness. Tangible net worth is compared with the Net

Present Value of a Shipper's obligations to White River under its contracts

in applying the 15% test in the prior paragraph.