MidContinent Express Pipeline LLC
Original Volume No. 1
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Effective Date: 04/10/2009, Docket: RP09-136-000, Status: Effective
Original Sheet No. 181 Original Sheet No. 181
GENERAL TERMS AND CONDITIONS
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(4) Nothing herein shall be read to preclude MEP
from requiring, and enforcing for the term of the initial contracts,
a greater amount of security in agreements supporting an application
for a certificate to construct new or expanded facilities, including
any replacement contract entered into upon a permanent release of
capacity under such an initial contract, any assignment of such an
initial contract or any resale of capacity subject to such an initial
contract in the event of a default.
(c) Where a Shipper selects the prepayment option
under Section 12.1(b) of these General Terms and Conditions, the
prepayment amounts shall be deposited in an interest-bearing escrow
account if such an account has been established by Shipper which
meets the criteria set out in this paragraph. The costs of
establishing and maintaining the escrow account shall be borne by
Shipper. The escrow bank must be rated at least AA or better and
shall not be affiliated with Shipper. The escrow arrangement shall
provide for the prepayment amounts to be applied against the
Shipper's obligation under its service agreement(s) with MEP and
shall grant MEP a security interest in such amounts as an assurance
of future performance. The escrow agreement shall specify the
permitted investments of escrowed funds so as to protect principal,
and shall include only such investment options as corporations
typically use for short-term deposit of their funds. Such escrow
account shall at all times maintain the amount of prepayments
required under Section 12.1(b) of these General Terms and Conditions.
If MEP is required to draw down the funds in escrow, it will notify
the Shipper and Shipper must replenish such funds within three (3)
Business Days after such notice.
(d) In the event MEP constructs new lateral facilities
to accommodate a Shipper, MEP may (unless otherwise agreed) require
from the Shipper security in an amount up to the cost of the
facilities. This provision does not apply to mainline expansions.
Such security may be in any of the forms available under Section
12.1(b) of these General Terms and Conditions, at Shipper's choice.
MEP is only permitted to recover the cost of facilities once, either
through rates or through this provision. As MEP recovers the cost of
these facilities through its rates, the security required shall be
reduced accordingly. Specifically, collateral provided by Shipper
related to new facilities shall be returned to that Shipper in equal
Monthly amounts over the term of its contract for service related to