Kinder Morgan Louisiana Pipeline LLC

Original Volume No. 1

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Effective Date: 03/01/2009, Docket: RP09-257-000, Status: Effective

Original Sheet No. 150 Original Sheet No. 150

 

GENERAL TERMS AND CONDITIONS

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9.3 PENALTY REVENUE

 

All amounts collected by KMLP for penalties, commencing

with the in-service date of KMLP's System facilities, shall be

determined for each annual period ending December 31 and

distributed, through a credit to current billings wherever feasible,

within ninety (90) days after each December 31 (the initial period

shall be the partial annual period commencing with the in-service

date of facilities and ending on the ensuing December 31). For

purposes of this Section 9.3, penalties shall include charges for

failure to comply with an Operational Flow Order (including during a

Critical Time). Such distribution shall be made as follows:

 

(a) These amounts shall be used first to compensate KMLP

for any cashout expenses and for any extraordinary out-of-pocket

costs it has incurred (including any compensation KMLP agreed to

provide for voluntary actions) to alleviate the conditions created

by the violation or which resulted in the issuance of an Operational

Flow Order or the declaration of Critical Time or other operational

action taken by KMLP under Section 31 of these General Terms and

Conditions. Costs that may be netted against penalty revenue may

include only actual, verifiable and prudent incremental costs

incurred to resolve the reliability concerns actually caused by the

particular party or parties against which the penalty has been

assessed and must relate to a circumstance which resulted in the

penalty revenue to be credited under this provision. If these

amounts are not adequate to reimburse KMLP for its expenses, the

unreimbursed such expenses shall be carried forward to future annual

periods until recouped.

 

(b) (1) Any remaining amounts will be refunded pro

rata to all Shippers, except as provided below, through a credit to

current billing wherever feasible, based on each Shipper's MDQ under

FTS Agreements plus nominated and confirmed volumes under ITS

Agreements in effect during each Month (relative to the total of

such volumes for all Shippers); provided, however, that such

calculation shall exclude volumes for any Shipper during any Month

in which such Shipper failed to comply with an Operational Flow

Order. In the event that for any Month, no penalty revenues are

distributed because all Shippers failed to comply with Operational

Flow Orders that Month, then the amount of penalty revenue for that

Month may be held by KMLP for application under Section 9.3(a) for