Norteño Pipeline Company

First Revised Volume No. 1

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Effective Date: 04/01/1996, Docket: CP96- 81-007, Status: Effective

Original Sheet No. 265 Original Sheet No. 265 : Superseded

 

 

GENERAL TERMS AND CONDITIONS

(continued)

 

term of its Service Agreement, as specified

herein. Norte¤o will automatically extend the

term of a Shipper's long-term firm transportation

Service Agreement pursuant to the terms of any

evergreen or rollover provision contained therein,

unless such Shipper provides a written request to

Norte¤o to terminate the Service Agreement.

 

(a) At least three (3) months prior to the

expiration of the Service Agreement, Shipper

shall provide written notice to Norte¤o of

its election to exercise its right of first

refusal to extend the term of its Service

Agreement.

 

(b) Within 48 hours of receipt of such notice,

Norte¤o will post on its Electronic Bulletin

Board for a period of fourteen (14) days such

information related to the firm capacity

under the expiring Service Agreement as would

be required for a Capacity Release Notice.

 

(c) Creditworthy parties may submit written,

binding offers for all or part of the posted

firm capacity during the posting period,

specifying the maximum quantity(ies), rate(s)

and term of the offer. Such an offer must be

accompanied by a valid request for firm

transportation service pursuant to Section 20

of these General Terms and Conditions.

 

(d) The best offer will be determined by

calculating the net present value of the

reservation charge as follows:

 

NPV = R x C

(1 + I)n

 

where: NPV = Net Present Value

R = Reservation Charge bid

C = Capacity, stated in MMBTU

I = Commission interest rate

n = exponent signifying term of

release, in months.