Monroe Gas Storage Company, LLC

Original Volume No. 1

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Effective Date: 04/29/2009, Docket: RP09-447-000, Status: Effective

Original Sheet No. 115 Original Sheet No. 115

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

2. CONTRACTING FOR STORAGE SERVICE (Continued)

 

2.3 Creditworthiness (Continued)

 

(c) Alternative Forms of Security

 

If at any time Potential Customer/Customer does not meet the

minimum acceptable credit standard as described in Section

2.3(b)(1) of these General Terms and Conditions, Potential

Customer/Customer shall be required to provide one or more of the

alternative forms of security to Operator set forth below.

Potential Customer/Customer's obligation under the alternative

forms of security shall at all times be no less than the total of

(i) the value of three (3) Month's worth of applicable service

charges for the requested MSQ at the maximum applicable unit rate

for Potential Customer/Customer's service(s) at 100% load factor,

plus (ii) the current market value of loaned gas, if any, for

Potential Customer/Customer's service as determined in accordance

with Section 2.3(c)(6) of these General Terms and Conditions, plus

(iii) for service that requires Operator to construct new

facilities, an amount determined by Operator that is reasonable in

light of the risks of the construction project, not to exceed

Potential Customer's/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). The Alternative Forms of Security are as follows:

 

(1) Potential Customer/Customer may post and maintain in effect

a standby, irrevocable Letter of Credit in an amount

sufficient for Customer's obligation under its service

agreement(s) with Operator as stipulated in Section 2.3(c)

these General Terms and Conditions (i) issued by a financial

institution with combined capital and surplus of at least

$500,000,000 that is rated at least A by Standard & Poor's

Corporation and A2 by Moody's Investor Services, Inc., (ii)

that provides for partial drawdowns, and (iii) in form and

substance is satisfactory to Operator. A form of letter of

credit is available from Operator. If Operator draws funds

under the Letter of Credit, Potential Customer/Customer

shall replenish the Letter of Credit to the required value

specified herein no later than five (5) Business Days after

such drawing.