W T G Hugoton, LP

Original Volume No. 1

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Effective Date: 08/01/2007, Docket: CP06- 90-002, Status: Effective

Original Sheet No. 213 Original Sheet No. 213 : Effective

 

GENERAL TERMS AND CONDITIONS

 

4. MERCHANTABLE GAS

 

Natural gas delivered by WTG Hugoton to a Shipper shall be merchantable

natural gas. WTG Hugoton will offer to negotiate with a Delivery Point

Operator, upon request, how WTG Hugoton will manage the quality of gas

delivered to the Delivery Point Operator.

 

5. FACILITIES

 

5.1 WTG Hugoton shall not be required to provide any requested service under

any Rate Schedules which would require the construction or acquisition by WTG

Hugoton of any new facilities. WTG Hugoton may condition any such

construction, acquisition, or expansion on Shipper agreeing to reimburse WTG

Hugoton for all costs incurred, including any taxes incurred by WTG Hugoton as

a result of such reimbursement. An economic feasibility test will be

performed to determine when WTG Hugoton may charge Shipper such costs. Such

test shall reflect the cost of the facility to be constructed, the incremental

cost related to such facilities and the revenues which WTG Hugoton estimates

to be generated attributable to the facilities, all of which will be based on

a discounted cash flow rate of return methodology. All new facilities

(whether built by Shipper or WTG Hugoton) shall be in conformance with the

regulations set forth in 49 CFR Part 192 and shall be subject to inspection

and prior approval by WTG Hugoton. Nothing in this Section 5 shall require

WTG Hugoton to file an application for a certificate of public convenience and

necessity under Section 7(c) of the Natural Gas Act, nor prevent WTG Hugoton

from contesting an application for service filed pursuant to Section 7(a) of

the Natural Gas Act. WTG Hugoton reserves the right to seek a waiver of the

policy set forth in this Section 5 for good cause shown, during any proceeding

before the Commission instituted under Section 7 of the Natural Gas Act.

 

5.2 In order to maintain and expand firm entitlement and utilization of WTG

Hugoton's system, WTG Hugoton may negotiate firm transportation contracts with

shippers whereby WTG Hugoton could make a contribution in aid of construction

(CIAC) to the shipper. The shipper would use such funds to assist in the

development of natural gas facilities. Such contributions must pass an

economic feasibility test similar to the one described in the preceding

paragraph.