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. 265 Original Sheet No. 265 : Effective

 

GENERAL TERMS AND CONDITIONS

 

(d) A new service agreement(s) and contract number(s) will be issued for

temporary released capacity. Permanently acquired capacity may be added to

existing agreements.

 

40.6 Determination and Posting of Best Offer; Awarding Capacity

 

(a) At the close of the open season WTG Hugoton will evaluate the bids

and will determine which bid constitutes the best bid by determining the

highest economic unit value unless the releasing Shipper has provided WTG

Hugoton an alternative best bid evaluation methodology. The releasing Shipper

may designate one of the following options to determine the best bid: 1)

highest rate; 2) net revenue and 3) present value. Other choices of bid

evaluation methodology may be selected by the releasing shipper at the

discretion of WTG Hugoton. WTG Hugoton will utilize a calculation based on

rate, term and quantity to determine the highest economic unit value,

utilizing the FERC interest rate. The comparative economic unit value of each

bid will be determined by calculating the Net Present Value (NPV) of each bid

over the term of the bid, and then dividing by the quantity of the respective

bid. The NPV calculation shall include only revenue generated by the

reservation rate or a guaranteed throughput volume. In those cases where one

or more bidders is willing to pay the maximum recourse reservation rate, the

NPV used in such cases is capped at, and may not exceed, the NPV equal to the

maximum reservation rate available to recourse shippers.