Caledonia Gas And Storage

Original Volume No. 1

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Effective Date: 05/01/2007, Docket: CP05- 15-003, Status: Effective

Original Sheet No. 58 Original Sheet No. 58 : Effective

19. REGULATION

The operation of the provisions of this Tariff shall be subject to any and all

governmental statutes and all lawful orders, rules, and regulations affecting

the storage, injection, withdrawal or loaning of Gas hereunder or the equipment

required in connection with such storage, injection, withdrawal or loaning of

Gas. It is understood that performance under any Agreement shall be subject to

all valid laws, orders, rules and regulations of duly constituted governmental

authorities having jurisdiction or control of the matter related hereto.

Should either of the parties, by force of any such law, order, rule or

regulation, at any time during the term of the Agreement be ordered or required

to do any act inconsistent with the provisions thereof, then for that period

only during which the requirements of such law, order, rule or regulation are

applicable, the Agreement shall be deemed modified to conform with the

requirement of such law, order, rule or regulation; provided, however, nothing

herein shall alter, modify or otherwise affect the respective rights of the

parties to cancel or terminate the Agreement under its terms and conditions.

20. POLICY WITH RESPECT TO FEES AND CONSTRUCTION OF NEW FACILITIES

20.1 Except as provided in Section 20.2 herein, Customer shall reimburse

Caledonia (a) for the costs of any facilities installed by Caledonia with

Customer’s consent to receive, measure, store or deliver Gas for Customer’s

account and (b) for any and all filings and approval fees required in

connection with Customer’s Service Agreement that Caledonia is obligated to pay

to the Commission or any other governmental authority having jurisdiction. Any

reimbursement due Caledonia by Customer pursuant to this Section 20.1 shall be

due and payable to Caledonia within ten (10) Days of receipt by Customer of

Caledonia’s bill(s) for same; provided, however, subject to Caledonia’s

consent, such reimbursement, plus carrying charges thereon, may be amortized

over a mutually agreeable period not to extend beyond the primary contract term

of the Service Agreement between Caledonia and Customer. Caledonia reserves

the right to request pre payment for new construction or facilities required at

it’s discretion. Carrying charges shall be computed utilizing interest factors

acceptable to both Caledonia and customer.

20.2 Caledonia may waive from time to time, at its discretion, all or a portion

of the facility cost reimbursement requirement set forth in Section 20.1 for

the FSS Rate Schedule if Customer provides Caledonia adequate assurances to

make construction of the facilities economical to Caledonia. All requests for

waiver shall be handled by Caledonia in a manner which is not unduly

discriminatory. For purposes of determining whether a project is economical,

Caledonia will evaluate projects on the basis of various economic criteria,

which will include the estimated cost of the facilities, operating and

maintenance as well as administrative and general expenses attributable to the

facilities, the revenues Caledonia estimates will be generated, as a result of

such construction, and the availability of capital funds on terms and

conditions acceptable to Caledonia. In estimating the revenues to be

generated, Caledonia will evaluate the existence of capacity limitations

downstream of the facilities, the marketability of the capacity, the