Caledonia Gas And Storage

First Revised Volume No. 1

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Effective Date: 09/30/2010, Docket: RP10-1032-000, Status: Effective

Original Sheet No. 60 Original Sheet No. 60

 

(a) Caledonia shall not be required to perform or to continue service

under any Rate Schedule on behalf of any Customer which is or has

become insolvent, or which, at Caledonia’s request, fails within a

reasonable period to demonstrate creditworthiness in accordance with

this Section 4; provided, however, that such Customer may receive

service under any Rate Schedule if such party provides Financial

Assurances as follows:

(i) Within five (5) days of Caledonia’s written request for Financial

Assurances, an amount equivalent to one (1) month (or the duration of

the Service Agreement, whichever is shorter) of estimated fees and

service charges; and/or

(ii) Within thirty (30) days of such request, an amount equal to (1) in

the case of Firm storage services, three (3) months (or the duration of

the Service Agreement, whichever is shorter) of Storage Reservation

Charges at the rate specified in Customer’s request for service or

Service Agreement ; or (2) in the case of Interruptible services, three

(3) months (or the duration of the Customer’s Service Agreement,

whichever is shorter) of the Interruptible charge(s) calculated on a

one hundred percent (100%) load factor basis, plus the market value (at

the time of the request for such Financial Assurances) of any

quantities of Gas loaned to the Customer pursuant to the relevant

Service Agreement.

Regarding Customers who have previously posted security for Gas loaned

to such Customer, if the market value of such Gas increases by ten

percent (10%) or more, such Customer shall deliver additional Financial

Assurances to cover such increase in market value within two (2)

Business Days of Caledonia’s request for same.

(b) If Customer chooses to provide Financial Assurances in the form of

cash (“Cash Collateral”) in the amount set forth above, Customer may

earn interest on such Cash Collateral by (i) delivering Cash Collateral

to a Custodian in the name of Customer and pledged to Caledonia

pursuant to a cash escrow, or account control agreement that is

reasonably satisfactory to Caledonia; or (ii) by directing Caledonia to

hold such Cash Collateral, in which case, Caledonia must pay Customer

interest on such cash collateral calculated in accordance with Section

154.501(d) of the Commission’s regulations.

(c) Cash Collateral is security only and shall not be treated as a

prepayment of any costs, fees, or other obligations that Customer may

owe to Caledonia. Customer hereby acknowledges and agrees that

payment of Cash Collateral shall not relieve Customer of its duty to

pay all invoices