Cove Point LNG Limited Partnership

Second Revised Volume No. 1

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Effective Date: 11/01/2000, Docket: RP00-572-000, Status: Effective

First Revised Sheet No. 111 First Revised Sheet No. 111 : Effective

Superseding: Original Sheet No. 111

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

 

4. BIDDING FOR AVAILABLE FIRM SERVICE (Continued)

 

(c) Assessing Bids and Awarding Capacity. Operator shall evaluate bids based upon their

net present value as set forth below, taking into account the price and primary term

offered. Operator shall use the current Commission-approved interest rate in

calculating the net present value of bids. Capacity shall be awarded based on the

acceptable highest value of the bids offered to Operator calculated in accordance with

this Section. Operator shall post the winning bids on its EBB.

 

(d) Pro Rata Awards to Equal Bidders. If two or more bidders, including the current

holder of the capacity subject to bid, submit acceptable highest value bids of equal

value, as calculated pursuant to paragraph (c) above, Operator shall award the

capacity first to the current holder of the capacity. If the current holder of the

capacity (i) is not among the bidders submitting equivalent highest value bids, (ii)

does not require all of the capacity subject to bid; or (iii) fails to execute a

Service Agreement after being awarded the capacity, any available capacity shall be

awarded on a pro rata basis to all bidders that submitted equivalent highest value

bids.

 

(e) Adjustment to Bid Rate. When the rate bid by a Bidder for service is at the Maximum

Base Reservation Charge for service under the applicable Rate Schedule, that bid rate

shall be subject to adjustment in accordance with the provisions of this Tariff and

shall be no more than the currently effective rate specified on the Currently

Effective Rates sheet of this Tariff.

 

(f) Short-Term Firm Service Agreements. Upon the termination of any firm Service

Agreement having a term of less than one year, the capacity associated with such

terminated Service Agreement shall be made available for bidding under the procedures

described in this Section 4, provided that: (i) the capacity is not previously

committed under the terms of this Tariff; and (ii) facility capacity remains

available.

 

(g) Long-Term Service Agreements/Right of First Refusal. If Buyer's long-term Service

Agreement does not extend according to its terms, Buyer may continue service upon

termination of that Service Agreement by (i) agreeing to match the highest value bid

offered to Operator for Buyer's firm service, or any portion thereof, through the

bidding process described in this Section 4; and (ii) executing a new Service

Agreement incorporating the new rate and term. A Buyer is eligible for a right of

first refusal if the Buyer is receiving firm service at the maximum applicable rate

pursuant to a Service Agreement with either (1) a term of service of at least twelve

consecutive months or (2) for a service which is not available for 12 consecutive

months, a contract term of more than one year. A Buyer is eligible for a right of

first refusal if the Buyer is receiving firm service at less than the maximum

applicable rate pursuant to a Service Agreement that meets the foregoing term criteria

and was executed prior to March 26, 2000; however, the right of first refusal will not

apply to any re-executed Service Agreement not at the maximum applicable rate. If

Buyer intends to exercise its right of first refusal as described herein, Buyer shall

notify Operator through Operator's EBB or facsimile transmission of that intent not

less than ninety (90) days before the termination date of its Service Agreement.

 

(i) In the event that Buyer provides Operator with a 90-day notice of intent to

exercise its right of first refusal, Operator shall promptly post on its EBB

the information described in Paragraph (a). Not later than sixty (60) days

prior to the termination of such Service Agreement, and for thirty (30) days

thereafter, Operator shall begin accepting bids from any prospective Buyer,

including prospective Buyers that already have submitted requests for service

for all or a portion of the service rights under the existing Buyer's long-term

Service Agreement.