Cove Point LNG Limited Partnership

Second Revised Volume No. 1

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Effective Date: 06/01/2003, Docket: CP01- 76-003, Status: Effective

Second Revised Sheet No. 134 Second Revised Sheet No. 134 : Effective

Superseding: First Revised Sheet No. 134

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

 

 

 

12. PENALTIES (Continued)

 

(c) Failure to Comply with Operational Flow Orders. If Buyer fails to comply with an

operational flow order issued by Operator pursuant to Section 17 (Operational Flow

Orders) of the General Terms and Conditions, a penalty of $5.00 per Dth per day shall

be assessed on all quantities taken or delivered in violation of that operational flow

order.

 

(d) Miscellaneous.

 

(1) All penalties and charges assessed under this Section shall be paid in addition

to the applicable transportation rates and charges, including any Excess

Withdrawal charge. If an action by Buyer results in a penalty under more than

one paragraph of this Section 12, the penalty resulting in the highest payment by

Buyer shall apply.

 

(2) In the event Buyer seeks to avoid any penalty provided for in this Section on the

ground that such charge was incurred because of a force majeure event as defined

at Section 14 (Force Majeure) of the General Terms and Conditions, Buyer shall

document such force majeure event to Operator. Operator shall waive penalties to

the extent that incurrence of the penalties or imbalance was caused by a force

majeure event as defined at Section 14.

 

(3) Operator may not assess against or collect from a Buyer any penalty set forth in

this Section 12, in whole or in part, if Buyer's imbalance did not affect

Operator's ability to provide service under any of its Rate Schedules in this

Tariff. Operator's determination not to assess or collect a penalty for any

individual occurrence shall not operate or be construed as a waiver of any

penalty or penalties for future occurrences whether of like or different nature.

 

(4) Operator may waive its right to collect all or any portion of the penalties

assessed against Buyer, provided that any such waiver is granted in a

nondiscriminatory manner.

 

(5) To the extent that any imbalance directly results from Buyer's reliance on

inaccurate data from Operator, no penalty will be assessed for that portion of

the imbalance shown by Buyer to be attributable to such inaccurate data.

 

(e) Penalty Revenue Sharing. Operator shall refund annually all penalty revenue collected

net of costs to Buyers. For each month during each annual period, Operator shall

determine the Buyers that have not incurred, in that month, any of the penalties set

forth in this Section 12 and, therefore, are eligible to share in the penalty revenue

collected in that month. Refunds will be apportioned to said Buyers based on each

respective Buyer's actual fixed cost contribution as a percentage of the total fixed

cost contribution of all such Buyers during each month of the annual period (or

portion thereof, if applicable). The fixed cost contribution for any capacity release

transaction not subject to the maximum rate ceiling shall be capped at the fixed cost

portion of the maximum tariff rate that applies to the original Shipper's contract.

The annual period will cover the 12 months ending July 31.

 

Following each annual period, Operator shall post on its EBB the penalty revenue

collected and file a report, which supports any costs that are netted against the

penalty revenue collected, with the Commission and serve on Buyers and interested

State Commissions. Any penalty revenue collected and retained until distribution by

Operator shall accrue interest calculated pursuant to Section 154.501(d) of the

Commission's regulations.