Overthrust Pipeline Company

First Revised Volume No. 1-A

 Contents / Previous / Next / Main Tariff Index

 

 

Effective Date: 10/01/1993, Docket: RS92- 71-001, Status: Effective

Original Sheet No. 74 Original Sheet No. 74 : Superseded

 

GENERAL TERMS AND CONDITIONS

 

 

such as GRI and ACA charges, and the projected incremental

volumes expected to be transported. Overthrust will

consider volumes to be incremental if the volumes that will

be transported would not otherwise flow through Overthrust's

system.

 

25.4 The economic value of a project shall be

determined using the discounted cash flow rate of return

methodology. The minimum acceptable rate of return may be

published from time to time on Overthrust's EBB.

 

When the present value of the incremental revenues from

the project is greater than the present value of the

incremental cost of service, Overthrust will pay for the

cost of the contemplated facilities. When the present value

of the incremental revenues from the project is less than

the present value of the incremental cost of service,

Shipper shall pay for the cost of the contemplated

facilities.

 

25.5 Shipper's payment for the cost of the new

facility shall include the full cost of the facility, the

tax burden created by the payment as well as the tax-on-tax

effect generated by such payment. Reimbursement for federal

income taxes on Shipper's payment will be computed by first

determining the tax-on-tax effect, and then deducting the

present value of the future tax benefit provided by the

future depreciation of plant involved in the payment for the

cost of the new facility.

 

The tax-on-tax effect will be determined by the product

of (a) the dollar amount qualifying as a contribution in aid

of construction under the Tax Reform Act of 1986 and (b) the

"tax rate" divided by 1 minus the tax rate:

 

i.e. [(Tax Rate) / (1-Tax Rate)]

 

The present value of the tax benefit provided by the

future depreciation of plant shall be determined by

Overthrust.

 

25.6 When Overthrust has previously paid for receipt

or delivery point facilities under this facilities-

reimbursement policy, Shipper shall, nevertheless, promptly

pay Overthrust for Overthrust's net book value of such

facilities when either of the following events occur: (1)

when Overthrust's ability to fully recover such costs is

denied in any Section 4 or Section 5 rate proceeding, or (2)