Transwestern Pipeline Company

Second Revised Volume No. 1

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Effective Date: 02/23/2000, Docket: RP99-481-002, Status: Effective

Substitute Fourth Revised Sheet No. 69 Substitute Fourth Revised Sheet No. 69 : Effective

Superseding: Third Revised Sheet No. 69

 

 

 

GENERAL TERMS AND CONDITIONS

(Continued)

 

13. CREDITWORTHINESS

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Prior to execution of a Transportation Service Agreement providing for service under

Rate Schedules FTS-1, LFT, FTS-3, EFBH, FTS-2 and ITS-1, a Shipper or a prospective

shipper (hereinafter in this section jointly referred to as "Shipper") shall be

required to establish creditworthiness with Transporter. Transporter shall not be

required to: (i) execute a Transportation Service Agreement providing for service

under the applicable Rate Schedule on behalf of any Shipper who fails to meet

Transporter's standards for creditworthiness; or (ii) initiate service to a Shipper

who fails to meet Transporter's standards for creditworthiness; or (iii) continue

transportation service on behalf of any Shipper who is or has become insolvent or who,

at Transporter's request, fails within a reasonable period to demonstrate

creditworthiness.

 

For purposes herein, the determination of Shipper's creditworthiness shall be based

upon the level of service requested by Shipper, Shipper's estimated financial strength

as defined by Dun & Bradstreet, and a composite credit appraisal of at least "3 ",

also as defined by Dun & Bradstreet. If Shipper is not rated by Dun & Bradstreet,

determination of a Shipper's creditworthiness shall be based upon a credit rating, as

evaluated by Transporter, based upon the level of service requested by Shipper and

financial analysis criteria and ratios which are generally acceptable in the natural

gas industry. If Transporter determines that Shipper does not have an acceptable

rating as set forth above, Shipper may, at its own expense, obtain a private rating

from Dun & Bradstreet, or, as an alternative, request that an independent certified

public accountant, mutually acceptable to Shipper and Transporter, prepare an

equivalent evaluation based on the financial analysis criteria and ratios which a re

generally acceptable in the natural gas industry.

 

If a Shipper otherwise fails to establish creditworthiness as provided herein, Shipper

may still receive service under the applicable Rate Schedule provided it furnishes and

maintains for the term of the Transportation Service Agreement: (i) a written

guarantee in a form satisfactory to Transporter from a third party which is

creditworthy as determined above, (ii) an irrevocable standby letter of credit, (iii)

a pre-payment, or (iv) other security acceptable to Transporter.

 

To permit Transporter to conduct a creditworthiness review, a Shipper shall, upon

request by Transporter, render to Transporter: (i) a completed credit application, and

(ii) complete financial statements prepared in accordance with generally accepted

accounting principles or, for non-U.S.-based Shippers, prepared in accordance with

equivalent principles. Upon requesting transportation service, a Shipper must submit

to Transporter a completed credit application unless it has previously submitted such

to Transporter within the last twelve (12) months. Transporter shall review a

Shipper's creditworthiness on an ongoing basis and Shipper shall provide, upon

Transporter's request, updated financial statements periodically in order to determine

the continuing creditworthiness of a Shipper.