Transwestern Pipeline Company

Second Revised Volume No. 1

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Effective Date: 04/14/2003, Docket: RP03-307-000, Status: Effective

Fifth Revised Sheet No. 84 Fifth Revised Sheet No. 84 : Effective

Superseding: Substitute Fourth Revised Sheet No. 84

24.4 Bid Solicitation

 

To the extent Transporter conducts a "bid solicitation" for posted capacity, all bids received during

the bid solicitation period will be treated as having been received at the same time and will be

awarded utilizing a Present Value method based on the bid criteria set forth below.

 

(i) Bid Solicitation Notice

Transporter's bid solicitation shall specify:

(a) quantity (MMBtu/day)

(b) the available points, paths or segments

(c) the effective date capacity is available

(d) the deadline for submitting bids

(e) whether transporter is willing to consider offers at less than maximum tariff rates for

all or any portion of the capacity or term

(f) A shipper need not offer to pay a different rate (including, without limitation, a

negotiated rate) that may be in excess of the maximum tariff rate to obtain such capacity.

 

(ii) Minimum Bid Solicitation Timelines

The following are the minimum periods that the notice of a bid solicitation will be posted:

(a) For a term of less than five (5) months, the bid solicitation period shall be a minimum of

one (1) business day.

(b) For a term of five (5) months to one (1) year, the bid solicitation period shall be a

minimum of three (3) business days.

(c) For a term of greater than one (1) year, the bid solicitation period shall be a minimum of

five (5) business days.

 

(iii) Bids

To be considered a valid bid, bids must be binding, must be received by the bid solicitation

deadline and must specify:

(a) the quantity desired (and whether the shipper is willing to accept a portion of the

quantity)

(b) primary receipt point(s)

(c) primary delivery point(s)

(d) the term

(e) reservation rate

 

(iv) Bid Evaluation

Valid bids will be evaluated by determining the highest present value using the current Commission

interest rate as defined in 18 C.F.R. 154.501(d) pursuant to the following formula:

-n

R x 1 - (1 + i ) x Q = present value

i

where: i = interest rate per month using the current Commission interest rate as

defined in 18 C.F.R. 154.501(d)

n = term, in months

R = the rate bid on a monthly basis (the reservation charge, if a two-part

rate and the commodity rate, if a one-part rate), and

Q = the Quantity stated in Dth

 

If Transporter receives both maximum rate bids and negotiated rate bids, then any negotiated rate

bid exceeding the maximum tariff rate shall be considered equal to the maximum tariff rate for the

purpose of evaluation.

 

Transporter will award the capacity to the shipper(s) whose bid(s) represents the highest total

present value. For purposes of determining the highest total present value, Transporter will

consider the guaranteed incremental revenues from the bid or combination of bids that yield the

highest total present value.

 

Bids with equal present value will be awarded on a pro rata basis, provided however, that if one

or more of the parties with equal bids is unwilling to accept a portion of the quantity desired,

then such bid(s) will be eliminated from the pro rata calculation.

 

Transporter will notify all bidders of the acceptance or rejection of their respective bids by

the close of the business day following the bid solicitation deadline.