East Tennessee Natural Gas, LLC

Third Revised Volume No. 1

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Effective Date: 03/01/2009, Docket: RP08-487-002, Status: Effective

Original Sheet No. 315B.03a Original Sheet No. 315B.03a




5.8 Allocation of Firm Capacity (continued)


(a) Existing Capacity (continued)


provided that such bidder cannot increase the

net present value of the bid to greater than the

net present value of the same bid if the bidder

had posted the collateral described in Section



(iii) The following rules will apply to ratings for

purposes of evaluating multiple bids as part of

the NPV bid evaluation process:

(1) Substitute Ratings. Transporter will

substitute the credit rating of a bidder's

guarantor or parent company, whichever is

higher, provided that such guarantor or

parent company has provided a guarantee

for all of the obligations under the

specific service agreement at issue and

satisfies the requirements of Section


(2) Equivalent Ratings. For any bidder that

does not have, or whose parent company or

guarantor does not have, a credit rating

from one or more of the credit rating

agencies noted above, Transporter will

assign an equivalent rating using a credit

scoring methodology, applied on a non-

discriminatory basis, provided such parent

company or guarantor has provided a

guarantee for all of the obligations under

the specific service agreement at issue.


(iv) Releasing shippers who propose to release

capacity for a term of more than one year will

have the option of specifying, pursuant to the

capacity release procedures in Section 17, that

the same NPV and Risk of Default processes as

set forth herein will be used by Transporter

when evaluating bids by replacement customers

for such released capacity. If a releasing

shipper makes such an election, Transporter will

follow the time line for non-standard capacity

release bid evaluation.


(v) All credit ratings shall be determined as of the

last day of the Open Season for the pipeline

capacity at issue, and in the event a bidder is

rated by two or more rating agencies and there

is a split rating between rating agencies, the

lowest rating applies.


(vi) For any bid submitted with a term of fifteen

(15) years or longer, Transporter will apply the

15-year Risk of Default factor from the S&P



(vii) It is a condition of any capacity award under

the foregoing bid evaluation process that the

winning bidder post any collateral indicated on

its bid form within five (5) business days of