Northern Natural Gas Company
Fifth Revised Volume No. 1
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Effective Date: 02/21/2009, Docket: RP01-223-004, Status: Effective
Fifth Revised Sheet No. 252 Fifth Revised Sheet No. 252 : Pending
Superseding: Subsitute Fourth Revised Sheet No. 252
GENERAL TERMS AND CONDITIONS
Once Northern has validated Shipper's request and determined that Shipper's offer
is the best bid, Northern shall send, for execution, to Shipper a Throughput
Service Agreement. Shipper shall have thirty (30) days from the date of tender
in which to execute the Throughput Service Agreement and return to Northern or
Shipper's request shall be deemed null and void. Northern is not required to
tender a Service Agreement for service at a rate less than maximum rate.
For purposes of the throughput request form, a Shipper may request an Operational
Area as a Point of Delivery to the facilities of a single LDC. Shipper shall be
required to specify the specific points for which gas will be delivered.
Additional Provisions for Requests for
Firm Throughput Service
Northern will advise Shipper of its ability to provide the service requested.
Except as provided below, Northern will give a Shipper requesting firm service
written confirmation within seven (7) work days after receipt of a request that
a Shipper will be allowed to enter into a TF, TFX, VFT, or LFT Service Agreement
containing the points requested or amend an existing TF, TFX, VFT, or LFT Service
Agreement to change primary receipt or delivery points; Shipper may not nominate
volumes at these points until the TF, TFX, VFT, or LFT Service Agreement or
amendment is executed.
The effective date of the TF, TFX, VFT, or LFT Service Agreement shall be that
agreed to by Northern and the Shipper and shall be set forth in the Service
To the extent capacity is not available, a request for new firm service shall be
voided and a request to amend a primary receipt or delivery point shall be
retained in Northern's capacity tracker system. Northern shall post weekly its
available capacity on the EBB. Northern shall have the right to post notices for
solicitation of bids for particular segments of capacity. Such notice may
include a bid evaluation methodology, in which case the posting will be made at
least three (3) days prior to bidding. In addition, Northern will post whether
bids have been received and show the full net present value (NPV) analysis for
the highest bid received, the shippers' bids, and provide the actual calculation
of the NPV with sufficient clarity to permit bidders to duplicate the results.
In the event Northern receives bids for new capacity, the capacity will be
allocated to the best bid. However, in the event Northern receives no bids for
the receipt or delivery point capacity, Northern will utilize its capacity
tracker system and offer the capacity to the first shipper requesting an
amendment to an existing contract.
In the event a specific bid evaluation methodology has not been posted, the
default methodology for the best bid will be the bid with the highest total NPV.
The NPV is the discounted cash flow of incremental revenues to Northern for
service. Incremental revenues are those revenues above and beyond the current
revenues which Northern already receives from reservation charges being paid
prior to the bid period. Northern will utilize the standard NPV calculation
based on the revenue stream over the specified term (which shall not exceed
twenty (20) years), discounted by the FERC interest rate to determine the highest
total incremental revenues. If an alternate bid evaluation methodology is used,
Northern will post the evaluation factors to be utilized along with each factor's
weight. The NPV calculation shall include only revenues generated by the
reservation rate or a guaranteed throughput volume. In those cases where one or
more bidders is willing to pay the maximum recourse rate, the NPV used in such
cases is capped at, and may not exceed, the NPV equal to the maximum reservation
rate available to recourse shippers. For purposes of NPV evaluation, the
aggregate NPVs of two or more bids for contiguous service may be considered
provided that the combined capacity under those bids does not exceed the maximum
capacity available for bid. For purposes of bid comparisons in allocating
capacity, Shippers willing to pay more than the maximum tariff rate will be
considered to be paying the maximum tariff rate and for purposes of bid
comparisons in allocating capacity, guaranteed throughput volume service applies
only in the case of a negotiated rate.