Northern Natural Gas Company
Fifth Revised Volume No. 1
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Effective Date: 11/22/2003, Docket: RP03-398-004, Status: Effective
Eighth Revised Sheet No. 267 Eighth Revised Sheet No. 267 : Superseded
Superseding: Seventh Revised Sheet No. 267
GENERAL TERMS AND CONDITIONS
Mandatory cash-out/in shall not apply to Operational Balancing Agreements
(OBAs), except as provided on Sheet No. 264.
(i) Volumetric Imbalance. Volumetric imbalance shall mean the volume
difference between receipts and deliveries, without consideration
of the dollar value of such volume but with consideration of the
applicable fuel and unaccounted-for.
(ii) Dollar Valuation or Dollar Volume Imbalance. Dollar Valuation or
Dollar Volume Imbalance shall be calculated by first determining
the monthly Volumetric Imbalance and then multiplying it by the
applicable Index Price (as defined below) for the same month.
B. Dollar Valuation
Northern and Shipper, or its Designee, shall receive and
deliver thermally equivalent gas volumes as nearly as
practicable at uniform hourly and daily rates of flow. Volume
differences between monthly receipts and deliveries shall be
accumulated and recorded in a Shipper account. Northern and
Shipper shall manage monthly receipts or deliveries so that the
account balance shall be kept as near to zero as practicable.
Imbalances shall be valued on a dollar volume basis, which means that
Northern will first determine the imbalance quantity for each
month by legal entity on an MMBtu basis and then will determine a
dollar value using the MMBtu quantity and the applicable
Monthly Index Price, as tiered for imbalance level. Dollar Valuation
will not apply to volumes that have been injected into or withdrawn
from storage under the Monthly Imbalance-to-Storage provisions set
forth in Subsection F. (iii) below.
C. Determination of Monthly Index Prices (MIPs)
The high, low and average Index Prices for the Market Area Index
Price, the Field Area Index Price, and the Gulf Coast Index Price
shall be determined each month using the quoted spot gas price at
price discovery points on Northern's system as appearing in "Gas
Daily," as provided below.
(i) Monthly Index Prices will be determined using a five-week period.
The five-week period is defined as beginning on the first Tuesday
of the calendar month for which the MIP is being established and
ending on the first or second Monday of the following month,
whichever is applicable, to arrive at a five-week period.
(ii) Market Area Monthly Index Prices (Market Area MIP)
a. The High Market Area Monthly Index Price (High Market Area
MIP) shall equal the arithmetic average of the highest
average weekly price occurring within each five-week period
at Northern-Demarcation and Northern-Ventura.
b. The Low Market Area Monthly Index Price (Low Market Area MIP)
shall equal the arithmetic average of the lowest average
weekly price within each five-week period at
Northern-Demarcation and Northern-Ventura.
c. The Average Market Area Monthly Index Price (Average Market
Area MIP) shall equal the arithmetic average of the five
average weekly prices at Northern-Demarcation and