Pine Prairie Energy Center, LLC

Original Volume No. 1

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Effective Date: 09/01/2007, Docket: RP07-563-000, Status: Effective

Original Sheet No. 160 Original Sheet No. 160 : Effective





a replacement Letter of Credit no later than 120

days prior to the expiration of the then-

effective Letter of Credit. PPEC will return the

expiring Letter of Credit to Customer within five

(5) days of the date the Replacement Letter of

Credit becomes effective;


(2) each Letter of Credit shall be in form and

substance satisfactory to PPEC, and shall provide

for partial drawdowns and, without limiting the

generality of the foregoing, shall be issued by a

financial institution acceptable to PPEC that is

rated at least BBB- by Standard and Poor's

Corporation and Baa3 by Moody's Investor Services,

Inc.; and


(3) in addition to all other remedies available to

PPEC at law or in equity, if Customer fails to

provide a replacement Letter of Credit in

accordance with this Section 31.7(a), PPEC may

draw upon the expiring Letter of Credit to the

full amount thereof and apply the funds so drawn

in payment in whole or in part of the obligations

of Customer under each or any of Customer's Storage

Service Agreements.


(b) Customer shall provide to PPEC, to secure its

obligation to PPEC pursuant to each of Customer's Storage Service

Agreements, a Guarantee granted to PPEC by Customer's direct or

indirect parent (the "Guarantor") with an Acceptable Credit

Rating. The Guarantee shall be in a form acceptable to PPEC and

the provisions of this Section shall apply to the Guarantor as if

the Guarantor were the Customer.


(c) If Customer has requested, PPEC may accept other

forms of Financial Assurances to secure Customer's obligations

under the Storage Service Agreements, provided that PPEC may

reject or accept such other forms of Financial Assurances in a

manner that is not unduly discriminatory; or


(d) Customer shall prepay for service in an amount as

set forth immediately below, provided that such prepayments shall

be considered collateral held for security and not advance

payments for services and that Customer may deposit its prepayment

funds into an interest-bearing escrow account established by

Customer granting PPEC access to the account for payment of

services under Customer's Storage Service Agreement(s).


The dollar value of the Financial Assurances set forth above in

this Section 31.7 to be provided by Customer shall be in an amount

equal to: (1) in the case of Firm Storage Services to be provided

by PPEC using existing facilities, reservation charges payable at

the rate specified in Customer's bid for service or Storage

Service Agreement for a period of three (3) Months or the duration

of the Customer's bid or Storage Service Agreement, whichever is

shorter; (2) in the case of Interruptible services to be provided

by PPEC using existing facilities, the Interruptible charge(s)

calculated on a one hundred percent (100%) load factor basis

payable for a period of three (3) Months or the duration