Tennessee Gas Pipeline Company


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Effective Date: 10/01/2003, Docket: RP00-477-005, Status: Effective

First Revised Sheet No. 361A First Revised Sheet No. 361A : Effective







5.3 Compliance: An OFO Recipient must comply with a Balancing Alert within the

time period set forth therein unless the OFO Recipient is able to demonstrate

that such compliance (a) is not within its physical control or capability;

(b) is prevented by operating conditions on a third party system which are

beyond its control; (c) is precluded by contractual restrictions with persons

other than Transporter; and/or (d) is prevented due to a force majeure event

as defined in Article X of Transporter's General Terms and Conditions.

Provided that the OFO Recipient shall make a good faith effort to comply with

any such OFO, including seeking waivers of any contractual limits with third

parties or modifications of operating conditions on third party systems. OFO

Recipient shall notify Transporter immediately if it believes that it is

excused from compliance with the OFO for any of the above stated reasons, and

shall provide Transporter with documentation sufficient to support its basis

for non-compliance.


5.4 Penalties: If a Shipper, point operator, and/or OBA Holder fails to comply

with a Balancing Alert it will be subject to a charge equal to $15.00 plus the

applicable Regional Daily Spot Price for each dekatherm of gas by which it

deviates from the requirements of the Balancing Alert; provided that an OFO

Recipient at a point at which flows are not subject to electronic flow

monitoring will not be assessed the $15.00/dth charge for any volumes by which

it exceeds the requirements of the OFO during the first day the OFO is in

effect; provided further that an OFO Recipient shall not incur any charges or

penalties if (a) such charges or penalties would not have been incurred but

for its compliance with a Balancing Alert, including any preliminary action

taken in response to a warning issued by Transporter as a precondition to a

Balancing Alert, or (b) it can demonstrate to Transporter's satisfaction that

its noncompliance with the OFO resulted in a benefit to the system. "Regional

Daily Spot Price" means the highest spot price published in Gas Daily for the

day(s) on which, and for the region(s) in which, the Balancing Alert is in

effect; provided that if the Balancing Alert is in effect on days on which no

Gas Daily is published, the applicable price(s) reflected in the most recently

published Gas Daily shall be used in assessing the charge.


5.5 Liability of Transporter: Transporter shall not be liable for interruption or

curtailment of firm services in connection with an OFO unless the interruption

or curtailment was the direct result of Transporter's negligence or willful

misconduct. Otherwise, Transporter shall not be liable for any costs incurred

by an OFO Recipient in complying with an OFO including any damages that result

from any party failing to comply promptly and fully with an OFO. A

noncomplying party shall indemnify Transporter against any claims of



5.6 Unilateral Action: In the event (a) of non-response to an OFO, or (b) the

actions taken thereunder are insufficient to correct the system problem for

which it was issued, or (c) there is insufficient time to carry out the

procedures with respect to Balancing Alerts, Transporter may periodically take

unilateral action, including the curtailment of firm service, to maintain the

operational integrity of Transporter's system (or any portion thereof). For

purposes of this section, the operational integrity of Transporter's system

shall encompass the integrity of the physical system and the preservation of

physical assets and their performance (including the capability and

performance of storage fields), the overall operating performance of the

entire physical system as an entity (or any portion thereof) and the

maintenance (on a reliable and operationally sound basis) of total system

deliverability and the quality of gas delivered.