Tennessee Gas Pipeline Company


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Effective Date: 05/01/2005, Docket: RP05-249-000, Status: Effective

Second Revised Sheet No. 415 Second Revised Sheet No. 415 : Effective

Superseding: First Revised Sheet No. 415








On an annual basis, for the twelve month period ending following the date of

implementation of this section pursuant to Order No. 637, and each year

thereafter, ("Crediting Period"), Transporter shall determine the total amount

of penalty charges invoiced and collected during the Crediting Period under the

following provisions of this Tariff:


(i) Sections 6.4 and 11 of Rate Schedule IS;


(ii) Sections 3.4(b), 3.4(c), 7.2 and 11 of Rate Schedule FS;


(iii) Section 7 of Rate Schedule PAL; and


(iv) Article VIII, Sections 2, 3, 4 and 5 of the General Terms and Conditions.


From the total amount of penalty charges collected, all amounts related to

revenues or costs incurred by Transporter as a result of having to purchase,

confiscate or sell gas, as well as the portion of the charges collected based on

the spot price for gas, related to the penalties referenced in this Article

XXXVIII, shall be credited to the cashout mechanism as revenue or costs pursuant

to Section 7(g)(i) of Rate Schedule LMS-MA. For purposes of determining costs,

in addition to any other costs, all amounts collected based on the spot price

for gas shall be considered reimbursement for costs. The remaining amount of

penalty charges collected shall be credited to all eligible parties. For

purposes of this Article XXXVIII, eligible party shall be defined as any

balancing party under Rate Schedules LMS-MA, LMS-PA, or SA or to the extent not

governed by a balancing agreement, a shipper who received service under Rate

Schedules FT-A, FT-G, FT-GS, FT-BH, FT-IL, IT, FS, PTR, NET, NET 284, PAT, and

IT-X during the Crediting Period. Transporter shall credit to all such eligible

parties in total an amount equal to the penalty revenues, net of costs,

collected during the Crediting Period plus accrued interest. Transporter shall

credit the eligible party's invoice within 60 days following the end of the

Crediting Period with its allocated share of the penalty credit pro rata based

on a percentage of the party's scheduled volumes to total scheduled volumes

during the Crediting Period, except that for supply aggregation agreements, only

the scheduled volumes at physical points at which the supply aggregation

agreement is performing the balancing function shall be included. A single

annual allocation percentage will be derived for each eligible party for the

Crediting Period. In determining such annual allocation percentage, the

scheduled volumes of parties who were assessed a penalty charge under the tariff

provisions identified in this Article XXXVIII during a particular month will be

excluded from the total volumes for that month; provided that where a

Replacement Shipper is assessed a penalty under a release contract, the

Releasing Shipper will not be disqualified from receiving its allocated share of

the penalty credit based on the Replacement Shipper being assessed a penalty.

To the extent an eligible party has terminated service during the Crediting

Period and Transporter is no longer rendering invoices to such party at the time

of the penalty credit, Transporter shall make a cash disbursement to such party

in lieu of an invoice credit.