Transwestern Pipeline Company, LLC

Third Revised Volume No. 1

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Effective Date: 08/01/2007, Docket: RP06-614-003, Status: Effective

Third Revised Sheet No. 122 Third Revised Sheet No. 122 : Effective

Superseding: First Revised Sheet No. 122








13.1 Prior to execution of a Service Agreement, a Shipper or a prospective shipper

(hereinafter in this section jointly referred to as "Shipper") shall be required to

establish creditworthiness with Transporter. Transporter shall not be required to: (1)

execute a Service Agreement providing for service on behalf of any Shipper who fails to

meet Transporter's standards for creditworthiness; or (2) initiate service to a Shipper

who fails to meet Transporter's standards for creditworthiness; or (3) continue

transportation service on behalf of any Shipper who is or has become insolvent or who,

at Transporter's request, fails within a reasonable period to demonstrate



13.2 Shipper shall provide current financial statements, annual reports, or other filings

with regulatory agencies which discuss Shipper's financial status, a list of all

corporate affiliates, parent companies and subsidiaries, and any reports from credit

reporting and bond rating agencies which are available. Shipper shall provide a bank

reference and two trade references.


13.3 A shipper will be deemed creditworthy if (a) its rating by Standard & Poor's

Corporation ("S&P") is at least BBB- or Baa3 by Moody's Investor Service ("Moody's") or

(b) Shipper satisfies a credit appraisal performed by Transporter.


13.4 In the event Shipper does not meet the criterion in Section 13.3(a), Transporter shall

evaluate Shipper's creditworthiness based upon the level of service requested.

Transporter shall apply consistent evaluation practices to all similarly situated

Shippers to determine the Shipper's financial ability to satisfy the payment

obligations due to Transporter over the term of the requested service agreement. Such

credit appraisal shall be based upon Transporter's evaluation of the following

information and credit criteria:


(a) S&P and Moody's opinions, watch alerts, and rating actions will be considered in

determining creditworthiness;


(b) Consistent financial statement analysis will be applied by Transporter to determine

the acceptability of Shipper's current and future financial strength. Shipper's

balance sheets, income statements, cash flow statements and auditor's notes will be

analyzed along with key ratios and trends regarding liquidity, asset management,

debt management, debt coverage, capital structure, operational efficiency and



(c) Results of bank and trade reference checks and credit reports should demonstrate

that a Shipper is paying its undisputed obligations in a timely manner;


(d) Shipper is not operating under any chapter of the bankruptcy laws and is not

subject to liquidation or debt reduction procedures under state laws. An exception

for a Shipper who is a debtor in possession operating under Chapter XI of the

Federal Bankruptcy Act will be made if Transporter is adequately assured that the

service billing will be paid promptly as a cost of administration under the federal

court's jurisdiction;


(e) Whether Shipper is subject to any lawsuits or judgments outstanding which would

seriously reflect upon the Shipper's ability to remain solvent;


(f) Whether Shipper has any delinquent balances outstanding for services provided

previously by Transporter and whether Shipper has paid its account balances

according to the terms established in its service agreements and whether any

deductions or payments were withheld for claims not authorized by the service

agreements; and


(g) Any other information obtained that is relevant to Shipper's current and future

financial strength.