Western Gas Interstate Company

Fourth Revised Volume No. 1

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Effective Date: 04/01/1996, Docket: CP96- 81-006, Status: Effective

Original Sheet No. 163 Original Sheet No. 163 : Effective







usage for each year for the depreciable

life of the facilities to be built or

for the number of years under the

initial term of the operable service

agreement, whichever is shorter, and the

currently effective rate for the service



(2) In calculating the incremental cost of

service, Western shall utilize the

methodologies for calculating cost of

service which underlies its currently

effective transportation rates.


(3) The projected costs and revenues in

nominal dollars will be evaluated using

a standard discounted cash flow

analysis, with a discount rate equal to

the most recently approved overall rate

of return for Western or the FERC

generic rate of return for utilities,

whichever is greater. Western will

undertake projects for which the internal

rate of return is positive by greater

greater than 3%.


(4) When Western has previously paid for all

or a portion of delivery point

facilities under this facilities

reimbursement policy, Shipper shall,

nevertheless, within thirty (30) days

after receipt of invoice prepared by

Western, pay Western for Western's net

book value of such facilities when

either of the following events occurs:

(1) When Western's ability to fully recover

such costs is denied in any Section 4 or

Section 5 rate proceeding, or (2) when

Shipper ceases operations at the delivery

point where the facilities were installed.


(b) Any new facilities contemplated by Section

5.3(e) which do not meet the economic test of

Section 5.4(a)(3) shall be installed by

Western at Shipper's expense.