High Island Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 04/07/1999, Docket: GT99- 17-000, Status: Effective

Original Sheet No. 119 Original Sheet No. 119 : Effective







resultant dollar figure to present value on the

basis of the Federal Energy Regulatory Commission

interest rate described in 18 CFR Section

154.67(c)(2)(iii)(A) that is in effect on the date

that the calculation is made for all Qualified

Bids, provided, however, that in comparing present

values, HIOS will not factor into its calculation

any portion of a proposed transaction term that

exceeds 20 years from the commencement of service.


This calculation is expressed in the following




r X 1-(1+i) X u = Net Present Value




Where: i = The interest rate per month

n = The number of months in the

term of the proposed

agreement, not to exceed 240

months for purposes of the


r = The proposed reservation

charge per unit per month; and

u = The maximum daily quantity of

capacity requested, in Dth.


16.8(b) The available capacity shall be awarded

conditionally to the Qualified Bid with the highest

Net Present Value. If, following identification of

the highest-value Qualified Bid, the capacity that

remains available is greater than the capacity

requested in the Qualified Bid with the next

highest Net Present Value, then capacity shall also

be awarded conditionally to such next highest bid.

This procedure shall continue until the