Colorado Interstate Gas Company, L.L.C.
High Plains System 2018 Expansion
to Cheyenne Hub Delivery Points
Colorado Interstate Gas Company, L.L.C. (CIG) is conducting a binding Open Season for additional High Plains System capacity to be made available by approximately October 1, 2018. The additional High Plains transportation capacity offered in this Open Season will have primary receipt rights at existing and potentially new interconnections with processing plants in the DJ Basin and will have primary delivery rights at various points off the Wyoming Interstate Company, L.L.C. (WIC) system Cheyenne Hub High Pressure Pool. CIG is conducting this Open Season on the terms described below.
This binding Open Season will commence on August 17, 2017 and is scheduled to close at 11:00 a.m. Mountain Time on September 7, 2017. Bids must be received prior to the close of the Open Season and must be submitted to KMWestBids@kindermorgan.com using the Bid Sheet attached hereto.
CIG intends to provide notification of capacity awards by 4:00 p.m. Mountain Time on September 7, 2017.
By submitting a Bid Sheet, the bidding party will be representing that it has full authority to bind the requesting company.
Questions concerning this Open Season should be directed to:
Greg Ruben 719-520-4870
Laine Lobban 719-520-4344
Description of The High plains 2018 expansion
The High Plains System 2018 Expansion consists of 222 MDth/day of south-to-north capacity on CIG's existing High Plains System in Weld County, Colorado from primary receipt rights at existing and potentially new interconnections with processing plants in the DJ Basin to primary delivery rights at various points off the WIC Cheyenne Hub High Pressure Pool. The delivery points may include:
LOCATION PIN NUMBER
LOCATION NAME
INTERCONNECTING PIPE
AVAILABLE CAPACITY (AS OF SEPTEMBER 2017) DTH/D
896002
Dullknife (DUL)
Trailblazer
1,376,968
800716
Thunder Chief (TDC)
Cheyenne Plains
282,800
800184
Curley (CUR)
742,350
800104
Bowie ((BOW)
CIG
631,100
896021
Rockport (RKP)
KMIT
238,000
896018
Little Wolf (LTW)
PSCo
67,900
896026
Owl Creek (OWL)
394,700
896084
Sitting Bull (STB)
REX
62,900
800212
Dover (DOV)
139,229
This additional capacity will be made available through acquisition of off-system capacity, modifications of facilities and/or changes in operations of existing facilities.
CIG will provide the requested transportation service under existing Rate Schedule TF-HP of CIG's FERC Gas Tariff (CIG Tariff). The expansion capacity includes off-system capacity acquired by CIG on WIC.
CIG will consider negotiated rate bids for this capacity. CIG anticipates that it will require bids for service for at least 10 years at maximum recourse rates (plus any off-system capacity charge pursuant to Section 4.3 of the General Terms and Conditions of CIG's Tariff). CIG will also consider negotiated reservation rate bids of at least $3.65/Dth/month for the expansion project to go forward and/or for capacity to be awarded under this Open Season.
Negotiated rate bids must also provide that, subject at all times to FERC's approval of the particular costs, CIG shall be entitled to recovery of Greenhouse Gas Emissions Costs incurred by CIG attributable to TF-HP service. As used herein "Greenhouse Gas Emissions Costs" means (i) the cost of any carbon emissions tax or other greenhouse gas assessment that is imposed on CIG, (ii) the cost of any greenhouse gas mitigation efforts, including the costs of credits and offsets, that CIG incurs to comply with any greenhouse gas laws, rules or regulations, and/or (iii) costs incurred under a voluntary program of greenhouse gas mitigation. If (i) CIG is unsuccessful in having the FERC-approved Greenhouse Gas Emissions Costs incurred by it recovered through a FERC-approved surcharge applicable to all shippers, and (ii) such amounts are recoverable only through CIG's FERC-approved recourse rates, then Bidder must agree to modify its negotiated fixed monthly reservation rate by the amount of CIG's maximum reservation rate under Rate Schedule TF-HP that is attributable to such costs.
In addition to the bid rate, each bid shall be subject to the applicable maximum commodity rate and all other maximum rates, charges and surcharges, including ACA, Fuel and L&U, and any other authorized surcharges assessed under the TF-HP Rate Schedule as those amounts may be amended or superseded from time-to-time. To the extent the service involves the use of other CIG facilities or the facilities of other pipelines, additional charges above the recourse rate for Rate Schedule TF-HP will apply. Each bid will also be subject to the applicable maximum commodity rate and all other maximum rates, charges and surcharges, including ACA, Fuel and L&U, and any other authorized surcharges assessed to CIG for the WIC Capacity under WIC's FT Rate Schedule.
CIG anticipates the expansion capacity will be available by approximately October 1, 2018.
BID CONDITIONS AND PROCEDURES
Bidders may include in their bids some or all of the following conditions:
- The successful acquisition by CIG of the WIC Capacity described above by September 15, 2017;
- The receipt of approval from the appropriate management, management committee, and/or board of directors of bidder and its parent companies of the bid by September 15, 2017.
For purposes of awarding capacity in this Open Season, CIG reserves the right to reject any bid which contains conditions not previously listed. In addition, CIG reserves the right to not proceed with the development of the expansion capacity if CIG determines, in its sole discretion, that:
- CIG is unable to obtain any necessary regulatory or administrative authority to provide the expansion capacity;
- Insufficient demand for the expansion capacity is demonstrated In this Open Season;
- CIG is unable to obtain any necessary off-system capacity on terms and conditions acceptable to CIG's management, in its sole discretion; or
- The cost of developing the additional capacity exceeds an amount that CIG believes will provide an acceptable return on the expansion project.
Successful bidders will be required to execute Firm Transportation Service Agreements (FTSAs) with CIG in the form contained in the CIG Tariff within 30 days from tender by CIG.
EVALUATION CRITERIA
CIG will evaluate all Open Season bids based on the net present value (NPV) of the proposed monthly TF-HP reservation charges. Maximum Recourse Reservation Rate bids will be evaluated at the current rate ($2.4425/dth/month). Maximum Recourse Reservation Rate bids will be subject to the additional off-system capacity reservation rate to be paid to WIC (anticipated to be $1.2075/dth/month). Negotiated Rate bids will be evaluated based on the Negotiated Rate bid less the anticipated off-system capacity reservation rate of $1.2075 to be paid to WIC. Negotiated Rate bids in excess of the Maximum Recourse Reservation Rate (after adjustment for the anticipated off-system capacity reservation rate of $1.2075/dth/month) will be evaluated at the Maximum Recourse Reservation Rate for purposes of allocating capacity.
The net present value of a bid will be the sum of the present values for all of the months beginning with the first month of service through the end date of the bid term.
The present value for each month will be calculated as follows:
PV = (R X Q)/((1+i)to the power of n)
Where:
R = the monthly reservation bid rate
Q = the monthly bid quantity
i = the monthly discount rate of .3300% (This is the annual discount rate of 3.96% divided by 12).
n = the number of months from the earliest date the capacity is available in the open season to the month the revenue will be received (the first month capacity is available n = 1, the second month n = 2, and so on).
If there is not sufficient capacity available to meet all acceptable bids, and if two or more acceptable bids are of equivalent net present value, then the capacity will be allocated pro rata among those bidders, unless one or more of the bidders have elected not to have their bids prorated (as indicated on their Open Season Bid Sheet).
CREDITWORTHINESS REQUIREMENTS
Successful bidders must, at a minimum, demonstrate creditworthiness in the manner described in the CIG FERC Gas Tariff, at Section 4.14 of the General Terms and Conditions.
BID SHEET
Open Season EBB Identifier: High Plains System 2018 Expansion
Email Bid To: KMWestBids@KinderMorgan.com
A. Shipper Information
Legal Name of Bidder:__________________________
Name of Requesting Party:_______________________
Title of Requesting Party:________________________
DUNS Number:________________________________
Phone:_______________________________________
B. Term of Service (e.g., 1 Year):____________________________
Effective Start Date:___________________________________
Term End Date:____________________________
C. Maximum Daily Quantity (MDQ):____ __________________
Will you accept a pro rata allocation of capacity if necessary Yes__ No___
Receipt Point(s)
Delivery Point(s)
Requested Dth/day MDQ
D. Bid Rate (expressed as the maximum recourse reservation rate or a rate per Dth per month and check the appropriate box to reflect a discounted reservation rate or a negotiated rate):
□ Maximum Rate Schedule TF-HP Reservation Rate (subject to additional off-system reservation rate paid to WIC).
□ Discounted Reservation Rate of $_________________/Dth/month (subject to additional off-system reservation rate paid to WIC).
□ Negotiated Rate of $ /Dth/month (inclusive of the off-system reservation rate to be paid to WIC).
*By submitting a bid to Transporter, the bidding party certifies that (a) all information contained in the request is complete and accurate, (b) it satisfies, or will be able to satisfy, all the requirements of Transporter's FERC Gas Tariff, and (c) the person submitting the bid has full authority to bind the bidding party.