MIDCONTINENT EXPRESS PIPELINE LLC
FTS TRANSPORTATION
INITIAL OPEN SEASON – IOS 01-27-2020
In this open season, MEP is soliciting bids for firm transportation capacity effective November 1, 2020. This is an Initial Open Season (IOS) pursuant to Section 2.1(b)(1) of the General Terms and Conditions of MEP's Tariff.
CAPACITY AVAILABLE (Dth/day) Effective November 1, 2020
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Capacity is available in the following segments through (a) the capacity MEP leases on the intrastate pipeline system of Enable Oklahoma Intrastate Transmission, LLC ("Enable") (referred to herein as "Leased Capacity"), (b) MEP Zone 1, and (c) MEP Zone 2:
Leased Capacity
Segment 10 – 25,000 dth/d
Zone 1
Segment 100 – 25,000 dth/d
Segment 110 – 25,000 dth/d
Segment 120 – 25,000 dth/d
Segment 130 – 25,000 dth/d
Segment 140 – 25,000 dth/d
Segment 150 – 25,000 dth/d
Zone 2
Segment 200 – 25,000 dth/d
Segment 210 – 25,000 dth/d
Bids may be submitted for all or part of the MDQ set forth above, subject to the Leased Capacity shaping requirement below; however, the MDQ cannot vary during the contract term. The term of service applicable to bids for the capacity in this IOS must commence on November 1, 2020.
LEASED CAPACITY SHAPING REQUIREMENT
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A bidder desiring to bid on Leased Capacity is required to bid for the same aggregate point capacity in Zone 1 and Zone 2, consistent with the following ratios:
Leased Capacity: Receipt Zone - Required Ratio: 100%
MEP Zone 1: Delivery Zone - Required Ratio: 100%
MEP Zone 2: Delivery Zone - Required Ratio: 100%
AVAILABLE RECEIPT AND DELIVERY POINTS
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LEASED CAPACITY – RECEIPT POINTS:
Receipt 44599 EMP-EOIT/MEP West Pool for up to 25,000 dth/d
MEP ZONE 2 – DELIVERY POINT:
Delivery 44451 – Transco/MEP Del Choctaw for up to 25,000 dth/d
Note: If a bidder is interested in bidding on other receipt or delivery points in the path of the available capacity, please contact your account manager to determine if capacity is available for the requested time period.
BID PARAMETERS
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POSTING and BIDDING PERIOD: January 27, 2020 – January 30, 2020
BID SUBMISSION: Bids must be received by MEP by 2:00 p.m. Central Clock Time on January 30, 2020
Email: FTServiceRequest@kindermorgan.com
DISCOUNT RATE AND DATE TO WHICH BIDS ARE DISCOUNTED: 4.96%, discounted to November 1, 2020, which shall be the Discount Date as that term is used in this posting.
BID REQUIREMENTS AND IOS TERMS AND CONDITIONS
1. BID RATE SECONDARY RECEIPT/DELIVERY POINTS – ZONE 1 AND ZONE 2
For any capacity awarded to a bidder in Zones 1 and/or 2 at a bid reservation rate which is less than the applicable maximum reservation rate set forth in MEP's tariff, the bid reservation rate will apply to all secondary receipt and delivery points in such zones traversed by the primary path. Secondary receipt point availability and associated Leased Capacity Charges are subject to MEP's lease terms with Enable.
2. CURRENTLY APPLICABLE LEASED CAPACITY CHARGES FOR AVAILABLE LEASED CAPACITY:
Other West Zone - $0.15/Dth per day
3. CURRENTLY APPLICABLE MAXIMUM MONTHLY BASE RESERVATION RATES FOR AVAILABLE CAPACITY FOR MEP ZONE 1 and MEP ZONE 2:
Zone 1 - $10.48/Dth of MDQ per month
Zone 2 - $10.23/Dth of MDQ per month
Monthly Base Reservation Rates are per Dth of Contract MDQ, and are exclusive of applicable surcharges.
4. BID RATE REQUIREMENTS
Any bid submitted for a specified rate equal to the applicable maximum tariff rate shall be deemed to be a bid at the applicable maximum tariff rate, as may be revised from time to time.
All bids for capacity in Zones 1 and/or 2 must be submitted as a Monthly Base Reservation Rate and must be within the applicable minimum and maximum rates set forth in MEP's FERC Gas Tariff, as applicable. Bids in the form of a Negotiated Rate or Negotiated Rate Formula will not be valid.
5. RESERVE PRICE MATRIX
MEP has established and provided to an Independent Third Party a Reserve Price Matrix for capacity offered in this IOS.
In order to be eligible for a possible award of capacity, the rate bid must meet the applicable Reserve Price as established by MEP in the Reserve Price Matrix for the relevant firm capacity.
6. CREDITWORTHINESS REQUIREMENT
All bidders must satisfy MEP's creditworthiness requirements, as stated in Section 12 of the General Terms and Conditions of MEP's FERC Gas Tariff, prior to submitting a bid. Any bid submitted which causes bidder to exceed bidder's pre-determined level of creditworthiness is deemed an invalid bid. Potential bidders are encouraged to contact MEP's Credit Department prior to bid submittal to determine whether they have established sufficient credit for their bid.
7. COMMODITY CHARGES, SURCHARGES AND LEASED CAPACITY CHARGES
The Reservation Rate included in any bid for capacity in Zones 1 and/or 2 must be for the Monthly Base Reservation Rate only. Any applicable commodity charges and surcharges and reservation surcharges, as well as the revenue from the Leased Capacity, will not be included in the guaranteed revenue stream considered for bid evaluation purposes. Advance Payments are separately discussed below. In addition to the awarded Base Reservation Rate, the winning Bidder will pay the Leased Capacity Charges, and all applicable commodity charges and surcharges, at the applicable maximum rate contained in MEP's FERC Gas Tariff, as may be revised from time to time.
8. FUEL AND GLU CHARGES
The Reservation Rate included in any bid for capacity in Zones 1 and/or 2 is exclusive of all applicable fuel and gas lost and unaccounted for (GLU) charges. Bidder will be required to pay any and all applicable fuel and GLU charges set forth in MEP's FERC Gas Tariff, as may be revised from time to time. Fuel and unaccounted for gas for Leased Capacity will be paid as part of applicable Leased Capacity Charges.
9. Quantity Limitations/AUTHORIZED OVERRUN SERVICE
For any capacity which may be awarded at a discounted rate, the bid rate shall only apply to firm daily delivery quantities, including any related capacity release quantities, up to Bidder's awarded Contract MDQ. Firm deliveries made on any day in excess of the applicable contract MDQ, including any related capacity release quantities, shall be charged all applicable maximum rates, charges, and surcharges set forth in MEP's FERC Gas Tariff. Without limitation of the foregoing, all Authorized Overrun Service provided to the Awarded Bidder shall be billed at the applicable maximum Authorized Overrun Rate set forth in MEP's FERC Gas Tariff, as may be revised from time to time.
10. ADVANCE PAYMENTS
A Bid may include an Advance Payment. Advance Payments will be included in the guaranteed revenue stream discounted back to the Discount Date for NPV purposes. For evaluation purposes, the NPV of the Advance Payment and the NPV of the bid rate for the relevant capacity may not in the aggregate exceed the NPV at the applicable maximum rate over the bid term.
11. BID EVALUATION METHODOLOGY
All bids for this IOS will be evaluated using the NPV formula which is posted on MEP's DART system on the commencement date of the Posting and Bidding Period. All bids will be discounted to the Discount Date for NPV purposes. MEP's internet website may be accessed at: http://pipeportal.kindermorgan.com/PortalUI/DefaultKM.aspx?TSP=MEP. The NPV formula for evaluating bids was posted on August 24, 2010, on MEP's internet website under Informational Postings/Notices/Non-Critical and is titled “NET PRESENT VALUE FORMULA”.
12. BID AGGREGATION
In order to determine the successful Bidders, MEP shall aggregate acceptable bids (including prorated bids to the extent applicable) if aggregation would achieve the highest NPV in relation to the available capacity.
13. DETERMINATION OF HIGHEST ECONOMIC VALUE AND PRORATIONING
In any situation where the capacity associated with acceptable bids exceeds the available firm capacity, including situations in which the highest NPV is determined using bid aggregation, then any available capacity will be allocated among bids, up to the MDQ bid, to achieve the optimal solution (highest aggregate NPV for capacity available). In order to determine the highest economic value of all acceptable bids received, MEP will calculate the NPV of all such bids in two ways: 1) assuming prorationing of bid capacity by one or more Bidders to the extent required to achieve the optimal solution regardless of any bid's stated minimum acceptable quantity and 2) assuming prorationing of bid capacity by all Bidders down to the minimum acceptable quantity set out in the respective bids. If a bid indicates that the Bidder is not willing to prorate to the extent required by the optimal solution, the available capacity will first be allocated (Initial Allocation) among other bids which indicate that the Bidders are willing to prorate to the extent required by the optimal solution. The Initial Allocation shall be consistent with the optimal solution for the Bidders participating in the Initial Allocation. The Bidder(s) not willing to prorate to the extent required by the optimal solution will be afforded the opportunity (irrespective of any stated minimum acceptable quantity) to take any capacity, up to MDQ bid, not allocated to other Bidders under the Initial Allocation. If allocation of capacity among Bidders in the preceding sentence is required, allocation will be implemented in order to achieve the optimal solution for the capacity remaining to be allocated (irrespective of any stated minimum acceptable quantity), provided that the quantity allocated to a Bidder may not exceed the MDQ bid by that Bidder. In applying the above procedures, in the event that MEP receives two (2) or more acceptable bids or sets of acceptable bids for service, which produce the same NPV (and produce the highest aggregate NPV), then available capacity will be allocated prorata based on MDQ bid.
14. NPV TIE BREAKER METHODOLOGY
If a tie for highest economic value between bids or sets of bids of identical value remains at the end of the prorationing process, MEP will apply the Tiebreaking procedures set forth in MEP's FERC Gas Tariff at Section 14.10 (d) of the General Terms and Conditions.
15. AWARDS OF CAPACITY
Bids are binding on the bidder unless withdrawn prior to the end of the open season or until MEP notifies the bidder that it has not been awarded any capacity. MEP will notify each bidder within 1 business day as to whether or not it has been awarded capacity pursuant to the terms of this open season.
If you have any questions regarding this Initial Open Season, please contact Darryl Outlaw at 205-325-7421 or your Account Manager.
BID FORM FOR FTS CAPACITY
In order to be valid, a bid must contain all of the applicable information required by this Bid Form. Any bid submitted for a specified rate equal to the applicable maximum tariff rate shall be deemed to be a bid at the applicable maximum tariff rate, as may be revised from time to time.
DATE ____________________ IOS 02-03-2020
BIDDER/SHIPPER NAME:
_________________________________________________
SERVICE TYPE: FTS
Requested Contract MDQ: __________ Dth/day
Leased Capacity Charges:
Other West Zone - $0.15/Dth/day of MDQ
MONTHLY BASE RESERVATION RATE BID, as applicable :
Zone 1 $ ____________ /Dth/Month
Zone 2 $ _____________/Dth/Month
ADVANCE PAYMENT AMOUNT (Optional) $________ PAYABLE DATE ___________
TERM START DATE _________________ TERM END DATE ______________________
PRIMARY POINT(S) AND POINT MDQ(S)
RECEIPT POINT NAME
PIN #
Requested MDQ (Dth/day)
Minimum Acceptable MDQ (Dth/day)
DELIVERY POINT NAME
Shipper represents that the person executing this Bid Form has been duly authorized by Shipper to submit this on Shipper's behalf and to bind Shipper to the foregoing for the term hereof.
[Do we usually include a statement about how long the bid is binding on Shipper as part of this form]
CONTACT NAME: ____________________________________________________
TITLE: ______________________________________________________________
DATE: ______________________________________________________________
Email to MEP at FTServiceRequest@ Kindermorgan.com by 2:00 pm on Thursday,
January 30, 2020.