DATE: August 21, 2017 TIME: 3:30 PM
TO: ALL TENNESSEE GAS PIPELINE COMPANY, L.L.C. CUSTOMERS
RE: AVAILABLE FIRM CAPACITY (OPEN SEASON POSTING #1112)
Tennessee Gas Pipeline Company, L.L.C. (“Tennessee”) is holding this Open Season in accordance with Article XXVI, Section 5 of the General Terms and Conditions of its FERC Gas Tariff (“Tariff”), commencing at 3:30 PM, Monday, August 21, 2017, and ending at 4:00 PM, Monday, August 28, 2017 (the “Open Season Period”). The capacity offered in this open season is the subject of a pre-arranged deal pursuant to Article XXVI, Section 5.9 of the GT&C of Tennessee's Tariff, the terms and conditions of which are disclosed below. Therefore, the customer under the pre-arranged deal (the “Pre-Arranged Shipper”) has the right to match the highest net present value per dekatherm (“NPV/Dth”) bid received in this open season.
Rate Schedule:
FT-A
Transportation Quantity (“TQ”):
90,000 Dth/d
Term:
The earlier of (i) the in-service date of the new point of interconnection, or (ii) February 1, 2020 (the “Commencement Date”) for a term of seven (7) years.
Primary Receipt Point:
412879 – Pennant/TGP Hickory Bend Mahoning
Primary Delivery Point:
A new point of interconnection to be constructed at approximately Mile Post 217-1+2.4 in North Beaver Township, Pennsylvania (the “Proposed Interconnect”); provided, however, that if the Proposed Interconnect has not been completed and placed in service by the Commencement Date, then Shipper's Primary Delivery Point shall be 420867 – Zone 4 200L Pool.
To the extent Shipper's Primary Delivery Point is not the Proposed Interconnect as of the Commencement Date, then upon the completion of the Proposed Interconnect, Shipper shall have the right to amend its Primary Delivery Point to the Proposed Interconnect pursuant to Tennessee's Tariff.
Secondary Receipt Points – Group A:
All Zone 4 Receipt Points south of Proposed Interconnect and 420867 – Pooling Pt – 200 Leg – Zone 4 (the “Group A Secondary Receipt Point(s)”).
Secondary Receipt Points – Group B:
All Zone 4 Receipt Points north of Proposed Interconnect (excluding 420867) (the “Group B Secondary Receipt Point(s)”).
Monthly Discounted Reservation Rate:
$3.9633 per Dth
For deliveries from a Group B Secondary Receipt Point to the Primary Delivery Point, in addition to the monthly discounted reservation rate specified above, Shipper shall pay the lesser of (1) $0.04 per Dth, and (2) the difference between Tennessee's applicable Base Reservation Rate for Zone 4-4 under Rate Schedule FT-A and the discounted reservation rate specified above, stated in terms of a daily rate. The Discounted Reservation Rate will only apply to deliveries to the Primary Delivery Point.
Commodity Rate
I. For deliveries from a Group A Secondary Receipt Point to the Primary Delivery Point, in addition to the monthly discounted reservation rate specified above, Shipper shall pay Tennessee's applicable Minimum Commodity Rate per Dth.
II. For deliveries from a Group B Secondary Receipt Point to the Primary Delivery Point, in addition to the monthly discounted reservation rate specified above, Shipper shall pay Tennessee's applicable Base Commodity Rate per Dth.
Revenue Reduction Option:
Exhibit B to any gas transportation agreement executed between Tennessee and Shipper shall provide Shipper a one-time right to reduce the TQ under such gas transportation agreement to 0 Dth/day to be effective on the date that is five (5) years after the Commencement Date by providing written notice to Tennessee of its election no later than the date that is four (4) years after the Commencement Date.
Consistent with Article XXVI, Section 5.2 of the GT&C of Tennessee's Tariff, in comparing the NPV/Dth of the Pre-Arranged Deal to the NPV/Dth of competing bids submitted during the Pre-Arranged Open Season, Tennessee's calculation of the NPV/Dth of the Pre-Arranged Deal shall assume that Shipper exercises its Revenue Reduction Option effective on the date that is five (5) years after the Commencement Date.
Other Charges
Shipper shall also pay ACA, applicable Fuel and Loss Retention (“F&LR”), Electric Power Cost Recovery (“EPCR”) charges, and all other applicable surcharges specified in Tennessee's Tariff, as may be in effect from time to time.
Without limiting or waiving any other rights that Tennessee may have with respect to this Open Season, Tennessee reserves the following rights:
1. At any time during this Open Season, upon notice and in its sole discretion, to terminate this Open Season, to extend the Open Season Period, or to modify this Open Season.
2. To clarify and finalize bids containing non-specific and/or ambiguous bid information (including, without limitation, rate, term, and receipt or delivery points) or discrepancies in bid information, provided that Tennessee shall have no obligation to do so.
3. On a not unduly discriminatory basis, to reject any bid or service request that, in Tennessee's sole determination, is incomplete, is inconsistent with the terms of this Open Season, contains additions or modifications to the terms of the open season, is otherwise deficient in any respect (including failure to provide credit support as Tennessee deems necessary), or requests service outside the scope of this Open Season.
4. To reject any bid that does not specify capacity within the paths posted above.
5. To award capacity to mutually agreeable alternate receipt or delivery points if capacity is unavailable at the meters specified in the bid.
6. To award capacity for a quantity less than the bid quantity, if sufficient capacity is not available to award the entire bid quantity.
7. To reject any bid that will result in a reduction of reservation charges.
8. To reject negotiated rate bids.
9. To reject contingent bids.
This Open Season is for capacity available for the receipt/delivery point paths specified above. In order to be considered eligible to be awarded capacity following this Open Season, potential shippers must submit a bid that specifies terms, volumes, receipt points and delivery points that are consistent with the respective dates, quantities and associated receipt and delivery zones outlined above. All Bids should refer to Open Season #1112.
Available capacity volumes are contingent upon mainline, meter and lateral capacity. Bids cannot exceed the stated maximum volumes.
Parties interested in this capacity should submit a binding Firm Transportation request through the DART system or submit a binding bid via facsimile at (713) 369-9305. Customers may also submit a binding bid via e-mail by e-mailing their bid to TGPBidroom@kindermorgan.com. Confirm Tennessee's receipt of any bid by contacting the Bidroom between 8 AM and 5 PM CDT, Monday through Friday.
All bids submitted during the open season may be replaced with a higher Net Present Value NPV/Dth bid during the Open Season Period. Bids cannot be replaced with lower NPV/Dth bids. Upon completion of this Open Season, all remaining bids will be considered binding until a successful bid(s) has been awarded.
In the event that bids are received in the open season with a higher NPV/Dth than the Pre-Arranged Deal, but for a lower volume than what was specified in the Pre-Arranged Deal, Pre-Arranged Shipper if electing to match shall be required to match that lower volume, higher NPV/Dth bid. The remaining volume of the Pre-Arranged Deal that was not bid on in the Open Season shall be contracted for according to the terms of the Pre-Arranged Deal. The Pre-Arranged Shipper shall have a one-time right within 2 business days of notification to match any bids with a higher NPV/Dth in order to obtain the capacity.
All final bids for each Proposal received during the open season will be evaluated on an NPV/Dth basis using the following factors:
NPV/Dth = En [R*(1 / (1+i)**n)]/TQ
En = Summation of months 1 through n (Sigma)
n = term in months
R = Incremental monthly revenue
i = Monthly Discount Factor of 0.8333%
TQ = Contract TQ
Tennessee reserves the right to accept any one bid or combination of bids that will result in the largest aggregate NPV/Dth for the aforementioned packages. Ties will be broken in accordance with Article XXVI, Section 5.6 of the Tariff.
Scott Minear (713) 420-5177
Mary Limbaugh (713) 420-4576
Kenny Durio (713) 420-5307
Adrienne Reid (713) 369-8413
Jason Connelly (713) 420-2446
E-mail TGPBidroom@kindermorgan.com