Cheyenne Receipt Points to REX
Open Season Notice of Firm Capacity on
Cheyenne Plains Gas Pipeline Company, L.L.C. ("Cheyenne Plains") from
Cheyenne Receipt Points into Rockies Express Pipeline LLC ("REX")
Bid Deadline – 2:00 PM Mountain Time, May 8 2020
Portable Document Format (.pdf) file of Open Season:
https://pipeline2.kindermorgan.com/PortalWeb/PortalDocs.aspx?code=CP&parent=1600
Responding to market interest for firm transportation capacity, Cheyenne Plains has determined that modifying and utilizing existing Cheyenne Plains compression at its Cheyenne yard will result in an additional 400,000 dekatherms ("Dth") per day of firm transportation capacity from Wyoming Interstate Company, L.L.C. ("WIC") and Colorado Interstate Gas Company, L.L.C. ("CIG") receipt points at its Cheyenne yard for increased delivery into REX (referred to herein as the "Enhancement Project"). Cheyenne Plains is conducting a binding Open Season for this transportation service capacity as outlined below:
400,000 Dth/day beginning August 1, 2021
800716 WIC/CPG (TDC) THUNDER CHIEF
800184 WIC/CPG (CUR) CURLEY
800614 CIG/CPG (RCD) RED CLOUD
*Up to meter unsubscribed capacity.
New Zone 2 Rockies Express Meter Station located near Cheyenne yard
Secondary Receipt and Delivery Locations on Cheyenne Plains' system will be subject to the applicable maximum tariff rates on Cheyenne Plains system.
Cheyenne Plains recommends that bids have a proposed term of at least three (3) years (although Cheyenne Plains reserves the right to reject any bid which fails to comport with the provisions of this open season).
Additional guidance on recommended terms and other bid components is provided in the General Open Season Description and Bidding Requirements discussion provided below.
2:00 PM Mountain Standard Time, May 15, 2020
To bid, complete the attached binding bid sheet and email it to KMWestBids@KinderMorgan.com. Cheyenne Plains reserves the right to reject any bid which fails to comport with the provisions of this open season
NOTE: Cheyenne Plains will rely upon the time an emailed bid is received to determine whether a bid is timely. Bids that are received after the end date and time listed above (as determined by the time stamp on Cheyenne Plains' email inbox) will be considered invalid bids and will not be eligible for an award of capacity in this Open Season. Cheyenne Plains recommends that bids be submitted well in advance of the closing time listed above to minimize the risk that any email delay could cause a bid to be excluded from consideration.
The capacity offered in this Open Season requires the construction of a new interconnect between the facilities of Cheyenne Plains and the facilities of REX. Completion of those interconnection facilities is subject to:
· Receipt of sufficient bids in this Open Season to economically justify the construction of the interconnection facilities;
· Receipt of all required regulatory and environmental permits and authorizations, all in a form acceptable to Cheyenne Plains in its sole discretion; and
· Receipt of management approval.
Cheyenne Plains reserves the right to not award any capacity in this Open Season if any of the conditions described above are not fully satisfied, as determined by Cheyenne Plains, in its sole discretion.
Bids submitted in this Open Season must include the bidding party's name, the Open Season Name (‘Cheyenne Receipt Points to REX'), quantity, term, and rate.
By submitting a bid, the bidding party certifies that:
(a) All information contained in the bid is complete and accurate.
(b) It satisfies, or will be able to satisfy, all the requirements of Cheyenne Plains' Federal Energy Regulatory Commission ("FERC") Gas Tariff, First Revised Volume No. 1, as the same may be amended from time to time ("Cheyenne Plains' Tariff") including, without limitation, the creditworthiness requirements.
(c) The person submitting the bid has full authority to bind the bidding party.
The bid rate must be either presented as the reservation rate per Dth/month or stated as the maximum tariff rate.
Bids submitted in this Open Season will constitute a binding irrevocable offer by the bidding party to contract for capacity. The award of the capacity in this open season will be an acceptance of the offer and the parties shall be contractually bound at that time.
Cheyenne Plains anticipates that bids with the following terms will be required for the Enhancement Project to go forward and/or for capacity to be awarded under this Open Season (reservation rate bids will be exclusive of commodity charges contained in Cheyenne Plains' Tariff, and additional commodity charges will be assessed for any volumes actually transported under those agreements), although Cheyenne Plains reserves the right to reject any bid which fails to comport with the provisions of this open season:
· Term of three (3) years and with reservation rates of at least $2.2660 per Dth per month; or
· Term of five (5) years and with reservation rates of at least $1.5208 per Dth per month; or
· Term of seven (7) years and with reservation rates of at least $1.2927 per Dth per month; or
· Term of ten (10) years and with reservation rates of at least $1.1102 per Dth per month.
Cheyenne Plains notes that while such terms and rates would generally be acceptable to Cheyenne Plains, if Cheyenne Plains does not receive maximum recourse or negotiated rate bids for quantities and terms sufficient to economically justify Cheyenne Plains' capital investment in the Enhancement Project, then Cheyenne Plains reserves the right not to move forward with the project described in this Open Season, or to negotiate with bidders to propose a more appropriately sized expansion at a corresponding rate. Existing shippers with capacity on Cheyenne Plains' system that could be used in lieu of the Enhancement Project should notify Cheyenne Plains if they wish to permanently turnback their capacity through a release to prospective shippers in this Open Season. Those who wish to so release their capacity should notify Cheyenne Plains of the amount, the term, and any other conditions that would be necessary to effectuate such a release of their capacity. Such notices should be submitted to Cheyenne Plains before the close of the Open Season.
If bidder's bid does not qualify for a right-of-first-refusal (ROFR) in accordance with Section 4.9 of Cheyenne Plains' Tariff, then Cheyenne Plains will consider bids conditioned upon receiving a contractual right-of-first-refusal, exercisable and administered in accordance with Section 4.9 of the General Terms and Conditions of Cheyenne Plains' Tariff.
The bid rate must be presented as: (a) the reservation rate per Dth/month, (b) the reservation rate per Dth/day (which will be converted to a monthly rate by multiplying the daily rate times 365 and dividing the result by 12, rounded to the fourth decimal place), or (c) the maximum tariff rate.
In addition to the bid rate, each bidding party will be subject to the applicable maximum usage rate and maximum usage surcharges, all other maximum rates, charges and surcharges, including ACA, Fuel and L&U, and any other authorized surcharges assessed under the applicable Rate Schedule of Cheyenne Plains' Tariff as those amounts may change from time to time. This includes incremental lateral charges and any third party charges resulting from the use of capacity that Cheyenne Plains may hold on other pipelines.
Bids offering discounted or negotiated rates must also provide that, subject at all times to FERC's approval of the particular costs, Cheyenne Plains will be entitled to recovery of Greenhouse Gas Emissions Costs incurred by Cheyenne Plains attributable to natural gas transported by Cheyenne Plains on its system. As used herein "Greenhouse Gas Emissions Costs" means (a) the cost of any carbon emissions tax or other greenhouse gas assessment that is imposed on Cheyenne Plains, and/or (b) the cost of any greenhouse gas mitigation efforts, including the costs of credits and offsets that Cheyenne Plains incurs to comply with any greenhouse gas laws, rules or regulations. If (i) Cheyenne Plains 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 Cheyenne Plains' FERC-approved recourse rates, then shipper must agree to modify its negotiated or discounted fixed monthly reservation rate by the amount of Cheyenne Plains' maximum reservation rate under Rate Schedule FT that is attributable to such costs.
Cheyenne Plains reserves the right to reject negotiated rate bids, bids that have rates less than the maximum recourse rate, bids stated as the dollar equivalent of the current maximum recourse rate, bids that are incomplete, contain offers of varying rates within the term, contain additional or modified terms or are inconsistent with the provisions of Cheyenne Plains' Tariff. Cheyenne Plains also reserves the right to reject bids that do not reflect the same quantity for the duration of the term
Cheyenne Plains reserves the right to seek clarification of bids that have what appears to be an obvious error. Any clarification by bidders must be provided in writing and within the time requested by Cheyenne Plains. Such clarifications will be incorporated as part of the binding bid submitted by the bidder.
Cheyenne Plains notes that FERC Order No. 894, in some cases, prohibits multiple affiliates of the same entity from bidding in an Open Season for capacity in which the pipeline may allocate capacity on a pro rata basis. It appears to Cheyenne Plains that the restrictions imposed by FERC Order No. 894 will be applicable in this Open Season and FERC recommends that potential bidders review and adhere to the requirements of that FERC Order.
Although this is a binding open season, Cheyenne Plains reserves the right, in its sole discretion, to consider requests for capacity received after the close of the Open Season period, including requests to modify a validly submitted bid, but shall be under no obligation to do so. Requests for capacity received after the close of the Open Season period will be subject to the terms and conditions set forth in this Open Season
Execution of FTSA:
Each successful bidder and Cheyenne Plains shall enter into and execute an FTSA reflecting the terms of its bid as awarded by Cheyenne Plains. All successful bidders shall execute and return the FTSA within the earlier of the day before the first day of the term of firm transportation service in the bid as awarded by Cheyenne Plains or twenty (20) business days following the day Cheyenne Plains tenders the FTSA to the bidder ("Execution Date"). If a successful bidder fails to fully execute and return the FTSA on or before the Execution Date, then Cheyenne Plains reserves the right to cancel the successful bidder's binding bid without prejudice as to Cheyenne Plains' right to seek any and all permitted remedies as a result of the breach of the bid. The FTSA will be in the form contained in Cheyenne Plains' Tariff. Cheyenne Plains and any successful bidder may mutually agree to enter into and execute more than one FTSA that together reflect all the terms of the successful bid as awarded by Cheyenne Plains.
Evaluation Criteria:
If Cheyenne Plains receives acceptable bids for capacity in excess of the actual amount of available capacity, then Cheyenne Plains will award and/or allocate the capacity in a manner that yields the highest total PV as calculated below. In determining which bid(s) yield the highest total PV, Cheyenne Plains reserves the right to combine multiple bids, in whole or in part, in a manner that results in a total PV of the combined bids that exceeds the highest PV achievable by accepting one or more of the disaggregated bids. This process could result in a bidder being awarded less capacity than requested (unless such bidder elects on its bid sheet not to accept an allocation of capacity).
PV will be calculated as the sum of the present values for all of the months beginning with the first month capacity is available through the end date of the bid term. Bids stating a commencement date upon the in-service date of any to-be-constructed facilities will be evaluated using Cheyenne Plains' estimate of the completion date of the required facilities (i.e., August 1, 2021).
The PV 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 0.3958% (which is the annual discount rate of 4.75 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).
CREDITWORTHINESS REQUIREMENTS
By no later than June 15, 2020, each successful bidder must demonstrate, and maintain throughout the term of the related FTSA(s), satisfaction of creditworthiness in the manner set forth below:
1. If bidder is rated by Standard & Poor's Corporation ("S&P") and/or Moody's Investor Service ("Moody's") (hereinafter referred to as a "Rated Bidder"), then the Rated Bidder shall satisfy its creditworthiness obligations by making a demonstration to Cheyenne Plains that: (a) Rated Bidder's senior unsecured debt securities are rated at least BBB- by S&P or Baa3 by Moody's or Rated Bidder's long-term issuer rating is at least BBB- by S&P or Baa3 by Moody's (in the event Rated Bidder is rated differently by multiple agencies, the lowest rating shall be used in making such determination); and (b) Rated Bidder is not under review for possible downgrade by S&P and/or Moody's to a level below that set forth in subpart (a) of this Section 1.
If at any time prior to or during the term of any FTSA executed in connection with this Open Season, a Rated Bidder's S&P or Moody's rating falls below the levels described above, or a Rated Bidder becomes unrated or otherwise fails to satisfy the requirements of this Section 1, then for the time period that the Rated Bidder's ratings are below that level or a Rated Bidder is unrated or is otherwise unable to satisfy the requirements of this Section 1, Rated Bidder shall satisfy its creditworthiness obligation by providing one of the forms of credit support described in Section 2 below. If a Rated Bidder subsequently becomes able to satisfy the S&P or Moody's rating levels described above, the Rated Bidder may immediately satisfy its creditworthiness obligations in the manner provided in this Section 1.
2. If at the time bidder is unable to satisfy its creditworthiness obligations in the manner set forth in Section 1 above, then bidder shall satisfy its creditworthiness obligations by providing and maintaining, at its option: (a) an irrevocable, unconditional guarantee of its obligations in connection with this Open Season, and any related FTSA executed in connection with this Open Season, acceptable to Cheyenne Plains and issued by another person or entity which satisfies the creditworthiness standards set forth in Section 1; or (b) an irrevocable letter of credit acceptable to Cheyenne Plains and from a bank acceptable to Cheyenne Plains equal to the lesser of two (2) years or the period of time remaining in the term, of the anticipated charges in connection with this Open Season, and any related FTSA executed in connection with this Open Season; or (c) such other credit arrangements which are mutually agreed to by Cheyenne Plains and bidder, and which are accepted by Cheyenne Plains on a nondiscriminatory basis.
3. If at any time bidder is unable to satisfy the creditworthiness standards set forth in Section 1 above, then, upon reasonable request by Cheyenne Plains, in addition to the requirements set forth in Section 2 above, bidder shall promptly provide evidence to Cheyenne Plains of bidder's creditworthiness, which Cheyenne Plains may share with its lenders or creditors or any nationally recognized rating agency that is then maintaining a rating of Cheyenne Plains' debt securities.
4. If any change in ratings or conditions requires bidder to change the manner in which it demonstrates its satisfaction of its creditworthiness requirements, bidder shall make that demonstration (including if necessary the provision of any guarantee or letter of credit) within fifteen (15) business days of the change in ratings or conditions requiring the new demonstration of creditworthiness.
Bidders that fail to satisfy the creditworthiness requirements of this section within a reasonable time will have their capacity award withdrawn. Cheyenne Plains reserves the right to seek any and all permitted remedies as a result of the breach of the bid. Cheyenne Plains will treat the financial statements provided by prospective shippers as confidential.
Contact Information:
Questions concerning this Open Season should be directed to:
Laine Lobban 719-520-4344
Anthony Sanabria 719-677-7582
Greg Ruben 719-520-4870
Open Season Binding Bid Sheet
Email Bid To: KMWestBids@KinderMorgan.com
Legal Name of Bidder:
Name of Requesting Party:
Title of Requesting Party:
DUNS Number:
Phone:
B. Capacity Bid:
Form of Service: FT
Requested Term Start Date:
Requested Term End Date:
Maximum Delivery Quantity: Dth/day
Will you accept a pro rata allocation of capacity if necessary Yes No
If this box is checked and bidder's bid does not qualify for a ROFR in accordance with Section 4.9 of Cheyenne Plains' Tariff, then this bid is subject to Cheyenne Plains providing bidder a contractual ROFR in accordance with Section 4.9 of Cheyenne Plains' Tariff.
Receipt Point(s)
Receipt Point Quantity (Dth/day)
Delivery Point(s)
Delivery Point Quantity (Dth/day)
*The sum of the delivery point quantities at the primary delivery location(s) must equal the MDQ.
C. Reservation Rate (select one):
Maximum Recourse Rate
Discounted Recourse Rate: $ ________ per Dth per Month _____ (which for illustrative purposes is equivalent to $ ________ per Dth per day)
Negotiated Rate: $ ________ per Dth per Dth per Month _____ (which for illustrative purposes is equivalent to $ ________ per Dth per day)
In addition to the bid rate, successful bidders will be subject to the applicable maximum commodity rate and maximum commodity surcharges, all other maximum rates, charges and surcharges, including ACA, Fuel and L&U, and any other authorized surcharges assessed under the applicable Rate Schedule of Cheyenne Plains' Tariff as may change from time to time. This includes incremental lateral charges and any third party charges resulting from the use of capacity that Cheyenne Plains may hold on other pipelines.
*By submitting this binding bid to Cheyenne Plains, the bidding party certifies that (a) all information contained in the bid is complete and accurate, (b) it satisfies, or will be able to satisfy, all the requirements of Cheyenne Plains' Tariff, and (c) the person submitting the bid has full authority to bind the bidding party.
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