INITIAL OPEN SEASON WITH PREARRANGED SHIPPER
IOWA-ILLINOIS TO MARKET
FTS TRANSPORTATION
INITIAL OPEN SEASON – IOS1902-5
AVAILABLE WITH SW OPTION
In this open season, Natural is soliciting bids for firm transportation capacity in Natural's market area. This is an Initial Open Season (IOS) pursuant to Section 5.1(c)(1) of the General Terms and Conditions of Natural's Tariff. This IOS involves a Prearranged Shipper pursuant to the provisions of Natural's Tariff.
CAPACITY AVAILABLE (Dth./day)/TERM
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Beginning April 1, 2019, the capacity is available as follows:
10,277 Dth./d from the Northern Border/NGPL Harper receipt point (Pin 908090) in Segment 14 to the beginning of Segment 29.
1,880 Dth/d in Segments 29 and 38.
1,915 Dth./d (April-October), 1,958 Dth./d (Nov) and 1,880 Dth./d (December-March) in Segment 39.
The Capacity Available in Segment 29 assumes a primary transportation path through the entire segment. Additional capacity is available if Bidder's primary transportation path does not require capacity through the entire segment. The table provided below indicates the Capacity Available in Segment 29 for a number of primary delivery points. For information on Capacity Available at other delivery points in Segment 29 that may be requested in this IOS, please contact your Account Director.
Available Segment 29
Primary Delivery Point Name LOC # Capacity (Dth./day)
-------------------------------------- ------ ---------------------------
INT PWER/NGPL CLINTON HENRY 11054 10,277
INVENERG/NGPL LSP-NELSON POWER PLAN 39529 5,170
Lee Cty/NGPL Power Plant Lee 37329 3,290
NicorGas/NGPL Rockford Winnebago 900012 1,880
Wisc Elec/NGPL Genoa City #1 MC Henr 900008 1,880
Bids may be submitted with varying start dates and daily quantities for periods commencing no earlier than April 1, 2019. See “Extended Capacity Terms” section below for more detail regarding segment capacity availability.
RIGHT TO MATCH
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The Prearranged Shipper included in this IOS has the right to match any higher value bids that may be received by Natural in this IOS, in accordance with the provisions of Natural's Tariff.
AVAILABLE RECEIPT POINT
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Northern Border/NGPL Harper (LOC 908090) is the only receipt point that may be utilized for bids in this IOS.
AVAILABLE DELIVERY POINTS
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The following delivery points may be utilized for bids in this IOS. Each point listed below has capacity available equivalent to the corresponding segment capacity available in this IOS.
LOC # Primary Delivery Point Name Segment
--------- ------------------------------------ ---------
11054 INTERSTATE POWER/NGPL CLINTON 29
39529 INVENERGY NELSON POWER PLANT 29
37329 LEE CTY/NGPL POWER PLANT LEE 29
900012 NICORGAS/NGPL ROCKFORD MCHENRY 29
900008 WISC ELECTRIC/NGPL GENOA CITY MCHENRY 29
900001 NORTH SHORE/NGPL GRAYSLAKE LAKE 39
40257 CALPINE/NGPL ZION ENERGY LAKE 39
907112 WISC ELECTRIC/NGPL KENOSHA 39
Bidders interested in other primary delivery points should contact their Account Director at Natural prior to bid submission.
THE FOLLOWING PROVISIONS ARE APPLICABLE TO ALL BIDS:
BID PARAMETERS
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POSTING and BIDDING PERIOD: February 26, 2019 – March 1, 2019.
BID SUBMISSION: Bids must be received by Natural by 2:00 p.m. Central Time on March 1, 2019.
Email bids to ngplmarketing@kindermorgan.com
DISCOUNT RATE AND DATE TO WHICH BIDS ARE DISCOUNTED: 5.18%, discounted to April 1, 2019 which shall be the Discount Date as that term is used in this posting.
BID REQUIREMENTS AND IOS TERMS AND CONDITIONS
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OPTIONAL SERVICES
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A bid may also include the SW service option, at Bidder's election. All Base Reservation Rates applicable to the SW Option will be included in the guaranteed revenue stream considered for bid evaluation purposes, to the extent applicable to Bidder's bid. The optional services of LN (late nominations) and NB (no balancing) are not applicable to the evaluation of this capacity included in this IOS, and therefore, any charges for such service options will not be taken into account for bid evaluation purposes.
BID RATE SECONDARY RECEIPT/DELIVERY POINTS
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a) Capacity Without SW Option: For any capacity awarded to a bidder at a bid reservation rate which is less than the applicable maximum reservation rate set forth in Natural's tariff, and which does not include the SW Option, the bid reservation rate will apply only to the secondary receipt points in the zones traversed by the primary path.
For any capacity awarded to a bidder at a rate which does not include the SW Option, the bid reservation rate will apply to all secondary delivery points in the zones traversed by the primary path.
b) Capacity With SW Option: For any capacity awarded to a bidder at a bid reservation rate bid which is less than the applicable maximum rate set forth in Natural's tariff, and which includes the SW Option, the bid reservation rate will apply to all secondary receipt and delivery points under Natural's tariff which are applicable to the SW Option.
CURRENTLY APPLICABLE MAXIMUM MONTHLY BASE RESERVATION RATE FOR AVAILABLE CAPACITY FROM IOWA-ILLINOIS TO MARKET:
Without SW Option:
Off-Peak Peak
$3.46 $3.69
With SW Option:
$6.865 $7.895
Monthly Base Rates are per Dth of Contract MDQ, and are exclusive of applicable surcharges.
EXTENDED CAPACITY TERMS
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Bidders may locate firm pipeline segment capacity availability information, for 15 months following the month of this posting, on Natural's Electronic Bulletin Board at:
https://pipeportal.kindermorgan.com/PortalUI/DefaultKM.aspx?TSP=NGPL. This website also contains information on firm receipt and delivery point capacity availability for the same 15 month period. Any bid submitted for capacity extending beyond this 15 month period will be subject to Natural's determination that sufficient capacity is available beyond the 15 month period to permit Natural to accept any such bid. Bidders interested in a bid term extending beyond the 15 month period should therefore contact their Account Director at Natural prior to bid submission in order to determine whether the desired capacity is available.
FFTS CAPACITY AVAILABLE
Any capacity which is available for bid under Rate Schedule FTS is also available for bid under Rate Schedule FFTS. Any day on which FTS Capacity is posted as available can be requested as an Available Day under FFTS. The reserve price matrix for Rate Schedule FTS will also apply to Rate Schedule FFTS. Bidders desiring to bid on FFTS capacity should contact their NGPL Account Director for a bid form.
CONTINGENCY
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A Bidder may submit a bid under Rate Schedule FTS with a contingency that any awarded Contract MDQ be contracted for as Rate Schedule DSS at the greater of the applicable maximum rate set forth in Natural's tariff or the bid rate; provided however, if the amount of available DSS capacity is less than the MDQ that would otherwise be awarded to the Bidder based on the bid evaluation methodology in this IOS, such contingent bid shall not be an acceptable bid.
RESERVE PRICE MATRIX
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Natural has established and provided to an Independent Third Party a Reserve Price Matrix for capacity offered in this IOS with and without the SW Option.
In order to be eligible for a possible award of capacity, the Net Present Value (NPV) of a bid must meet the minimum NPV of the bid quantity multiplied by the applicable Reserve Price as established by Natural in the Reserve Price Matrix for the relevant firm capacity.
BID REQUIREMENTS
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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 must be submitted in an SFV rate form and must be within the applicable minimum and maximum rates set forth in Natural's FERC Gas Tariff. Bids in the form of a Negotiated Rate or Negotiated Rate Formula will not be valid.
CREDITWORTHINESS REQUIREMENT
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All bidders must satisfy Natural's creditworthiness requirements, as stated in Section 16 of the General Terms and Conditions of Natural'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 Natural's Credit Department prior to bid submittal to determine whether they have established sufficient credit for their bid.
COMMODITY CHARGES AND SURCHARGES
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The reservation rate included in any bid must be for the Base Reservation Rate only (including the SW option rate, to the extent applicable), which is exclusive of all applicable surcharges. Any applicable commodity charges and surcharges and reservation surcharges 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 all applicable commodity charges and surcharges and reservation surcharges, other than discountable third party surcharges which are covered in the following paragraph, at the applicable maximum rate contained in Natural's Gas FERC Tariff, as may be revised from time to time.
From time to time, certain reservation and/or commodity surcharges may be approved by the FERC for inclusion in Natural's FERC Gas Tariff which Natural is: (i) required to collect from shippers and remit to the FERC or to another third party; and (ii) permitted to discount the amount of such surcharge from the applicable maximum rate set forth in Natural's FERC Gas Tariff ("Discountable Third Party Surcharges"). With respect to any capacity award hereunder, Natural shall discount any particular Discountable Third Party Surcharge to the maximum extent permitted under the provisions of Natural's FERC Gas Tariff. A Bidder awarded capacity herein shall only be responsible for payment to Natural of any portion of any such applicable Discountable Third Party Surcharge which Natural is not permitted to discount.
FUEL AND GLU CHARGES
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The reservation rate included in any bid 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 Natural's FERC Gas Tariff, as may be revised from time to time.
Quantity Limitations/
AUTHORIZED OVERRUN SERVICE
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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 Natural'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 Natural's FERC Gas Tariff, as may be revised from time to time.
ADVANCE PAYMENTS
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An Advance Payment will not increase the value of a bid received in this IOS.
OBLIGATION TO AWARD CAPACITY
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Natural is not obligated to award firm capacity based on the following types of bids pursuant to its Tariff (GTC Section 5.1(d)(4)):
(1) on any bid for a term of less than one year, under which service is to commence more than sixty (60) days following the close of the open season (winter only, e.g.)); and
(2) any bid for a term which is not continuous from the commencement of service date to the termination of service date reflected in the bid.
BID EVALUATION METHODOLOGY
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All bids for this IOS will be evaluated using the NPV formula which is posted on Natural's Electronic Bulletin Board (EBB) on the commencement date of the Posting and Bidding Period. All bids will be discounted to the Discount Date for NPV purposes. Natural's EBB may be accessed via the Interactive Web at: http://pipeline.kindermorgan.com. The NPV formula for evaluating bids was posted on June 15, 2011 on Natural's EBB under Informational Postings/Notices/Non-Critical and is titled “NET PRESENT VALUE FORMULA”.
BID AGGREGATION
----------------------------- In order to determine the successful Bidders, Natural shall aggregate acceptable bids (including prorated bids to the extent applicable) if aggregation would achieve the highest NPV in relation to the available capacity.
DETERMINATION OF HIGHEST ECONOMIC VALUE AND PRORATIONING
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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, Natural 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 Natural 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.
NPV TIEBREAKER METHODOLOGY
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If a tie between bids or sets of bids remains at the end of the prorationing process, Natural will apply the Tiebreaking procedures set forth in Natural's FERC Gas Tariff at Section 5.1(d)(6) of the General Terms and Conditions.
NATURAL GAS PIPELINE COMPANY OF AMERICA LLC
Reservations
Natural reserves the right to clarify 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 Natural shall have no obligation to do so.
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 ____________________ IOS1902-5
BIDDER/SHIPPER NAME
_________________________________________________
SERVICE TYPE – FTS
Contract MDQ __________
Bid Includes SW Option Yes_____No_____
If No SW Option:
PEAK OFF-PEAK
MONTHLY BASE RESERVATION RATE ________ __________
(No SW Option)
If SW Option:
MONTHLY BASE RESERVATION RATE ________ _________
(SW Option)
ADVANCE PAYMENT AMOUNT (Optional) ________ PAYABLE DATE ___
TERM START DATE _____________ TERM END DATE _________________
PRIMARY POINT(S) AND POINT MDQ(S)
POINT NAME LOC MDQ
RECEIPT(S) __________________________ _________ _________
__________________________ _________ _________
DELIVERY(S) _________________________ _________ _________
_________________________ _________ _________
If Bidder will accept less than the Contract MDQ bid, state Minimum Acceptable MDQ _________________ Dth/d
Awarded Contract MDQ to be contracted for as Rate Schedule DSS at the greater of the applicable maximum rate set forth in Natural's tariff or the bid rate.
YES________________ NO_______________________
________________________________ ___________________________
NAME TITLE
________________________________
DATE
Email: NGPLMARKETING@KINDERMORGAN.COM
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