Bid Information
Rate Schedule: TFX
Delivery Point: Demarc (POI 37654)
Receipt Point / Receipt Point(s) priority for allocation purpose / Maximum Daily Quantity / Term
Start Date / Term
End Date / Reservation Rate ($/Dth/day) / Minimum Acceptable Quantity (Dth/day)1
1/ If no minimum quantity is provided, Northern will assume a minimum quantity of zero.
Bids will be for service commencing on or after December 1, 2017, for a term at least through October 31, 2019. Service must end on a March 31 or October 31 for any service that extends beyond October 31, 2019.
For negotiated rate bids the following terms apply:
- Reservation rates must be fixed rates multiplied by 30.4 (one-part or two-part with maximum commodity rates).
- Rollover Provision: During a negotiation period ending no later than 19 months prior to the contract end date, the parties can negotiate a rate, quantity and term for a successive contract extension. If the parties are unable to reach agreement, Northern will tender an amendment to extend the agreement for a five year period at Northern's maximum rates. Bidder can choose not to execute the agreement, in which case the agreement will not be extended.
- Bidder shall be provided the use of all receipt points in MIDs 1-7 (including the MIDs 1-7 Pooling point) on an alternate basis. In the event an outage on Northern’s pipeline system that impacts the Bidder’s ability to schedule any primary receipt and delivery points, Bidder may use either (1) any Field Area receipt point in MIDs 8 through 16A for delivery to Demarc or (2) any receipt point in MIDs 1-7 for delivery to any Field Area delivery point.
- Bidder shall pay an additional $0.20/Dth/day for delivered quantities received at receipt points in MIDs 8 to 16A and an additional $0.20/Dth/day for quantities delivered to delivery points in MIDs 1 to 16A.
- If any primary points are realigned, the reservation rate for the entire MDQ shall be increased by $0.30/Dth/day for the remaining term of the agreement.
- Reservation charge credits: Bidders waive their right to reservation charge credits under Section 22 of the General Terms and Conditions of Northern FERC Gas Tariff. However, Bidders’ charges shall be reduced, in Northern’s sole discretion, for any quantity that is unable to be delivered up to the MDQ. In the event of an outage on Northern that impacts the Bidder’s ability to flow the primary receipt and delivery points in the agreement, Northern and Bidder will work together on a commercially reasonable basis to realign to a different point. If no such point is available, then bidder will not pay more for services than if reservation charge credits would have applied pursuant to Northern’s tariff.
The capacity will be awarded to the highest bid(s) based on a determination of the best bid, or combination of bids that result in the highest net present value (NPV) of reservation revenue, on a per unit of capacity basis, using revenues from the start of the service through March 31, 2020, except for bids with a reservation rate of $0.22/Dth/day or greater, Northern will use the entire term bid to determine the NPV per unit. The NPV per unit will be determined by discounting the cash flow (using the FERC interest rate) generated from the reservation rate multiplied by the MDQ for each month, by bid, and then dividing the NPV by the maximum daily quantity bid. One-part rate bids will be evaluated as reservation rate bids less $0.04/Dth/day. In addition, for Bidders requesting a receipt point that requires construction, for the NPV evaluation the rate bid will be reduced by an amount equivalent to the allocated capital required for the requested service, to be determined in Northern’s sole discretion. For bid evaluation purposes, reservation rates evaluated at greater than maximum rate will be considered paying the maximum tariff rate. Requests for realignment will be evaluated based on the incremental rate bid.
Northern will optimize the receipt point capacity available to maximize the delivery point capacity awarded. Bidders may indicate multiple receipt points with a priority to be used when Northern maximizes receipt point capacity. Northern has the right to aggregate bids, or portions of bids, that generate the highest NPV to Northern.
Customers requesting service are responsible for ensuring arrangements have been made for any capacity necessary on any upstream or downstream pipeline for their quantities to be confirmed during the nomination and scheduling process.
The reservation rate bid is binding.
Northern reserves the right to reject any bid(s) less than maximum rates.
Northern reserves the right to accept any bid(s) which are subject to any other contingencies, including contingencies associated with the completion of construction, and accept differences in the negotiated rate provisions.
Service agreements must be executed prior to the effective date of the service. If the service agreement is not executed by the effective date bid, the rate will be adjusted to reflect the overall revenue of the binding bid.
Northern and customer(s) may agree to amend the service agreement, as allowed by Northern’s Tariff, at any time after award of the capacity.
Northern will evaluate and award capacity for incremental bids based on the terms of this open season. Any remaining capacity will be released as generally available capacity. However, in accordance with Northern’s Tariff, Northern will process any requests for realignment (without incremental rates) in the order they were received within seven (7) work days of the close of the open season or by 5 p.m. on December 1, 2017.
Customer must meet the creditworthiness provisions of Northern’s Tariff. Upon request by Northern, customer shall provide appropriate credit assurance within ten (10) calendar days of Northern’s request.If a non-creditworthy customer fails to
provide the appropriate security, Northern may award the capacity to the next best bid(s) or proceed to remarket the capacity, and customer will be liable for any difference in value of the bids, in addition to any other remedies available by law.
Customer Information
Customer Name (Company Legal Name)
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Phone Number
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Bid Authorization
Person authorized to submitbinding bid to Northern Natural Gas Company
AGREED TO AND ACCEPTED BY
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