GENERAL TERMS AND CONDITIONS

(continued)


 


 

28. ORDER OF DISCOUNTS, DISCOUNT TERMS


 

28.1 If and when Pipeline discounts the rates applicable for service

under any Service Agreement under Rate Schedules included in

Pipeline's FERC Gas Tariff, the amount of any such discount shall be

accounted for as a reduction of maximum rates in the following

sequence to the extent any of the following components are included

in the maximum rate:


 

Reservation Charges - Fixed Cost Unit Rate

component of base

reservation rate for firm

service


 

Volumetric Charges - Fixed Cost Unit Rate

component of base usage

rate for interruptible

service


 

28.2 In the event Pipeline agrees to discount its rate to Shipper below

Pipeline's maximum rate under Pipeline's Rate Schedules FT and IT,

the following discount terms may be reflected on Exhibit C to the FT

Service Agreement and Exhibit C to the IT Service Agreement and will

apply without the discount constituting a material deviation from

Pipeline's pro forma Service Agreement; provided, however, any such

discount shall not be less than Pipeline's minimum rate.


 

Among other methods, a discounted rate may be based on published

index prices for specific receipt and/or delivery points or other

agreed upon published pricing reference points (such discounted rate

may be based upon the differential between published prices or

arrived at by formula).


 

Any agreement containing such discounted rate shall specify the rate

component(s) to be discounted (i.e., reservation charge or usage

charge or both). To the extent the firm reservation charge is

discounted, any formula will provide a reservation rate per unit of

contract demand and the index price differential rate formula shall

be calculated to state a rate per MDTQ. Furthermore, such index-

based discount shall not change the underlying rate design or

include any minimum bill or minimum take provision that has the

effect of guaranteeing revenue.