Rate Schedule TF-1 Service Agreement Contract No. 143077
WHEREAS:
THEREFORE, in consideration of the premises and mutual covenants set forth herein, Transporter and Shipper agree as follows:
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EXHIBIT A Dated and Effective February 25, 2021 to the Rate Schedule TF-1 Service Agreement (Contract No. 143077) between Northwest Pipeline LLC and Puget Sound Energy, Inc. SERVICE DETAILS | |||||||||||||||||||||||||||||||||||||||||||
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EXHIBIT B Dated and Effective February 25, 2021, (subject to Commission acceptance) to the Rate Schedule TF-1 Service Agreement (Contract No. 143077) between Northwest Pipeline LLC and Puget Sound Energy, Inc.
NON-CONFORMING PROVISIONS The following provisions were accepted as non-conforming by the Commission on October 24, 2019 in Docket No. RP20-36.
CREDIT B-1.1 Transporter’s obligations under this Agreement are contingent upon Shipper’s continuing satisfaction of the creditworthiness standard or the collateral alternative set forth in this Article B-I. Any reference to Shipper in this Article B-I shall also refer and apply to its Guarantor if Shipper has provided a guaranty of financial performance as collateral pursuant to Section B-1.8(a).
B-1.2 Upon Transporter’s request, Shipper shall furnish annually the up-to-date information specified below (“Credit Information”). In addition, Transporter reserves the right to request Credit Information at any other time if Transporter reasonably believes that Shipper’s creditworthiness, collateral, or ability to pay may have deteriorated. Shipper shall furnish complete Credit Information to Transporter within ten (10) days after receiving Transporter’s request (“Credit Information Deadline”). Transporter will maintain any non-public data included in Shipper’s Credit Information on a confidential basis for one (1) year after its receipt. Credit Information will include:
(a) Financial statements (to include a balance sheet, income statement and statement of cash flow), annual reports, 10-K reports or other financial filings with regulatory agencies. If the above information is available on the public internet, Shipper instead may provide instructions regarding where such statements may be located by Transporter.
(b) Private credit ratings, if obtained by Shipper.
(c) Such other information as may be mutually agreed to by the Parties.
Transporter shall not be obligated to consider any information other than that which Shipper provides, but may, in its sole discretion, elect to do so if Transporter believes that the Credit Information provided by Shipper is inaccurate or incomplete.
B-1.3 Transporter shall apply consistent evaluation practices to all similarly situated shippers executing transportation service agreements for service on the Upgraded Delivery Facilities when determining Shipper’s financial ability to perform the payment obligations that may be due Transporter during the term of this Agreement.
B-1.4 Transporter will apply the following standard in determining whether Shipper is creditworthy:
(a) Shipper will be deemed creditworthy if: (i) Shipper has a long-term senior unsecured debt rating of BBB- or better from Standard & Poor’s Corporation (“ S&P ”) or Baa3 or better from Moody’s Investor Service (“ Moody’s ”), (if Shipper is rated by both agencies, then the lower rating shall apply); and (ii) Shipper’s Credit Limit determined in accordance with Section B-1.5 is equal to or greater than the Minimum Credit Requirement identified in Section B-1.7; or
(b) Shipper will be considered creditworthy if: (i) Shipper’s long-term senior unsecured debt is not rated by S&P or Moody’s, but Transporter nevertheless determines based on the results of a thorough evaluation of the information provided by Shipper in Section B-1.2 that Shipper’s debt rating is equivalent to the ratings in Section B-1.4(a)(i); and (ii) Shipper’s Credit Limit is equal to or greater than the Minimum Credit Requirement.
B-1.5 If Shipper satisfies either Section B-1.4(a)(i) or B-1.4(b)(i), as applicable, then Transporter will establish Shipper’s Credit Limit utilizing the Credit Information provided by Shipper in Section B-1.2. “Shipper’s Credit Limit” will equal five percent (5%) of Shipper’s Tangible Net Worth, where “Tangible Net Worth” means total equity, less goodwill and intangible assets, less accumulated other comprehensive income, less restricted cash. If Shipper’s Credit Limit is less than the Minimum Credit Requirement, then Shipper must provide collateral pursuant to Section B-1.8 in an amount equal to the difference between the Minimum Credit Requirement and Shipper’s Credit Limit (“Shipper’s Credit Shortfall”).
B-1.6 If Shipper does not satisfy either Section B-1.4(a)(i) or B-1.4(b)(i), as applicable, then Transporter will not establish a credit limit for Shipper. Rather, Shipper will be required to provide collateral pursuant to Section B-1.8 in an amount equal to the Minimum Credit Requirement.
B-1.7 The “Minimum Credit Requirement” shall equal the Facility Charges payable over the next thirty-six (36) months or the remaining term of this Agreement, whichever is less; provided in no event shall the Minimum Credit Requirement during the Primary Term or any extension thereof be less than the minimum credit support required under Transporter’s Tariff.
B-1.8 If Shipper fails or ceases to satisfy either Section B-1.4(a) or B-1.4(b), as applicable, Transporter will notify Shipper of the basis for such determination and the amount of collateral that Shipper must provide, not to exceed the Minimum Credit Requirement. Similarly, if Shipper has previously provided collateral pursuant to this Section B-1.8, but such collateral fails or ceases to satisfy the conditions of this Section B-1.8, Transporter will notify Shipper of the basis for such determination and the amount of collateral that Shipper must provide, not to exceed the Minimum Credit Requirement. Shipper will have fifteen (15) days after receipt of such notice (“Collateral Deadline”) to provide the specified amount of collateral in one or more of the acceptable forms described below.
(a) Shipper may provide a guaranty of financial performance, in form and substance reasonably satisfactory to Transporter, from one or more guarantors (collectively “Guarantor”) that complies with the information requirements in Section B-1.2 and meets the applicable creditworthiness standard in Section B-1.4. At least annually, Transporter will reevaluate the creditworthiness of Shipper and its Guarantor pursuant to this Article B-I and will notify Shipper of the results and whether any other collateral must be provided.
(b) A standby irrevocable letter of credit (“LC”) in form and substance satisfactory to Transporter, drawn upon a major U.S. bank having assets of at least U.S. $10 billion and with a credit rating of A- or better from S&P or A3 or better from Moody’s (if the bank is rated by both agencies, then the lower rating shall apply). At least annually, Transporter will reevaluate the creditworthiness of Shipper and the bank providing the LC pursuant to this Article B-I and will notify Shipper of the amount by which the LC must be adjusted or eliminated.
(c) Shipper may provide a cash security deposit (“Deposit”). The Deposit must be sufficient to cover Shipper’s Credit Shortfall. The Deposit shall accrue interest and Transporter shall pay the interest accrued on the Deposit to Shipper quarterly. At least annually, Transporter will reevaluate Shipper’s creditworthiness pursuant to this Article B-I and will notify Shipper of the amount by which the Deposit must be adjusted or eliminated.
(d) Shipper may provide such other collateral as mutually agreed to in writing by the Parties on a nondiscriminatory basis.
B-1.9 If Shipper defaults under Section B-1.2 or B-1.8, then Transporter may terminate this Agreement by providing thirty (30) days’ notice of termination to Shipper and FERC. However, Shipper may avoid such termination by curing such default within the thirty (30) day notice period. If this Agreement is terminated pursuant to this Section B-1.9, then Transporter may immediately cease providing service to Shipper and pursue whatever rights and remedies are available to Transporter in law and in equity.
DISPUTED STATEMENTS B-2.1 If Shipper should dispute the amount of any statement delivered under this Agreement, then on or before the disputed statement’s due date Shipper shall notify Transporter of the dispute and provide documentation identifying the basis for the dispute. In addition, Shipper shall pay by the statement’s due date:
(a) The full amount of the statement, subject to refund with interest on the refunded amount upon final determination of the dispute in Shipper’s favor; or
(b) Such amount of the statement as Shipper concedes to be correct and, within ten (10) days after the statements due date, furnish a surety bond from a surety having an A.M. Best credit rating of “A” or better, guarantying payment to Transporter of the withheld amount with interest upon final determination of the dispute in Transporter’s favor.
B-2.2 Interest on any overpayment or underpayment of the amount finally determined to be due shall accrue at the lesser of one and one-half percent (1.5%) per month or the highest rate permissible under applicable law, calculated daily and compounded monthly. Final determination of the amount due may be reached by either agreement of the Parties or judgment of the courts.
B-2.3 If Shipper posts a surety bond and the amount finally determined to be due Transporter is less than or equal to the amount that Shipper asserted in its documentation as being the correct amount due, then Transporter shall reimburse Shipper the premium paid by Shipper for the surety bond.
B-2.4 Except as permitted in Section B-2.1(b), Shipper’s failure to pay the full amount of any statement when due shall be deemed a default under this Agreement. Upon such default, Transporter may terminate this Agreement by providing thirty (30) days’ notice of termination to Shipper and FERC. However, Shipper may avoid such termination by taking one of the following actions within the thirty (30) day notice period:
(a) Not disputing the statement and paying the full amount due together with interest at the rate set forth in Section B-2.2; or
(b) Disputing the statement in compliance with Section B-2.1(a) or B-2.1(b); provided Shipper’s delay in complying with Section B-2.1(a) or B-2.1(b) shall be deemed a waiver of Shipper’s right to recover any interest or bond premium under Section B-2.1(a) or B-2.1(b).
If this Agreement is terminated pursuant to this Section B-2.4, then Transporter may immediately cease providing service to Shipper and pursue whatever rights and remedies are available to Transporter in law and in equity.
MISCELLANEOUS B-3.1 This Agreement shall be governed by and construed in accordance with the laws of the State of Utah without giving effect to any choice or conflict of law provision or rule that would cause the laws of any other jurisdiction to apply.
B-3.2 The provisions of this Agreement shall be considered as prepared through the joint efforts of the Parties and shall not be construed against either Party as a result of the preparation or drafting thereof.
B-3.3 If any provision of this Agreement is held to be unenforceable by a court or regulatory body of competent jurisdiction, then the remaining provisions of this Agreement will remain in full force and effect.
B-3.4 No waiver by either Party of any one or more defaults by the other in the performance of any provisions of this Agreement will operate or be construed as a waiver of any other default or defaults, whether of a like or of a different character.
B-3.5 Any lawsuit, action or proceeding arising out of or relating to this Agreement shall be instituted in the federal courts of the United States of America or the courts of the State of Utah in each case located in Salt Lake City, Salt Lake County, Utah, and each Party irrevocably submits to the exclusive jurisdiction of such courts in any such lawsuit, action or proceeding.
B-3.6 The prevailing Party in any lawsuit, action or proceeding brought to enforce this Agreement or collect any amount due under this Agreement shall be entitled to recover its reasonable attorneys’ fees, expert witnesses’ fees and other expenses incurred at trial and any appeal.
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EXHIBIT C Dated and Effective February 25, 2021 to the Rate Schedule TF-1 Service Agreement (Contract No. 143077) between Northwest Pipeline LLC and Puget Sound Energy, Inc. INCREMENTAL FACILITIES PAYMENT OBLIGATION
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