|DATE: February 15, 2011 TIME: 12:00 Noon
TO: ALL CUSTOMERS AND POTENTIAL CUSTOMERS OF ANR PIPELINE
RE: OPEN SEASON POSTING #141 REGARDING PRE-ARRANGED DEAL
ANR is posting as a pre-arranged deal the following capacity currently held under firm transportation contracts with terms set to expire after the 2011-2012 storage season. ANR is soliciting bids on the entire package.
Capacities are summarized below:
Service from April 1, 2012 to March 31, 2020:
Rate Schedule ETS WI Citygate to Storage Summer only 14,495 Dth/d MDQ.
Rate Schedule ETS Storage to WI Citygate Winter only 50,000 Dth/d MDQ.
Rate Schedule FSS Storage Annual Ratcheted, 2,515,344 Mcf MSQ; 50 Days of service.
Rates for the services will be fixed at current maximum tariff for services under Rates Schedule FSS, and at the lesser of current maximum tariff rates or future maximum tariff rates for services under Rate Schedule ETS.
In addition, pursuant to ANR's FERC Gas Tariff Part 6.32.5, for this package of services, ANR has agreed with the pre-arranged Shipper to Reduction Options as follows:
Service Reduction Rights: Shipper will have loss of load reduction rights as to all above referenced Service Agreements as follows:
1. Using 2011-12 firm sales service peak day requirements for service areas served by ANR as filed with the Public Service Commission of Wisconsin in Shippers' Gas Supply Plan, reduction rights will be limited to 105% of the reduction in peak day service requirements for those same service areas as filed by Shipper in subsequent Gas Supply Plans. Such reduction rights shall in no case exceed:
a. For Storage Service Year April 2012 to March 2013 winter citygate deliveries will be reduced by no more than 15,000 Dth/d MDQ from existing levels. Notification of such reduction will be made by October 1, 2011.
b. For Storage Service Year April 2013 to March 2014 winter citygate deliveries will be reduced by no more than 15,000 Dth/d MDQ. Notification of such reduction will be made by October 1, 2012.
c. For Storage Service Year April 2014 to March 2015 winter citygate deliveries will be reduced by no more than 20,000 Dth/d MDQ. Notification of such reduction will be made by October 1, 2013.
d. The affected Service Agreements will be adjusted to reflect the reduced citygate delivery MDQ on the winter storage transport contracts as stated above, with commensurate reductions to the MDWQ, MSQ and MDIQ of the corresponding storage, as well as commensurate MDQ reductions to the corresponding injection transport contracts.
2. If timely service reduction or termination opportunities are available under service agreements with other pipeline service providers that serve areas common with ANR, Shipper will in good faith select the highest delivered cost service for termination.
3. Any reduction rights set forth above that are foregone by Shipper in one year shall not carry over to future years.
ANR will entertain any acceptable binding bona fide offers for this capacity. To be considered a bona fide offer, bids must be for the entire package of services herein, with identical routes and characteristics of service. Bids must be for a minimum of the term set forth herein. Minimum rates for each service in the bid must be at the rates set forth herein, or at maximum recourse rates. Parties interested in submitting binding offers should do so by 3:00 pm CCT on February 23, 2011, via e-mail by sending their requests to ANRMarketing@transcanada.com. Offers will immediately thereafter be evaluated in accordance with ANR's FERC Gas Tariff, including creditworthiness provisions, and will be ranked based on the highest net present value (NPV). All bids submitted may be withdrawn and/or replaced with a higher NPV bid during the bona fide offer period. Bids cannot be replaced with lower NPV bids. NPV for each contract will be calculated as below, and the final NPV will be a summation of all individual contract NPVs. The incumbent Shipper will have the right to match any bid whose NPV is greater than the pre-arranged deal, within 21 calendar days of notification.
All final bids received during the solicitation will be evaluated on a Net Present Value (NPV) basis using the factors below.
NPV = En [R*(1 / (1+i)**n)]
En = Summation of months 1 through n (Sigma)
n = term in months
R = Incremental monthly revenue
i = Monthly Discount Factor (current FERC quarterly rate). This rate can be found at http://www.ferc.gov/legal/acct-matts/interest-rates.asp
ANR reserves the right to reject any discounted bids. ANR will reject any bids which are for less than the full package of services herein. ANR will reject any bids which are for a term less than the full term contemplated herein. ANR will reject contingent bids. Please contact your Marketing Representative or one of the following Representatives with any questions.
Anderson, Erik 248-205-4560
Anderson, Larry 832-320-5472
Bennett, Lee 262-792-5407
Garman, Ken 262-792-5406
Hopper, Bruce 262-792-5403
MacMillan, Bob 248-205-7547
Skarb, Gary 248-205-4536
Smith, Jeremy 832-320-5395
Sowa, Amy 832-320-5374
Walby, Sheila 248-205-7458
Wells, Mike 832-320-5436