TSP Name: Northern Natural Gas Company TSP: 784158214 Notice ID: 076048 Notice Type: TSP Capacity Offering Subject: FIELD AND FIELD TO DEMARC CAPACITY AND ALTERNATE EVALUATION METHODOLOGY Critical: N Post Date/Time: 03/25/2024 09:07 AM Notice Status: Supersede Prior Notice: 075920 For Gas Day(s): 03/25/2024 - 10/31/2024 Notice Effective Date/Time: 03/25/2024 09:07 AM Notice End Date/Time: 11/01/2024 08:59 AM Required Response Indicator Description: 5-No response required Notice Text: This notice provides an updated index table. Northern is offering customers the option to request formula-based rates in addition to fixed-rate requests to be evaluated for Field Area receipts for delivery to Demarc. The capacity will be awarded using the Alternate Evaluation Methodology described below. Northern will not begin evaluating requests for April 2024 prior to 10 a.m. Thursday, March 21. Northern has determined that it will have up to 54,750 Dth/day of capacity available for transportation from points south of Brownfield to Demarc in the Field Area beginning April 1, 2024 through April 30, 2024 as illustrated in the capacity table included below. Northern has also evaluated an alternate configuration that would provide up to 99,000 Dth/day of Mitchell to Gaines (Group 825R) capacity during the month of April by reducing the capacity available from points south of Brownfield to Demarc. Northern will evaluate requests and award capacity based on the operating configuration that maximizes the use of capacity and allows for the highest total NPV to Northern to be awarded for the evaluation period. In evaluating bids using an alternate configuration, Northern may impute value to capacity in the base configuration. Northern will not begin evaluating requests for any of the Brownfield configurations for April 2024 prior to 10 a.m. Monday, March 25. Brownfield Configurations April 1, 2024 Groups Base Configuration Maximum Brownfield Alternate Configuration #1 Maximum Mitchell to Gaines Alternate Configuration #2 Mitchell to Gaines and Brownfield 464D FIELD TO DEMARC 54,750 812 46,750 998R BROWNFIELD SOUTH 54,750 812 46,750 598R SEMINOLE-SUBSYSTEM 54,750 812 46,750 825R MITCHELL TO GAINES 0 99,000 41,000 Any customer awarded capacity in the month of April that may be impacted by planned service outages must agree to contractual reduction obligations regardless of rate. Upon notice from Northern, at least 40 hours prior to the start of the Gas Day, customer must reduce the point quantities affected by a maintenance outage unless customer and Northern mutually agree to realign all or a portion of the contract quantity affected by the outage at the contract rate or other mutually agreeable rate. When necessary, Northern will, on a not unduly discriminatory basis, determine the contracts and quantities that must be reduced based upon value to Northern. At this time, Field and Field to Demarc capacity through October 31, 2024, is limited due to maintenance outages that are posted under Planned Service Outage. Northern is willing to award up to 100,000 Dth/day of Field to Demarc capacity in the month of April that contains contractual reduction obligations. If you have questions about available capacities, please contact your Marketing Representative. As operational needs change from day-to-day, Northern may have additional Demarc capacity available. Please contact your Marketing Representative if you have questions. Requests for Service Northern will not sell capacity or grant realignment requests for unsubscribed capacity except as set forth below: · Requests received 60 calendar days to 0 days prior to the effective date of a contract for five (5) consecutive months or more (consecutive days); · Requests received 30 calendar days to 0 days prior to the effective date of a contract for the next full month or more (consecutive days); or · Requests received 7 business days to 0 days prior to the effective date of a contract for a gas day plus any consecutive term. Northern will sell capacity for multiple year terms up to 60 calendar days prior to the effective date for service requested for a minimum of 5 months each year, and if the request for service includes a heating season month (November through March), then all the heating season months must be included. However, Northern will sell unsubscribed capacity or grant realignments for the remaining winter (November through March) and upcoming summer (April through October). See Non-Critical notices for additional details of AWARDING OF REQUESTS FOR NEAR-TERM SERVICE. Alternate Evaluation Methodology The capacity will be awarded based on a request or combination of requests that results in the highest net present value ("NPV") of revenue on a per unit of capacity basis, using revenues and the Evaluation Periods described below: ·Requests for service beginning between March 02, 2024 and April 1, 2024, will provide NPV through April 30, 2024 ·Requests for service beginning between April 02, 2024 and May 01, 2024, will provide NPV through May 31, 2024 ·Requests for service beginning between May 02, 2024 and June 01, 2024, will provide NPV through June 30, 2024 ·Requests for service beginning between June 02, 2024 and July 01, 2024, will provide NPV through July 31, 2024 ·Requests for service beginning between July 02, 2024 and August 01, 2024, will provide NPV through August 31, 2024 ·Requests for service beginning between August 02, 2024 and September 01, 2024, will provide NPV through September 30, 2024 ·Requests for service beginning between September 02, 2024 and October 01, 2024, will provide NPV through October 31, 2024 For request evaluation purposes, the assumed reservation component for fixed one-part rate requests will be as the one-part rate less: · $0.01/Dth/day for receipt points south of the Brownfield compressor station for delivery to points south of the Brownfield compressor station · $0.035/Dth/day for receipt points north of the Brownfield compressor station for delivery to points south of the Brownfield compressor station · $0.052/Dth/day for receipt points south of the Brownfield compressor station for delivery to points north of the Brownfield compressor station · $0.024/Dth/day for receipt points north of the Plainview compression station for delivery to points north of the Plainview compressor station These deductions will be applied to one path of a contiguous one-part request. Index-Based Formula Rates to Demarc In addition to awarding capacity per notice AWARDING OF REQUESTS FOR NEAR-TERM SERVICE, Northern may allow index-based formula rate requests for Field Area receipts for delivery to Demarc. Index-based formula rates for primary delivery to Demarc will be accepted using the formula template below where customer provides values for (R), and the fixed rate variables (I) and (S). The variable (C) is only required if contiguous paths are requested. " Total Charge" = MDQ times "Formula Rate" " Formula Rate" = [(D minus ((R plus I) divided by F)) times S times C] Where, D = Midpoint price from Platts Gas Daily for Northern, demarc R = Midpoint price from Platts Gas Daily index location I = premium or discount to applicable index F = 1.0 less the applicable fuel percentage S = percentage of formula to Northern, must be greater than or equal to 85% C = fixed percentage equal to the Demarc MDQ divided by the total contract MDQ *In no event shall the "Formula Rate" be less than $0.00 Index-Based Formula Rates with multiple locations for (R) will have the formula: [(D minus AR) times C times S] Where, (AR) = the average of the values obtained from the formula [IL divided by F] where (IL) is the Midpoint price of the receipt index locations independently used in the formula, however, the result of the formula may not be greater than (D). When calculating the "Rate," in no event will [(D minus AR)] be less than zero; additionally, if any result used in the independent calculation of (AR) yields a greater value than (D), that result will be treated as equal to (D) when averaging the value of (AR). Example for component (AR) in the Rate: On a day where (D) = $2.00, individual index location within (AR) consists of $1.99 for Waha and (-)$1.00 for El Paso, Permian, F = 0.96, the component of $1.99 for the Waha portion of the formula when calculating (AR) would be $2.00 and the El Paso, Permian portion of the formula would be (-)$1.04 for an average receipt (AR) value of $0.48. Customers may request alternative formula rates for deliveries to Demarc; however, Northern reserves the right to reject any index-based formula rate requests that deviate from the above templates. Northern may limit the number of index-based formula rate requests awarded. Customers may submit alternate fixed-priced requests contingent on the amount of capacity awarded to their index-based formula rate requests. Northern will evaluate index-based formula rate requests that use Platts Gas Daily Indices by using the Platts Gas Daily index price assumptions in the tables below. Index Prices for Evaluation Northern, demarc El Paso, Permian Waha Panhandle, Tx.-Okla. NGPL, Midcontinent (D) (R) (R) (R) (R) $1.44 ($0.19) ($0.21) $1.34 $1.34 Northern will update this notice when the prices in the table are changed. Index-based formula rate capacity will not be awarded for one hour after the table is updated to allow modifications to requests. The applicable fuel percentages as follows: · 2.34% for primary receipts in MIDs 1-7 to Demarc (Sections 1 and 2 Fuel) · 1.64% for primary receipts in MIDs 8-16A to Demarc (Section 2 Fuel) · 0.78% for Primary receipts in MIDs 1-7 to MIDs 1-7 · 2.42% for Primary receipts in MIDs 8-16A to MIDs 1-7 Any formula that results in a reservation rate in excess of Northern's maximum tariff rate will be evaluated as if the reservation rate was Northern's maximum tariff rate. A customer may request contiguous service to increase the value of its request. Contiguous service requests may contain one or more contiguous point(s) where the receipt point of one path is the same location as the delivery point of another path. For purposes of contiguous service requests, Northern will aggregate the NPVs of requests containing the following contiguous points: Pampa Pooling Point (POI #79530), Beaver Pooling Point (POI #54576), Mullinville Pooling Point (POI #54575), Mid Continent Pool (POI #61020), Brownfield Pooling Point (POI 79387), Bushton Pooling Point (POI #54577), and any of Northern's Field Area deferred delivery points associated with physical points. For evaluation purposes, the NPV calculation of a request with contiguous paths will be performed for each individual path and then added together for evaluation purposes. Northern reserves the right to (1) consider other contiguous points not denoted in this posting; (2) reject all or portions of a contiguous service request that requires displacement of capacity in order to accommodate the combination of receipt and delivery points in a contract; and (3) require that contiguous service requests be split into multiple contracts to manage capacity constraints. To the extent that a customer's request requires multiple contracts, Northern and customer may agree to adjust the MDQ, subject to available capacity, to account for fuel requirements. Customers that use storage points must have an active storage contract. Parties that do not have an active storage contract may request one. In the event Northern requires multiple contracts to fulfill a contiguous service request, the average rate will be applied to each contract. Less than maximum rate or negotiated rate requests that contain a contiguous path will be subject to the additional charges when alternate points are used, as detailed below, which will impact the rate paid by the customer resulting in the entire request being a negotiated rate. Northern may allocate the value of rate among the contiguous paths such that no path will be above the maximum rates for evaluation purposes but will be subject to additional rates if alternate receipt or delivery points are used. For evaluation and contracting purposes, if capacity is allocated or not available for any segment of a contiguous path request, each segment's quantity will be allocated such that all paths of the request are equal. Customers may elect to have all available capacity awarded to contiguous paths regardless of whether capacity is allocated in any particular segment. All winning non-maximum rate requests will be subject to the following terms ("Non-Maximum Rate Terms"): a) If any points are realigned, Shipper shall pay an additional $0.30/Dth/day for the entire contract MDQ for the remaining term of the Agreement unless mutually agreed upon by Shipper and Northern. The rate for such agreed upon realignment will be the rate requested. b) Reservation charge credits: i) Customer waives its right to reservation charge credits. ii) In the event of an outage on Northern's pipeline system that impacts the Shipper's ability to flow the primary receipt and delivery points, Northern will reduce charges to Shipper based on the contractual rate only for any primary quantity, including the contiguous path, that Northern deems impacted by an outage. The quantities subject to credits shall not be less than any primary quantity allocated in the Timely cycle and any curtailed quantity that is not ultimately scheduled. Reservation Contract Language: Shipper waives its right to reservation charge credits under Section 22 of the General Terms and Conditions of Northern's FERC Gas Tariff. However, in the event of an outage on Northern that impacts the Shipper's ability to flow the primary receipt and delivery points, Shipper's rate will be reduced to zero for any primary quantity, including any affected contiguous path, allocated in the Timely cycle or curtailed. Shipper's rate will not be reduced for any quantity that is ultimately rescheduled. c) For contracts with receipts in MIDs 1-7: i) For any delivered quantities from receipt points located in MIDs 8 through 16A, Shipper shall pay an additional $0.40/Dth/day charge. ii) For any delivered quantities in MIDs 1-7 from alternate receipt points located in MIDs 1 through 7, Shipper shall pay an additional $0.40/Dth/day charge. iii) For quantities delivered to non-primary points located in MIDs 1 through 16A, Shipper shall pay an additional $0.40/Dth/day charge. iv) Shipper shall pay an additional charge equal to the higher of $0.40/Dth/day or the Platts Gas Daily spread between Midpoints for Northern, demarc and Waha for any delivered quantities to Demarc or Demarc Deferred Delivery that in aggregate exceed the primary MDQ at Demarc. v) In the event of an outage on Northern's pipeline system that impacts the Shipper's ability to schedule any primary receipt and delivery points, Shipper may use either (1) Any Field Area receipt point located in MIDs 8 through 16A for delivery to the primary delivery point or (2) Any receipt point located in MIDs 1 through 7 for delivery to any Field Area delivery point located in MIDs 1 through 16A during the outage at the rate requested. d) For contracts with receipts in MIDs 8-16B: i) For any delivered quantities from alternate receipt points located in MIDs 1 through 7, Shipper shall pay the higher of an additional (1) $0.40/Dth/day charge or (2) a daily charge per dekatherm equal to the Midpoint price of Platts Gas Daily Panhandle, Tx.-Okla. less the Midpoint price of Platts Gas Daily Waha. ii) For quantities delivered to non-primary delivery points located in MIDs 1 through 16A, Shipper shall pay an additional $0.40/Dth/day charge. iii) Shipper shall pay an additional charge equal to the higher of $0.40/Dth/day or the Platts Gas Daily spread between Midpoints for Demarc and Panhandle for any delivered quantities to Demarc or Demarc Deferred Delivery that in aggregate exceed the primary MDQ at Demarc. iv) In the event of an outage on Northern's pipeline system that impacts the Shipper's ability to schedule any primary receipt and delivery points, Shipper may use any receipt point listed below for delivery to any Field Area delivery point located in MIDs 1 through 16A during the outage at the rate requested. e) Requests with primary physical receipts located in MIDs 8-12 outside of the Beaver North Allocation Group (1025) and for delivery to primary points included in the Beaver North Allocation Group (1025) will provide for all alternate receipt points in MIDs 8-16A. f) Requests with primary physical receipts located MIDs 13-16B shall pay an additional $0.40 for any alternate receipts in MIDs 8-16A. g) Rate Adjustment Election Structure: Customers may request a Rate Adjustment Election structure (further defined below in condition h) for the winter months (November through March) which limits the rate exposure on elected quantities (that will not be less than scheduled quantities) where natural gas supply fails to be available by providing a fixed rate for the formula component "M" where: M = "Maximum Rate Exposure" The lower of the Index-Based F ormula Rate request and component "M" will be used for evaluation purposes. In this alternate structure, the Total Charge for the contract would be modified as follows: "Total Charge" = MDQ times [("Formula Rate" times (1-P)) + ("Adjusted Formula Rate" times P)] and the "Adjusted Formula Rate" will be defined as the lesser of the "Formula Rate" and the "Maximum Rate Exposure." P = Rate Adjustment Election volume not scheduled (including any contiguous path volume) divided by total contract MDQ *In no event shall the "Formula Rate" or "Adjusted Formula Rate" be less than $0.00 *The value used for determining Customer's NPV for request evaluation purposes will be the "Adjusted Formula Rate" for the entire contract MDQ for any Rate Adjustment Election request structure requested (i.e., P will be equal to 1). *For contracting purposes, the "Adjusted Formula Rate" will not be greater than the fixed price calculated for the Adjusted Formula Rate." h) Index-based formula rate requests awarded with Rate Adjustment Election will be subject to the following terms: Solely in the event the Shipper's firm natural gas supply fails to be available to the Shipper on a Gas Day due to operational issues associated with the natural gas firm supply, Shipper may elect to modify its reservation rate using the Rate Adjustment Election structure set forth in Shipper's request. In no event may Shipper use the Rate Adjustment Election for any reason other than a verifiable loss of natural gas supply. To the extent Shipper uses its Rate Adjustment Election, it shall be Shipper's obligation to authenticate such loss of natural gas supply, at the request of Northern, including authenticating that the lost natural gas supply was acquired on a firm basis, consistent with industry standards. Shipper will provide notice to Northern of its intent to exercise the Rate Adjustment Election as soon as reasonably practicable. The notice must include the number of days the Rate Adjustment Election is to remain in effect and the quantity to which the election applies. Authentication information must be provided to Northern at Northern's request. In the event Shipper is able to replace its natural gas supply prior to the close of the Gas Day on any day Shipper has provided Northern notice of a Rate Adjustment Election, Shipper must notify Northern of its intent to replace the supply and modify the Rate Adjustment Election for the current Gas Day. To the extent any Rate Adjustment Election supply is modified, the original rate formula components "R" and "D" and "I" will be adjusted for the identified portion of the Rate Adjustment Election quantity each day by substituting Shipper's actual purchase price in "R" (Midpoint price from Platts Gas Daily index for the receipt location), the actual selling price in "D" (Midpoint price from Platts Gas Daily for the delivery location), and where "I" (premium or discount to applicable index) is replaced with zero. If daily scheduled quantities exceed the Rate Adjustment Election quantity, the original "Formula Rate" charges will be applicable to those excess scheduled quantities. Shipper may use the Rate Adjustment Election for any Gas Day during the term of service. Individual Months Service Northern is willing to sell firm capacity and grant realignments for requests greater than 30 days prior to the start date of service for any individual month between March 2024 and October 2024, for service from Demarc (POI #37654) to deferred delivery points in Northern's Field Area located in the Beaver North (Group 1025)delivery group. If you have any questions, please contact your account manager.