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FIRST REVISED SAMPLE FORM NO. 46 CANCELLING ORIGINAL SAMPLE FORM NO. 46

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RESIDENTIAL AND SMALL VOLUME END-USER TRANSPORTATION CONTRACT

Y 27

of 1

Please see attached Residential and Small Volume End-User Transportation Contract Form.

EFFECTIVE DEC 1,5 2009

REPLACED BY NMPRC BY Operation.of Law

Advice Notice No.5 {

~~~ Director, Regulatory Affairs

FIRST REVISED SAMPLE FORM NO. 46 CANCELLING ORGINAL SAMPLE FORM NO. 46


ARTICLE I II III IV V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIII

ATTACHMENT 1

ATTACHMENT 2

EXHIBITS A EXHIBITSB EXHIBIT C EXHIBIT D

CONTRACT NO. __ _

DATE _______ _

TRANSPORTATION CUSTOMER

AND

NEW MEXICO GAS COMPANY

TABLE OF CONTENTS

TITLE DEFINITIONS RECEIPTS AND DELIVERIES OF GAS FACILITIES QUALITY MEASUREMENT EQUIPMENT GAS MEASUREMENT CONTROL, OWNERSHIP, AND WARRANTIES TRANSPORTATION CHARGES TAXES TRANSPORTATION CUSTOMER BILLING AND PAYMENT FINANCIAL RESPONSIBILITY AND QUALIFICATIONS REGULATION TERM FORCE MAJEURE OTHER CONTRACTS OR AGREEMENTS NOTICES END-USER BILLING AND PAYMENT MISCELLANEOUS

RESIDENTIAL AND SMALL VOLUME END-USER NOMINATION PROCEDURE RULE NO. 33 - RESIDENTIAL AND SMALL VOLUME END-USERS TRANSPORTATION BALANCING RULE

RECEIPT POINTS DELIVERY POINTS

EXHIBITS

DELIVERY POINT CHANGE ORDERS CODE OF CONDUCT

PAGE 1 3 6 6 9

10 11 12 12 12 14 15 16 16 17 17 18 19

21

29

30 31 32 33

NOTE: This page is not considered a part of the Contract but is for the convenience of the parties only and may be removed at any time by either party hereto.

EFFECTIVE DEC 15 2009

REPLACED BY NMPRC BY Operation of Law



THIS GAS TRANSPORTATION CONTRACT is entered into this __ day of ____ , by and

between ___________ hereinafter referred to as "Transportation Customer", and NEW MEXICO

GAS COMPANY hereinafter referred to as "NMGC".

WITNESSETH

WHEREAS, NMGC operates facilities for the transportation of Gas within the State of New Mexico;

WHEREAS, Transportation Customer has proper authority to transport certain Gas which is currently

connected to NMGC's system or which can be tendered at mutually agreeable Receipt Points and Transportation

Customer wishes NMGC to transport such Gas within the State of New Mexico to one or more Delivery Points as

specified in Exhibit B which during the life of the Contract may, by mutual agreement of the parties, be altered to

mutually acceptable Receipt and Delivery Points for consumption within New Mexico;

WHEREAS, NMGC, subject to the terms and conditions set forth herein, is willing to receive such Gas

from Transportation Customer for transportation and delivery as herein provided; and

WHEREAS, this Gas Transportation Contract ("Contract") is entered into pursuant to the terms and

conditions of the New Mexico Public Regulation Commission's Rule 660, NMPRC Case No. 2760 and NMGC Rate

No. 115 as approved by the New Mexico Public Utility Commission, and all services provided for hereunder are

subject to such regulation.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained,

Transportation Customer and NMGC agree as follows:

I. DEFINITIONS

1.1 Balancing Rule shall mean NMGC Rule No. 33 Residential and Small Volume End-User

Transportation Balancing Rule attached as Attachment 2.

1.2 British Thermal Unit (Btu) shall mean the quantity of heat required to raise the temperature of one

(1) pound of water one degree Fahrenheit (l°F) at sixty degrees Fahrenheit (60°F).

1.3 Day shall mean a period of twenty-four (24) consecutive hours commencing at 8:01 a.m.,

Mountain Standard Time (MST) or Mountain Daylight Savings Time (MDST) collectively Mountain Time (MT).

1.4 Delivery Point(s) shall mean the point(s) specified in Exhibit B attached hereto. Change Order

shall mean an order attached as Exhibit C which adds or deletes Delivery Points.

1.5 Diligent Efforts shall mean the constant effort to accomplish an undertaking; the constancy or

steadiness of purpose or labor which is usual with people engaged in like enterprises, who desire speedy

accomplishment of their designs; the doing of an act or series of acts with practical expediency and without delay.

E F FE CT-IV rn NMGC's electronic bulletin board.

DEC 15 2009

REPLACED BY NMPRC BY Operation of raw



1.7 End-User shall include the definitions of a Residential End-User or a Small Volume End-User as

defined below.

1.8 Failure to Schedule Nomination ("FTSN") Cost of Gas shall mean the cost of gas imposed on the

Transportation Customer by NMGC when the Transportation Customer fails to have Gas confirmed to meet its

nomination. The FTSN Cost of Gas shall be calculated by multiplying the difference in the quantity of Gas that the

Transportation Customer nominated for the Receipt Point(s) for a specific Service Zone and the amount of Gas

actually delivered. FTSN Cost of Gas will be at the same cost as the highest priced Gas NMGC purchased for that

day plus $0.50 per MMBtu. In determining if FTSN Cost of Gas should be charged, the methodology set forth for

FTSN in NMGC Rate No. 115 shall be used.

1.9 Gas shall mean any mixture of gaseous hydrocarbons and noncombustible gases.

1.10 Imbalance shall mean the amount calculated by subtracting the total current Quarter deliveries

from the total current Quarter receipts less applicable fuel and losses under the Contract. NMGC shall determine the

Imbalance for the Transportation Customer pursuant to the Balancing Rule.

1.11 MMBtu shall mean one million Btu or a decatherm which is equivalent to ten (10) therms.

1.12 Month shall mean any period with approximately thirty (30) consecutive days.

1.13 NMPRC shall mean the New Mexico Public Regulation Commission or any successor thereto.

1.14 Nomination Procedure shall mean the Attachment 1 to the Contract denominated as "Residential

and Small Volume End-User Transportation Nomination Procedure" which is an integral part of Form No. 46 and is

an integral part of this Contract

1.15 Nomination Delivery Point(s) shall mean the consolidated facility number for those End-User

accounts that reside in each Service Zone. For each Service Zone, the Transportation Customer shall have a NMGC

designated consolidated facility number as assigned by NMGC for nomination purposes.

1.16 Operational Flow Order ("OFO") shall mean a demand by NMGC on the Transportation Customer

to have scheduled the Transportation Customer's nominated amount and/or to move the nomination and have Gas

scheduled at a different contracted Receipt Point, because of system stress caused by a peak or near-peak day or

operational emergency. In those situations where NMGC requests a change of Receipt Points the Transportation

Customer shall be required to have scheduled the same amount as originally nominated under the Contract. Failure

to comply with an OFO shall result in a charge of $50.00 per MMBtu for each MMBtu that Transportation Customer

fails to have scheduled pursuant to NMGC request.

1.17 Over-Delivery shall mean an Imbalance which reflects total deliveries less than total receipts of

Gas into NMGC system, taking into account applicable fuel and losses, where receipts include those volumes

credited to Transportation Customer with the imposition ofFTSN or OFO pursuant to NMGC Rule No. 33.

EFFE TIVE DEC 15 2009

REPLACED BY NMPRC BY Operation of Caw

2



1.18 NMGC Rate shall mean the specified Rate of NMGC filed with the NMPRC and in effect from

time to time in accordance with the rules of the NMPRC, including any successor Rate.

1.19 NMGC Rule shall mean the specified Rule of NMGC filed with the NMPRC and in effect from

time to time in accordance with the rules of the NMPRC, including any successor Rule.

1.20 Psia shall mean pounds per square inch, absolute.

1.21 Psig shall mean pounds per square inch, gauge.

1.22 Quarter shall mean approximately a three calendar month period beginning with the first billing

cycle ("BD1 ") for January, April, July, andpctober each year. If this Contract should terminate prior to the end of a

Quarter, then the last Quarter shall also be ~eemed to end coterminous with termination. Each End-User's billing

cycle measured volume will be attributed to the appropriate Quarter using a proration methodology.

1.23 Receipt Point(s) shall mean the point(s) specified in Exhibit A attached hereto.

1.24 Residential End-UserCs) shall mean the person(s) at any Delivery Point(s) specified in Exhibit B

attached hereto that would be subject to NMGC Rate No. 10 if that End-User was a Sales Customer.

1.25 Sales Customer shall have the same meaning as defined in NMPRC Rule No. 660.

1.26 Service Zone shall mean the NMGC designated areas hereinafter known as the Northwest Service

Zone (NW), the Southeast Service Zone (SE), the Southwest Service Zone (SW), Clovis Service Zone (Clovis),

Clayton Service Zone (Clayton), Chama! Dulce Service Zone (ChamalDulce), and CanutillolLa Union Service Zone

(WGI).

1.27 Small Volume End-User(s) shall mean any Delivery Point(s) specified in Exhibit B attached

hereto that would be subject to any of NMGC's existing Rates if that End-User was a Sales Customer and is

expected to have a yearly usage of not more than four thousand (4,000) MMBtu in any twelve (12) month

consecutive period.

1.28 Tender shall mean making Gas available for receipt by NMGC at the Receipt Point(s) listed on

Exhibit A.

1.29 Under-Delivery shall mean an imbalance which reflects total deliveries in excess of total

Receipt(s) of Gas into NMGC's system, taking into account applicable fuel and losses, where Receipt(s) include

those volumes credited to Transportation Customer with the imposition of FfSN or OFO pursuant to NMGC Rule

No. 33.

II. RECEIPTS AND DELIVERIES OF GAS

2.1 Transportation Customer shall nominate quantities of Gas to be transported by communicating

RV

with NMGC's Gas Systems Administration in accordance with the Nomination Procedure. Transportation Customer

agrees to use Diligent Efforts to Tender Gas in accordance with its nomination(s).

EFFECTIVE DEC 15 2009 3

REPLACED BY NMPRC Operation of law.



2.2 Subject to the terms and conditions of this Contract and, NMGC Rule No. 21 , NMGC agrees to

transport Gas tendered by Transportation Customer at the Receipt Point(s) and to deliver to the Delivery Point(s) on

a firm basis equivalent quantities of Gas on a Btu basis. Transportation Customer agrees that the quantity of Gas

received by NMGC at the Receipt Point(s) shall be reduced by a quantity of Gas equal to the applicable percentage

as specified in NMGC Rate No. 115. Such reduction in Gas quantity received shall be deemed to reflect Gas

consumed as fuel and normal pipeline losses (also known as "fuel and losses") according to the applicable rules,

regulations and tariffs under NMGC Rate No. 115.

2.3 In the event the Transportation Customer obtains permission from an End-User, NMGC shall

provide the last twelve (12) months of historical consumption data pertaining to such End-User. Transportation

Customer agrees to furnish NMGC proof of End-User permission.

2.4 Transportation Customer shall use forecasted weather and historical daily usage for each

Residential End-User(s) and Small Volume End-User(s). Transportation Customer shall calculate the necessary

quantities and nominate the quantities of Gas to be transported by communicating with NMGC Gas Systems

Administration in accordance with the Nomination Procedure.

2.5 NMGC agrees to transport and deliver sufficient Gas to serve the Transportation Customers' End-

User(s). To the extent the actual consumption of the Transportation Customer's End-User(s) is greater than or less

than the scheduled volume, NMGC will deliver the actual amount needed and any excess or shortfall shall be subject

to the Quarterly True Up provisions of the Balancing Rule.

2.6 In the event that Transportation Customer's scheduled receipt volume is less than the nominated

receipt volume, FTSN Cost of Gas will be imposed, unless the failure is due to error or mistake of NMGC.

2.7 Transportation Customer agrees to use Diligent Efforts to secure the cooperation of any other

entities in the transportation chain with respect to NMGC's operating procedures under this Contract.

2.8 Transportation service hereunder shall be subject to interruption of service applicable to the

Delivery Point(s) under NMGC Rule No. 21 or any subsequent rule on file with the NMPRC concerning

curtailments and interruptions and NMGC shall not be liable for any damages to Transportation Customer or other

parties because of the operation of said rule. The priority group for all Delivery Point(s) under this Contract shall be

determined in accordance with the provisions ofNMGC Rule No. 21.

2.9 Nothing contained in this Contract shall limit either party's right to take any action whatsoever to

correct or remedy any potentially hazardous situation or condition on such party's system. That party shall

immediately give notice of the action to the other party.

2.10 Transportation Customer warrants and agrees that during the term of this Contract, Transportation

Customer shall not cause directly or indirectly nor assist any End-User specified in Exhibit B to have any of the Gas

which is being transported to such End-User pursuant to this Contract, transported to such End-User through

4



facilities not owned or controlled by NMGC so long as NMGC has facilities that are available and adequate for

transportation to such End-User. In the event that Transportation Customer breaches this Section, Transportation

Customer shall pay to NMGC, in addition to amounts paid or payable for Gas actually transported by NMGC, and in

addition to any legal or equitable rights of NMGC, an amount as liquidated damages equal to the cost of service rate

applicable in accordance with Section 8.1 multiplied by the amount of Gas transported to such End-User through

facilities not owned or controlled by NMGC.

2.11 Transportation Customer shall nominate to the Nomination Delivery Point that is provided in

Exhibit B for the applicable Service Zone.

2.12 In the event that Transportation Customer adds new Delivery Point(s) to this Contract, NMGC will

add such Delivery Point(s) to the corresponding Service Zone in Exhibit B pursuant to the Exhibit C Change Order,

provided that, Transportation Customer shall have the sole obligation to timely provide all required information to

process the Change Order(s). The Change Order Exhibit C may be provided electronically or by paper copy and will

generally conform to Exhibit C attached. Prior to addition, the End-User must be current on its account with

NMGC. The addition of new Delivery Point(s) will be effective as of the meter reading date for the beginning of

the next billing cycle for such new Delivery Point(s) Transportation Customer shall adjust its nomination(s)

accordingly. Transportation Customer must give NMGC ten (10) business days prior written notice of any

additional Delivery Point(s).

2.13 Transportation Customer shall use the EBB for all functions required under the Nomination

Procedure that can be conducted via the EBB.

2.14 NMGC shall use Diligent Efforts to make available via the EBB, weather forecasting information

that it ordinarily receives. Notwithstanding the same, it shall be the sole responsibility of Transportation Customer

to obtain any necessary weather forecasts to make accurate nominations. NMGC shall have the right to review

Transportation Customer's nomination process. If such a review reveals a significant variance with NMGC's

internal forecast then:

(a) Transportation Customer shall justify to NMGC reasonable satisfaction that its nomination process

is accurate, or

(b) revise its nomination process so that it is accurate.

In the event Transportation Customer refuses to either (1) justify or, (2) revise its nomination process after a request

by NMGC, then NMGC shall have the right to terminate the Contract.

2.15 In the event NMGC issues an OFO, in addition to any FfSN Cost of Gas that may be imposed for

Transportation Customer's failure to nominate or schedule, an OFO Charge shall be imposed on each MMBtu the

~rFEn "fI,lE'O have scheduled in compliance with the OPO.

DEC 15 2009

REPLACED BY NMPRC BY Operation of law

5



III. FACILITIES

3.1 Prior to receipt or delivery of Gas hereunder, NMGC shall determine the meters, pressure

regulators and other related equipment and facilities reasonably required at the Receipt or Delivery Point(s). If such

meters, pressure regulators and other related equipment and facilities are not currently in place, the parties shall

negotiate a separate facilities construction agreement.

3.2 After initial receipts and deliveries of Gas have commenced, NMGC shall operate and maintain all

facilities for receiving and delivering of Gas hereunder. If damage occurs to NMGC facilities or Transportation

Customer's facilities as the result of negligence by the other party, that other party shall be liable for all damages

resulting from such negligence.

3.3 Subject to paragraphs 3.1 and 3.2, meter(s) and other related equipment and facilities installed or

maintained by or on behalf of NMGC shall be the exclusive means of determining the quantity of Gas received and

delivered hereunder.

3.4 NMGC may require Transportation Customer to install, at the expense of Transportation Customer

and all other users of that Receipt Point(s), including NMGC, pro rata, hydrogen sulfide monitoring equipment

upstream of the Receipt Point(s) if NMGC reasonably believes that such equipment is necessary.

3.5 Transportation Customer shall have the right, at its sole option and expense, to install and operate

check meter(s) at the Receipt Point(s) and at the Delivery Point(s).

IV. QUALITY

4.1 All Gas Tendered at Receipts Points shall be of merchantable pipeline quality. Gas Tendered through

interstate pipelines and at tailgates of cryogenic or lean oil processing plants shall be deemed to be of merchantable

pipeline quality. Currently, the cryogenic or lean oil processing plants located in New Mexico on Company's system

are the Williams Kutz 1, Kutz 2 and Lybrook plants; Duke's Artesia and Eunice plants and Frontier's Maljamar

andABQ plants. All Gas Tendered from other sources shall be reasonably free of objectionable material, and

commercially free of dust, gums or gumforming constituents, liquids or solid matter and any other substance which

interferes with the intended purpose of Merchantability of gas, or causes interference with the proper and safe

operation of the lines, meters, regulators, or other appliances through which it may flow; and which must conform to

the following specifications:

(a) Shall not contain more than a trace indication of oils and other liquids that are employed in the

operation of Gas processing and/or compression facilities.

6

x

x

x

x

x

x

x

x

x

x

x



(b) Shall be commercially free of water in their liquid state at the temperature and pressure at which

delivered, and in no event contain water vapor in excess of seven (7) pounds per million cubic feet.

The water vapor content shall be determined by use of dew-point apparatus approved by the

Bureau of Mines, or by any other method that is deemed appropriate for the conditions.

(c) Shall not contain more than three quarters (3/4) grains of total sulfur per one hundred (100)

x

x

x

x

x

standard cubic feet, which includes hydrogen sulfide, carbonyl sulfide, carbon disulfide, x

mercaptans, and mono-, di- and poly-sulfides. The Gas shall also meet the following individual x

specifications for hydrogen sulfide (H2S) and mercaptans: x

i. Hydrogen Sulfide: The Gas shall not contain more than one-quarter (1/4) grain per one x

hundred (100) standard cubic feet. x

ii. Mercaptan Sulfur: The Gas shall not have mercaptan sulfur content greater than three x

tenths (0.3) grain per one hundred (100) standard cubic feet. x

(d) Shall not contain in excess of 2-mol% of Carbon Dioxide (C02), x

(e) Shall not contain in excess of 0.2-mol% of Oxygen (02), Every effort shall be made to keep the x

Gas free of oxygen. x

(f) Shall not contain in excess of 5-mol% of total inert gasses. x

(g) Shall be commercially free of hydrocarbons and not have a hydrocarbon dew point that exceeds x

fifteen degrees Fahrenheit (15° F) between 100 and 1000 Psia. x

(h) Shall not be delivered into any of the Company's transmission or distribution pipeline systems at a x

temperature less than forty degrees Fahrenheit (400 F) nor greater than one hundred twenty degrees x

Fahrenheit (1200 F). x

(h) Have a minimum heating value of not less than nine hundred fifty (950) British thermal units (Btu) x

per cubic foot, and not to exceed greater than eleven hundred (1100) Btu per standard cubic foot. x

(i) Shall not contain hydrocarbons with a molecular carbon content of Cs and above (Cs+) in excess of

0.2 gallon per one thousand (1000) standard cubic feet.


REPLACED BY NMPRC BY Operation of Caw, _

7

x

x



4.2 If, at any time, Gas Tendered to the Company at the Receipt Point(s) hereunder fails to conform to

the applicable quality specifications, the Company shall promptly provide notice to Transportation Customer of the

deficiency. Transportation Customer shall remedy any such deficiency within a reasonable period of time. If, in the

Company's reasonable judgment, non-conforming deliveries threaten imminent physical danger or harm to the

Company's system, operations or facilities, then the Company, at its option, may immediately refuse to accept any

further non-conforming Gas. In addition, in the event Gas Tendered to the Company at the Receipt Point(s)

hereunder fails to conform to the applicable quality specifications and (a) are in close proximity to the Company's

distribution system or (b) is a repeat offense, the Company, at its sole option, may immediately refuse to accept any

Gas Tendered by the Transportation Customer at said Receipt Point(s).

4.3 If Gas delivered to the Delivery Point(s) fails to conform to the applicable quality specifications,

Transportation Customer shall notify the Company in writing of such deficiency. Transportation Customer, at its

option, may refuse to take any non-conforming deliveries of Gas. The term of this Contract may be lengthened or

extended by any period during which Transportation Customer has refused deliveries of non-conforming Gas by

Transportation Customer submitting a written request for such extension to the Company. The Company may not

unreasonably refuse such lengthening or extension.

4.4 The Company at its reasonable discretion and without undue discrimination, may accept any Gas

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

x

stream received into its pipeline provided such Gas will not result in a blended stream which does not comply with x

Gas Quality specifications in Section 5.1, or prevent delivery of the blended stream into a downstream pipeline or x

other Delivery Points, or cause a change of more than 4% to the Wobbe Number at the nearest distribution point, and x

that at the Company's reasonable judgment will not adversely impact the Company's facilities, pipeline integrity or x

operations. x

4.5 Whenever the Company deems it necessary, the Company shall conduct or have conducted on its x

behalf a test or tests to determine the quality of Gas received at the Receipt Point(s) for transport. Upon x

Transportation Cus-tomer's written request the Company shall provide copies of such tests.


REPLACED BY NMPRC BY Operation of Ofw -----~--

8

x



4.6 The Company and Transportation Customer agree that Transportation Customer shall enter into

separate agreements regarding the processing of the Gas should such processing be required to ensure that it meets

the above quality specifications.

V. MEASUREMENTEQUWMENT

5.1 Reading, calibration and adjustment of NMGC meter(s) and related measurement equipment shall

be performed solely by NMGC, but such reading, calibration and adjustment may be witnessed by representative(s)

of Transportation Customer. Upon Transportation Customer's written request, NMGC shall provide Transportation

Customer with a schedule of dates for reading and calibration.

5.2 All meter(s) and related equipment shall be calibrated by and at the expense of NMGC at

reasonable intervals to be determined at the sole discretion of NMGC, which shall be consistent with calibration

intervals with NMGC's system purchase and sales as reflected by Rule No. 17.5.650 NMAC. Subject to Rule

650.32(d), Transportation Customer may, upon written notice, request NMGC to perform additional calibrations at

any time at Transportation Customer's sole expense. If, upon any test, the measuring equipment is found to be not

more than two percent (2%) erroneous, previous readings of such equipment shall be considered correct in

computing the volumes of Gas delivered hereunder, but such equipment shall be adjusted at once to read accurately

at that time. If the percentage of inaccuracy of the measuring equipment is found to be in excess of two percent (2%)

as a result of any test, such equipment shall be adjusted at once and the previous readings shall be corrected for a

period extending back to the time such inaccuracy occurred, if such time is ascertainable, and if not ascertainable,

then back one-half (112) of the time elapsed since the date of last calibration testing, but not to exceed a correction

period of six (6) calendar months, and such adjustment shall be in full settlement of the claims which may arise on

account of such inaccuracy. In addition, if the percentage of inaccuracy of the measuring equipment is found to be in

excess of two percent (2%), as a result of an additional calibration made at the written request of and paid for by

Transportation Customer, said payment shall be refunded.

5.3 If, for any reason, any of the measuring equipment is out of service or out of repair so that the

volume of Gas delivered cannot be ascertained, said volume shall be estimated on the basis of the best data available,

using the first of the following methods which in NMGC reasonable judgment is the most accurate and feasible:

(a) By using the registration of Transportation Customer's check meter, if installed at Transportation F FE CT I Vtmer's cost and accurately registering (plus or minus two percent (2%); or

DEC 15 2009

REPLACEO BY NMPRC Operation JJ'f raW

9

x

x

x



(b) By correcting the error, if the percentage of error is ascertainable by calibration, test or

mathematical calculation; or

(c) By estimating the volume of delivery by comparison with deliveries made during preceding

periods under similar conditions when the meter was registering accurately; or

(d) By using the meter's back, lower and/or uncorrected reading if available.

VI. GAS MEASUREMENT

6.1 All measurement of Gas hereunder by orifice meter(s) shall be computed in accordance with

specifications prescribed in ANSI/API Publication 2530 entitled "Orifice Metering of Natural Gas" or its successor,

including appendices or revisions, applied in an appropriate manner. Corrections shall be made for deviation from

the Ideal Gas Laws in accordance with Publication 2530 at the pressure and temperature at which the Gas is

measured. If Gas volumes are measured by positive displacement, rotary, turbine, or other non-orifice type meter(s),

all such measurements shall be computed in accordance with the recommendations of the manufacturer of the

meter(s) and generally accepted practices in the natural Gas industry.

6.2 The temperature of Gas flowing through the meter(s) may be determined by recording

thermometer or temperature compensator, installed and maintained by or on behalf of NMGC, to properly record the

temperature of Gas. The arithmetic average of the temperature recorded during each Month, or any portion thereof

during which Gas is flowing, shall be deemed to be the temperature for such period and shall be used to make proper

correction in the computation of Gas volumes for such period.

6.3 The specific gravity of the Gas shall be determined by chromatographic analysis of Gas samples

accumulated from the main stream.

6.4 A base pressure and assumed atmospheric pressure, which are designated in Exhibit A for each

Receipt Point(s), shall be utilized for measurement purposes regardless of any variation from the actual barometric

pressure.

6.5 A base pressure and assumed atmospheric pressure dependent upon the town of each Delivery

Point(s), shall be utilized for measurement purposes regardless of any variation from the actual barometric pressure.

6.6 The Btu content of Gas Tendered at the Receipt Point(s) shall be the total heating value thereof

determined by analysis of Gas samples accumulated from the main stream in a sample bottle of a type generally used

by NMGC for its system supply Gas. The analysis shall be made by means of passing the sample through a

chromatograph to determine the chemical composition. For Tenders of Gas to NMGC the heating value thus

determined shall be expressed in terms of total heating value per cubic foot of Gas, dry (not saturated with water

vapor) at 14.73 Psia and at sixty degrees Fahrenheit (60°F). The number of cubic feet of Gas Tendered hereunder,

mUltiplied by the Btu content per cubic foot of such Gas, shall determine the total Btu quantity Tendered hereunder.


REPLACED BY NMPRC BY Operation of Law

10



6.7 The Btu content of Gas delivered at the Delivery Point(s) shall be the total heating value thereof

determined in accordance with NMGC Rule No. 20, Rates and Units of Measurement.

6.8 The method of obtaining Gas samples for analysis by Gas chromatography to determine the total

heating value of Gas shall be as prescribed in Gas Processors Association Bulletin No. 2166-68, or its successor,

including its appendices and revisions. Total heating value measurements shall be made as frequently as necessary,

but at least twice a year.

6.9 Upon giving ten (10) Days written notice, each party shall have access to the measuring equipment

and all other instruments used by the other party in determining the quantity and quality of the Gas delivered; but the

reading, calibrating and adjusting thereof shall be done by the employees, agents or representatives of the party

controlling the measurement equipment. In accordance with Rule No. 17.3.310 NMAC, the charts and records shall

be kept on file for a period of three (3) years for the mutual use of the parties. Tests of heating value will be kept on

file for a period of six (6) years for the mutual use of the parties. Either party shall submit to the other records and

charts from such equipment, subject to return by that party within thirty (30) Days after receipt thereof.

6.10 The Gas Tendered may not be separately metered at the Receipt Point(s). NMGC may be

receiving third parties' Gas at the Receipt Point(s) simultaneously with Transportation Customer's Gas. The

allocation of Gas by the upstream processor, gatherer or pipeline and the Nomination Procedure shall control the

amount of Gas attributed to Transportation Customer at the Receipt Point(s).

VII. CONTROL, OWNERSHIP, AND WARRANTIES

7.1 As between Transportation Customer and NMGC, NMGC shall be deemed to be in control and

possession of the Gas from the time said Gas is received by NMGC at the Receipt Point(s) until said Gas is delivered

to the Delivery Point(s).

7.2 Transportation Customer represents and warrants that it has title to all Gas Tendered to NMGC

and that such Gas is free from any liens and/or adverse claims. Upon request from NMGC, Transportation Customer

shall provide NMGC with adequate written evidence of its title to all Gas Tendered.

7.3 Transportation Customer represents and warrants that all Gas delivered to the Delivery Point(s)

shall be consumed in the State of New Mexico.

7.4 Transportation Customer warrants that, upon NMGC's reasonable request, it shall take all

necessary steps to ensure that all Gas Tendered to NMGC at the Receipt Point(s) shall be odorized in compliance

with Rule No. 17.10.650 NMAC and 49 CFR Section 192.625 or successor regulation and any such odorization shall

be at Transportation Customer's sole expense.

7.5 Transportation Customer represents and warrants that it shall pay any applicable third party

transportation and/or standby charges or any other charges for all transportation of the Gas by parties other than

NMGC.

11



7.6 Transportation Customer shall indemnify and hold harmless NMGC, its officers, agents,

employees and contractors from any loss, liability or damages, including costs and reasonable attorney's fees,

suffered as a result of any claim, action or suit brought by any person arising from any breach by Transportation

Customer of any warranty in this Contract.

7.7 Transportation Customer shall indemnify and hold harmless NMGC, its officers, agents,

employees and contractors from any and all losses, liability, or damage whatsoever, including costs and reasonable

attorneys' fees, suffered by NMGC, its officers, agents, employees or contractors arising either directly or indirectly,

from any claim, action or suit brought by any person, association or entity, public or private asserting ownership of

or interest in Gas Tendered for transportation under this Contract.

7.8 Each party agrees to give the other reasonable written notice of any claim, action or suit brought

against it that is subject to the provisions of this Article VII.

7.9 Transportation Customer further warrants that it will comply with all Federal Energy Regulatory

Commission rules and regulations as applicable to this transaction.

VIII. TRANSPORTATION CHARGES

8.1 The cost of service rates and charges presently applicable for the transportation service to be

provided for each Delivery Point(s) under this Contract shall be those rates as specified in NMGC Rate No. 115.

Transportation Customer's contract(s) with its End-User(s) shall give NMGC the right to bill and collect for Rate

No. 115. NMGC shall have the right and obligation for the collection of the Rate No. 115, rates or charges from the

End-User(s).

IX. TAXES

9.1 Transportation Customer shall payor cause to be paid, all applicable taxes, including fees or

charges, now or hereafter levied or assessed by any governmental authority not otherwise included within NMGC'

transportation rates, including specifically gross receipts, compensating use, or franchise or other taxes, fees or

changes imposed on the act, right or privilege of transporting, handling, delivery or use of the Gas, which is

measured by volume, heating value, monetary value or sales price of the Gas. Such taxes, fees or charges shall be in

addition to NMGC charges as specified in Article VIII above.

X. TRANSPORTATION CUSTOMER BILLING AND PAYMENT

10.1 Any amounts due for FTSN Cost of Gas charges, OFO charges, True-up Imbalances and any other

transportation charges, that are not otherwise collected from an End-User of the Transportation Customer, shall be

billed to the Transportation Customer. Transportation Customer shall pay NMGC for all amounts so billed within

twenty (20) Days of the invoice date.


REPLACED BY iiMPRC BY operation of law ----

12



Remittances shall be forwarded to:

NEW MEXICO GAS COMPANY

Address ______ _

City, State ______ _

ATTENTION: _____ _

10.2 NMGC shall determine all charges billed to the Transportation Customer's End-Users by billing

cycle. NMGC uses 21 billing cycles for each Month. As soon as practicable thereafter, NMGC shall render by first

class mail or EBB to Transportation Customer, a statement showing the volumes and charges billed hereunder for

each billing cycle. These statements will include Beginning Date Read, Ending Date Read, Therm Conversion

Factor, Measured Volume and all charges billed for each individual account ("End-User Billing Summary Detail").

10.3 If NMGC owes Transportation Customer payment as a result of True-up Imbalance, NMGC

agrees to pay Transportation Customer for all amounts so owed pursuant to the Rule No. 33, provided that any such

amount may be credited against any other payment then due and owing from the Transportation Customer, under this

Contract. Any remittance to the End-User(s) will be Transportation Customer's sole option.

10.4 Transportation Customer hereby agrees that if its End-User(s) fails to make timely payment on or

before the due date as stated on the invoices of all amounts so billed, NMGC shall be entitled to charge the End-User

interest on the unpaid portion of the statement. NMGC will issue a report to the Transportation Customer regarding

End-Users that have failed to pay their charges within twenty (20) days of bill date. If NMGC receives payment

within thirty (30) days of the bill date from the End-User no interest charges will be assessed. If payment has not

been received by thirty (30) days from the bill date, interest shall accrue at the rate of six hundred sixty seven one

thousandths percent (0.667%). per calendar month or at such other rates as may be specified by any applicable

NMGC Rule for delinquent accounts, from the date upon which the payment was due. After thirty (30) days of the

bill date if an End-User has still failed to pay its bill, NMGC in addition to any other remedy it may have hereunder,

may require the End-User to return to NMGC as Sales Customers upon ten (10) days written notice.

10.5 Transportation Customer agrees to not violate NMGC Rule Nos. 18 and 19 in its provision of

service with its End-User(s).

10.6 In the case of disputed amounts, Transportation Customer shall pay the entire amount of the

statement under protest. Within thirty (30) Days after receipt of Transportation Customer's written protest, NMGC

shall make a complete investigation of the matter and, if the statement is found to be correct, shall explain the basis

for such determination. If the statement is in error, NMGC shall promptly submit a corrected statement to

Transportation Customer, together with any necessary refund and interest at a rate of six hundred sixty seven one x

thousands percent (0.667%) per calendar month or of such other rate as may be specified by any applicable NMGC x

EFFECTIVE DEC 15 Z009

REPLACED BY r"MPRC RV Operation of raw

13



Rule for delinquent accounts, from date of payment. All statements, billings, and payments hereunder shall be final

unless questioned within thirty-six (36) calendar months from the date of such billing, statement, or payment.

10.7 In the case of disputed amounts with an End-User, NMGC will handle collection as provided in

Rule Nos. 17.5.410 and 17.10.650 NMAC.

XI. FINANCIAL RESPONSIBILITY AND QUALIFICATIONS

11.1 Prior to delivery of Gas pursuant to this Contract, Transportation Customer shall provide NMGC

evidence satisfactory to NMGC of Transportation Customer's financial responsibility. If Transportation Customer is

unable to provide reasonable evidence of financial responsibility which is satisfactory to NMGC, then Transportation

Customer shall do one of the following:

(a) Provide NMGC with a letter of credit from a financial institution reasonably acceptable to NMGC

in an amount that would recover all or any portion of the potential damages or expenses resulting

from a breach of the Contract by the Transportation Customer. This letter of credit shall not be

revocable until ninety (90) Days following the termination of this Contract; or

(b) Pay NMGC a security deposit in an amount that would recover all or any portion of the potential

damages or expenses resulting from a breach of the Contract by the Transportation Customer.

NMGC may retain the security deposit throughout the life of this Contract or until all

transportation related charges including Imbalance Cash-Outs, FTSN Cost of Gas and OFO

charges are fully paid, whichever occurs later. NMGC shall have all rights to set off and apply the

security deposit against all obligations of the Transportation Customer under this Contract as

allowed by 11 U.S.c. Section 553. Interest shall accrue and shall be paid to Transportation

Customer by NMGC at the rate specified in NMGC Rule No.7, as it may be adjusted from time to

time by the NMPRC. Upon termination of this Contract and within twenty (20) Days of

Transportation Customer paying all sums due NMGC and resolving all outstanding imbalances

pursuant to this Contract, such security deposit, together with any unpaid interest, shall be paid by

NMGC to Transportation Customer.

Past due charges for transportation services including amounts for imbalance assessments, FTSN Cost of Gas, OFO

charges if any, may be collected from the letter of credit or deposit.

11.2 If, during the term of the Contract, NMGC determines that the financial responsibility of

Transportation Customer has become impaired or unsatisfactory based upon Transportation Customer's payment

history with NMGC, credit history information pertaining to Transportation Customer, imbalance management, or

the transportation volume has substantially increased in total MMBtus, NMGC may demand and Transportation

Customer must comply with either provision (a) or (b) above within ten (10) Days of NMGC's written demand.

After such ten (10) Days, this Contract at the sole option of NMGC may be terminated.


REPLACED BY NMPRC BY Operation. QL~ClW

14

BY



11.3 In the event Transportation Customer makes an assignment for the benefit of creditors or any

general arrangement with creditors, or if there are instituted by or against Transportation Customer proceedings in

bankruptcy or under any insolvency law or law for reorganization, receivership or dissolution, NMGC may terminate

this Contract without notice. NMGC's exercise of any right reserved under this Article shall be without prejudice to

any claim for damages or any other legal or equitable right of NMGC.

11.4 Transportation Customer agrees to require that all of its End-Users shall be subject to NMGC Rule

No.7 with respect to deposits.

11.5 In order to provide service to End-Users Transportation Customer shall agree to the following:

(a) That it will provide documentation of its forecasting model that will be used in making its

nominations. Such model must contain the following:

(i) Daily Heating Degrees: Historical, Normal and Forecasted by Location

(ii) End-User historical load profiles

(iii) Functionality that normalizes end-user usage based on heating degree days

(iv) Functionality that adjusts end-user projected usage based on forecasted temperatures for

end-user's location

(b) Submit an affidavit by Transportation Customer (or an executive officer if Transportation

Customer is a corporation) stating under oath that Transportation Customer has formed a good

faith belief that it has or will have adequate Gas Supplies to serve the End-User under this Contract

including any necessary transportation.

(c) Transportation Customer agrees to be bound by the Code of Conduct (attached hereto as Exhibit

D).

(d) Transportation Customer agrees to register with and be certified by the NMPRC prior to

participating in the Gas Choice Program.

XII. REGULATION

12.1 This Contract shall be subject to all present and future applicable and valid laws, orders, rules and

regulations of any duly constituted governmental authority, Federal, State, Tribal or Local, having jurisdiction over

the parties, their facilities, or any provision of this Contract.

12.2 If any governmental authority having jurisdiction over the parties shall take any action which may

affect any terms or conditions of this Contract, such action shall apply to the terms and conditions of this Contract

upon the effective date of the governmental action or order; provided, however, that NMGC shall give timely written

notice to Transportation Customer of such change, prior to the effective date of the governmental action or order if

possible and in any event no later than ten (10) days after that effective date. In the event Transportation Customer

deems such change unacceptable, in addition to pursuing any other rights or remedies available to Transportation

Customer, it may terminate this Contract within thirty (30) days of the effective date of the governmental action or


REPLACED BY ~!MPRC Operation of Law

15



order. Any changes in the terms and conditions of this Contract pursuant to this Paragraph shall not affect the

remaining terms and conditions of this Contract.

12.3 This Contract, and all its terms and provisions, shall at all times be subject to modification by

order of the New Mexico Public Regulation Commission upon notice and hearing and a finding of good cause

therefore. In the event that any party to this Contract shall request the NMPRC to take any action which could cause

a modification in the provisions of this Contract, that party shall provide written notice to the other parties at the time

of filing the request with the NMPRC.

XIII TERM

13.1 Subject to the other terms and provisions hereof, this Contract shall be effective from the date first

written above. If Transportation Customer does not commence to Tender Gas under this Contract within forty-five

(45) Days from the date first written above, NMGC may terminate this Contract upon five (5) Days written notice.

Unless otherwise terminated in accordance with the provisions herein, performance under this Contract shall

continue and remain in full force and effect until ______ and Month-to-Month thereafter unless terminated

by either party upon thirty (30) Days prior written notice.

XIV FORCE MAJEURE

14.1 The term force majeure, as employed herein, shall mean acts of God, strikes, lockouts or other

industrial disturbances (not including market or similar economic conditions), acts of public enemy, wars, blockages,

insurrections, riots, arrests and restraints of rulers and people, civil or military disturbances, explosions, sabotage,

epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, inability to secure labor, inability of

either party hereto to obtain necessary materials, supplies or permits due to existing or future rules, orders and laws

of governments or courts, Federal, State, Tribal or Local, present and future orders of any regulatory body having

jurisdiction, breakage or accident to machinery or pipelines, the necessity for making repairs or alterations to

machinery or pipelines, freezing of pipelines, other unforeseen operational problems or any other cause (not

including market or similar economic conditions), whether of the kind herein enumerated or otherwise, not

reasonably within the control of the party claiming force majeure.

14.2 In the event either party is rendered unable, wholly or in part, by force majeure to carry out its

obligations under this Contract, it is agreed that upon the affected party giving notice and full particulars of such

force majeure in writing, by telephone, by EBB or by telefax and followed by written confirmation, to the other party

within a reasonable time after the occurrence of the cause relied on, then the obligations of NMGC, so far as they are

affected by suchforce majeure, shall be suspended from its inception and during the continuance of any inability so

caused but for no longer period, and such cause shall, as far as possible, be remedied with all reasonable dispatch.

The term of this Contract shall not be deemed lengthened or extended by any period offorce majeure~

14.3 It is understood and agreed that the settlement of strikes or lockouts shall be entirely within the

discretion of the party affected, and that the requirement of the use of diligence in restoring normal operating

16

BY



conditions shall not require the settlement of strikes or lockouts by acceding to the demands to the parties involved in

such strikes or lockouts when such course is inadvisable in the discretion of the party affected.

XV. OTHER CONTRACTS OR AGREEMENTS

15.1 The following contracts or service agreements are superseded by this Contract:

NMGC CONTRACT NUMBER:

If any monies owed by Transportation Customer under a superseded Contract or service agreement are not paid

within twenty (20) Days of the date set forth above, deliveries may be suspended upon five (5) Days written notice.

15.2 The following contracts or service agreements are not superseded by nor affected by this Contract:

NMGC CONTRACT NUMBER:

XVI. NOTICES

16.1 Except as herein otherwise provided, any notice, request, demand provided for in this Contract or

any notice which either party may wish to give to the other, shall be in writing and shall be considered as duly

delivered upon receipt by registered or certified mail or by telefax to the address of the parties or by posting on

NMGC' EBB, as follows:

NOTICES:

INVOICES:

TO TRANSPORTATION CUSTOMER:

ATTN:

Telephone No. ( )

Telefax No. (

EBB

ATTN:

Telephone No. (

Telefax No. ( )

TRUE-UP IMBALANCE SETTLEMENT STATEMENTS:


REPLACEfiBY r,fMPRG

ATTN:

Telephone No. ( )

Telefax No. ( )

Qnepoat' r ·.A~.r .. -v -fOJ:J."U'f""'L~~~~'-

17



TO: NEW MEXICO GAS COMPANY

Address _______ _

City / State _______ _

ATTN: Transportation Contract Management

Telephone No. (505) ____ _

Telefax No. (505) ____ _

EBB

or at such address as either party may from time to time designate by providing notice as set forth above. In the

event of emergency, notice may be given by telephone and telefax and confirmed in writing delivered as aforesaid

within three (3) Days of telephonic notification.

16.2 For the purposes of Paragraph 2.1, notices to NMGC Gas Systems Administration shall be made

to:

Telephone, regular hours: (505) ____ or (505) ____ or

(505) or (505) ___ _

(7:30 a.m. - 3:30 p.m. MDT)

Telefax No. : (505) __ _

EBB

XVII. END-USER BILLING AND PAYMENT

17.1 Transportation Customer hereby appoints NMGC as its agent for billing matters under this

Contract. NMGC shall bill Transportation Customer's End-Users for the transportation charges incurred by

Transportation Customer in serving the End-Users. NMGC will bill Residential End-Users and Small Volume End

Users under the applicable rate as provided in Rate 115. In addition, NMGC shall bill any charges, rates or expenses

incurred by Transportation Customer in providing service to its End-Users, provided that, Transportation Customer

shall have the sole obligation to timely provide such commodity charges, rates, or expenses to NMGC in order to be

billed. In the event of partial payment(s), NMGC shall have the right to deduct all applicable due but unpaid

transportation charges for the Transportation Customer's End-User(s) prior to remittance. NMGC shall then remit

the remaining portion of collections from End-Users, attributable to Transportation Customer's service, to

Transportation Customer.

17.2 NMGC shall bill the End-Users at the same time and in the same manner (except for the billing

format) as if the End-Users were NMGC Sales Customers. NMGC shall remit the Transportation Customer's

portion of the bills collected to the Transportation Customer at the end of each calendar month. NMGC shall be

entitled to hold any and all monies received from End-Users without interest until the next payment date. In

performing the billing and collection function for Transportation Customer, NMGC will follow Rule Nos. 17.5.410

and 17.10.650 NMAC (where applicable) as if the End-Users were NMGC Sales Customers. In the event an End

User fails to pay and Transportation Customer wishes to terminate service to the End-User, Transportation Customer

18



shall give NMGC ten (10) business days prior written notice and such End-User shall return to NMGC as a Sales

Customer at the beginning of the billing cycle for the End-User. NMGC shall not have any collection responsibility,

as to the portion of the bill pertaining to Transportation Customer's commodity charges, after cut-off or termination

of service pursuant to Rule Nos. 17.5.410 and 17.10.650 NMAC. After cut-off or any other termination of service,

Transportation Customer, as to the portion of the bill pertaining to its commodity charges, shall be responsible for

any and all collection of past due or delinquent bills from its End-Users.

17.3 It shall be the sole obligation of the Transportation Customer to provide the End-User(s)

applicable prices, rates, fees, charges, taxes and expenses to NMGC ten (l0) working days prior to the end of each

billing cycle. If Transportation Customer does not timely submit new commodity prices for use on the bills, NMGC

shall have the right to use the last provided information. Failure to timely provide pricing, rates, fees, charges, taxes

or expense information by Transportation Customer shall not result in NMGC' undertaking prior period adjustments.

Instead, NMGC shall make any changes in pricing, rates, fees, charges, taxes or expense in subsequent bills.

17.4 Transportation Customer agrees to indemnify and hold harmless any and all actions undertaken by

NMGC as an agent for Transportation Customer, except that Transportation Customer shall not be required to

indemnify or hold harmless NMGC for intentional tortious actions or gross negligence on the part of NMGC.

XVIII. MISCELLANEOUS

18.1 A waiver by either Transportation Customer or NMGC of anyone or more defaults by the other in

the performance of any provision of this Contract shall not operate or be construed as a waiver of any future default

or defaults, whether of a like or of a different character.

18.2 This Contract shall be binding upon and inure to the benefit of the successors, assignees and legal

representatives of the parties hereto.

18.3 Neither party may assign its rights nor delegate its obligations under this Contract to any entity not

affiliated with that party without the prior written consent of the other party, which shall not be unreasonably

withheld; provided, however, that, in the event NMGC shall transfer all or any portion of its Gas operations to a third

party which shall continue such Gas operations, NMGC may assign its rights and delegate its obligations hereunder

without prior consent. In the event of such assignment and delegation, Transportation Customer may at its option

terminate this Contract upon thirty (30) Days written notice.

18.4 Any change, modification, or alteration of this Contract shall be in writing and signed by the

parties hereto, except Change Orders. Change Orders shall be signed by Transportation Customer only.

18.5 This Contract contains the entire agreement between the parties and, except as stated herein, there

are no promises, agreements, warranties or conditions affecting it.

18.6 The interpretation and performance of this Contract shall be construed in accordance with the laws

of the State of New Mexico.

18.7 The parties agree that, wherever appropriate, Rule Nos. 17.5.410 and 17.10.650 NMAC shall be

deemed to apply to the Transportation Customer's End-Users as if the End-Users were NMGC Sales Customers.

19

BY



18.8 The Transportation Customer agrees that any agreement between the Transportation Customer and

its End-Users shall contain a provision allowing NMGC to impose any applicable term or condition of this Contract

on the End-Users, including but not limited to billing, collecting, interest charges or other fees and charges.

18.9 NMGC shall be entitled to recover any and all damages (including but not limited to: direct,

indirect, consequential, special and punitive) to hold harmless NMGC and its Sales Customers and End-Users on its

system, because of, arising out of, or as a result of a breach of the Contract by the Transportation Customer.

IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by duly authorized officers as

of the day, month, and year first written below.

ATTEST:

Title: _____________ _

ATTEST:

Title: ____________ _


REPLACED BY NMPR( OoeYatlon Oltlfw

20

Transportation Customer

By __________________ __

Title ________ _ Date

NEW NlEXICO GAS COMPANY

By ___________________ _

Title, _________ _ Date



ATTACHMENT 1

CONTRACT NO. T ____ _

Residential and Small Volume End-User Transportation Agreement

Dated ______ _

Between _________ _

and NEW MEXICO GAS COMPANY

RESIDENTIAL AND SMALL VOLUME END-USER TRANSPORTATION NOMINATION PROCEDURE

The Nomination Procedure is included as Attachment 1 and is permitted by the NMPRC pursuant to NMPUC Case

No. 2760.


REPLACED BY NMPRC BY . Op§mtI<nr f)fJ:aw""""~_~, ...

21



RESIDENTIAL AND SMALL VOLUME END-USERS TRANSPORTATION NOMINATION PROCEDURE

This nomination procedure has been developed for use by Transportation Customer(s) to serve any Residential End

Users and those Small Volume End-User(s) with yearly consumption of four thousand (4,000) MMBtu or less, on

NMGC transmission and distribution systems. All nominations must be made by the Designated Representative (the

"Designated Representative") of the Transportation Customer with whom NMGC has a valid, executed Form No. 46

transportation contract. The Designated Representative must either be named in the Transportation Request Form on

file with NMGC or previously agreed to by NMGC. The Designated Representative will be responsible for

establishing and maintaining communication with NMGC's Gas Systems Administration, located at NMGC Division

offices in Albuquerque, New Mexico, concerning the quantity of gas to be tendered to NMGC at each Receipt

Point(s) and the quantity of gas to be delivered to the Delivery Point(s). In addition, it is the responsibility of the

Transportation Customer to tender sufficient supply taking into account applicable fuel and losses to meet the

calculated demands at the Delivery Point(s) on a daily basis and to adhere to the Nomination Procedure with regard

to NMGC's receipt of Gas Tendered by Transportation Customer.

ELECTRONIC BULLETIN BOARD

Transportation Customer shall use the Electronic Bulletin Board (EBB) for all functions that can be conducted via

the EBB to perform the Nomination. If the EBB system is not, for any reason, operational at the time nominations

are required to be made hereunder, the Transportation Customer shall submit nominations and confirmations by e

mail or telefax.

PRIMARY NOMINATIONS

The Designated Representative must contact NMGC Gas Systems Administration Department by 8:00 a.m. MT one

(1) day prior to the date of receipt and delivery of Gas and submit the following required information using NMGC

EBB:

1. The Transportation Customer name.

2. DUNS number.

3. The Nominations Purposes contract number (as assigned by NMGC and specified in Exhibits A and B).

4. The date the nomination was submitted.

5. The beginning and ending date Gas is to flow. (AT THE END OF THE CALENDAR MONTH, ALL

NOMINATIONS BECOME ZERO.)

6. The name, telephone and telefax number of the person who prepared the nomination on behalf of the

Transportation Customer.

22



7. An emergency contact number.

8. For each Receipt Point(s):

a. The NMGC facility number for the Receipt Point(s) and the Petroleum Institute Data Reference

number (DRN).

b. The contract number, if applicable, of the upstream transporter delivering the Gas at the Receipt

Point(s).

c. The MMBtu shall be calculated using forecasted weather and historical daily usage for the

applicable End-Users taking into account applicable fuel and losses, rounded to the nearest whole

MMBtu.

9. For Delivery Point(s) (consolidated facility):

a. Applicable usage codes.

b. The NMGC' Nomination Delivery Point (consolidated facility number) for each Service Zone as

specified in Exhibit B.

c. The MMBtu to be delivered shall be calculated using forecasted weather and historical daily usage

for the applicable End-Users less applicable fuel and losses, rounded to the nearest whole MMBtu.

CONFIRMATION

Each nominated receipt volume must be confirmed by the operator of the upstream pipeline.

The operator of a Receipt Point(s) must confirm the nominated volume on the same day that the primary nomination

is made, one (1) day prior to the date of receipt and delivery of Gas. The confirmation must be submitted on

NMGC's EBB by 8:00 a.m. MT. For Intra-Day nominations, confirmation must be received by 2:00 p.m. MT,

eighteen (18) hours prior to Gas Flow Day. Each confirmation must include:

1. The operator's name.

2. DUNS number

3. The operator number (as assigned by NMGC).

4. The date the confirmation was submitted.

5. The beginning and ending date Gas is to flow.

6. The name, telephone and telefax number of the person who prepared the confirmation on behalf of the

operator.


8. For each Receipt Point(s).

a. The receipt facility number and applicable usage codes.

b. The NMGC Nominations Purposes contract number.

23



c. The MMBtu confirmed for each contract.

If the Receipt Point(s) is an upstream pipeline, NMGC will assume the volume will be confirmed by the upstream

pipeline. The upstream pipeline's tariff, deadlines and procedures govern the scheduling of gas on the upstream

pipeline's system. It is the responsibility of the Transportation Customer to assure compliance with the upstream

pipeline's requirements. NMGC will allocate capacity for the Transportation Customer's Gas based on nominations.

FTSN NOMINATIONS

If a Transportation Customer wishes to nominate FTSN gas from the Company, the Transportation Customer must

follow the terms and conditions for primary nominations set forth in the Nomination Procedure, except that contract

numbers and Receipt facility numbers for FTSN nominations shall be as follows. When nominating FTSN, the

Transportation Customer will use the Transportation Customer's NMGC transportation contract number. The

receipt facility numbers for FTSN nominations within each segment of NMGC system are as follows:

Northwest

Southeast

Remotes

Receipt

009603

004688

090402

Scheduling of FTSN will be in accordance with the provisions of NMGC Rate No. 115, as revised and in effect from

time to time pursuant to the rules of the NMPRC.

SCHEDULING OF GAS

PRIMARY NOMINATIONS

At 8:00 a.m. MT, NMGC will begin preparation of its schedule of Gas to flow. Nominations received by NMGC by

8:00 a.m. MT twenty-four (24) hours prior to flow-day will be considered Primary Nominations. No Primary

DEC 15 2009

REPLACED BY NMPRC BY OperatIon" Q!J:aw "

~~Cr-"O""""""<=,:r."-,,, .... _

24



Nomination or Confirmation will be accepted after 8:00 a.m. MT unless prior approval is received by the

Transportation Customer via telephone from the Gas Systems Administration Department, which approval shall not

be unreasonably withheld.

If Nomination and Confirmation MMBtu's do not match, the lesser of the two will be used for the scheduling of Gas.

If a contract MDQ is exceeded by confirmed Nominations, NMGC will not schedule volumes in excess of the MDQ

unless prior approval is obtained from NMGC's Transportation Services Department which approval shall not be

unreasonably withheld.

CAPACITY ALLOCATIONS

At 8:00 a.m. Mountain Time, on day before flow, NMGC will initiate a Capacity Allocation at any and all receipt or

delivery facilities in which Primary Nomination requests have exceeded the physical capabilities of the facility.

Transportation Customers affected by the Capacity Allocation reduction to their requested Primary Nomination must

submit an Intra-Day Nomination to have their volumes replaced. Due to the timelines necessary for NMGC and

affected Transporters to re-nominate their volumes to meet current nomination deadlines with the Interstate

Pipelines, NMGC will report any Capacity Allocation by 12:00 p.m. (Noon) MT on day before flow. These re

nominations will continue to be subject to the final scheduling provided by the Interstate Pipelines.

INTRA-DAY NOMINATIONS

The Designated Representative must contact NMGC Administration Department by 2:00 p.m. MT eighteen (18)

hours prior to Gas flow day. The following conditions apply to this nomination:

1. The same information must be submitted as that required by primary nomination and confirmation.

2. Only excess capacity will be available for Intra-Day nominations.

3. Intra-Day nominations will not roll-over and become primary nominations.

4. Intra-Day nominations and confirmations must be clearly identified by placing a "Y" in the Intra-Day field

blank on the EBB or telefax the Nomination, attached as Exhibit I, in the event the EBB is inoperable.

FLOW DAYIREAL-TIME NOMINATIONS

NMGC will accept a Flow-DaylReal-Time nomination under the following conditions:

E- '~to1i<'7l! F~ f 6:T ~ V·.'' E.~~ . •••• ""';;~J g I ,

DEC 15 2009 25

REPLACm NMPRC lRV Operatinn I'\f , "",,'



1. The same information must be submitted as that required by an Intra-day nomination.

2. Only excess capacity will be available for Flow-DaylReal-Time nominations if this re-nomination is

requested at a facility other than the original nomination request.

3. Flow-DaylReal-Time nominations will not roll-over and become primary nominations.

4. Flow-DaylReal-Time nominations and confirmations must be clearly identified by placing a "Y" in the

Intra-Day field blank on the EBB or the telefax Nomination Form, attached as Exhibit I, in the event the

EBB is inoperable.

5. Transportation Customer's supply volumes were reduced on their final schedule as reported by NMGC at

8:00 a.m. MT on Flow-Day and/or Transportation Customer was notified by their end-user that they will be

utilizing volumes in excess of original nomination.

6. Transportation Customer submits Flow-DaylReal-Time nomination to NMGC and the upstream

supplier/pipeline to ensure NMGC has "PHYSICAL" receipt of the additional volumes by 12:00 p.m.

(Noon) MT on Flow-Day.

7. NMGC will not accept a Flow-DaylReal-Time nomination that would initiate a Capacity Allocation on

Flow-Day.

FINAL SCHEDULING OF GAS

The capacity remaining after primary nominations have been scheduled will be allocated to Intra-Day nominations.

NMGC will report the final schedule of Gas to flow on its EBB system by 7:30 a.m. MT on the Day following the

posting of the schedule which is also the Day that the scheduled Gas shall flow. In the event NMGC' EBB system is

not operational, NMGC will report this final schedule by 7:30 a.m. MT by telefax to the telefax number last

designated in writing by the Transportation Customer(s).

If the final schedule of Gas for delivery to an End-User on NMGC's system indicates that a Transportation

Customer's scheduled and confirmed Gas is less than ninety percent (90%) of the Transportation Customer's

nomination, NMGC shall give notice of such condition to Transportation Customer by 7:30 a.m. MT by: (1) posting

such notice on NMGC's EBB (if such is operational); or (2) providing telephone notice to Transportation Customer

at the telephone number last designated in writing to NMGC; or (3) providing notice by telefax to Transportation

Customer at the telefax number last designated in writing to NMGC. If the shortage of supply is not renominated

and scheduled for the Day of flow per this Nomination Procedure, FTSN Cost of Gas will be applied per the

Contract.


REPLACED tSY ~~MPRC BY Operation of l"aw

""-<-'~-'>,c"'~--,""".==""""""''''''>''1:'-.• Y'

26

BY



CONTRACT START-UP

For the purpose of initial nominations of Gas into NMGC's system, the following information must be on file in

NMGC Gas Systems Administration Department three (3) business days prior to the date of receipt and delivery of

Gas:

1. Completed nomination and confirmation forms.

2. Name, telephone and telefax number, and mailing address of the Designated Representative.


4. Name, telephone and telefax number of the operator(s).

5. Name, telephone and telefax number of the End-User (if applicable).

If the nomination is not received for any given Day, the last nomination received will apply until another nomination

is received or the calendar month ends. AT THE END OF THE CALENDAR MONTH, ALL NOMINATIONS

BECOME ZERO. Nominations and confirmations must be made for each new calendar month in accordance with

the above procedures. If Contract start-up begins at the end of a month this may require submission of two (2)

nominations, i.e., one for the start of Contract and one for the immediately following calendar month.

OPERATIONAL FLOW ORDER ("OFO")

NMGC shall have the right to require a change of Receipt Point(s) pursuant to an OFO. In those situations where

NMGC requests a change of Receipt Point(s) the Transportation Customer shall be required to have scheduled the

same total amount of scheduled volumes as originally confirmed under the Contract. Failure to comply with an OFO

shall result in a charge of $50.00 per MMBtu for each MMBtu that Transportation Customer fails to have scheduled

pursuant to NMGC request. Failure to comply with an OFO shall result in a charge of $50.00 per MMBtu for each

MMBtu that Transportation Customer fails to have scheduled pursuant to NMGC's demand.

DEC 15 2009

REPLACED ~iMPRC 27

Qperatia[bOf~raw.~.,~_._ ....

BY



NMGC CONTACT PHONE NUMBERS

The following may be used to communicate with NMGC Administration Department:

Telephone, regular hours (7:30 a.m. - 3:30 p.m. MT):

(505) 241-_ or (505) 241-_ or

(505) 241-_ or (505) 241-_

Telefax: (505) __ _

24 Hour Contact: (505) ____ (digital pager)

Electronic Bulletin Board: (505) _____ _

28



ATTACHMENT 2


Residential and Small Volume End-User Transportation Agreement

Dated ______ _

Between _________ _


RULE NO. 33

RESIDENTIAL AND SMALL VOLUME END-USER TRANSPORTATION BALANCING

Transportation Balancing Rule No. 33 is included as Attachment 2 and is permitted by the NMPRC pursuant to

NMPUC Case No. 2760.

FECTIVE DEC 15 2009

REPU\CED BY NMPRC 29



EXHIBIT A

MASTER CONTRACT NO. T ____ _

Residential And Small Volume End-Users Transportation Agreement Dated _____ _

Between ________ _ and NEW MEXICO GAS COMPANY

RECEIPT POINTS

NAME, LOCATION and STATION/ BASE

METER NUMBER PRESSURE

ASSUMED ATMOSPHERIC

PRESSURE SERVICE ZONE

t~~;f'\~ltv" E· I c'~,~1 ~. ~"' DEC 15 2009

REPLACED BY NMPRC BY Operation of law

==="=~''''''''''''''J"-''''.=~"""""~~~,,,,=-t._

30

E



EXHIBITB



Between ________ _ and NEW MEXICO GAS COMPANY

DELIVERY POINTS

NMGC ACCOUNT NO. SERVICE ZONE SERVICE ADDRESS.

rll=C "I'" 200-11 !"g,~, ... ;) "

31



NMGC ACCOUNT NO.

EXHIBIT C-CHANGE ORDER



Between _________ _


DELIVERY POINTS

DELIVERY POINT (SERVICE ADDRESS) ADDIDELETE

Transportation Customer agrees that this Change Order shall be used to supplement and update Exhibit "B" to this contract. By: ___________ _ Title: ____________ _

Transmittal Date: ________ _

REPLACED By NMPRG 32

BY = QperAt10JlqfJ:~w ... ~~ ...



'EXHIBITD


Residential And Small Volume End-Users Transportation Agreement Dated ______ _

Between __________ _ and NEW MEXICO GAS COMPANY

CODE OF CONDUCT

Each marketer participating in the Gas Choice Program shall:

1. Communicate to its customers, in clear understandable terms, the customers' rights and responsibilities under their agreements with the marketer as participants in the Gas Choice Program.

2. Include pricing and payment terms that are clear and understandable.

3. Refrain from engaging in communications or practices which are fraudulent, deceptive, or misleading.

4. Deliver gas to NMGC on behalf of its customers in accordance with the requirements of the Gas Choice Program.

DEC 15 2009

REPLACED BY NMPRC OQeration of raw

=-= .. "'::;.'I':~==<.~ .... """";..-~",,,~,~ .• ~"

33

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