Common use of Specific methodology Clause in Contracts

Specific methodology. Note: A reference to an ‘expansion; under this section means a ‘RiT Expansion’ as defined in clause 1 of this agreement. Methodology Reference to Working example in section 3.2 below 1 For an initial expansion, if the Incremental Cost of the expansion is less than the Firm Tariff, then the Firm Tariff will be recalculated as follows: (Current Firm Tariff x Existing Capacity + Incremental Cost x New Capacity) (Existing Capacity + New Capacity) • The new Firm Tariff should be a lower number. • The expansion would have a SECC of $0. Refer to expansions a and b of the working example below. 2 For an initial expansion, if the Incremental Cost of the expansion is more than the Firm Tariff, then • the Firm Tariff will not change; and • the expansion’s SECC will equal Incremental Cost less Firm Tariff. 3 For a subsequent expansion, if the expansion’s Notional SECC (being Incremental Cost less Firm Tariff) is greater than the previous expansion’s SECC, then: • the Firm Tariff will not change; • the previous expansion’s SECC will not change; and • the expansion’s SECC will equal its Notional SECC. Refer to expansion c of the working example below. 4 For a subsequent expansion, if the expansion’s Notional SECC (being Incremental Cost less Firm Tariff) is less than the immediately previous expansion’s SECC, then the Transporter will apply the following allocation methodology to determine that expansion’s SECC and any change to previous expansions’ SECCs. Assume: • a series of expansions occurred in the order of: expansions a, b, c, d; • each expansion’s SECC are described as SECC(a), SECC(b), SECC(c) and SECC(d); • each expansion’s additional capacity are described as Cap(a), Cap(b), Cap(c) and Cap(d); and • each expansion’s Incremental Cost are described as IC(a), IC(b), IC(c) and IC(d). Step 1: Determine the Excess Contribution (EC) of expansion d () = [( + ()) − ()]×() The Excess Contribution of expansion d (EC(d)) represents the contribution which expansion D could be applied towards previous expansions’ Incremental Costs assuming: • expansion d has an SECC equal to SECC(c); and • expansion d’s contribution is first applied towards its own Incremental Cost (i.e. IC(d)). Refer to expansion d of the working example below. For expansion d, EC(d) = [(1.06+0.21)- 0.93]x73 = 24.82 Methodology Reference to Working example in section 3.2 below Step 2: Is the Excess Contribution of expansion d (EC(d)) sufficient to reduce SECC(c) and SECC(d) to the same level as SECC(b)? EC(d ) If  (SECC(c)  SECC(b)) , then go to Step 3 (Cap(c)  Cap(d )) OR EC(d ) If  (SECC(c)  SECC(b)) (Cap(c)  Cap(d )) then the new SECC(c) and SECC(d) will each equal to: NewSECC (c) / SECC(d )  OldSECC(c)  EC(d ) (Cap(c)  Cap(d )) Step 3: Is the Excess Contribution of expansion d (EC(d)) sufficient to reduce SECC(b), SECC(c) and SECC(d) to the same level as SECC(a)? EC(d ) If  (SECC(a)  SECC(c)) , then go to Step 4 (Cap(b)  Cap(c)  Cap(d )) OR EC(d ) If  (SECC(a)  SECC(c)) (Cap(b)  Cap(c)  Cap(d )) then the new SECC(b), SECC(c) and SECC(d) will equal: NewSECC (b) / SECC(c) / SECC(d )  OldSECC(b)  EC(d ) (Cap(b)  Cap(c)  Cap(d )) Step 4: Further rolling calculations EC(d ) If  (SECC(a)  SECC(c)) (Cap(b)  Cap(c)  Cap(d )) then SECC(a), SECC(b), SECC(c) and SECC(d) will be reduced to an amount below the old SECC(a), towards zero. The calculation methodology for this reduction will be an extrapolation of that applied in Steps 2 and 3 above. If the EC(d) is greater than the quantity required to reduce SECC(a), SECC(b), SECC(c) and SECC(d) to zero, then the calculation methodology will be further extrapolated to reduce the Firm Tariff. Firm Tariff will not be affected by this process unless the Excess Contribution of the Last Expansion is greater than the amount required to reduce all previous expansions’ SECCs to zero. For expansion d 24.82/(73+67) < (0.21-0) which means: New SECC for expansions c and d = 0.21 – 24.82/(73+67) = 0.21 – 0.18 = 0.03 expansion d would not have any impact on SECC of expansions a and b or the Firm Tariff.

Specific methodology. Note: A reference to an ‘expansion; under this section means a ‘RiT Expansion’ as defined in clause 1 of this agreement. Methodology Reference to Working example in section 3.2 below 1 For an initial expansion, if the Incremental Cost of the expansion is less than the Firm Tariff, then the Firm Tariff will be recalculated as follows: (Current Firm Tariff x Existing Capacity + Incremental Cost x New Capacity) (Existing Capacity + New Capacity) • The new Firm Tariff should be a lower number. • The expansion would have a SECC of $0. Refer to expansions a and b of the working example below. 2 For an initial expansion, if the Incremental Cost of the expansion is more than the Firm Tariff, then • the Firm Tariff will not change; and • the expansion’s SECC will equal Incremental Cost less Firm Tariff. 3 For a subsequent expansion, if the expansion’s Notional SECC (being Incremental Cost less Firm Tariff) is greater than the previous expansion’s SECC, then: • the Firm Tariff will not change; • the previous expansion’s SECC will not change; and • the expansion’s SECC will equal its Notional SECC. Refer to expansion c of the working example below. 4 For a subsequent expansion, if the expansion’s Notional SECC (being Incremental Cost less Firm Tariff) is less than the immediately previous expansion’s SECC, then the Transporter will apply the following allocation methodology to determine that expansion’s SECC and any change to previous expansions’ SECCs. Assume: • a series of expansions occurred in the order of: expansions a, b, c, d; • each expansion’s SECC are described as SECC(a), SECC(b), SECC(c) and SECC(d); • each expansion’s additional capacity are described as Cap(a), Cap(b), Cap(c) and Cap(d); and • each expansion’s Incremental Cost are described as IC(a), IC(b), IC(c) and IC(d). Step 1: Determine the Excess Contribution (EC) of expansion d () = [( + ()) − ()]×] × () The Excess Contribution of expansion d (EC(d)) represents the contribution which expansion D could be applied towards previous expansions’ Incremental Costs assuming: • expansion d has an SECC equal to SECC(c); and • expansion d’s contribution is first applied towards its own Incremental Cost (i.e. IC(d)). Refer to expansion d of the working example below. For expansion d, EC(d) = [(1.06+0.21)- 0.93]x73 = 24.82 Methodology Reference to Working example in section 3.2 below Step 2: Is the Excess Contribution of expansion d (EC(d)) sufficient to reduce SECC(c) and SECC(d) to the same level as SECC(b)? EC(d ) If  (SECC(c)  − SECC(b)) , then go to Step 3 (Cap(c)  + Cap(d )) OR EC(d ) If  (SECC(c)  − SECC(b)) (Cap(c)  + Cap(d )) then the new SECC(c) and SECC(d) will each equal to: NewSECC (cNewSECC(c) / SECC(d )  = OldSECC(c)  − EC(d ) (Cap(c)  + Cap(d )) Step 3: Is the Excess Contribution of expansion d (EC(d)) sufficient to reduce SECC(b), SECC(c) and SECC(d) to the same level as SECC(a)? EC(d ) If  (SECC(a)  − SECC(c)) , then go to Step 4 (Cap(b)  + Cap(c)  + Cap(d )) OR EC(d ) If  (SECC(a)  − SECC(c)) (Cap(b)  + Cap(c)  + Cap(d )) then the new SECC(b), SECC(c) and SECC(d) will equal: NewSECC (bNewSECC(b) / SECC(c) / SECC(d )  = OldSECC(b)  − EC(d ) (Cap(b)  + Cap(c)  + Cap(d )) Step 4: Further rolling calculations EC(d ) If  (SECC(a)  − SECC(c)) (Cap(b)  + Cap(c)  + Cap(d )) then SECC(a), SECC(b), SECC(c) and SECC(d) will be reduced to an amount below the old SECC(a), towards zero. The calculation methodology for this reduction will be an extrapolation of that applied in Steps 2 and 3 above. If the EC(d) is greater than the quantity required to reduce SECC(a), SECC(b), SECC(c) and SECC(d) to zero, then the calculation methodology will be further extrapolated to reduce the Firm Tariff. Firm Tariff will not be affected by this process unless the Excess Contribution of the Last Expansion is greater than the amount required to reduce all previous expansions’ SECCs to zero. For expansion d 24.82/(73+67) < (0.21-0) which means: New SECC for expansions c and d = 0.21 – 24.82/(73+67) = 0.21 – 0.18 = 0.03 expansion d would not have any impact on SECC of expansions a and b or the Firm Tariff.