Contract analysis

I. Introduction and Purpose Ridgeline Midstream Services LLC ("Ridgeline"), a wholly owned subsidiary of Dunmore Energy Holdings Ltd. ("DEH"), hereby submits this initial settlement offer ("Settlement Offer" or "Version 1.0") to all parties of record in the proceedings pending before the Federal Energy Regulatory Commission ("FERC" or the "Commission") under Docket Nos. RP22-847-000 (Rate Case) and RP22-847-001 (Inte

II. Parties to This Settlement Offer The following is a summary of the parties of record in Docket Nos. RP22-847-000 and RP22-847-001, together with their respective contact and identification information, for reference in the settlement discussions. A. Ridgeline Midstream Services LLC (Applicant) Ridgeline Midstream Services LLC ("Ridgeline") is a limited liability company organized and existing under the laws of th

III. Background and Summary of Filed Positions To provide context for the settlement proposals set forth in Section IV below, this section summarizes the relevant background of the Ridgeline Pipeline System, Ridgeline's filed rate and cost of service, and the positions taken by the intervenors and protestant. A. The Ridgeline Pipeline System The Ridgeline Pipeline System (the "System") is a 187-mile, 24-inch-diameter

IV. Ridgeline's Settlement Proposal In light of the foregoing background and party positions, Ridgeline proposes the following settlement terms for consideration by all parties of record. These terms are intended to address the principal contested issues in these proceedings and to provide a framework for further negotiations. A. Proposed Settlement Rate

1. Recourse Rate Ridgeline proposes a negotiated recourse rate for firm transportation service on the System of $0.2100 per Dth, comprised of the following components: Reservation Charge: $0.2060/Dth Usage Charge: $0.0040/Dth Total Recourse Rate: $0.2100/Dth This proposed settlement rate represents a reduction of $0.0165/Dth from Ridgeline's filed recourse rate of $0.2265/Dth, or an approximately 7.3 percent reductio

2. Moratorium Period Ridgeline proposes a rate moratorium period of three (3) years from the effective date of the settlement rate. During the moratorium period: (a) Ridgeline would not file to increase its recourse rates under Section 4 of the NGA, 15 U.S.C. § 717c; and (b) No party to the settlement agreement would file a complaint under Section 5 of the NGA, 15 U.S.C. § 717d, to reduce Ridgeline's rates during the

3. Rate Design Elements The following rate design elements are proposed as part of the settlement: Rate Design Methodology. The settlement rate would employ a straight fixed-variable ("SFV") rate design, consistent with the Commission's policy for natural gas pipeline rates. Under SFV rate design, all fixed costs, including return on equity, depreciation, and fixed operating costs, are recovered through the reservati

1. Interconnection Configuration Ridgeline proposes the following configuration for the physical interconnection between the Ridgeline Pipeline System and the ATPC system at the Wetzel County Interconnect: Location. The interconnection would be located at the Wetzel County Interconnect, at Milepost 0.0 of the Ridgeline Pipeline System, tying into ATPC's existing 30-inch mainline at ATPC Milepost 412.6. The interconne

2. Cost Allocation The total estimated cost of the interconnection facilities is $22.3 million. This estimate encompasses the meter station, pig launcher/receiver, interconnection piping, SCADA integration, and associated civil and electrical work. For purposes of this settlement, Ridgeline proposes the following modified cost allocation: This proposed allocation represents a meaningful movement from Ridgeline's file

3. Interconnection Agreement Ridgeline proposes to negotiate and execute an Interconnection Agreement with ATPC that would govern the design, construction, operation, and maintenance of the interconnection facilities at the Wetzel County Interconnect. Consistent with Commission requirements, the Interconnection Agreement would be filed with FERC as a rate schedule and would be subject to Commission review and approva

1. General Terms and Conditions Enhancements As part of the settlement, Ridgeline offers to include the following enhancements to the General Terms and Conditions ("GT&C") of its FERC Gas Tariff, Original Volume No. 1: Capacity Release Provisions. Ridgeline would incorporate capacity release provisions consistent with the Commission's capacity release policies, including prearranged deal posting requirements, bidding

2. Items Not Addressed in This Proposal Ridgeline notes that certain tariff provisions require further development and analysis and are not resolved by this Settlement Offer. These items include, but are not limited to: (a) A fuel, lost, and unaccounted-for gas ("FL&U") tracker mechanism, which would provide for periodic adjustments to the FL&U retention percentage based on actual system experience; (b) Creditworthin

V. Basis for Settlement Proposal A. Public Interest Benefits Ridgeline submits that the settlement terms proposed herein serve the public interest for several important reasons. First, settlement of these proceedings would avoid the substantial costs and delays associated with a protracted Track II hearing before ALJ Whitfield. The hearing schedule currently contemplates multiple rounds of direct, answering, and rebu

VI. Proposed Settlement Procedures A. Term Sheet and Definitive Agreement This Version 1.0 constitutes a non-binding settlement offer intended to establish a framework for negotiations among the parties. Nothing in this Settlement Offer creates a binding obligation on Ridgeline or any other party, and no party shall be deemed to have agreed to any term proposed herein unless and until such agreement is reflected in a

VII. Conditions and Reservations This Settlement Offer is submitted subject to the following conditions and reservations:

1. Without Prejudice. This Settlement Offer is made without prejudice to any of Ridgeline's filed positions, testimony, or arguments in the hearing track of these proceedings. Nothing in this Settlement Offer shall be construed as limiting, waiving, or modifying any position taken by Ridgeline in its application, its answer to the ATPC protest, or any testimony or exhibit that Ridgeline may file in the hearing track.

2. No Admission. Nothing in this Settlement Offer constitutes an admission by Ridgeline that its filed recourse rate of $0.2265/Dth, its proposed cost of service, its proposed ROE, its proposed capital structure, its proposed interconnection cost allocation, or any other aspect of its application is unjust, unreasonable, or otherwise deficient. Ridgeline continues to believe that its filed rate and cost of service ar

3. Right to Withdraw or Modify. Ridgeline reserves the right to withdraw, modify, supplement, or supersede this Settlement Offer at any time prior to the execution of a definitive Stipulation and Agreement by all parties. This Settlement Offer shall automatically expire and be of no further force or effect upon the filing of a revised settlement offer (Version 2.0 or later) or upon written notice of withdrawal by Rid

4. Rule 602 Protections. If settlement is not reached in these proceedings, this Settlement Offer, and all discussions, communications, and documents exchanged in connection with the settlement process, shall not be used by any party, FERC Trial Staff, the presiding ALJ, or the Commission in the hearing track or in any other proceeding, consistent with the protections afforded by Rule 602 of the Commission's Rules of

5. Contingent on Unanimous Acceptance and FERC Approval. This Settlement Offer, and any settlement agreement resulting from it, is expressly conditioned on acceptance by all parties of record, including ATPC, MGPC, CMGA, and FERC Trial Staff, and on approval by the Commission. If any party declines to join the settlement, or if the Commission declines to approve the settlement or approves it subject to conditions una

VIII. Conclusion and Contact Information Ridgeline respectfully urges all parties to engage constructively and in good faith at the settlement conference scheduled for November 30, 2022, before Settlement Judge Margolis. Ridgeline believes that the terms proposed in this Settlement Offer provide a reasonable and balanced framework for resolving the contested issues in these proceedings and that a negotiated settlemen