1016-00005 · Dunmore Energy Holdings · Lender Communications

letter-to-noteholders-ferc-update.docx DOCUMENT Finance & Banking

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PRIVILEGED & CONFIDENTIAL

CALDERWOOD & HARKNESS LLP Attorneys at Law

1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7800 Facsimile: (202) 555-7801 www.calderwoodharkness.com

December 16, 2024

Samantha Hu Portfolio Manager Harborview Capital Management LLC 450 Park Avenue, 18th Floor New York, NY 10022

Peter Nowicki Managing Partner Sentinel Ridge Fund LP 301 Commerce Street, Suite 2200 Fort Worth, TX 76102

Re: Ridgeline Midstream Services LLC — Status Update on Federal Energy Regulatory Commission Proceedings, Docket Nos. RP22-847-000 and RP22-847-001; $150,000,000 7.875% Second Lien Senior Secured Notes due 2030

Dear Ms. Hu and Mr. Nowicki:

I. Introduction and Purpose

Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") serves as outside counsel to Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company (Cayman Registry No. CR-381204), and its wholly owned U.S. subsidiary, Ridgeline Midstream Services LLC ("Ridgeline"), a Delaware limited liability company (EIN: 87-4231956), with principal offices at 700 Kanawha Boulevard East, Suite 1400, Charleston, West Virginia 25301. This letter is filed under C&H Matter No. 1016-00005.

The purpose of this letter is to provide a periodic status update on the proceedings pending before the Federal Energy Regulatory Commission ("FERC" or the "Commission") affecting Ridgeline, in connection with the $150,000,000 aggregate principal amount of 7.875% Second Lien Senior Secured Notes due 2030 (the "Notes"), originally issued on September 22, 2021, pursuant to that certain Indenture, dated as of September 22, 2021 (the "Indenture"), between Ridgeline, as Issuer, and Continental Trust Company of Delaware, as Trustee. As you are aware, the Notes are held by Harborview Capital Management LLC ("Harborview") and Sentinel Ridge Fund LP ("Sentinel Ridge" and, together with Harborview, the "Noteholders").

This letter is being provided as a courtesy and informational update at the direction of our clients, DEH and Ridgeline, and is intended solely for the benefit of the Noteholders. Nothing in this letter constitutes, or should be construed as constituting, a legal opinion, officer's certificate, compliance certificate, or any other certification or representation under the Indenture or any related agreement or document. We note, for the avoidance of doubt, that Calderwood & Harkness represents DEH and Ridgeline only in the FERC proceedings and in connection with the matters described herein, and does not represent, and has not been engaged by, either of the Noteholders.

II. Background on the FERC Proceedings

A. Overview of the Ridgeline Pipeline System

Ridgeline owns and operates the Ridgeline Pipeline System (the "System"), a 187-mile, 24-inch-diameter high-pressure natural gas transmission pipeline that extends from the Wetzel County Interconnect in Wetzel County, West Virginia (the receipt point), to the Waynesburg Compressor Station in Greene County, Pennsylvania (the delivery point). The System was placed into service on October 1, 2021, following completion of construction at an original total construction cost of approximately $587.2 million.

The System has a design capacity of 1.2 billion cubic feet per day ("Bcf/d"), equivalent to 1,200,000 dekatherms per day ("Dth/d"). Current throughput on the System is approximately 680 million cubic feet per day ("MMcf/d"), representing approximately 56.7% utilization of the System's design capacity. The System includes three compressor stations — the Wetzel Station, the Mannington Station, and the Waynesburg Station — with aggregate installed compression of 45,000 horsepower. The sole member of Ridgeline is DEH, which holds a 100% membership interest.

B. Nature of the FERC Proceedings

On May 12, 2022, Ridgeline filed an application before FERC seeking two related authorizations:

(a) Approval of an initial tariff rate for interstate transportation service under FERC Gas Tariff, Original Volume No. 1, filed pursuant to Part 284, Subpart G of the Commission's regulations governing open-access transportation service. This application was assigned Docket No. RP22-847-000.

(b) Authorization for physical interconnection with the existing pipeline network of Appalachian Trunk Pipeline Company, LLC ("ATPC"), at the Wetzel County Interconnect. This interconnection application was assigned Docket No. RP22-847-001 and is being processed in conjunction with the tariff rate application in Docket No. RP22-847-000.

Both applications were filed pursuant to the regulatory authority granted under Sections 4, 5, and 7 of the Natural Gas Act, 15 U.S.C. §§ 717c, 717d, and 717f, as well as the Commission's implementing regulations at 18 C.F.R. Parts 154, 157, and 284. Ridgeline's FERC Code is 960442.

C. Filed Rate and Cost of Service (as Originally Filed)

In its original filing, Ridgeline submitted a cost-of-service study supporting its proposed initial recourse rate. The key components of the original filing are summarized as follows:

Rate Base (as filed): $612.40 million, comprised of net plant in service of $563.71 million, a working capital allowance of $18.64 million, accumulated deferred income taxes ("ADIT") of negative $12.45 million, and other rate base items of $42.50 million.

Proposed Return on Equity ("ROE"): 14.00%, based on a discounted cash flow ("DCF") analysis of a proxy group of comparable natural gas pipeline companies, as presented in the testimony of Ridgeline's rate-of-return witness.

Capital Structure: 55% equity and 45% debt, reflecting the actual capitalization of Ridgeline at the time of filing.

Cost of Debt: 5.25%, representing the weighted average cost of the senior secured term loan and the Notes.

Weighted Average Cost of Capital ("WACC"): 10.0625%, calculated as (55% × 14.00%) + (45% × 5.25%).

Total Cost of Service: $97.36 million, inclusive of return on rate base, depreciation, operating and maintenance expenses, administrative and general expenses, taxes (both income and other), and revenue credits.

Proposed Initial Recourse Rate: $0.2265 per Dth, consisting of a reservation component of $0.2223 per Dth and a usage component of $0.0042 per Dth, derived using a 100% load factor applied to billing determinants of 438,000,000 Dth per year (i.e., 1,200,000 Dth/d × 365 days).

D. Interconnection with ATPC

The proposed interconnection with ATPC involves the construction of new facilities at the Wetzel County Interconnect, located at milepost 0.0 of the Ridgeline System. Specifically, the interconnection would require the installation of a new meter station and pig launcher/receiver at the Ridgeline receipt point, tying into ATPC's existing 30-inch mainline at ATPC Milepost 412.6. The total estimated cost of the interconnection facilities is $22.3 million.

In its application, Ridgeline proposed a cost-sharing arrangement under which Ridgeline would bear $7.6 million (34.1%) of the interconnection costs and ATPC would bear $14.7 million (65.9%) of the interconnection costs, based on relative benefits methodology as supported by Ridgeline's engineering testimony. ATPC, a Pennsylvania limited liability company with principal offices at 2200 Penn Center West, Suite 300, Pittsburgh, Pennsylvania 15276, and a subsidiary of Tidewater Infrastructure Partners LP, opposes the proposed cost allocation. ATPC is represented in these proceedings by Kellner, Royce & Dillard LLP, and filed a protest on August 15, 2022, arguing that the costs should be allocated on an equal (50/50) basis. We address the settlement posture with respect to the interconnection cost allocation in Section V below.

III. Procedural History and Current Status

A. Key Procedural Milestones

The proceedings have followed the procedural trajectory summarized below:

May 12, 2022: Ridgeline filed its application and initial tariff in Docket Nos. RP22-847-000 and RP22-847-001.

June 14, 2022: FERC issued a Notice of Filing, establishing an intervention deadline of August 15, 2022, and inviting comments on the application.

July 28, 2022 — August 15, 2022: Three interventions were filed during the intervention period: the Mountainside Gas Producers Coalition ("MGPC") intervened on July 28, 2022; the Clearwater Municipal Gas Authority ("CMGA") intervened on August 1, 2022; and ATPC filed a combined protest and intervention on August 15, 2022, the final day of the intervention period.

September 22, 2022: FERC issued an order granting all interventions, establishing a Track II procedural schedule for the proceedings, and appointing Settlement Judge Howard Margolis to explore the possibility of a negotiated resolution.

November 14, 2022: Administrative Law Judge ("ALJ") Clara Whitfield was appointed to preside over the hearing. A prehearing conference was held on the same date at which the procedural schedule for the hearing was established and discovery protocols were set.

December 5, 2022: Ridgeline filed the direct testimony of seven witnesses, including witnesses on cost of service, rate of return, rate design, engineering, depreciation, operating and maintenance expenses, and the proposed interconnection with ATPC.

January 9, 2023: Answering testimony was filed by ATPC (three witnesses), MGPC (two witnesses), and CMGA (one witness), addressing Ridgeline's proposed tariff rate, ROE, load factor, and interconnection cost allocation.

B. FERC Deficiency Letter and Stay of Proceedings

On January 19, 2023, the FERC Office of Energy Market Regulation issued a Deficiency Letter (the "Deficiency Letter") with respect to Ridgeline's tariff filing. The Deficiency Letter was prepared by Dr. Miriam Okafor, Lead Economic Analyst, and Jonathan Briggs, Lead Trial Attorney, and identified fourteen (14) specific deficiencies in Ridgeline's filing. The deficiency items are as follows:

Item 1: Inadequate support for the proposed ROE, including insufficient analysis of the DCF proxy group composition and the treatment of outliers.

Item 2: Missing fuel, lost, and unaccounted-for gas ("FL&U") tracker mechanism in the proposed tariff.

Item 3: Missing interruptible transportation ("IT") rate derivation and supporting workpapers.

Item 4: Insufficient support for the 100% load factor assumption used in the rate derivation.

Item 5: Missing capacity release provisions as required under 18 C.F.R. § 284.8.

Item 6: Incomplete compliance with the North American Energy Standards Board ("NAESB") Wholesale Gas Quadrant ("WGQ") standards, as required by the Commission's orders.

Item 7: Missing Electronic Bulletin Board ("EBB") posting requirements as required under 18 C.F.R. § 284.13.

Item 8: Inadequate shipper-must-have-title provisions in the General Terms and Conditions of the tariff.

Item 9: Interconnection agreement with ATPC not filed as a rate schedule, as required under 18 C.F.R. § 154.1.

Item 10: No penalty revenue crediting mechanism for scheduling penalties and cashout imbalance revenues.

Item 11: Inadequate creditworthiness provisions, including the absence of an unsecured credit limit methodology.

Item 12: Missing segmentation provisions and flexible receipt and delivery point provisions.

Item 13: No greenhouse gas ("GHG") emission cost recovery provisions, as contemplated by recent Commission policy statements.

Item 14: Failure to address the implications of Order No. 2222 on the pipeline's operations and tariff structure.

On February 6, 2023, ALJ Whitfield issued an order staying the procedural schedule in both Docket Nos. RP22-847-000 and RP22-847-001 pending Ridgeline's response to the Deficiency Letter. On March 15, 2023, Ridgeline filed a partial response addressing eight (8) of the fourteen (14) deficiency items (Items 2, 5, 6, 7, 8, 10, 11, and 12). Ridgeline indicated in its partial response that the remaining six items required additional analysis and the engagement of outside consultants.

C. Extensions and Dormant Status

The procedural history following Ridgeline's partial response has been characterized by a series of extensions, as described below:

April 28, 2023: Ridgeline filed a motion requesting a 120-day extension of time to respond to the remaining deficiency items. The motion was granted by ALJ Whitfield on May 10, 2023, establishing a new deadline of August 28, 2023.

August 25, 2023: Ridgeline filed a second motion requesting an additional 180-day extension, citing the need for its newly retained rate design consultant to complete a comprehensive tariff redesign. ALJ Whitfield granted the motion on September 8, 2023, establishing a new deadline of February 23, 2024. At this time, the status of the proceeding was changed to "dormant" on the FERC docket.

February 20, 2024: Ridgeline filed a third motion requesting a twelve-month extension, representing that the tariff redesign was progressing but required additional time for completion and internal review. ALJ Whitfield granted the motion on March 4, 2024, with conditions, including the requirement that Ridgeline file quarterly status reports with the Commission updating the parties and the presiding judge on the progress of the tariff redesign. The current deadline for filing the redesigned tariff and supplemental testimony is February 21, 2025.

D. Quarterly Status Reports Filed

In compliance with ALJ Whitfield's March 4, 2024 order, Ridgeline has filed quarterly status reports on the following dates:

First quarterly status report: June 15, 2024

Second quarterly status report: September 14, 2024

Third quarterly status report: December 13, 2024 (filed contemporaneously with this letter)

Each quarterly status report has described the progress of the tariff redesign, including summaries of the key revisions to the rate design parameters and the status of the consultant's engagement.

E. Current Proceeding Status

As of the date of this letter, the proceeding remains dormant on the FERC docket. The current deadline for filing the redesigned FERC Gas Tariff, Original Volume No. 1, together with supplemental testimony addressing all fourteen deficiency items, is February 21, 2025. Ridgeline intends to meet this deadline, and the preparation of the redesigned tariff and supplemental testimony is proceeding on schedule, as described in Section IV below.

IV. Tariff Redesign — Current Status

A. Engagement of Braswell Energy Consulting Group

In connection with the comprehensive redesign of the tariff, DEH engaged Braswell Energy Consulting Group LLC ("Braswell"), a Virginia limited liability company based in McLean, Virginia, with offices at 8300 Greensboro Drive, Suite 450, McLean, Virginia 22102, pursuant to an engagement letter dated April 15, 2023, under engagement number BEC-2023-0041. The lead consultant on the engagement is Dr. Raymond Braswell, the firm's founder and president, who previously served as a senior economist at FERC and has extensive experience in natural gas pipeline rate design and tariff proceedings before the Commission. Braswell's scope of work encompasses the comprehensive revision of FERC Gas Tariff, Original Volume No. 1, to address all fourteen deficiency items identified in the Deficiency Letter, as well as the preparation of updated cost-of-service analyses, rate design models, and supporting workpapers.

B. Revised Rate Design Parameters

In the course of the tariff redesign, Ridgeline and Braswell have developed a revised rate design that incorporates several material changes from the original filing, reflecting both the guidance provided in the Deficiency Letter and updated market and financial data. The revised rate design parameters are as follows:

Rate Design Methodology: The original 100% load factor billing determinants have been replaced with a modified fixed-variable rate methodology at a 75% load factor. This change was made in response to Deficiency Item 4 and is intended to more accurately reflect the anticipated utilization of the System.

Revised Billing Determinants: 1,200,000 Dth/d × 365 days × 75% = 328,500,000 Dth per year.

Revised ROE: 12.50%, reduced from the originally proposed 14.00%. The revised ROE is based on an updated DCF proxy group analysis performed as of the third quarter of 2024, reflecting current market conditions and recent Commission precedent regarding the appropriate range of returns for natural gas pipeline companies.

Capital Structure: Unchanged at 55% equity and 45% debt, consistent with Ridgeline's actual capitalization.

Cost of Debt: Unchanged at 5.25%, representing the weighted average cost of the senior secured term loan and the Notes.

Revised WACC: 9.2375%, calculated as (55% × 12.50%) + (45% × 5.25%), a reduction from the originally proposed WACC of 10.0625%.

Revised Return on Rate Base: $56.57 million, calculated as the revised WACC of 9.2375% applied to the rate base of $612.40 million.

Revised Cost-of-Service Components:

• Depreciation expense: $14.68 million

• Updated operating and maintenance expenses: $13.92 million

• Updated administrative and general expenses: $5.14 million

• Taxes other than income: $3.80 million

• Updated income tax allowance: $15.04 million

• Revised revenue credits: ($6.00 million)

Revised Total Cost of Service: $103.15 million, an increase from the original total cost of service of $97.36 million. The increase is attributable primarily to the lower billing determinants (reflecting the shift from 100% to 75% load factor), which results in a higher per-unit rate notwithstanding the reduction in the proposed ROE.

Revised Proposed Recourse Rate: $0.3140 per Dth, consisting of a reservation component of $0.3102 per Dth and a usage component of $0.0038 per Dth.

C. Tariff Drafting Progress

Four successive drafts of the redesigned tariff have been prepared during the period of the proceeding's dormancy:

First Draft (August 2023): Initial draft prepared by Braswell, incorporating preliminary responses to the deficiency items and establishing the framework for the revised tariff structure.

Second Draft (January 2024): Revised draft incorporating feedback from Ridgeline's internal legal and regulatory teams and further development of the FL&U tracker mechanism, IT rate derivation, and NAESB compliance provisions.

Third Draft (June 2024): Substantially revised draft reflecting the updated rate design parameters (including the shift to 75% load factor and revised ROE of 12.50%) and incorporating additional tariff provisions addressing capacity release, EBB posting requirements, creditworthiness, and segmentation.

Fourth Draft (November 2024): Near-final draft addressing all fourteen deficiency items identified in the Deficiency Letter. This draft includes, among other provisions, the FL&U tracker mechanism, IT rate derivation, capacity release provisions, NAESB WGQ Version 3.2 compliance, EBB posting requirements, creditworthiness provisions (including an unsecured credit limit methodology), segmentation and flexible receipt and delivery point provisions, a GHG cost recovery tracker, and provisions addressing Order No. 2222 implications. This fourth draft is undergoing final internal review and is expected to be filed, subject to any further revisions arising from that review, on or before the February 21, 2025 deadline.

In addition to the tariff itself, supplemental pre-filed testimony is being prepared by two witnesses for filing on or before February 21, 2025: Dr. Natasha Orlov, Director of Rates & Regulatory at Ridgeline, who will testify regarding the revised rate design, cost of service, and tariff structure; and Angela Moretti, Vice President of Finance & Treasurer at Ridgeline, who will provide updated financial testimony addressing the revised capital structure, cost of capital, and financial projections.

V. Settlement Discussions

Settlement discussions have been conducted under the auspices of Settlement Judge Howard Margolis, as contemplated by the Commission's September 22, 2022 order. To date, four settlement conferences have been held:

First settlement conference: November 30, 2022

Second settlement conference: March 8, 2023

Third settlement conference: July 12, 2023

Fourth settlement conference: January 18, 2024

No settlement has been reached to date. The principal points of disagreement among the parties are as follows:

(1) Return on Equity. The parties remain divided on the appropriate ROE. ATPC has proposed an ROE of 10.75%, contending that Ridgeline's credit risk and operational profile do not justify a return at the higher end of recent Commission-approved ranges. MGPC has proposed an ROE of 11.25%, while Ridgeline maintains its revised proposal of 12.50%. The spread between the lowest and highest proposals (10.75% to 12.50%, or 175 basis points) has narrowed somewhat from the original filing (in which Ridgeline proposed 14.00%), but remains a significant obstacle to settlement.

(2) Interconnection Cost Allocation. ATPC continues to advocate for a 50/50 allocation of the $22.3 million interconnection facility costs, which would result in each party bearing approximately $11.15 million. Ridgeline maintains its proposed allocation of 34.1% to Ridgeline ($7.6 million) and 65.9% to ATPC ($14.7 million), based on relative benefits.

(3) Load Factor. Intervenors ATPC and MGPC advocate for the use of an 85% or higher load factor in the rate derivation, which would result in a lower per-unit recourse rate. Ridgeline proposes a 75% load factor, which it contends more accurately reflects the anticipated utilization of the System given current market conditions and contractual commitments.

Taking these differences into account, the parties remain approximately $0.058 per Dth apart on the ultimate recourse rate, with ATPC and MGPC's implied ceiling at approximately $0.2560 per Dth and Ridgeline's floor at $0.3140 per Dth. Settlement discussions are expected to continue in parallel with the resumed hearing following Ridgeline's filing of the redesigned tariff and supplemental testimony.

VI. Relevance to the Notes

A. Notes Overview

As noted above, Ridgeline issued $150,000,000 aggregate principal amount of 7.875% Second Lien Senior Secured Notes due 2030 on September 22, 2021, pursuant to the Indenture. The Notes are secured by a second-priority lien on substantially all assets of Ridgeline, including the Ridgeline Pipeline System, the compressor stations, and related equipment, easements, rights-of-way, and permits. The Notes rank junior in right of payment and lien priority to the obligations outstanding under the Senior Secured Credit Facility, dated September 15, 2021, among Ridgeline, as Borrower, Pinnacle National Bank, N.A., as Administrative Agent, and Granite Trust Company and Lakeshore Capital Bank, as Syndicate Lenders (the "Senior Secured Credit Facility"). The Senior Secured Credit Facility consists of a $400 million senior secured term loan and a $75 million revolving credit facility. As of December 31, 2024, the outstanding balance under the senior secured term loan is $362.8 million.

B. Impact of Proceeding Status

The outcome of the FERC proceedings will determine Ridgeline's approved tariff rate for firm interstate transportation service under its FERC Gas Tariff, which directly affects the revenue profile and long-term financial performance of the Ridgeline Pipeline System. Because the tariff rate establishes the recourse rate applicable to future firm transportation service agreements, the resolution of the proceedings is of material significance to the value of the Notes and the collateral securing them.

It is important to note, however, that the current dormant status of the proceeding does not impair Ridgeline's ongoing operations. Ridgeline continues to provide transportation service at current contracted rates under its existing transportation service agreements, and the System continues to operate at approximately 56.7% utilization. The dormant status of the FERC proceeding pertains to the regulatory approval of Ridgeline's tariff rate and does not affect Ridgeline's authorization to operate the System or to provide transportation service.

Ridgeline's current throughput of approximately 680 MMcf/d generates revenue that is sufficient to service both the Senior Secured Credit Facility and the Notes. We understand from management that Ridgeline remains current on all scheduled interest payments under the Notes and all principal and interest payments under the Senior Secured Credit Facility, and that no event of default or potential event of default exists under either facility as of the date of this letter.

The redesigned tariff, once approved by FERC, would establish the recourse rate applicable to future firm transportation service agreements and would govern the rates, terms, and conditions of open-access transportation service on the Ridgeline Pipeline System going forward.

C. Financial Position

For the Noteholders' reference, we provide the following summary of the financial position of DEH and Ridgeline, based on information provided to us by management:

Original construction cost of the Ridgeline Pipeline System: $587.2 million.

Financing sources for construction: $400 million senior secured term loan, $150 million Second Lien Notes, and $37.2 million equity contribution by DEH.

DEH consolidated annual revenue for the fiscal year ended December 31, 2023: approximately $485 million.

DEH estimated enterprise value: approximately $2.8 billion, based on an internal valuation as of December 31, 2023. We note that this figure has not been independently verified by Calderwood & Harkness and is provided for informational purposes only.

Patricia Dunmore, Founder and Chairperson of DEH, holds a 72% controlling equity interest in DEH.

VII. Anticipated Next Steps and Timeline

Looking ahead, the principal milestones and anticipated next steps in the FERC proceedings are as follows:

February 21, 2025: Filing deadline for the redesigned FERC Gas Tariff, Original Volume No. 1, and supplemental testimony in Docket Nos. RP22-847-000 and RP22-847-001. Ridgeline intends to meet this deadline, and the fourth draft of the revised tariff is currently undergoing final internal review.

Post-Filing Resumption of Hearing: Following the filing of the redesigned tariff and supplemental testimony, Ridgeline anticipates that ALJ Whitfield will lift the stay of proceedings and re-establish a Track II procedural schedule for the resumed hearing, including deadlines for answering testimony, rebuttal testimony, and an evidentiary hearing. Calderwood & Harkness submitted a proposed procedural schedule to ALJ Whitfield in a November 2024 letter, which contemplated answering testimony approximately 60 days following the filing and an evidentiary hearing in the third or fourth quarter of 2025.

Continued Settlement Discussions: Settlement discussions are expected to continue in parallel with the resumed hearing. The parties have expressed a willingness to continue negotiations under the supervision of Settlement Judge Margolis.

Quarterly Status Reports: Ridgeline will continue to file quarterly status reports with FERC as required under ALJ Whitfield's March 4, 2024 order, for so long as such reports remain required.

Updates to Noteholders: Calderwood & Harkness will provide the Noteholders with further updates as material developments occur in the proceedings, at the direction of DEH and Ridgeline.

VIII. Disclaimer and Limitations

We wish to reiterate the following important limitations and disclaimers with respect to this letter:

This letter is provided for informational purposes only and does not constitute a legal opinion, officer's certificate, compliance certificate, or any other certification, warranty, or representation under the Indenture, the Senior Secured Credit Facility, or any other agreement, instrument, or document.

Calderwood & Harkness represents DEH and Ridgeline only in connection with the FERC proceedings and the matters described herein. Calderwood & Harkness does not represent, and has not been engaged by, either of the Noteholders or any other holder of the Notes or any interest therein. The Noteholders are encouraged to consult their own legal, financial, and tax advisors regarding the implications of the FERC proceedings for their investment in the Notes.

This letter contains confidential information shared at the direction of our clients for informational purposes. Certain information contained herein may be subject to the attorney-client privilege and/or the work product doctrine. By providing this letter, neither DEH nor Ridgeline intends to waive any applicable privilege or protection. The Noteholders are requested to treat the contents of this letter as confidential and not to disclose or distribute this letter, or any portion thereof, to any third party without the prior written consent of Calderwood & Harkness, except as may be required by applicable law or regulation.

No assurance can be given as to the timing or outcome of the FERC proceedings, including without limitation the final tariff rate that may be approved by the Commission, the resolution of the interconnection cost allocation dispute, or the prospects for settlement. The FERC proceedings involve complex regulatory, legal, and economic issues, and the ultimate outcome is subject to the discretion of the Commission and the presiding ALJ.

We trust this update is helpful. Please do not hesitate to contact the undersigned or Brett Callahan (lead associate, direct line: (202) 555-7823, brett.callahan@calderwoodharkness.com) should you have any questions or wish to discuss any aspect of the proceedings in greater detail.

Sincerely,

CALDERWOOD & HARKNESS LLP

By: ________

George Trujillo, Partner 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7812

Email: george.trujillo@calderwoodharkness.com

cc:

Patricia Dunmore, Chairperson, Dunmore Energy Holdings Ltd.

James K. Winfield, Chief Executive Officer & President, Ridgeline Midstream Services LLC

Angela Moretti, Vice President of Finance & Treasurer, Ridgeline Midstream Services LLC

Brett Callahan, Calderwood & Harkness LLP

David Stanton, Calderwood & Harkness LLP

PRIVILEGED & CONFIDENTIAL
CALDERWOOD & HARKNESS LLP Attorneys at Law
1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7800 Facsimile: (202) 555-7801 www.calderwoodharkness.com
December 16, 2024
Samantha Hu Portfolio Manager Harborview Capital Management LLC 450 Park Avenue, 18th Floor New York, NY 10022
Peter Nowicki Managing Partner Sentinel Ridge Fund LP 301 Commerce Street, Suite 2200 Fort Worth, TX 76102
Re: Ridgeline Midstream Services LLC — Status Update on Federal Energy Regulatory Commission Proceedings, Docket Nos. RP22-847-000 and RP22-847-001; $150,000,000 7.875% Second Lien Senior Secured Notes due 2030
Dear Ms. Hu and Mr. Nowicki:
I. Introduction and Purpose
Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H") serves as outside counsel to Dunmore Energy Holdings Ltd. ("DEH"), a Cayman Islands exempted limited company (Cayman Registry No. CR-381204), and its wholly owned U.S. subsidiary, Ridgeline Midstream Services LLC ("Ridgeline"), a Delaware limited liability company (EIN: 87-4231956), with principal offices at 700 Kanawha Boulevard East, Suite 1400, Charleston, West Virginia 25301. This letter is filed under C&H Matter No. 1016-00005.
The purpose of this letter is to provide a periodic status update on the proceedings pending before the Federal Energy Regulatory Commission ("FERC" or the "Commission") affecting Ridgeline, in connection with the $150,000,000 aggregate principal amount of 7.875% Second Lien Senior Secured Notes due 2030 (the "Notes"), originally issued on September 22, 2021, pursuant to that certain Indenture, dated as of September 22, 2021 (the "Indenture"), between Ridgeline, as Issuer, and Continental Trust Company of Delaware, as Trustee. As you are aware, the Notes are held by Harborview Capital Management LLC ("Harborview") and Sentinel Ridge Fund LP ("Sentinel Ridge" and, together with Harborview, the "Noteholders").
This letter is being provided as a courtesy and informational update at the direction of our clients, DEH and Ridgeline, and is intended solely for the benefit of the Noteholders. Nothing in this letter constitutes, or should be construed as constituting, a legal opinion, officer's certificate, compliance certificate, or any other certification or representation under the Indenture or any related agreement or document. We note, for the avoidance of doubt, that Calderwood & Harkness represents DEH and Ridgeline only in the FERC proceedings and in connection with the matters described herein, and does not represent, and has not been engaged by, either of the Noteholders.
II. Background on the FERC Proceedings
A. Overview of the Ridgeline Pipeline System
Ridgeline owns and operates the Ridgeline Pipeline System (the "System"), a 187-mile, 24-inch-diameter high-pressure natural gas transmission pipeline that extends from the Wetzel County Interconnect in Wetzel County, West Virginia (the receipt point), to the Waynesburg Compressor Station in Greene County, Pennsylvania (the delivery point). The System was placed into service on October 1, 2021, following completion of construction at an original total construction cost of approximately $587.2 million.
The System has a design capacity of 1.2 billion cubic feet per day ("Bcf/d"), equivalent to 1,200,000 dekatherms per day ("Dth/d"). Current throughput on the System is approximately 680 million cubic feet per day ("MMcf/d"), representing approximately 56.7% utilization of the System's design capacity. The System includes three compressor stations — the Wetzel Station, the Mannington Station, and the Waynesburg Station — with aggregate installed compression of 45,000 horsepower. The sole member of Ridgeline is DEH, which holds a 100% membership interest.
B. Nature of the FERC Proceedings
On May 12, 2022, Ridgeline filed an application before FERC seeking two related authorizations:
(a) Approval of an initial tariff rate for interstate transportation service under FERC Gas Tariff, Original Volume No. 1, filed pursuant to Part 284, Subpart G of the Commission's regulations governing open-access transportation service. This application was assigned Docket No. RP22-847-000.
(b) Authorization for physical interconnection with the existing pipeline network of Appalachian Trunk Pipeline Company, LLC ("ATPC"), at the Wetzel County Interconnect. This interconnection application was assigned Docket No. RP22-847-001 and is being processed in conjunction with the tariff rate application in Docket No. RP22-847-000.
Both applications were filed pursuant to the regulatory authority granted under Sections 4, 5, and 7 of the Natural Gas Act, 15 U.S.C. §§ 717c, 717d, and 717f, as well as the Commission's implementing regulations at 18 C.F.R. Parts 154, 157, and 284. Ridgeline's FERC Code is 960442.
C. Filed Rate and Cost of Service (as Originally Filed)
In its original filing, Ridgeline submitted a cost-of-service study supporting its proposed initial recourse rate. The key components of the original filing are summarized as follows:
Rate Base (as filed): $612.40 million, comprised of net plant in service of $563.71 million, a working capital allowance of $18.64 million, accumulated deferred income taxes ("ADIT") of negative $12.45 million, and other rate base items of $42.50 million.
Proposed Return on Equity ("ROE"): 14.00%, based on a discounted cash flow ("DCF") analysis of a proxy group of comparable natural gas pipeline companies, as presented in the testimony of Ridgeline's rate-of-return witness.
Capital Structure: 55% equity and 45% debt, reflecting the actual capitalization of Ridgeline at the time of filing.
Cost of Debt: 5.25%, representing the weighted average cost of the senior secured term loan and the Notes.
Weighted Average Cost of Capital ("WACC"): 10.0625%, calculated as (55% × 14.00%) + (45% × 5.25%).
Total Cost of Service: $97.36 million, inclusive of return on rate base, depreciation, operating and maintenance expenses, administrative and general expenses, taxes (both income and other), and revenue credits.
Proposed Initial Recourse Rate: $0.2265 per Dth, consisting of a reservation component of $0.2223 per Dth and a usage component of $0.0042 per Dth, derived using a 100% load factor applied to billing determinants of 438,000,000 Dth per year (i.e., 1,200,000 Dth/d × 365 days).
D. Interconnection with ATPC
The proposed interconnection with ATPC involves the construction of new facilities at the Wetzel County Interconnect, located at milepost 0.0 of the Ridgeline System. Specifically, the interconnection would require the installation of a new meter station and pig launcher/receiver at the Ridgeline receipt point, tying into ATPC's existing 30-inch mainline at ATPC Milepost 412.6. The total estimated cost of the interconnection facilities is $22.3 million.
In its application, Ridgeline proposed a cost-sharing arrangement under which Ridgeline would bear $7.6 million (34.1%) of the interconnection costs and ATPC would bear $14.7 million (65.9%) of the interconnection costs, based on relative benefits methodology as supported by Ridgeline's engineering testimony. ATPC, a Pennsylvania limited liability company with principal offices at 2200 Penn Center West, Suite 300, Pittsburgh, Pennsylvania 15276, and a subsidiary of Tidewater Infrastructure Partners LP, opposes the proposed cost allocation. ATPC is represented in these proceedings by Kellner, Royce & Dillard LLP, and filed a protest on August 15, 2022, arguing that the costs should be allocated on an equal (50/50) basis. We address the settlement posture with respect to the interconnection cost allocation in Section V below.
III. Procedural History and Current Status
A. Key Procedural Milestones
The proceedings have followed the procedural trajectory summarized below:
May 12, 2022: Ridgeline filed its application and initial tariff in Docket Nos. RP22-847-000 and RP22-847-001.
June 14, 2022: FERC issued a Notice of Filing, establishing an intervention deadline of August 15, 2022, and inviting comments on the application.
July 28, 2022 — August 15, 2022: Three interventions were filed during the intervention period: the Mountainside Gas Producers Coalition ("MGPC") intervened on July 28, 2022; the Clearwater Municipal Gas Authority ("CMGA") intervened on August 1, 2022; and ATPC filed a combined protest and intervention on August 15, 2022, the final day of the intervention period.
September 22, 2022: FERC issued an order granting all interventions, establishing a Track II procedural schedule for the proceedings, and appointing Settlement Judge Howard Margolis to explore the possibility of a negotiated resolution.
November 14, 2022: Administrative Law Judge ("ALJ") Clara Whitfield was appointed to preside over the hearing. A prehearing conference was held on the same date at which the procedural schedule for the hearing was established and discovery protocols were set.
December 5, 2022: Ridgeline filed the direct testimony of seven witnesses, including witnesses on cost of service, rate of return, rate design, engineering, depreciation, operating and maintenance expenses, and the proposed interconnection with ATPC.
January 9, 2023: Answering testimony was filed by ATPC (three witnesses), MGPC (two witnesses), and CMGA (one witness), addressing Ridgeline's proposed tariff rate, ROE, load factor, and interconnection cost allocation.
B. FERC Deficiency Letter and Stay of Proceedings
On January 19, 2023, the FERC Office of Energy Market Regulation issued a Deficiency Letter (the "Deficiency Letter") with respect to Ridgeline's tariff filing. The Deficiency Letter was prepared by Dr. Miriam Okafor, Lead Economic Analyst, and Jonathan Briggs, Lead Trial Attorney, and identified fourteen (14) specific deficiencies in Ridgeline's filing. The deficiency items are as follows:
Item 1: Inadequate support for the proposed ROE, including insufficient analysis of the DCF proxy group composition and the treatment of outliers.
Item 2: Missing fuel, lost, and unaccounted-for gas ("FL&U") tracker mechanism in the proposed tariff.
Item 3: Missing interruptible transportation ("IT") rate derivation and supporting workpapers.
Item 4: Insufficient support for the 100% load factor assumption used in the rate derivation.
Item 5: Missing capacity release provisions as required under 18 C.F.R. § 284.8.
Item 6: Incomplete compliance with the North American Energy Standards Board ("NAESB") Wholesale Gas Quadrant ("WGQ") standards, as required by the Commission's orders.
Item 7: Missing Electronic Bulletin Board ("EBB") posting requirements as required under 18 C.F.R. § 284.13.
Item 8: Inadequate shipper-must-have-title provisions in the General Terms and Conditions of the tariff.
Item 9: Interconnection agreement with ATPC not filed as a rate schedule, as required under 18 C.F.R. § 154.1.
Item 10: No penalty revenue crediting mechanism for scheduling penalties and cashout imbalance revenues.
Item 11: Inadequate creditworthiness provisions, including the absence of an unsecured credit limit methodology.
Item 12: Missing segmentation provisions and flexible receipt and delivery point provisions.
Item 13: No greenhouse gas ("GHG") emission cost recovery provisions, as contemplated by recent Commission policy statements.
Item 14: Failure to address the implications of Order No. 2222 on the pipeline's operations and tariff structure.
On February 6, 2023, ALJ Whitfield issued an order staying the procedural schedule in both Docket Nos. RP22-847-000 and RP22-847-001 pending Ridgeline's response to the Deficiency Letter. On March 15, 2023, Ridgeline filed a partial response addressing eight (8) of the fourteen (14) deficiency items (Items 2, 5, 6, 7, 8, 10, 11, and 12). Ridgeline indicated in its partial response that the remaining six items required additional analysis and the engagement of outside consultants.
C. Extensions and Dormant Status
The procedural history following Ridgeline's partial response has been characterized by a series of extensions, as described below:
April 28, 2023: Ridgeline filed a motion requesting a 120-day extension of time to respond to the remaining deficiency items. The motion was granted by ALJ Whitfield on May 10, 2023, establishing a new deadline of August 28, 2023.
August 25, 2023: Ridgeline filed a second motion requesting an additional 180-day extension, citing the need for its newly retained rate design consultant to complete a comprehensive tariff redesign. ALJ Whitfield granted the motion on September 8, 2023, establishing a new deadline of February 23, 2024. At this time, the status of the proceeding was changed to "dormant" on the FERC docket.
February 20, 2024: Ridgeline filed a third motion requesting a twelve-month extension, representing that the tariff redesign was progressing but required additional time for completion and internal review. ALJ Whitfield granted the motion on March 4, 2024, with conditions, including the requirement that Ridgeline file quarterly status reports with the Commission updating the parties and the presiding judge on the progress of the tariff redesign. The current deadline for filing the redesigned tariff and supplemental testimony is February 21, 2025.
D. Quarterly Status Reports Filed
In compliance with ALJ Whitfield's March 4, 2024 order, Ridgeline has filed quarterly status reports on the following dates:
First quarterly status report: June 15, 2024
Second quarterly status report: September 14, 2024
Third quarterly status report: December 13, 2024 (filed contemporaneously with this letter)
Each quarterly status report has described the progress of the tariff redesign, including summaries of the key revisions to the rate design parameters and the status of the consultant's engagement.
E. Current Proceeding Status
As of the date of this letter, the proceeding remains dormant on the FERC docket. The current deadline for filing the redesigned FERC Gas Tariff, Original Volume No. 1, together with supplemental testimony addressing all fourteen deficiency items, is February 21, 2025. Ridgeline intends to meet this deadline, and the preparation of the redesigned tariff and supplemental testimony is proceeding on schedule, as described in Section IV below.
IV. Tariff Redesign — Current Status
A. Engagement of Braswell Energy Consulting Group
In connection with the comprehensive redesign of the tariff, DEH engaged Braswell Energy Consulting Group LLC ("Braswell"), a Virginia limited liability company based in McLean, Virginia, with offices at 8300 Greensboro Drive, Suite 450, McLean, Virginia 22102, pursuant to an engagement letter dated April 15, 2023, under engagement number BEC-2023-0041. The lead consultant on the engagement is Dr. Raymond Braswell, the firm's founder and president, who previously served as a senior economist at FERC and has extensive experience in natural gas pipeline rate design and tariff proceedings before the Commission. Braswell's scope of work encompasses the comprehensive revision of FERC Gas Tariff, Original Volume No. 1, to address all fourteen deficiency items identified in the Deficiency Letter, as well as the preparation of updated cost-of-service analyses, rate design models, and supporting workpapers.
B. Revised Rate Design Parameters
In the course of the tariff redesign, Ridgeline and Braswell have developed a revised rate design that incorporates several material changes from the original filing, reflecting both the guidance provided in the Deficiency Letter and updated market and financial data. The revised rate design parameters are as follows:
Rate Design Methodology: The original 100% load factor billing determinants have been replaced with a modified fixed-variable rate methodology at a 75% load factor. This change was made in response to Deficiency Item 4 and is intended to more accurately reflect the anticipated utilization of the System.
Revised Billing Determinants: 1,200,000 Dth/d × 365 days × 75% = 328,500,000 Dth per year.
Revised ROE: 12.50%, reduced from the originally proposed 14.00%. The revised ROE is based on an updated DCF proxy group analysis performed as of the third quarter of 2024, reflecting current market conditions and recent Commission precedent regarding the appropriate range of returns for natural gas pipeline companies.
Capital Structure: Unchanged at 55% equity and 45% debt, consistent with Ridgeline's actual capitalization.
Cost of Debt: Unchanged at 5.25%, representing the weighted average cost of the senior secured term loan and the Notes.
Revised WACC: 9.2375%, calculated as (55% × 12.50%) + (45% × 5.25%), a reduction from the originally proposed WACC of 10.0625%.
Revised Return on Rate Base: $56.57 million, calculated as the revised WACC of 9.2375% applied to the rate base of $612.40 million.
Revised Cost-of-Service Components:
• Depreciation expense: $14.68 million
• Updated operating and maintenance expenses: $13.92 million
• Updated administrative and general expenses: $5.14 million
• Taxes other than income: $3.80 million
• Updated income tax allowance: $15.04 million
• Revised revenue credits: ($6.00 million)
Revised Total Cost of Service: $103.15 million, an increase from the original total cost of service of $97.36 million. The increase is attributable primarily to the lower billing determinants (reflecting the shift from 100% to 75% load factor), which results in a higher per-unit rate notwithstanding the reduction in the proposed ROE.
Revised Proposed Recourse Rate: $0.3140 per Dth, consisting of a reservation component of $0.3102 per Dth and a usage component of $0.0038 per Dth.
C. Tariff Drafting Progress
Four successive drafts of the redesigned tariff have been prepared during the period of the proceeding's dormancy:
First Draft (August 2023): Initial draft prepared by Braswell, incorporating preliminary responses to the deficiency items and establishing the framework for the revised tariff structure.
Second Draft (January 2024): Revised draft incorporating feedback from Ridgeline's internal legal and regulatory teams and further development of the FL&U tracker mechanism, IT rate derivation, and NAESB compliance provisions.
Third Draft (June 2024): Substantially revised draft reflecting the updated rate design parameters (including the shift to 75% load factor and revised ROE of 12.50%) and incorporating additional tariff provisions addressing capacity release, EBB posting requirements, creditworthiness, and segmentation.
Fourth Draft (November 2024): Near-final draft addressing all fourteen deficiency items identified in the Deficiency Letter. This draft includes, among other provisions, the FL&U tracker mechanism, IT rate derivation, capacity release provisions, NAESB WGQ Version 3.2 compliance, EBB posting requirements, creditworthiness provisions (including an unsecured credit limit methodology), segmentation and flexible receipt and delivery point provisions, a GHG cost recovery tracker, and provisions addressing Order No. 2222 implications. This fourth draft is undergoing final internal review and is expected to be filed, subject to any further revisions arising from that review, on or before the February 21, 2025 deadline.
In addition to the tariff itself, supplemental pre-filed testimony is being prepared by two witnesses for filing on or before February 21, 2025: Dr. Natasha Orlov, Director of Rates & Regulatory at Ridgeline, who will testify regarding the revised rate design, cost of service, and tariff structure; and Angela Moretti, Vice President of Finance & Treasurer at Ridgeline, who will provide updated financial testimony addressing the revised capital structure, cost of capital, and financial projections.
V. Settlement Discussions
Settlement discussions have been conducted under the auspices of Settlement Judge Howard Margolis, as contemplated by the Commission's September 22, 2022 order. To date, four settlement conferences have been held:
First settlement conference: November 30, 2022
Second settlement conference: March 8, 2023
Third settlement conference: July 12, 2023
Fourth settlement conference: January 18, 2024
No settlement has been reached to date. The principal points of disagreement among the parties are as follows:
(1) Return on Equity. The parties remain divided on the appropriate ROE. ATPC has proposed an ROE of 10.75%, contending that Ridgeline's credit risk and operational profile do not justify a return at the higher end of recent Commission-approved ranges. MGPC has proposed an ROE of 11.25%, while Ridgeline maintains its revised proposal of 12.50%. The spread between the lowest and highest proposals (10.75% to 12.50%, or 175 basis points) has narrowed somewhat from the original filing (in which Ridgeline proposed 14.00%), but remains a significant obstacle to settlement.
(2) Interconnection Cost Allocation. ATPC continues to advocate for a 50/50 allocation of the $22.3 million interconnection facility costs, which would result in each party bearing approximately $11.15 million. Ridgeline maintains its proposed allocation of 34.1% to Ridgeline ($7.6 million) and 65.9% to ATPC ($14.7 million), based on relative benefits.
(3) Load Factor. Intervenors ATPC and MGPC advocate for the use of an 85% or higher load factor in the rate derivation, which would result in a lower per-unit recourse rate. Ridgeline proposes a 75% load factor, which it contends more accurately reflects the anticipated utilization of the System given current market conditions and contractual commitments.
Taking these differences into account, the parties remain approximately $0.058 per Dth apart on the ultimate recourse rate, with ATPC and MGPC's implied ceiling at approximately $0.2560 per Dth and Ridgeline's floor at $0.3140 per Dth. Settlement discussions are expected to continue in parallel with the resumed hearing following Ridgeline's filing of the redesigned tariff and supplemental testimony.
VI. Relevance to the Notes
A. Notes Overview
As noted above, Ridgeline issued $150,000,000 aggregate principal amount of 7.875% Second Lien Senior Secured Notes due 2030 on September 22, 2021, pursuant to the Indenture. The Notes are secured by a second-priority lien on substantially all assets of Ridgeline, including the Ridgeline Pipeline System, the compressor stations, and related equipment, easements, rights-of-way, and permits. The Notes rank junior in right of payment and lien priority to the obligations outstanding under the Senior Secured Credit Facility, dated September 15, 2021, among Ridgeline, as Borrower, Pinnacle National Bank, N.A., as Administrative Agent, and Granite Trust Company and Lakeshore Capital Bank, as Syndicate Lenders (the "Senior Secured Credit Facility"). The Senior Secured Credit Facility consists of a $400 million senior secured term loan and a $75 million revolving credit facility. As of December 31, 2024, the outstanding balance under the senior secured term loan is $362.8 million.
B. Impact of Proceeding Status
The outcome of the FERC proceedings will determine Ridgeline's approved tariff rate for firm interstate transportation service under its FERC Gas Tariff, which directly affects the revenue profile and long-term financial performance of the Ridgeline Pipeline System. Because the tariff rate establishes the recourse rate applicable to future firm transportation service agreements, the resolution of the proceedings is of material significance to the value of the Notes and the collateral securing them.
It is important to note, however, that the current dormant status of the proceeding does not impair Ridgeline's ongoing operations. Ridgeline continues to provide transportation service at current contracted rates under its existing transportation service agreements, and the System continues to operate at approximately 56.7% utilization. The dormant status of the FERC proceeding pertains to the regulatory approval of Ridgeline's tariff rate and does not affect Ridgeline's authorization to operate the System or to provide transportation service.
Ridgeline's current throughput of approximately 680 MMcf/d generates revenue that is sufficient to service both the Senior Secured Credit Facility and the Notes. We understand from management that Ridgeline remains current on all scheduled interest payments under the Notes and all principal and interest payments under the Senior Secured Credit Facility, and that no event of default or potential event of default exists under either facility as of the date of this letter.
The redesigned tariff, once approved by FERC, would establish the recourse rate applicable to future firm transportation service agreements and would govern the rates, terms, and conditions of open-access transportation service on the Ridgeline Pipeline System going forward.
C. Financial Position
For the Noteholders' reference, we provide the following summary of the financial position of DEH and Ridgeline, based on information provided to us by management:
Original construction cost of the Ridgeline Pipeline System: $587.2 million.
Financing sources for construction: $400 million senior secured term loan, $150 million Second Lien Notes, and $37.2 million equity contribution by DEH.
DEH consolidated annual revenue for the fiscal year ended December 31, 2023: approximately $485 million.
DEH estimated enterprise value: approximately $2.8 billion, based on an internal valuation as of December 31, 2023. We note that this figure has not been independently verified by Calderwood & Harkness and is provided for informational purposes only.
Patricia Dunmore, Founder and Chairperson of DEH, holds a 72% controlling equity interest in DEH.
VII. Anticipated Next Steps and Timeline
Looking ahead, the principal milestones and anticipated next steps in the FERC proceedings are as follows:
February 21, 2025: Filing deadline for the redesigned FERC Gas Tariff, Original Volume No. 1, and supplemental testimony in Docket Nos. RP22-847-000 and RP22-847-001. Ridgeline intends to meet this deadline, and the fourth draft of the revised tariff is currently undergoing final internal review.
Post-Filing Resumption of Hearing: Following the filing of the redesigned tariff and supplemental testimony, Ridgeline anticipates that ALJ Whitfield will lift the stay of proceedings and re-establish a Track II procedural schedule for the resumed hearing, including deadlines for answering testimony, rebuttal testimony, and an evidentiary hearing. Calderwood & Harkness submitted a proposed procedural schedule to ALJ Whitfield in a November 2024 letter, which contemplated answering testimony approximately 60 days following the filing and an evidentiary hearing in the third or fourth quarter of 2025.
Continued Settlement Discussions: Settlement discussions are expected to continue in parallel with the resumed hearing. The parties have expressed a willingness to continue negotiations under the supervision of Settlement Judge Margolis.
Quarterly Status Reports: Ridgeline will continue to file quarterly status reports with FERC as required under ALJ Whitfield's March 4, 2024 order, for so long as such reports remain required.
Updates to Noteholders: Calderwood & Harkness will provide the Noteholders with further updates as material developments occur in the proceedings, at the direction of DEH and Ridgeline.
VIII. Disclaimer and Limitations
We wish to reiterate the following important limitations and disclaimers with respect to this letter:
This letter is provided for informational purposes only and does not constitute a legal opinion, officer's certificate, compliance certificate, or any other certification, warranty, or representation under the Indenture, the Senior Secured Credit Facility, or any other agreement, instrument, or document.
Calderwood & Harkness represents DEH and Ridgeline only in connection with the FERC proceedings and the matters described herein. Calderwood & Harkness does not represent, and has not been engaged by, either of the Noteholders or any other holder of the Notes or any interest therein. The Noteholders are encouraged to consult their own legal, financial, and tax advisors regarding the implications of the FERC proceedings for their investment in the Notes.
This letter contains confidential information shared at the direction of our clients for informational purposes. Certain information contained herein may be subject to the attorney-client privilege and/or the work product doctrine. By providing this letter, neither DEH nor Ridgeline intends to waive any applicable privilege or protection. The Noteholders are requested to treat the contents of this letter as confidential and not to disclose or distribute this letter, or any portion thereof, to any third party without the prior written consent of Calderwood & Harkness, except as may be required by applicable law or regulation.
No assurance can be given as to the timing or outcome of the FERC proceedings, including without limitation the final tariff rate that may be approved by the Commission, the resolution of the interconnection cost allocation dispute, or the prospects for settlement. The FERC proceedings involve complex regulatory, legal, and economic issues, and the ultimate outcome is subject to the discretion of the Commission and the presiding ALJ.
We trust this update is helpful. Please do not hesitate to contact the undersigned or Brett Callahan (lead associate, direct line: (202) 555-7823, brett.callahan@calderwoodharkness.com) should you have any questions or wish to discuss any aspect of the proceedings in greater detail.
Sincerely,
CALDERWOOD & HARKNESS LLP
By: ________
George Trujillo, Partner 1601 K Street NW, Suite 900 Washington, DC 20006 Telephone: (202) 555-7812
Email: george.trujillo@calderwoodharkness.com
cc:
Patricia Dunmore, Chairperson, Dunmore Energy Holdings Ltd.
James K. Winfield, Chief Executive Officer & President, Ridgeline Midstream Services LLC
Angela Moretti, Vice President of Finance & Treasurer, Ridgeline Midstream Services LLC
Brett Callahan, Calderwood & Harkness LLP
David Stanton, Calderwood & Harkness LLP

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