Boston Gas 10-K
EXHIBIT 10.12.1
Amendments to Exhibit 10.12, Gas Sales Agreement between the Company and
Alberta Northeast Gas, Ltd., dated as of October 1, 1992; May 5, 1993;
November 27, 1995; March 14, 1996; and November 27, 1995. (Filed herewith.)
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
October 1, 1992
Xx. Xxxxxxx Xxxxxxx
Boston Gas Company
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxxx:
With regard to Gas Sales Agreement No. 1 between Alberta Northeast Gas
Limited and Boston Gas Company ("Boston Gas"), dated February 7, 1991 ("Gas
Sales Agreement No. 1"), this letter reflects our agreement to the following
amendments to Gas Sales Agreement No. 1:
1. In the first Whereas clause, the words "34,318 Mcf of gas per day
escalating to 149,635" shall be changed to "39,787 Mcf of gas per day escalating
to 159,631".
2. In Article VII, Section 1, the number 8.55% in the first sentence
shall be changed to 6.55%.
3. In Article VII, Section 2, the table setting forth each U.S.
Repurchaser's share of the Daily Contract Quantity shall be deleted and the
following table substituted therefore:
Share of Daily Contract
U.S. Repurchaser Quantity ("Share")
---------------- -----------------------
Long Island Lighting Company 15.20%
Yankee Gas Services Company 14.35%
New Jersey Natural Gas Company 12.60%
The Brooklyn Union Gas Company 12.00%
Southern Connecticut Gas Company 7.50%
Central Xxxxxx Gas & Electric
Corporation 7.05%
Connecticut Natural Gas Corporation 5.75%
National Fuel Gas Supply Corporation 5.00%
Boston Gas Company
October 1, 1992
Page 2
Public Service Electric and
Gas Company 5.00%
Boston Gas Company 6.55%
Colonial Gas Company 3.00%
Consolidated Edison Company of
New York, Inc. 2.50%
EnergyNorth Natural Gas, Inc. 2.00%
Essex County Gas Company 1.00%
Valley Gas Company .50%
Notwithstanding the foregoing, the obligations of the parties with respect
to 4 MMcf/d of the volumes associated with Colonial Gas Company's share shall be
subject to the receipt and maintenance of any regulatory authorizations
necessary in connection therewith. The parties will use all reasonable efforts
to obtain such regulatory authorizations on a long-term basis and to continue,
in the interim, to implement and maintain temporary arrangements sufficient to
permit the ongoing delivery and purchase of such volumes. In addition, the
obligations of the parties with respect to 10 MMcf/d of the volumes associated
with Connecticut Natural Gas Corporation's Shares (on an aggregate under all ANE
Gas Purchase Contracts) shall be subject to the availability of firm capacity on
Algonquin Gas Transmission Company to transport such volumes to Connecticut
Natural Gas Corporation (the "Algonquin capacity"). The parties will use all
reasonable efforts to establish and maintain temporary arrangements sufficient
to permit the delivery and purchase of all or a portion of such volumes on an
interim basis commencing on November 1, 1992 through the date of the
availability of the Algonquin capacity.
4. Exhibit I shall be deleted in its entirety and replaced by the Exhibit
I attached to this agreement.
EXHIBIT I
---------
DISTRIBUTION OF PURCHASES
Jan. 25, 1992-Mar. 31, 1992
(144,677 Mcf/d)
---------------------------
New Jersey Natural Gas Company 24,583
Boston Gas Company 13,100
Long Island Lighting Company 20,599
The Brooklyn Union Gas Company 13,047
Yankee Gas Services Company 11,302
Connecticut Natural Gas Corporation 5,666
Central Xxxxxx Gas and Electric Corporation 11,593
National Fuel Gas Supply Corporation 10,000
Public Service Electric and Gas Company 10,290
Southern Connecticut Gas Company 6,352
Consolidated Edison Company of
New York, Inc. 5,145
EnergyNorth Natural Gas, Inc. 4,000
Colonial Gas Company 6,000
Essex County Gas Company 2,000
Valley Gas Company 1,000
DISTRIBUTION OF PURCHASES
Apr. 1, 1992-Sept. 30, 1992
(147,184 Mcf/d)
---------------------------
New Jersey Natural Gas Company 25,200
Boston Gas Company 13,100
Long Island Lighting Company 20,599
The Brooklyn Union Gas Company 13,047
Yankee Gas Services Company 12,289
Connecticut Natural Gas Corporation 6,409
Central Xxxxxx Gas and Electric Corporation 11,593
National Fuel Gas Supply Corporation 10,000
Public Service Electric and Gas Company 10,290
Southern Connecticut Gas Company 6,512
Consolidated Edison Company of
New York, Inc. 5,145
EnergyNorth Natural Gas, Inc. 4,000
Colonial Gas Company 6,000
Essex County Gas Company 2,000
Valley Gas Company 1,000
DISTRIBUTION OF PURCHASES
Oct. 1, 1992-Oct. 31, 1992
(159,631 Mcf/d)
--------------------------
New Jersey Natural Gas Company 33,138
Boston Gas Company 13,100
Long Island Lighting Company 20,599
The Brooklyn Union Gas Company 13,047
Yankee Gas Services Company 14,747
Connecticut Natural Gas Corporation 6,409
Central Xxxxxx Gas and Electric Corporation 11,593
National Fuel Gas Supply Corporation 10,000
Public Service Electric and Gas Company 10,290
Southern Connecticut Gas Company 8,563
Consolidated Edison Company of
New York, Inc. 5,145
EnergyNorth Natural Gas, Inc. 4,000
Colonial Gas Company 6,000
Essex County Gas Company 2,000
Valley Gas Company 1,000
Boston Gas Company
October 1, 1992
Page 3
If this letter properly states our agreement, please acknowledge that fact
by signing in the space provided below and returning an executed copy of this
letter to me.
Sincerely,
ALBERTA NORTHEAST GAS LIMITED
By /s/ Xxxxxxx X. Xxxx
--------------------------------------
Xxxxxxx X. Lucy
Executive Vice President
ACKNOWLEDGED AND ACCEPTED
THIS 20TH DAY OF October, 1992
BOSTON GAS COMPANY
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
May 5, 1993
Xx. Xxxxxxx Xxxxxxx
Boston Gas Company
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Second Amendment To ANE Gas Sales Agreement(s)
---------------------------------------------
Dear Xx. Xxxxxxx:
With regard to Gas Sales Agreement No. 1 between Alberta Northeast Gas
Limited ("ANE") and Boston Gas Company ("Boston Gas"), dated February 7, 1991
("Gas Sales Agreement No. 1"), this letter reflects our agreement to the Second
Amendment to Gas Sales Agreement No. 1, as follows:
1. Article XIV. Article XIV shall be amended by the addition of the
-----------
following sentence immediately after the first sentence of such Article XIV:
No consent shall be required for any assignment, pledge or
mortgage of, or grant of a security interest in, this Agreement
by Boston Gas in connection with any borrowing by, or
indebtedness of Boston Gas or any corporate affiliate thereof
(i.e., a corporation owning, owned by, or under common control
----
with such Repurchaser).
Xx. Xxxxxxx
May 5, 1993
Page 2
2. National Fuel Assignment. ANE and Boston Gas acknowledge and consent
------------------------
to the assignment by National Fuel Gas Supply Corporation ("NFG Supply") of its
interest in, and rights and obligations under, Gas Sales Agreement No. 1 between
ANE and NFG Supply to National Fuel Gas Distribution Corporation. As of the
effective date (as determined by the Federal Energy Regulatory Commission) of
NFG Supply's FERC Order No. 636 restructuring, the phrase "National Fuel Gas
Supply Corporation" as it appears in Gas Sales Agreement No. 1 between ANE and
NFG Supply and Gas Sales Agreement No. 1 between ANE and Boston Gas and the
Exhibits to both such agreements shall be replaced with the phase "National Fuel
Gas Distribution Corporation," and all references to "National Fuel" appearing
in both such Agreements shall be deemed to refer to National Fuel Gas
Distribution Corporation. Notwithstanding the foregoing, Article VII, Section 2,
paragraph 3 shall be deleted and replaced by the following restated paragraph:
The one exception to the foregoing relates to National Fuel
Gas Supply Corporation ("NFG Supply"), which is seeking to
purchase its 10,000 Mcf/d commencing on a date prior to November
1, 1991. In the event that NFG Supply commences its purchase
prior to the commencement of purchases by the other U.S.
Repurchasers, the Daily Contract Quantity under Purchase Contract
No. 1 shall be 10,000 Mcf per day, and NFG Supply's Share shall
be 100%, for the period of such advance purchases and the term of
National Fuel's entitlement to purchase gas shall be calculated
from the date on which NFG Supply's purchases commence. In that
event, the Daily Contract Quantity for the period following the
conclusion of National Fuel's entitlement to purchase gas will be
190,000 Mcf per day, and National Fuel's share will be 0%. In any
event, however, the first contract year shall be deemed to be the
year in which Repurchasers other than NFG Supply commence
purchases.
Xx. Xxxxxxx
May 5, 1993
Page 3
If this letter properly states our agreement, please acknowledge that fact
by signing in the space provided below and returning an executed copy of this
letter to me.
Sincerely,
ALBERTA NORTHEAST GAS LIMITED
By /s/ Xxxxxxx X. Xxxx
------------------------------------
Xxxxxxx X. Lucy
Executive Vice President
ACKNOWLEDGED AND ACCEPTED
THIS 25th DAY OF Oct, 1993
Boston Gas Company
By /s/ X. X. Xxxxxxx
--------------------------
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
November 27, 0000
Xxxxxxx Xxxxxxx
Xxxxxx Gas Company
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Amendment to Gas Sales Agreement No. 1
--------------------------------------
Dear Xx. Xxxxxxx:
Gas Purchase Contract No. 1 between Alberta Northeast Limited ("ANE") and
TransCanada Gas Marketing Limited (formerly Western Gas Marketing Limited)
("TGML"), as agent for TransCanada Pipelines Limited ("TransCanada"), dated
February 7, 1991, as amended ("Purchase Contract No. 1"), has been amended
effective November 1, 1995 to reflect changes agreed upon in the recently-
concluded price renegotiation between ANE and TGML pursuant to Article VII,
Section 7 of Purchase Contract No. 1. A copy of the amending agreement, together
with the Protocols appended thereto ("Amendment to Purchase Contract No. 1"), is
attached hereto. The amendments made effective by the Amendment to Purchase
Contract No. 1 are:
1. Certain adjustments to the base price of the gas
purchased by ANE from TGML pursuant to Purchase
Contract No. 1;
2. An increase in the Annual Triggering Quantity from 60%
to 70%;
3. An option for the sale of gas in alternative markets
and the sharing of revenues associated therewith; and
4. A refund mechanism associated with pipeline
transportation rates in effect subject to refund.
These amendments to Purchase Contract No. 1 were approved by a vote of more
than sixty percent (60%) of the Repurchaser Shares under Gas Sales Agreement No.
1 between ANE and Boston Gas, dated February 7, 1991, as amended ("Gas Sales
Agreement No. 1"), and require corresponding amendments to Gas Sales Agreement
No. 1.
Specifically, effective upon the effectiveness of the Amendment to Purchase
Contract No. 1, Article VIII, Reduction of Shares, Section 2 of Gas Sales
Agreement No. 1 is amended by deleting the percentage "60%" at both places that
it appears therein and substituting the percentage "70%" therefore, and all
other provisions of Gas Sales Agreement No. 1 are deemed amended to the extent
necessary to implement the Amendment to Purchase Contract No. 1, including the
Alternative Market Sale Protocol and the Protocol for the Treatment of Increases
in U.S. Pipeline Rates.
Please acknowledge these amendments by signing in the space provided below
and returning an executed copy to me.
Sincerely,
Alberta Northeast Gas Limited
/s/ Xxxxxxx X. Lucy
Xxxxxxx X. Xxxx
President
ACKNOWLEDGED AND ACCEPTED THIS
6TH DAY OF DEC, 1995
BOSTON GAS COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Title: Vice President
----------------------
2
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
November 17, 1995
VIA OVERNIGHT COURIER
---------------------
Xx. Xxxxx Xxxxx
TransCanada Gas Marketing Limited,
as agent for TransCanada
PipeLines Limited
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxx X0X 0X0
Re: Amendment to Gas Purchase Contract No. 1 between TGML and ANE
-------------------------------------------------------------
Dear Xx. Xxxxx:
Alberta Northeast Gas Limited ("ANE") and TransCanada Gas Marketing Limited
(formerly Western Gas Marketing Limited) ("TGML"), as agent for TransCanada
Pipelines Limited ("TransCanada"), are parties to Gas Purchase Contract No. 1,
dated February 7, 1991, as amended ("Purchase Contract"), which provides, inter
-----
alia, for the delivery of gas by TGML to ANE at TransCanada's points of
----
interconnection with Tennessee Gas Pipeline Company ("Tennessee") near Niagara
Falls, Ontario for redelivery to National Fuel Gas Distribution Corporation
("National Fuel") and with Iroquois Gas Transmission System, L.P. ("Iroquois")
near Iroquois, Ontario for redelivery to fourteen other utility companies
engaged in the distribution of natural gas in the Northeastern United States
(together with National Fuel, the "U.S. Repurchasers"). This Amendment concerns
changes to the Purchase Contract agreed upon in our recently-concluded price
renegotiation pursuant to Article VII, Section 7 of the Purchase Contract.
Specifically, this letter reflects our agreement to the following
amendments to the Purchase Contract effective November 1, 1995:
Xx. Xxxxx Xxxxx
November 17, 1995
Page 2
1. Article I, Definition of Terms, Section 14, "Annual Triggering
Quantity," is amended by deleting the words "sixty percent (60%)" therein and
substituting the words "seventy percent (70%)" therefore.
2. With respect to the obligation to sell and deliver gas in Article II,
Contract Quantities; Deliveries, Section 1, quantities of gas may be diverted to
alternative markets in accordance with the provisions of the Alternative Market
Sale Protocol attached hereto as Appendix A.
3. Article VII, Price, Section 6(a), is amended by deleting the price
"$3.79" and substituting the price "$3.67" therefore.
4. Article VII, Price, Section 6(a), is amended by deleting the price
"$3.38" and substituting the price "$3.26" therefore.
5. With respect to the New York Weighted Average Price in Article VII,
Price, Section 6(b), the impact of acceptance by the Federal Energy Regulatory
Commission, subject to refund, of transportation rate changes filed by Tennessee
Gas Pipeline Company, a Division of Tenneco Inc., Texas Eastern Transmission
Corporation or Transcontinental Gas Pipeline Corporation will be accounted for
in accordance with the provisions of the Protocol for the Treatment of Increases
in U.S. Pipeline Rates attached hereto as Appendix B; provided, however, that
the Refund Period (as defined therein) for any such rate in effect subject to
refund as of November 1, 1995 shall commence as of November 1, 1995.
The effectiveness of these amendments is subject to approval of this
Amendment on or before November 15, 1995, by the producers for TGML by a vote
that TGML believes to be sufficient to require the Alberta Petroleum Marketing
Commission ("APMC") to issue an unconditional finding of producer support in
accordance with the provisions of the Natural Gas Marketing Act (Alberta) and a
finding of such producer support by the APMC on or before December 15, 1995.
TGML will make its application to the APMC expeditiously in order to ensure that
the APMC's determination with respect to the finding of producer support is
issued by December 15, 1995.
The parties agree that billing and payment under the Contract shall reflect
the amendments to the Contract set forth
Xx. Xxxxx Xxxxx
November 17, 1995
Page 3
herein commencing with the December 1995 invoice for gas purchased during
November 1995; provided, however, that the continuing effectiveness of these
amendments is subject to obtaining such changes as are appropriate to the long
term import and export authorizations currently held in connection with the
Purchase Contract. TGML and ANE agree that they will use their best efforts to
seek to obtain and cause the other to seek to obtain the regulatory and
governmental authorizations necessary to effectuate the terms of this Amendment.
Finally, the parties agree that this letter agreement and the ballot
tendered by TGML to the TGML producers in connection therewith shall be
"communications" for purposes of Paragraph 5 of the Negotiation and
Confidentiality Agreement between the parties dated as of June 16, 1995.
This letter agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
If this letter agreement properly states our agreement, please acknowledge
that fact by signing in the space below and returning an executed copy to me.
Sincerely,
Alberta Northeast Gas Limited
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Lucy
President
ACKNOWLEDGED AND ACCEPTED THIS
28 DAY OF NOVEMBER, 1995
TRANSCANADA GAS MARKETING LIMITED
as Agent for
TRANSCANADA PIPELINES LIMITED
By: [SIGNATURE ILLEGIBLE]^^ BY: [SIGNATURE ILLEGIBLE]^^
--------------------- ---------------------
Title: _______________________ Title: _________________________
APPENDIX A
ALTERNATIVE MARKET SALE PROTOCOL
The Alternative Market Sale Option consists of (i) ANE Repurchasers
declining to purchase their ANE volumes on certain days in order to permit (ii)
the sale by Seller of ANE volumes in alternative markets in the circumstances
and under the terms and conditions described herein. The purpose of any
transaction undertaken pursuant to the Alternative Market Sale Option shall be
to maximize the mutual economic benefits for both Seller and each of the
participating Repurchasers of the market opportunity. All capitalized terms not
defined herein shall have the meanings ascribed to them in the Gas Purchase
Contracts between ANE and Seller ("Contract(s)").
The protocol for the implementation of the Alternative Market Sale Option
shall be as follows:
1. Seller may at any time and from time to time notify ANE of its desire
to implement the Alternative Market Sale Option. Such notice shall identify the
volumes which are the subject of the potential sale, the price per MMbtu at
which such volumes can be sold in the alternative market (the "Alternative
Market Price"), the term of the potential sale, the delivery point at which the
sale will be made, and any other relevant terms and conditions of the sale,
including without limitation the projected incremental and avoided costs, if
any, to Seller of making such sale in lieu of delivering the ANE volumes to ANE
at
APPENDIX A
the Delivery Points. ANE shall promptly notify the Repurchasers that Seller has
proposed a potential sale and identify the volumes which are the subject of the
potential sale, the Effective Price per MMbtu (i.e., the Alternative Market
----
Price plus or minus Seller's projected incremental or avoided costs), the term
of the potential sale and any other relevant terms and conditions of the sale.
2. Upon receipt of such notice, any Repurchaser desiring to participate
in the Alternative Market Sale Option shall so notify ANE, stating the volumes
which such Repurchaser is willing to forego purchasing, the cost per MMbtu to
the Repurchaser of obtaining natural gas (or other fuel) to replace the ANE
volumes declined (which, net of the Contract commodity charge, shall be the
"Repurchaser Replacement Cost") and the term for which the Repurchaser will
decline to purchase the volumes which are the subject of its notice.
3. The volumes which are the subject of the Alternative Market Sale
Option shall be offered to the other Repurchasers, at the Alternative Market
Price, pursuant to the reofferring provisions of the ANE Gas Sales Agreements.
All volumes not purchased following such reofferring shall be available for sale
by Seller for the agreed-upon term. To the extent that available volumes exceed
the volumes stated in Seller's notice, such volumes will be allocated to the
Alternative Market Sale giving
2
APPENDIX A
priority to those volumes with the lowest Repurchaser Replacement Cost.
4. The Net Benefits of the Alternative Market Sale Option shall be
calculated on an individual Repurchaser basis and shall be distributed by Seller
as follows: 50% of the Net Benefit associated with each Repurchaser transaction
shall be retained by Seller for distribution to the TransCanada producers, and
50% of such Net Benefit shall be credited to ANE for the benefit of the
Repurchaser participating in the transaction in accordance with Paragraph 6
hereof. The Net Benefit of each transaction shall be calculated as follows:
(a) The Net Commodity Charge shall be equal to the Contract commodity
charge less all costs per MMbtu to be avoided by Seller as
identified in its notice (for example, transportation commodity
charges [including fuel] not payable as a result of not
delivering the ANE volumes to the Delivery Points) of making the
sale in the alternative market.
(b) The Revenue associated with the Alternative Market Sale Option
shall be equal to the Alternative Market Price less the Net
Commodity Charge.
(c) The Expenses associated with each Repurchaser's participation in
the Alternative Market Sale Option shall be calculated by adding
the incremental costs per MMbtu (including fuel) to be incurred
by Seller as identified in its notice in making the sale in the
alternative market, if any, and the Repurchaser Replacement Cost.
(d) The Net Benefit associated with each Repurchaser's participation
in the Alternative Market Sale Option shall consist of the
Revenue less the
3
APPENDIX A
Expenses per MMbtu of gas which is the subject of the Alternative
Market Sale Option.
5. All volumes which are the subject of an Alternative Market Sale Option
shall be included in the calculation of the Annual Triggering Quantity for the
relevant year.
6. All Repurchaser Replacement Costs, together with ANE's 50% share of
the Net Benefits of an Alternative Market Sale Option transaction, shall be
credited to the Contract commodity charges otherwise payable by ANE on the
invoice for the month in which the Alternative Market Sale Option is
implemented. ANE shall in turn credit the commodity charges otherwise payable to
ANE by the ANE Repurchasers participating in the Alternative Market Sale Option.
4
APPENDIX B
TREATMENT OF INCREASES IN U.S. PIPELINE RATES
IN THE CALCULATION OF THE PRICE OF GAS PURSUANT TO ARTICLE VII
The Contract provides, at Article VII, Section 6(b), that the price of gas
purchased thereunder is to be determined by reference to, among other things,
the New York City Gate price for natural gas, or "Pg", which is in turn defined
by reference to certain rates charged by Texas Eastern Transmission Company,
Tennessee Gas Pipeline Company, and TransContinental Gas Pipeline Corporation,
which collectively comprise the natural gas components of the price formula
(such pipelines and the relevant rates are further referred to herein as the
U.S. Pipelines and the U.S. Pipeline Rates). The parties understand that, when a
U.S. Pipeline files for a rate increase, the increase is generally suspended for
a period not exceeding five months, at which point, if a new rate has not been
finally approved, the proposed increased rate is placed into effect subject to
refund. The parties agree that, when any rate increase is placed into effect
subject to refund, the price of gas purchased under the Contract shall be
calculated, billed and paid as set forth in this protocol. The parties further
agree that this protocol shall govern both increases filed for in the U.S.
Pipeline Rates identified herein and increases filed for in any successor U.S.
Pipeline rate schedules which may later be adopted by the parties for purposes
of calculating the price of gas purchased under the
APPENDIX B
Contract, including in both cases increases in any components or subcomponents
of those rates.
The protocol for treatment of U.S. Pipeline Rate increases in effect
subject to refund shall be as follows:
1. The period commencing on the date on which a proposed U.S. Pipeline
Rate increase (the "Proposed Rate") is placed into effect subject to refund
until the date on which a rate approved by the Federal Energy Regulatory
Commission pursuant to the rate filing (the "Approved Rate") is placed into
effect (and is not subject to refund) shall be the "Refund Period." The "Refund
Period Rate" shall be the rate established by the Federal Energy Regulatory
Commission as the rate to be utilized in calculating refunds due to U.S.
Pipeline customers for the Refund Period.
2. For each month during the Refund Period, Buyer shall calculate, and
Seller shall confirm, the commodity charge (the "Initial Commodity Charge") for
each MMbtu of gas purchased during such month on the basis of the Proposed Rate.
Seller shall xxxx to and collect from ANE the Initial Commodity Charge for each
MMbtu of gas purchased in each month during the Refund Period.
3. Within thirty days of the close of the Refund Period, Buyer shall
retroactively calculate, and Seller shall confirm, the commodity charge (the
"Adjusted Commodity Charge") for each
0
XXXXXXXX X
the Refund Period, utilizing the Refund Period Rate. The difference between the
Initial Commodity Charge and the Adjusted Commodity Charge, multiplied by the
number of MMbtu's purchased by Buyer from Seller during the relevant month,
shall be the "Price Differential" for that month.
4. Seller shall refund to Buyer, by wire transfer in U.S. Dollars to an
account to be identified by Buyer, an amount equal to the Price Differential for
each month of the Refund Period together with interest on each such month's
Price Differential calculated and compounded monthly at a rate equal to the
"Prime Rate" as published by the Wall Street Journal under "Money Rates" on the
last publication date of each month. Buyer shall also refund to the U.S.
Repurchasers, for each MMbtu of gas purchased by each Repurchaser during the
Refund Period, the amount (if any) by which the Initial Commodity Charge per
MMbtu billed to and collected from the Repurchasers exceeds the Adjusted
Commodity Charge, together with each Repurchaser's proportional share of the
interest calculated as above. To the extent that Seller fails to make any wire
transfer payment required by this paragraph 5, Buyer shall be entitled to offset
as a credit the amount of such payment due from Seller against the next invoice
rendered by Seller to Buyer for the purchase of gas under the Contract, and/or
to pursue any other remedy available to Buyer under the Contract or otherwise.
3
APPENDIX B
5. As of the date on which the Approved Rate goes into effect, Buyer
shall calculate, and Seller shall confirm, the commodity charge for gas
purchased under the Contract on the basis of the Approved Rate, both for the
purpose of calculating the commodity charge per MMbtu to be billed to and paid
by ANE and for the purpose of calculating the commodity charge per MMbtu to be
billed to and collected from the Repurchasers. For greater certainty, it is
confirmed that the "applicable surcharges" referenced in Article VII, Section
6(b) of the Contract will include any FERC-approved surcharge imposed as a
result of appeals by the relevant U.S. Pipeline of the Approved Rate.
6. The procedures set forth herein shall be applied to each U.S. Pipeline
Rate independently.
4
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
March 14,1996
Xxxxxxx Xxxxxxx
Boston Gas Company
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Amendment to ANE Gas Sales Agreement No. 1
------------------------------------------
Dear Xx. Xxxxxxx:
The Gas Purchase Contract No. 1 between Alberta Northeast Limited ("ANE") and
TransCanada Gas Marketing Limited ("TGML") (formerly Western Gas Marketing
Limited ("WGML")), as agent for TransCanada PipeLines Limited ("TransCanada")
dated February 7, 1991, as amended ("Purchase Contract No. 1"), has been amended
to (1) add Commonwealth Gas Company ("Commonwealth") as a U.S. Repurchaser and
(2) facilitate, permanently on a firm basis, the delivery of the daily share of
the ANE volumes of National Fuel Gas Distribution Corporation ("National Fuel")
to the point of interconnection between TransCanada and Empire State Pipeline
("Empire") at Chippawa, Ontario.
A copy of the July 25, 1991 Letter Amendment between ANE and WGML, as agent for
TransCanada, with respect to the addition of Commonwealth as a U.S. Repurchaser,
and a copy of the March 6, 1996 Letter Amendment between ANE and TGML, as agent
for TransCanada, with respect to the delivery of National Fuel's share of the
ANE volumes to Chippawa ("1996 Letter Amendment"), are attached hereto.
These amendments require corresponding amendments to the Gas Sales Agreement
between ANE and Boston Gas Company ("Boston Gas") respecting Purchase Contract
No. 1, dated February 7, 1991, as amended ("Gas Sales Agreement No. 1").
1. Amendments related to the addition of Commonwealth as a U.S.
-----------------------------------------------------------
Repurchaser:
-----------
Effective upon the effectiveness of the Gas Sales Agreement between ANE and
Commonwealth, Gas Sales Agreement No. 1 shall be amended as follows:
March 14, 1996
Page 2
(a) In the fourth Whereas clause, the number "fourteen (14)" shall be
changed to "fifteen (15)."
(b) In Article VII, Section 1, the number "6.55%" in the first
sentence shall be changed to "4.30%."
(c) In Article VII, Section 2, the table setting forth each U.S.
Repurchaser's share of the Daily Contract Quantity shall be
deleted and the following table substituted therefore:
Share of Daily Contract
U.S. Repurchaser Quantity ("Share")
---------------- ------------------
Long Island Lighting Company 15.20
Yankee Gas Services Company 14.35
New Jersey Natural Gas Company 12.60
The Brooklyn Union Gas Company 12.00
Southern Connecticut Gas Company 7.50
Central Xxxxxx Gas & Electric 7.05
Corporation
Connecticut Natural Gas 5.75
Corporation
National Fuel Gas Distribution 5.00
Corporation
Public Service Electric and 5.00
Gas Company
Boston Gas Company 4.30
Colonial Gas Company 3.00
Consolidated Edison Company of 2.50
New York, Inc.
Commonwealth Gas Company 2.25
2
March 14, 1996
Page 3
EnergyNorth Natural Gas, Inc. 2.00
Essex County Gas Company 1.00
Valley Gas Company 0.50
(d) In Article IX, Section 1, the number "fifteen (15)" shall be
changed to "sixteen (16)" and in Article IX, Section 2, the
number "fourteen (14)" shall be changed to "fifteen (15)."
2. Amendments related to the delivery of National Fuel's share to
--------------------------------------------------------------
Chippawa:
--------
Effective upon the effectiveness of the 1996 Letter Amendment, Gas Sales
Agreement No. 1 is amended as follows:
(a) In Article IX, Section 1, the entire fifth sentence shall be
deleted and the following sentence substituted therefore: "The
portion to be paid by Boston Gas to ANE shall be equal to the sum
of (1) the product of the total Iroquois Monthly Demand Charge
billed to ANE by TransCanada in a month times a fraction, the
numerator of which is Boston Gas's Share and the denominator of
which is the sum of the Shares of all U.S. Repurchasers except
National Fuel and (2) the product of the commodity charges billed
to ANE by TransCanada with respect to deliveries to the Iroquois
Point of Delivery in a month times a fraction, the numerator of
which is the quantity of gas delivered by ANE to Boston Gas
during such contract month and the denominator of which is the
quantity of gas delivered by ANE to all U.S. Repurchasers except
National Fuel during such month."
3
March 14, 1996
Page 4
Please acknowledge these amendments by signing in the space provided below and
returning an executed copy to me.
Sincerely,
Alberta Northeast Gas Limited
/s/ Xxxxxxx X. Lucy
Xxxxxxx X. Xxxx
President
ACKNOWLEDGED AND ACCEPTED THIS
22nd DAY OF March, 1996
BOSTON GAS COMPANY
By: /s/ [SIGNATURE ILLEGIBLE]^^
--------------------------------
Title: VICE PRESIDENT
-----------------------------
4
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
July 25, 1991
Xx. Xxxxxx Xxxx
Western Gas Marketing Ltd.,
as agent for
TransCanada PipeLines Limited
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Dear Xx. Xxxx:
With regard to the February 7, 1991 Gas Purchase Contract No. 1
between Western Gas Marketing Limited as agent for TransCanada PipeLines Limited
("Western Gas"), and Alberta Northeast Gas Limited ("ANE") ("Gas Purchase
Contract No. 1"), and to the February 7, 1991 Gas Sales Agreements No. 1 between
ANE and each of the U.S. Repurchasers ("Gas Sales Agreements No. 1"), this
letter reflects our agreement to the following prospective amendments to Gas
Purchase Contract No. 1 and to each of the Gas Sales Agreements No. 1:
Gas Purchase Contract No. 1
---------------------------
1. In the sixth Whereas clause, the words "fifteen (15)" shall
be changed to "sixteen (16)".
2. In the seventh Whereas clause, the words "fifteen (15)" shall
be changed to "sixteen (16)".
Gas Sales Agreements No. 1
--------------------------
1. In the fourth Whereas clause, the words "fourteen (14)" shall
be changed to "fifteen (15)".
2. In Article VII, Section 2, the table setting forth each U.S.
Repurchaser's share of the Daily Contract Quantity shall be deleted and the
following table substituted therefore:
Xx. Xxxxxx Xxxx
July 25, 1991
Page 2
Share of Daily Contract
U.S. Repurchaser Quantity ("Share")
---------------- ------------------
Long Island Lighting Company 15.20%
Yankee Gas Services Company 14.35%
New Jersey Natural Gas Company 12.60%
The Brooklyn Union Gas Company 12.00%
Southern Connecticut Gas Company 7.50%
Central Xxxxxx Gas & Electric
Corporation 7.05%
Connecticut Natural Gas Corporation 5.75%
National Fuel Gas Supply Corporation 5.00%
Public Service Electric and
Gas Company 5.00%
Boston Gas Company 4.30%
Colonial Gas Company 3.00%
Consolidated Edison Company of
New York, Inc. 2.50%
Commonwealth Gas Company 2.25%
EnergyNorth Natural Gas, Inc. 2.00%
Essex County Gas Company 1.00%
Valley Gas Company .50%
3. In the fifth sentence of Article IX, Section 1, the words
"fifteen (15)" shall be changed to "sixteen (16)".
4. In the first sentence of Article IX, Section 2, the words
"fourteen (14)" shall be changed to "fifteen (15)".
5. Exhibit I shall be deleted in its entirety and replaced by
the Exhibit I attached to this agreement.
This letter reflects the express agreement of Western Gas and
ANE that the effectiveness of these prospective amendments to Gas Purchase
Contract No. 1 and Gas sales Agreements No. 1 are conditioned only upon (i) the
issuance of an order by the Department of Energy, Office of Fossil Energy,
authorizing Commonwealth Gas Company to import 4,500 Mcf of gas per day from
ANE, and (ii) receipt of any necessary regulatory approvals for the
transportation of the Daily Contract Quantity in accordance with the shares set
forth above, all in form and substance acceptable to ANE and Western Gas.
Xx. Xxxxxx Xxxx
July 25, 1991
Page 3
If this letter properly states our agreement, please acknowledge
that fact by signing in the space provided below and returning an executed copy
of this letter to me.
Sincerely,
ALBERTA NORTHEAST GAS LIMITED
By /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx, President
ACKNOWLEDGED AND ACCEPTED THIS
9th DAY OF August, 1991
WESTERN GAS MARKETING LIMITED
as agent for
TRANSCANADA PIPELINES LIMITED
By /s/ SIGNATURE ILLEGIBL^^
-------------------------
EXHIBIT I
---------
DISTRIBUTION OF PURCHASES
Nov. 1, 1991-Dec. 31, 1991
(34,318 Mcf/d)
--------------------------
Volume
U.S. Repurchaser (Mcf/d)
---------------- -------
New Jersey Natural Gas Company 4,389
Long Island Lighting Company 4,309
The Brooklyn Union Gas Company 2,209
Yankee Gas Services Company 2,140
Central Xxxxxx Gas and Electric Corporation 1,963
National Fuel Gas Supply Corporation 10,000
Public Service Electric and Gas Company 1,742
Boston Gas Company 1,497
Southern Connecticut Gas Company 1,134
Colonial Gas Company 1,045
Connecticut Natural Gas Corporation 1,018
Consolidated Edison Company
of New York, Inc. 870
Commonwealth Gas Company 784
EnergyNorth Natural Gas, Inc. 696
Essex County Gas Company 348
Valley Gas Company 174
DISTRIBUTION OF PURCHASES
Jan. 1, 1992-Mar. 31, 1992
(125.268 Mcf/d)
--------------------------
New Jersey Natural Gas Company 20,803
Long Island Lighting Company 20,423
The Brooklyn Union Gas Company 10,469
Yankee Gas Services Company 10,145
Central Xxxxxx Gas and Electric Corporation 9,303
National Fuel Gas Supply Corporation 10,000
Public Service Electric and Gas Company 8,255
Boston Gas Company 7,099
Southern Connecticut Gas Company 5,375
Colonial Gas Company 4,953
Connecticut Natural Gas Corporation 4,822
Consolidated Edison Company of
New York, Inc. 4,128
Commonwealth Gas Company 3,715
EnergyNorth Natural Gas, Inc. 3,302
Essex County Gas Company 1,651
Valley Gas Company 825
DISTRIBUTION OF PURCHASES
Apr. 1, 1992-Oct. 31, 1992
(149.635 Mcf/d)
--------------------------
New Jersey Natural Gas Company 25,200
Long Island Lighting Company 24,741
The Brooklyn Union Gas Company 12,682
Yankee Gas Services Company 12,289
Central Xxxxxx Gas and Electric Corporation 11,270
National Fuel Gas Supply Corporation 10,000
Public Service Electric and Gas Company 10,000
Boston Gas Company 8,600
Southern Connecticut Gas Company 6,512
Colonial Gas Company 6,000
Connecticut Natural Gas Corporation 5,841
Consolidated Edison Company of
New York, Inc. 5,000
Commonwealth Gas Company 4,500
EnergyNorth Natural Gas, Inc. 4,000
Essex County Gas Company 2,000
Valley Gas Company 1,000
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
March 6, 1996
Xx. Xxxxx Xxxxx
TransCanada Gas Marketing Limited
as agent for TransCanada
PipeLines Limited
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxx X0X 0X0
Re: Amendment to Gas Purchase Contract
No. 1 between ANE and TGML
----------------------------------
Dear Xx. Xxxxx:
Alberta Northeast Limited ("ANE") and TransCanada Gas Marketing Limited
(formerly Western Gas Marketing Limited) ("TGML"), as agent for TransCanada
Pipelines Limited ("TransCanada"), are parties to Gas Purchase Contract No. 1,
dated February 7, 1991, as amended ("Purchase Contract No. 1"), which provides,
inter alia, for the delivery of gas by TGML to ANE at TransCanada's points of
----- ----
interconnection with Tennessee Gas Pipeline Company ("Tennessee") near Niagara
Falls, Ontario for redelivery to National Fuel Gas Distribution Corporation
("National Fuel") and with Iroquois Gas Transmission System, L.P. ("Iroquois")
near Iroquois, Ontario for redelivery to fourteen other utility companies
engaged in the distribution of natural gas in the Northeastern United States.
This Amendment concerns one change to Purchase Contract No. 1. Namely, National
Fuel has requested, and TGML and ANE have agreed, to amend Purchase Contract No.
1 to facilitate, permanently on a firm basis, the delivery of National Fuel's
daily share of the ANE volumes to the point of interconnection between
TransCanada and Empire State Pipeline ("Empire") at Chippawa, Ontario.
Xx. Xxxxx Xxxxx
March 6, 1996
Page 2
This letter reflects our agreement to the following amendments to the
Purchase Contract No. 1:
1. The following new Whereas Clause is inserted after the Second Whereas
Clause:
WHEREAS, TransCanada owns and operates an additional extension of its
pipeline system to a point on the International Border between the United
States of America and Canada near Chippawa, Ontario, where it interconnects
with the facilities of a U.S. interstate pipeline, Empire State Pipeline
("Empire"), which point is herein called the "Chippawa Point of
Interconnection"; and
2. The Eighth Whereas Clause is amended as follows:
(a) by deleting the word "Tennessee" at each place that it appears
therein and substituting the word "Empire" therefore; and
(b) by deleting the words "Niagara Falls" therein and substituting the
word "Chippawa" therefore.
3. Article I, Definition of Terms, Section 10, is amended by deleting the
words "Niagara Falls" at each place that it appears in the second paragraph
thereof and substituting the word "Chippawa" therefore.
4. Article I, Definition of Terms, Section 11, is amended as follows:
(a) by deleting the number "16." in the first sentence thereof and
substituting the number "17." therefore; and
(b) by deleting the words "Niagara Falls" at both places that they appear
in the second sentence thereof and substituting the word "Chippawa" therefore.
Xx. Xxxxx Xxxxx
March 6, 1996
Page 3
5. Article I, Definition of Terms, is amended by inserting the following
new Section 17. after Section 16. thereof:
17. The term "Chippawa Point of Delivery" shall mean a point on the
Canadian side of the international boundary between Canada and the United
States of America at or near the Chippawa Point of Interconnection.
6. Article I, Definition of Terms, Section 17, is renumbered Section 18.
7. Article II, Contract Quantities; Deliveries, Section 5, is amended by
deleting the word "Tennessee" at both place that it appears therein and
substituting the word "Empire" therefore.
8. Article IV, Delivery Pressure, is amended as follows:
(a) by deleting the word "Tennessee" in the second sentence thereof and
substituting the word "Empire" therefore;
(b) by deleting the word "Niagara Falls" in the second sentence thereof
and substituting the word "Chippawa" therefore; and
(c) by deleting the number "700" in the second sentence thereof and
substituting the number "1225" therefore.
9. Article VII, Price, Section 2, is amended by deleting the words
"Niagara Falls" in the first sentence thereof and substituting the word
"Chippawa" therefore.
10. Article VII, Price, Section 2(b), is amended by deleting the words
"Niagara Falls" at each place that they appear therein and substituting the word
"Chippawa" therefore.
Xx. Xxxxx Xxxxx
March 6, 1996
Page 4
11. Article VII, Price, Section 3, is amended as follows:
(a) by deleting the words "Niagara Falls" at each place that they appear
in the definition of "DC-DPC" therein and substituting the word "Chippawa1"
therefore; and
(b) by inserting the following new provisos as full text after the
blocked definition of "DC-DPC":
provided, however, that the commodity charge in respect of gas which Buyer
requests and Seller tenders for delivery at the Chippawa Point of Delivery
shall be increased or decreased, as the case may be, by an amount equal to
(i) the amount by which the sum of the monthly demand toll per Mcf, the
DPC and TransCanada's commodity toll applicable to the firm transportation
of gas to the Chippawa Point of Delivery from time to time, calculated per
Mcf, exceeds or is less than the sum of the corresponding costs per Mcf
applicable to the firm transportation of gas to the Niagara Falls Point of
Delivery and (ii) an amount equal to the product of the commodity charge,
as otherwise determined for the Iroquois Point of Delivery, and the
differential between the fuel requirement applicable to the firm
transportation of gas to the Chippawa and Niagara Falls Points of
Delivery, calculated per XXxxx
00. Article VII, Price, Section 4, is amended by deleting the words
"Niagara Falls" in the second sentence thereof and substituting the word
"Chippawa" therefore.
13. Article VII, Price, Section 5, is amended by deleting the word "form"
in the first sentence thereof and substituting the word "from" therefore.
14. Article VIII, Xxxxxxxx and Payment, Section 1, is amended by inserting
the words "at each Point of Delivery" after the words "daily and total quantity
of gas delivered hereunder" in the first sentence thereof.
Xx. Xxxxx Xxxxx
March 6, 1996
Page 5
15. Article X, Measurement of Gas, Sections 3(b) and 3(h), are amended by
deleting the word "Tennessee" at each place that it appears therein and
substituting the word "Empire" therefore.
16. Article XII, Force Majeure, Section 1, is amended by deleting the word
"Tennessee" in the second sentence thereof and substituting the word "Empire"
therefore.
17. Article XII, Force Majeure, Section 3, is amended by deleting the word
"Tennessee" at each place that it appears therein and substituting the word
"Empire" therefore.
18. Article XII, Force Majeure, Section 4, is amended by deleting the word
"Tennessee" therein and substituting the word "Empire" therefore.
The effectiveness of these amendments is subject to obtaining such changes
as are appropriate to the long term import and export authorizations currently
held in connection with the Purchase Contract No. 1. TGML and ANE agree that
they will use their best commercially reasonable efforts to seek to obtain and
cause the other to seek to obtain the regulatory and governmental authorizations
necessary to effectuate the terms of this Amendment.
This letter agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.
Xx. Xxxxx Xxxxx
March 6, 1996
Page 6
If this letter agreement properly states our agreement, please
acknowledge that fact by signing in the space below and returning an executed
copy to me.
Sincerely,
Alberta Northeast Gas Limited
/s/ Xxxxxxx X. Lucy
Xxxxxxx X. Xxxx
President
ACKNOWLEDGED AND ACCEPTED THIS
02 DAY OF MARCH, 1996
TRANSCANADA GAS MARKETING LIMITED
as agent for
TRANSCANADA PIPELINES LIMITED
By: /s/ Xxxx X. Xxxxxxx
-----------------------------
XXXX X. XXXXXXX
Title: Vice President, Marketing
----------------------------
By: /s/ G. Xxxxxxxx Xxxxxxxx
-----------------------------
G. XXXXXXXX XXXXXXXX
Title: President
__________________________
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
November 27, 0000
Xxxxxxx Xxxxxxx
Xxxxxx Gas Company
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Amendment to Gas Sales Agreement No. 1
--------------------------------------
Dear Xx. Xxxxxxx:
Gas Purchase Contract No. 1 between Alberta Northeast Limited ("ANE")
and TransCanada Gas Marketing Limited (formerly Western Gas Marketing Limited)
("TGML"), as agent for TransCanada Pipelines Limited ("TransCanada"), dated
February 7, 1991, as amended ("Purchase Contract No. 1"), has been amended
effective November 1, 1995 to reflect changes agreed upon in the recently-
concluded price renegotiation between ANE and TGML pursuant to Article VII,
Section 7 of Purchase Contract No. 1. A copy of the amending agreement, together
with the Protocols appended thereto ("Amendment to Purchase Contract No. 1"), is
attached hereto. The amendments made effective by the Amendment to Purchase
Contract No. 1 are:
1. Certain adjustments to the base price of the gas
purchased by ANE from TGML pursuant to Purchase
Contract No. 1;
2. An increase in the Annual Triggering Quantity
from 60% to 70%;
3. An option for the sale of gas in alternative
markets and the sharing of revenues associated
therewith; and
4. A refund mechanism associated with pipeline
transportation rates in effect subject to refund.
These amendments to Purchase Contract No. 1 were approved by a vote of
more than sixty percent (60%) of the Repurchaser Shares under Gas Sales
Agreement No. 1 between ANE and Boston Gas, dated February 7, 1991, as amended
("Gas Sales Agreement No. 1"), and require corresponding amendments to Gas Sales
Agreement No. 1.
Specifically, effective upon the effectiveness of the Amendment to
Purchase Contract No. 1, Article VIII, Reduction of Shares, Section 2 of Gas
Sales Agreement No. 1 is amended by deleting the percentage "60%" at both places
that it appears therein and substituting the percentage "70%" therefore, and all
other provisions of Gas Sales Agreement No. 1 are deemed amended to the extent
necessary to implement the Amendment to Purchase Contract No. 1, including the
Alternative Market Sale Protocol and the Protocol for the Treatment of Increases
in U.S. Pipeline Rates.
Please acknowledge these amendments by signing in the space provided
below and returning an executed copy to me.
Sincerely,
Alberta Northeast Gas Limited
/s/ Xxxxxxx X. Lucy
Xxxxxxx X. Xxxx
President
ACKNOWLEDGED AND ACCEPTED THIS
6/th/ DAY OF DEC, 1995
BOSTON GAS COMPANY
By: /s/ SIGNATURE ILLEGIBLE ^^
---------------------------
Title: Vice President
-------------------------
2
[LETTERHEAD OF ALBERTA NORTHEAST GAS LIMITED APPEARS HERE]
November 17, 1995
VIA OVERNIGHT COURIER
---------------------
Xx. Xxxxx Xxxxx
TransCanada Gas Marketing Limited,
as agent for TransCanada
PipeLines Limited
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxx MSE 1J4
Re: Amendment to Gas Purchase Contract
No. 1 between TGML and ANE
----------------------------------
Dear Xx. Xxxxx:
Alberta Northeast Gas Limited ("ANE") and TransCanada Gas Marketing
Limited (formerly Western Gas Marketing Limited) ("TGML"), as agent for
TransCanada Pipelines Limited ("TransCanada"), are parties to Gas Purchase
Contract No. 1, dated February 7, 1991, as amended ("Purchase Contract"), which
provides, inter alia, for the delivery of gas by TGML to ANE at TransCanada's
----- ----
points of interconnection with Tennessee Gas Pipeline Company ("Tennessee") near
Niagara Falls, Ontario for redelivery to National Fuel Gas Distribution
Corporation ("National Fuel") and with Iroquois Gas Transmission System, L.P.
("Iroquois") near Iroquois, Ontario for redelivery to fourteen other utility
companies engaged in the distribution of natural gas in the Northeastern United
States (together with National Fuel, the "U.S. Repurchasers"). This Amendment
concerns changes to the Purchase Contract agreed upon in our recently-concluded
price renegotiation pursuant to Article VII, Section 7 of the Purchase Contract.
Specifically, this letter reflects our agreement to the following
amendments to the Purchase Contract effective November 1, 1995:
Xx. Xxxxx Xxxxx
November 17, 1995
Page 2
1. Article I, Definition of Terms, Section 14, "Annual Triggering
Quantity," is amended by deleting the words "sixty percent (60%)" therein and
substituting the words "seventy percent (70%)" therefore.
2. With respect to the obligation to sell and deliver gas in Article II,
Contract Quantities; Deliveries, Section 1, quantities of gas may be diverted to
alternative markets in accordance with the provisions of the Alternative Market
Sale Protocol attached hereto as Appendix A.
3. Article VII, Price, Section 6(a), is amended by deleting the price
"$3.79" and substituting the price "$3.67" therefore.
4. Article VII, Price, Section 6(a), is amended by deleting the price
"$3.38" and substituting the price "$3.26" therefore.
5. With respect to the New York Weighted Average Price in Article VII,
Price, Section 6(b), the impact of acceptance by the Federal Energy Regulatory
Commission, subject to refund, of transportation rate changes filed by Tennessee
Gas Pipeline Company, a Division of Tenneco Inc., Texas Eastern Transmission
Corporation or Transcontinental Gas Pipeline Corporation will be accounted for
in accordance with the provisions of the Protocol for the Treatment of Increases
in U.S. Pipeline Rates attached hereto as Appendix B; provided, however, that
the Refund Period (as defined therein) for any such rate in effect subject to
refund as of November 1, 1995 shall commence as of November 1, 1995.
The effectiveness of these amendments is subject to approval of this
Amendment on or before November 15, 1995, by the producers for TGML by a vote
that TGML believes to be sufficient to require the Alberta Petroleum Marketing
Commission ("APMC") to issue an unconditional finding of producer support in
accordance with the provisions of the Natural Gas Marketing Act (Alberta) and a
finding of such producer support by the APMC on or before December 15, 1995.
TGML will make its application to the APMC expeditiously in order to ensure that
the APMC's determination with respect to the finding of producer support is
issued by December 15, 1995.
The parties agree that billing and payment under the Contract shall
reflect the amendments to the Contract set forth
Xx. Xxxxx Xxxxx
November 17, 1995
Page 3
herein commencing with the December 1995 invoice for gas purchased during
November 1995; provided, however, that the continuing effectiveness of these
amendments is subject to obtaining such changes as are appropriate to the long
term import and export authorizations currently held in connection with the
Purchase Contract. TGML and ANE agree that they will use their best efforts to
seek to obtain and cause the other to seek to obtain the regulatory and
governmental authorizations necessary to effectuate the terms of this Amendment.
Finally, the parties agree that this letter agreement and the ballot
tendered by TGML to the TGML producers in connection therewith shall be
"communications" for purposes of Paragraph 5 of the Negotiation and
Confidentiality Agreement between the parties dated as of June 16, 1995.
This letter agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
If this letter agreement properly states our agreement, please
acknowledge that fact by signing in the space below and returning an executed
copy to me.
Sincerely,
Alberta Northeast Gas Limited
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Lucy
President
ACKNOWLEDGED AND ACCEPTED THIS
25 DAY OF NOVEMBER, 1995
TRANSCANADA GAS MARKETING LIMITED
as Agent for
TRANSCANADA PIPELINES LIMITED
By: /s/ [SIGNATURE ILLEGIBLE]^^ By: /s/ [SIGNATURE ILLEGIBLE]^^
---------------------------- ----------------------------
Title: ________________________ Title: ________________________
APPENDIX A
ALTERNATIVE MARKET SALE PROTOCOL
The Alternative Market Sale Option consists of (i) ANE Repurchasers
declining to purchase their ANE volumes on certain days in order to permit (ii)
the sale by Seller of ANE volumes in alternative markets in the circumstances
and under the terms and conditions described herein. The purpose of any
transaction undertaken pursuant to the Alternative Market Sale Option shall be
to maximize the mutual economic benefits for both Seller and each of the
participating Repurchasers of the market opportunity. All capitalized terms not
defined herein shall have the meanings ascribed to them in the Gas Purchase
Contracts between ANE and Seller ("Contract(s) ").
The protocol for the implementation of the Alternative Market Sale
Option shall be as follows:
1. Seller may at any time and from time to time notify ANE of its
desire to implement the Alternative Market Sale Option. Such notice shall
identify the volumes which are the subject of the potential sale, the price per
NMbtu at which such volumes can be sold in the alternative market (the
"Alternative Market Price"), the term of the potential sale, the delivery point
at which the sale will be made, and any other relevant terms and conditions of
the sale, including without limitation the projected incremental and avoided
costs, if any, to Seller of making such sale in lieu of delivering the ANE
volumes to ANE at
APPENDIX A
the Delivery Points. ANE shall promptly notify the Repurchasers that Seller has
proposed a potential sale and identify the volumes which are the subject of the
potential sale, the Effective Price per MMbtu (i.e., the Alternative Market
----
Price plus or minus Seller's projected incremental or avoided costs), the term
of the potential sale and any other relevant terms and conditions of the sale.
2. Upon receipt of such notice, any Repurchaser desiring to participate
in the Alternative Market Sale Option shall so notify ANE, stating the volumes
which such Repurchaser is willing to forego purchasing, the cost per MMbtu to
the Repurchaser of obtaining natural gas (or other fuel) to replace the ANE
volumes declined (which, net of the Contract commodity charge, shall be the
"Repurchaser Replacement Cost") and the term for which the Repurchaser will
decline to purchase the volumes which are the subject of its notice.
3. The volumes which are the subject of the Alternative Market Sale
Option shall be offered to the other Repurchasers, at the Alternative Market
Price, pursuant to the reofferring provisions of the ANE Gas Sales Agreements.
All volumes not purchased following such reofferring shall be available for sale
by Seller for the agreed-upon term. To the extent that available volumes exceed
the volumes stated in Seller's notice, such volumes will be allocated to the
Alternative Market Sale giving
2
APPENDIX A
priority to those volumes with the lowest Repurchaser Replacement Cost.
4. The Net Benefits of the Alternative Market Sale Option shall be
calculated on an individual Repurchaser basis and shall be distributed by Seller
as follows: 50% of the Net Benefit associated with each Repurchaser transaction
shall be retained by Seller for distribution to the TransCanada producers, and
50% of such Net Benefit shall be credited to ANE for the benefit of the
Repurchaser participating in the transaction in accordance with Paragraph 6
hereof. The Net Benefit of each transaction shall be calculated as follows:
(a) The Net Commodity Charge shall be equal to the Contract
commodity charge less all costs per MMbtu to be avoided by
Seller as identified in its notice (for example, transportation
commodity charges [including fuel] not payable as a result of
not delivering the ANE volumes to the Delivery Points) of making
the sale in the alternative market.
(b) The Revenue associated with the Alternative Market Sale Option
shall be equal to the Alternative Market Price less the Net
Commodity Charge.
(c) The Expenses associated with each Repurchaser's participation in
the Alternative Market Sale Option shall be calculated by adding
the incremental costs per MMbtu (including fuel) to be incurred
by Seller as identified in its notice in making the sale in the
alternative market, if any, and the Repurchaser Replacement
Cost.
(d) The Net Benefit associated with each Repurchaser's participation
in the Alternative Market Sale Option shall consist of the
Revenue less the
3
APPENDIX A
Expenses per MMbtu of gas which is the subject of the
Alternative Market Sale Option.
5. All volumes which are the subject of an Alternative Market Sale
Option shall be included in the calculation of the Annual Triggering Quantity
for the relevant year.
6. All Repurchaser Replacement Costs, together with ANE's 50% share of
the Net Benefits of an Alternative Market Sale Option transaction, shall be
credited to the Contract commodity charges otherwise payable by ANE on the
invoice for the month in which the Alternative Market Sale Option is
implemented. ANE shall in turn credit the commodity charges otherwise payable to
ANE by the ANE Repurchasers participating in the Alternative Market Sale Option.
4
APPENDIX B
TREATMENT OF INCREASES IN U.S. PIPELINE RATES IN THE
CALCULATION OF THE PRICE OF GAS PURSUANT TO ARTICLE VII
The Contract provides, at Article VII, Section 6(b), that the price of
gas purchased thereunder is to be determined by reference to, among other
things, the New York City Gate price for natural gas, or "Pg", which is in turn
defined by reference to certain rates charged by Texas Eastern Transmission
Company, Tennessee Gas Pipeline Company, and TransContinental Gas Pipeline
Corporation, which collectively comprise the natural gas components of the price
formula (such pipelines and the relevant rates are further referred to herein as
the U.S. Pipelines and the U.S. Pipeline Rates). The parties understand that,
when a U.S. Pipeline files for a rate increase, the increase is generally
suspended for a period not exceeding five months, at which point, if a new rate
has not been finally approved, the proposed increased rate is placed into effect
subject to refund. The parties agree that, when any rate increase is placed into
effect subject to refund, the price of gas purchased under the Contract shall be
calculated, billed and paid as set forth in this protocol. The parties further
agree that this protocol shall govern both increases filed for in the U.S.
Pipeline Rates identified herein and increases filed for in any successor U.S.
Pipeline rate schedules which may later be adopted by the parties for purposes
of calculating the price of gas purchased under the
APPENDIX B
Contract, including in both cases increases in any components or subcomponents
of those rates.
The protocol for treatment of U.S. Pipeline Rate increases in effect
subject to refund shall be as follows:
1. The period commencing on the date on which a proposed U.S. Pipeline
Rate increase (the "Proposed Rate") is placed into effect subject to refund
until the date on which a rate approved by the Federal Energy Regulatory
Commission pursuant to the rate filing (the "Approved Rate") is placed into
effect (and is not subject to refund) shall be the "Refund Period." The "Refund
Period Rate" shall be the rate established by the Federal Energy Regulatory
Commission as the rate to be utilized in calculating refunds due to U.S.
Pipeline customers for the Refund Period.
2. For each month during the Refund Period, Buyer shall calculate, and
Seller shall confirm, the commodity charge (the "Initial Commodity Charge") for
each MMbtu of gas purchased during such month on the basis of the Proposed Rate.
Seller shall xxxx to and collect from ANE the Initial Commodity Charge for each
MMbtu of gas purchased in each month during the Refund Period.
3. Within thirty days of the close of the Refund Period, Buyer shall
retroactively calculate, and Seller shall confirm, the commodity charge (the
"Adjusted Commodity Charge") for each
0
XXXXXXXX X
the Refund Period, utilizing the Refund Period Rate. The difference between the
Initial Commodity Charge and the Adjusted Commodity Charge, multiplied by the
number of MMbtu's purchased by Buyer from Seller during the relevant month,
shall be the "Price Differential" for that month.
4. Seller shall refund to Buyer, by wire transfer in U.S. Dollars to an
account to be identified by Buyer, an amount equal to the Price Differential for
each month of the Refund Period together with interest on each such month's
Price Differential calculated and compounded monthly at a rate equal to the
"Prime Rate" as published by the Wall Street Journal under "Money Rates" on the
last publication date of each month. Buyer shall also refund to the U.S.
Repurchasers, for each MMbtu of gas purchased by each Repurchaser during the
Refund Period, the amount (if any) by which the Initial Commodity Charge per
MMbtu billed to and collected from the Repurchasers exceeds the Adjusted
Commodity Charge, together with each Repurchaser's proportional share of the
interest calculated as above. To the extent that Seller fails to make any wire
transfer payment required by this paragraph 5, Buyer shall be entitled to offset
as a credit the amount of such payment due from Seller against the next invoice
rendered by Seller to Buyer for the purchase of gas under the Contract, and/or
to pursue any other remedy available to Buyer under the Contract or otherwise.
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APPENDIX B
5. As of the date on which the Approved Rate goes into effect, Buyer
shall calculate, and Seller shall confirm, the commodity charge for gas
purchased under the Contract on the basis of the Approved Rate, both for the
purpose of calculating the commodity charge per MMbtu to be billed to and paid
by ANE and for the purpose of calculating the commodity charge per MMbtu to be
billed to and collected from the Repurchasers. For greater certainty, it is
confirmed that the "applicable surcharges" referenced in Article VII, Section
6(b) of the Contract will include any FERC-approved surcharge imposed as a
result of appeals by the relevant U.S. Pipeline of the Approved Rate.
6. The procedures set forth herein shall be applied to each U.S.
Pipeline Rate independently.
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