EXHIBIT B-6
WASHINGTON GAS LIGHT COMPANY
AND
WGL HOLDINGS, INC.
SERVICE AGREEMENT
THIS AGREEMENT made this ____ day of ____________ 2000, between Washington
Gas Light Company, a District of Columbia and Virginia corporation (hereinafter
called the Company) and WGL Holdings, Inc., a Virginia corporation (hereinafter
called the Affiliate).
WITNESSETH:
The Company is a subsidiary of the Affiliate. The Company has specialists
who are experienced in the operations of gas utilities and related businesses,
together with appropriate facilities and equipment, through which it is prepared
to furnish services, as hereinafter described, to the Affiliate.
The rendition of such services on a centralized basis will enable the
Affiliate to realize substantial economic and other benefits through (1)
efficient use of personnel and equipment, (2) coordination of analysis and
planning, and (3) availability of specialized personnel and equipment which the
Affiliate cannot economically maintain on an individual basis. Furthermore, the
execution of this service agreement establishes procedures to allocate costs
that will further assure that utility customers do not subsidize nonutility
operations.
The Company has previously entered into service agreements with other WGL
affiliates (collectively, the "Affiliates") on substantially the same terms and
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conditions. The Company will render all services performed under all agreements
at cost, which cost shall be fairly and equitably apportioned among the
Affiliates. To the extent that any charges for services or goods are rendered to
the Affiliates on the basis of estimated costs, they are readjusted to actual
costs at least annually except in cases of construction, in which event such
charges are adjusted upon completion of the individual projects.
WITNESSETH THAT the Company and the Affiliate, in consideration of the
promises included herein, agree as follows:
1. Agreement to Furnish Services. The Company agrees to furnish to the
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Affiliate, upon the terms and conditions set forth in Attachment A, which is
attached hereto and constitutes a part hereof, each of the services described in
Article II of said Attachment A, at such times, for such periods and in such
manner, as the Company and the Affiliate respectfully may from time to time
request. The Company will maintain an organization sufficient to render with
efficiency and reasonable promptness each of the services described in Article
II of said Attachment A, but it shall not be obligated to perform any services
hereunder without reasonable notice.
2. Effective Date of this Agreement. This Agreement shall become effective
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when approved by the State Corporation Commission of Virginia and supersedes any
previous agreements between the Company and the Affiliate.
3. Termination. This Agreement may be terminated upon not less than thirty
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(30) days written notice, by either the Company or the Affiliate; provided,
however, that this Agreement shall be terminated automatically (i) to the extent
that performance under this Agreement may conflict with any rule, regulation or
order of any state or federal regulatory agency having jurisdiction over the
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Company or the Affiliate, or (ii) if this Agreement shall become invalid or
illegal under any state law or under any rule, regulation or order of any state
commission or other state body having jurisdiction in the premises.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.
WASHINGTON GAS LIGHT COMPANY
By:______________________________________
Xxxxxx X. Xxxxxxx
President and Chief Operating Officer
WGL HOLDINGS, INC.
By:______________________________________
Xxxxxx X. Xxxxxxx
President and Chief Operating Officer
Attachment A
WASHINGTON GAS LIGHT COMPANY
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Services Available Between the Company
and Affiliate, Methods of Charging Therefor, and
Miscellaneous Terms and Conditions of Service Agreements
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS Page
A. "WGL".............................................................. 1
B. "Affiliate" and "Affiliates"....................................... 1
C. "Service Agreement"................................................ 1
ARTICLE II. DESCRIPTION OF SERVICES
A. Accounting, Financial and Statistical Services..................... 1
B. Auditing and Internal Audit Services............................... 2
C. Budget Services.................................................... 2
D. Corporate and Legal Services....................................... 2
E. Engineering, Operations and Planning Service....................... 2
F. Human Resources Services........................................... 2
G. Information Systems Services....................................... 3
H. Gas Dispatching Services........................................... 3
I. Marketing and Advertising Service.................................. 3
J. Insurance Services................................................. 3
K. Methods Services................................................... 3
L. Officers........................................................... 4
M. Rate Services...................................................... 4
N. Tax Services....................................................... 4
O. Miscellaneous Services............................................. 4
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ARTICLE III. COMPENSATION
A. Specific Direct Salary Charges to Affiliate........................ 5
B. Apportioned Direct Salary Charges to Affiliate..................... 5
C. Indirect Labor Costs............................................... 5
D. Apportionment of Employee Benefits................................. 6
E. Other Expenses..................................................... 6
F. Apportionment of Overhead.......................................... 6
G. Transfer of Equipment and Goods.................................... 6
ARTICLE IV. BILLING
A. Monthly Bills and Detail Statement of Charges...................... 7
B. Information to be Furnished by Affiliate........................... 7
ARTICLE V. INSPECTION OF RECORDS........................................... 7
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WASHINGTON GAS LIGHT COMPANY
Services Available to Affiliate,
Methods of Charging Therefor, and
Miscellaneous Terms and Conditions of Service Agreements
ARTICLE I. DEFINITIONS
A. The term "WGL" or "Company" shall mean Washington Gas Light Company and
its successors.
B. The term "Affiliate" shall mean any corporation affiliated with WGL and
which is a party to a "Service Agreement" with WGL; the term "Affiliates" refers
to the affiliates of WGL collectively.
C. The term "Service Agreement" shall mean an agreement, of which this
Attachment A constitutes a part, for the rendition of service by WGL.
ARTICLE II. DESCRIPTION OF SERVICES
The services and facilities which the Company is prepared to render and
furnish to the Affiliate, as requested from time to time by the Affiliate, are
set forth in general terms below. The details listed under each heading are
intended to be illustrative rather than inclusive and are subject to
modification from time to time in accordance with the state of the art and the
needs of the Affiliate.
A. Accounting, Financial and Statistical Services.
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WGL will advise and assist the Affiliate in accounting, financial and
statistical matters, including the preparation and furnishing of financial,
statistical and other related reports and analyses; credit services such as
credit checks and collection of overdue accounts; cash management services such
as billing, processing and application of cash receipts; payroll processing
services; and financial services such as forecasting cash requirements,
obtaining financing and evaluating proposed sales programs and financing terms.
B. Auditing and Internal Audit Services.
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WGL will conduct periodic audits of the general records of the Affiliate
and will coordinate the audit programs of the Affiliate with those of the
independent accountants in the annual examination of their accounts.
C. Budget Services.
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WGL will advise and assist the Affiliate in matters involving the
preparation and development of budgets and budgetary controls.
D. Corporate and Legal Services.
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WGL will advise and assist the Affiliate in connection with corporate
and legal matters, and with administrative and judicial proceedings involving
regulatory, tax, contract, tort, property, insurance and similar matters.
E. Engineering, Operations and Planning Services.
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WGL will advise and assist the Affiliate in connection with estimates of
gas requirements and gas available, gas transmission, measurement, storage and
distribution, construction requirements, negotiation of gas purchase and sale
contracts, and other operating matters.
F. Human Resources Services.
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WGL will advise and assist the Affiliate, as required, in connection with
employee relations matters, including recruitment, employee placement, training,
compensation, safety, labor relations and health, welfare and employee benefits.
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G. Information Systems Services.
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WGL will process data for the Affiliate by means of electronic,
magnetic tape, or other tabulating or calculating equipment maintained on a
centralized basis. These services will include the computing, preparing and
processing of service bills and other bookkeeping, accounting, analytical and
related functions.
H. Gas Dispatching Services.
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WGL will advise and assist the Affiliate in the dispatching of the gas
supplies available to the Affiliate, and in determining and effecting the most
efficient routing and distribution of such supplies in light of the respective
needs therefor and the applicable laws and regulations of governmental bodies.
If requested, WGL will provide a central dispatcher or dispatchers to handle the
routing and dispatching of gas.
I. Marketing and Advertising Services.
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WGL will advise and assist Affiliate in matters involving the furnishing of
information to customers, employees, investors and other interested groups, and
to the public generally, including the preparation of booklets, photographs,
motion pictures, and other means of presentation, and assistance to Affiliate in
their marketing and advertising programs.
J. Insurance Services.
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WGL will advise and assist Affiliate in general insurance matters, in
obtaining policies, making inspections and settling claims.
K. Methods Services.
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WGL will advise and assist the Affiliate in the formation of accounting
practices and methods of procedure, in the standardization of forms, and with
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respect to the purchase, rental and use of mechanical and electronic computing
equipment. WGL will also conduct such special studies as may be requested by the
Affiliate.
L. Officers.
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Any Affiliate may, with the consent of WGL, elect to any office of the
Affiliate any officer or employee of WGL whose compensation is paid by WGL.
Services rendered to the Affiliate by such person as an officer shall be billed
by WGL to the Affiliate and paid for as provided in Articles III, IV and V, and
the Affiliate shall not be required to pay any compensation directly to any such
person.
M. Rate Services.
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WGL will advise and assist the Affiliate in all rate matters, including
the design and preparation of schedules and tariffs, the analysis of rate
filings of producers and pipeline suppliers, and the preparation and
presentation of testimony and exhibits to regulatory authorities.
N. Tax Services.
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WGL will advise and assist the Affiliate in tax matters, in the
preparation of tax returns and in connection with proceedings relating to taxes.
O. Miscellaneous Services.
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WGL will render to any Affiliate any such services, not hereinabove
described, as from time to time WGL may be equipped to render and such Affiliate
may desire to have performed.
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ARTICLE III. COMPENSATION
It is the intent of the Company and the Affiliate that charges for goods,
services, and facilities shall compensate the Company for all its costs
including without limitation its direct costs, all indirect costs related to
such direct costs and all overhead costs of providing goods, services, and
facilities.
The amounts which an Affiliate shall pay to WGL shall be determined as
provided in this Article III.
A. Specific Direct Salary Charges to Affiliate.
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To the extent that time spent by the officers and employees of WGL is
related to specific, identifiable services, a direct salary charge shall be made
based on the hourly rates of compensation.
B. Apportioned Direct Salary Charges.
---------------------------------
To the extent that the time spent by the officers and employees of WGL is
related to services rendered to Affiliates generally, or to any specified group
of the Affiliates, a direct salary charge shall be made to the Affiliates
generally, or to such specified group of the Affiliates, and allocated to each
such Affiliate upon such equitable basis or bases as WGL may from time to time
specify.
C. Indirect Labor Costs.
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There shall be added to the direct labor charges in (A) and (B) of this
Article III a suitable loading factor for holidays, vacations, sick time and
such other excused time with pay as is consistent with WGL's accounting
policies.
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D. Apportionment of Employee Benefits.
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The employee benefit expenses which are related to direct salary charges
made pursuant to paragraphs (A) and (B) of this Article III shall be apportioned
among the several Affiliates, as applicable, in the proportions which the
respective direct salary charges made pursuant to the rendering of such services
to each Affiliate bear to the aggregate of such direct salary charges.
E. Other Expenses.
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All expenses, other than salaries and employee benefit expenses incurred by
WGL in connection with services rendered to a specific Affiliate shall be
charged directly to such Affiliate. All such expenses incurred by WGL in
connection with services rendered to the Affiliate generally or to any specified
group of Affiliates shall be apportioned in the manner set forth in paragraph
(B) of this Article III for the apportionment of salary charges. All other
expenses shall be considered Overhead, which shall include: rents; depreciation;
amortization; return; taxes; compensation of employees performing office service
functions; general office supplies; charges for utility, maintenance and similar
services; legal fees and fees of independent accountants; and all other such
expenses normally treated as Overhead.
F. Apportionment of Overhead.
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The Overhead shall be allocated among the Affiliates in the manner
prescribed by WGL to fairly apportion the Overhead charges between the Company
and the Affiliates.
G. Transfer of Equipment or Goods.
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Where applicable, the sale price of goods transferred to or from affiliated
companies will be based on approved tariffs in effect at the time of the sale or
transfer. If the sale is not covered by a tariff, the sales price of items
transferred between affiliated companies will be based on the net book value at
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the time of transfer.
ARTICLE IV. BILLING
A. Monthly Bills and Detail Statement of Charges.
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As soon as practicable after the close of each month WGL will issue to the
Affiliate an Invoice and Detail of Charges which will itemize the amounts due
for services, overhead and expenses for such month, computed pursuant to Article
III. All amounts so billed shall be paid within fifteen (15) days after the
receipt of the xxxx therefor.
To the extent required by law, all bills shall be accompanied by a
statement showing the manner in which such charge was determined.
B. Information to be Furnished by Affiliate.
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The Affiliate will forward to WGL from time to time, as requested, such
financial and statistical information as WGL may need to compute the charges
payable by Affiliate upon such basis as may have been specified pursuant to
Article III.
ARTICLE V. INSPECTION OF RECORDS
WGL agrees to keep its books and records available for inspection at all
reasonable times by representatives of the Affiliate in order that the
correctness of the charges made by WGL for services to the Affiliate may be
verified by the Affiliate. The Affiliate agrees to do the same on behalf of WGL.
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