EXIBIT 10.16
OPERATING AGREEMENT
This Agreement made and entered into the 13th day of November, 1996, to be
effective the 1st day of December 1996 (the "Effective Date"), by and between
Westar Transmission Company (hereinafter called "Operator"), and Energas
Company, a division of Atmos Energy Corporation ("Customer");
WITNESSETH
WHEREAS, Operator currently owns and operates approximately 500 Metering
Facilities which will be subject to this Agreement; and
WHEREAS, Customer will by way of a separate agreement convey approximately
1,735 Metering Facilities to Operator as set forth on Exhibit A, which will
become subject to this Agreement; and
WHEREAS, Operator and Customer mutually desire to enter into an Operating
Agreement covering those certain metering and delivery facilities defined in
Article I as "Metering Facility(ies)"; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1. "Party" or "Parties" means Customer and/or Operator
hereunder, acting by and through duly authorized representatives.
Section 2. "Metering Facility(ies)" means the equipment and facilities
located in the West Texas area (including but not limited to all pipe, valves,
fittings, meters and regulators) which are presently connected (or connected in
the future under Article II) directly to Operator's pipeline system(s), and are
described on Exhibit A as follows:
a) Orifice Meters;
b) Large Capacity Positive Displacement Meters ("Large Meters"), being
Class IV or larger positive displacement, turbine, and rotary meters
which includes those meters with a capacity equal to or greater than
1800 cubic feet per hour at 8 ounces of pressure;
c) Other Positive Displacement Meters ("Other
Meters"), being those Class I through III meters which includes those
meters with a capacity less than 1800 cubic feet per hour at 8 ounces of
pressure.
Customer shall retain ownership of and continue maintaining and operating any
and all metering facilities regardless of type and size which are currently
connected to pipeline systems not owned by Operator. Additionally, all yard
lines and service lines downstream of the Metering Facility(ies) shall remain
the property of Customer, and Customer retains all liabilities and obligations
associated with such yard and service lines. Operator shall own, operate and
maintain all taps, valves and regulators upstream of the Metering Facilities.
Section 3. "Day" means the period of twenty-four consecutive hours
commencing at 7:00 a.m. Central Time (CT) on one calendar day and ending at 7:00
a.m. (CT) on the following calendar day. The reference date for any day should
be the calendar date upon which such twenty-four (24) hour period began.
Section 4. "Month" means the period commencing at 7:00 a.m. CT on the
first day of a calendar month and ending at 7:00 a.m. CT on the first day of the
following month.
Section 5. "MCF" means the quantity of gas occupying a volume of one
thousand (1000) cubic feet at a temperature of sixty (60) degrees Fahrenheit and
an absolute pressure of fourteen and sixty-five hundredths pounds per square
inch absolute (14.65 psia).
Section 6. "BTU" means the amount of heat required to raise the
temperature of one avoirdupois pound of pure water from fifty-eight and five
tenths (58.5) degrees Fahrenheit to fifty-nine and five tenths (59.5) degrees
Fahrenheit at a constant pressure of fourteen and sixty-five hundredths (14.65)
pounds per square inch absolute.
Section 7. "MMBTU" means one million (1,000,000) BTU.
Section 8. "PSIG" means pounds per square inch gauge.
Section 9. "PSIA" means pounds per square inch absolute.
Section 10. "Gross Heating Value" means the number of Btu's liberated
by the complete combustion at a constant pressure, of one (1) cubic foot of gas,
at a base temperature of sixty (60) degrees Fahrenheit and a referenced pressure
base of fourteen and sixty-five hundredths (14.65) psia, with air of the same
temperature and pressure of the gas, after products of combustion are cooled to
the initial temperature of the gas, and after the water of the combustion is
condensed to the liquid
state. The Gross Heating Value of the gas shall be corrected for the actual
water vapor content of the gas being delivered, provided, if the actual water
vapor content is seven (7) pounds or less per one million (1,000,000) cubic
feet, the gas will be assumed to be dry and no correction will be made.
ARTICLE II
MEASUREMENT EQUIPMENT AND TESTING
Section 1. Unless otherwise mutually agreed upon in writing,
Operator will be the "Operating Party" for all Orifice Meters and Large Capacity
Positive Displacement Meters and Customer will be the "Operating Party" for
Other Positive Displacement Meters; provided, that for any Orifice Meters and
Large Meters which are downgraded to a classification as Other Meters after the
Effective Date, Operator shall continue to be the Operating Party.
Section 2.
A. In the event Customer determines that a new Orifice Meter or
Large Meter ("New Metering Facility") is required to provide service to Customer
under this Agreement, or if Customer and Operator agree that a New Metering
Facility is required, Operator shall install, own, and operate, or cause to be
installed and operated such New Metering Facility. Customer shall pay to
Operator or Operator's designee the actual cost of such installations (including
taxes on income, if any, for aid in construction reimbursements) plus an
overhead charge of fifteen percent of such actual cost (example provided on the
attached Exhibit A). Customer shall pay such costs within thirty (30) days of
receipt of invoice. Customer at its cost, shall provide location sites
acceptable to Operator for all such New Metering Facilities. Operator shall
designate the type of New Metering Facilities that shall be utilized; provided,
if Operator, after the installation of New Metering Facilities pursuant to
Operator's initial designation for any point hereunder, designates a different
type of New Metering Facilities, the cost of such different New Metering
Facilities shall be borne by Operator. Operator will install or cause to be
installed a New Metering Facility only upon receipt of a completed "New
Facilities Request" form from Customer (example provided in attached Exhibit B).
B. Customer shall not be responsible for costs associated with the
replacement, rebuilding or repair of any Metering Facilities owned by Operator
already in place and being used to provide service under this Agreement.
C. For all Other Positive Displacement Meters, unless otherwise
agreed, Customer shall install, own and operate or
cause to be installed and operated all equipment determined by Customer to be
necessary for the measurement of gas to be delivered under this Agreement.
D. All equipment installed by either Party will be based upon industry
standard designs and operated in accordance with this Agreement. Either Party
may install, maintain, and operate, at its sole cost and expense, check metering
facilities or other related equipment including, but not limited to, separate
Metering Facilities, and equipment which will give either party the right to
share pressure/differential sensing lines and positive displacement meter pulse
output; provided, however, that such equipment shall be installed in a manner
that will not interfere with the operation of the other Party's Metering
Facilities and/or telemetry equipment.
Section 3. Orifice meters installed in such Metering Facilities shall be
constructed and operated in accordance with ANSI/API 2530 (AGA Report No. 3),
Orifice Metering of Natural Gas and Other Related Hydrocarbon Fluids, Second
Edition, dated September 1985, and any subsequent modification and amendment
thereof, as mutually agreed upon, and shall include the use of flange
connections and, where necessary, straightening vanes and pulsation dampening
equipment.
Section 4. Positive displacement or turbine meters installed in such
Metering Facilities shall be constructed and operated in accordance with the
provisions of AGA Measurement Committee Report No. 6 (AGA Report No. 6) dated
January 1971, when positive meters are employed, and AGA Measurement Committee
Report No. 7 (AGA Report No. 7), First Revision, dated November 1984, when
turbine meters are used, with any subsequent amendments or revisions of either
report, as mutually agreed upon.
Section 5. When electronic transducers and flow computers, solar and
otherwise, are used, the gas shall have its volume, mass, and/or energy content
computed in accordance with the applicable AGA standards including, but not
limited to, AGA Report Nos. 3,5,6, and 7 and any subsequent modification and
amendments thereof as mutually agreed upon. The Parties specifically agree to
accept the use of these electronic devices in lieu of mechanical devices with
charts.
Section 6. The Operating Party shall give thirty (30) days minimum
notice to the other Party in order that the other Party may have representatives
present to observe any changing, inspecting, testing, calibrating, or adjusting
of the Metering Facilities. The official charts, recordings, and readings from
such Metering Facilities shall remain the property of the Operator or Customer,
as appropriate, but upon request, the Operator or Customer will submit its
records and charts, together
with calculations therefrom, to the other Party for inspection and verification,
subject to return within sixty (60) days after receipt thereof.
Section 7.
A. The Operator or Customer (as appropriate) shall, in the
presence of the other Party's representative, if such other Party requested to
be present, verify the accuracy and adjust or calibrate all transmitting or
recording devices used in the Metering Facilities within the time frames
specified below:
a) Orifice Meters - monthly or quarterly, as determined by
Operator,
b) Large Capacity Positive Displacement Meter - one (1) to
three (3) years, as determined by Operator, (Operator shall
have three (3) years from date of conveyance described in the
second Recital to test the meters which it receives in the
conveyance and make any subsequent adjustments to bring them
into compliance with the Agreement);
c) Other Positive Displacement Meter - from the earlier of the
last test date or the date of manufacture - up to twelve (12)
years for Class II and Class III meters and up to twenty (20)
years for Class I meters, as determined by Customer.
B. If during any test of the Metering Facilities, an adjustment
or calibration error is found which results in an incremental adjustment to the
calculated hourly flow rate through each meter in excess of two percent (2%) of
the correct flow rate (whether positive or negative and using the adjusted flow
rate as the percent error equation denominator), then any previous recording of
such equipment shall be corrected to zero (0) error (i) for any and all months
in which the error existed (and which is either known definitely or agreed to by
both Parties), and (ii) the total monthly adjustment per meter is greater than
50 MMBTUs. The total flow for the period will be redetermined in accordance with
the provisions of Section 9. below. If the period of error condition cannot be
determined or agreed upon between the Parties, such correction shall be made
over a period extending over the last one-half (1/2) of the time elapsed since
the date of the latest test, provided that such correction period will not
exceed six (6) months. For a known calculation error for which the time period
can be determined and agreed upon by both Parties, the correction period shall
be the agreed upon time period with no limits on the correction period.
C. If, during any test of the Metering Facilities, an
adjustment or calibration error is found which results in an incremental
adjustment to the calculated hourly flow rate which does not exceed two percent
(2%) of the adjusted flow rate (as described in part B. of this Section), all
prior recordings shall be considered to be accurate.
D. During all tests, the Metering Facilities will be adjusted or
calibrated to as near as zero (0) error as possible by the Operator or Customer
as appropriate.
Section 8. In the event a special test is requested by a Party of the other
Party's Metering Facilities, (a test not scheduled under the provisions of
Section 7. above),the requesting Party shall give seventy-two (72) hours advance
notice and both Parties shall cooperate to secure a prompt test of the accuracy
of such equipment. If the Metering Facility tested is found to be within two
percent (2%) of the correct flow rate, or if an inspection of the Metering
Facility indicates no problems, the Party performing the test shall have the
right to xxxx the requesting Party for the cost of such special test, including
any labor and transportation costs pertaining to such special test and the
requesting Party shall pay such costs within thirty (30) days of its receipt of
the invoice.
Section 9. If, for any reason the Metering Facility is (i) out of adjustment,
(ii) out of service, or (iii) in need of repair and the total calculated hourly
flow rate through the Metering Facility is found to be in error by an amount of
more than two percent (2%) of the correct flow rate, the total quantity of gas
delivered shall be redetermined in accordance with the first of the following
methods which both Parties mutually agree is feasible:
(a) by correcting the error by re-reading the official charts, or by
straightforward application of a correcting factor to the quantities
recorded for the period (if the net percentage of error is
ascertainable by calibration, tests or mathematical calculation);
(b) by using the registration of any mutually agreeable check metering
facility or telemetry equipment, if installed and accurately
registering (subject to testing as described in Section 7 above);
(c) by using upstream and downstream measurement;
(d) by estimating the quantity, based upon deliveries made during
periods of similar conditions when the meter was registering
accurately;
(e) where parallel multiple meter runs exist, by calculation using the
registration of such parallel meter runs; provided that they are
measuring gas from upstream and downstream headers in common with the
faulty metering equipment, are not controlled by separate regulators,
and are accurately registering,
Section 10. Each Party shall retain and preserve for a period of at least two
(2)years all test data, charts, and other similar records.
Section 11. Each Party shall have the right to remove at its cost all
Metering Facilities, excluding the tap, owned by it within a reasonable period
of time following the expiration or termination of this Agreement.
Section 12. Customer has current end users connected to Metering Facilities
which are currently customers of Customer, and the intent of this Operating
Agreement and any separate meter conveyance agreement is to convey Metering
Facilities only.
ARTICLE III
MEASUREMENT SPECIFICATIONS
The measurements of the quantity and quality of all gas delivered at the
Metering Facilities shall be conducted in accordance with the following:
Section 1. Unit of Volume: The unit of volume for measurement shall be one
(1) cubic foot of gas at a temperature base of sixty (60) degrees Fahrenheit and
at a pressure base of fourteen and sixty-five hundredths (14.65) psia. Such
measured volumes, converted to MCF, shall be multiplied by their BTU per cubic
foot and divided by 1,000 to determine MMBTUs received and delivered hereunder.
Section 2. Volume Computations: Computations of gas volumes from measurement
data shall be made in accordance with the following depending upon the type of
measurement being utilized by Operating Party:
(a) Orifice Meters - ANSI/API 2530 (AGA Report No. 3), Orifice
Metering of Natural Gas and Other Related Hydrocarbon Fluids, Second
Edition, dated September 1985, and any subsequent amendments or
revisions as mutually agreed upon;
(b) Positive and turbine meters - For positive meters AGA Measurement
Committee Report No. 6 (AGA Report No. 6), dated January 1971, and any
subsequent amendments or revisions. For turbine
meters, AGA Measurement Committee Report No. 7 (AGA Report No. 7),
First Revision, dated November, 1984, and any subsequent amendments or
revisions as mutually agreed upon.
(c) Electronic transducers and flow computers - AGA Report Nos. 3,5,6,
& 7 and any subsequent amendments or revisions as mutually agreed
upon.
Section 3. Temperature Measurement: The temperature of the gas shall be
determined by a recording thermometer so installed that it may record the
temperature of the gas flowing through the meters. The average temperature to
the nearest one (1) degree Fahrenheit, obtained while the gas is being
delivered, shall be the applicable flowing gas temperature for the period under
consideration for volume calculation. In lieu of recording thermometers either
Party may elect to install temperature compensating devices on its positive
displacement meters. For existing meters that currently do not have a recording
thermometer or a temperature compensating device, then the temperature used for
volume calculation shall be sixty (60) degrees Fahrenheit. All new Large Meter
installations and all meter replacements shall have either a recording
thermometer or a temperature compensating device.
Section 4. Specific Gravity Measurement: The specific gravity of the gas
shall be determined by calculating the specific gravity from an on-line
chromatographic device installed and located at a suitable point to record
representative average specific gravity of the gas being metered or by other
mutually agreeable methods. The gravity, to the nearest one-thousandth (0.001),
obtained while gas is being delivered shall be the specific gravity of the gas
used for the recording period. If on-line chromatographic devices are not
currently installed and available for use, the Party's are not obligated to
install equipment and, spot sampling or continuous sampling using standard type
specific gravity sampling methods may be used in lieu of an on-line
chromatograph. If the spot sampling or continuous sampling method is used, the
specific gravity of the gas delivered hereunder shall be determined on at least
a quarterly basis from a gas analysis. The result shall be obtained to the
nearest one-thousandth (0.001) and should be applied during the applicable
quarter or time period for the determination of gas volumes delivered.
Section 5. Adjustment for Supercompressibility: Adjustments to measured gas
volumes for the effects of supercompressibility shall be made in accordance with
accepted AGA standards. Operator shall obtain representative carbon dioxide and
nitrogen mole fraction values for the gas delivered as may be required to
compute such adjustments in accordance with
standard testing procedures. At each Party's option (as applied to that Party's
Metering Facilities only), equations for the calculation of supercompressibility
may be taken from either (i) the AGA Manual for the Determination of
Supercompressibility Factors for Natural Gas, dated December, 1962 (also known
as the "NX-l9 Manual"), or (ii) the AGA Report No. 8, dated December, 1985,
Compressibility and Supercompressibility for Natural Gas and Other Hydrocarbon
Gases, or at operating Party's option, any subsequent revision to AGA Report No.
8.
Section 6. Atmospheric Pressure: The Atmospheric Pressure shall be the actual
atmospheric pressure at different elevations per the attached Exhibit A. Exhibit
A shall be updated by the Operating Parties from time to time to reflect
additions or deletions of Metering Facilities covered by this Agreement.
Section 7. Determination of Gross Heating Value: The gross heating value of
the gas delivered hereunder shall be determined by calculating the BTU from an
on-line chromatograph or a gas analysis of a spot or continuous gas sample. Spot
samples shall be taken at least quarterly, and a continuous sample shall be
taken monthly. Such sample shall be taken at a suitable point on the facilities
to be representative of the gas being metered.
Section 8. Other Tests: Other tests to determine water content, hydrogen
sulfide, sulfur and other impurities in the gas shall be conducted by Operator
annually, at four mutually agreeable locations at Operator's expense and shall
be conducted in accordance with standard industry testing procedures. If
additional tests of the same type are requested by Customer, Customer shall bear
the costs of such tests. For all other tests, each Party shall bear the cost of
testing the Metering Facilities for which it is responsible only in the event
the gas tested is determined not to be within the applicable specification(s),
otherwise the requesting Party shall bear the cost of such test(s).
Section 9. New Test Methods: If at any time during the term hereof a new
method or technique is developed with respect to gas measurement, such new
method or technique may be substituted for the method set forth in this Article
when such methods or techniques are in accordance with the currently accepted
standards of the American Gas Association, and if mutually agreed upon by the
Parties.
ARTICLE IV
QUALITY
Section 1. Gas delivered by Operator hereunder at the Metering Facilities
shall conform to the following
specifications:
(a) Liquids - the gas shall be commercially free of
water and hydrocarbons in liquid form.
(b) Hydrogen Sulfide - the gas shall not contain more than one (1)
grain of hydrogen sulfide per one hundred (100) cubic feet.
(c) Organic Sulfur - the gas shall not contain more than ten (10)
grains of organic sulfur per one hundred (100) cubic feet.
(d) Carbon Dioxide - the gas shall not contain more than two percent
(2%) carbon dioxide by volume.
(e) Dust, Gums, etc. - the gas shall be commercially free of dust,
gums and other solid matter.
(f) Water Vapor - the gas shall not contain more than seven pounds (7
lbs.) of water in the vapor phase per million cubic feet.
(g) BTU Content - the gas shall have a BTU of not less than nine
hundred fifty (950) BTUs (dry) per cubic foot or more than eleven
hundred (1100) BTUs (dry) per cubic foot at standard temperature and
pressure.
(h) Temperature - the temperature of the gas shall not be more than
one hundred twenty (120) degrees Fahrenheit.
(i) Oxygen - the gas shall not contain more than one percent (1%)
oxygen by volume.
ARTICLE V
DELIVERY PRESSURE
Section 1. Operator shall make all reasonable efforts to maintain one hundred
fifty (150) psig at the inlet to all Town Border Stations (TBSs), all other
deliveries shall be made at the pressure existing from time to time in
Operator's facilities. Notwithstanding the one hundred fifty (150) psig
requirement at the TBSs, neither Party shall be required to install compression
facilities in order to effect deliveries hereunder at the Metering Facilities.
ARTICLE VI
OUTAGES
Section 1. For all outages outside Force Majeure which (i) occur as a result
of any negligent act or omission of Operator, or (ii) are caused by or involve
third parties (Third Party Outage), Operator shall be obligated to reimburse
Customer for all direct costs and expenses incurred, including but not limited
to, reasonable direct costs of restoring service and relighting furnaces
(Restoration Expenses); however, Operator shall not be responsible for any other
charges or claims including, but not limited to, incidental, consequential, or
punitive damages. Notwithstanding the immediately preceding sentence, Operator
is only obligated to reimburse Customer for Restoration Expenses for a Third
Party Outage when and only to the extent that Operator is successful in finally
recovering damages (less Operator's attorneys' fees, court costs and collection
expenses) from such third party. When there is joint or concurrent conduct as
described in (i) and (ii) above leading to an outage, Operator shall only be
responsible for paying to Customer Restoration Expenses to the degree that
Operator is jointly or concurrently liable, and Operator shall subsequently
reimburse Customer for the third party's share of Restoration Expenses after
Operator's recovery, if any, of Restoration Expenses as set forth in the
immediately preceding sentence.
ARTICLE VII
MAINTENANCE OF FACILITIES
Section 1. Each Party shall maintain its Metering Facilities including
chromatographs and odorizers owned by it and used in its performance hereof in
good, safe, and efficient operating condition and repair. In addition each Party
shall maintain and replace from time to time its Metering Facilities in a
reasonable manner according to industry standards with the intent to obtain
accurate measurement.
Section 2. Each Party shall have the right at the time the other Party is
testing a Metering Facility to inspect that Metering Facility which is the
subject of the test. If the inspecting Party establishes that the Metering
Facilities are not operating in accordance with the terms of this Agreement,
then upon receipt of notice, the testing Party shall be obligated to correct
such condition within seventy two (72) hours, or as soon thereafter as is
reasonably practical with the exercise of due diligence.
ARTICLE VIII
ODORIZATION
Section 1. Operator shall be responsible for odorization of the natural gas
delivered to Customer only from Metering Facilities directly connected to
pipeline systems which Operator owns as of the Effective Date in accordance with
applicable laws or safety regulations and shall construct, maintain and operate
any facilities required for the performance of this obligation. Customer shall
be responsible for odorization of the natural gas received by Customer from
pipelines that are not owned by Operator. Customer shall be responsible for
monitoring and performing all odorant checks within its delivery systems and
will notify Operator immediately of any low readings. Customer shall also be
responsible for any regulatory requirements associated with monitoring and
performing odorant checks on its delivery systems. The consideration for the
costs of odorization service provided hereunder is included in the
transportation service fee relating to any gas transported by Operator which is
ultimately delivered to, or on behalf of Customer, or its affiliated entities.
ARTICLE IX
SHARING OF SCADA INFORMATION
Section 1. Operator and Customer will make reasonable efforts, to share SCADA
data. The Party requesting access to SCADA data which is in the possession of
the other Party shall bear all costs associated with obtaining such data from
the other Party.
ARTICLE X
ANNUAL OPERATING MEETING
Section 1. Customer's and Operator's operating personnel agree to make
reasonable efforts to meet on an annual basis to discuss the Operating Agreement
in order to identify and resolve any outstanding operating issues.
ARTICLE XI
TERM
Section 1. This Agreement, regardless of when executed, is effective as of
the Effective Date, continuing through December 31, 2001 (Primary Term), and
shall continue thereafter month-to-month unless terminated by either Party with
at least thirty (30) days written notice prior to the end of the Primary Term,
or any subsequent month thereafter.
ARTICLE XII
AUDIT
Section 1. During the term hereof and for two (2) years thereafter, each
Party and its duly authorized representative shall have access to and the right
to inspect and audit during regular business hours all meters and measurement
records maintained and operated by the other Party. Any matters not challenged
within a period of two (2) years of their occurrence,
are deemed waived by the Parties.
ARTICLE XIII
JOINT USE
Section 1. Each Party grants to the other Party, without cost, ingress and
egress to facilities and sites where the Parties will jointly use such sites to
operate their respective facilities.
ARTICLE XIV
INDEMNIFICATION
Section 1. Each Party assumes full responsibility for its own acts performed
under this Agreement, and shall indemnify and save harmless the other Party from
all liability, loss, claims, costs and damages (including but not limited to
attorney's fees and court costs) on actions, including injury to or death of
persons and environmental impacts, arising from any act or accident in
connection with the acts or omissions hereunder or any breach hereunder of the
indemnifying Party, except to the extent of any negligence or willful misconduct
of the other Party.
ARTICLE XV
ASSIGNMENT
Section 1. This Agreement may not be assigned by either Party (except to an
affiliate of such Party) without the prior written consent of the other, such
consent not to be unreasonably withheld.
ARTICLE XVI
NOTICES
Section 1. Any notice required to be given under this Agreement or any notice
which either Party hereto may desire to give the other Party shall be in writing
and shall be considered duly delivered when hand-delivered or when deposited in
the United States mail, postage prepaid, registered or certified, and addressed
as follows:
If to Customer: ENERGAS COMPANY
0000 XXX Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
Attention: Intrastate Gas Supply
Department
Phone: (000) 000-0000
ENERGAS COMPANY
0000 00xx Xxxxxx
Xxxxxxx, Xxxxx 00000
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Technical Services Department
24 Hour Phone: (000) 000-0000
If to Operator: WESTAR TRANSMISSION COMPANY
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Director of Pipeline
Operations
24 Hour Phone: (000) 000-0000 (Houston,
Texas)
24 Hour Phone: (000) 000-0000 (Amarillo,
Texas)
or such other address as Operator, Customer, or their respective successors or
permitted assigns shall designate by written notice given in the manner
described above. Routine communications may be mailed by ordinary mail and are
deemed delivered when hand-delivered or when deposited in the United States
mail, postage prepaid, and addressed to the above-designated name and address.
ARTICLE XVII
FORCE MAJEURE
Section 1. In the event that either Operator or Customer is rendered
unable, wholly or in part, by reason of an event of force majeure, to perform
its obligations under this Agreement, other than to make payment due hereunder,
and such Party has given notice and full particulars of such force majeure in
writing to the other party as soon as possible after the occurrence of the cause
relied on, then the obligations of the Parties, insofar as they are affected by
such force majeure, shall be suspended during the continuance of such inability,
but for no longer period, and such cause shall insofar as possible, be remedied
with all reasonable dispatch; provided, however, that the settlement of strikes
or lock-outs shall be entirely within the discretion of the Party having such
difficulty, and the above requirement that any force majeure be remedied with
all reasonable dispatch shall not require the settlement of strikes or lock-outs
by acceding to the demands of the opposing Party when such course is inadvisable
in the discretion of the Party
having the difficulty.
Section 2. The term "force majeure" as used in this Agreement shall
mean any cause not reasonable within the control of the Party claiming
suspension and includes, but is not limited to, acts of God; strikes; lock-outs;
wars; riots; orders or decrees of any lawfully constituted federal, state, or
local body; fires; storms; floods; wash-outs; explosions; breakage or accident
to machinery or lines of pipe; inability to obtain or delay in obtaining rights-
of-way, material, supplies, or labor permits; repair, maintenance, or
replacement of facilities used in the performance of the obligations contained
in this Agreement; or any other cause whether of the kind herein enumerated or
otherwise.
ARTICLE XVIII
REMEDIES UPON MATERIAL DEFAULT
Section 1. If either Party hereto shall fail to perform any material
covenant or obligation imposed upon it under this Agreement, then in such event
the non-defaulting Party may, at its option, terminate this Agreement upon
acting in accordance with the procedures hereafter set forth in this Section.
The non-defaulting Party shall cause a written notice to be served on the
defaulting Party, which notice shall state specifically the cause of terminating
this Agreement and shall declare it to be the intention of the non-defaulting
Party to terminate this Agreement if the default is not cured. The defaulting
Party shall have ten (10) days after receipt of the aforesaid notice in which to
remedy or remove the cause or causes stated in the termination notice, and, if
within such ten-day period, the defaulting Party does so remedy or remove said
cause or causes and fully indemnifies the non-defaulting Party for any and all
consequences of such breach, then such termination notice shall be withdrawn and
this Agreement shall continue in full force and effect. In the event that the
defaulting Party fails to remedy or remove the cause or causes or to indemnify
the non-defaulting Party for any and all consequences of such breach within such
ten-day period, this Agreement shall be terminated and of no further force or
effect from and after the expiration of such ten-day period.
ARTICLE XIX
MISCELLANEOUS
Section 1. Notwithstanding anything contained in this Agreement to
the contrary, the Parties hereby specifically reserve any rights each Party may
have under any other Agreements between the Parties to collect any refunds due a
Party as a result of any measurement test, calibration or adjustment which
reflects an error exceeding the parameters allowed in such other Agreements.
Section 2. On or about the anniversary date of this Agreement, and
each anniversary thereafter, the Parties will conference to discuss operating
matters in general, and specifically to negotiate the addition or deletion of
Metering Facilities by way of a mutually agreeable amendment to this Agreement;
provided, neither Party is obligated to add or delete any such Metering
Facilities to this Agreement.
Section 3. It is the intent of the Parties under this Agreement to
have Operator operate all Metering Facilities classified as Large Meters and
Orifice Meters which are directly attached to Operator's pipeline system and
which are in turn connected to Customer's systems or its customers (Additional
Meters). If after the conveyance of the 1,735 meters as set forth in the second
Recital in this Agreement, it is discovered that there are Additional Meters,
then Customer will immediately convey such meters to Operator by way of a
CONVEYANCE in the same form used to convey the aforementioned 1,735 Meters.
Section 4. Operator will notify Customer in a reasonable time of any
changes made to the 1,735 meters which would affect measurement readings,
including but not limited to, changes of indexes, pressure changes, meter
changes, or other type changes to the measurement facility affecting the
Customer's ability to read and acquire accurate measurement readings from any of
the 1,735 meters. Operator recognizes that the Customer needs to read and
determine volumes on the 1,735 meters for its business and operational needs,
and billing purposes to its customers.
Section 5. The Parties understand and agree that Customer's 1,735
Metering Facilities that are being conveyed to Operator are subject to mutually
agreeable adjustments to Exhibit "A" which may result from the completion of a
current audit of such facilities, and the Parties agree to execute the
appropriate documents reflecting such adjustments.
Section 6. The intent of the Parties is to convey any real property
rights related to the 1,735 Metering Facilities (as may be later adjusted as set
forth above) from Customer to Operator; however, as of the Effective Date, some
of those properties have not been specifically identified; therefore, the
parties agree to identify those properties within three months of the Effective
Date and, to the extent necessary, execute a conveyance of such properties to
Operator.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed.
"CUSTOMER" "OPERATOR"
ENERGAS COMPANY, a division WESTAR TRANSMISSION COMPANY
of Atmos Energy Corporation
By: By:
------------------------- --------------------------
Name: Name:
----------------------- ------------------------
Title: Title:
---------------------- -----------------------
EXHIBIT B
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FACILITY DATA DATA DEFINITION REMARKS
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FACILITY NAME
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METER TYPE
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OPERATOR
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3RD PARTY
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CAPACITY
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STATE
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COUNTY
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TOWNSHIP/BLOCK
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RANGE/SURVEY
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SYSTEM NUMBER
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I.D. DATE
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ASSOCIATED
CONTRACT
--------------------------------------------------------------------------------
COMMENTS
================================================================================
