EXHIBIT NO. 10.12
Amendment to the
Gas Gathering Agreement
Between
Questar Gas Company
and
Questar Gas Management Company
This Amendment is entered into this 6th day of February, 1998,
between Questar Gas Company and Questar Gas Management Company.
The Parties represent as follows:
A. Mountain Fuel Supply Company (MFS) and Questar Pipeline
Company entered into a Gas Gathering Agreement on October 11, 1993
(Agreement).
B. Questar Gas Management Company (QGM) assumed all of Questar
Pipeline Company's interest, rights, duties and obligations under the
Agreement in an Assignment dated March 1, 1996 (Assignment).
C. Mountain Fuel Supply Company became Questar Gas Company (QGC)
on January 1, 1998.
The Parties agree as follows:
Article III (a)(3) to the Agreement is deleted and the first
amended Article III (a)(3) below is inserted in its place.
Article III - Gathering Charges, Reimbursements and Credits
(3) Effective after August 31, 1997, until the termination
of this Agreement, rates will be redetermined each year, to be
effective from September 1 through the following August 31, and will
be based on:
(i) An allocated portion of the annual cost of service
for the prior calendar year that is attributable
to QGM's gathering function through which any gas
dedicated under Section I(d) flows during that
year, in accordance with the methodology shown in
Appendix B. The allocation for each cost center
under this subparagraph shall be the ratio of the
November through March volumes dedicated and
flowing under Section I(d) to total November
through March volumes for each cost center.
(ii) An assignment of 60% of the resultant annual
gathering cost of service to demand charges and
40% to commodity charges.
(iii) Billing determinants. Demand charge: Each
month's demand charge is one-twelfth of the total
demand allocation. Commodity charge: the actual
quantity gathered under this Agreement during the
prior calendar year.
(iv) Gathering rates will be determined based on
Questar Gas' share of the costs for each of QGM's
gathering cost centers.
2. Paragraphs 3.(d) (e) (f) and (g) of Appendix B to the
Agreement are deleted and first amended paragraphs 3.(d) (e) (f) (g)
and (h) of Appendix B to the Agreement below are inserted in their
place.
(d) Federal and State Income Taxes. Questar Gas' combined
federal and state income tax rate shall be applied to the equity
portion of the return on rate base.
(e) Rate Base. The average rate base shall be determined
by taking an average of the beginning and ending months for which data
are being used pursuant to paragraph 1 above (adjusted as necessary
pursuant to that paragraph) and shall include that portion of the
following that are directly related or allocable to the gathering
services performed under this Agreement:
(i) Gas plant,
(ii) Accumulated depreciation and amortization,
(iii) Working capital,
(iv) Deferred income taxes, and
(v) QGM's general and intangible plant
(f) Rate of Return. The rate of return on rate base shall
be the pre-tax rate of return derived from the overall rate of return
allowed by the Utah Public Service Commission for Mountain Fuel
effective at the end of the period.
(g) All accounting and allowed costs will be consistent
with ratemaking policies that have been set by the Utah Public Service
Commission, including allowed rate of return and methodologies for
calculating rate base, test year and types of costs that are not
allowed.
(h) The costs of gathering activities determined under this
Appendix will be reduced by other operating revenues that are directly
related to those costs.
3. Except as expressly amended, the Agreement remains in full
force and effect.
This Amendment is entered into by the authorized representatives
of the Parties whose signatures appear below.
Questar Gas Company: Questar Gas Management Company:
By: /s/X. X. Xxxx By: /s/X. X. Xxxxxxx
X. X. Xxxx X. X. Xxxxxxx
Name (please type) Name (please type)
President & CEO President & CEO
Title Title
