Exhibit 10.7
CONFIDENTIAL
GAS TRANSPORTATION AND
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BALANCING AGREEMENT
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This Agreement, dated as of May 1, 2001, between Northern Illinois Gas
Company d/b/a Nicor Gas Company ("Nicor Gas" or "Company") and Xxxxxx Energy
LLC, Elwood Energy II, LLC, and Xxxxxx Energy III, LLC (referred to collectively
as "Xxxxxx Energy" or "Customer").
WHEREAS, Elwood Energy is expanding its natural gas-fired electric power
generation facility in or near Elwood, Illinois (the "Generation Facilities"
described in more detail below), on a site located within the geographic area to
which Nicor Gas provides gas distribution service; but within such distance of
interstate natural gas pipeline facilities of Northern Border Pipeline Company
("NBPL") and Alliance Pipeline Company ("APL") that bypass of Company's gas
distribution facilities is economically feasible and practical;
WHEREAS, Xxxxxx Energy has provided an affidavit to Nicor Gas stating
Xxxxxx Energy's intent to bypass Company's facilities absent the transportation
and balancing service from Nicor Gas called for under this Agreement and other
evidence required by and satisfactory to Nicor Gas to verify the investment
required by Xxxxxx Energy in order to bypass Company's facilities;
WHEREAS, gas to be received by Xxxxxx Energy at its Generation Facilities
from Nicor Gas under this Agreement beginning on or about May 1, 2001 will be
delivered to Nicor Gas for the account of Xxxxxx Energy from interconnects with
approved interstate pipeline facilities and redelivered by Nicor Gas to the gas
pipeline facilities of The Peoples Gas Light and Coke Company ("Peoples Gas" or
"PGLC") and transported via Peoples Gas' pipeline facilities to an
interconnection directly (or indirectly via Xxxxxx Energy gas pipeline
facilities) with Nicor Gas' gas meters serving the Generation Facilities, where
it will be delivered to Nicor Gas for redelivery to Xxxxxx Energy; and
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WHEREAS, Xxxxxx Energy has entered into this Agreement with Nicor Gas for
contract service under Rate 17 of Nicor Gas' Schedule of Rates for Gas Service,
and Nicor Gas has contracted with Peoples Gas to receive certain transportation
and balancing services necessary for Nicor Gas to provide to Xxxxxx Energy the
services called for in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. Unless a clear contrary intention appears, the following
terms, where used in this Agreement, and in all exhibits, recitals, appendices
and amendments related to this Agreement, shall have the following meaning:
(a) "APL" shall mean Alliance Pipeline Company.
(b) "Balancing and Storage Service" shall mean a service under which
Company (i) accepts quantities of gas delivered for the account
of Customer at the Receipt Point when and to the extent such
quantities are in excess of the Generation Facilities' metered
requirements, or (ii) delivers gas to Customer at the Delivery
Point when and to the extent the Generation Facilities' metered
requirements exceed quantities of gas delivered to Nicor Gas for
the account of Customer at the Receipt Point.
(c) "Balancing Service Account Balance" shall mean the quantity of
gas at any time in the account which is, for accounting purposes,
the quantity of gas delivered to Company at the Receipt Point
under the Balancing and Storage Service in excess of the quantity
of gas delivered to Customer at the Delivery Point under the
Balancing and Storage Service.
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(d) "Billing Month" shall mean the period between two consecutive
meter readings taken as nearly as practicable to thirty (30)-day
intervals.
(e) "Business Day" shall mean any day on which Company is open for
the conduct of business with the public, and each such day shall
commence at 8:00 a.m. CCT and end at 5:00 p.m. CCT.
(f) "Buy-Out Amount" shall have the meaning set forth in Section 14.
(g) "Central Clock Time" or "CCT" shall mean local time in Chicago,
Illinois.
(h) "Company" shall mean Northern Illinois Gas Company d/b/a Nicor
Gas Company or any successor or permitted assign.
(i) "Contract Quantity" shall mean Customer's MDCQ, MHQ, MMDN, MFBQS
and MFBQnS entitlements under this Agreement.
(j) "Contract Year" shall mean the twelve-month period beginning
April 1 of each year during the term of this Agreement except for
the first Contract Year which shall mean an eleven (11) month
period beginning on May 1, 2001 through March 31, 2002, inclusive
of the commencement and ending dates.
(k) "Critical Day" shall have, with respect to gas requested to be
injected into or withdrawn from storage in Company's facilities,
the meaning ascribed to it in Company's Schedule of Rates and
shall have, with respect to gas requested to be injected into or
withdrawn from storage in Peoples Gas' facilities in connection
with this Agreement, the meaning ascribed to it in the Peoples
Gas Agreement.
(l) "Customer" shall mean Xxxxxx Energy LLC, Elwood Energy II, LLC,
and Xxxxxx Energy III, LLC or any successor or permitted
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assignee of these companies.
(m) "Customer's Purchase Option" shall have the meaning set forth in
Section 31.
(n) "Delivery Point" shall mean the outlet side of the
interconnection between Nicor Gas' meter(s) serving the
Generation Facilities and Xxxxxx Energy's facilities for
receiving the gas from Nicor Gas for use in the Generation
Facilities.
(o) "Delivery Variance" shall have the meaning set forth in Section
41.
(p) "Dispatch Schedule" shall have the meaning set forth in Exhibit
B.
(q) "Effective Degree Day" or "EDD" shall be derived from (i) the
Degree Day meaning ascribed to it in Company's Schedule of Rates
and (ii) wind and xxxxxxx correction factors. Each variable shall
be determined using Company's then existing weather service
resources.
(r) "Excess Storage Charge" shall have the meaning set forth in
Section 4(g).
(s) "Exercise Price" shall have the meaning set forth in Section 31.
(t) "Force Majeure" shall have the meaning set forth in Section 11.
(u) "Forecast Burn" shall be Customer's estimate of plant consumption
for the next calendar day(s) and shall have the meaning set forth
in Exhibit B, Communications Protocol.
(v) "Forecast Variance" shall have the meaning set forth in Section
42.
(w) "Gas Cost" or "GC" shall have the meaning ascribed to it in
Company's Schedule of Rates.
(x) "Gas Day" shall have the meaning ascribed to it in Company's
Schedule of Rates.
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(y) "Generation Facilities" shall mean Customer's Phase I and Phase
II electric power generating facilities comprised of nine (9)
simple-cycle natural gas turbine units with a combined installed
generating capacity of approximately 600 MW for Phase I (4-units)
and 775 MW for Phase II (5-units) at Customer's premises located
near the intersection of Xxxx and Xxxxxxxxx Roads in Elwood,
Illinois.
(z) "Global Point Agreement(s)" or "GPAs" shall mean a Global Point
Agreement between Company and NBPL, or other interstate
pipelines, to aggregate and treat interconnection locations
between Company and these pipelines as one nomination point
location in order to maximize the hourly delivery flexibility to
be provided to Customer or its authorized agents.
(aa) "Lender," "Lenders" and "Lender(s)" shall have the meaning set
forth in Section 16.
(bb) "Market Price" shall mean the price, converted to the
corresponding price per therm, set forth in Gas Daily under the
heading Daily Price Survey, Chicago-LDCs, Large e-use, midpoint
of the range for the flow date. Market Price for any Gas Day for
which Gas Daily is not published shall be determined by the issue
of Gas Daily first published after such Gas Day.
(cc) "Maximum Balancing Service Account Balance" or "MBAB" shall have
the meaning set forth in Section 2(b).
(dd) "Maximum Daily Contract Quantity" or "MDCQ" shall mean the
maximum quantity of gas that Company shall receive at the Receipt
Point and deliver to Customer at the Delivery Point on any Gas
Day. During the Summer Months, Customer's MDCQ
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shall be 2,416,000 therms per Gas Day. During the Non-Summer
Months, Customer's MDCQ shall be 2,844,000 therms per Gas Day.
(ee) "Maximum Firm Balancing Quantity Non-Summer" ("MFBQnS") shall
mean the Non-Summer maximum Forecast Variance quantity Company
shall have the firm obligation to receive from or deliver to
Customer as Balancing and Storage Service (Injection/Withdrawal)
on any Gas Day.
(ff) "Maximum Firm Balancing Quantity Summer" ("MFBQS") shall mean the
Summer Month maximum Forecast Variance quantity Company shall
have the firm obligation to receive from or deliver to Customer
as Balancing and Storage Service (Injection/Withdrawal) on any
Gas Day.
(gg) "Maximum Hourly Quantity" or "MHQ" shall mean the maximum
quantity of gas that Company shall deliver to Customer at the
Delivery Point in any hour. During the Summer Months the MHQ
shall be 151,000 therms per hour. During the Non-Summer Months,
the MHQ shall be 177,750 therms per hour.
(hh) "Minimum-Maximum Daily Nomination" or "MMDN" shall have the
meaning set forth in Section 2(a).
(ii) "NBPL" shall mean Northern Border Pipeline Company.
(jj) "NBPL's Gas Tariff" shall mean NBPL's FERC Gas Tariff (First
Revised Volume No. 1) on file and in effect, as it may be revised
from time to time, with the Federal Energy Regulatory Commission
or any successor to that agency.
(kk) "NGPL" shall mean Natural Gas Pipeline Company of America.
(ll) "Non-Summer Months" shall mean the months of October, November,
December, January, February, March, April and May.
(mm) "Notices" shall have the meaning set forth in Section 33.
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(nn) "Operational Balancing Agreement(s)" or "XXXx" shall have the
meaning ascribed to it in NBPL's, NGPL's and APL's respective gas
tariffs.
(oo) "Operational Flow Order" or "OFO" shall have the meaning ascribed
to it in NBPL's, NGPL's, APL's and Company's respective gas
tariffs.
(pp) "Option Equipment" shall have the meaning set forth in Section
31.
(qq) "Peoples Gas" or "PGLC" shall mean The Peoples Gas Light and Coke
Company.
(rr) "Peoples Gas Agreement" shall have the meaning set forth in
Section 28.
(ss) "Person" shall have the meaning set forth in Section 16.
(tt) "Phase I Term" shall mean the period of time beginning May 1,
2001 and ending September 30, 2004 and shall apply to Customer's
initial four (4) gas turbine units in commercial operation prior
to the effective date of this Agreement (Xxxxxx Units 1-4).
(uu) "Phase II Term" shall mean the period of time beginning May 1,
2001 and ending March 31, 2006 and shall apply to Customer's
additional five (5) gas turbine units (Xxxxxx Units 5-9).
(vv) "Receipt Point" shall mean the interconnection(s) between NBPL,
NGPL and APL interstate pipeline facilities and Peoples Gas'
and/or Nicor Gas' LDC facilities, as applicable.
(ww) "Requested Authorized Use" shall have the meaning ascribed to it
in Company's Schedule of Rates.
(xx) "Schedule of Rates" shall mean Company's Schedule of Rates for
Gas Service (Ill.C.C. No. 16) on file and in effect, as it may be
revised from time to time, with the Illinois Commerce
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Commission or any successor to that agency.
(yy) "Storage Inventory Overrun Charge" shall have the meaning set
forth in Section 4(f).
(zz) "Summer Months" shall mean the months of June, July, August and
September.
(aaa) "Transportation Service" shall mean a service under which Nicor
Gas receives gas delivered to Nicor Gas for the account of
Xxxxxx Energy at a Receipt Point, causes the gas to be
transported via Peoples Gas' pipeline facilities to the Delivery
Point, and redelivers the gas to Xxxxxx Energy at the Delivery
Point.
(bbb) "Unauthorized Use" shall have the meaning ascribed to it in
Company's Schedule of Rates.
2. Services. Except as otherwise provided in this Agreement, the
services provided by Company shall be firm and not subject to interruption,
except for reason of Force Majeure. Company agrees to provide, and Customer
agrees to pay for, the following services at Customer's Generation Facilities.
(a) Except as otherwise provided for in this Agreement, on any
Gas Day during the Summer Months and the Non-Summer Months during
the term of this Agreement, Customer shall have the right to firm
Transportation Service within the "Minimum-Maximum Daily
Nomination" or "MMDN" available, not to exceed the applicable
MDCQ, subject to the terms and conditions of this Agreement.
Company shall not be obligated to deliver gas to Customer at an
hourly rate in excess of the MHQ. Company will use its reasonable
efforts to deliver gas to Customer at an hourly rate in excess of
the MHQ and MDCQ as requested by Customer. Such use of gas at a
rate in
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excess of the Customer's MHQ and MDCQ, when requested by Customer
and subsequently approved by Company, shall not be deemed as
Unauthorized Use.
(b) Customer shall be entitled to receive Balancing and Storage
Service during the Summer Months and the Non-Summer Months
subject to the terms and conditions of this Agreement. The
Balancing Service Account Balance at any time shall not exceed a
maximum of 7,250,000 therms ("Maximum Balancing Service Account
Balance" or "MBAB"). Any Balancing Service Account Balance in
excess of the MBAB shall be subject to either (i) the Storage
Inventory Overrun Charge or (ii) the Excess Storage Charge.
During the Summer Months, Customer's Maximum Firm Balancing
Quantity Summer ("MFBQS") shall be limited to 1,812,000 therms
per Gas Day. During the Summer Months, Balancing and Storage
Service in excess of Customer's MFBQS (1,812,000 therms) per Gas
Day shall be interruptible by Company. During the Non-Summer
Months, Customer's Maximum Firm Balancing Quantity Non-Summer
("MFBQnS") shall be limited to 888,750 therms per Gas Day. During
the Non-Summer Months, Balancing and Storage Service and Forecast
Variances in excess of Customer's MFBQnS (888,750 therms) per Gas
Day shall be interruptible by Company. During the Non-Summer
Months, Customer withdrawals from storage may be further limited
by Company on any Gas Day that Company forecasts that it will
experience sixty (60) or more Effective Degree Days or when
Company or Peoples Gas declares a Critical Day. On any Gas Day
that Company forecasts that it will experience sixty (60) or more
Effective Degree Days, Customer withdrawals from storage will
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be interruptible, based on reasonable operating limitations.
Nicor Gas may require Customer to nominate flowing supplies, if
necessary, to ensure firm service under this Agreement. On any
Gas Day that Company forecasts that it will experience sixty (60)
or more Effective Degree Days, Company shall have the right to
limit Company's firm deliveries to Customer's Generation
Facilities to Customer's corresponding firm city-gate deliveries
on applicable interstate pipelines for such day(s). However,
Company agrees that it will not unreasonably reduce Customer's
MFBQS and MFBQnS injection and withdrawal storage rights in order
for Company to provide incremental interruptible services. On
Critical Days declared by Company or Peoples Gas and on days that
Company forecasts that it will experience sixty-five (65) or more
Effective Degree Days, Customer's MFBQS and MFBQnS withdrawals
from storage will be interruptible, subject to reasonable
operating limitations, and Company's firm deliveries to the
Generation Facilities will be limited to Customer's corresponding
hourly confirmed city-gate volumes delivered on NBPL, APL and
NGPL as applicable. Company's forecast of Effective Degree Days,
and any corresponding reduction in transportation or storage
rights pursuant to this section, shall be made no later than the
time by which Company is required to declare a Critical Day
pursuant to Company's Schedule of Rates, but in any case no later
than 8:00 A.M. CCT on the calendar day prior to adjustment of the
Contract Quantities.
(c) Except as otherwise provided in this Agreement, Company's
Unaccounted-for Gas percentage shall not apply to any service
under this Agreement.
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3. Customer Responsibility. Acquisition and delivery of Customer-owned
gas to the Receipt Point(s) shall be the sole responsibility of Customer.
4. Charges for Services. Notwithstanding anything to the contrary in
Company's Schedule of Rates, charges for services under this Agreement shall be
limited to the following:
(a) Reservation Charge payable for each Summer Month at the
rate of $0.045 per therm of M DCQ in such Billing Month.
(b) Volumetric Charge payable for each Billing Month at the
rate of $0.0037 per therm delivered by Company to Customer during
each Summer Month and $0.0092 per therm delivered by Company to
Customer during each Non-Summer Month.
(c) Delivery Variance Charge assessed at the rate of $0.05
per therm on each occurrence and for each Delivery Variance
greater than or equal to 50,000 therms on non-Critical and non-
OFO days as ascribed to in Section 41.
(d) Balancing and Storage Service Reservation Charge assessed
and payable for each Summer Month at the rate of $0.335 per therm
of Customer's Maximum Firm Balancing Quantity Summer ("MFBQS")
(1,812,000 therms) during such Billing Month .
(e) Forecast Variance Charge assessed daily and payable at
the end of the Billing Month at the following rates for the
absolute positive or negative variance, expressed in therms,
between the total daily quantity of gas delivered by Company to
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the Generation Facilities versus Customer's Forecast Burn as
described in Section 42.
Summer Months
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Greater of +/- 20% of Forecast Burn or
200,000 therms $0.000/therm
* above & **= 1,208,000 therms $0.005/therm
* 1,208,000 & **= 1,812,000 therms $0.010/therm
* 1,812,000 & **= 2,416,000 therms $0.048/therm
* 2,416,000 therms (non-firm) Negotiable
(* = more than) (** = less than)
Non-Summer Months
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Greater of +/- 20% of Forecast Burn or
200,000 therms $0.000/therm
* above & **= 474,000 therms $0.005/therm
* 474,000 & **= 888,750 therms $0.055/therm
* 888,750 - 1,180,000 therms (non-firm) $0.055/therm
* 1,180,000 (non-firm) Negotiable
(* = more than) (** = less than)
(f) Storage Inventory Overrun Charge assessed monthly, at the
rate of $0.05 per therm, on each occurrence where the highest
daily quantity in storage is in excess of 7,250,000 therms, but
not to exceed 9,515,000 therms.
(g) Excess Storage Charge assessed monthly, at the rate of
$0.10 per therm, on each occurrence where the highest daily
quantity in storage is in excess 9,515,000 therms, or assessed
daily where Balancing and Storage Service on any day exceeds
2,416,000 therms but is less than 3,020,000 therms in the Summer
Months or where Balancing and Storage Service injections on any
day exceeds 1,180,000 therms but less than 1,475,000 therms in
the Non-Summer Months.
(h) Upstream Transportation Charges.
(i) Reservation Charge payable for each Summer Month at
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the rate of $0.0737 per therm of MDCQ (2,416,000) during
such Billing Month.
(ii) Volumetric Charge, inclusive of fuel, payable for each
Billing Month at the rate of $0.0044 per therm on quantities
delivered by Company to Customer during such Billing Month.
(i) Requested Authorized Use shall be a volumetric charge, at the
rate set forth in Section 7, on the quantities of gas requested
by Customer and authorized by Company for any such day.
(j) Unauthorized Use shall be a volumetric charge, at the rate set
forth in Section 7, on the last gas measured for such days.
Customer recognizes that charges authorized under this Agreement are
subject to Company's Rider 8, Adjustment of Municipal and State
Utility Taxes, of Company's Schedule of Rates, as in effect from time-
to-time. Customer further recognizes that should a taxing authority
having appropriate jurisdiction over Customer levy a tax on the use of
natural gas ("Gas Use Tax"), and subsequently require Company to
collect such a tax, Customer shall reimburse Company for any
applicable charges resulting from the invoked Gas Use Tax, provided
however, to the extent Company has the authority or discretion under
its Schedule of Rates to discount or waive the invoked tax, Company
shall use all reasonable means to mitigate the invoked tax liability
and through any appropriate discounts or exemptions, pass such
benefits on to Customer.
5. Billing and Payment.
(a) Each month during the term of this Agreement, Company
shall tender to Customer an invoice for services rendered during
the preceding month. Pipeline deliveries,
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Customer gas usage, determination of storage volume balances,
Forecast Variances, Delivery Variances, Requested Authorized Use,
and Unauthorized Use and balancing overruns will, however, be
calculated on a daily basis. Company may send its invoice to
Customer via facsimile. Customer shall remit payment to Company
by wire transfer or automated clearinghouse no later than
fourteen (14) days after Customer's receipt of such invoice.
(b) If Customer fails to remit the full amount payable by
it when due, interest on the unpaid portion shall accrue at a
rate equal to the lower of (i) the then-effective prime rate of
interest published under "Money Rate" by the Wall Street Journal,
plus one percent (1%) per annum from the due date until the date
of payment, or (ii) the maximum applicable lawful interest rate.
(c) If Customer fails to remit the full amount payable by
it when due, Company may, in the absence of a good faith dispute
as to the amount due and owing, suspend its performance under
this Agreement on ten (10) days' written notice to Customer.
Company may not suspend its performance under this Agreement for
any reason other than set forth in this subsection (c) of this
section.
(d) Minimum Monthly and Annual Xxxx. The minimum monthly
xxxx for each Summer Month shall be the sum of (i) the
Reservation Charge set forth in Section 4(a), (ii) the Balancing
and Storage Service Reservation Charge set forth in Section 4(d),
and (iii) the Reservation Charge set forth in Section 4(h)(i),
adjusted for applicable taxes. The minimum annual xxxx for each
Contract Year shall be $4.35 million, excluding any Storage
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Inventory Overrun, Excess Storage, Delivery Variance, Requested
Authorized Use, Unauthorized Use, Buy-Out-Amounts, incremental
GPA/OBA charges and applicable taxes. The Phase I and Phase II
contract term extensions shall result in the minimum monthly
billing and minimum annual billing being adjusted in a pro rata
manner consistent with Exhibit C.
6. Requested Authorized Use. From time to time, Company
and Customer may agree to negotiate: 1) authorized overrun levels of daily
Balancing and Storage Service to inject or withdraw Customer-owned supplies
and/or Forecast Variance charges; or 2) for purchase of Company-owned supplies
(Requested Authorized Use). Authorized overruns of Balancing and Storage
Service and/or Forecast Variance charges shall be in writing and shall be
permitted only after a prior request by Customer and upon approval by Company,
subject to the mutual agreement of the parties to any negotiated charges.
Requested Authorized Use gas supplies shall be available during the Summer
Months upon prior request from Customer and during the Non-Summer Months only
upon prior request from Customer and authorization by Company. All requests
for Requested Authorized Use shall be confirmed in writing by Company.
Requests for Requested Authorized Use made prior to the Gas Day, during the
Summer Months when requested and during the Non-Summer Months when requested
and approved, shall be available only on a daily basis in volumes not to
exceed Customer's MDCQ. Requests for Requested Authorized Use made during the
Gas Day, during the Summer Months if requested and during the Non-Summer
Months if requested and approved, shall be granted only on a daily basis in
volumes not to exceed Customer's MDCQ multiplied by the number of remaining
hours in the Gas Day divided by twenty-four (24) hours. Requested Authorized
Use shall be accounted for as the first gas delivered on any Gas Day for which
it
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CONFIDENTIAL
has been requested. Unauthorized Use shall be the last volume delivered on
any Gas Day. If the volume of Requested Authorized Use is greater than
Customer's metered usage on any Gas Day, the difference shall be accounted
for as injections into storage. The Company's Unaccounted-for Gas
percentage will not apply to any Requested Authorized Use unless such
volumes are injected into storage.
7. Charges for Requested Authorized Use, Unauthorized Use and Authorized
Overruns. Requested Authorized Use of Company gas supplies, when approved,
will be charged at the higher of (a) the Company's GC, or (b) the Market Price
plus $0.02 per therm. Use of Company gas supplies without requested
authorization and subsequent approval, will be considered Unauthorized Use.
Unauthorized Use will be charged at $6.00 per therm plus the higher of (c) the
Company's GC, or (d) the Market Price plus $0.02 per therm. Prior to the
beginning of the Gas Day, Company and Customer may agree to a negotiated
Forecast Variance Charge and/or authorized overruns of the Balancing and
Storage Se rvice. Such negotiated volumes shall be confirmed in writing and
any such negotiated charges shall be applied as the last rate tier and
quantities billed for purposes of computing the daily Forecast Variance charge
and for overrun of Balancing and Storage Service. Injections and withdrawals
from storage which exceed Customer's MFBQS and MFBQnS limitations or any
agreed upon authorized overrun quantities shall be interruptible by Company.
During the Summer Months, injections into and withdrawals from storage in
excess of 1,812,000 therms (the MFBQS) shall be interruptible but overrun
charges equal to the Excess Storage Charge shall only apply to quantities in
excess of the Summer Month MDCQ. Unless otherwise agreed upon in writing,
Balancing and Storage Service injections exceeding 3,020,000 therms per day in
the Summer Months and 1,475,000 therms per day in the Non-Summer Months shall
be subject to forfeiture of the excess gas to Company plus any applicable OFO
charges. During the Summer Months, Balancing and Storage
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Service withdrawals exceeding 3,020,000 therms per day shall be negotiable.
During the Summer Months, unauthorized Balancing and Storage Service withdrawals
exceeding 3,020,000 therms shall be subject to a per therm charge of $1.00 plus
the higher of (i) Company's GC or (ii) the Market Price plus $0.02 per therm.
During the Non-Summer Months, injections into and withdrawals from storage in
excess of 888,750 therms and less than 1,180,000 therms shall be interruptible
and overrun charges shall be assessed a rate of five and five-tenths cents
(5.5c) per therm plus any applicable Forecast Variance charges. During the Non-
Summer Months, withdrawals from storage which exceed 1,1800,000 therms or any
agreed upon authorized overrun of Balancing and Storage Service shall be deemed
as Unauthorized Use of Gas and shall also be subject to any applicable Forecast
Variance charges; conversely, injections to storage which exceed 1,180,000
therms but not to exceed 1,475,000 therms or any agreed upon authorized overrun
of Balancing and Storage Service shall be subject to the Excess Storage Charge
plus any applicable Forecast Variance charges.
8. Incorporation of Rate 77. The parties agree to incorporate Rate 77 of
Company's Schedule of Rates, as it may be revised from time to time and except
as modified by this Agreement, as part of this Agreement for contract service
under Rate 17. All other applicable provisions of the Company's Schedule of
Rates as in effect from time-to-time shall apply, unless specifically modified
by this Agreement. Company and Customer understand and agree that the
obligations under this Agreement and the applicable provisions of Company's
Schedule of Rates may change due to orders of the Illinois Commerce Commission
or to applicable law. The parties agree to comply with any such changes.
9. Storage. If on any Gas Day Customer-owned gas nominated to Company
exceeds Customer's metered gas deliveries to the Generation Facilities, the
difference in volumes shall be the volume of gas injected into storage and added
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to Customer's Balancing Service Account Balance. If on any Gas Day Customer-
owned gas nominated to Company is lower in volume than Customer's metered gas
deliveries to the Generation Facilities, the balance of any gas held in storage
will be applied against such metered deliveries. Customer shall have the firm
right to injections and withdrawals from storage, subject to the terms herein,
up to Customer's MFBQS and MFBQnS contract quantities. Customer-owned gas
injected into storage will be net of the Company's Unaccounted-for Gas
percentage as in effect from time-to-time, provided that, Company's Unaccounted-
for Gas percentage shall not be assessed on injection quantities which exceed a
cumulative volume of seventy (70) million therms in any Contract Year. On any
Gas Day, should the volume of gas delivered to the plant exceed the sum of (a)
Requested Authorized Use, (b) Customer's daily nominations plus (c) any volumes
available from storage, the Unauthorized Use provisions of this Agreement will
apply. Withdrawals from storage are firm, subject to the reasonable, operational
limitations of Nicor Gas and other conditions set forth in this Agreement.
10. Use of NBPL, APL and NGPL. Gas supplies nominated by Customer,
or its authorized agent, for delivery to Customer's Generation Facilities or
into storage must be transported on NBPL, APL and NGPL interstate pipelines.
Customer, or its authorized agent, shall routinely inform Company of its
forecasted hourly and daily usage in accordance with Exhibit B. In addition,
Customer shall supply Company its Forecast Burn by 7:00 A.M. on business days
and Nicor Gas shall, using reasonable operating practices and given Company's
other firm obligations, make available to Customer at 8:00 A.M. on business
days, the minimum and maximum quantities that can be reasonably accepted as
Customer's MMDN. During the months of June, July and August of each Contract
Year, Company shall make available as the MMDN no less than the minimum
quantities shown on Exhibit D as allowed receipts from NBPL, APL, and NGPL.
Conversely, during the months of June, July and August of each Contract Year,
Company shall
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not require as a part of the MMDN receipts by Customer of more than the
quantities shown on Exhibit D. During all other days and months of the year,
Company's MMDN limits shall be reasonably applied from Customer's Forecast Burn,
MFBQS, MFBQnS, and Company's other firm service obligations. In the event
Company's operational conditions require it to reduce MMDN rights of Customer
during this period to less than the parameters shown on Exhibit D, a 4.8 cent
($.048) per therm credit shall be granted to Customer for the quantity affected;
provided that, such reduction of Customer's MMDN rights are not the result of
any OFO or Critical Day restrictions invoked by Company or any applicable
interstate pipelines.
11. Force Majeure. In the event any obligation imposed by this Agreement
on either party, except for the payment of money when it becomes due and owing
hereunder (including, without limiting the generality of the foregoing, the
payment by Customer of the charges calculated pursuant to Section 4 hereof),
cannot be performed, on account of an act of God, strike, labor dispute, fire,
war, civil disturbances, explosion, breakage or accident to machinery or lines
of pipe, quarantine, epidemic, severe storms, act or interference of any
governmental authority or agency including failure to grant any permit, or by
any similar cause reasonably beyond the control of the party otherwise required
to perform such obligation ("Force Majeure"): (a) the party so required to
perform shall do all things reasonably possible to remove the cause of such
interference as expeditiously as is reasonably possible; (b) during the
continuance of such interference, and while the party so required to perform is
attempting removal of the interference, the obligation imposed on such party
shall be suspended to the extent that the interference prohibits such
performance; and (c) any directly corresponding obligation imposed on the other
party to this Agreement shall, during this period, likewise be suspended pro
---
tanto. It is expressly understood and agreed that Force Majeure does not
-----
include scheduled outages of equipment served hereunder for turnarounds or
normal maintenance. In order to invoke the suspension in whole or in part by
reason of
19
Force Majeure of any obligation imposed by this Agreement, the party
claiming such cause shall give notice in writing, including by facsimile, or by
telephone confirmed in writing, to the other party after the initial occurrence
of the cause relied on. Neither party shall at any time be required against its
will to adjust or settle any labor dispute.
Under Force Majeure conditions invoked by Customer, defined as non-
economic, should Customer incur an unauthorized overrun of its Contract
Quantities as per this Agreement, Customer shall reimburse Company an amount
equal to the higher of (i) the actual interstate pipeline penalties incurred by
Company that were directly related to Customer's unauthorized overrun of its
Contract Quantities ("Pipeline Penalties") or (ii) a volumetric charge of $0.048
per therm during the Summer Months or $0.055 per therm during the Non-Summer
Months multiplied by the quantity of unauthorized overrun.
12. Cooperation. Customer and Company agree that they will cooperate
to the fullest extent in the administration of this Agreement and operation
hereunder. Company and Customer shall each provide the other with a twenty-four
hour contact for operational matters. The parties shall work together to
schedule planned outages of their respective facilities at mutually agreeable
times, but in no event will Company conduct a planned outage of its facilities
serving the Generation Facilities during the Summer Months if such planned
outage could cause, or does cause Company to fail to perform any of its
obligations hereunder.
13. Regulatory Approvals. Upon request by either party, the other
party agrees to cooperate in obtaining any necessary regulatory approval of this
Agreement. Neither party shall be responsible for any filing fees or costs
incurred by the other, its agent or any third party respecting this Agreement.
14. Term and Cancellation. Except as provided in this Agreement, this
Agreement shall be effective on May 1, 2001 and shall remain in full force and
20
CONFIDENTIAL
effect until March 31, 2006, for a period of fifty-nine (59) consecutive months,
inclusive of the beginning and ending dates. Effective May 1, 2001, this
Agreement supercedes and cancels the Gas Transportation and Balancing Agreement
dated May 1, 0000 xxxxxxx Xxxxxxxx Xxxxxxxx Gas Company d/b/a Nicor Gas Company
and Xxxxxx Energy LLC, subject to any outstanding obligations between the
parties. Customer shall have the option of canceling this Agreement beginning
with the end of the second Summer Month period, or September 30, 2002, and at
the end of each successive Summer Month period thereafter, during the initial
fifty-nine (59) month term, upon giving one (1) year prior written notice to
Company and upon delivering to Company on or before such anniversary date the
following "Buy-Out Amount" for each of the corresponding anniversary years.
Company and Customer agree that the following "Buy-Out-Amount(s)" shall be
determined by calculating the remaining unamortized portions of (i) termination
fee of $1.575 million at September 30, 2002 and shall be reduced by amortizing
at a rate of $0.525 million per year thereafter, (ii) Company and PGL&C's
facilities investment of $1.787 million at September 30, 2002, $1.239 million at
September 30, 2003, $0.645 million at September 30, 2004, and zero thereafter,
and (iii) NBPL GPA/OBA fixed costs of $0.750 million at September 30, 2002, and
amortized at a rate of $0.250 million per year thereafter. In the event of a
buy-out, Customer shall separately have the right to purchase from the Company
on-site meters and related equipment located at Company's Station 144, serving
Elwood's Phase I turbines, pursuant to section 31(b). Customer recognizes that
the Buy-Out-Amounts listed below may change or adjust upward dependent on the
unamortized fixed cost of other Global Point and Operational Balancing
agreements in place at the time of termination. Customer agrees to reimburse
Company for any such incremental unamortized GPA/OBA fixed costs. Customer's
termination rights do not apply to extension terms provided for in this
Agreement beyond March 31, 2006.
---------------------------------------------------------------------------
Anniversary Buy-Out Amount
---------------------------------------------------------------------------
Second (September 30, 2002) $4,112,000
---------------------------------------------------------------------------
21
-------------------------------------------------------------------------
Third (September 30, 2003) $2,789,000
-------------------------------------------------------------------------
Fourth (September 30, 2004) $1,420,000
-------------------------------------------------------------------------
15. Order of Delivery. On any Gas Day, the order of gas delivered to
the Customer shall be: (a) Requested Authorized Use gas supplies of Company, (b)
Customer-owned gas nominated to Company on NBPL, APL and NGPL (confirmed
Transportation Service within the "MMDN") and (c) Balancing and Storage Services
for injection or withdrawal up to the MFBQS or MFBQnS, as applicable, of
Customer-owned gas, (d) interruptible injections or withdrawals, as applicable,
of Customer-owned gas, and (e) Unauthorized Use.
16. Assignment.
(a) Except as provided in this Section 16, neither party
shall assign, pledge or otherwise transfer this Agreement or any
right or obligation under this Agreement without first obtaining
the other party's written consent, which consent shall not be
unreasonably withheld or delayed. Except as specifically provided
for in this Section 16, any assignment or transfer of this
Agreement or any rights, duties or interests hereunder by any
party without the written consent of the other party shall be
void and of no force or effect.
(b) Company shall be permitted to assign or otherwise
transfer this Agreement or its rights, duties and obligations
hereunder, in whole or in part, by operation of law or otherwise,
without Customer's consent, to any successor to or transferee of
the direct or indirect ownership or operation of all or part of
the pipeline system to which the Generation Facilities are
connected that can fully perform Company's obligations under this
22
Agreement, provided the proposed assignee is creditworthy,
and upon the assumption by any such permitted assignee of
Company's rights, duties and obligations hereunder, Company
shall be released and discharged therefrom to the extent
provided in the assignment agreement.
(c) So long as no material event of default with respect to
Customer has occurred and is continuing, Customer shall be
permitted to assign or otherwise transfer this Agreement in
whole, by operation of law or otherwise, without Company's
consent, (i) to Xxxxxx Marketing, LLC, or (ii) to any
assignee succeeding to the ownership of the Generation
Facilities, provided the proposed assignee is creditworthy,
and upon the assumption by any such permitted assignee of
Customer's rights, duties and obligations hereunder,
Customer shall be released and discharged therefrom to the
extent provided in the assignment agreement.
(d) Company hereby consents to Customer's assignment of
this Agreement to any and all Lenders (as defined below) or
the granting to any or all Lenders of a lien or security
interest in any right, title or interest in part or all of
the Generation Facilities or any or all of Customer's rights
under this Agreement for the purpose of the financing or
refinancing of the Generation Facilities. In order to
facilitate the obtaining of financing or refinancing of the
Generation Facilities without Company's consent, Company
shall cooperate with Customer and execute consents,
agreements or similar documents with respect to the
assignment hereof to any Lender as customary for comparable
transactions in connection with the financing or refinancing
of the Generation Facilities, provided that such
23
assignment shall recognize and shall not impair or otherwise
adversely affect Company's rights under this Agreement.
Company recognizes that such consent may grant certain
rights to such Lenders, which shall be fully developed and
described in said consent documents, including that (i) this
Agreement shall not be amended or terminated (except for
termination pursuant to the terms of this Agreement) without
the consent of Lenders; (ii) without extending the cure
period set forth in this Agreement, Lenders shall be given
notice of, and the same opportunity to cure, any Customer
breach or default of this Agreement, provided that
notwithstanding the foregoing Lender(s) may have in addition
to the cure periods set forth herein an additional sixty
(60) days from the expiration of such cure period to cure
any breach or default of this Agreement; (iii) if a Lender
forecloses, takes a deed in lieu or otherwise exercises its
remedies pursuant to any security documents, that Company
shall, at Lender's request, continue to perform all of its
obligations hereunder, and Lender or its nominee may perform
in the place of Customer, and may assign this Agreement to
another party in place of Customer (provided either (A) such
proposed assignee is creditworthy or (B) Company consents to
the assignment to such proposed assignee, which consent
shall not be unreasonably withheld or delayed), and enforce
all of Customer's rights hereunder; (iv) that Lender(s)
shall have no liability under this Agreement except during
the period of such Lender(s)' ownership and/or operation of
the Generation Facilities and any defaults for non-payment
existing immediately prior to such period; (v) that Company
shall accept performance in accordance with this Agreement
by Lender(s) or its (their)
24
nominee; and (vi) that Company shall make representations
and warranties to Lender(s) as Lender(s) may reasonably
request, including, but not limited to, (A) Company's
corporate existence, (B) Company's corporate authority to
execute, deliver, and perform this Agreement, (C) the
binding nature of this Agreement on Company, (D) receipt of
such regulatory approvals by Company as are required by law
with respect to its performance under this Agreement,
subject to such continuing jurisdiction as the Illinois
Commerce Commission may have over this Agreement, and (E)
whether any defaults by Customer are known by Company then
to exist under this Agreement and shall, upon request of
Customer, cause Company's counsel to issue an opinion to
Customer and any Lender affirming in customary form the
representations of Company in subsections (a)(i), (a)(ii),
(a)(iii)(A), (iv) and (v) of Section 17.
(e) As used in this Agreement, the term "Lender(s)" means
(i) any individual, governmental authority, corporation,
limited liability company, partnership, limited partnership,
trust, association or other entity ("Person") that from time
to time enters into loans with Customer, its successors or
permitted assigns for the financing or refinancing of the
Generation Facilities or any part thereof or which are
secured by the Generation Facilities (including a sale-
leaseback transaction), (ii) the holders of indebtedness
evidencing any such loans, or (iii) any Person acting on
behalf of such lender(s) to whom any lenders' rights under
such loans have been transferred, any trustee on behalf of
any such lenders, and any Person subrogated to the rights of
such lenders.
25
17. Representations and Warranties
(a) Company hereby makes the following representations and
warranties to Customer:
(i) Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of
Illinois, and has the legal power and authority to own its
properties, to carry on its business as now being
conducted and to enter into this Agreement and carry out
the transactions contemplated hereby and perform and carry
out all covenants and obligations on its part to be
performed under and pursuant to this Agreement.
(ii) The execution, delivery and performance by Company of this
Agreement have been duly authorized by all necessary
corporate action, and do not and will not require any
consent or approval of Company's board of directors other
than that which has been obtained.
(iii) (A) The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and
the fulfillment of and compliance with the provisions of
this Agreement, do not and will not conflict with or
constitute a breach of or a default under, any of the
terms, conditions or provisions of any legal requirements,
or any organizational documents, agreement, deed of trust,
mortgage, loan agreement, other evidence of indebtedness
or any other agreement or
26
instrument to which Company is a party or by which it or
any of its property is bound, or result in a breach of or
a default under any of the foregoing, and (B) Company has
obtained all permits, licenses, approvals and consents of
governmental authorities required for the lawful
performance of its obligations hereunder, subject to such
continuing jurisdiction as the Illinois Commerce
Commission may have over this Agreement.
(iv) This Agreement constitutes the legal, valid and binding
obligation of Company enforceable in accordance with its
terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws
relating to or affecting the enforcement of creditors'
rights generally or by general equitable principles,
regardless of whether such enforceability is considered in
a proceeding in equity or at law.
(v) There is no pending, or to the knowledge of Company,
threatened action or proceeding affecting Company before
any governmental authority, which purports to affect the
legality, validity or enforceability of this Agreement.
(b) Customer hereby makes the following representations and
warranties to Company:
(i) Customer is a Delaware limited liability corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware, and has the legal power and
authority to own its
27
properties, to carry on its business as now being
conducted and to enter into this Agreement and carry out
the transactions contemplated hereby and perform and carry
out all covenants and obligations on its part to be
performed under and pursuant to this Agreement.
(ii) The execution, delivery and performance by Customer of
this Agreement have been duly authorized by all necessary
company action, and do not and will not require any
consent or approval of Customer's Management Committee
other than that which has been obtained.
(iii) The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and
the fulfillment of and compliance with the provisions of
this Agreement do not and will not conflict with or
constitute a breach of or a default under, any of the
terms, conditions or provisions of any legal requirements,
or any organizational documents, agreement, deed of trust,
mortgage, loan agreement, other evidence of indebtedness
or any other agreement or instrument to which Customer is
a party or by which it or any of its property is bound, or
result in a breach of or a default under any of the
foregoing.
(iv) This Agreement constitutes the legal, valid and binding
obligation of Customer enforceable in accordance with its
terms, except as such enforceability may be limited by
bankruptcy,
28
insolvency, reorganization or similar laws relating to or
affecting the enforcement of creditors' rights generally
or by general equitable principles, regardless of whether
such enforceability is considered in a proceeding in
equity or at law.
(v) There is no pending, or to the knowledge of Customer,
threatened action or proceeding affecting Customer before
any governmental authority which purports to affect the
legality, validity or enforceability of this Agreement.
18. Interference with Company's Service. Whenever any of the
Customer's utilization equipment has characteristics which, in the sole
reasonable judgment of Company, will cause interference with the service to any
other customer or interfere with the proper metering, suitable facilities shall
be provided by Company at Customer's expense to preclude such interference.
19. Monitoring of Usage. Company shall not be responsible for
monitoring Customer's daily usage or notifying Customer of potential storage
inventory overrun, excess storage, Delivery Variance, Forecast Variance, or
unauthorized use of gas conditions. However, at Customer's request, Company
shall provide to Customer or its authorized agent, via facsimile or electronic
file, Customer's daily flow data and storage balances on a daily basis no later
than the Gas Day after flow.
20. Negotiations for Additional Service. It is understood and agreed
that, upon expiration or termination of this Agreement, Company and Customer may
enter into good faith negotiations for additional transportation and storage
services.
29
21. Bypass. Except as provided in Section 27, Customer agrees not to
take deliveries of natural gas directly from any interstate pipeline or any
other intrastate gas pipeline or any other service provider for the purposes of
bypassing Company's local distribution system while this Agreement remains in
effect.
22. Confidentiality. Company and Customer recognize the proprietary
nature of this Agreement and agree to treat the contents of this Agreement on a
confidential basis in the same manner as each treats its own proprietary
information of a similar nature.
23. Gas Specifications. The quality of Customer-owned gas delivered
to Company on behalf of Customer shall meet or exceed the specifications
contained in 83 Illinois Administrative Code Section 530.10 and Section 530.15
and the FERC-approved gas tariffs of APL, NBPL and NGPL. Customer-owned gas that
does not meet such specifications may be refused by Company and Customer will
indemnify Company against any loss or damage resulting from delivery of such
gas, for the account of Customer, which does not meet such specifications.
24. Additional Company Facilities. Should a change in Customer's
equipment or operations require Company to install additional Company facilities
to deliver Customer-owned gas to Customer's Generation Facilities, Company shall
provide Customer with a written estimate of the facilities cost prior to
incurring any costs or commencing any construction. Customer shall notify
Company, in writing, within sixty (60) days if it wishes for Company to proceed
with the facility upgrade. Customer shall reimburse Company for all reasonable
and verifiable costs associated with any facilities upgrade approved by
Customer, in writing, in accordance with Company's Schedule of Rates.
30
25. Pressure and Back-Up Services. Company will provide gas pressure at
the outlet of Company's meter(s) serving Customers no lower than the lowest
delivery pressure provided at the regulator outlet(s) of the NBPL and APL
Receipt Point(s), less 20 pounds per square inch gauge (psig). During a service
interruption on interstate pipelines serving Company, should back-up services be
provided to Customer's Generation Facilities by Company, such services would be
provided by the Company on a reasonable efforts basis.
26. OFOs. Should interstate pipelines serving Company issue an Operational
Flow Order ("OFO"), (a) Company agrees to accept Customer's pipeline nominations
in volumes not to exceed Customer's daily-metered usage, provided that such
Customer nomination does not proportionally exceed any limitations imposed on
other similarly affected customers, and (b) injections into storage may be
prorated and will be subject to the reasonable operational limitations of the
Company.
27. Company Non-Performance.
(a) If, on any Gas Day, Company shall fail to perform under this
Agreement, for any reason other than Force Majeure, then, Company
agrees to hold Customer harmless from any damages (including without
limitation any penalties imposed by interstate pipelines and any
amount by which Customer's cost to obtain and receive gas from other
suppliers under subsection (a)(ii) of this section exceeds Customer's
costs under this Agreement attributable to the service not performed
by Company) resulting from Company's failure to perform and, at the
sole option of Customer, Customer may pursue the additional remedies
set forth in either subsection (a)(i) or subsection (a)(ii) of this
section: (i) Company shall owe
31
Customer, and be liable to Customer for, the product of: (quantity of
nominated gas not delivered or received) x (the Market Price); or (ii)
Customer shall have the right to obtain and receive gas from sources
other than Company for the period of such failure by Company and to
take any and all actions necessary to obtain and receive such gas,
including without limitation submitting all nominations to interstate
pipelines (including the next-available intra-day nomination or
emergency intra-day nomination) in accordance with interstate
pipelines respective gas tariff(s) necessary to have such gas
delivered to Customer, and Company will reasonably cooperate with
Customer's actions and will not prevent or delay Customer from
exercising its rights under this subsection (a)(ii) of this section.
(b) The remedies set forth in this Section 27 are Customer's sole and
exclusive remedies for Company's failure to perform under this
Agreement.
(c) In no event shall either party be liable to the other for
consequential, punitive, exemplary, special or indirect damages in
tort, contract or otherwise.
28. Peoples Gas Agreement. As part of this Agreement, Company has
contracted with Peoples Gas to provide a portion of Customer's transportation
and balancing services as provided by Company under this Agreement. As such, the
Agreement between Company and Peoples Gas, dated May 1, 2001, is attached as
Exhibit A ("Peoples Gas Agreement"). Company and Customer agree that, if Peoples
Gas exercises its rights under the Peoples Gas Agreement to give notice of its
intent to suspend or terminate service to Company as a result of Company's
failure to pay an amount due and payable to Peoples Gas thereunder, Company
shall transmit such notice, by telephone, confirmed in writing, or by facsimile
or e-
32
mail, to Xxxxxx Energy no less than one (1) Business Day after receipt from
Peoples Gas. Xxxxxx Energy may elect to cure the default in order to prevent the
suspension or termination of service under the Peoples Gas Agreement, and
Company shall then be liable to Xxxxxx Energy for compensation for reasonable
costs incurred by Xxxxxx Energy in curing the payment default, including payment
of the amount remitted by Xxxxxx Energy to Peoples Gas, plus interest from
Xxxxxx Energy's date of payment, with the interest rate to be determined in
accordance with Company's Schedule of Rates. Any such action by Xxxxxx Energy to
cure a payment default is not intended to prevent Company from disputing any
payment default claimed by Peoples Gas, including any amount that Peoples Gas
asserts is due and owing under the Peoples Gas Agreement, and should any such
dispute be resolved in Company's favor following cure of such default by Xxxxxx
Energy, then Elwood Energy shall be entitled to receive the amount paid or
refunded by Peoples Gas in resolution of the dispute to the extent that Company
has not already reimbursed Xxxxxx Energy.
29. OBA and GPA. Company shall maintain a Global Point Agreement (GPA) and
an Operational Balancing Agreement (OBA) with NBPL combining the Xxxxxx Delivery
Point on NBPL with receipt points where Company interconnects with NBPL. Company
and Customer agree that the annual charges associated with NBPL's GPA/OBA are
embedded in Section 4 herein. Company further agrees to use "reasonable efforts"
to secure additional flexible Global Point and Operational Balancing agreements
with APL thus enabling greater optionality by and between the parties. Should
Company incur additional charges to facilitate agreements with APL, Customer
shall have the option and ability to add supplies sourced from APL at the
incremental cost to Company (net of any potential reduction in NBPL GPA/OBA
costs), or Customer may elect to defer the ability to utilize additional APL
points as sources for gas supply.
33
30. Gas Flow. Company recognizes Customer's hourly use of gas will not
occur evenly throughout the Gas Day. Subject to the Customer's hourly and daily
limitations, or other limitations set forth in this Agreement, Company agrees to
arrange for the twenty-four (24) hour, or "daily", receipt of transportation gas
and re-deliver gas to Customer, subject to the MHQ, as needed, over a portion of
the Gas Day.
31. Company's Facilities and Customer Purchase Option.
(a) Company shall permit Customer to connect data feed wires to
Company's Xxxxxx flow computer to be located adjacent to the Company's
meters for the purpose of enabling Customer the ability to monitor
fuel information generated by Company's Xxxxxx flow computer,
including, without limitation, flow rate, temperature and pressure.
(b) Upon termination of this Agreement for any reason, Customer shall
have the right and option ("Customer's Purchase Option") in its sole
discretion to purchase the following equipment from Company located or
to be located at the inlet flanges of the Generation Facilities (the
"Option Equipment"): (i) Phase I, two 16-inch meter runs, (ii) Phase
I, upstream and downstream measurement headers, (iii) Phase I, orifice
or turbine metering, (iv) Phase II, 12-inch ultrasonic and 6-inch
turbine meters, (v) any Company-owned Xxxxxx flow computer(s), (vi)
any Company-owned Electrical SCADA, and (vii) any Company-owned gas
chromatograph(s) or similar Btu analyzer(s) located at the Generation
Facilities. In the event Customer exercises its Customer's Purchase
Option, Company will take whatever action is necessary to acquire such
equipment in order to carry out its obligation hereunder to sell such
34
equipment to Customer, free and clear of any claims of third parties.
The purchase price for the Option Equipment shall be two hundred
eighty-five thousand dollars ($285,000) which shall cover Company's
investment in metering and related equipment at Station 144 serving
Customer's Phase I turbines. Company and Customer agree that purchase
price for the Option Equipment related to Company's investment in any
metering and related equipment serving Customer's Phase II turbines
are embedded in the Buy-Out-Amount(s) ascribed to in Section 14.
Customer shall exercise Customer's Purchase Option by giving written
notice to Company no later than thirty (30) days after termination of
this Agreement.
(c) Within fifteen (15) days after receiving Customer's notice of its
intent to exercise Customer's Purchase Option, Customer shall pay
Company $285,000 as consideration and Company shall transfer and
convey title to the Option Equipment to Customer by special warranty
deed or xxxx of sale, as appropriate, free and clear of any and all
liens, claims, mortgages and other encumbrances. Each party shall be
responsible for paying its own attorneys' fees incurred in connection
with said transfer and conveyance.
32. Communication Protocol and Change in Usage. Communications between
Company and Customer shall be as defined and ascribed to in the Communications
Protocol contained in Exhibit B to this Agreement.
33. Notices. All communications, statements and payments ("Notices")
required under this Agreement shall be in writing and shall be considered duly
delivered when sent by facsimile, a nationally recognized overnight courier
35
service, first class mail or hand delivered.
(a) Notices to Nicor Gas shall be sent to:
--------------------------------------------------------------------------------
Notices Except Operating Communications
--------------------------------------------------------------------------------
Nicor Gas
X.X. Xxx 000
Xxxxxx, Xxxxxxxx 00000-0000
--------------------------------------------------------------------------------
Attn: Xxxxxxx Xxxxxx, Rate Administration
--------------------------------------------------------------------------------
Facsimile: (000) 000-0000
--------------------------------------------------------------------------------
Telephone: (000) 000-0000, ext. 2135
e-mail: xxxxxxx@xxxxx.xxx
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operating Communications
--------------------------------------------------------------------------------
As specified in Exhibit B
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Payments
--------------------------------------------------------------------------------
As specified on Company's invoice
--------------------------------------------------------------------------------
(b) Notices to Xxxxxx Energy shall be sent to:
--------------------------------------------------------------------------------
All Notices
--------------------------------------------------------------------------------
Xxxxxx Energy LLC
c/o Dominion Energy, Inc.
0000 Xxxxxxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
--------------------------------------------------------------------------------
Attn: General Manager
--------------------------------------------------------------------------------
Facsimile: (000) 000-0000
--------------------------------------------------------------------------------
Telephone: (000) 000-0000
--------------------------------------------------------------------------------
With a copy to:
--------------------------------------------------------------------------------
Peoples Energy Resources Corporation
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
--------------------------------------------------------------------------------
Attn: Xxxxxx Energy Commercial Manager
--------------------------------------------------------------------------------
Facsimile: (000) 000-0000
--------------------------------------------------------------------------------
Telephone: (000) 000-0000
--------------------------------------------------------------------------------
(c) Each party agrees to notify the other in writing of any
changes of address or change of designated person for the
36
purposes hereof. Such changes are not subject to Section 36.
34. Waiver of Defaults. A waiver by either party of any one or more
defaults by the other in the performance of any provisions of this Agreement
shall not operate as a waiver of any future default or defaults, whether of a
like or different character.
35. Entire Agreement. This Agreement contains the entire agreement
between the parties, and except as stated in this Agreement, there are no oral
or written promises, agreements, warranties, obligations, assurances, or
conditions precedent or otherwise affecting it.
36. Amendments. Any change, modification, or alteration of this
Agreement shall be in writing, signed by the parties to this Agreement, and no
course of dealing between the parties shall be construed to alter the terms
hereof, except as stated in this Agreement.
37. No Third Party Beneficiary. The parties agree that there is no
third party beneficiary of this Agreement and that the provisions of this
Agreement do not impart enforceable rights to anyone who is not a party.
38. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Illinois without regard to principles
of conflicts of law. The parties agree that the forum of any litigation shall
be in a state or federal court located within the State of Illinois.
39. Preparation of Agreement. This Agreement was prepared by all
parties to this Agreement and not by any party to the exclusion of any other.
37
40. Captions. The captions in this Agreement are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
41. Delivery Variance. On any Gas Day, the Delivery Variance shall be
the quantity of gas delivered to Company at the Receipt Point(s) by Customer or
its authorized agent that is greater than the maximum or less than the minimum
quantity defined by Company for the MMDN on NBPL, APL, or NGPL, and in total,
for a Gas Day. The Delivery Variance Charge set forth in Section 4(c) shall
apply to any Delivery Variance quantities greater than or equal to 50,000 therms
for each non-Critical and non-OFO Gas Day occurrence, however, no such Delivery
Variance Charge shall apply to the first six (6) billable Delivery Variance
events unless the cumulative volume of Delivery Variances greater than or equal
to 50,000 therms, occurring on non-Critical and non-OFO days, exceeds 600,000
therms in a Contact Year. During the Contract Year, should the cumulative volume
of Delivery Variances greater than or equal to 50,000 therms, occurring on non-
Critical and non-OFO days, exceeds 600,000 therms, all prior and subsequent
Delivery Variances greater than or equal to 50,000 therms shall be assessed the
Delivery Variance Charge. On Critical Days and OFO days, the Delivery Variance
Charge shall apply to all quantities of gas delivered to Company at the Receipt
Point(s) by Customer or its authorized agent that is different in quantity from
the minimum or maximum or specific volume of gas requested by Company for
Customer delivery. Customer shall be obligated to use "reasonable-efforts" to
prevent the continued reoccurrence of Delivery Variances charges incurred by
itself, its authorized agent(s) or fuel manager(s). Should Customer fail to
utilize "reasonable-efforts" to prevent reoccurring Delivery Variances, Company
shall have the ability to request termination of Customer's fuel management
arrangements. Company shall be held harmless for any termination or exit fees
imposed on Customer resulting from termination of Customer's fuel management
arrangements.
38
42. Forecast Variance. On any Gas Day, the Forecast Variance shall be
the quantity of gas delivered by Company to the Generation Facilities that is
different in quantity, by more or less, than the Forecast Burn of Customer, or
its authorized agent, as communicated to Company on or before the 7:00 AM CCT on
the Business Day prior to the Gas Day. The applicable Summer Month and Non-
Summer Month Forecast Variance Charge(s) set forth in Section 4(e) shall apply
to any Forecast Variance which exceeds the greater of 200,000 therms or a
quantity equal to plus or minus twenty (20) percent of Customer's daily Forecast
Burn of gas as communicated to Company. During the Summer Months, Company shall
not be obligated to provide Balancing and Storage Service under this Agreement
in excess of 1,812,000 therms per day, Customer's Maximum Firm Balancing
Quantity Summer. During the Non-Summer Months, Company shall not be obligated to
provide Balancing and Storage Service under this Agreement if Customer's
Forecast Variances exceeds 888,750 therms per day, Customer's Maximum Firm
Balancing Quantity Non-Summer.
43. Phase I Primary Term. Except as provided for in this Agreement,
the primary term for Customer's Phase I generating equipment shall be a forty-
one (41) month period beginning May 1, 2001 and ending September 30, 2004,
inclusive of the beginning and ending dates. Upon expiration of the forty-one
(41) month term, the initial demand charge(s) in this Agreement shall adjust
downward by thirty (30) percent while the volumetric charges shall remain
unchanged. Upon expiration of the Phase I term, Company and Customer agree that
specific contract quantities in this Agreement shall adjust downward while the
specific contract demand rates in this Agreement shall adjust upward as ascribed
to in Exhibit C of this Agreement, "Expiration of Phase I".
44. Phase I Primary Term Extension. Customer shall have the
39
option of extending the primary term of this Agreement for Customer's Phase I
generating equipment, given one hundred eighty (180) days written notice to
Company. The extension term for Phase I shall be an eighteen (18) month period
beginning October 1, 2004 and ending March 31, 2006, inclusive of the beginning
and ending dates. Should Customer elect to extend the Phase I term, Company and
Customer agree that the initial demand charges in this Agreement shall adjust
upward by thirty (30) percent for four-ninths (4/9) of the contract quantities
as ascribed to in Exhibit C of this Agreement, "Extension of Phase I Primary
Term".
45. Phase II Term Extension. Customer shall have the option of
extending the term of this Agreement for Customer's Phase II generating
equipment, given one hundred eighty (180) days written notice to Company,
providing such term extension is allowable within applicable law. The extension
period for Phase II shall be a five (5) year term beginning April 1, 2006 and
ending March 31, 2011, inclusive of the beginning and ending dates. Should
Customer elect to extend the Phase II term, Company and Customer mutually agree
that the "then-existing" demand charges, absent any Phase I primary term
extension, in this Agreement, shall adjust upward by thirty (30) percent as
ascribed to in Exhibit C of this Agreement, "Extension of Phase II". Company and
Customer further agree that specific contract quantities in this Agreement shall
adjust downward while specific demand rates in this Agreement shall adjust
upward, dependant on Customer's decision to extend the Phase I primary term.
Should Company and Customer agree to an extension of Phase II or an extension of
Phase I and Phase II for the period of April 1, 2006 to March 31, 2011 and
should Company incur incremental costs for any Global Point or Operational
Balancing Agreements necessary to support such an term extension, Customer shall
reimburse Company for any such reasonable incremental GPA/OBA costs.
46. Phase I and Phase II Term Extension. Customer shall have
40
the option of extending the term of this Agreement for Customer's Phase I and
Phase II generating equipment, given one hundred eighty (180) days written
notice to Company, providing such term extension is allowable within applicable
law. The extension period for Phase I and Phase II shall be a five (5) year term
beginning April 1, 2006 and ending March 31, 2011, inclusive of the beginning
and ending dates. Should Customer elect to extend the Phase I and Phase II term,
Company and Customer mutually agree that the initial demand charges in this
Agreement shall adjust upward by thirty (30) percent as ascribed to in Exhibit C
of this Agreement, "Extension of Phase I and Phase II". Company shall not be
obligated to extend the Phase I term beyond the primary term extension of March
31, 2006 absent the Phase II term extension. Should Company and Customer agree
to an extension of Phase I and Phase II for the period of April 1, 2006 to March
31, 2011 and should Company incur incremental costs for any Global Point or
Operational Balancing Agreements necessary to support such an term extension,
Customer shall reimburse Company for any such reasonable incremental GPA/OBA
costs.
47. Flowing Gas Requirements. Should Company and Customer agree to
the extension of this Agreement, either in whole or in part, for a term
extending beyond March 31, 2006 as ascribed herein, Company shall have the right
to require Customer, its authorized agent(s) or fuel manager(s), to nominate and
deliver pipeline supplies each Gas Day in quantities equal in volumes to
Customer's hourly gas requirements at the Generation Facilities should
Customer's Generation Facilities be dispatched. Company will notify Customer
prior to extension of the Agreement, if Company will exercise this right for
service beyond March 31, 2006.
48. Rebate of Charges. Company agrees to a twenty-five (25) percent
rebate of charges billed to Customer, excluding any Storage Inventory Overrun,
Excess Storage, Delivery Variance, Requested Authorized Use, Unauthorized Use,
Buy-Out-Amounts, incremental GPA/OBA charges and applicable
41
taxes, which exceed $5.75 million in a Contract Year. Company further agrees to
a fifty (50) percent rebate of charges billed to Customer, excluding any Storage
Inventory Overrun, Excess Storage, Delivery Variance, Requested Authorized Use,
Unauthorized Use, Buy-Out-Amounts incremental GPA/OBA charges and applicable
taxes, which exceed $6.75 million in a Contract Year. Company and Customer agree
that the rebate threshold amounts, above which Company shall rebate such
percentages as stated herein, shall adjust, in a prorate manner, for the
applicable Phase I and Phase II contract term extensions as ascribed to in
Exhibit C.
42
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
in duplicate effective as of the date first written above.
XXXXXX ENERGY LLC Northern Illinois Gas Company
d/b/a Nicor Gas Company
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx By: /s/ Xxxxxxxx Xxxxxx
Title: General Manager --------------------------------
Name: Xxxxxxxx Xxxxxx
-----------------------------
Title: Asst. VP / Supply Ventures
----------------------------
XXXXXX ENERGY II, LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Manager
XXXXXX ENERGY III, LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Manager
43
Exhibit A
Peoples Gas Agreement
44
Exhibit B
Communications Protocol
-----------------------
Customer agrees that it shall notify Company of its estimated hourly and daily
forecasted usage and its daily gas nominations. Subject to other mutually
agreed upon circumstances or conditions, the communication protocol between
Customer and Company shall be as follows:
(a) Forecasted Usage. On or before 7:00 A.M. CCT on the Business Day
prior to the beginning of each Gas Day, Customer, or its authorized
agent, shall notify Company of Customer's forecasted burn for the next
Gas Day expressed as hourly and daily forecasted use of gas. Such
forecasted use by Customer shall be Customer's Forecast Burn for the
next Gas Day(s). If Customer fails to submit a Forecast Burn, then the
quantity shall be zero. Customer, or its authorized agent, may update
this forecast but the 7:00 A.M. Forecast Burn shall be binding on
Customer in determining Customer's Forecast Variance as ascribed to in
Section 42 of this Agreement. Customer's 7:00 A.M. notification shall
include Customer's requested range of gas deliverability for the Gas
Day(s) both in aggregate and by individual pipeline for Transportation
Service. Customer's 7:00 A.M. notification shall also include a
confirmation or update of Customer's anticipated hourly and daily flow
of gas for the Gas Day beginning at 9:00 A.M. CCT of that day.
Notification to Company shall be by telephone (confirmed by facsimile
or by e-mail) or by facsimile or e-mail, to Company's Gas Control
Department. Customer shall send, by facsimile or e-mail, a
confirmation of Customer's Forecast Burn to Company's Rate
Administration Department as ascribed to in Section 33(a). Customer's
Forecast Burn is not required to equal the most recent hourly and
daily forecasted power run schedules ( Dispatch Schedule) but
45
differences in excess of the MFBQS or MFBQnS, as applicable, permit
the Company to set reasonable limits on the MMDN. Customer's Dispatch
Schedules, including updates and revised schedules, shall be non-
binding on Customer. Updated Dispatch Schedules, and its associated
natural gas consumption, shall be revised by Customer and provided to
Company for any changes communicated to Customer throughout the
Business Day. Communication of Customer's Forecast Burn and forecasted
power dispatch schedules shall be provided to Company in a format
agreeable to both parties and shall include the planned loading and
unloading of Customer's nine (9) generating units. Excluding weekends
and holidays, normal business hours for Company's Gas Control
Department are Monday through Friday, 7:00 A.M. to 3:30 P.M. CCT.
During normal business hours, Customer shall contact Company's Gas
Control Department by phone at (000) 000-0000, extension 2222, by
facsimile at (000) 000-0000, or by e-mail at xxxxxxx@xxxxx.xxx.
Outside of normal business hours, Customer shall contact Company's Gas
Control Department by phone at (000) 000-0000(24-hours), or by
facsimile at (000) 000-0000 (24 hours).
(b) Updated Dispatch Schedules and Forecasted Use Changes. In the
event of a significant change in Customer's hourly and daily
forecasted usage, Customer, shall use "reasonable-efforts" to give
Company's Gas Control Department thirty (30) minutes notification, by
telephone, and confirmed by facsimile or e-mail, of any planned
revision to Customer's hourly and daily forecasted usage. A
significant change will be defined as, but not limited to, any change
which will result in a twenty percent (20%) variation in the hourly
and/or daily forecasted usage, or other equivalent variation, such as
the loading or unloading of an additional generating unit(s).
Unanticipated changes in Customer's hourly and daily forecasted
46
usage and/or actual metered deliveries shall be communicated to
Company as expeditiously as is reasonably possible. Notification of
changes shall not alter the Forecast Burn as the basis for billing of
the Forecast Variance Charge unless accompanied by an accepted and
confirmed nomination change by Company.
(c) Nomination and Receipt of Customer Gas. On or before 8:00 A.M.
CCT on the Business Day prior to the beginning of each Gas Day,
Company shall notify Customer of 1) Customer's (or its authorized
agent's) minimum right to nominate and deliver to Company gas supplies
from NBPL, APL, and NGPL individually and in total for the next Gas
Day(s); and 2) the maximum obligation of Customer (or its authorized
agent) to deliver gas supplies from the same pipelines for the next
Gas Day(s). These parameters shall be set forth in the 8:00 A.M.
notification of the daily MMDN by Company to Customer (or its
authorized agent) and shall be determined using Customer's Forecast
Burn, MFBQs, and Company's other firm service obligations. Company
agrees to use "reasonable efforts" to permit Customer (or its
authorized agent) the ability to nominate pipelines supplies in
quantities sufficient to cover Customer's 1) Forecast Burn or 2) last
forecasted power dispatch schedule prior to any nomination deadlines.
Company and Customer anticipate that in most instances Customer shall
be given a range-of-volume for nomination purposes with an "up-to"
limitation; however, based on operational conditions and Company's
obligations to other firm customers, Company reserves the right to
request an absolute nomination volume by pipeline. Specifically,
subject to daily gas operating conditions, Company shall have the
right to set the MMDN; however, Company agrees that Customer's
nomination(s) of pipeline supplies shall not be unreasonably denied or
restricted by Company in order for Company to provide incremental
interruptible storage
47
(injection) services. Company may set the MMDN at more than the
Forecast Burn and shall have the right to require Customer, its
authorized agent or fuel manager, to deliver (nominate) pipeline
supplies sufficient to cover Customer's last power dispatch schedule
if Customer's storage bank volume is less than fifteen-percent of
capacity. In setting the daily MMDN, Company may also restrict or
require Customer, as applicable, to nominate certain minimum or
maximum quantities where the Customer's Forecast Burn and the latest
Dispatch Schedule vary by more than the MFBQS or MFBQnS, as
applicable. Customer's failure to deliver pipeline supplies within the
defined daily parameters of the MMDN, as determined by Company, shall
result in the applications of the Delivery Variance charge as ascribed
to in Section 41 of this Agreement. Should Company's setting of the
MMDN at more or less than Customer's (or its authorized agent's)
requested gas deliverability for a Gas Day cause Customer to incur any
Storage Inventory Overrun, Excess Storage and Unauthorized Use charges
as per this Agreement, Company agrees to the waiver of such charges.
Company shall have the ability to determine the timing of any Customer
repayment of deficit storage volumes or the withdrawal of storage
overruns and excess storage.
(d) Nominations. Prior to each Gas Day and in accordance with the
applicable interstate pipeline nomination protocols, Customer, or its
authorized agent, shall submit notifications and subsequent
nominations to Customer's pipeline suppliers for the corresponding Gas
Day. Nominations to each pipeline shall be pursuant to an agreed upon
procedure. Customer shall notify Company by 8:30 A.M. CCT of its
reasonable estimate of the quantity of gas to be delivered by
pipelines and in total, within the MMDN parameters for the next Gas
Day. Customer shall advise Company at 9 A.M. of its daily nominations
of pipeline
48
supplies to be electronically nominated at 11:30 A.M. for the next Gas
Day(s). Nominations will be accepted by Company if received
electronically by Company's Gas Transportation Department no later
than 11:30 A.M. CCT on the business day prior to the Gas Day the
nomination is to be effective. Customer's daily nominations, submitted
by Customer or its authorized agent, will be accepted by Company if
received via facsimile by Company's Gas Transportation Department no
later than 8:00 A.M. CCT on the business day prior to the Gas Day the
nomination is to be effective. Company agrees that to the extent, and
only to the extent, that "late" or "intra-day" nomination services are
available to similarly situated power plants, Customer shall have the
right and ability to make "late" or "intra-day" nominations.
Nominations, submitted by Customer and received by Company
electronically, shall be made via Company's "GAS EXCHANGE" nomination
system protocol or any replacement protocol provided by Company to
Customer. Nominations, submitted by Customer and received by Company
via facsimile, shall be made by faxing such nomination to Company's
Gas Transportation Nomination Desk at (000) 000-0000. During normal
business hours, Company's Gas Transportation Nomination Desk may be
contacted by telephone at (000) 000-0000, Option 2. On or before 3:15
P.M. CCT, on the Business Day prior to the beginning of the Gas Day,
Customer and Company shall review a daily summary of Customer's gas
nominations and Company's corresponding pipeline confirmations for the
following Gas Day or applicable weekend or holiday period. Customer's
summary of gas nominations and Company's resulting confirmations shall
detail the volume of gas supplies to be delivered on each
interconnecting pipeline with Company.
(e) Weekend Nomination Changes. For the Gas Day(s) of Saturday,
Sunday, and Monday, Customer's nominations shall be made in
49
accordance with the aforementioned protocol. For the Gas Days of
Sunday and Monday, Customer shall be permitted to change its daily
nomination on applicable interstate pipelines, and such change will be
accepted by Company, if submitted by Customer or its authorized agent
and received by Company's Gas Control Department via facsimile no
later than 11:30 A.M. CCT on the calendar day prior to the Gas Day the
nomination is to be effective and providing such change is mutually
agreeable between Company and Customer. During normal business hours,
Company's Gas Control Department shall be contacted by telephone at
(000) 000-0000, extension 2222, by facsimile at (000) 000-0000 or by
e-mail at xxxxxxx@xxxxx.xxx. Outside of normal business hours,
Company's Gas Control Department shall be contacted by telephone at
(000) 000-0000 (24 hours) and confirmed by facsimile at (000) 000-0000
(24 hours). Following a nomination change made on the weekend for the
Gas Days of Sunday or Monday, Customer or its authorized agent shall,
on the first business day following the weekend, work with Company's
Gas Transportation Department to account for such change.
(f) Holiday Nominations and Changes. Should a holiday fall on a
traditional business day, Customer or its authorized agent shall have
the right to change its daily nomination for the subsequent Gas Day(s),
providing such changes are made no later than 11:30 A.M. CCT on the
calendar day prior to the Gas Day the nomination is to be effective and
within the protocols described in items (d) and (e) of Exhibit B.
(g) Critical Day Notification. The declaration of Critical Day shall
be by telephone, facsimile or email notification to Customer by Company
and
50
may be verified by telephoning Company's Gas Transportation Department
at (000) 000-0000, Option 3. The declaration of a Critical Day by
Peoples Gas with respect to gas stored in Peoples Gas' facilities in
connection with this Agreement may be verified by telephoning Peoples
Gas at (000) 000-0000. Company shall notify Customer, on or before 8:00
A.M. CCT on the calendar day prior to the Gas Day, of Company's
invocation of a Critical Day and/or curtailment of Customer's access to
gas withdrawals from storage. Under such curtailment, Company agrees to
reasonably cooperate with Customer to allow Customer the ability
arrange Transportation Service to ensure the firm delivery of the MHQ
provided for under this Agreement.
51
Exhibit C
Contract Term Reduction And Extension Contract Quantities
---------------------------------------------------------
Unless specifically modified in Exhibit C of this Agreement, all applicable
charges and contract quantities in this Agreement shall remain unchanged.
Expiration of Phase I, effective October 1, 2004
Summer Month MDCQ 1,342,250 therms
Non-Summer Month MDCQ 1,580,000 therms
Summer Month MHCQ 84,000 therms
Non-Summer Month MHCQ 98,750 therms
Summer Month Demand Charge $0.0567/therm $ 76,106
(1,342,250 therms x $0.0567/therm)
Summer Month Bal. Res. Charge $0.4220/therm $425,376
(84,000 therms x 12 hrs. x $0.422/therm)
Summer Month Upstream Res. Chrg. $0.0929/therm $124,695
(1,342,250 therms x $0.0929/therm)
Balancing Storage Capacity 4,032,000 therms
(84,000 therms x 12 hrs. x 4 Days)
Storage Inventory Overrun Quantities >4,032,000, <=5,291,700 therms
Excess Storage Quantities >5,291,700 therms
Forecast Variance Quantities
Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=672,000 therms $0.005/therm
>672,000 and <=1,008,000 therms $0.010/therm
>1,008,000 and <=1,342,250 therms $0.048/therm
>1,342,250 therms Negotiable (Interruptible)
Non-Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=263,300 therms $0.005/therm
>263,300 and <=493,750 therms $0.055/therm
>493,750 and <=655,550 therms $0.055/therm (Interruptible)
>655,550 therms Negotiable (Interruptible)
Balancing Overrun
Summer Months
>1,342,250 and <= 1,680,000 therms $0.100/therm (Interruptible)
>1,680,000 therms Negotiable (Interruptible)
52
Non-Summer Months
>493,750 and <=655,550 therms $0.055/therm (Interruptible)
>655,550 and <=819,440 therms (Inj) $0.100/therm (Interruptible)
>655,550 therms (Withdrawal) Negotiable (Interruptible)
Minimum Xxxx Summer Months $626,177
Minimum Annual Xxxx $2,862,000
(Oct. '04 - Sept. '05)
(600,000/4,950,000*3,256,930)-3,256,930
Rebate of Charges 25% Rebate Exceeding $3,701,000
(800,000*5/9+3,256,930)
(Oct. '04 - Sept. '05) 50% Rebate Exceeding $4,257,000
(1,800,000*5/9+3,256,930)
Extension of Phase I Primary Term, effective October 1, 2004 - March 31, 2006
Summer Month MDCQ 2,416,000 therms
Non-Summer Month MDCQ 2,844,000 therms
Summer Month MHCQ 151,000 therms
Non-Summer Month MHCQ 177,750 therms
Summer Month Demand Charge $0.0510/therm $123,216
(2,416,000 therms x $0.0510/therm)
Summer Month Bal. Res. Charge $0.3800/therm $688,560
(151,000 therms x 12 hrs. x $0.3800/therm)
Summer Month Upstream Res. Chrg. $0.0835/therm $201,736
(2,416,000 therms x $0.0835/therm)
Balancing Storage Capacity 7,250,000 therms
(151,000 therms x 12 hrs. x 4 Days)
Storage Inventory Overrun Quantities >7,250,000, <=9,515,000 therms
Excess Storage Quantities >9,515,000 therms
Forecast Variance Quantities
Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=1,208,000 therms $0.005/therm
>1,208,000 and <=1,812,000 therms $0.010/therm
>1,812,000 and <=2,416,000 therms $0.048/therm
>2,416,000 therms Negotiable (Interruptible)
Non-Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=474,000 therms $0.005/therm
>474,000 and <=888,750 therms $0.055/therm
53
>888,750 and <=1,180,000 therms $0.055/therm (Interruptible)
>1,180,000 therms Negotiable (Interruptible)
Minimum Xxxx Summer Months $1,013,512
Minimum Annual Xxxx $4,829,000
(Oct. '04 - Sept. '05) (1,013,512-893,799)*4+4,350,000
Rebate of Charges 25% Rebate Exceeding $6,229,000
(1,013,512-893,799)*4+4,950,000+800,000
(Oct. '04 - Sept. '05) 50% Rebate Exceeding $7,229,000
(1,013,512-893,799)*4+4,950,000+1,800,000
Extension of Phase II, effective April 1, 2006 - March 31, 2011
Summer Month MDCQ 1,342,250 therms
Non-Summer Month MDCQ 1,580,000 therms
Summer Month MHCQ 84,000 therms
Non-Summer Month MHCQ 98,750 therms
Summer Month Demand Charge $0.0737/therm $98,924
(1,342,250 therms x $0.0737/therm)
Summer Month Bal. Res. Charge $0.5490/therm $553,392
(84,000 therms x 12 hrs. x $0.5490/therm)
Summer Month Upstream Res. Chrg. $0.1207/therm $162,010
(241,600*.737*.7*1.3)
(1,342,250 therms x $0.1207/therm)
Balancing Storage Capacity 4,032,000 therms
(84,000 therms x 12 hrs. x 4 Days)
Storage Inventory Overrun Quantities >4,032,000, <=5,291,700 therms
Excess Storage Quantities >5,291,700 therms
Forecast Variance Quantities
Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=672,000 therms $0.005/therm
>672,000 and <=1,008,000 therms $0.010/therm
>1,008,000 and <=1,344,000 therms $0.048/therm
>1,344,000 therms Negotiable (Interruptible)
Non-Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=263,300 therms $0.005/therm
54
>263,300 and <=493,750 therms $0.055/therm
>493,750 and <=655,550 therms $0.055/therm (Interruptible)
>655,550 therms Negotiable (Interruptible)
Balancing Overrun
Summer Months
>1,342,250 and <= 1,680,000 therms $0.100/therm (Interruptible)
>1,680,000 therms Negotiable (Interruptinle)
Non-Summer Months
>493,750 and <=655,550 therms $0.055/therm (Interruptible)
>655,550 and <=819,440 therms (Inj) $0.100/therm (Interruptible)
>655,550 therms (Withdrawal) Negotiable (Interruptible)
Minimum Xxxx Summer Months $814,326
Minimum Annual Xxxx $3,615,000
(814,326-626,177)*4+2,862,000
(April '06 - March '11)
Rebate of Charges 25% Rebate Exceeding $4,454,000
(800,000*5/9+4,009,526)
(April '06 - March '11) 50% Rebate Exceeding $5,010,000
(1,800,000*5/9+4,009,526
Extension of Phase I and Phase II, effective April 1, 2006 - March 31, 2011
Summer Month MDCQ 2,416,000 therms
Non-Summer Month MDCQ 2,844,000 therms
Summer Month MHCQ 151,000 therms
Non-Summer Month MHCQ 177,750 therms
Summer Month Demand Charge $0.0585/therm $141,336
(2,416,000 therms x $0.0585/therm)
Summer Month Bal. Res. Charge $0.4360/therm $790,032
(151,000 therms x 12 hrs. x $0.4360/therm)
Summer Month Upstream Res. Chrg. $0.0958/therm $231,453
(2,416,000 therms x $0.0958/therm)
Balancing Storage Capacity 7,250,000 therms
(151,000 therms x 12 hrs. x 4 Days)
Storage Inventory Overrun Quantities >7,250,000, <=9,515,000 therms
Excess Storage Quantities >9,515,000 therms
Forecast Variance Quantities
55
Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=1,280,000 therms $0.005/therm
>1,280,000 and <=1,812,000 therms $0.010/therm
>1,812,000 and <=2,416,000 therms $0.048/therm
>2,416,000 therms Negotiable (Interruptible)
Non-Summer Months
>of +/- 20% or 200,000 therms $0.000/therm
>above and <=474,000 therms $0.005/therm
>474,000 and <=888,750 therms $0.055/therm
>888,750 and <= 1,180,000 therms $0.055/therm (Interruptible)
>1,180,000 therms Negotiable (Interruptible)
Minimum Xxxx Summer Months $1,162,821
Minimum Annual Xxxx $5,426,000
(1,162,821-893,799)*4+4,350,000
(April `06 - March `11)
Rebate of Charges 25% Rebate Exceeding $6,436,000
(5,635,654+800,000)
(April '06 - March '11) 50% Rebate Exceeding $7,436,000
(5,635,654+1,800,000)
56
