Exhibit 10.37
[Tennessee Gas Pipeline Letterhead]
August 2, 1999
Boston Gas Company
Xxx Xxxxxx Xx.
Xxxxxx, Xx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx via facsimile: (000) 000-0000
RE: CONTRACT RESTRUCTURING LETTER AGREEMENT
Dear Xxxx:
This Contract Restructuring Letter Agreement ("Letter Agreement") is
entered into by and between Tennessee Gas Pipeline Company ("Tennessee"), Boston
Gas Company ("Boston Gas") and Essex County Gas ("Essex") (Boston Gas and Essex
are referred to collectively as "Shippers"). Whereas, Tennessee, Boston Gas and
Essex (being hereinafter referred to as a "Party" and collectively referred to
as the "Parties"), have agreed upon the terms and conditions under which to
extend and amend certain Firm Transportation and Storage Service Agreements
("Firm Agreements") to restructure the firm services received by Shippers from
Tennessee (hereinafter referred to as "Contract Restructuring"). The Parties
wish to proceed with the Contract Restructuring based on the following terms and
principles subject to the execution and regulatory approval of final agreements
effectuating the provisions described herein.
1. Primary Point Amendment
Subject to Shippers' participation in an open season to change primary
points in accordance with Article XXVIII, Section 5.7 of the General Terms
and Conditions of Tennessee's FERC Gas Tariff, Tennessee shall allow
Shippers to amend the Firm Agreements identified below to effectuate a
change in primary receipt points from meters located in Zones 00, 0L, and
01 to meter number 07-0018, Tennessee's Northern Storage Withdrawal
(located in Tennessee's Zone 4) to be effective in accordance with the
quantity limitations detailed in Appendix A attached hereto. The reduction
of primary firm receipt meter TQ by the applicable percentages and
resulting quantities from the current primary receipt points in Zones 00,
0L, and 01 shall be implemented pro-rata across the Firm Agreements
identified below at all affected meters. Thus, the currently existing
Zones 00, 0L, and 01 primary receipt points by Firm Agreement shall each
be reduced individually by the applicable amendment percentage and meter
number 07-0018
Contract Restructuring Letter Agreement
August 2, 1999
Page 2
shall be increased by the like quantity so that the receipt quantity of
each Firm Agreement is thereby preserved.
As detailed below, Xxxxx' decision regarding renewal of 100% of the
current MDQ on Essex' FT-A Agreement No. 8518 for a period of three years
impacts the allowable amendment percentage available to Shippers. The
table below briefly outlines the allowable amendment percentages by Firm
Agreement number:
K# 10/31/2003
-- ----------
Retain 100% of Firm Agreements 2062 15%
(Identified in Item 2 below)
Inclusive of FT-A Agreement 8518 8518 15%
Retain 100% of Firm Agreements 2062 15%
(Identified in Item 2 below)
Exclusive of FT-A Agreement 8518 8518 N/A
Appendix A also details the associated buyout amounts by Firm Agreement.
The buyout amounts outlined in Appendix A are equivalent to 60% of the
effective upstream (Zones 00/01 to Zone 04) annual demand charge
multiplied by the applicable amendment quantity. The buyout payment will
be due to Tennessee prior to October 31, 1999.
2. Term
Subject to Xxxxxxx's amendment of the Firm Agreements as described in Item
1 above, Shippers shall elect to extend 100% of the currently existing
Transportation Quantity ("TQ") or Maximum Storage Quantity ("MSQ"), as
applicable, of each of the following Firm Agreements pursuant to Article
III, Section 10.5 of the General Terms and Conditions of Tennessee's FERC
Gas Tariff for a period of three years, such that the subsequent
expiration date of each of the Firm Agreements is October 31, 2003: Boston
Firm Agreement Nos. 20241, 623, 2062, and 527; Essex Firm Agreement Nos.
577 and 2272. Each extension shall continue the Primary Extended Term as
outlined in Section 10.5. Unless otherwise expressly agreed by Tennessee,
as applicable, Shippers currently existing Maximum Daily Injection
Quantity, Maximum Daily Withdrawal Quantity and ratchet levels shall
remain in effect through the Primary Extended Term in each applicable Firm
Agreement.
Contract Restructuring Letter Agreement
August 2, 1999
Page 3
At Essex' option, on or before September 30, 1999, Xxxxx will submit a
rollover election pursuant to Article III, Section 10.5 of the General
Terms and Conditions of Tennessee's FERC Gas Tariff to extend up to 100%
of the current MDQ of Essex' FT-A Agreement 8518 for a period of three
years, such that the subsequent expiration date of the FT-A Agreement is
October 31, 2003. This extension shall constitute the Primary Extended
Term as outlined in Section 10.5.
In the event Essex elects by September 30, 1999 to extend 100% of the
current MDQ of the FT-A Agreement, Tennessee agrees to allow Xxxxx to
amend its primary receipt zone in accordance with Tennessee's FERC Gas
Tariff as described in Item 1 above.
3. Rate
Subject to Shipper's amendment of the Firm Agreement as described in Item
1 above and to Shipper's extension of the FT-A Agreements as described in
Item 2 above and for the period commencing November 1, 1999 and extending
through the Primary Extended Term, Shippers shall pay a negotiated rate
for service comprised of the following: (1) Tennessee's Base Reservation
Rate effective as of November 1, 1999; and (2) Tennessee's Base Commodity
Rate effective as of November 1, 1999. In addition, Shippers shall pay all
then-effective surcharges and applicable fuel. (The rates are therefore
fixed, but the surcharges and fuel charges are not).
Subject to Xxxxxxx's amendment of the Firm Agreements as described in Item
1 above and to Shipper's extension of the FS-MA Agreements as described in
Item 2 above and for the period commencing November 1, 1999 and extending
through the Primary Extended Term, Shippers shall pay a negotiated rate
for service comprised of the following: Tennessee's Tariff Rate effective
as of November 1, 1999 for deliverability, space, injection, withdrawal
and overrun. In addition, Shippers shall pay all then-effective surcharges
and applicable fuel. (The rates are therefore fixed, but the surcharges
and fuel charges are not).
During the period defined above, this Letter Agreement shall be the sole
agreement between the Parties affecting the rates.
4. National Fuel/Tennessee Northern Storage Receipt Point Amendment
Pursuant to the NPV open season process outlined in Section 5.7 of Article
XXVIII of Tennessee's FERC Gas Tariff on or before August 31, 1999,
Shippers will submit an amendment request effective April 1, 2000 or
November 1, 2000 to amend approximately 5,945 Dth/d of receipt point
capacity on Boston Gas' FT-A Agreement No. 20241 and 807 Dth/d of receipt
point capacity on Essex's FTA Agreement No. 10788 from the National Fuel
Xxxxxxx Settlement receipt point (meter number 1-1693) to Tennessee
Northern Storage (meter number 7-0018).
Contract Restructuring Letter Agreement
August 2, 1999
Page 4
5. Letter Agreement
This Letter Agreement shall be treated as confidential and the Parties
agree not to disclose any information concerning this Letter Agreement
including, without limitation, the existence of this letter Agreement
without the prior written consent of the other Party except to employees,
consultants, agents and advisors who must be aware of the Letter Agreement
to perform the Party's obligations hereunder if these persons have agreed
to be bound by the parties' confidentiality obligations; provided,
however, either Party may disclose the terms of this letter Agreement if:
one, such disclosure is required in a judicial or administrative process
in connection with any action, suit, proceeding, investigation, audit or
claim or otherwise by applicable law and two, the Party requests
confidential treatment of the disclosure in the judicial or administrative
process.
Notwithstanding anything herein to the contrary, this Letter Agreement and
the execution of any agreements to effectuate the arrangements proposed in
this Letter Agreement shall be in accordance with and subject to the terms
of Tennessee's FERC Gas Tariff and to all valid laws, orders, rules and
regulations of duly constituted authorities having jurisdiction as amended
from time to time and to the receipt and acceptance of all regulatory
authorizations necessary on terms acceptable to Tennessee; provided
further, if the regulatory authorizations are not received in time to
implement all of the terms of this Letter Agreement by November 1, 1999,
Tennessee shall have the right to terminate this Letter Agreement at any
time prior to November 1, 1999.
Shippers and Tennessee agree to cooperate in the preparation and filing of
all necessary applications for authorizations and to support such filings
in their entirety to effectuate the arrangements proposed in this Letter
Agreement.
If this Letter Agreement accurately represents your understanding of the
agreement among Tennessee and Shippers, please have the appropriate party
execute the facsimile copy of this Letter Agreement and return same to the
undersigned. Upon execution by Tennessee, I will fax two (2) fully executed
originals of the Letter Agreement for your retention. If you have any questions,
please do not hesitate to contact me at (000) 000-0000.
Sincerely
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Account Manager
Marketing Northern Accounts
Contract Restructuring Letter Agreement
August 2, 1999
Page 5
AGREED TO AND ACCEPTED AGREED TO AND ACCEPTED
THIS 19TH DAY OF AUGUST, 1999, THIS 18TH DAY OF AUGUST, 1999,
TENNESSEE GAS PIPELINE BOSTON GAS COMPANY
COMPANY
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------- ------------------------------
Name: Xxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxx
-------------------------------- ------------------------------
Its: Agent and Attorney-in-Fact Its: Vice President
-------------------------------- ------------------------------
AGREED TO AND ACCEPTED
THIS 18TH DAY OF AUGUST, 1999,
ESSEX COUNTY GAS
COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
--------------------------------
Its: Vice President
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