Limited Settlement Agreement
This
Settlement Agreement is entered into this 24th day of August, 2006, between
The
Narragansett Electric Company d/b/a National Grid ("National Grid"), Southern
Union Company ("Southern Union"), the Department of the Attorney General for
the
State of Rhode Island (the "Attorney General"), and the Rhode Island Department
of Environmental Management ("RIDEM") (collectively the "Parties").
WHEREAS,
the
Parties to this Settlement Agreement participated in the Rhode Island Division
of Public Utilities and Carriers (the "Division") proceeding concerning the
Joint Petition of National Grid and Southern Union (the "Joint Petition") for
the approval of the sale of Southern Union's Rhode Island gas distribution
assets to National Grid (the "Division Proceeding"); and
WHEREAS,
the
Attorney General and RIDEM asked the Division to condition approval of the
sale
on the imposition of an escrow to
secure
the payment of a potential judgment on environmental contamination claims
relating to the Bay Street Area of Tiverton, Rhode Island (the "Bay Street
Area"); and
WHEREAS,
Southern Union and National Grid opposed the imposition of an escrow;
and
WHEREAS,
the
Division entered a Report and Order ("Order"), dated July 25, 2006, approving
the Joint Petition without requiring as a condition of such approval the posting
of an escrow; and
WHEREAS,
as
parties to the Division Proceeding, the Attorney General and RIDEM have the
right to appeal from the Order; and
WHEREAS,
certain
of the Parties have ongoing disputes concerning, among other things, the
responsibilities for claimed environmental contamination in the Bay Street
Area,
and believe this Settlement Agreement is in the best interests of the people
of
the State of Rhode Island.
NOW,
THEREFORE, in
consideration of the Recitals hereto and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, hereby agree as follows:
(1) National
Grid and the Attorney General (acting on behalf of the State of Rhode Island)
shall execute a letter agreement in the form annexed hereto as Exhibit A, which
provides, in relevant part, that if a final, non-appealable money judgment
is
entered in favor of the State against Southern Union in
connection with the alleged environmental contamination in the Bay Street Area,
and the State cannot collect on such judgment, then National
Grid will pay the
State
up
to $13,000,000 towards such unsatisfied judgment, all pursuant to the terms
of
Exhibit A.
(2)
(a)
Southern Union will conduct supplemental site investigations (consistent with
site investigations protocols previously accepted by RIDEM and conducted by
Southern Union) on the following three properties [Lots 13-03, 16-01 and 16-02]
if RIDEM determines that conditions pose an imminent hazard [as defined in
the
RIDEM Remediation Regulations in Section 3.31] on those properties;
(b)
Southern Union will implement interim remedial action plans
acceptable to RIDEM for the following six properties [Lots 13-03, 16-01, 16-02,
15-01, 17-03 and 21-04] if RIDEM determines that conditions pose an imminent
hazard on those properties ;
(c)
If
RIDEM is able to secure appropriate access to the following properties [21-2A,
21-1, 15-2, 16-10, 7-3, & 22-01] which, to date, Southern Union has
requested but been denied access, as described in the Supplemental and Phase
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Site Investigation Report, Southern Union will conduct a site investigation
consistent with the site investigations protocols previously accepted by RIDEM
and conducted by Southern Union. The refusal of any property owner to grant
access or permission hereunder, or the failure of RIDEM to gain access, to
perform work shall not alter the rights, defenses and remedies of such property
owner or of Southern Union. Furthermore, if any lot covered under this
subsection is found to contain contaminants that are deemed to pose an imminent
hazard by RIDEM as defined under the RIDEM Remediation Regulations, then such
sites shall be subject to the requirements of 2(a & b);
(d)
Southern Union shall not perform the work described in Paragraph 2 until it
first obtains RIDEM’s written approval, and Southern Union shall perform its
obligations under this Paragraph 2 within a reasonable time after receiving
the
necessary approvals, assents and access; and
(e)
With
respect to any particular property listed or described above in this Xxxxxxxxx
0, Xxxxxxxx Xxxxx shall be relieved of its obligation to perform the task or
tasks described in this Paragraph 2 should the property owner(s) of such
property refuse access or permission, or if RIDEM fails to gain access, to
perform the work.
(3) The
Attorney General and RIDEM shall not appeal the Order and shall not take any
further action or position with respect to the Order in any proceeding arising
out of or relating to the Order.
(4) This
Settlement Agreement and its provisions shall not constitute or be construed
as
an admission of liability or responsibility by any Party with
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respect
to alleged environmental contamination in the Bay Street Area. This Settlement
Agreement and its provisions shall not be construed as a waiver of any rights,
remedies or defenses of any Party, except as expressly set forth
herein. The
parties acknowledge that nothing contained in this Settlement Agreement limits
the State's rights or remedies to pursue any and all parties for any and all
claims the State may have against them, including, but not limited to claims
related to what is commonly referred to as the Bay Street Area of Tiverton,
Rhode Island, except that the State and DEM shall give up their right to appeal
or to have any further involvement in the PUC action referenced herein or any
related appeal. The parties further acknowledge that nothing contained in this
Settlement Agreement limits Southern Union's rights, remedies, claims or
defenses, including its right to pursue any and all third parties for any and
all claims.
(5) All
prior
discussions and agreements with respect to the subject matter hereof are merged
in this Settlement Agreement which alone constitutes the entire agreement
between the Parties as to its subject matter. This Settlement Agreement may
not
be amended, modified or terminated except by a written agreement signed by
all
Parties which specifically references this Settlement Agreement.
(6) This
Settlement Agreement may be enforced in a court of law.
(7) This
Settlement Agreement may be signed in counterparts each of which shall be deemed
an original and all of which together shall constitute one and the same
instrument.
The
Narragansett Electric Company
d/b/a
National Grid
/s/
XXXXXX X. XXXXXXXXXXX
By:
Xxxxxx X. Xxxxxxxxxxx
Its:
Vice President
Southern
Union Company
/s/
XXXXXX X. XXXXXXX
By:
Xxxxxx X. Xxxxxxx
Its: Vice
President
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Department
of the Attorney General
for
the
State of Rhode Island
/s/
Xxxxxx X. Xxxxx
By:
Xxxxxx X. Xxxxx
Its:
Deputy Attorney General
Rhode
Island Department of
Environmental
Management
/s/
W. Xxxxxxx Xxxxxxxx
By:
W.
Xxxxxxx Xxxxxxxx
Its:
Director
EXHIBIT
A
The
Narragansett Electric Company
000
Xxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
August
24, 2006
Department
of the Attorney General
of
the
State of Rhode Island
Providence,
Rhode Island
Re:
Tiverton Environmental Liabilities
Ladies
and Gentlemen:
In
the
event that the State of Rhode Island obtains a money judgment in a court of
competent jurisdiction against Southern Union Company, a Delaware corporation
("Southern Union"), in connection with the alleged environmental contamination
in the "Bay Street Study Area" of Tiverton, Rhode Island as defined on Schedule
A (the "Judgment"), the Judgment becomes final and non-appealable,
and the State of Rhode Island cannot recover any amounts due to it in respect
of
such Judgment from Southern Union because of the occurrence of a Non-Payment
Event (as defined below), The Narragansett Electric Company, a Rhode Island
corporation ("Narragansett"), hereby promises to pay any such amounts owed
(excluding any fines or penalties) to the State of Rhode Island by Southern
Union; provided, however,
that in no event shall Narragansett be obligated to pay, in the aggregate,
more
than the lesser of (a)
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$13.0
million or (b) $13.0 million less the aggregate
amount previously paid by Southern Union in satisfaction of its obligations
under the Judgment (other than payment of any fines or penalties). For the
purposes of this letter agreement, "Non-Payment Event" means that Southern
Union
does not pay the Judgment within 60 days of receipt of a written demand, with
written notice to Narragansett.
The
State
of
Rhode Island
shall
provide Narragansett and Southern Union with ten (10) days prior written notice
of its intent to demand payment under this letter agreement. All notices or
demands on Narragansett and Southern Union under this letter agreement shall
be
deemed effective when received, shall be in writing and shall be delivered
by
hand, overnight courier or by certified or registered mail, or by facsimile
transmission promptly confirmed by certified or registered mail, addressed
to
Narragansett at the address written above and addressed to Southern Union at
the
address listed below, or at such other address or fax number as Narragansett
or
Southern Union shall have notified the State
of
Rhode Island.
This
letter agreement shall terminate upon the earlier of (a) payment in full by
Southern Union of all amounts due under the Judgment or (b) the tenth
anniversary of the date of this letter agreement. This letter agreement
constitutes the entire agreement, and supersedes all prior written agreements
and understandings, and all oral agreements, between Narragansett and
the
State of
Rhode Island
with
respect to the subject matter hereof.
No
amendment or waiver of any provision of this letter agreement shall be effective
unless it is in writing and signed by Narragansett and the State
of
Rhode Island.
The
following address shall be used for all notices
hereunder to Southern Union: Southern Union Company, 0000 Xxxxxxxxxx Xxxx,
Xxxxxxx, XX 00000 Attention: Xxxxx X. Xxxxxxx, SVP and CFO.
[SIGNATURE
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Very
truly yours,
THE
NARRAGANSETT ELECTRIC COMPANY
By:/s/
XXXXXXX X. XXXX
Name:
Xxxxxxx X. Xxxx
Title:
President
Agreed
and Accepted:
Department
of the Attorney General of the
State
of
Rhode Island
By:
/s/ XXXXXX X. XXXXX
Name:
Xxxxxx X. Xxxxx
Title:
Deputy Attorney General
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