TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
between
TRANSCONTINENTAL GAS PIPE LINE COPRORATION
and
ATLANTA GAS LIGHT COMPANY
DATED
AUGUST 1, 1991
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
THIS AGREEMENT entered into this 1st day of August, 1991, by and between
TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation,
hereinafter referred to as "Seller," first party, and ATLANTA GAS LIGHT
COMPANY, hereinafter referred to as "Buyer," second party,
W I T N E S S E T H
WHEREAS, Buyer is a party to the Stipulation and Agreement Regarding
Service Restructuring dated September 17, 1990 in FERC Docket Nos.
CP88-391, et al, and desires to receive service under Seller's Rate
Schedule FS on the terms set forth herein.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS SERVICE
1. Subject to the terms and conditions of Seller's Rate Schedule FS and
this Service Agreement, Seller agrees to make available on a firm basis
each day for purchase by Buyer such quantities of gas as Buyer may
request from time to time not to exceed Buyer's Daily Sales Entitlement
as set forth on Exhibit "A" attached hereto. Such service shall not be
subject to curtailment or interruption except as provided in Articles V
and VI of this Service Agreement. In the event of such curtailment or
interruption Section 11 or 13 of the General Terms and Conditions shall
apply.
ARTICLE II
TERM OF AGREEMENT
1. This Agreement shall be effective as of the later of or the
date on which all necessary Commission authorizations are received and
shall remain in force and effect until ("Primary Term"). For
purposes of this Service Agreement, the term "Contract Year" shall mean
the period from the effective date through March 31, 1991 and each
twelve month period thereafter through the term of this Service
Agreement.
2. Commencing at the end of the Primary Term, and on each anniversary
date thereafter, the term of this Service Agreement shall be extended by
successive one Contract Year periods unless either Buyer or Seller
notifies the other in writing not less than two Contract Years prior to
the end of the Primary Term or two Contract Years prior to any
anniversary date thereafter, as the case may be, of its election not to
extend the term of this Service Agreement.
3. In the event Seller has elected, pursuant to Section 2 above, to
terminate this Service Agreement, but Seller has not received
abandonment authorization under Section 7(b) of the Natural Gas Act on
or before one hundred eighty (180) days prior to the effective date of
such termination, then Buyer and Seller shall negotiate new terms and
conditions pursuant to the procedure set forth in Section 1 of Article
VII of this Service Agreement.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
It is the intent of the parties that such renegotiated terms and
provisions will provide for a firm sales service under which Buyer would
be entitled to its ratable share, based on Buyer's Daily Sales
Entitlement, of the gas supplies. Such renegotiated terms and
conditions shall govern FS Service during any period after termination
of this Service Agreement but prior to receipt of any necessary
abandonment authorization; provided, however, such renegotiated terms
and provisions shall in no way extend the contractual obligations of the
parties under this Service Agreement (i. e. such renegotiated terms and
conditions are only intended to determine the manner in which service
will be performed under Transco's NGA Section 7(c) Certificate prior to
receipt of abandonment authorization).
ARTICLE III
RATES AND CHARGES
1. Buyer shall pay Seller each month as invoiced the sum of the
following charges:
(a) Firm Service Charge: the product of (i) Buyer's Daily Sales
Entitlement and (ii) the applicable Firm Service Fee per Mcf determined
pursuant to the procedures set forth on Exhibit "A" attached to this
Service Agreement;
(b) Non-Gas Demand Charge: the product of (i) Buyer's Daily Sales
Entitlement and (ii) the applicable FS Non-Gas Cost Service Fee as set
forth on Sheet No. 23 of Sellers FERC Gas Tariff; and
(c) Gas Commodity Charge: the product of (i) the Gas Commodity Rate
which is comprised of the Delivered Gas Price per dt less the actual
Transportation Charge per dt and (ii) the total volumes of gas (in dts)
purchased hereunder at the Redelivery Point(s) by Buyer. The Delivered
Gas Price per dt shall be determined each month in accordance with the
provisions of Exhibit "A" attached to this Service Agreement. The
actual Transportation Charge shall equal the commodity portion of all
transportation charges by Seller under Seller's Rate Schedules FT and/or
IT (at the maximum applicable non-discounted rates), including the
imputed unit cost of fuel retained, the GRI Adjustment Charge, the ACA
Charge, Seller's PSP surcharge(s) and any other FERC-approved charge by
Seller, if applicable, to transport gas sold and purchased under
Seller's FS Rate Schedule from the Delivery Point(s) to the Redelivery
Point(s) set forth in Exhibit "B" to this Service Agreement;
2. (a) In the event that Seller is unable on any day to deliver the
quantities of gas requested by Buyer pursuant to the terms of this
Service Agreement up to Buyer's Daily Sales Entitlement, the provisions
set forth in Section 3 of this Article III and Exhibit "C" attached to
this Service Agreement shall apply.
(b) Except as set forth in Section 3 of this Article III, Article VII,
Section 3(e) of Exhibit "A" and Exhibit "C" attached hereto, Buyer and
Seller agree that the price at which gas is purchased and sold
hereunder, including the Firm Service Charge, is final, and that neither
party will contest in any proceeding
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
the appropriateness of such price or of the pricing mechanism set forth
herein, and that neither party will seek or be entitled to any refunds
or adjustment in price as a result of any such proceedings.
3. In the event that Seller is unable on any day to deliver at the
delivery point(s) quantities of gas requested by Buyer up to Buyer's
Daily Sales Entitlement, the Firm Service Charge set forth in Section
1(a) of this Article III shall be reduced for such month by an amount
equal to the product of (a) the difference between Buyer's Nominated
Purchase Quantity (Mcfs) and the volumes actually delivered (Mcf) by
Seller on the day the underdelivery occurred and (b) the Firm Service
Fee per Mcf divided by the number of days in such month.
4. Buyer agrees that Seller shall have the unilateral right to file
with the appropriate regulatory authority and make changes effective in
a) Seller's Rate Schedule FS pursuant to which service hereunder is
rendered, b) any provisions of the General Terms and Conditions of
Seller's FERC Gas Tariff that are applicable to Rate Schedule FS or c)
this Service Agreement; provided, however, Seller shall not have the
right, without the consent of Buyer, unless required to do so pursuant
to applicable laws or regulations, to make any filings pursuant to
Section 4 of the Natural Gas Act to change any of the material terms
and/or provisions of this Service Agreement, including adding any new
provisions to this Service Agreement, the Rate Schedule FS or the
General Terms and Conditions of Seller's Tariff that would modify the
material terms and/or provisions of this Service Agreement. The parties
agree for purposes of this section that only Article I, Article II,
Article III, Article IV, Article V, Article VI, Article VII and the
provisions of Xxxxxxxx "X", "X" and "C" hereto shall be considered
material. Seller agrees that nothing herein is intended to limit Buyer's
right to protest or contest the aforementioned filings.
ARTICLE IV
POINT(S) OF DELIVERY AND AGENCY AUTHORITY
1. Gas purchased and sold hereunder will be delivered by Seller for
Buyer's account at (a) the interconnection(s) of Seller's pipeline
facilities of third party seller(s) from whom Seller purchases its gas
supply and/or (b) the interconnection(s) of Seller's pipeline facilities
with the facilities of third party transporter(s) with whom Seller has
contracted for the transportation of gas supplies to its system and/or
(c) the outlet of Seller's system storage facilities ("Delivery
Point(s)").
2. Buyer hereby appoints Seller as its agent for the purpose of
arranging for the transportation of gas purchased and sold hereunder
from the Delivery Point(s) to the ultimate point(s) of delivery
("Redelivery Points") to Buyer listed on Exhibit "B" attached hereto.
In consideration of Buyer's obligation under this Service Agreement,
including the payment of certain fees pursuant to Article III hereof,
Seller agrees to accept such agency appointment. Pursuant to this
agency authority Seller may (a) request and execute on buyer's behalf
transportation Service Agreement(s) under Seller's Rate Schedule IT to
transport gas purchased hereunder and/or (b) nominate and schedule
transportation service under Buyer's IT and FT Agreements for gas
purchased by Buyer hereunder. Seller shall be responsible for all
imbalance penalties incurred in connection with volumes purchased under
this Service Agreement.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
Buyer agrees not to exercise any rights it has under the FT Agreement or
otherwise which would interfere in any way with Seller's ability to
utilize a pro rata share of capacity entitlements under the FT
Agreement(s), as set forth in Transco's FT Rate Schedule, ("Telescoped
Rights") (including any associated upstream Rate Schedule IT or third
party pipeline capacity entitlements) to arrange for the transportation
of gas purchased and sold to Buyer hereunder. For purposes of the
preceeding sentence, Seller's pro rata share at Station 65 shall be
equal to the product of (i) a percentage calculated by dividing Buyer's
Daily Sales Entitlement by Buyer's Total Daily Transportation Contract
Quantity under the FT Agreement(s) and (ii) a percentage calculated by
dividing the quantity of gas requested hereunder from Seller on such day
by Buyer's total daily sales entitlement under the FS Agreement. For
purposes of determining Seller's pro rata share of capacity at any point
on Seller's system the product of (i) and (ii) above shall be multiplied
by Buyer's Transportation Contract Quantity under the FT Agreement at
the applicable point.
ARTICLE V
GAS SUPPLY UNDERTAKINGS
1. In consideration of Buyer's obligations under this Service
Agreement, including the Firm Service Charge, Seller undertakes to have
available sufficient gas supplies to perform its sales obligation for
the term of this Service Agreement, which shall consist of the Primary
Term and any extension thereto pursuant to Section 2 of Article II
above, subject only to:
(a) the force majeure provisions of Article VI of this Service
Agreement;
(b) the non-interference by the Commission or any other governmental
body (legislative, executive or judicial) with the terms and conditions
of this Service Agreement which are material to Seller's ability to
secure gas supplies. The parties agree for purposes of this subsection
that Article II, Article III, Article IV, this Article V, Article VI,
Article VII, and the provisions in Xxxxxxxx "X", "X" and "C" hereto are
material to Seller's ability to secure gas supplies; and
(c) the absence of any marterial change in the regulatory environment
which frustrates Seller's ability to provide service in the manner
contemplated by this Service Agreement. By way of example but not of
limitation, any direct or indirect re-regulation of field prices or any
requirement that interstate pipelines function as common carriers would
constitute such a material change.
The foregoing is not intended nor shall it be construed as obligating
Seller to furnish gas supplies hereunder which are marketable in all of
Buyer's markets at all times during the term of the Service Agreement as
such term is defined above in this Section 1, or as extending Seller's
gas supply undertakings beyond the term of this Service Agreement as
such term is defined above in this Section 1.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
2. In consideration of Seller's obligations under this Service
Agreement, Buyer undertakes to perform its obligations for the term of
this Service Agreement subject only to:
(a) the force majeure provisions set for in Article VI below;
(b) the non-interference by the Commission or any other governmental
body (legislative, executive or judicial) with the terms and conditions
of FS Service and/or this Service Agreement which are material to
Buyer's ability to perform its obligations; and
(c) the absence of any material change in the regulatory environment
which would frustrate Buyer's ability to perform its obligations in the
manner contemplated by this Service Agreement. By way of example, but
not of limitation, any actions taken by a state and/or local public
utility commission having jurisdiction over Buyer, which prohibits Buyer
from buying gas under this Service Agreement or from recovering the cost
of buying gas under this Service Agreement from Buyer's customer(s)
would constitute such a material change.
3. Subsections 1(b), 1(c), 2(b) and 2(c) of this Article V, insofar as
they would operate to suspend under this agreement the supply
obligations of Seller or purchase obligations of Buyer under certain
specified circumstances and events, shall suspend the rights and
obligations of the parties under this Service Agreement prospectively
only upon written notice to the other party and are not intended, nor
shall they be construed, as excusing any obligations of Seller and/or
Buyer arising under the Service Agreement for periods prior to the date
of receipt of such notice ("Notice Date"). In the event Seller's supply
obligation is suspended pursuant to this subsection 3, such obligation
shall be suspended on a non-discriminatory basis.
The Party giving notice of suspension ("Suspending Party") shall take
all reasonable steps to remedy the situation and remove the cause or
contingencies affecting the performance of the obligations under this
Service Agreement. During any period that the obligations of the Seller
hereunder are suspended pursuant to Sections 1(b) or (c) above, but not
1(a), Seller agrees to continue firm sales service to Buyer; provided
however, the terms and conditions governing such service during such
period of suspension ("Suspension Period") shall not be the terms set
forth in this Service Agreement. Instead, the terms and conditions of
such service shall be negotiated by the parties pursuant to the
procedure set forth in Section 2 of Article VII of this Service Agreement.
It is the intent of the parties that such renegotiated terms and
provisions will provide for a firm sales service on a non-discriminatory
basis under which Buyer would be entitled to its ratable share, based on
Buyer's Daily Sales Entitlement, of the available gas supplies.
ARTICLE VI
FORCE MAJEURE
The term force majeure as employed herein shall mean acts of God,
strikes, lockouts or other industrial disturbances, acts of the public
enemy, wars, blockades, insurrections, riots,
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
epidemics, landslides, lightning, earthquakes, fires, storms, floods,
washouts, arrests, the order of any court or government authority having
jurisdiction while the same is in force and effect, civil disturbances,
explosions, breakage, accidents to machinery or lines of pipe, freezing
of or damage to xxxxx or delivery facilities, National Weather Service
warnings or advisories, whether official or unofficial, that result in
the evacuation or facilities or platforms, well blowouts, inability to
obtain or unavoidable delay in obtaining material, equipment, and any
other cause whether of the kind herein enumerated or otherwise, not
reasonably within the control of the party claiming suspension and which
by the exercise of due diligence such party is unable to prevent or
overcome.
In the event of either party being rendered unable, wholly or in part, by
force majeure to carry out its obligations (other than the continuing
obligation set forth hereinbelow), it is agreed that on such party's
giving notice and full particulars of such force majeure in writing or
by telegraph or telecopy to the other party within a reasonable time
(not to exceed five (5) days) after the occurrence of the cause relied on,
the obligations of both parties, so far as they are affected by such
force majeure, shall be suspended during such period of force majeure,
but for no longer period, and such cause shall so far as possible be
remedied with all reasonable dispatch.
Neither party shall be liable in damages to the other for any act,
omission or circumstance occasioned by, or in consequence of, force
majeure, as herein defined.
Such causes or contingencies affecting the performance by either party,
however, shall not relieve it of liability unless such party shall give
notice and full particulars of such cause or contingency in writing or
by telegraph or telecopy to the other party within a reasonable time
after the occurrence relied upon, nor shall such causes or contingencies
affecting the performance by either party relieve it of liability in the
event of its failure to use due diligence to remedy the situation and
remove the cause with all reasonable dispatch, nor shall such causes or
transportation contingencies affecting the performance relieve Buyer
from its obligation to make payments of amounts in respect of commodity
charges for natural gas delivered, Firm Service Charges and Non-Gas
Demand Charges, except for any adjustment to the Firm Service Charge as
specified in Article III of this Service Agreement.
ARTICLE VII
ARBITRATION AND RENEGOTIATION
1. On or before one hundred eighty (180) days prior to the date on which
this Service Agreement terminates pursuant to Article II hereof, Seller
shall submit an Offer ("Offer") to Buyer setting forth proposed terms
and conditions for continued service. Buyer may submit a Counter Offer
("Counter Offer") within ten (10) working days of receipt of the Offer.
If a Counter Offer is received within the indicated period, the parties
will proceed with negotiations. If a Counter Offer is not received
within ten (10) working days, the Offer will be deemed accepted. If the
parties are unable to agree on the terms and conditions for continued
service within thirty (30) days ("30 day Negotiation Period") following
Seller's receipt of the Counter Offer, the Offer and the Counter Offer
will be submitted to a Board of Arbitration in Washington, D. C. in
accordance with the Commercial Arbitration Rules of the American
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
Arbitration Association (but not administered by the American
Arbitration Association) subject to the parties agreement herein to
modify or override those rules in certain respects by adoption of the
following procedures:
a) Within ten (10) days following the end of the 30 day Negotiation
Period, each party must name its choice of an arbitrator who has
accepted the appointment. In the event either party fails to name an
arbitrator, such party's arbitrator shall be appointed by the Senior
Judge (in service) of the United States District Court for the District
of Columbia. Within ten (10) days after both arbitrators have accepted
appointment, the two arbitrators shall name a third arbitrator, or, if
they are unable to agree upon the third, the third arbitrator shall be
appointed by the Senior Judge (in service) of the United States District
Court for the District of Columbia. The three (3) arbitrators shall be
qualified by education and/or experience to pass on the particular
issues in dispute, and shall not be (i) financially interested in the
outcome of the dispute or (ii) former or current employees of either
party. Each party shall pay the compensation and expenses of the
arbitrator named by or for it, and both shall share equally the
compensation and expenses of the third arbitrator.
(b) The three arbitrators shall meet and hear the parties with respect
to matters relevant to which proposed Offer will, amount other things,
compensate Seller for the value of providing the continued service,
which shall include but not be limited to executed long term sales
agreements between other sellers serving the same or similar markets
and their customers. The jurisdiction of the arbitrators shall be
limited to the selection, based on all relevant evidence presented, of
either the Offer or the Counter Offer proposed either by Seller or by
Buyer pursuant to the provisions of this section. No other provisions
shall be selected by the arbitrators. The decision by the arbitrators
shall be in writing, signed by the arbitrators or a majority of them,
rendered within seventy (70) days of the appointment of the third
arbitrator, and final, binding and non-appealable, except as set forth
in the Uniform Arbitration Act of Delaware [Footnote 1]
as to the parties hereto.
The provisions adopted by the arbitrators shall be effective as of the
first day following termination of this Service Agreement. During any
period prior to a decision by the arbitrators but after the expiration
of the primary term of this Service Agreement, Buyer shall continue to
pay the rates and charges in effect prior to the expiration of the
primary term. Such rates and charges shall be adjusted retroactively as
necessary to conform to the arbitrators' decision.
2. In the event the rights and obligations of the parties hereunder are
suspended pursuant to Section 3 of Article V above, then within ten (10)
working days following the Notice Date, the Suspending Party shall
submit an Offer ("Offer") to the other party setting forth proposed
terms and conditions for continued FS Service. The other party may
submit a Counter
[Footnote 1] 1 Del. Code Xxx. tit. 10, Section 5703 (1974)
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
Offer ("Counter Offer") within ten (10) working days of receipt of the
Offer. If a Counter Offer is received within the indicated period, the
parties will proceed with negotiations. If a Counter Offer is not
received within ten (10) working days, the Offer will be deemed
accepted. If the parties are unable to agree on the terms and
conditions for continued FS Service within thirty (30) days ("30 day
Negotiation Period") following the Suspending Party's receipt of the
Counter Offer, the Offer and the Counter Offer will be submitted to a
Board of Arbitration in Washington, D.C. in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
(but not administered by the American Arbitration Association) subject
to the parties' agreement herein to modify or override those rules in
certain respects by adoption of the following procedures:
(a) Within ten (10) days following the end of the 30 day Negotiation
Period, each party must name its choice of an arbitrator who has
accepted the appointment. In the event either party fails to name an
arbitrator, such party's arbitrator shall be appointed by the Senior
Judge (in service) of the United States District Court for the District
of Columbia. Within fifteen (15) days after both arbitrators have
accepted appointment, the two arbitrators shall name a third arbitrator,
or, if they are unable to agree upon the third, the third arbitrator
shall be appointed by the Senior Judge (in service) of the United States
District Court for the District of Columbia. The three (3) arbitrators
shall be qualified by education and/or experience to pass on the
particular issues in dispute and shall not be (i) financially interested
in the outcome of the dispute or (ii) current or former employees of
either party. Each party shall pay the compensation and expenses of the
arbitrator named by or for it, and both shall share equally the
compensation and expenses of the third arbitrator.
(b) The three arbitrators shall meet and hear the parties with respect
to matters relevant to which proposed Offer will, among other things,
compensate Seller for the value of providing the continued service,
which shall include but not be limited to executed long term sales
agreements between other Sellers serving similar markets and their
customers. The jurisdiction of the arbitrators shall be limited to the
selection, based on all relevant evidence presented, of either the Offer
or the Counter Offer proposed either by Seller or by Buyer pursuant to
the provisions of this section. No other provisions shall be selected
by the arbitrators. The decision by the arbitrators shall be in
writing, signed by the arbitrators or a majority of them, rendered
within forty-five (45) days of the appointment of the third arbitrator,
and final, binding and non-appealable, except as set forth in the
Uniform Arbitration Act of Delaware [Footnote 2]
as to the parties hereto. The
provisions adopted by the arbitrators shall be effective as of the first
day following the Notice Date regardless of the actual date of decision
of the arbitrators. In the event the situation that led to the
suspension is not remedied within six (6) months of
[Footnote 2] Del. Code Xxx. tit. 10, Section 5703 (1974)
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
the Notice Date, this Service Agreement may be terminated by either
party. In the event Seller elects to terminate this Service Agreement
at such time, but Seller has not yet received authorization under
Section 7(b) of the NGA to abandon service under the FS Rate Schedule,
then the terms and conditions in effect during the Suspension Period
shall continue in effect during the period following Seller's
termination of this Service Agreement until the date any necessary
abandonment authority is received by Seller. During any period prior to
a decision by the arbitrators but after the Notice Date, Buyer shall
continue to pay the rates and charges in effect prior to the Notice
Date, subject to any adjustments to the Firm Service Charge set forth in
Article III of this Service Agreement. Such rates and charges shall be
adjusted retroactively as necessary to conform to the arbitrators'
decision.
ARTICLE VIII
MISCELLANEOUS
1. The subject headings of the Articles of this agreement are inserted
for the purpose of convenient reference and are not intended to be a part
of this agreement nor to be considered in any interpretation of the
same.
2. This agreement supersedes and cancels as of the effective date
hereof the following contract(s) between the parties hereto:
none
3. No waiver by either party of any one or more defaults by the other
in the performance of any provisions of this agreement shall operate or
be construed as a waiver of any future default or defaults, whether of a
like or a different character.
4. THE INTERPRETATION AND PERFORMANCE OF THIS SERVICE AGREEMENT SHALL
BE IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
RECOURSE TO THE LAW GOVERNING CONFLICT OF LAWS, AND TO ALL PRESENT AND
FUTURE VALID LAWS WITH RESPECT TO THE SUBJECT MATTER, INCLUDING PRESENT
AND FUTURE ORDERS, RULES AND REGULATIONS OF DULY CONSTITUTED
AUTHORITIES.
5. Notices to either party shall be in writing and shall be considered
as duly delivered when mailed to the other party at the following
address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Senior Vice President - Gas Supply
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
(b) If to Buyer:
Atlanta Gas Light Company
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
6. This agreement shall be binding upon, and inure to the benefit of
the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
signed by their respective Presidents or Vice Presidents thereunto duly
authorized and attested by their respective Secretaries or Assistant
Secretaries the day and year above written.
TRANSCONTINENTAL GAS PIPE LINE
CORPORATION
ATTEST:
By /s/ Xxxxx X. Xxxxxx By /s/ Xxx X. Xxxxxx
Asst. Secretary Xxx X. Xxxxxx
Senior Vice president - Finance,
Rates & Marketing
SELLER
ATTEST: ATLANTA GAS LIGHT COMPANY
By /s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Gunthter
Asst. Secretary
Vice President
Title
BUYER
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
EXHIBIT "A"
SALES ENTITLEMENTS AND GAS PRICE
1. Buyer's Daily Sales Entitlement: Buyer's Daily Sales Entitlement(s)
shall be equal to Mcf/d. [Footnote 3]
2. Procedure to Determine the Delivered Gas Price and Buyer's Nominated
Purchase Quantity:
(a) No later than two (2) business days prior to Seller's receipt point
transportation nomination deadline for the applicable month, Seller
shall propose to Buyer a Delivered Gas Price for the following month.
Such proposed Delivered Gas Price may be revised by Seller at any time
prior to acceptance by Buyer in writing; provided however Seller agrees
not to revise a proposed Delivered Gas Price that Buyer has verbally
agreed to accept, as long as Buyer confirms such acceptance by telecopy
or other written communication as soon as possible but in no event later
than the close of business on the day of verbal acceptance.
(b) During the succeeding period ending on the date set forth in
Subparagraph c) below, Buyer and Seller shall negotiate with the intent
of determining a mutually agreeable Delivered Gas Price for the
following month.
(c) No later than five (5) p.m. C.S.T. on the day prior to the day that
receipt point transportation nominations are due on Seller's system for
the applicable month, Buyer shall notify Seller in writing of Buyer's
daily nominated purchase quantity not to exceed Buyer's Daily Sales
Entitlement ("Nominated Purchase Quantity") for the following month and,
if Buyer and Seller have agreed to a Delivered Gas Price for the
following month, such agreed to Delivered Gas Price. In the event Buyer
and Seller have been unable to agree to a Delivered Gas Price for the
following month, or if during the period from the effective date of this
Service Agreement through March 31, 1991 the agreed to Delivered Gas
Price is higher than the Default Price, the Delivered Gas Price shall be
the Default Price, which shall equal the sum of (1) the Unit Price of
Gas as determined in accordance with Subparagraph (d) below and (2) the
Commodity portion of all transportation charges by seller under Seller's
Rate Schedule FT (calculated on a fully telescoped basis at the maximum
applicable rate) and associated upstream transportation charges under
Seller's Rate Schedule IT (calculated on a fully telescoped basis at the
maximum.
[Footnote 3] Buyer's Daily Sales Entitlement and Nominated Purchase Quantity
shall be increased as appropriate, to the dekatherm equivalent quantity and to
include fuel retained by Seller under its Rate Schedule FT and IT, as
applicable, to transport such gas from the Delivery Point(s) to the
Redelivery Point(s).
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
applicable rate), including the imputed unit cost of fuel retained by
Seller, the GRI Adjustment Charge, the ACA Charge, Seller's PSP
Surcharge(s), and any other charge by Seller which has been approved by
the FERC, if applicable to transport the gas sold and purchased hereunder
to the Redeliver Point(s) ("Transportation Charge").
In the event of a refund and/or surcharge by Seller applicable to the
Transportation Charge for zone(s) 1, 2 and/or 3, Seller's refund and/or
surcharge obligation to Buyer related to the transportation of gas
purchased by Buyer hereunder, shall be determined by multiplying (i) the
per unit amount obtained by dividing the total dollars which Seller is
obligated to refund and/or entitlted to surcharge for zone(s) 1, 2 and/or
3 which are associated with Seller's transportation of gas purchased by
all Buyers under this Rate Schedule FS by the total quantity of gas
purchased by all such Buyers under this Rate Schedule FS during the period
to which such
adjustment is applicable by (ii) the quantity of gas purchased by Buyer
under this Rate Schedule FS during the period to which such adjustment is
applicable. Refunds and/or surcharges applicable to the Transportation
Charge for zone(s) 4, 5 and/or 6 shall be determined based on the actual
volumes purchased and transported for each Buyer. The foregoing
surcharge and/or refund shall be the only adjustment to the Delivered
Gas Price hereunder.
(d) Unit Price of Gas:
The Unit Price of Gas shall be determined by computing the following:
(i) During the period from the effective date of this Service Agreement
througn March 31, 1991 - the simple average of the four regional prices
(rounded to the fourth decimal place) set forth in the table "Gas Price
Report" (in $/MMBtu) published in the first issue for such month of
Natural Gas Week (or any succeeding publication of Oil Daily, Inc.) for
these regions: 1) Texas, Gulf Coast Offshore, Spot Delivered to Pipeline;
2) Texas, Gulf Coast Onshore, Spot Delivered to Pipeline; 3) Louisiana,
Gulf Coast Offshore, Spot Delivered to Pipeline; 4) Louisiana, Gulf
Coast Onshore, Spot Delivered to Pipeline.
(ii) During the period from April 1, 1991 through the term of this
Service Agreement as extended for the Nominated Purchase Quantity - the
simple average of the four regional prices (rounded to the fourth
decimal place) set forth in the table "Gas Price Report" (in $/MMBtu)
published in the first issue for such month of Natural Gas Week (or any
succeeding publication of Oil Daily, Inc.) for these regions: 1) Texas,
Gulf Cost Offshore, Spot Delivered to Pipeline; 2) Texas, Gulf Coast
Onshore, Spot Delivered to Pipeline; 3) Louisiana, Gulf Coast Offshore,
Spot Delivered to Pipeline; 4) Louisiana, Gulf Coast Onshore, Spot
Delivered to Pipeline.
(iii) During the period from April 1,1991 through the term of this
Service
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
Agreement as extended for quantities purchased hereunder in excess of
the Nominated Purchase Quantity-100% of the price set forth in the table
"Gas Price Report" (in $/MMBTU) published in the first issue for such
month of Natural Gas Week (or any succeeding publication of Oil Daily,
Inc.) for the region: Louisiana, Gulf Coast Onshore, Spot Delivered to
Pipeline.
(iv) Either Buyer or Seller may request a change in the price
determination procedures set forth in this Subparagraph (d) in the event
that the operation of such procedures does not reasonably reflect the
weighted average price of spot gas available to Buyer, as reported to
and verified by an independent, nationally recognized public accounting
firm. For purposes of this subparagraph, the results of the existing
procedure shall be deemed to be reasonably reflective of such weighted
average spot gas price so long as it falls within a range of 90 to 110
percent of such price. If such range is exceeded for three consecutive
months, then Seller and Buyer shall meet to undertake to agree upon an
alternative published spot price index. Additionally, in the event Oil
Daily, Inc. ceases publishing Natural Gas Week (and does not replace it
with a successor publication), the parties shall use best efforts to
agree on an alternative publication in a timely manner.
(e) Nothing herein or in the Service Agreement shall require Buyer to
agree prior to any Calendar Month to nominate to purchase any quantity
of gas hereunder during the following Calendar Month and Buyer's failure
to nominate, or undernomination of gas quantities, hereunder for any
month shall not limit Buyer's ability to request or Seller's obligation
to deliver quantities of gas hereunder on any day up to Buyer's Daily
Sales Entitlement; provided, however, Buyer agrees that Buyer's
Nominated Purchase Quantity may be relied upon by Seller as the
approximate quantity of gas which Buyer will purchase from Seller
hereunder during the next Calendar Month unless Buyer is required to
change such purchases as a result of a change in market conditions, and,
provided further, Buyer agrees that a change in the price of gas
supplies available to Buyer shall not constitute such a change in market
conditions.
(f) Buyer and Seller hereby agree that the delivered price of gas is
commercially sensitive information and agree that neither will disclose
such information to any third party unless by mutual consent, which will
not be unreasonably withheld or unless required to do so by judicial or
governmental order, rule or regulation, except that selected data may be
aggregated and composited with comparable data from the contracts for
statistical purposes, by a person subject to reasonable confidentiality
restrictions and provided that neither the identity of Buyer or Seller
nor any data not necessary for such statistical purpose is disclosed.
3. Firm Service Fee
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
a) During the period from the effective date of this Service Agreement
through March 31, 1992, the Firm Service Fee shall be $6.50 per Mcf for
each month.
b) During the period from April 1, 1992 through March 31, 1993, the
Firm Service Fee shall be $6.20 per Mcf for each month.
c) During the period from April 1, 1993 until renegotiated pursuant to
subparagraph d) below, the Firm Service Fee shall be $5.80 per Mcf for
each month.
d) Either party may request that the Firm Service Fee be renegotiated
effective April 1, 1994, and annually thereafter. Either party may
request renegotiation by giving notice to the other party at least one
hundred eighty (180) days prior to the first day of the contract year
for which the Firm Service Fee is being renegotiated. In the event the
parties are unable to agree on a new Firm Service Fee at least one
hundred fifty (150) days prior to the first day of the contract year for
which the Firm Service Fee is being renegotiated then the party
requesting renegotiation shall make a final offer to the other party for
a new Firm Service Fee ("Final Offer") within five days following the
commencement of such one hundred fifty (150) day period. The other
party may submit a final counter offer ("Final Counter Offer") within
ten (10) working days of receipt of the request. If a Final Counter
Offer is received within the indicated period, the parties will proceed
with negotiations. If a Final Counter Offer is not received within ten
(10) working days, the Final Offer submitted by the party requesting
renegotiation will be deemed accepted. If the parties are unable to
agree on a new Firm Service Fee by one hundred twenty (120) days prior
to the first day of the applicable contract year, both the Final Offer
and the Final Counter Offer will be submitted to a board of arbitration
in Washington, D.C. in accordance with the Commercial Arbitration Rules
of the American Arbitration Association (but not administered by the
American Arbitration Association), but subject to the parties' agreement
herein to modify or override those rules in certain respects by adoption
of the following procedures:
(i) No later than one hundred (100) days prior to the first day of the
year for which renegotiation has been requested, each party must name
its choice of an arbitrator who has accepted the appointment. In the
event either party fails to name an arbitrator, such party's arbitrator
shall be appointed by the Senior Judge (in service) of the United States
District Court for the District of Columbia. Within ten (10) days after
both arbitrators have accepted appointment, the two arbitrators shall
name a third arbitrator, or, if they are unable to agree upon the third,
the third arbitrator shall be appointed by the Senior Judge (in service)
of the United States District Court for the District of Columbia. The
three (3) arbitrators shall be
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
qualified by education and/or experience to pass on the particular
issues in dispute and shall not be (i) financially interested in the
outcome of the dispute or (ii) current or former employees of either
party. Each party shall pay the compensation and expenses of the
arbitrator named by or for it, and both shall share equally the
compensation and expenses of the third arbitrator.
(ii) The three arbitrators shall meet and hear the parties with respect
to matters relevant to which proposed Firm Service Fee will compensate
Seller for the value of providing and maintaining long term gas
supplies, on terms and conditions consistent with a "swing service",
which shall include but not be limited to executed long term sales
agreements between other Sellers serving the same or similar markets and
their customers. The jurisdiction of the arbitrators shall be limited
to the selection, based on all relevant evidence presented, of either
the Final Offer or the Final Counter Offer proposed either by Seller or
by Buyer pursuant to the provisions of this subsection (e). No other
Service Fee will be selected by the arbitrators. The decision by the
arbitrators shall be in writing, signed by the arbitrators or a majority
of them, rendered within seventy (70) days of the appointment of the
third arbitrator, and final, binding and non-appealable, except as set
forth in the Uniform Arbitration Act of Delaware [Footnote 4]
as to the parties
hereto. The provisions adopted by the arbitrators shall be effective as
of the first day of the applicable year, regardless of the actual date
of decision of the arbitrators. During any period prior to a decision by
the arbitrators but after commencement of the Contract Year for which
the Service Fee is being renegotiated, Buyer shall continue to pay the
Service Fee that was in effect during the previous Contract Year. Such
Service Fee shall be adjusted retroactively, as necessary, to conform to
the arbitrators decision.
4. Other Conditions
Upon request by Buyer, Seller shall make available to Buyer in Seller's
Houston office the necessary information for Buyer to evaluate Seller's
gas supply portfolio. Such evaluation shall include an examination of
the adequacy of the natural gas reserves committed and/or available to
Seller to satisfy Seller's obligations to furnish natural gas merchant
services. Seller also agrees to cooperate and make available the
necessary personnel to provide assistance to Buyer in reviewing the gas
supply data. Such evaluation shall not be required more frequently than
annually, and shall be subject to disclosure safeguards designed to
protect commercially sensitive or confidential information. In no event
shall Buyer's review of information concerning Seller's gas supply
portfolio, or Buyer's attendance at meetings with Seller or Seller's
agent concerning Seller's gas supply portfolio, be cited as or construed
to be evidence of Buyer's endorsement of, agreement with or acquiescence
in Seller's gas supply portfolio management activities and practices.
[Footnote 4] Del. Code Xxx. tit. 10, Section 5703 (1974)
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
EXHIBIT "B"
REDELIVERY POINTS
1. Station 54*
2. Athens Meter Station, located at mile post 1106.56 on Seller's main
transmission line on the southwesterly side of Xxxxxx Springs Road and
.13 mile southeasterly of Xxxxxx Springs Road bridge in Xxxxxx County,
Georgia.
3. Atlanta Meter Station, located at mile post 1039.59 on Seller's main
transmission line near Jonesboro, Xxxxxxx County, Georgia.
4. Bogart Meter Station, located at mile post 1098.81 on Seller's main
transmission line, adjacent to the intersection of Seller's main line
and U.S. Highway 29, approximately 0.5 mile southeasterly from the City
of Xxxxxx, Xxxxx County, Georgia.
5. Franklin Meter Station, located approximately 1.5 miles
northwesterly of Franklin, Georgia, at mile post 994.36 on Seller's main
transmission line.
6. Stockbridge Meter Station, located at mile post 1050.23 on Seller's
main transmission line approximately 1.5 miles downstream from Seller's
Compressor Xxxxxxx Xx. 000 xxxx Xxxxxxxxxxx, Xxxxxxx.
7. Peachtree City Meter Station, located at mile post 1027.15 on
Seller's main transmission line approximately 0.5 mile south of Tyrone,
Georgia near Georgia State Highway No. 74 in Fayette County, Georgia.
8. Conyers Meter Station, located at mile post 1064.52 on Seller's main
transmission line adjacent to Georgia State Highway No. 12,
approximately 1.6 miles southeasterly from the City of Xxxxxxx, Rockdale
County, Georgia.
9. Lithonia Meter Station, located at mile post 1058.88 on Seller's
main transmission line adjacent to Georgia Xxxxx Xxxxxxx Xx. 000 near
the city of Lithonia, Rockdale County, Georgia.
10. Danielsville Meter Station, located at mile post 1120.40 on
Seller's main transmission line, of the northeasterly side of Georgia
State Highway No. 98A, approximately on mile southeasterly of the City
of Danielsville, Madison County, Georgia.
* Delivery to Seller's Washington Storage Field for injection into
storage is subject to the terms, conditions, and limitations of Seller's
WSS Rate Schedule.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
11. Ball Ground Meter Station, located at mile post 54.388 on Seller's
Georgia extension in Cherokee County, Georgia.
12. Cumming Meter Station, located at mile post 36.76 on Seller's
Georgia extension in Forsyth County, Georgia.
13. Suwanee Meter Station, located at mile post 26.96 on Seller's
Georgia extension in Gwinnett County, Georgia.
14. East Athens Meter Station, located at approximately mile post
1108.83 on Seller's main transmission line, of the west side of Nowhere
Road, Xxxxxx County, Georgia.
15. Seller's Eminence Storage Field, Xxxxxxxxx County, Mississippi.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
SERVICE AGREEMENT
RATE SCHEDULE FS
(Continued)
EXHIBIT "C"
DAMAGES
1. (a) In the event that Seller is unable on any day to deliver the
quantities of gas requested by Buyer pursuant to the terms of this
Service Agreement, up to Buyer's Daily Sales Entitlement, and if Buyer
is able to replace such volumes with volumes from other natural gas
(excluding liquefied natural gas and synthetic natural gas) sources
("Replacement Volumes"), then Seller shall pay to Buyer, as Buyer's sole
and exclusive remedy for such failure to deliver (except for the
adjustments specified in Section 3 of Article III of this Service
Agreement) liquidated damages in an amount equal to (i) the difference
between (a) the price per dekatherm that Buyer would have paid if the
gas had been delivered under this Service Agreement (including the Firm
Service Fee) and (b) the cost per dekatherm reasonably incurred by Buyer
for the Replacement Volumes, adjusted if necessary for pricing point
comparability, multiplied by (ii) the difference, up to one hundred
percent (100%) of the Replacement Volumes delivered to Buyer's city gate
on the applicable day, between (a) Buyer's Daily Sales Entitlement and
(b) the volumes actually delivered hereunder.
(b) In the event that Seller is unable on any day to deliver the
quantities of gas requested by Buyer pursuant to the terms of this
Service Agreement up to Buyer's Daily Sales Entitlement, and if Buyer is
unable to replace such volumes from other natural gas (excluding
liquefied natural gas and synthetic natural gas) sources, Buyer hereby
expressly reserves any and all claims and/or causes of action Buyer has
or may have against Seller for breach of Seller's obligations hereunder.
Additionally, Seller hereby expressly reserves any defenses it may have
with regard to such claims and/or causes of action.
(c) Notwithstanding subsection 1(a) and 1(b) above, if Seller's failure
to deliver is due to a force majeure condition or an adverse
governmental action as described in subsections 1(a), 1(b) or 1(c) of
Article V of this Service Agreement, Seller shall not be required to pay
any damages (except for the adjustment specified in Section 3 of Article
III of this Service Agreement).
[LETTERHEAD OF TRANSCO GAS MARKETING COMPANY APPEARS HERE]
December 13, 1994
Xx. Xxxxxxx Xxxxxxx, Vice President
Gas Supply & Federal Regulation
Atlanta Gas Light Company
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
RE: FS Commodity Agreement
April 1, 1995 - March 31, 1996
Dear Xx. Xxxxxxx:
When executed by you in the space provided below, this letter will
evidence the agreement between Atlanta Gas Light Company ("Buyer") and
Transco Gas Marketing Company, as Agent for Transcontinental Gas Pipe
Line Corporation ("Seller"), regarding the negotiation of the Delivered
Gas Price for swing service provided to Buyer under Seller's FS Rate
Schedule under the following terms and conditions:
1) This Letter Agreement applies to the two FS Agreements between the
parties dated August 1, 1991, for Daily Sales Entitlement of Mcf/day
and Mcf/day, respectively.
2) The Gas Commodity Charge will be equal to the arithmetic average of
the following:
Page Two
Atlanta Gas Light Company
December 13, 1994
5)
6) This Letter Agreement is effective April 1, 1995 until .
If the foregoing correctly reflects our agreement, please execute in the
space provided below and return to the undersigned.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Director, Natural Gas Marketing
Agreed and accepted to this 29 day of December , 1994.
ATLANTA GAS LIGHT COMPANY
/s/ Xxxxxxx X. Xxxxxxx
AMENDMENT TO FS SERVICE AGREEMENTS
WHEREAS, Transcontinental Gas Pipe Line Corporation ("Seller") and Atlanta
Gas Light Company, ("Buyer"), are parties to two FS Service Agreements dated
August 1, 1991 under which Buyer's Daily Sales Entitlements equal _____ Mcf/day
and _____ Mcf/day, respectively, ("FS Agreements");
WHEREAS, Buyer requested renegotiation of the Firm Service Fee under
Section 3 d) of Exhibit "A" of the two FS Agreements and the parties have agreed
on a new Firm Service Fee; and
WHEREAS, Buyer and Seller desire to amend the FS Agreements ("Amendment")
previously entered into:
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, Seller and Buyer hereby agree to amend the FS
Agreements as follows:
This Amendment shall apply to the FS Agreements between the parties dated
August 1, 1991, for Daily Sales Entitlement of _____ and _____ Mcf/day,
respectively.
1. From April 1, 1996 until renegotiated, pursuant to Section 3 d) of
Exhibit "A" of the FS Agreements, the Firm Service Fee shall be $_____
per Mcf for each month, exclusive of the Non-Gas Demand Fee.
2. In the event of a conflict between the provisions of the FS Agreement
and this Amendment, the provisions of this Amendment shall control.
3. This Amendment shall be effective for the period April 1,1996 through
the later of _____, or such time when the Firm Service Fee is
renegotiated pursuant to Section 3 d) of Exhibit "A" of the FS
Agreement.
4. Except as herein amended, the FS Agreements previously entered into
shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
this _____ day of _____, 199__, by their respective representatives.
XXXXXXXX ENERGY SERVICES COMPANY
As Agent for
TRANSCONTINENTAL GAS PIPE LINE
CORPORATION
/s/ Xxxxxxx X. Xxxxxxx
By Xxxxxxx X. Xxxxxxx
Title Director Southern Region Marketing
Date February 21, 1996
ATLANTA GAS LIGHT COMPANY
/s/ Xxxxxxx X. Xxxxxxx
By Xxxxxxx X. Xxxxxxx
Title VP, Gas Supply and Federal Regulation
Date March 15, 1996
Page 2
