EXHIBIT 10.65
By Federal Express
October 14, 1999
Atlanta Gas Light Company
000 Xxxx Xxxxxxxxx Xxxxxx, XX
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. Xxxxx Xxxxx
Re: Precedent Agreement Dated April 16, 1998,
As Amended By Letter Agreements Dated
October 13, 1998, December 14, 1998,
February 15, 1999, and August 11, 1999
(collectively, the "Agreement"), By
and Between Etowah LNG Company, L.L.C. ("Etowah")
and Atlanta Gas Light Company ("AGLC")
Dear Xxxxx:
The August 11, 1999 Letter Agreement referenced above provides that AGLC has
until October 15, 1999, in which to exercise its rights to terminate the
Agreement pursuant to the so-called "PSC-Out" contained in Paragraph 3 of the
Agreement. In lieu of exercising its termination rights under Paragraph 3 of
the Agreement at this time, AGLC would like an extension of time in which to
assess the extent and timing of its storage needs and to determine the role of
the Etowah service in AGLC's gas capacity plan. Accordingly, in consideration
of AGLC foregoing its present right to exercise the PSC-Out and in consideration
of the mutual agreements set forth in this letter, AGLC and Etowah agree as
follows:
1. Paragraph 3 of the Agreement is hereby amended and restated in its
entirety as follows:
3. If Company accepts its FERC Authorization, then within 30
days Company and Customer shall execute and deliver an LNG-1
Service Agreement that provides for (i) a Maximum Daily
Vaporization Quantity (MDVQ) of 200,000 Mcf per day, (ii) a
Primary Delivery Point (subject to change by mutual agreement
and according to Company's FERC-approved tariff)
Atlanta Gas Light Company
October 14, 1999
Page 2
at the interconnect between Company's Facility and Customer's
Facility, and (iii) a primary term of 20 years from the in-
service date, subject to Paragraph 8(a); provided, however, that
Company's obligation to provide service pursuant to the executed
Service Agreement remains subject to Company's receipt and
acceptance of any remaining necessary contractual and property
rights, financing arrangements, and regulatory approvals, in form
and substance satisfactory to Company. Any other provision of
this Paragraph 3 to the contrary notwithstanding, Customer and
Company agree that the obligations, agreements, and
representations in this Precedent Agreement remain subject of the
following (PSC-Out): if Customer (i) files a bona fide Gas
supply Plan, which includes, among other things, the service for
which Customer has subscribed from Company (Storage Service) with
the Georgia Public Service Commission (PSC) on or before August
1, 1998; (ii) pursues, on a best efforts basis, approval of the
Gas Supply Plan; and (iii) either (a) receives from the PSC by
September 30, 2000, an order(s) rejecting, disapproving, or
excluding those portions of the Gas Supply Plan that specifically
relate to the Storage Service, or (b) receives from the PSC by
September 30, 2000, an order that places Customer at unreasonable
risk, in Customer's sole judgment, for rejection, disapproval, or
exclusion of the Storage Service in future Gas Supply Plan
filings, or through an amendment to Customer's Gas Supply Plan,
or (c) concludes that Customer is at unreasonable risk, in
Customer's sole judgment, for rejection, disapproval, or
exclusion of the Storage Service in future Gas Supply Plan
filings, or through an amendment to Customer's Gas Supply Plan,
because the PSC failed to act by September 30, 2000, on the PSC
Staff's recommendation with respect to the Storage Service as
contemplated by the September 11, 1998 PSC order or (d) if, for
any other reason, Customer concludes, in Customer's sole
judgment, that execution and delivery of the above-referenced
LNG-1 Service Agreement is not in Customer's best interest, then
Customer may terminate this Precedent Agreement if Company
receives a written notice of termination, enclosing a copy of the
applicable order(s), if any, from the PSC, by October 15, 2000;
provided, however, that if Company has not received the specified
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notice of termination by October 15, 2000, then this PSC-Out
shall become null and void and have no effect, and the other
provisions of this Precedent Agreement shall continue with full
force and effect. If Customer terminates this Precedent
Agreement pursuant to this PSC-Out, then such termination
relieves Customer and Company of further liability; provided,
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however, that Customer agrees to
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Atlanta Gas Light Company
October 14. 1999
Page 3
reimburse Company for all actual costs, including without
limitation (i) expenses incurred in the design and engineering of
the Facility, (ii) expenses incurred in preparing for regulatory
approvals, (iii) the cost of all land and materials, and (iv) an
after-tax carrying charge of 7% on all such actual costs. Upon
reimbursement, Company agrees to convey its interest in any land
acquired for the Facility to Customer or to another entity that
Customer designates.
2. Etowah and AGLC agree and confirm that the Agreement, as amended by
this letter, is in full force and effect.
3 Etowah confirms that it will suspend any further engineering, design,
and other preparatory activities for the Etowah LNG project, including
efforts to obtain necessary regulatory approvals. AGLC confirms its
understanding that in the event it terminates the Agreement by October
15, 2000, pursuant to the PSC-Out provision in Paragraph 3, it will
reimburse Etowah for all actual costs as provided in Paragraph 3 of
the Agreement.
Agreed to and Accepted as of
this 14/th/ day of October, 1999.
ETOWAH LNG COMPANY, L.L.C.
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Its: Vice President
ATLANTA GAS LIGHT COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
