Exhibit 10a
FPS-1 SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 15th day of April, 1996, by and
between COVE POINT LNG LIMITED PARTNERSHIP ("Operator") and ATLANTA GAS
LIGHT COMPANY ("Buyer").
WITNESSETH: That in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
Section 1. Service to be Rendered. Operator shall perform and Buyer shall
receive service in accordance with the provisions of the effective Rate
Schedule FPS-1, the applicable General Terms and Conditions of Operator's
FERC Gas Tariff, First Revised Volume No. 1, on file with the Federal Energy
Regulatory Commission (Commission), as the same may be amended or superseded
in accordance with the rules and regulations of the Commission and the terms
and conditions of this Service Agreement including Appendices A and B. The
maximum obligation of Operator to provide FPS-1 service to or for Buyer is
specified in Appendix A, as the same may be amended from time to time by
agreement between Buyer and Operator. Service hereunder shall be provided
subject to the provisions of Subpart G of Part 284 of the Commission's
regulations.
Section 2. Term. Service under this Agreement shall commence as of April
16, 1996, and, subject to the provisions of Appendix A hereto, shall continue
in full force and effect for a term of five (5) Contract Years ending April
15, 2001. Pre-granted abandonment shall apply upon termination of this
Agreement.
Section 3. Rates. Unless otherwise agreed to by the parties in writing, and
subject to Appendix B attached hereto, Buyer shall pay Operator the maximum
charges and furnish Retainage as set forth in the above-referenced Rate
Schedule and Tariff.
Section 4. Notices. Notices to Operator under this Agreement shall be
addressed to it at 20 Montchanin Road, Wilmington, Delaware 19807, and
notices to Buyer shall be addressed to it at 303 Peachtree Street, N.E.,
Atlanta, Georgia 30308-3249, Attention: Director, Gas Supply, until changed
by either party by written notice.
Section 5. Superseded Agreements. This Service Agreement supersedes and
cancels, as of the effective date hereof, the following Service Agreements:
N/A.
ATLANTA GAS LIGHT COMPANY COVE POINT LNG LIMITED
PARTNERSHIP
By /s/ Stephen J. Gunther By /s/ John Hritcko, Jr.
Title Vice President Title Director Marketing and
Regulatory Affairs
Date May 7, 1996 Date April 22, 1996
Appendix A
to
FPS-1 Service Agreement
between
COVE POINT LNG LIMITED PARTNERSHIP (Operator)
and
ATLANTA GAS LIGHT COMPANY (Buyer)
QUANTITY: Maximum Contract Peaking Quantity: 1,000,000 Dth (MCPQ)
Maximum Daily Peaking Quantity: 100,000 Dth (MDPQ)
Receipt Points/Delivery Points:
Primary Receipt Points for Natural Gas:
Measuring Station Name Maximum Daily Quantity (Dth/day)
- ---------------------- --------------------------------
Cove Point LNG Loudoun As established pursuant to Section
Station/Columbia Gas Transmission 5(a) of Rate Schedule FPS-1 or as
Corporation otherwise mutually agreed upon
by Operator and Buyer
Primary Delivery Points for Natural Gas:
Measuring Station Name Maximum Daily Quantity (Dth/day)
- ---------------------- --------------------------------
Cove Point LNG Loudoun Station 100,000 Dth/day
Centerville/Washington Gas Company
and/or White Plains/Washington Gas
Company
The Master List of interconnects as defined in the General Terms and
Conditions of Operator's Tariff is incorporated herein by reference for
purposes of listing valid secondary receipt points and delivery points.
Other Terms and Conditions
A. Buyer's obligation to purchase service under this agreement is contingent
upon Buyer obtaining pipeline transportation to and from the Cove Point
pipeline that is acceptable to Buyer in its sole discretion. Buyer shall
not
be required during the initial Injection Season of this contract to
commence deliveries of natural gas to Operator prior to May 15, 1996. If
Buyer provides notice to Operator that it has not obtained acceptable
transportation by May 16, 1996, then this Agreement shall be terminated
effective immediately and Operator shall refund to Buyer any charges
collected from Buyer since the initiation of service. Unless such notice
to terminate is received by May 16, 1996, the Agreement shall remain in
full force and effect.
B. If during the first Contract Year of this Agreement, the Georgia Public
Service Commission (GPSC) issues a final order in buyer's Annual Gas
Supply Review that finds Buyer's aggregate storage quantities to be
excessive when compared to the peaking requirements necessary to serve
Buyer's firm loads attached to its system, Buyer may reduce its MCPQ and
MDPQ under this Agreement by the amount ordered by the GPSC. Such
reduction shall become effective thirty (30) days after the effective date
of such GPSC order, reducing Buyer's storage quantities. Buyer shall
provide Operator a copy of such order within ten (10) days of issuance by
the GPSC. In the event of a reduction, Operator shall, at Buyer's option,
during the thirty (30) days subsequent to the effective date of the
reduction either (i) assist and cooperate fully with Buyer in arranging for
the disposition of any inventory in storage in excess of the new MCPQ, or
(ii) purchase any such excess inventory in storage at the average of the
high and low index price (expressed in $/MMBtu) as published in Gas
Daily's Daily Price Survey for Appalachia, "Columbia, App." on the date of
the purchase, with payment to Buyer to be made within 45 days.
C. Buyer may terminate this Agreement effective as of the end of the first
Contract Year (April 15, 1997) by providing Notice to Operator of Buyer's
election to terminate no later than ninety (90) days prior to April
15,1997.
Service changes pursuant to this Appendix A shall commence as of April 16,
1996.
ATLANTA GAS LIGHT COMPANY COVE POINT LNG LIMITED
PARTNERSHIP
By /s/ Stephen J. Gunther By /s/ John Hritcko, Jr.
Title Vice President Title Director Marketing and
Regulatory Affairs
Date May 7, 1996 Date April 22, 1996
Appendix A
to
FPS-1 Service Agreement
between
COVE POINT LNG LIMITED PARTNERSHIP (Operator)
and
ATLANTA GAS LIGHT COMPANY (Buyer)
QUANTITY: Maximum Contract Peaking Quantity: 690,000 Dth (MCPQ)
Maximum Daily Peaking Quantity: 69,000 Dth (MDPQ)
Receipt Points/Delivery Points:
Primary Receipt Points for Natural Gas:
Measuring Station Name Maximum Daily Quantity (Dth/day)
- ---------------------- --------------------------------
Cove Point LNG Loudoun As established pursuant to Section
Station/Columbia Gas Transmission 5(a) of Rate Schedule FPS-1 or as
Corporation otherwise mutually agreed upon
by Operator and Buyer
Primary Delivery Points for Natural Gas:
Measuring Station Name Maximum Daily Quantity (Dth/day)
- ---------------------- --------------------------------
Cove Point LNG Loudoun Station, 69,000 Dth/day
Centerville/Washington Gas Company
and/or White Plains/Washington Gas
Company
The Master List of interconnects as defined in the General Terms and
Conditions of Operator's Tariff is incorporated herein by reference for
purposes of listing valid secondary receipt points and delivery points.
Other Terms and Conditions
A. If during the first Contract Year of this Agreement, the Georgia Public
Service Commission (GPSC) issues a final order in Buyer's Annual Gas
Supply Review that finds Buyer's aggregate storage quantities to be
excessive when compared to the peaking requirements necessary to serve
Buyer's firm loads attached to its system, Buyer may reduce its MCPQ and
MDPQ under this Agreement by the amount ordered by the GPSC. Such
reduction shall become effective thirty (30) days after the effective date
of such GPSC order, reducing Buyer's storage quantities. Buyer shall
provide Operator a copy of such order within ten (10) days of issuance by
the GPSC. In the event of a reduction, Operator shall, at Buyer's option,
during the thirty (30) days subsequent to the effective date of the
reduction either (i) assist and cooperate fully with Buyer in arranging
for the disposition of any inventory in storage in excess of the new MCPQ,
or (ii) purchase any such excess inventory in storage at the average of
the high and low index price (expressed in $/MMBtu) as published in Gas
Daily's Daily Price Survey for Appalachia, "Columbia, App." on the date of
the purchase, with payment to Buyer to be made within 45 days.
B. Buyer may terminate this Agreement effective as of the end of the first
Contract Year (April 15, 1997) by providing Notice to Operator of
Buyer's election to terminate no later than ninety (90) days prior to
April 15, 1997.
This Appendix A shall become effective as of July 1, 1996, and shall cancel
and supersede the previous Appendix A to the Service Agreement dated April
15, 1996. With the exception of this Appendix A, all other terms and
conditions of said Service Agreement shall remain in full force and effect.
ATLANTA GAS LIGHT COMPANY COVE POINT LNG LIMITED
PARTNERSHIP
By /s/ Stephen J. Gunther By /s/ John Hritcko, Jr.
Title Vice President Title Director Marketing and
Regulatory Affairs
Date July 9, 1996 Date July 3, 1996
Appendix B
to
FPS-1 Service Agreement
Between COVE POINT LNG LIMITED PARTNERSHIP (Operator)
and ATLANTA GAS LIGHT COMPANY (Buyer)
Rates and Charges:
Throughout the term of this Agreement, the monthly reservation charge
assessed and collected by Operator shall be the lower of the applicable
Maximum Reservation Charge on file with the Commission or the following:
Time Period Reservation Charge per Dth of
Maximum Daily Peaking Quantity
April 16, 1996-April 15, 1997 $4.00
April 16, 1997-April 15, 1998 $4.10
April 16, 1998-April 15, 1999 $4.15
April 16, 1999-April 15, 1900 $4.20
April 16, 2000-April 15, 2001 $4.25
Except as provided above, Buyer shall pay Operator all maximum charges and
furnish Retainage as set forth in Operator's Rate Schedule FPS-1 and Tariff,
such changes being: (i) the maximum commodity charge of $0.0009 per Dth of
gas delivered to Buyer; and (ii) the maximum retainage charge of 20.5% of the
quantity of natural gas received for storage.
In the event that the Commission, or such other entity as may have
jurisdiction over this Agreement, determines that the rates being offered by
Operator to Buyer for the service provided hereunder are in any way
discriminatory or otherwise improper, then Buyer, upon notification by
Operator, shall have the option of electing either (i) continuing to receive
service through the remaining term of this agreement; provided, however, that
effective upon the next succeeding April 16 following such notification,
Buyer shall pay Operator the maximum rates for the service provided hereunder
as set forth in Operator's Rate Schedule FPS-1 and Tariff, or (ii)
terminating this Agreement, such termination to be effective upon the
conclusion of the then-current Contract Year.
In the event Buyer chooses option (ii), the rates specified herein above for
the applicable time period shall remain in effect until the termination of
this Agreement. Buyer shall make its election within thirty (30) days after
Notice is provided by Operator. If no election is made by Buyer within said
thirty (30) days, then option (i) above shall be implemented.
This Appendix B shall become effective as of April 16, 1996, and shall
cancel and supersede the previous Appendix B to the Service Agreement dated
N/A. With the exception of this Appendix B, all other terms and conditions
of said Service Agreement shall remain in full force and effect.
ATLANTA GAS LIGHT COMPANY COVE POINT LNG LIMITED
PARTNERSHIP
By /s/ Stephen J. Gunther By /s/ John Hritcko, Jr.
Title Vice President Title Director Marketing and
Regulatory Affairs
Date May 7, 1996 Date April 22, 1996