EXHIBIT 10-C
GAS SALES AND PORTFOLIO ADMINISTRATION AGREEMENT
THIS GAS SALES AND PORTFOLIO ADMINISTRATION AGREEMENT
("Agreement") is entered and effective the 15th day of March,
1996, for services to begin April 1, 1996, by and between INDIANA
GAS COMPANY, INC. ("Buyer") and PROLIANCE ENERGY, LLC ("Seller")
(collectively, the "Parties" or individually "Party"). Buyer and
Seller agree as follows:
RECITALS
1. Seller is a limited liability company created and
existing under the laws of the State of Indiana, with its
registered office at One North Capitol Avenue, Indianapolis,
Indiana.
2. Buyer is a corporation incorporated and existing under
the laws of the State of Indiana with its principal place of
business at 1630 North Meridian Street, Indianapolis, Indiana.
3. This Agreement contains the mutual promises and
covenants pursuant to which Buyer as a purchaser of natural gas
and portfolio administration services, and Seller as a merchant
of natural gas and portfolio administration services, shall
perform the transactions described herein.
4. Under this Agreement, Seller agrees to provide natural
gas and portfolio administration services consistent with the
terms and conditions contained herein.
DEFINITIONS
The following terms shall have the following definitions for
this Agreement and its Appendices:
1. The term "ANR" shall mean ANR Pipeline Company.
2. The term "Balancing Quantities" shall mean the quantity
of Gas which satisfies the difference between the Gas quantities
scheduled for delivery to Buyer's Delivery Points and the actual
physical flow of Gas taken by Buyer at the Delivery Points.
3. The term "Btu" shall mean British thermal unit, as
defined in Transporter's Tariff.
4. The term "Contract Month" shall mean a calendar month
during the effectiveness of this Agreement, as interpreted in
light of Transporter's Tariff.
5. The term "Contract Rates" shall be the demand rates as
described in Appendix C.
6. The term "Day" shall be defined as it is defined in
"Transporter's Tariff," or as applied by "Transporter."
7. The term "Delivery Points" shall mean the points of
delivery of Gas from Seller to Buyer as specified in Appendix A.
8. The term "FERC" shall mean the Federal Energy
Regulatory Commission.
9. The term "Gas" shall mean natural gas.
10. The term "Maximum Daily Quantities" or "MDQ" shall mean
the maximum quantity of Gas which Seller shall be obligated to
supply on a firm basis to Buyer's Delivery Points on a particular
day.
11. The term "Maximum Portfolio Entitlement" shall mean the
maximum deliverability that Buyer is entitled to under the
contracts identified on Appendix C.
12. The term "Maximum Seasonal Quantities" or "MSQ" shall
mean the maximum quantity of Gas which Seller shall be obligated
to supply on a firm basis to Buyer's Delivery Points in a Summer
or Winter.
13. The terms "MMBtu," "Dekatherm" or "DTH" shall mean one
million (1,000,000) Btus.
14. The term "Nominated Daily Quantities" shall mean the
quantity of Gas nominated on a particular day for delivery to
Buyer's Delivery Points, including deliveries to storage for
Buyer.
15. The term "PEPL" shall mean Panhandle Eastern Pipe
Line Company.
16. The term "Portfolio Contracts" shall mean all of the
contracts that may be utilized to provide Gas to Buyer, except as
provided in Section 1.2, and which are identified on Appendix C.
17. The term "Summer" shall mean the summer season months
of April through October, inclusive.
18. The term "TETCO" shall mean Texas Eastern
Transmission Corporation.
19. The term "Texas Gas" shall mean Texas Gas
Transmission Corporation.
20. The term "Transportation Credit" shall mean the Gas
cost credit specified in Appendix C.
21. The term "Transporter" shall mean the transporting
pipeline(s) interconnected with Buyer, including without
limitation ANR, PEPL, TETCO or Texas Gas, as applicable to the
transaction involved.
22. The term "Transporter's Tariff" shall mean the tariff
provisions of Transporter, as approved by the FERC, or any
successor thereto, and Buyer's or Seller's contractual
arrangements with Transporter, including changes to such tariff
and arrangements made after this Agreement is effective.
23. The term "Winter" shall mean the winter season months
of November through March, inclusive.
ARTICLE 1 - GAS SALES
1.1. Seller represents, agrees and warrants that Seller can
and shall stand ready to provide on a firm basis for Buyer's
purchase at Buyer's Delivery Points the daily and seasonal
quantities of Gas set forth herein.
1.2. During the term of this Agreement, unless Seller is
unable to meet Buyer's Gas requirements, Buyer agrees that Seller
shall be its sole supplier of Gas. However, Buyer shall have and
maintain the right to produce, utilize, purchase or sell any and
all:
(a) Gas produced in Indiana which Buyer may be
required to purchase under Ind. Code 8-1-2-87.6 or
any successor provision thereto of the Indiana Code, or
(b) propane.
1.3. The Maximum Daily Quantities which Seller shall be
obligated to provide on a firm basis at Buyer's Delivery Points
are specified in Appendix B.
1.4. The Maximum Seasonal Quantities during Winter or Summer
which Seller shall be obligated to provide on a firm basis at the
Delivery Points are specified in Appendix B.
1.5. Buyer shall assign or release, or cause to be assigned
or released, to Seller, and Seller shall accept, subject to the
terms and conditions of the applicable assignment, release or
agency contract (as set forth below), all of the Portfolio
Contracts. In the event a third party consent for the assignment
or release of any Portfolio Contract cannot be obtained or an
assignment or release would not be economically desirable or
timely, Seller is hereby appointed as agent for all purposes to
administer such contracts until such time as such an assignment
or release is effected. Under this Agreement, Seller may fulfill
its obligation to provide Gas to Buyer by using both the
Portfolio Contracts and contracts entered into by and between
Seller and third parties, including suppliers, pipelines and
other service providers. Seller shall not be obligated to enter
into commitments with suppliers, pipelines or other service
providers which extend beyond the term or scope of this
Agreement.
1.6. If FERC should determine that Transporter's Tariff
shall cease to apply, in whole or in part, to transactions
hereunder, the Parties will promptly meet to determine and
negotiate mutually acceptable replacement guidelines and
standards. In that event, until an agreement is reached, the
most recently effective Transporter's Tariff shall continue to
apply for all purposes under this Agreement. Upon acceptance of
the replacement guidelines and standards, Buyer and Seller agree
to apply the replacement guidelines and standards retroactively
to the cessation date of Transporter's Tariff. Any resolution
shall be implemented within thirty (30) days of the acceptance of
the replacement guidelines and standards.
ARTICLE 2 - GAS SALES CHARGES
2.1. For all Maximum Portfolio Entitlements, Buyer shall pay
Seller each Contract Month the then-applicable Contract Rates
specified in Appendix C in order for Seller to stand ready to
deliver Gas to Buyer's Delivery Points on a firm basis. Seller
shall provide Buyer the Transportation Credit specified in
Appendix C.
2.2. Buyer shall pay Seller each Contract Month the
applicable supplier reservation costs specified in Appendix D, as
updated from time to time as provided in Article 6.
2.3. For all commodity quantities, Buyer shall pay Seller
each Contract Month an amount determined by multiplying the
applicable Nominated Daily Quantities and Balancing Quantities
for the Contract Month, by the applicable price per MMBtu as
determined pursuant to the commodity pricing provisions of
Appendix E. These pricing provisions shall reflect pricing
methods for Gas supply, and all other variable costs incurred by
Seller as provided in Appendix E. The other variable costs shall
include all applicable costs, including without limitation,
transportation commodity or usage charges, injection and
withdrawal costs, volumetric surcharges, and fuel as reflected in
each Transporter's Tariff and the applicable service agreements.
2.4. Buyer will pay taxes, if any, which are imposed with
respect to Gas delivered hereunder and which are not reflected in
the pricing methods in Appendix E; provided, however, Buyer shall
have no obligation to pay any sales or use taxes for which it
delivers to Seller an appropriate exemption certificate.
ARTICLE 3 - BALANCING
3.1. Seller shall provide Buyer with Balancing Quantities as
part of its gas sales and portfolio administration services.
Balancing procedures shall be agreed to by the Parties.
ARTICLE 4 - PORTFOLIO ADMINISTRATION SERVICES
4.1. Buyer and Seller agree that during the term of this
Agreement Seller shall provide all of Buyer's portfolio
administration services.
4.2. Seller's portfolio administration services shall
include without limitation Gas acquisition, scheduling receipt
and delivery quantities with Gas suppliers and pipeline
transporters, scheduling pipeline storage inventory quantities,
providing delivered Gas supplies, supply and portfolio planning,
and periodic portfolio reporting. Buyer shall retain complete
unilateral control of its physical Gas delivery, distribution,
transportation and storage facilities.
4.3. Seller shall provide Gas supply planning to Buyer as
part of its portfolio administration services. Supply
planning/gas control procedures shall be agreed to by the Parties
to govern the preparation and implementation of the supply plans.
4.4. Seller shall provide portfolio planning as part of its
portfolio administration services. Seller and Buyer shall review
periodically Buyer's supply requirements for potential changes.
Any portfolio entitlement changes are subject to Buyer's prior
approval. Seller shall represent Buyer in negotiations with
suppliers and pipelines to effectuate the portfolio changes.
Seller agrees that it will maintain for Buyer's benefit firm
contracts for transportation and other delivery services
(specifying Buyer's primary Delivery Points) and Gas supply that
will fully meet the MDQ and MSQ of Buyer as set forth in the
agreed upon supply plans.
4.5. During the term of this Agreement, Seller shall review
all FERC regulatory filings that could reasonably be expected to
impact the Gas supply or portfolio administration services
provided by Seller to Buyer. Seller shall inform Buyer on a
timely basis of Seller's review and analysis. Buyer shall timely
communicate its interests to Seller. Seller shall provide for
representation to protect the Parties' interests in FERC
proceedings and related appeals and notify Buyer promptly
concerning any conflict of interest it may identify. In the
event Seller's interests conflict with those of Buyer, Buyer and
Seller shall be free to represent their interests directly.
Seller shall provide Buyer with periodic written reports on the
status of such proceedings in which Seller represents Buyer.
4.6. During the term of this Agreement, Buyer agrees to
pay Seller the portfolio administration service fee specified in
Appendix F.
ARTICLE 5 - TERM
5.1. The initial term of this Agreement shall be through
October 31, 2000. If neither Party terminates this Agreement by
written notice at least twenty-four (24) months prior to
expiration of the initial term, the Agreement will remain in
effect for an additional one (1) year after the original
expiration date. Thereafter, the Agreement will continue year to
year unless terminated by written notice given at least twenty-
four (24) months prior to the expiration date of the then current
Agreement.
5.2. Notwithstanding the provisions of Section 5.1, this
Agreement shall not remain in effect beyond, and shall terminate
upon, the expiration of the wind-up period specified in Section
6.03 of Seller's Fundamental Operating Agreement. During the
course of any such wind-up of Seller's affairs, the sole supplier
requirements established in Sections 1.2 and 4.1 of this
Agreement shall be waived with respect to any Gas or related
services under any Portfolio Contracts assigned or transferred to
Buyer or its designee, or released from any agency established
under this Agreement, pursuant to Section 6.05 of the above-
referenced Fundamental Operating Agreement. Any minimum purchase
requirements imposed on Buyer under this Agreement shall be
reduced accordingly. The portfolio administration service fee
during the wind-up period shall be reduced to the extent
reductions in actual portfolio administration costs occur.
ARTICLE 6 - CHANGES TO APPENDICES
6.1. The Parties agree to make changes to Appendix A as
necessary to reflect changes in Buyer's Delivery Points.
6.2 The Parties agree to make changes, after timely
notice, to Appendix B as necessary to reflect changes in Buyer's
MDQ and MSQ. Buyer agrees to pay any appropriate cost increases
resulting from these changes.
6.3. The Parties agree that Appendices C, D, E, F and I
will be subject to change from time to time as provided in those
Appendices.
6.4. The Parties agree that changes in Appendix G can be
made by either party at any time. Buyer or Seller may change the
notice information in Appendix G by providing new designations to
the other Party by registered or certified mail.
6.5. The Parties agree that changes to Appendix H will
occur only upon mutual written agreement.
ARTICLE 7 - OPERATIONS
7.1. Buyer and Seller agree to accept for purposes of this
Agreement the applicable quality, delivery pressure, measurement
and other applicable rules, procedures, guidelines, tariff
provisions, contractual arrangements and policies of suppliers or
Transporter, as the same may change from time to time.
ARTICLE 8 - FORCE MAJEURE
8.1. All obligations of the Parties to this Agreement
shall be suspended while and only for so long as compliance is
prevented by a cause beyond the control of the Party claiming
force majeure, such as an Act of God, war, civil disturbance,
operational or performance failure or declaration of force
majeure by a supplier, leased storage field operator,
transporter, or other service provider, operational flow
order(s), federal or state or local law, or binding order of a
court or governmental agency, provided the suspension shall be
only to the extent performance was prevented by the event of
force majeure and provided the Party claiming force majeure
provides notice by telephone or by telecopy with reasonably full
particulars to the other Party at or near the time the Party
becomes aware of the force majeure, with written confirmation
sent within seventy-two (72) hours. A Party claiming force
majeure hereunder shall have the duty to make all reasonable
efforts to remedy the force majeure condition as promptly as
possible.
8.2. Notice of force majeure must be provided to the
representatives for Buyer or Seller designated in Appendix G.
ARTICLE 9 - PENALTIES
9.1. Seller shall be liable for all imbalance or other
penalties, cash-outs, or other costs imposed on Buyer or Seller
by any third party, including without limitation Seller's
upstream or other transporters and Transporters, to the extent
that such penalties, cash-outs or other costs are caused by
Seller's actions or inaction. Buyer shall be liable for all
imbalance or other penalties, cash-outs, or other costs imposed
on Buyer or Seller by any third parties, including without
limitation Seller's upstream or other transporters and
Transporters, to the extent that such penalties, cash-outs or
other costs are caused by Buyer's actions or inaction.
ARTICLE 10 - BILLING AND PAYMENT
10.1. Following each Contract Month, Seller shall furnish,
or have furnished, an itemized statement to Buyer stating the
amounts due Seller pursuant to this Agreement (the "Statement").
Following the receipt of Seller's Statement, Buyer shall make
payment by the due date. Invoice date, due date, and payment
method shall be as specified in Appendix H.
10.2. Interest shall accrue on all late payments commencing
on the applicable due date at the then current prime rate of
National City Bank, Indianapolis, Indiana, or its successor, or
the maximum lawful rate, whichever is lower.
ARTICLE 11 - REMEDIES
11.1. If Seller fails to deliver scheduled Gas and such
failure to deliver is not excused under this Agreement, then
Seller shall reimburse Buyer for the amount of increased cost to
Buyer of acquiring replacement Gas. The amount owed by Seller to
Buyer hereunder shall be calculated as the product of (a) the
difference, if positive, between (i) the price paid for
replacement Gas, including any additional transportation, fuel
and other variable costs incurred to receive such replacement
Gas, and (ii) the then applicable commodity charge, and (b) the
difference between the scheduled Gas and the quantity of Gas
actually delivered by Seller. Buyer and Seller agree to act in
good faith with respect to purchases of such replacement Gas so
as to minimize Seller's obligations to Buyer under this Section.
11.2. If Buyer fails to receive scheduled Gas and such
failure to receive is not excused under this Agreement, then
Buyer shall reimburse Seller in an amount calculated as the
product of (a) the difference, if positive, between (i) the then
applicable commodity charge and (ii) the price received from a
third party purchaser, including any additional transportation,
fuel and other variable costs incurred to deliver Gas to a third
party purchaser, and (b) the difference between the scheduled Gas
and the quantity of Gas actually received by Buyer. Seller and
Buyer agree to act in good faith with respect to sales of such
Gas to a third party purchaser so as to minimize Buyer's
obligations to Seller under this Section.
11.3. The Parties agree that the actual losses incurred by
a Party as a result of the other Party's failure to deliver or
receive quantities of Gas would be uncertain and impossible to
determine with precision. As a result, the remedies provided in
Article 11 for the failure to deliver or receive certain
quantities of Gas, respectively, shall be the failing Party's
entire and sole liability to the non-failing Party, and the right
to recover such remedies shall be the non-failing Party's sole
and exclusive remedy for the failing Party's failure or breach of
its obligation to deliver or receive the scheduled Gas under this
Agreement. The remedies provided pursuant to this Article are in
lieu of and exclude any and all other liabilities of the failing
Party as may be provided by contract, equity, or law for any such
failures or breaches, including, without limitation, the
obligation of either Party to deliver or receive quantities
hereunder in relation to the sale or purchase of Gas to or from
other parties.
ARTICLE 12 - CORRESPONDENCE
12.1. Except as provided in Section 8.2, any notice,
statement or bill shall be in writing and shall be duly delivered
when (a) mailed, postage prepaid, by registered, certified, or
first-class mail, or (b) sent by prepaid overnight delivery to
the applicable address, or (c) sent by hand delivery, or (d) sent
by telecopy directed to the appropriate person and telecopy
number with hard copy also delivered as in (a), (b) or (c) above.
Addresses, telephone numbers, and telecopy numbers are specified
in Appendix G.
ARTICLE 13 - RENEGOTIATION TO PRESERVE AGREEMENT
13.1. If any provision of this Agreement is declared or
rendered unlawful by a court of law or regulatory authority with
jurisdiction over either of the parties or deemed unlawful
because of a statutory or other change in the law, or if either
Party suffers a substantial economic detriment due either to a
determination relating to this Agreement by such an authority, or
as a result of fundamental changes in the marketplace or other
substantial changes in existing circumstances, the Parties will
promptly meet to determine and negotiate a mutually acceptable
agreement on such replacement provisions necessary to maintain
the benefits and obligations that arise under this Agreement.
ARTICLE 14 - MISCELLANEOUS
14.1. This Agreement is subject to all applicable laws,
orders, rules, and regulations of any state or federal
governmental body or official having jurisdiction and both Seller
and Buyer agree that the transactions agreed to hereunder shall
be conditioned upon compliance with all such laws, orders, rules
and regulations.
14.2. Seller and Buyer expressly agree that laws of the
State of Indiana shall govern the validity, construction,
interpretation and effect of this Agreement.
14.3. Either Party may pledge, mortgage or assign its
rights hereunder as security for indebtedness. This Agreement is
otherwise non-assignable except with the prior written consent of
Buyer and Seller.
14.4. This Agreement is conditioned on the continued
solvency of Buyer and Seller. If one Party becomes insolvent or
seeks bankruptcy relief, the other party may prospectively
terminate this Agreement on prior written notice without further
obligation other than to pay for services or Gas previously
provided. In the event of such termination, in order to ensure
the continued reliable provision of gas supply service to Buyer's
customers, the wind-up provisions of Section 6.05 of the
Fundamental Operating Agreement shall apply.
14.5. Notwithstanding any other provisions herein, the
Parties hereto waive any and all rights, claims, or causes of
action arising under this Agreement for incidental, consequential
or punitive damages.
14.6. Neither Buyer nor Seller intends for the provisions
of this Agreement to benefit any third party. No third party
shall have any right to enforce the terms of this Agreement
against Buyer or Seller.
14.7. The Parties acknowledge that their respective
business records and information are confidential in nature and
may contain proprietary and trade secret information.
Notwithstanding the foregoing, Seller agrees to provide Buyer
access to those records required to verify Seller's Statements to
Buyer. Confidential records and information in the possession of
either Party shall not be divulged to third parties without prior
consent of the other Party.
14.8. In interpretation and construction of this Agreement,
no presumption shall be made against any Party on grounds such
Party drafted the Agreement or any provision thereof.
14.9. No waiver by either Party of one or more defaults or
breaches by the other in performance of any of the terms or
provisions of this Agreement shall operate or be construed as a
waiver of any future default or breach, whether of a like or of a
different character.
14.10. The terms and conditions contained in this Agreement
and its Appendices herein constitute the full and complete
agreement between the Parties and any change to be made must be
submitted in writing and executed by both Parties.
14.11. Each Party represents that it has all necessary
power and authority to enter into and perform its obligations
under this Agreement and that this Agreement constitutes a legal,
valid and binding obligation of that Party enforceable against it
in accordance with its terms, except as such enforceability may
be affected by any bankruptcy law or the application of
principles of equity.
14.12. Seller agrees that there shall be no pattern of
adverse distinction and no pattern of undue discrimination in
carrying out its obligations under this Agreement relating to
Buyer as compared to other parties to whom Seller furnishes Gas
supply and portfolio administration services.
14.13. In the event any of the terms, covenants or
conditions of this Agreement, or any amendment hereto, or the
application of any such terms, covenants or conditions shall be
held invalid as to any Party or circumstance by any court having
jurisdiction, all other terms, covenants, or conditions of this
Agreement, or any amendment hereto, and their application, shall
not be affected thereby and shall remain in full force and
effect.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement in duplicate originals.
"SELLER"
PROLIANCE ENERGY, LLC
By: /s/Carl L. Chapman
Carl L. Chapman
President
"BUYER"
INDIANA GAS COMPANY, INC.
By: /s/Jerrold L. Ulrey
Jerrold L. Ulrey
Vice President
INDEX TO APPENDICES
APPENDIX A - Buyer's Delivery Points
APPENDIX B - Buyer's Maximum Quantities
APPENDIX C - Portfolio Information
APPENDIX D - Supplier Reservation Costs
APPENDIX E - Commodity Purchases
APPENDIX F - Portfolio Administration Service Fee
APPENDIX G - Notices
APPENDIX H - Invoice/Payment Data
Gas Sales And Portfolio Administration Agreement
APPENDICES INDEX
Appendix Title
A Buyer's Primary Delivery Points
B Buyer's Maximum Quantities
C Portfolio Information
D Supplier Reservation Costs
E Commodity Purchases
F Portfolio Administration Service Fees
G Notices
H Invoice/Payment Data
I Diversion of Entitlements
APPENDIX A - Buyer's Primary Delivery Points
North/East System
Delivery Point Delivery Point
2509 Dana 010530070 Dunkirk
2510 Danville 032150100 Muncie
2515 Elwood 037045550 ANR Storage
Facilities
2516 Fairmount ANRX22 Storage Injection
Points
2530 Noblesville PEPL IND GAS-INJ
2531 North Salem CGCU Points of Interconnection
2535 Richmond with Citizens Gas &
2538 Tipton Coke Utility
2576 Huntington
2597 Crawfordsville
2605 Upland
2684 Unionport
2751 Montpelier
2754 Sheridan
2757 Bloomingdale
2772 Newport
2780 Lebanon
2795 Anderson
2796 Zionsville
2812 Carpentersville
2822 Fowlerton
2823 Richmond
5233 Anderson 121N Rural
5530 Cent. Ind. Rurals
5531 West of Zionsville
5532 North of Zionsville
5534 East of King
5864 King
010530010 East Hancock School
010530030 Hope
APPENDIX A - Buyer's Primary Delivery Points
Central/Terre Haute System
Delivery Point
14411 Bedford
14412 Bedford
14431 Columbus
14432 Columbus
14433 Columbus
14461 Bargersville
14463 Bargersville
14481 Mitchell
14482 Mitchell
14491 Needmore
14492 Needmore
14493 Needmore
14501 Seymour
14511 Waynesville
14512 Waynesville
14521 Rural (Mitchell)
14522 Rural (Martinsville)
14523 Rural (Terre Haute)
14531 Crane
14533 Crane
18421 Sand Cut
18422 Sand Cut
18423 Sand Cut
18424 Sand Cut
APPENDIX A - Buyer's Primary Delivery Points
Central/Terre Haute System (Continued)
Delivery Point
18451 Clinton
18452 Clinton
18461 Hercules Clinton
18462 Hercules Clinton
18491 Terre Haute-2
18492 Terre Haute-2
18501 Terre Haute-3
18502 Terre Haute-3
18511 Terre Haute-4
18521 Stuckey Rd.
18522 Stuckey Rd.
18523 Stuckey Rd.
18531 Rural Ind.
18541 Terre Haute-6
18542 Terre Haute-6
18571 Magaret (Terre Haute)
18573 Magaret (Terre Haute)
037047100 West Shelbyville
CGCU Points of Interconnection with Citizens Gas & Coke Utility
APPENDIX A - Buyer's Primary Delivery Points
South System
Delivery Point
17031 Locust, KY
17032 Locust, KY
17251 Crestwood, KY
17252 Crestwood, KY
Greensburg System
Delivery Point
70017 Greensburg
70940 Westport
TETCO TETCO Storage Facilities
Amendment
Seller and Buyer agree that this Appendix A may be
amended as provided in this Agreement, which amendment
ultimately will be memorialized in a revised Appendix A.
PROLIANCE ENERGY, LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
APPENDIX B - Buyer's Maximum Quantities
Maximum Daily Quantities (in Dth)
Central/
Month North/East Terre Haute South Greensburg
April 257,000 125,000 31,500 3,420
May 206,000 94,900 20,100 2,610
June 152,000 70,800 15,400 2,630
July 94,100 38,900 5,530 1,550
August 119,000 52,800 9,890 2,020
September183,000 88,200 20,900 3,220
October 251,000 112,000 37,600 5,060
November 366,000 180,000 46,700 5,590
December 482,000 217,000 66,700 7,330
January 505,000 220,000 72,400 7,330
February 469,000 220,000 63,900 7,300
March 395,000 186,000 50,800 5,860
Maximum Seasonal Quantities (in Dth)
Central/
Month North/East Terre Haute South Greensburg
Summer 1996 11,202,130 5,850,260 1,676,840 267,145
Winter 1996-97 38,579,050 21,473,920 5,513,670 697,710
APPENDIX B - Buyer's Maximum Quantities
Amendment
Seller and Buyer agree that this Appendix B may be
amended as provided in this Agreement, which amendment
ultimately will be memorialized in a revised Appendix B.
PROLIANCE ENERGY, LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
Appendix C - Portfolio Information
I. Contracts and Contract Rates
The applicable demand costs shall be determined based
upon the rates and charges specified in each Transporter's
Tariff, including any applicable direct bills, surcharges,
or as other costs specified by the sheets identified below,
or other applicable sheets, as all of those sheets may be in
effect from time to time, and costs arising under applicable
agreements, including the agreements identified below, as
well as this Agreement. While Seller and Buyer agree that
the identified tariff sheets and agreements are intended to
be a complete listing of the applicable tariff sheets and
applicable agreements, they further agree that the omission
of the reference of one or more sheets or agreements from
that list will not affect Buyer's obligation to Seller for
rates, charges and costs incurred thereunder. Seller shall
provide to Buyer all Transporter refunds which are received
by Seller relative to Contracts or Contract Rates referenced
below or relative to any agreements referencing the
contracts below.
Contract No. Contract Rate
11713 Sheet No. 11
11714 Sheet No. 5
11715 Sheet No. 5
11716 Sheet No. 5
11718 Sheet No. 5
11719 Tariff Letter
11720 Tariff Letter
11721 Sheet No. 5
12044 Sheet No. 11
12045 Sheet No. 5
X-22 Sheet No. 16
Sheet No. 14
Sheet No. 15
19100 Sheet No. 7
Sheet No. 17
Sheet No. 17A
Sheet No. 18
Appendix C - Portfolio Information
Contract No. Contract Rate
20250 Sheet No. 7
Sheet No. 17
Sheet No. 17A
Sheet No. 18
20300 Sheet No. 7
Sheet No. 17
Sheet No. 17A
Sheet No. 18
32300 Sheet No. 10
33050 Sheet No. 10
70300 Sheet No. 68G
N0325 Sheet No. 10
Sheet No. 10
T3780 Sheet No. 11
Sheet No. 11
N0420 Sheet No. 10
Sheet No. 10
T3739 Sheet No. 11
Sheet No. 11
800171 Sheet No. 35
400109 Sheet No. 43
WSS Appendix I
PSS Appendix I
Appendix C - Portfolio Information
II. Transportation Credit
1. Seller shall provide to Buyer, as a credit against the
Contract Rates, a Transportation Credit ("TC") for the sale
from the Buyer to Seller of projected available annual
portfolio entitlements.
2. The Transportation Credit shall be calculated from time
to time to reflect changes in projected available annual
entitlements, based on the following formula:
TC = Base TC x Projected Available Annual Entitlements
Base Available Annual Entitlements
Where: a. Base TC = $1,864,000
b. Base Available Annual Entitlements = 35,913,000 Dth
c. Projected Available Annual Entitlements =
Total Entitlements - Normal Demand
(i) Total Entitlements are the sum of the
quantities of longhaul pipeline
transportation entitlements reserved by
Buyer.
(ii) Normal Demand is the projected normal
weather quantity of Buyer's firm longhaul
pipeline deliveries for firm customers.
3. The TC shall be divided among months based upon the
projected available monthly entitlements.
Amendment
Seller and Buyer agree that this Appendix C may be
amended from time to time by mutual agreement of the
Parties, which ultimately will be memorialized in a revised
Appendix C.
PROLIANCE ENERGY LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
APPENDIX D - Supplier Reservation Costs
Supplier Reservation Costs
April 1, 1996 to October 31, 1996
I. Reserved Commodity Quantities
a. Monthly Baseload Reserved Quantity (dth)
System
Central/
Month North/East Terre Greensburg South
Haute
April 110,424 39,136 2,927 9,914
May 86,222 25,047 2,764 3,914
June 73,595 25,047 2,493 2,087
July 68,830 22,556 1,680 2,087
August 70,438 25,047 2,190 2,087
September 72,542 25,047 2,493 2,087
October 88,326 35,483 1,689 2,087
APPENDIX D - Supplier Reservation Costs
b. Daily Swing Reserved Quantity (dth)
System
Central/
Month North/East Terre Greensburg South
Haute
April 124,774 8,179 1,061 12,071
May 145,894 10,787 65 17,063
June 87,216 0 358 13,985
July 0 0 0 3,684
August 36,708 0 0 8,234
September 116,746 22,268 997 19,724
October 136,038 11,832 1,222 16,415
II. Applicable Reservation Rates (dth/day)
System Winter Months April, 1996**
Monthly Daily Monthly Daily
Index Index Index Index
Reserved Reserved Reserved Reserved
Quantity Quantity Quantity Quantity
North/East * * $0.023 $0.0315
Central/Terre Haute * * $0.01636 $0.00606
Greensburg * * $0.025 $0.045
South * * $0.01636 $0.00606
*To be determined.
**October prices are to be determined, other Summer 1996
months are $0.00.
APPENDIX D - Supplier Reservation Costs
Assignment/Agency Administration of Supply Agreements
Buyer and Seller agree that quantities reserved under
supply reservation contracts entered into by Buyer prior to
April 1, 1996, and for which Seller has accepted assignment
or agency administration duties, shall be included in the
Reserved Commodity Quantities with Applicable Reservation
Rates as set forth in the original supply reservation
contracts.
Amendment
Seller and Buyer agree that this Appendix D may be
amended from time to time by mutual agreement of the
Parties, which ultimately will be memorialized in a revised
Appendix D.
PROLIANCE ENERGY, LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
Appendix E- Commodity Purchases
This Appendix E addresses the gas supply and other
variable costs applicable to Nominated Daily Quantities and
Balancing Quantities as identified below.
For Monthly Baseload Purchases:
Buyer shall pay to Seller each Contract Month an amount
determined by multiplying the monthly baseload quantities of
Gas scheduled for Buyer's purchase under this Agreement
during the Contract Month, by a price per MMBtu determined
using the first monthly index from Inside FERC's GAS MARKET
REPORT, in the table "PRICES OF SPOT GAS DELIVERED TO
INTERSTATE PIPELINES" for the applicable zone, specified
below, for the applicable month, plus all other applicable
variable costs as identified below shall apply.
For Daily Swing Purchases:
Buyer shall pay to Seller each Contract Month an amount
determined by summing all applicable "Daily Amounts" for the
Contract Month. A "Daily Amount" shall be calculated for
each day during the Contract Month for which daily swing
quantities of Gas have been confirmed for purchase. The
"Daily Amounts" shall be determined by multiplying (a) the
confirmed swing quantities of gas scheduled for the
particular day of the Contract Month, by (b) a price per
MMBtu determined using the arithmetic average of the high
and low prices in the price range reported in Gas Daily, in
the table "DAILY PRICE SURVEY", for the applicable zone,
specified below, for the applicable day. As to any day for
which Gas Daily for any reason (e.g. holidays and weekends)
does not publish the above referenced prices, the applicable
prices shall be that utilized for the last prior day such is
published. In addition all other applicable variable costs
as identified below shall apply.
For Other Purchases:
For any purchases not covered by a specified pricing
method, pricing shall be as negotiated and mutually agreed
to in writing by the Parties.
For Summer Storage Refill:
For summer refill of leased storage, Buyer shall pay to
Seller an amount based on averaging the seven summer monthly
indices for the applicable supply area, and based upon
presuming storage refill quantities to be equally split
between the summer months. For summer refill of company
storage, the parties will agree on the extent to which an
index average method will be used, after consideration of
the operational scheduling needs of company storage. In
addition, all other applicable variable costs as identified
below shall apply.
Appendix E- Commodity Purchases
For Storage Withdrawals:
For quantities of storage withdrawals for which Buyer
has previously paid for commodity, applicable storage
withdrawal variable costs as identified below shall apply.
For Applicable Indices:
System Applicable Monthly Indices
North/East PEPL - Texas, Oklahoma
ANR - Louisiana
Central/Terre Haute Texas Gas - Zone 1
Texas Gas - Zone SL
South Texas Gas - Zone 1
Texas Gas - Zone SL
Greensburg TETCO - East Louisiana
TETCO - West Louisiana
TETCO - East Texas
TETCO - South Texas
North/East PEPL - Oklahoma
ANR - Louisiana-Onshore South
Central/Terre Haute Texas Gas SL
South Texas Gas SL
Greensburg TETCO (ELA) - Louisiana-Onshore
South
TETCO (WLA) - Louisiana-Onshore South
TETCO (ETX) - East Texas - North La.
Area
TETCO (STX) - South - Corpus Christi
APPENDIX E- Commodity Purchases
(Continued)
System Applicable Monthly Indices
North PEPL - Texas, Oklahoma (mainline)
South Texas Gas - Zone 1
Texas Gas - Zone 2
Natural Gas Intelligence Gas Price Index
Texas Panhandle/Anadarko Basin/Oklahoma
System Applicable Daily Indices
North/East PEPL - Oklahoma
ANR - Louisiana - Onshore South
Central/Terre Haute Texas Gas SL - Louisiana - Onshore South
Texas Gas (entire Z1) - East Texas - North La. Area
South Texas Gas SL - Louisiana - Onshore South
Texas Gas (entire Z1) - East Texas - North
La. Area
Greensburg/Westport TETCO (ELA) - Louisiana - Onshore South
TETCO (WLA) - Louisiana - Onshore South
TETCO (ETX) - East Texas - North La. Area
TETCO (STX) - South - Corpus Christi
Trunkline - East - Houston - Katy
Trunkline - South - Corpus Christi
Trunkline - Louisiana - Onshore South
APPENDIX E- Commodity Purchases - Other Variable Costs
The other variable costs applicable to Nominated Daily
Quantities and Balancing Quantities shall be determined
based upon the rates and charges applicable under each
transporter's tariff, including the sheets identified below,
as well as other applicable sheets, as all of those sheets
may be in effect from time to time, and costs arising under
applicable agreements, including the agreements identified
below, as well as this Agreement.
North/East
PEPL
Contract No. Contract Rate
11713 Sheet No. 11
11714 Sheet No. 5
11715 Sheet No. 5
11716 Sheet No. 5
11717 Sheet No. 5
11719 Tariff Letter
11720 Tariff Letter
11721 Sheet No. 5
12044 Sheet No. 11
12045 Sheet No. 5
APPENDIX E - Commodity Purchases - Other Variable Costs
North/East
ANR
Contract No. Contract Rate
X-22 Sheet No. 16
Sheet No. 14
Sheet No. 15
Sheet No. 19
19100 Sheet No. 7
Sheet No. 17
Sheet No. 17A
Sheet No. 19
20250 Sheet No. 7
Sheet No. 17
Sheet No. 17A
Sheet No. 19
20300 Sheet No. 7
Sheet No. 17
Sheet No. 17A
Sheet No. 19
32300 Sheet No. 10
Sheet No. 19
33050 Sheet No. 10
Sheet No. 19
70300 Sheet No. 68G
APPENDIX E - Commodity Purchases - Other Variable Costs
Central/Terre Haute System
Texas Gas G-3
Contract No. Contract Rate
N0325 Sheet No. 10
Sheet No. 10
Sheet No. 14
T3780 Sheet No. 11
Sheet No. 11
Sheet No. 14
South System
Texas Gas G-4
Contract No. Contract Rate
N0420 Sheet No. 10
Sheet No. 10
T3739 Sheet No. 11
Sheet No. 11
APPENDIX E - Commodity Purchases - Other Variable Costs
Greensburg System
Texas Eastern
Contract No. Contract Rate
800171 Sheet No. 36
Sheet No. 126
Sheet No. 127
Sheet No. 128
Sheet No. 129
400109 Sheet No. 43
Sheet No. 126
Sheet No. 127
Sheet No. 128
Sheet No. 129
While Seller and Buyer agree that the identified tariff
sheets and agreements are intended to be a complete listing
of the applicable tariff sheets and applicable agreements,
they further agree that the omission of the reference of one
or more sheets or agreements from that list will not affect
Buyer's obligation to Seller for rates, charges and costs
incurred thereunder.
Amendment
Seller and Buyer agree that this Appendix E may be
amended from time to time by mutual agreement of the
Parties, which ultimately will be memorialized in a revised
Appendix E.
PROLIANCE ENERGY, LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
APPENDIX F - Portfolio Administration Service Fees
Portfolio Administration Service Fee
In each month of year one of the initial term of this
Agreement, Buyer shall pay to Seller a fee equal to one-
twelfth of Buyer's annual costs, to otherwise perform the
gas supply function (the "Base Year Amount"). The Base Year
Amount shall be $1,354,739. For purposes of this Appendix
F, year one shall be the twelve month period beginning April
1, 1996. In year two, the Base Year Amount shall be
adjusted to reflect the annual effect of the application of
the Consumer Price Index for the preceding year, minus a
productivity factor of one percent, provided that, in no
event shall the adjustment be a negative number. The Base
Year Amount shall be similarly adjusted each year during the
initial term of the Agreement, each annual adjustment being
cumulative of all prior adjustments.
The Parties agree that in the event there occurs a
material change in the circumstances which resulted in the
execution of this Agreement, e.g., fundamental change in the
natural gas market place or a significant change in the
nature or extent of the services to be provided or received
hereunder, and which materially impacts the portfolio
administration service costs, the Parties will negotiate in
good faith to account for that material change in the
circumstances and to adjust the portfolio administration
service fee accordingly.
Amendment
Seller and Buyer agree that this Appendix F may be
amended from time to time by mutual agreement of the
Parties, which ultimately will be memorialized in a revised
Appendix F.
PROLIANCE ENERGY LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
APPENDIX G- Notices
Invoice Information:
Buyer: Seller:
Indiana Gas Company, Inc. J. Groth
Corporate Accounting Proliance Energy, LLC
Attn.: Judy Shular 1630 North Meridian Street
1630 North Meridian Street Indianapolis, IN 46202
Indianapolis, IN 46202 (317) 321-0353
(317) 321-0461
Payments:
Buyer: Seller:
National City Bank Bank One
For the Account of: For the Account of:
Indiana Gas Company, Inc. Proliance Energy, LLC
Supply Plans/Operational/Force Majeure:
Buyer: Seller:
Supply Plans Supply Plans
Chris Kershner Brian Azman
(317) 321-0583 (317) 321-0422
Operational Operational
Randy Gary Curt Hribernik
(317) 321-0507 (317) 321-0610
Force Majeure Force Majeure
Randy Gary (317) 321-0507 Brian Azman - (317) 321-0422
Frank Lindsey (317) 321-0334 Curt Hribernik - (317) 321-0610
Gas Controller on Duty (317) 321-0535 John Talley - (317) 321-0479
Indiana Gas Company, Inc. Proliance Energy, LLC
1630 North Meridian Street 1630 North Meridian Street
Indianapolis, IN 46202 Indianapolis, IN 46202
(317) 321-0787 (Telecopy) (317) 921-2760 (Telecopy)
All Other Notices:
Buyer: Seller:
Gas Control Department Proliance Energy , LLC
Attn.: Randy Gary Attn: John R. Talley
1630 North Meridian Street 1630 North Meridian Street
Indianapolis, IN 46202 Indianapolis, IN 46202
APPENDIX G- Notices
(Continued)
Amendment
Seller and Buyer agree that this Appendix G may be
amended from time to time as provided in this Agreement,
which amendment ultimately will be memorialized in a revised
Appendix G.
PROLIANCE ENERGY, LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
APPENDIX H - Invoice/Payment Data
Invoice Date - On or before the tenth (10th) day after the Contract Month.
Due Date - Ten (10) days after receipt of invoice.
Payment Method - By wire transfer to account specified on invoice.
Amendment
Seller and Buyer agree that this Appendix H may be
amended from time to time by mutual agreement of the
Parties, which amendment ultimately will be memorialized in
a revised Appendix H.
PROLIANCE ENERGY, LLC INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President-Gas Supply & Rates
APPENDIX I- Diversion of Entitlements
I. Diversion of Delivered Gas Sales Entitlements From Buyer
Seller shall have the right to schedule entitlements of
Buyer to Citizens Gas & Coke Utility, provided that:
A. Seller shall reimburse Buyer for applicable
variable costs Buyer incurs in replacing diverted
supply with its own on system gas sources.
B. If such diversion causes Buyer to incur gas
costs related to on system gas sources, Seller shall
reimburse Buyer or otherwise assure Buyer suffers no
economic detriment from such incurrence of gas costs.
C. The "Shoulder Month Season" shall be the
consecutive months of October, November, December,
January, February, March and April during the term of
this Agreement. Unless otherwise agreed, the maximum
diversion quantity shall not exceed 70,000 Dth on any
day, nor 1,500,000 Dth for any Shoulder Month Season.
D. Seller shall administer Buyer's gas supply
portfolio such that any diversion will not endanger
Buyer's ability to meet system demands.
II. Diversion of Entitlements to Buyer
Buyer shall have the right to entitlements from Seller, as
follows:
A. Delivered Peaking Sales Service ("PSS")
1. Seller shall provide Buyer PSS with the following
entitlements:
Contract Month Maximum Daily PSS Maximum Annual PSS
December 50,000 Dth/day 500,000 Dth during any
January 50,000 Dth/day December, January,
February 50,000 Dth/day February period
2. Buyer shall pay Seller a demand cost of $2.88
per Dth multiplied by the Maximum Annual PSS and a
variable cost of $0.60 for each Dth of PSS nominated
for Buyer. Demand costs shall be divided equally
among December, January and February invoices.
Variable costs shall be invoiced for the month
nominated.
3. For PSS nominated for Buyer, Buyer shall pay
Seller the Gas Daily index average for Texas Gas
Zone SL for the applicable day.
APPENDIX I- Diversion of Entitlements
B. Delivered Winter Sales Services ("WSS")
1. Seller shall provide Buyer with WSS with the
following entitlements:
Contract Month Maximum Daily WSS Maximum Annual WSS
November 75,000 Dth/day 2,250,000 Dth during
December 75,000 Dth/day any winter period.
January 75,000 Dth/day
February 75,000 Dth/day
March 75,000 Dth/day
2. Buyer shall pay Seller as follows:
a. For WSS Commodity:
The applicable PEPL Gas Daily index average
commodity price under this Agreement
b. For WSS Variable Costs:
$0.30 per Dth utilized.
c. For WSS Demand Costs:
$3.45 per Dth per year for each Dth of Maximum
Annual WSS, billed in equal monthly amounts commencing
for April, 1996, and ending for March, 2000.
Amendment
Seller and Buyer agree that this Appendix I may be
amended from time to time by mutual agreement of the
Parties, which amendment ultimately will be memorialized in
a revised Appendix I.
PROLIANCE ENERGY, LLC. INDIANA GAS COMPANY, INC.
By: /s/Carl L. Chapman By: /s/Jerrold L. Ulrey
Carl L. Chapman Jerrold L. Ulrey
Its: President Its: Vice President