EX-10.12
FIRM TRANSPORTATION SERVICE AGREEMENT
RATE SCHEDULE FTS-2
THIS AGREEMENT entered into this 12th day of August, 1993,
by and between Florida Gas Transmission Company, a Corporation of
the State of Delaware ("Transporter"), and City Gas Company of
Florida, a Division of Elizabethtown Gas Company, a New Jersey
corporation ("Shipper").
W I T N E S S E T H :
WHEREAS, Shipper wishes to purchase firm natural gas
transportation service from Transporter and Transporter wishes to
provide firm natural gas transportation service to Shipper and
WHEREAS, Shipper has completed and submitted to Transporter
a valid request for firm transportation service ("Request"), and
WHEREAS, in accordance with such Request, such service will
be provided by Transporter for Shipper in accordance with the
terms hereof.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the sufficiency
of which is hereby acknowledged, Transporter and Shipper do
covenant and agree as follows:
ARTICLE I
Definitions
In addition to the definitions incorporated herein through
Transporter's Rate Schedule FTS-2, the following terms when used
herein shall have the meanings set forth below:
1.1 The term "Gas" shall mean pipeline quality natural gas
which complies with the quality provisions set forth in the
General Terms and Conditions of Transporter's effective FERC Gas
Tariff Volume No. 1, and includes gas remaining after processing
thereof.
1.2 The term "Rate Schedule FTS-2" shall mean Transporter's
Rate Schedule FTS-2 as filed with the FERC as changed and
adjusted from time to time by Transporter in accordance with
Section 3.3 hereof or in compliance with any final FERC order
affecting such rate schedule.
1.3 The term "FERC" shall mean the Federal Energy
Regulatory Commission or any successor regulatory agency or body,
including the Congress, which has authority to regulate the rates
and services of Transporter.
ARTICLE II
Quantity
2.1 The Maximum Daily Transportation Quantity ("MDTQ")
shall be set forth in Exhibit B attached hereto. The applicable
MDTQ shall be the largest daily quantity of gas Shipper may
tender for transportation in the aggregate to all Points of
Receipt, exclusive of Transporter's Fuel if applicable, and
receive at all Point(s) of Delivery as specified on Exhibits A
and B hereto on any day.
2.2 Shipper may tender natural gas for transportation to
Transporter on any day, up to the MDTQ plus Transporter's Fuel.
Transporter agrees to receive the aggregate of the quantities of
natural gas that Shipper tenders for transportation at the
Receipt Points, up to the maximum daily quantity specified for
each such Point on Exhibit A hereto, and to transport and deliver
to Shipper at each Delivery Point specified on Exhibit B, up to
the maximum daily quantity specified for each such point on
Exhibit B, the amount tendered by Shipper less Transporter's Fuel
(as provided in Rate Schedule FTS-2), provided, however, that
Transporter shall never be required to transport and deliver on
any day more than the MDTQ.
ARTICLE III
Rate Schedule
3.1 Upon the commencement of service hereunder, Shipper
shall pay Transporter, for all service rendered hereunder, the
rates established under Transporter's Rate Schedule FTS-2 as
filed with the FERC and as said Rate Schedule may hereafter be
legally amended or superseded.
3.2 This Agreement in all respects shall be and remain
subject to the provisions of said Rate Schedule and of the
applicable provisions of the General Terms and Conditions of
Transporter on file with the FERC (as the same may hereafter be
legally amended or superseded), all of which are made a part
hereof by this reference.
3.3. Transporter shall have the unilateral right to file
with the appropriate regulatory authority and make changes
authorized by such authority in (a) the rates and charges
applicable to its Rate Schedule FTS-2, (b) Rate Schedule FTS-2
pursuant to which this service is rendered; provided, however,
that the firm character of service shall not be subject to change
hereunder, or (c) any provisions of the General Terms and
Conditions applicable to Rate Schedule FTS-2. Transporter agrees
that Shipper may protest or contest the aforementioned filings,
or seek authorization from duly constituted regulatory
authorities for Such adjustment of Transporter's existing FERC
Gas Tariff as may be found necessary in order to assure that the
provisions in (a), (b), or (c) above are just and reasonable.
ARTICLE IV
Term of Agreement
4.1 This Agreement shall be effective upon the in-service
date of the Phase III Facilities, which shall be deemed to be the
first day of the month following the date on which Transporter
gives notice to the Commission that the Phase III Facilities, as
defined in Article X of this Agreement, are in-service, and shall
continue in effect for a primary term of 20 years.
4.2 Termination for Non-Payment. In the event Shipper
fails to pay for service provided pursuant to this Agreement,
Transporter, in addition to any other rights it may have, shall
also have the right to suspend or terminate service as permitted
by the applicable provision of the General Terms and Conditions
to Transporter's FERC Gas Tariff.
ARTICLE V
Point(s) of Receipt and Delivery
and Maximum Daily Quantities
5.1 The Point(s) of Receipt and maximum daily quantity for
each point(s), for all gas delivered by Shipper into
Transporter's pipeline system under this Agreement shall be at
the Point(s) of Receipt on Transporter's pipeline system as set
forth in Exhibit A.
5.2 The Point(s) of Delivery and maximum daily quantity for
each point(s) for all gas delivered by Transporter to Shipper, or
for the account of Shipper, under this Agreement shall be at the
Point(s) of Delivery as set forth in Exhibit B.
ARTICLE VI
Notices
All notices, payments and communications with respect to
this Agreement shall be in writing and sent to the addresses
stated below or at any other such address as may hereafter be
designated in writing:
ADMINISTRATIVE MATTERS
Transporter: Florida Gas Transmission Company
P. 0. Box 1188
Houston, Texas 77251-1188
Attention:Marketing Administration Department
Fax No. 713-853-6756
Shipper: City Gas Company of Florida
955 E. 25th Street
Hialeah, FL 33013
Attention: Jack Langer
cc: Joseph Lachowiec
Elizabethtown Gas Company
One Elizabethtown Plaza
Union, NJ 07083
Fax: (908)289-1370
PAYMENT BY WIRE TRANSFER
Transporter: Florida Gas Transmission Company
Nations Bank ABA No. 053000196
Account No. 001658806
Charlotte, North Carolina
ARTICLE VII
New Facilities
Subsequent to commencement of service under this Agreement,
Transporter, upon Shipper's written request, at its reasonable
discretion, may agree to construct or acquire new facilities, or
expand existing facilities, in order to perform service under
this Agreement. For purposes of this Agreement and Rate Schedule
FTS-2, an expanded facility shall be deemed to be a new facility.
If in Transporter's reasonable judgment it is necessary to
construct or acquire new facilities, or to expand existing
facilities, in order to accommodate a change in service requested
by Shipper and to enable Transporter to receive or deliver
Shipper's MDTQ at the Receipt and Delivery Point(s) as they may
be amended from time to time, and Transporter agrees as provided
herein to construct, acquire, or expand such facilities, then
Transporter shall notify Shipper of the additional cost required.
Upon Shipper's written agreement, such facilities shallr
construed, acquired or expanded, subject to the receipt and
acceptance by Transporter of any necessary authorizations,
permits and approvals. Shipper agrees to reimburse Transporter,
promptly upon receipt of Transporter's invoices, for all costs
and expenses incurred under this Article VII by Transporter for
any pipeline and related facilities, including but not limited to
the cost of any tap, electronic measurement equipment or data
communications equipment for new meters, and appurtenant
equipment and materials, and overhead expenses. To the extent
such reimbursement qualifies as a contribution in aid of
construction under the Tax Reform Act of 1986, P.L. 99-514
(1986), Shipper also shall reimburse Transporter for the income
taxes incurred by Transporter as a direct result of such
contribution in aid of construction by Shipper, as calculated
pursuant to the Commission's order in Transwestern Pipeline
Company, 45 FERC Paragraph 61,116 (1988). Transporter shall have
title to and the exclusive right to operate and maintain all such
facilities.
ARTICLE VIII
Regulatory Authorizations and Approvals
8.1 Transporter's obligation to provide service is
conditioned upon receipt and acceptance of any necessary
regulatory authorization that is acceptable in form and substance
to Transporter to provide Firm Transportation Service to Shipper
in accordance with the terms of Rate Schedule FTS-2, or any
successor thereto which is substantially similar in form and
content, and this Service Agreement. Shipper agrees to reimburse
Transporter for all reporting and/or filing fees incurred by
Transporter in providing service under this Service Agreement.
ARTICLE IX
Pressure
9.1 The quantities of gas delivered or caused to be
delivered by Shipper to Transporter hereunder shall be delivered
into Transporter's pipeline system at a pressure sufficient to
enter Transporter's system, but in no event shall such gas be
delivered at a pressure exceeding the maximum authorized
operating pressure or such other pressure as Transporter permits
at the Point(s) of Receipt.
9.2 Transporter shall have no obligation to provide
compression and/or alter its system operations to effectuate
deliveries at the Point(s) of Delivery hereunder.
ARTICLE X
Other Provisions
10.1 Prior to Transporter's execution of this Agreement,
Shipper must demonstrate creditworthiness satisfactory to
Transporter. In the event Shipper fails to establish
creditworthiness, Transporter shall not execute this Agreement
and this Agreement shall not become effective.
10.2 Service pursuant to this Agreement is expressly subject
to the following conditions:
(a) The issuance, and acceptance by Transporter, of all
necessary authorizations from the FERC pursuant to the Natural
Gas Act or Natural Gas Policy Act permitting Transporter to
construct, own and operate the Phase III facilities as described
in Transporter's certificate application, as it may be amended or
supplemented from time to time, and to effectuate the proposed
service hereunder (hereinafter "Phase III Facilities"). All such
authorizations shall be in form and substance satisfactory to
Transporter, and shall be final before the respective
governmental authority and no longer subject to appeal or
rehearing; provided, however, that Transporter may waive the
condition that such authority be final and/or no longer subject
to appeal or rehearing. Such authorization shall include
approval of a capacity allocation methodology acceptable to
Transporter in the event requests for service for the proposed
Phase III Facilities exceed the availability of the expanded
capacity which Transporter, in its sole discretion, is willing to
build;
(b) Receipt and acceptance by Transporter of all other approvals
required to construct the Phase III Facilities including all
necessary authorizations from federal, state, local, and/or
municipal agencies or other governmental authorities. All such
approvals shall be in form and substance satisfactory to
Transporter, and shall be final before the respective
governmental authority and no longer subject to appeal or
rehearing; provided, however, that Transporter may waive the
condition that such authority be final and/or no longer subject
to appeal or rehearing.
(c) The approval of rates by the FERC for transportation
services provided on the Phase III Facilities that are acceptable
to Transporter, in Transporter's sole opinion. Shipper agrees to
support a levelized rate methodology for the Phase III Facilities
in any proceeding before the Commission during the term of this
Agreement.
(d) The receipt by Transporter of all necessary right-of-way
easements or permits in form and substance acceptable to
Transporter;
(e) The ability of Transporter to obtain financing to construct
the Phase III Facilities that is satisfactory to transporter, in
Transporter's sole opinion. Shipper agrees to provide reasonable
cooperation in Transporter's effort to obtain financing;
(f) In the event that all requisite approvals from the FERC
necessary to effectuate the proposed service hereunder are not
granted in satisfactory form on or before December 31, 1993, then
at such time either party shall have the right to terminate this
Agreement upon sixty days written notice; provided, however, that
if such approvals are obtained prior to the expiration of the
sixty day notice period, such notice shall be of no further force
or effect and this Agreement shall continue in accordance with
the terms herein.
(g) Transporter agrees to make all reasonable efforts to obtain
the necessary authorizations, financing service commitments and
all other approvals necessary to effectuate service under this
Agreement. Shipper agrees to exercise good faith in the
performance of this Agreement by supporting Transporter's efforts
to obtain all necessary authorizations, financing and other
approvals necessary to effectuate service under this Agreement.
By executing this Agreement, Shipper agrees to the resolution on
non-environmental issues in the Phase III proceeding as set forth
in the August 25, 1992 Offer of Settlement filed in Docket No.
CP92-182, et al.
(h) At any time prior to Transporter's acceptance of all
authorizations necessary to construct the Phase III Facilities,
Transporter retains the right to terminate this Agreement, and to
withdraw any requests or applications for regulatory approvals,
and to terminate this project, at any time Transporter determines
in its sole discretion that the project is no longer economical
to pursue.
(i) Shipper is obligated to reimburse Transporter for the
construction of taps, meters, receipt and delivery point
upgrades, construction of supply and delivery laterals not
included in the description of the Phase III Facilities and any
other construction necessary to receive gas into, and deliver gas
from, Transporter's Phase III Facilities. To the extent such
reimbursement qualifies as a contribution in aid of construction
under the Tax Reform Act of 1986, P.L. 99-514 (1986), Shipper
also shall reimburse Transporter for the income taxes incurred by
Transporter as a direct result of such contribution in aid of
construction by Shipper, as calculated pursuant to the
Commission's order in Transwestern Pipeline company, 45 FERC
Paragraph 61,116 (1988). Transporter shall have title to and the
exclusive right to operate and maintain all such facilities.
In the event the conditions set forth in this Article X are
not satisfied, this Agreement shall be deemed null and void upon
written notice by Transporter to Shipper.
ARTICLE XI
Miscellaneous
11.1 This Agreement shall bind and benefit the successors
and assigns of the respective parties hereto; provided, however,
neither party shall assign this Agreement or any of its rights or
obligations hereunder without first obtaining the written consent
of the other party and any other regulatory authorizations deemed
necessary by Transporter.
11.2 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
defaults of a like or different character.
11.3 This Agreement contains Exhibits A and B which are
incorporated fully herein.
11.4 This Agreement shall not be binding upon Transporter
until executed by Transporter.
11.5 THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS EXCLUDING ANY
CONFLICT OF LAW RULES WHICH MAY REQUIRE THE APPLICATION OF
ANOTHER JURISDICTION.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers effective as of the
date first written above.
ATTEST: FLORIDA GAS TRANSMISSION COMPANY
By: By: Peter E. Weidler
Title: Vice President
ATTEST: CITY GAS COMPANY OF FLORIDA, A
DIVISION OF ELIZABETHTOWN GAS
COMPANY
By: Jimmie Cromwell By: Jack Langer
Title: President & CEO