EXHIBIT 10-A-26
SERVICE AGREEMENT
between
CNG TRANSMISSION CORPORATION
and
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INCORPORATED
DATED
October 17, 1995
SERVICE AGREEMENT
APPLICABLE TO TRANSPORTATION OF NATURAL GAS
UNDER SECTION 8 OF RATE SCHEDULE FTNN
(FTNN-GSS SERVICE)
AGREEMENT made as of this October 17, 1995, by and between CNG
TRANSMISSION CORPORATION, a Delaware corporation, hereinafter called "Pipeline,"
and PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INC., a North Carolina
corporation, hereinafter called "Customer."
WHEREAS, on October 4, 1993, Pipeline and Rochester Gas and Electric
Corporation ("RG&E") entered into a Marketing Agreement that was designed to
permit Pipeline to assist RG&E in marketing RG&E's upstream transportation
capacity on Texas Eastern Transmission Corporation ("Texas Eastern"), Tennessee
Gas Pipeline Company ("Tennessee"), and on-system storage demand and capacity,
and related transportation capacity on Pipeline;
WHEREAS, Pipeline and Customer entered into a Letter Agreement on
September 17, 1993, in which it was agreed that Customer would acquire part of
the RG&E capacity;
WHEREAS, Pipeline and Texas Eastern sought authorization of the Federal
Energy Regulatory Commission ("FERC") as necessary to construct facilities and
to provide certain services to Customer, in two FERC dockets: Texas Eastern
Transmission Corporation, Docket No. CP94-6-000, and CNG Transmission
Corporation, Docket No. CP94-89-000;
WHEREAS, by order issued November 1, 1994, in the referenced dockets (69
FERC P. 61,132 (1994)), the FERC granted Pipeline and Texas Eastern certificates
of public convenience and necessity, but materially modified portions of the
original proposal and refused to rule on other portions;
WHEREAS, on January 12, 1995, Pipeline and Customer entered into a Letter
Agreement amending the September 17, 1993 Agreement, so that Customer's capacity
would be established in two phases:
Phase I beginning on April 1, 1995 for 720,000 Dt of Storage Capacity
under Pipeline's Rate Schedule GSS with a related Storage Demand of
12,000 Dt/day, and on November 1, 1995 for firm transportation capacity
of 8,000 Dt/day on Pipeline's system; and
Phase II beginning on April 1, 1996 for 360,000 Dt of additional
Storage Capacity under Pipeline's Rate Schedule GSS with a related
Storage Demand of 6,000 Dt/day, and November 1, 1996 for 4,000 Dt/day
of firm transportation capacity on Pipeline's system;
WHEREAS, on February 1, 1995, Pipeline and RG&E entered into a Replacement
Marketing Agreement to reflect the modifications in the November 1, 1994, FERC
Order; and
WHEREAS, Pipeline and Texas Eastern filed a Joint Stipulation and
Agreement in the referenced dockets on February 21, 1995, which the FERC
approved by order issued May 31, 1995, authorizing certain services by Pipeline
for Customer including the services reflected in this Service Agreement (71 FERC
P. 61,244 (1995));
NOW, THEREFORE, WITNESSETH: That, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
Quantities
A. During the term of this Agreement, Pipeline will transport for
Customer, on a firm basis, and Customer may furnish, or cause to be furnished,
to Pipeline natural gas for such transportation, and Customer will accept, or
cause to be accepted, delivery from Pipeline of the quantities Customer has
tendered for transportation.
B. The maximum quantities of gas which Pipeline shall deliver and which
Customer may tender shall be as set forth on Exhibit A, attached hereto.
ARTICLE II
Rate
A. Unless otherwise mutually agreed in a written amendment to this
Agreement, beginning on November 1, 1995, Customer shall pay Pipeline for
transportation services rendered pursuant to this Agreement, the maximum rates
and charges provided under Section 8 of Rate Schedule FTNN set forth in
Pipeline's effective FERC Gas Tariff, including applicable surcharges and the
Fuel Retention Percentage.
B. Pipeline shall have the right to propose, file and make effective with
the Federal Energy Regulatory Commission or any other body having jurisdiction,
revisions to any applicable rate schedule, or to propose, file, and make
effective superseding rate schedules for the purpose of changing the rate,
charges, and other provisions thereof effective as to Customer; provided,
however, that (i) Section 2 of Rate Schedule FTNN "Applicability and Character
of Service," (ii) term, (iii) quantities, and (iv) points of receipt and points
of delivery shall not be subject to unilateral change under this Article. Said
rate schedule or superseding rate schedule and any revisions thereof which shall
be filed and made effective shall apply to and become a part of this Service
Agreement. The filing of such changes and revisions to any applicable rate
schedule shall be without prejudice to the right of Customer to contest or
oppose such filing and its effectiveness.
ARTICLE III
Term of Agreement
Subject to all the terms and conditions herein, this Agreement shall be
effective as of November 1, 1995, and shall continue in effect for a primary
term through and including March 31, 2016, and from year to year thereafter,
until either party terminates this Agreement by giving written notice to the
other at least twenty-four months prior to the start of the next contract year.
ARTICLE IV
Points of Receipt and Delivery
The Points of Receipt and Delivery and the maximum quantities for each
point for all gas that may be received for Customer's account for transportation
by Pipeline shall be as set forth on Exhibit A.
ARTICLE V
Incorporation By Reference of Tariff Provisions
To the extent not inconsistent with the terms and conditions of this
Agreement, the following provisions of Pipeline's effective FERC Gas Tariff, and
any revisions thereof that may be made effective hereafter are hereby made
applicable to and a part hereof by reference:
1. All of the provisions of Rate Schedule FTNN, or any effective
superseding rate schedule or otherwise applicable rate schedule; and
2. All of the provisions of the General Terms and Conditions, as they may
be revised or superseded from time to time.
ARTICLE VI
Miscellaneous
A. No change, modification or alteration of this Agreement shall be or
become effective until executed in writing by the parties hereto; provided,
however, that the parties do not intend that this Article VI.A. requires a
further written agreement either prior to the making of any request or filing
permitted under Article II hereof or prior to the effectiveness of such request
or filing after Commission approval, provided further, however, that nothing in
this Agreement shall be deemed to prejudice any position the parties may take as
to whether the request, filing or revision permitted under Article II must be
made under Section 7 or Section 4 of the Natural Gas Act.
B. Any notice, request or demand provided for in this Agreement, or any
notice which either party may desire to give the other, shall be in writing and
sent to the following addresses:
Pipeline: CNG Transmission Corporation
445 West Main Street
Clarksburg, West Virginia 26301
Attention: Vice President, Marketing and Customer Services
Customer: Public Service Company of North Carolina, Inc.
400 Cox Road
P.O. Box 1398
Gastonia, NC 28053-1398
Attention: Sr. Vice President, Gas Supply & Marketing
or at such other address as either party shall designate by formal written
notice.
C. No presumption shall operate in favor of or against either party hereto
as a result of any responsibility either party may have had for drafting this
Agreement.
D. The subject headings of the provisions of this Agreement are inserted
for the purpose of convenient reference and are not intended to become a part of
or to be considered in any interpretation of such provisions.
E. The capacity herein is in addition to the service currently provided by
Pipeline to Customer. Therefore this Service Agreement does not supersede or
cancel any current Service Agreements between Customer and Pipeline. If this
Service Agreement becomes effective as an executed Service Agreement, its
quantities shall be in addition to the contract quantities and the Maximum Daily
Delivery Obligation(s) stated in Exhibit A to the Service Agreement between
Customer and Pipeline under Rate Schedule FTNN (FTNN-GSS), dated October 8,
1993, effective November 1, 1993.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound, have
caused this Agreement to be signed by their duly authorized officials as of the
day and year first written above.
CNG TRANSMISSION CORPORATION
(Pipeline)
By: s\ Joseph A. Curia
Its: Vice President
PUBLIC SERVICE COMPANY OF NORTH
CAROLINA, INC.
(Customer)
By: s\ Franklin H. Yoho
Its: Senior Vice President -
Marketing & Gas Supply
(Title)
EXHIBIT A
To the FTNN-GSS Service Agreement
Dated October 17, 1995
Between CNG Transmission Corporation
and Public Service Company of North Carolina, Inc.
A. Quantities
The maximum quantities of gas that Pipeline shall deliver and that Customer
may tender shall be as follows:
1. Total Transportation Quantities upon implementation of Phase I,
commencing November 1, 1995:
a. Maximum Daily Transportation Quantity ("MDTQ") of 12,000 Dt.
b. A Maximum Annual Transportation Quantity ("MATQ") of 1,812,000 Dt.
2. Total Transportation Quantities upon implementation of Phase II,
commencing November 1, 1996:
a. An additional 6,000 Dt per Day, for an MDTQ of 18,000 Dt.
b. A corresponding MATQ of 2,718,000 Dt.
3. Termination of Phase I Quantities:
Upon twenty four months' prior written notice, Customer may reduce the
MDTQ by up to 20,000 Dt and the MATQ by a corresponding quantity, up
to 3,020,000 Dt, effective at any time after October 31, 2015.
B. Points of Receipt
1. The Receipt Point(s) for subsequent transportation to Customer for all
storage withdrawal quantities shall be the points of withdrawal from Pipeline's
storage pool(s).
2. These Point(s) of Receipt shall only be Primary, as defined in
Pipeline's FERC Gas Tariff, to the extent that corresponding nominations for
withdrawal from Pipeline's storage pool(s) is provided under the "Service
Agreement Applicable To The Storage Of Natural Gas Under Rate Schedule GSS (Part
284)" between Pipeline and Public Service Company of North Carolina dated
October 17, 1995.
EXHIBIT A
November 1, 1995 FTNN-GSS Agreement
Between CNG Transmission Corporation
and Public Service Company of North Carolina, Inc.
Page 2 of 3
C. Point of Delivery
The Maximum Daily Delivery Obligation(s) (MDDO) stated below, if any,
reflect Pipeline's total obligation to deliver quantities to the Point of
Delivery to Customer, to Customer's assignee, or to any applicable Replacement
Customer. Each of the parties will use due care and diligence to assure that
uniform pressures will be maintained at the Delivery Point as reasonably may be
required to render service hereunder, but Pipeline shall not be required to
deliver gas (or cause gas to be delivered) at greater than the maximum pressures
specified herein. The Points of Delivery and the MDDO's under this Service
Agreement, if applicable, shall be as follows:
1. Up to the specified MDDO, at an existing interconnection between the
facilities of Pipeline and Transcontinental Gas Pipe Line Corporation
("Transco") located in Prince William County, Virginia, known as the Nokesville
Interconnection:
a. Effective upon implementation of Phase I, commencing November 1, 1995
-- 12,000 Dt per Day.
b. Effective upon implementation of Phase II, commencing November 1, 1996
-- 18,000 Dt per Day.
2. Up to the nominated quantities permitted by paragraph B.2.c, above,
at points of injection into Pipeline's storage pools.
D. Aggregate MDDO's
1. The MDDO's stated in Paragraph C.1., above, are in addition to:
a. the MDDO's derived from the Service Agreement between Customer and
Pipeline under Rate Schedule FTNN dated October 17, 1995; and
b. the MDDO of 30,000 Dt per Day stated in Exhibit A to the Service
Agreements between Customer and Pipeline under Rate Schedule FTNN and
Section 8 of Rate Schedule FTNN (FTNN-GSS Service) dated October 8,
1993, effective November 1, 1993; notwithstanding the representation
in the November 1, 1993 Agreements that 30,000 Dt per Day represents
the totality of firm service to Customer at that Delivery Point.
EXHIBIT A
November 1, 1995 FTNN-GSS Agreement
Between CNG Transmission Corporation
and Public Service Company of North Carolina, Inc.
Page 3 of 3
2. Absent modification or termination of the service agreements identi-
fied in paragraph D.1.b., above, or exercise of a reduction as noted in para-
graph D.3., below, Pipeline's aggregate MDDO at the Nokesville Interconnection
to Customer, Customer's assignee or to any applicable Replacement Customer under
Customer's long-term firm transportation service agreements shall be:
a. Effective commencing November 1, 1995 -- 50,000 Dt per Day.
b. Effective commencing November 1, 1996 -- 60,000 Dt per Day.
3. If Customer exercises its option to reduce any MDTQ under this Service
Agreement or the Rate Schedule FTNN Service Agreement between Pipeline and
Customer dated October 17, 1995, then the MDDO's set forth hereunder shall be
reduced by a corresponding quantity as of the effective date of Customer's MDTQ
reduction.