Exhibit 10-A-28
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 RATE SCHEDULE FTNN
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 Fede-
ral 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 ap-
proved 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 cove-
nants herein contained, the parties hereto agree as follows:
ARTICLE I
Quantities
A. During the term of this Agreement, Pipeline will transport for Cus-
tomer, 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 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 ("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 October 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 services that are 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 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 Agreement
Effective November 1, 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 8,000 Dt.
b. A Maximum Annual Transportation Quantity ("MATQ") of
2,920,000 Dt.
2. Total Transportation Quantities upon implementation of Phase II,
commencing November 1, 1996:
a. An additional 4,000 Dt per Day, for an MDTQ of 12,000 Dt.
b. A corresponding MATQ of 4,380,000 Dt.
3. Termination of Phase I Quantities:
Upon twenty-four months' prior written notice, Customer may reduce
the MDTQ by up to 8,000 Dt and the MATQ by a corresponding quantity up to
2,920,000 Dt, effective at any time after October 31, 2015.
B. Points of Receipt
1. Total Entitlements
The Points of Receipt and the maximum quantities for each point shall
be as set forth below. Each of the parties will use due care and
diligence to assure that uniform pressures will be maintained at the
Receipt Points as reasonably may be required to render service
hereunder, but Pipeline shall not be required to accept gas at less
than the minimum pressures specified herein. In addition to the
quantities specified below, Customer may increase the quantities
furnished to Pipeline at each receipt point, so long as such
quantities, when reduced by the fuel retention percentage specified
in Pipeline's
EXHIBIT A
November 1, 1995 FTNN Agreement
Between CNG Transmission Corporation
and Public Service Company of North Carolina, Inc.
Page 2 of 4
currently effective FERC Gas Tariff, do not exceed the quantity limitation
specified below for each Primary Receipt Point.
a. Phase I
Up to 8,000 Dt per Day at the interconnection of the
facilities of Pipeline and Texas Eastern Pipeline Corporation
or other pipeline(s), in Westmoreland County, Pennsylvania,
known as the Oakford Interconnection, at a pressure of not
less than five hundred seventy-five (575) psig;
b. Phase II
Up to a combined maximum daily quantity of 4,000 Dt at the
following Appalachian Aggregation Points:
(i) Cornwell Station, located in Kanawha County, West
Virginia;
(ii) Bridgeport Station, located on Line TL-373 in Harrison
County, West Virginia; and
(iii) Hastings Station (wet gas) located in Wetzel County,
West Virginia.
2. Use of Receipt Points for Injection Of Gas Into Storage
Customer's right to use the above Receipt Points to tender gas for
injection into storage under its Part 284 storage service agreement
dated October 17, 1995, shall be subject to the following terms and
conditions:
a. Nominations of Receipts for Injection into Storage, whether
made by Customer or by Customer's agent, assignee, or
Replacement Customer, shall reduce Customer's entitlement to
Receipts for Transportation at each affected Receipt Point, by
an equivalent quantity.
b. Nominations of Receipts for Transportation under this
Agreement, whether made by Customer or by Customer's agent,
assignee, or Replacement Customer, shall reduce Customer's
entitlement to Receipts for Injection into Storage at each
affected Receipt Point, by an equivalent quantity.
c. All nominations under this Agreement for injection into
storage shall be subject to Pipeline's confirmation of a
corresponding nomination for injection of such gas into
Pipeline's storage Pool(s), under a valid Service Agreement
for storage service by Pipeline; provided, however, that this
requirement shall not affect Customer's ability to inject gas
into storage in accordance with Section 9 of Rate Schedule
FTNN.
EXHIBIT A
November 1, 1995 FTNN Agreement
Between CNG Transmission Corporation
and Public Service Company of North Carolina, Inc.
Page 3 of 4
d. These limitations on Points of Receipt for injection into
storage shall not be affected by any capacity release or
assignment of service entitlements under this Agreement.
C. Points of Delivery
The Maximum Daily Delivery Obligation(s) (MDDO) stated below, if any,
reflect Pipeline's total obligation to deliver quantities to the Point(s) 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(s) 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 Corpora-
tion ("Transco") in Prince William County, Virginia, known as the
Nokesville Interconnection:
a. Effective upon implementation of Phase I, commencing November
1, 1995 -- 8,000 Dt per Day.
b. Effective upon implementation of Phase II, commencing November
1, 1996 -- 12,000 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 Section 8 of Rate Schedule FTNN (FTNN-GSS
Service) 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 Agreement
Between CNG Transmission Corporation
and Public Service Company of North Carolina, Inc.
Page 4 of 4
2. Absent modification or termination of the service agreements
identified in paragraph D.1.b., above, or exercise of a reduction as
noted in paragraph 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 Section 8 of Rate Schedule FTNN (FTNN-GSS)
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.