EXHIBIT 10-A-41
AMENDMENT TO FS SERVICE AGREEMENTS
This Amendment to FS Service Agreements (this "Amendment") is made by
and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION ("TGPL") and PUBLIC
SERVICE COMPANY OF NORTH CAROLINA, INC. ("Buyer") related to three (3) Rate
Schedule FS Service Agreements dated August 1, 1991, with Daily Sales
Entitlements of 16,204 Mcf per day (16,771 Dekatherms ("Dt") per day); 24,306
Mcf per day (25,157 Dt per day); and 32,408 Mcf per day (33,542 Dt per day)
(collectively, "FS Agreements").
WHEREAS, Buyer requested renegotiation of the Firm Service Fee under
Section 3d) of Exhibit "A" of the FS Agreements; and
WHEREAS, Buyer and Williams Energy Services Company, as agent for TGPL
("Seller"), have reached agreement as set forth below regarding the Gas
Commodity Charge for swing service, the Firm Service Fee renegotiation, and the
term, all as related to the FS Agreements; and
WHEREAS, Buyer and Seller desire to amend the FS Agreements previously
entered into to reflect such agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, Seller and Buyer agree to amend the FS Agreements
as follows:
I. Definitions. Capitalized terms used in this Amendment but not defined
shall have the meaning ascribed to them in the FS Agreements.
2. Term. Buyer and Seller agree the FS Agreements shall have an extended
term ending no earlier than March 31, 2002, and neither Buyer nor
Seller shall exercise its right not to extend the term of the FS
Agreements under Article II[ of the FS Agreements to the extent such
exercise would result in an extended term of the FS Agreements ending
prior to March 31, 2002.
3. FS Fee. Effective April 1, 1999, and during the remaining term
(including any extended term) of the FS Agreements (i) the Firm
Service Fee shall be $4.5625 per Dt per month, and (ii) neither Buyer
nor Seller shall exercise its rights to request or engage in
renegotiation of the Firm Service Fee under Section 3d) of Exhibit "A"
of the FS Agreements.
4. Base Load FS Credit. No later than three (3) business days prior to the
first-of-the-month nomination deadline of TGPL, Buyer may notify Seller
of its election to receive and purchase a specified quantity of Gas (in
Dts) each day during such month not to exceed Buyer's Daily Sales
Entitlement (such specified daily quantity the "Base Load Quantity").
In the event Buyer timely elects to receive and purchase a Base Load
Quantity during a month, (a) each day during such month Buyer shall
purchase and receive a quantity of gas not less than the full Base Load
Quantity, and (b) Buyer shall purchase and receive a quantity of gas
not less
Amendment to FS Service Agreements
Public Service Company of North Carolina, Inc.
Page 2 of 2
than the full Base Load Quantity, and (b) the Gas Commodity Charge for
such month shall be reduced by an amount equal to $0.10 times the Base
Load Quantity times the number of days in such month; provided,
however, in the event Buyer fails to receive and purchase a quantity of
gas at least equal to the full Base Load Quantity on any day during
such month, (i) Buyer shall not be entitled to such Gas Commodity
Charge reduction for that day and (ii) Buyer shall pay Seller the
Market Differential plus $0.05 (for administrative and incidental
costs), in both cases (i) and (ii) for each Dt not received and
purchased. For purposes of this Amendment, the "Market Differential"
shall mean the amount, in no event less than zero, obtained by
subtracting the Market Price from the Gas Commodity Rate.
5. Demand Ceiling FS Credit. No later than three (3) business days prior to
the first-of-the-month nomination deadline of TGPL, Buyer may notify
Seller of its election to receive and purchase no more than a specified
quantity of Gas (in Dts) each day during such month that is less than
Buyer's Daily Sales Entitlement (such specified daily quantity the
"Demand Ceiling Quantity"). In the event Buyer timely elects to receive
and purchase not more than the Demand Ceiling Quantity during a month,
(a) each day during such month Buyer shall purchase and receive a
quantity of gas not more than the Demand Ceiling Quantity, and (b) the Gas
Commodity Charge for such month shall be reduced by an amount equal to
$0.10 times (the Daily Sales Entitlement minus the Demand Ceiling Quantity)
times the number of days in such month; provided, however, in the event
Buyer receives a quantity of gas more than the Demand Ceiling
Quantity on any day during such month, (i)Buyer shall not be entitled to
such Gas Commodity Charge reduction for that day and (ii) Buyer shall pay
Seller the Market Price (in lieu of the Gas Commodity Rate) plus $0.05 (for
administrative and incidental costs), in both cases (i) and (ii) for each
Dt received in excess of the Demand Ceiling Quantity.
6. Market Price. As used in this Amendment, the "Market Price" shall mean
the higher of (i) the weighted average of the spot gas posted indices in
Inside F. E. R. C. 's Gas Market Report, the relevant first of the
month issue, "Prices of Spot Gas delivered to Pipelines,"
Transcontinental Gas Pipeline Corporation Zones 1, 2 and 3 fully telescoped
in the same proportions as Buyer's converted firm transportation service
purchased from TGPL, or (ii) an amount equal to the sum of the following
(a), (b) and (c), to be calculated using price listings as published by Gas
Daily as applicable to the day Buyer fails to receive and purchase at least
the full Base Load Quantity; provided, if such day occurs on Saturday,
Sunday or any other day on which Gas Daily is not published, the following
(a), (b), and (c) shall be calculated using the applicable price listings
in the nearest subsequent publication of Gas Daily.
(a) (Under the heading "Daily Price Survey," the highest price in the range
of prices listed under the heading "Common" for the section
"South--Corpus Christi," delivery in "Transco Zl St.
Amendment to FS Service Agreements
Public Service Company of North Carolina, Inc.
Page 3 of 3
30") multiplied by the percentage applicable to such delivery/receipt
point as listed in Section 3.2 of TGPL's Rate Schedule FT (currently 17%);
(b) (Under the heading "Daily Price Survey," the highest price in
the range of prices listed under the heading "Common" for the
section "East-Houston-Katy," delivery in "Transco Z2 St. 45;")
multiplied by the percentage applicable to such
delivery/receipt point as listed in Section 3.2 of TGPL's Rate
Schedule FT (currently 25 %); and
(c) (Under the heading "Daily Price Survey," the highest price in
the range of prices listed under the heading "Common" for the
section "Louisiana-Onshore South," delivery in "Transco Z3 St.
50, 62, 65 ") multiplied by the sum of the percentages
applicable to such delivery/receipt points as listed in
Section 3.2 of TGPL's Rate Schedule FT (such sum currently
58%).
7. Buyer and Seller acknowledge and agree that the remedies and measure of
damages provided herein are reasonably designed to compensate Seller
for actual damages in the event of a failure by Buyer to receive and
purchase at least the full Base Load Quantity, and are not individually
or cumulatively a penalty.
8. Except as otherwise modified herein, the terms and conditions of the FS
Agreements shall remain as originally written in full force and effect.
ACCEPTED AND AGREED: WILLIAMS ENERGY SERVICES COMPANY
As Agent for
TRANSCONTINENTAL GAS PIPE LINE
CORPORATION
By: /s/ H. Dean Jones, II
H. Dean Jones, II
Vice President
Date: November 25, 1998
PUBLIC SERVICE COMPANY OF
NORTH CAROLINA. INC.
By: /s/ Franklin H. Yoho
Name: Franklin H. Yoho
Title: Vice President-Marketing & Gas Supply
Date: November 20, 1998