<Page>

                                                                 EXHIBIT 10.8.32

DATE: APR 04, 2001                                          CONTRACT NO.: 106117

                            FTS - 1 SERVICE AGREEMENT

THIS AGREEMENT is entered into by ANR PIPELINE COMPANY (Transporter) and

SITHE/INDEPENDENCE POWER PARTNERS L. P. (Shipper).

WHEREAS, Shipper has requested Transporter to transport Gas on its behalf and
Transporter represents that it is willing to transport Gas under the terms and
conditions of this Agreement.

NOW, THEREFORE, Transporter and Shipper agree that the terms below, together
with the terms and conditions of Transporter's applicable Rate Schedule and
General Terms and Conditions of Transporter's FERC Gas Tariff constitute the
transportation service to be provided and the rights and obligations of Shipper
and Transporter.

1.   AUTHORITY FOR TRANSPORTATION SERVICE:
     (284B = SECTION 311; 284G = BLANKET)

     284G

2.   RATE SCHEDULE: FIRM TRANSPORTATION SERVICE (FTS - 1)

3.   CONTRACT QUANTITIES:

     Primary Route- See Exhibit attached hereto

     Such contract quantities shall be reduced for scheduling purposes, but not
     for billing purposes, by the Contract Quantities that Shipper has released
     through Transporter's capacity release program for the period of any
     release.

4.   TERM OF AGREEMENT:

     Aug 01, 2001 to

     Dec 31, 2014

<Page>

DATE: APR 04, 2001                                         CONTRACT NO.: 106117

5.   RATES:

     Maximum rates, charges, and fees shall be applicable for the entitlements
     and quantities delivered pursuant to this Agreement unless Transporter has
     advised Shipper in writing or by GEMStm that it has agreed otherwise. For
     example, Transporter and Shipper may agree that a specified discounted rate
     will apply: (a) only to certain specified firm service entitlements under
     this Agreement; (b) only if specified quantity levels are actually achieved
     under this Agreement (with higher rates, charges, and fees applicable to
     all quantities above those levels, or to all quantities under the Agreement
     if the specified levels are not achieved); (c) only to production reserves
     committed by the Shipper; (d) only during specified time periods; or (e)
     only to specified Receipt Points, Delivery Points, Mainline Area Segments,
     Supply Areas, transportation paths, or defined geographical areas;
     provided, however, that any such discounted rates set forth above shall be
     between the minimum and maximum rates applicable to the service provided
     under this Agreement.

     In addition, the discount agreement may include a provision that if one
     rate component which was at or below the applicable Maximum Rate at the
     time the discount agreement was executed subsequently exceeds the
     applicable Maximum Rate due to a change in Transporter's Maximum Rates so
     that such rate component must be adjusted downward to equal the new
     applicable Maximum Rate, then other rate components may be adjusted upward
     to achieve the agreed overall rate, as long as none of the resulting rate
     components exceed the Maximum Rate applicable to that rate component. Such
     changes to rate components shall be applied prospectively, commencing with
     the date a Commission Order accepts revised tariff sheet rates. However,
     nothing contained herein shall be construed to alter a refund obligation
     under applicable law for any period during which rates that had been
     charged under a discount agreement exceeded rates, which ultimately are
     found to be just and reasonable.

     It is further agreed that Transporter may seek authorization from the
     Commission and/or other appropriate body at any time and from time to time
     to change any rates, charges or other provisions in the applicable Rate
     Schedule and General Terms and Conditions of Transporter's FERC Gas Tariff,
     and Transporter shall have the right to place such changes in effect in
     accordance with the Natural Gas Act. This Agreement shall be deemed to
     include such changes and any changes, which become effective by operation
     of law and Commission order. Nothing contained herein shall be construed to
     deny Shipper any rights it may have under the Natural Gas Act, including
     the right to participate fully in rate or other proceedings by intervention
     or otherwise to contest changes in rates in whole or in part.

<Page>

DATE: APR 04, 2001                                          CONTRACT NO.: 106117

6.   INCORPORATION BY REFERENCE:

     The provisions of Transporter's applicable Rate Schedule and the General
     Terms and Conditions of Transporter's FERC Gas Tariff are specifically
     incorporated herein by reference and made a part hereof.

7.   NOTICES:

     All notices can be given by telephone or other electronic means, however,
     such notices shall be confirmed in writing at the addresses below or
     through GEMStm. Shipper and Transporter may change the addresses below by
     written notice to the other without the necessity of amending this
     Agreement:

     TRANSPORTER:

     ANR PIPELINE COMPANY
     9 Greenway Plaza
     Houston, TX 77046
     Attention: Transportation Services

     SHIPPER:

     SITHE/INDEPENDENCE POWER PARTNERS L. P.
     C/O SITHE ENERGIES
     335 MADISON AVENUE
     28TH FLOOR
     NEW YORK, NY 10017
     Attention: JANINE MAHEN

     Telephone: 212-351-0000
     Fax: 212-351-0005

<Page>

DATE: APR 04, 2001                                          CONTRACT NO.: 106117

     INVOICES AND STATEMENTS:

     SITHE/INDEPENDENCE POWER PARTNERS L.P.
     C/O SITHE/INDEPENDENCE INC
     76 INDEPENDENCE WAY
     P.O. Box 1046
     OSWEGO, NY 13126-0000
     Attention: LARRY MESSINA

     Telephone: 315-342-8410
     Fax:       315-343-5175

     NOMINATIONS:

     SITHE/INDEPENDENCE POWER PARTNERS L. P.
     C/O ENRON GAS MARKETING
     P.O. Box 1188
     HOUSTON, TX 77251-1188
     Attention: LINDA PHINNEY

     Telephone: 713-853-1412
     Fax:

     ALL OTHER MATTERS:

     SITHE/INDEPENDENCE POWER PARTNERS L. P.
     C/O SITHE/INDEPENDENCE INC
     76 INDEPENDENCE WAY
     P.O. Box 1046
     OSWEGO, NY 13126-0000
     Attention: LARRY MESSINA

     Telephone: 315-342-8410
     Fax:       315-343-5175

8.   FURTHER AGREEMENT:

     Replaces Contract 19630

<Page>

DATE: APR 04, 2001                                          CONTRACT NO.: 106117

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective Officers or Representatives there unto duly authorized to be
effective as of the date stated above.

SHIPPER: SITHE/INDEPENDENCE POWER PARTNERS L. P.

BY:  /s/ Martin B. Rosenberg
     --------------------------------
TITLE: Senior Vice President

DATE:  July 26, 2001

TRANSPORTER: ANR PIPELINE COMPANY

BY:  /s/ Joseph E. Pollard
     --------------------------------
TITLE: Director, Transportation Services

DATE:  August 3, 2001

<Page>

<Table>
<Caption>
                                                               Contract No:  106117
PRIMARY ROUTE EXHIBIT                                        Rate Schedule:  FTS-1
          TO AGREEMENT BETWEEN                               Contract Date:  Apr 04, 2001
ANR PIPELINE COMPANY (TRANSPORTER)                          Amendment Date:
AND SITHE/INDEPENDENCE POWER PARTNERS L. P. (SHIPPER)
                                                                
Receipt                      Delivery               Annual     Winter       Summer
Number                       Number                  MDQ        MDQ          MDQ
Name                         Name                   (DTH)      (DTH)        (DTH)

103702                       11616                   40000          0          0
S W HEADSTATION              FARWELL (DELIVERY)
   FROM:  Aug 01, 2001         TO:  Dec 31, 2014
</Table>