Exhibit 10.17.1
May 26, 1995
Mr. King Oberg
Vice President - Gas Supply
Cascade Natural Gas Corporation
PO Box 24464
Seattle, WA 98124
RE: Continuation of Water Power's Jackson Prairie
Storage Release to Cascade
Dear King:
In anticipation of FERC's approval of the certificated release of Jackson
Prairie storage capacity to Cascade later this fall, I would propose the
following procedures with respect to the ongoing payment of charges:
(1) As for the monthly payments identified in Section 3.1 of the Storage
Release Agreement, I propose that Cascade would continue to remit payment to
Water Power;
(2) If FERC does not grant certificate authority to continue the
release or does so upon terms which are unacceptable to the parties, or if
FERC does not otherwise finally act on the application by November 1, 1995,
then Water Power will take title to Cascade's working natural gas inventory
presently in storage at Jackson Prairie (480,000 Dth) and would provide
"peaking gas supplies" to Cascade of up to 15,000 Dth per day of firm
deliverability and 5,533 Dth per day of best-efforts deliverability for the
period May 1, 1995 through April 30, 1996, subject to the terms and
conditions of the Gas Storage Project Agreement dated September 25, 1989, and
such regulatory approvals as may be required. As additional compensation for
making these peaking gas supplies available, Water Power shall charge, and
Cascade shall pay, $54,120.50 per calendar month for the one year term of
this arrangement, and any payments previously received in accordance with
paragraph 1 above shall be credited against Cascade's monthly payment
obligation. It is also understood and agreed that Cascade will purchase
480,000 Dth of peaking gas supplies from Water Power prior to May 1, 1996,
under this agreement.
Mr. King Oberg
Page - 2
If the foregoing terms and conditions are acceptable to you, please sign
where indicated and return a copy of this letter to me at your earliest
convenience.
Very truly yours,
/s/
Patricia A. Grable
Manager, Pipeline & Regulatory Affairs
The Washington Water Power Company
ACKNOWLEDGED AND AGREED
TO THIS 28 OF May , 1995
------ -------
/s/
- ----
King Oberg
Vice President - Gas Supply
Cascade Natural Gas Corporation
FIRST AMENDMENT TO THE AGREEMENT FOR THE RELEASE
OF JACKSON PRAIRIE STORAGE CAPACITY
On this 28th day of April , 1995, The Washington Water Power Company
------ -------
("Water Power") and Cascade Natural Gas Corporation ("Cascade") (hereinafter
collectively referred to as the "Parties") have entered into this Agreement
("First Amendment") for the purpose of amending the Agreement for the Release of
Jackson Prairie Storage Capacity ("Release Agreement") previously executed by
the Parties on July 23, 1990.
WITNESSETH:
WHEREAS, Water Power and Cascade are parties to a Release Agreement,
whereby Water Power will release a portion of its capacity and deliverability in
the Jackson Prairie Storage Project to Cascade, for a primary term ending April
30, 1995; and
WHEREAS, Water Power and Cascade desire to extend the primary term of the
aforementioned Release Agreement to April 30, 1998, subject to the receipt of
necessary regulatory approvals;
NOW, THEREFORE, in consideration of their mutual covenants, the Parties
hereby agree to amend the Release Agreement in the following respects:
1. Section 4.1 of the Release Agreement is hereby deleted and replaced
with a new Section 4.1 which reads, in its entirety, as follows:
4.1 Subject to the satisfaction of all conditions precedent,
including the receipt of necessary regulatory approvals, the primary
term of this Agreement shall continue until April 30, 1998, and
thereafter, on a year-to-year basis unless terminated by either Party
upon twelve (12) months' written notice of termination received prior
to April 30, 1998, or any anniversary thereafter.
2. Section 5.3 of the Release Agreement is hereby deleted and replaced
with a new Section 5.3 which reads, in its entirety, as follows:
5.3 If all conditions precedent are not satisfied in time to
allow for Cascade's use of the released Deliverability and Capacity by
November 1, 1995, either Party may, upon fifteen (15) day's written
notice, cancel this Agreement.
3. The Parties agree to substitute revised versions of the following
Exhibits, which were previously attached to the Release Agreement:
Exhibit A: Substitution of First Revised Appendix A to Jackson Prairie
Storage Project Agreement, as amended and currently in effect.
Exhibit B: consent of Northwest Pipeline and Washington Natural Gas
Company to the Release.
Exhibit C: Transportation Service Agreement entered into between
Cascade and Northwest Pipeline is deleted in its entirety.]
IN WITNESS WHEREOF each Party has caused this First Amendment to be
executed under the hands of its duly authorized representative.
THE WASHINGTON WATER POWER CASCADE NATURAL GAS
COMPANY CORPORATION
By: /s/ Gary G. Ely By: /s/ King Oberg
------------------------ -----------------------
Gary G. Ely King Oberg
Vice President, Natural Gas Vice President, Gas
Supply
Exhibit A
Revised Appendix to Gas Storage Project Agreement
FIRST REVISED APPENDIX A
TO
GAS STORAGE PROJECT AGREEMENT
A. Characteristics and Capabilities of the Jackson Prairie Storage
Project for the 1989/1990 Storage Cycle and thereafter:
Cushion Gas:
Zone 2 Sot less than 16.8 Bcf
Zone 9 Not less than 2.0 Bcf
Working Gas
Capacity Not more than 15.1 Bcf
Zone 2 Storage Gas Not more than 34.4 Bcf
Deliverability:
Firm Not more than 450,000 Mcf Daily
Best Efforts Up to 71,800 Mcf daily
B. Unless the Management Committee approves an alternate method, the
Seasonal Working Gas Quantity available for withdrawal during any Storage Cycle
is determined by the lessor of;
(1) The quantity of Working Gas in storage at the beginning of the
Storage Cycle; or
(2) The least quantity of Working Gas in storage at any time between
August 31st and September 30th of the preceding Storage Cycle divided by
0.80; or
(3) The least quantity of Working Gas in storage at any time between
June 30th and September 30th of the preceding Storage Cycle divided by
0.35.
The maximum amount of Seasonal Working Gas Quantity is equivalent to the
Working Gas Capacity and shall not exceed 15.l Bcf, as stated above in Section
A.
C. During any Storage Cycle, the project Operator shall be required to
withdraw from the Storage Project, upon demand by Northwest Pipeline Corporation
pursuant to Section 6.3 of ARTICLE VI of the Gas Storage Project Agreement, a
daily quantity of natural gas determined as follows:
(1) Subject to the limitations on the replacement of Working Gas as
stated in Paragraph D of this Appendix, when the Working Gas in the
Storage Reservoir exceeds 45 percent of the Working Gas Capacity, the
dally withdrawal quantity shall be 100 percent of the Firm
Deliverability (defined above as not more than: 450,000 Mcf). For
withdrawals below 45 percent of the working Gas Capacity, the daily
withdrawal quantity shall be reduced one percent of Firm Deliverability
for each additional one percent of the working Gas withdrawn below 45
percent of the Working Gas Capacity. For calculation purposes, this
percent of Working Gas withdrawn shall be based on the percent
withdrawn at the beginning of the given day; and
(2) The dally Best Efforts Deliverability quantity as that quantity
is stated in Section A above.
D. After the commencement of an annual Storage Cycle, withdrawals from
the Seasonal Working Gas Quantity may be replaced both to maintain the
Deliverability of the Storage Project and to restore the quantity available for
withdrawal; provided, however, that Working Gas injected above the level of the
Seasonal Working Gas Quantity established at the beginning of an annual Storage
Cycle shall be considered as applicable to the Seasonal Working Gas Quantity of
the next succeeding Storage Cycle and shall not increase the Seasonal Working
Gas Quantity of the current Storage Cycle.
The Project Operator shall transfer up to 500,000 Mcf of Cushion Gas from
Zone 9 to Zone 2 of the Storage Project during the period from October 1 through
April 30 of any Storage Cycle to maintain the Deliverability as stated above and
shall replace said Cushion Gas prior to the commencement of this next storage
Cycle by retransfer from Zone 2 to Zone 9.
This Appendix A shall become effective on the date designated by the
Federal Energy Regulatory Commission and on such date shall supersede any
previously effective Appendix A establishing the Characteristics and
Capabilities of the Jackson Prairie Storage project.
Attest: THE WASHINGTON WATER POWER COMPANY
/s/ Merilee Fulton By: /s/ Gary E. Ely
Vice President
Attest: WASHINGTON NATURAL GAS COMPANY
In Its Individual Capacity and
as Project Operator
/s/ Paul A. Hoglund By /s/ Robert R. Golliver
President
Attest: NORTHWEST PIPELINE CORPORATION
/s/ Karen B. Martinez By /s/ Tim J. Hausler
Vice President
Exhibit B
Consent to Release
February 2, 1995
Mr. James Gustafson
Senior Vice President
Washington Natural Gas Corporation
815 Mercer Street
Seattle, WA 98111
Mr. Matt J. Gillis
Vice President of Operations
Northwest Pipeline Corporation
295 Chipeta Way
PO Box 58900
Salt Lake City, UT 84158-0900
RE: Waiver/Consent of Jackson Prairie Management Committee
Concerning Release of Capacity and Deliverability by Washington
Water Power to Cascade
Gentlemen:
The Washington Water Power Company (WWP) and Cascade Natural Gas
(Cascade) intend to amend their existing agreement (hereinafter "Release
Agreement"), whereby WWP would continue to release a share of its capacity
and deliverability in the Jackson Prairie Storage Project (Project) to
Cascade. In order to effectuate this continued release, the following waivers
and consents must be obtained from the Management Committee of the Project.
In accordance with Article 5.3 of the Gas Storage Project Agreement,
dated September 25, 1989, the Management Committee, comprised of the
undersigned, hereby consents to the release by WWP to Cascade of 150,000
therms of firm deliverability, 55,328 therms of best efforts deliverability,
and 4,800,000 therms of seasonal capacity in the Project, for an additional
period extending from May 1, 1995 to April 30, 1998. Moreover, to the extent
that this release is, or may be, construed as an assignment of a portion of
WWP's interest in the Project, the undersigned, as representative of each
owner of the Project, expressly waive any rights of first refusal arising
under Article 13.1 of the Gas Storage Project Agreement.
If you are in agreement with the foregoing, please sign in the space
provided below and return the original to my office. An original signed by
all parties will be returned to you. Thank you for your attention to this
matter.
Very truly yours,
THE WASHINGTON WATER POWER COMPANY
/s/ Gary G. Ely
Gary G. Ely
ACKNOWLEDGED AND AGREED TO
THIS 27th DAY OF FEBRUARY, 1995.
------
/s/ James Gustafson
Mr. James Gustafson
ON BEHALF OF WASHINGTON NATURAL
GAS COMPANY
ACKNOWLEDGED AND AGREED TO
THIS 12th DAY OF MARCH, 1995.
------
/s/ Matt J. Gillis
By Mr. Matt J. Gillis
ON BEHALF OF NORTHWEST PIPELINE
CORPORATION