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Exhibit 10.15
WATER SUPPLY AGREEMENT
This Agreement made this 13th day of June, 1994, by and between THE
CONNECTICUT WATER COMPANY, having its principal office in the Town of Clinton,
County of Middlesex and State of Connecticut (the "Company"), and THE
HAZARDVILLE WATER COMPANY, having its principal office in the Town of Enfield,
County of Hartford and State of Connecticut ("HWC").
W I T N E S S E T H :
WHEREAS, the Company has agreed to construct and operate a regional
pipeline to be owned by the Town of Somers and/or the State of Connecticut for
the purpose of providing water service to certain areas outside the present
boundaries of the Company's Somers System; and
WHEREAS, HWC has need of water from the Company to be delivered to HWC
through said regional pipeline for limited use in HWC's service area; and
WHEREAS, HWC and the Company mutually desire to establish an agreement
pursuant to which the Company would provide water to HWC to meet such needs.
NOW THEREFORE,
It is mutually agreed between the parties hereto as follows:
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1. (a) The Company shall enter into one or more contracts with the
Town of Somers and/or the State of Connecticut with respect to the
construction, operation and maintenance of a regional water pipeline to be
constructed from the Company's Somers System to the Rye Hill Circle area in
Somers, Connecticut (herein, the "Regional Pipeline"). These contractual
arrangements will be substantially in the form of Exhibit A hereto (which
exhibit is the Installation and Service Agreement dated as of June 5, 1992
between the Company and the Town of Guilford, Connecticut), but with such
changes therein as may be satisfactory to the Company. HWC shall enter into an
agreement or agreements with the Town of Somers and/or the State of Connecticut
with respect to the construction of a water distribution system within the
exclusive service area (herein "ESA") of HWC, as determined by the Upper
Connecticut River Water Utility Coordinating Committee, such system to be
interconnected with the Regional Pipeline and provide water service within the
Rye Hill Circle area. HWC may, from time to time enter into additional similar
agreements with respect to other homes within the ESA of HWC. Said contracts
between HWC and the Town of Somers and/or the State of Connecticut shall
contain such provisions as to ownership and use thereof by HWC as shall be
acceptable to HWC. The Company or HWC, as the case may be, in its sole
discretion, may modify or supplement any of its contractual arrangements as it
considers appropriate.
(b) Said agreements between the Company and the Town of Somers
and/or the State of Connecticut shall provide that the said Town and/or State
shall own the Regional Pipeline for a term of sixty-one years, with the
Regional Pipeline then being conveyed to the Company at no cost to the Company;
provided, however, that said agreements shall also expressly provide that,
after such conveyances upon expiration of said sixty-one year period, (i) the
Company shall be permitted, without limitation as to time and at no cost
(whether direct or indirect) to the Company, to continue to utilize the entire
Regional Pipeline for the purposes, including the transmission of water in such
quantities, then utilized by the Company or thereafter deemed
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necessary or desirable by the Company; and (ii) HWC shall be permitted to
utilize the Regional Pipeline as permitted by this Agreement, without
limitation as to time and at no additional cost to HWC beyond (A) the costs to
HWC reflected in this Agreement and (B) HWC's proportionate share of those
additional costs incurred by the Company as a result of ownership of the
Regional Pipeline.
2. (a) Said agreements between the Company and the Town of
Somers and/or the State of Connecticut shall include obligations on the part of
the Company to maintain in good working order all improvements constructed by
the Town of Somers and/or the State of Connecticut for the aforesaid Regional
Pipeline and any distribution system or domestic service lines extending from
the Regional Pipeline to areas not within the ESA of HWC. Such maintenance and
operation by the Company of the Regional Pipeline and the aforesaid
improvements shall be in accordance with the standards set by the State of
Connecticut Department of Public Health and Addiction Services ("DPHAS") or any
successor agency and the State of Connecticut Department of Public Utility
Control ("DPUC").
(b) Said agreements between HWC and the Town of Somers and/or the
State of Connecticut shall include obligations on the part of HWC to maintain
in good working order any and all such improvements, all in accordance with
standards set by DPHAS and DPUC.
3. (a) The Company hereby agrees to provide potable water, fire
protection and related services to HWC but only for resale by HWC solely to
customers of HWC who are within the ESA of HWC and for whom HWC has received
specific approval to serve from the Connecticut Department of Environmental
Protection. The water supplied by the Company under this Agreement shall meet
all federal, state and other water quality requirements applicable to the
Company. The Company shall indemnify and hold harmless HWC for any and all
costs,
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fees, expenses, damages and loss of any type or nature incurred as a result of
any failure of the Company to comply with the aforesaid water quality
requirements.
(b) HWC agrees to, and does hereby consent to, all operations of
the Company contemplated by this Agreement.
4. (a) HWC will pay the established charges (based on the size
of the master meter located on the Regional Pipeline at the boundary of the ESA
of HWC and the quantity of water used) for all water supplied hereunder in
accordance with the established rates of the Company's Somers System, which
rates may from time to time be revised with the approval of the DPUC. The
charges by the Company to HWC shall also include, without limitation, the
Company's then existing standard inch foot charges as calculated for the
Regional Pipeline, standard charges for all private fire connections made to
the Regional Pipeline, standard charges for any and all hydrants installed
along the Regional Pipeline within the ESA of HWC as may be authorized from
time to time by the Town of Somers and standard charges for each service
connection made to the Regional Pipeline. HWC shall be billed for all water
delivered to HWC through the Regional Pipeline, as measured by the meters
contemplated by Section 10 hereof, except that water taken directly from the
Regional Pipeline as a result of main breaks, fire protection or flushing shall
be excluded. The Company will bill HWC for meter charges and other charges and
rates in accordance with its rules and regulations, except to the extent
otherwise directed by the DPUC.
(b) Notwithstanding the provisions of subsection (a), at such time
as HWC complies with the requirements of Section 8(a) hereof, and is capable of
inserting water into the Regional Pipeline, HWC shall continue to pay all other
charges then applicable in accordance with subsection (a) hereof and, in
addition, the quarterly bill for the last quarter of each calendar year
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thereafter during the term of this Agreement shall include, in addition to all
other amounts payable by HWC under subsection (a) hereof, a minimum purchase
charge equal to (1) the amount, if any, by which (A) the amount of water
delivered by the Company to HWC, as measured by the master meter, during the
twelve month period immediately preceding the month in which HWC so complies
with Section 8(a) hereof (adjusted, if necessary, to reflect a full year's
consumption), exceeds (B) the amount of water actually purchased pursuant to
this Agreement from the Company by HWC during such calendar year, times (2) the
then applicable rates of the Company.
(c) The Company agrees to provide and be responsible for providing
water for public and private fire service along the length of the Regional
Pipeline through the use of direct connections to the Regional Pipeline,
including the installation and maintenance of hydrants in the Town of Somers.
The Company will bill any such service within the ESA of HWC to HWC as provided
in subsection (a) hereof.
(d) The rates at which HWC shall resell water purchased by HWC from
the Company pursuant to this Agreement to HWC's customers shall be set by the
DPUC.
5. (a) The maximum amount of water which the Company shall be
obligated to provide to HWC pursuant to this Agreement shall in no event exceed
100,000 gallons in any one day. The Company shall be under no obligation to
supply amounts of water to HWC pursuant to the Regional Pipeline in excess of
said 100,000 gallons per day, except for emergency use in the event of a fire
or main break within that portion of the ESA of HWC serviced through the
Regional Pipeline, and excluding water lost from the Regional Pipeline as a
result of main breaks or flushing.
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(b) The Company will design, and use its best efforts to operate,
the Regional Pipeline so that the Regional Pipeline is capable of delivering
1,100 gallons per minute at a residual pressure of 50 psi at the intersection
of George Wood Road and Rye Hill Circle. The Pipeline will be designed to
provide adequate service up to ground elevation 400 USGS datum. The Company
undertakes only to supply water to HWC in such quantity existing in the
Company's Somers System at any time. The Company will make all reasonable
efforts to prevent interruptions of service and, when such interruptions occur,
will endeavor to reestablish service with the shortest possible delay
consistent with the safety of customers and the general public.
(c) The parties hereto will jointly apply to DEP for a diversion
permit with respect to 100,000 gallons per day of water to be sold by the
Company to HWC through the Regional Pipeline pursuant to this Agreement. It
shall be the Company's obligation to obtain any and all such approvals (other
than the diversion permit and approval of this Agreement by the DPUC) as may be
required to enable the parties to carry out this Agreement. HWC agrees to
cooperate with the Company in pursuing any such approvals which may be needed.
The Company shall undertake primary responsibility for obtaining the requisite
diversion permit from DEP, and HWC shall cooperate with respect thereto.
6. The Company shall be permitted to extend, enlarge and expand
the Regional Pipeline and/or to interconnect with said Pipeline at any time and
from time to time in such manner as the Company deems necessary or desirable in
connection with its operations. HWC hereby grants the Company such approvals
as may be necessary or desirable to enable the Company to effect such
extensions, enlargements, expansions and interconnections within the ESA of
HWC. Nothing in this section is intended to address the issue of what entities
may provide water service within the ESA of CWC or of HWC.
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7. Upon compliance with all water quality and technical
engineering requirements deemed by the Company to be reasonably necessary,
using good standard engineering practice, to ensure proper operation of the
Regional Pipeline and upon payment of all reasonable costs relating to said
interconnection: (i) HWC may interconnect with the Regional Pipeline in order
to provide water service to homes experiencing present or future pollution
problems; and (ii) additionally, upon confirmation by DPUC of compliance by HWC
with the interconnection requirements set forth in the third paragraph of
Section II of the so-called Rye Circle Memorandum of Understanding dated May 3,
1994 (the "MOU"), HWC may interconnect with the Regional Pipeline any portion
of the HWC system within the ESA of HWC now or hereafter in existence.
8. (a) Upon compliance with the requirements of Section 7, HWC
may, through one or more of the interconnections contemplated by Section 7(ii),
insert water into the Regional Pipeline and thereby utilize the Regional
Pipeline to supply water to existing or future customers of HWC located within
the ESA of HWC; provided, however, that HWC shall (i) inject into the Regional
Pipeline only potable water which meets all federal, state and other water
quality requirements applicable to either the Company or HWC; (ii) be fully
responsible for complying, and shall indemnify and hold harmless the Company
for any and all costs, fees, expenses, damages and loss of any type or nature
incurred as a result of any failure of HWC to comply, with the aforesaid water
quality requirements and standards, and any and all technical or operational
conditions reasonably requested by the Company to ensure proper operation and
maintenance of the Regional Pipeline and HWC's interconnections thereto; and
(iii) be limited to a total use of the Regional Pipeline to transmit a maximum
of 400,000 gallons of water per day, regardless of whether such water is
purchased from the Company or supplied to the Regional Pipeline by HWC, it
being the intent of this clause (iii) that the aggregate amount of
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water (A) sold by the Company to HWC pursuant to this Agreement, and (B)
inserted by HWC into the Regional Pipeline pursuant to this Section 8 (a) shall
in no event exceed 400,000 gallons per day (except for emergency use for fire
flow).
(b) HWC may also construct or receive contributions of additional
plant which, subject to the requirements of Section 7, may be interconnected to
the Regional Pipeline to fulfill HWC's service obligations within its ESA in
the vicinity of the Regional Pipeline.
9. (a) HWC will install at its expense all necessary pipes,
valves, meters and pits and other appurtenances required to effect any and all
interconnections between HWC and the Regional Pipeline, including water meters.
The Company shall have the right to approve the design, construction and
operation of all connections to the Company water system and the Regional
Pipeline, and all meter vaults, metering devices, and any other appurtenances
thereto. The cost of all such work shall be paid by HWC. Meters and piping up
to the main line gate valve on the Company side of each meter pit shall be and
at all times remain the property of the entity then owning the applicable
portion of the Regional Pipeline. The Company shall be responsible for the
maintenance of the meters. The necessity for, and selection of, all
connections, materials, and the location thereof shall be within the sole and
exclusive judgment of the Company and shall be based solely upon good water
utility engineering practices to ensure proper operation and maintenance of the
Regional Pipeline and to preserve the ability of the Company and of HWC to
carry out their respective rights and obligations under this Agreement;
provided that no meters shall be required on those interconnections to the
Regional Pipeline where HWC is not capable of inserting water into the Regional
Pipeline.
(b) HWC agrees that any and all modifications to its existing water
supply system that are necessary or desirable to enable it to accept delivery
of water delivered through the Regional
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Pipeline shall be undertaken by HWC at its own expense. Any such
interconnections will be made only within the ESA of HWC within the Town of
Somers.
(c) HWC shall, at its expense, obtain such permits and other rights
which may be necessary or desirable to enable HWC to interconnect with the
Regional Pipeline.
10. The measurement of water delivered to HWC shall be undertaken by
the Company. Such flow measurements shall be made by approved metering devices
to be installed on the Regional Pipeline at the border of the ESA of HWC and at
such other locations (such as at the border of the ESA of HWC and the ESA of
the Company's Northern Division if the Regional Pipeline is so extended, and at
those interconnections where HWC is capable of inserting water into the
Regional Pipeline), as may be deemed necessary by the Company to ensure proper
calculation of the amount of water actually delivered by the Company to HWC.
All such metering devices shall be inspected at least annually and calibrated
periodically by the Company. A copy of the inspection and calibration reports
shall be provided to HWC. HWC shall have the right, upon reasonable notice to
the Company, to inspect each such meter. The Company shall give HWC reasonable
notice of each annual inspection and calibration of such meters and HWC shall
have the right to be present during such operations.
11. The Company shall operate and maintain the Regional Pipeline
in accordance with customary water utility engineering practices. HWC shall
operate and maintain that portion of its water system connected at any time to
the Regional Pipeline in accordance with customary water utility engineering
practices and with the guidelines set forth below:
(i) HWC shall use its best efforts to minimize the wasteful use of
water within that portion of its service area connected to the Regional
Pipeline. Should the Company impose
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restrictions on water use on its customers (e.g., sprinkling bans) HWC shall
likewise impose such restrictions on its customers within said area. The
imposition of said restrictions shall be within the sole and exclusive
discretion of the Company. Nothing in this Agreement shall prevent HWC from
imposing its own restrictions above and beyond those imposed by the Company.
(ii) HWC shall ensure that all users connected to that portion of its
water system connected to the Regional Pipeline who raise the water pressure
install suitable backflow prevention devices as required by state or federal
law. HWC shall ensure that all users connected to that portion of its water
system connected to the Regional Pipeline which repump the water supplied by
HWC do all such repumping on a schedule approved by HWC and in conformance with
all existing cross connection regulations.
12. HWC shall, and to the extent necessary shall cause those
customers of HWC served through the Regional Pipeline to, comply in all
respects with all of the rules and regulations of the Company which may from
time to time be in effect and approved by the DPUC and applicable to the
matters contemplated by this Agreement.
13. The Company shall bill HWC monthly for fire protection and
quarterly for water purchased and all other charges. All bills for services
rendered or obligations payable hereunder shall be due and payable within
thirty (30) days of the receipt of a bill therefor by HWC. Any amount
remaining unpaid after such 30-day period shall thereafter bear interest to the
date of payment at a rate per annum equal to (i) the prime rate of interest of
Fleet Bank of Connecticut, as established and announced by such bank from time
to time, plus (ii) 2 percent. If HWC fails to pay any sum due under this
Agreement or otherwise fails to comply with any other provision of this
Agreement, HWC will pay to the Company, to the extent permitted by law, such
further
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amounts as shall be sufficient to cover the cost and expenses, including
without limitation reasonable attorneys' fees, incurred by the Company in
collecting any sums due hereunder or in otherwise enforcing any of its rights.
In addition to any other rights which it may have, the Company shall have the
right to refuse to provide water service to HWC if it has failed to make any
payment required by this Agreement for more than 60 days after receipt of a
bill therefor.
14. HWC agrees that, except as specifically provided in this
Agreement, it will indemnify and save the Company harmless from and against any
and all loss, cost, liability or damage incurred directly or indirectly by the
Company as a result of any negligence or misconduct on the part of HWC, its
employees or agents, in connection with the construction or use of any of the
HWC interconnections with the Regional Pipeline and the taking by HWC of any
action contemplated by this Agreement. The Company agrees that, except as
specifically provided in this Agreement, it will indemnify and save HWC
harmless from and against any and all loss, cost, liability or damage incurred
directly or indirectly by HWC as a result of any negligence or misconduct on
the part of the Company, its employees or agents, in connection with the
Company's operation or use of the Regional Pipeline and the taking by the
Company of any action contemplated by this Agreement.
15. Neither the Company nor HWC shall be liable in damages or
otherwise for any failure to perform any obligation, except that HWC shall not
be relieved of its payment obligations under this Agreement because of any
failure which is occasioned by or in consequence of any act of God, act of
public enemy, war, blockages, insurrection, riot, epidemic, land slide,
lightning, earthquake, fire, storm, flood, washout, civil disturbance, strike,
lockout or other industrial disturbance, power failure, explosion, breakage or
accident to machinery or lines of pipe, failure or want of water supply,
binding order, decree, regulation
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or judgment of any court or governmental authority or any other cause, whether
of the kind enumerated or otherwise, not completely within the control of the
Company or HWC, as the case may be, which act, omission, or circumstance the
Company or HWC, as the case may be, is unable to prevent or overcome by the
exercise of due diligence ("force majeure"). It is understood and agreed that
the settlement of any such existing or impending strike, lockout or other
industrial disturbance shall be entirely within the discretion of the Company
or HWC, as the case may be, and that the foregoing requirement that any force
majeure shall be beyond the complete control of the Company or HWC, as the case
may be, and shall be prevented or overcome by the exercise of due diligence
shall be deemed to be fulfilled even though such strike, lockout or other
industrial disturbance may not be settled and could have been settled by
acceding to the demands of the opposing party. It also is understood and
agreed that the foregoing requirement that any force majeure shall be beyond
the complete control of the Company and shall be prevented or overcome by the
exercise of due diligence shall be deemed to be fulfilled even though any such
force majeure may not be prevented or overcome and could have been prevented or
overcome had the Company undertaken treatment or other techniques with respect
to water delivered and sold pursuant to this Agreement if such techniques
exceed the treatment or other techniques undertaken by the Company with respect
to water supplied by the Company from the same sources to its retail customers.
16. The Company assumes no responsibility for operation and
maintenance of any portion of the water systems constructed and owned by HWC.
17. The respective obligations of the parties hereto are subject
to the following conditions precedent:
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(i) Such approval of this Agreement as may be required by
the DPUC and the DPHAS.
(ii) (a) Delivery to the Company of an opinion of counsel
for HWC that HWC has authority to enter into this
Agreement and carry out all of its obligations
hereunder, and that this Agreement has been duly
authorized, executed and delivered on behalf of HWC
and is a legal, valid and binding agreement
enforceable against HWC in accordance with its terms;
and (b) Delivery to HWC of an opinion of counsel for
the Company that the Company has authority to enter
into the Agreement and carry out all of its
obligations hereunder, and that this Agreement has
been duly authorized, executed and delivered on
behalf of the Company and is a legal, valid and
binding agreement enforceable against the Company in
accordance with its terms.
(iii) Approval by DPUC of rates for HWC to be charged to
those customers of HWC served from the Regional
Pipeline, which rates observe the principles set
forth in the first paragraph of Section II of the
MOU.
(iv) Assurances, satisfactory to the Company and to HWC,
that, except for the incremental costs, if any, of
increasing the joint application to the DEP for the
diversion permit contemplated by Section 5(b)) from
62,500 gallons per day to 100,000 gallons per day,
which incremental cost will be paid by HWC, neither
the Company nor HWC shall bear any costs, and shall
be fully reimbursed for all expenses, incurred
directly or indirectly with respect to obtaining such
diversion permit; and
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(v) the receipt by HWC of written confirmation by DPHAS
of the principle set forth in the last sentence of
Section IV of the MOU.
18. This Agreement shall be effective as of the date of
satisfaction (or waiver) of the last of the conditions set forth in Section 17
and, unless sooner terminated by mutual agreement, shall remain in full force
and effect until December 31, 2060.
19. This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties.
20. In the event of any dispute or disagreement between the
parties either with respect to the interpretation of any provisions of this
Agreement or with respect to the performance by the Company or by HWC
hereunder, then upon the written request of either party, each of the parties
will appoint a designated officer whose task it will be to meet for the purpose
of endeavoring to resolve such dispute or to reach agreement upon a mutual
satisfactory alternative dispute resolution mechanism. The designated officers
shall meet at a mutually agreeable location as often as the parties reasonably
deem necessary in order to gather and furnish to the other all information with
respect to the matter in issue which the parties believe to be appropriate and
germane in connection with its resolution. Such officers shall discuss the
problem and/or negotiate in good faith in an effort to resolve the dispute
without the necessity of any formal proceeding and/or to reach agreement upon a
mutually satisfactory alternative dispute resolution mechanism. All verbal and
written communications between the parties and issued or prepared in connection
with this section shall be deemed prepared and communicated in furtherance, and
in the context, of dispute settlement, and shall be exempt from discovery and
production, and shall not be admissible in evidence (whether as an admission or
otherwise), in
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any proceedings for the resolution of the dispute. No formal proceedings for
the litigation of such dispute shall be commenced until either of the
designated officers concludes in good faith that continued negotiations of the
matter in issue does not appear likely to produce a mutually acceptable
resolution or agreement upon a mutually satisfactory alternative dispute
resolution mechanism.
21. This Agreement constitutes the complete agreement of the
parties. No amendment of this Agreement shall be effective unless in writing
and signed by each of the parties hereto.
22. All communications under this Agreement shall be in writing
and shall be mailed by first class mail, postage prepaid, to the addressee's
respective address as shown below, marked for attention as there indicated, or
at such other address as such addressee may have furnished in writing to the
other party hereto:
The Connecticut Water Company
93 West Main Street
Clinton, CT 06413
Attention: Vice President-Operations
and
The Hazardville Water Company
10 Kearney Road, Suite 301
Needham, MA 02194
Attention: Jonathan S. Avery, President
23. Two or more duplicate originals of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the day and year first above written.
THE CONNECTICUT WATER COMPANY
By /s/ Marshall T. Chiaraluce
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Its President and CEO
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THE HAZARDVILLE WATER COMPANY
By /s/ Jonathan S. Avery
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Its President
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