EXHIBIT 10.E
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Public Utilities Commission )
of the State of California, )
)
Complainant, )
)
v. ) Docket No. RP00-241-000, et al.
)
El Paso Natural Gas Company, )
El Paso Merchant Energy-Gas, L.P., )
and El Paso Merchant Energy Company, )
)
Respondents. )
JOINT SETTLEMENT AGREEMENT
Pursuant to Rule 602 of the Rules of Practice and Procedure of the
Federal Energy Regulatory Commission ("Commission"), 18 C.F.R. Section 385.602
(2002), El Paso Natural Gas Company ("EPNG"), El Paso Merchant Energy Company
and El Paso Merchant Energy-Gas, L.P. (jointly, "Merchant"), the Public
Utilities Commission of the State of California ("CPUC"), Pacific Gas and
Electric Company ("PG&E"), Southern California Edison Company ("Edison") and the
City of Los Angeles hereby submit and enter into this Joint Settlement Agreement
("Settlement Agreement").
ARTICLE 1
DEFINITIONS
The following terms have the following meanings:
1.1 "Article" means a numbered Article of this Settlement Agreement,
unless otherwise noted, and all references to an Article shall include all
paragraphs, subparts or subparagraphs of that Article.
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1.2 "California Settling Parties" means the CPUC, PG&E, Edison, and the
City of Los Angeles, as those parties are defined herein.
1.3 "Capacity Allocation Proceeding" means the proceeding pending
before the Commission at Docket No. RP00-336-000, including all subdockets.
1.4 "City of Los Angeles" means the City of Los Angeles, a California
municipal corporation.
1.5 "Commission" means the Federal Energy Regulatory Commission.
1.6 "CPUC" means the Public Utilities Commission of the State of
California, or its successor.
1.7 "Edison" means Southern California Edison Company, a California
corporation.
1.8 "Effective Date" has the meaning set forth in Paragraph 10.1 of
this Settlement Agreement.
1.9 "El Paso Settling Parties" means EPNG and Merchant, as those
parties are defined herein.
1.10 "EPNG" means El Paso Natural Gas Company, a Delaware corporation.
1.11 "Master Settlement Agreement" means the agreement memorialized in
the settlement agreement to be filed with the California Superior Court for the
County of San Diego in June 2003 at Case No. J.C.C.P. Nos. 4221, 4224, 4226 and
4228.
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1.12 "Merchant" means El Paso Merchant Energy Company and El Paso
Merchant Energy-Gas, L.P.
1.13 "Paragraph" means a numbered paragraph of this Settlement
Agreement, unless otherwise noted, and all references to a paragraph shall
include all subparts or subparagraphs of that paragraph.
1.14 "PG&E" means Pacific Gas and Electric Company, a California
corporation.
1.15 "Power-Up Project" means the facilities as proposed in EPNG's
October 3, 2002 certificate application at Docket No. CP03-1-000.
1.16 "Settlement Agreement" means this document.
1.17 "Settling Parties" means EPNG, Merchant, the CPUC, PG&E, Edison
and the City of Los Angeles, as those parties are defined herein. Each of the
Settling Parties may be individually referred to herein as a "Settling Party."
1.18 "Special Master" means the individual designated by the parties
and approved by the court to resolve disputes regarding certain contractual
commitments, as more fully described in Article 12.
1.19 "Stipulated Judgment" means the agreement memorialized in the
Stipulation to Entry of Judgment to be filed no later than June 30, 2003, with
the United States District Court for the Central District of California, in
proceedings to be filed by the State of California, Edison, and PG&E, in which
the Special Master is to be appointed. A pro forma copy of the Stipulated
Judgment is attached hereto as Tab 3.
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1.20 "1996 Settlement" means the settlement approved by the Commission
in Docket No. RP95-363-000, et al., on April 16, 1997. El Paso Natural Gas Co.,
79 FERC Paragraph 61,028 (1997), reh'g denied, 80 FERC Paragraph 61,084 (1997).
ARTICLE 2
FACTUAL AND PROCEDURAL BACKGROUND
2.1 On April 4, 2000, the CPUC filed a complaint against EPNG and
Merchant in Docket No. RP00-241-000. On March 28, 2001, the Commission issued an
order that, among other things, set for hearing the issue of whether EPNG and/or
Merchant had market power and, if so, exercised it to drive up the price of
natural gas at the California border. Pub. Util. Comm'n of Cal. v. El Paso
Natural Gas Co., 94 FERC Paragraph 61,338 (2001).
2.2 The market power hearing commenced on May 14, 2001, and ended on
June 19, 2001. On May 31, 2001, the Chief Judge submitted a report to the
Commission in which he asked the Commission to clarify whether he should take
evidence on the Standards of Conduct issue that had been raised by the CPUC but
which the Commission had previously dismissed. Pub. Util. Comm'n of Cal. v. El
Paso Natural Gas Co., 95 FERC Paragraph 63,020 (2001). The Commission issued an
Order on Rehearing on June 11, 2001, in which it set the Standards of Conduct
issue for hearing. Pub. Util. Comm'n of Cal. v. El Paso Natural Gas Co., 95 FERC
Paragraph 61,368 (2001). This second phase of the hearing was held from August
2-6, 2001.
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2.3 The Chief Judge issued his first Initial Decision on October 9,
2001. Pub. Util. Comm'n of Cal. v. El Paso Natural Gas Co., 97 FERC Paragraph
63,004 (2001). On December 27, 2001, the Commission remanded the proceeding for
a limited supplemental hearing on whether, during the period from November 2000
through March 2001, EPNG made all of its capacity available to its shippers at
its California delivery points and provided non-discriminatory access to such
capacity. Pub. Util. Comm'n of Cal. v. El Paso Natural Gas Co, 97 FERC Paragraph
61,380 (2001). This third phase of the hearing began on March 21, 2002, and
concluded on April 10, 2002.
2.4 On September 23, 2002, the Chief Judge issued his second Initial
Decision. Pub. Util. Comm'n of Cal. v. El Paso Natural Gas Co, 100 FERC
Paragraph 63,041 (2002). The parties filed briefs on and opposing exceptions
with the Commission, and oral argument was held before the Commission on
December 2, 2002. The Commission has not yet issued an order on the two Initial
Decisions.
2.5 On March 21, 2003, the Settling Parties filed a joint motion to
defer for forty-five days any further action in Docket No. RP00-241-000, et al.,
to enable the Settling Parties to finalize and file this Settlement Agreement
with the Commission. The Settling Parties subsequently asked the Commission to
extend the deadline for an additional thirty days, which the Commission granted.
ARTICLE 3
SCOPE OF SETTLEMENT
3.1 In further implementation of the Master Settlement Agreement and as
reflected more fully in Article 11, this Settlement Agreement constitutes a full
and complete resolution of (1) all claims and issues that were raised by the
California Settling
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Parties in the proceeding at Docket No. RP00-241-000 and all subdockets, and (2)
all related claims and issues that were raised by the California Settling
Parties in the Capacity Allocation Proceeding and in any other Commission
proceedings, including but not limited to allegations raised that EPNG violated
its certificates and/or the 1996 Settlement, and that EPNG and/or Merchant
violated the Natural Gas Act, the Natural Gas Policy Act and/or the Commission's
regulations or orders.
ARTICLE 4
SETTLING PARTIES
4.1 This Settlement Agreement in its entirety is sponsored jointly by
the Settling Parties.
4.2 The Settling Parties jointly request and urge the Commission to
approve this Settlement Agreement without condition or modification.
4.3 None of the Settling Parties, either directly or indirectly, shall
seek in any proceeding or forum to set aside or modify this Settlement Agreement
or challenge its applicability after the Settlement Agreement becomes effective
pursuant to the terms of Article 10.
4.4 The Settling Parties agree to cooperate, each at its own expense,
and to use their best efforts in securing all necessary governmental approvals
for this Settlement Agreement and in defending against any litigation affecting
the validity and enforceability of this Settlement Agreement, or any provision
thereof.
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ARTICLE 5
CAPACITY AVAILABLE TO EPNG'S CALIFORNIA DELIVERY POINTS
5.1 EPNG agrees to make 3290 MMcf/day of firm primary capacity
available to its California delivery points, provided that each of the following
conditions occur:
5.1.1 As more fully set forth in Article 6, EPNG is able to
place into service its 320 MMcf/day Power-Up expansion
project as proposed in Docket No. CP03-1-000;
5.1.2 As more fully set forth in Article 7, EPNG obtains
tariff authority to provide shippers who contract for
any unsubscribed or turnback capacity of an aggregate of
no more than 623 MMcf/day of the 3290 MMcf/day to a
primary non-California delivery point(s) with dual
primary delivery point rights that permit the shippers
to ship gas either to a primary non-California delivery
point(s), to a primary California delivery point, or to
a combination of both; and
5.1.3 As more fully set forth in Article 8, EPNG obtains
tariff authority to revise the procedure originally
agreed to in the 1996 Settlement whereby northern
California shippers may recall Block II capacity in
order to serve customers in PG&E's service area.
5.2 EPNG will not be deemed to have violated its obligations in this
Article if it is unable to make available or schedule to its California delivery
points 3290 MMcf/day of firm primary capacity due to, for the duration of, and
to the extent of, events and factors beyond its control, including but not
limited to: (a) force majeure events (as defined in
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Section 7.2 of the General Terms and Conditions of EPNG's Volume No. 1-A
Tariff); (b) delays in securing necessary regulatory approvals; (c) superseding
regulatory or court rulings; (d) shipper choices which have relocated or will
relocate shippers' primary delivery points from California points to
non-California points, thereby reducing the contractual amount of capacity with
California primary delivery point rights below 3290 MMcf/day; and (e) shipper
choices to use dual primary delivery point capacity to deliver gas to
non-California delivery points instead of to California delivery points;
provided, however, and subject to the foregoing, that nothing herein will alter
EPNG's obligation herein to maintain facilities sufficient to physically deliver
3290 MMcf/day to its California delivery points.
5.3 EPNG shall not add new firm incremental load to its system that
would prevent it from making available or scheduling to its California delivery
points 3290 MMcf/day of firm primary capacity, as set forth in Paragraph 5.1.
5.4 The Settling Parties agree that with regard to the choices provided
shippers by the Commission, this Settlement Agreement, including the obligations
undertaken by EPNG in this Article, is not intended to, and does not, preclude,
restrict or inhibit any such choices in any way, but rather broadens such
choices by, among other things, eliminating contractual restraints on the
delivery of gas to the California border.
ARTICLE 6
LINE 2000 POWER-UP
6.1 On October 3, 2002, in Docket No. CP03-1-000, EPNG submitted an application
for Commission certificate authority to install additional compression on its
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Line 2000 that would add an additional 320 MMcf/day of capacity to its system,
all as more fully described in the application.
6.2 If EPNG receives the necessary environmental and regulatory
approvals, as proposed by EPNG, including but not limited to Commission
certificate authorization in Docket No. CP03-1-000, then EPNG shall construct
the Power-Up Project on a phased schedule with in-service dates as proposed in
its certificate application at Docket No. CP03-1-000. EPNG will use all
commercially reasonable efforts to obtain all approvals on a timely basis to
meet that schedule.
6.3 Upon completion of the Power-Up Project, EPNG will have the
physical capacity to deliver up to 3840 MMcf/day in the aggregate to the
California delivery points as follows: (a) 540 MMcf/day to SoCal-Topock; (b) 400
MMcf/day to Mojave-Topock; (c) 1140 MMcf/day to PG&E-Topock; and (d) 1760
MMcf/day to Ehrenberg.
6.4 No California Settling Party shall object to the recovery in EPNG's
rates in its next rate case of the costs reasonably incurred by EPNG in
connection with the increase of physical California delivery capacity from 3290
MMcf/day to 3840 MMcf/day, which physical capacity will be available to serve
California and East of California markets. Those costs are all the costs
reasonably incurred by EPNG associated with the construction of the Power-Up
Project (Docket No. CP03-1-000) and the Line 2000 Conversion Project (Docket No.
CP00-422-000). The California Settling Parties shall not be prohibited from
objecting to the allocation of such costs in EPNG's next rate case.
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ARTICLE 7
DUAL PRIMARY DELIVERY POINTS
7.1 Upon approval of this Settlement Agreement, EPNG will have tariff
authority to provide shippers who contract for no more than 623 MMcf/day of the
3290 MMcf/day by obtaining unsubscribed or turnback capacity as part of the
conversion from full requirements to contract demand to a non-California
delivery point(s) with dual primary delivery point rights that permit the
shippers to ship gas either to a primary non-California delivery point(s) or to
a primary California delivery point. Accordingly, effective on the first day of
the month following the Effective Date of this Settlement Agreement, the General
Terms and Conditions of EPNG's Volume No. 1-A Tariff shall be modified to
reflect the changes shown on the Pro Forma Tariff Sheets attached hereto under
Tab 1; provided, however, that the California Settling Parties will have the
right to argue to the Commission in the future that non-California shippers
should not be permitted to acquire part of the 3290 MMcf/day and change the
primary delivery points to non-California points. Upon agreeing to a shipper's
request to move its primary delivery point from a California point to a
non-California point, EPNG agrees to notify the California Settling Parties
promptly of the fact of such agreement.
7.2 Unless the parties otherwise agree, at no time during the term of
this Settlement Agreement shall EPNG be obligated to provide capacity under firm
contracts with primary rights to California delivery points, either on a
"single" or "dual" basis, that exceeds the following:
SoCal Topock 540 MMcf/day
PG&E Topock 1140 MMcf/day
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Mojave Topock 400 MMcf/day
SoCal Ehrenberg 1210 MMcf/day
7.3 Except as may be limited by Article 8 relating to Block II recall
rights, shippers holding contracts with dual primary rights will have the sole
discretion to determine the points to which they will nominate their gas
deliveries on any given day, i.e., subject to the provisions of EPNG's tariff,
EPNG's shippers will determine where and how much gas will be delivered to
California and non-California delivery points on EPNG's system.
ARTICLE 8
BLOCK II RECALL RIGHTS
8.1 The parties to the 1996 Settlement divided EPNG's 1.614 Bcf/day of
turnback capacity into three blocks (Blocks I, II, and III) for the term of that
settlement. Block II contains 614 MMcf/day of capacity, and, among other things,
it gives shippers serving customers in PG&E's market area the right to recall
Block II capacity under certain conditions.
8.2 The Settling Parties agree that, during the remaining term of the
1996 Settlement, Block II capacity will remain subject to recall by PG&E or
shippers serving a market in PG&E's service territory. Upon approval of the
Settlement Agreement by the Commission, EPNG's tariff provisions regarding the
Block II recall process will be revised to clarify the recall process as stated
in the pro forma tariff sheets attached hereto under Tab 2. Accordingly,
effective on the first day of the month following the Effective Date of this
Settlement Agreement, Section 4 of the General Terms and Conditions of
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EPNG's Volume No. 1-A Tariff shall be revised to clarify the recall process as
reflected in the provisions set forth on the Pro Forma Tariff Sheets attached
hereto under Tab 2.
ARTICLE 9
AFFILIATE ISSUES
9.1 EPNG agrees that no affiliate of the pipeline will enter into new
contractual commitments to hold capacity on the EPNG system for the term of this
Settlement Agreement except (1) to the extent that such affiliate requires the
capacity to fulfill its obligations existing under the terms of the Master
Settlement Agreement, or (2) to replace existing capacity to serve existing
contractual obligations. As of the date of this Settlement Agreement, existing
capacity held by Merchant is: (1) approximately 37 MMcf/day of firm capacity
which it acquired directly from EPNG and that has primary California delivery
rights; (2) approximately 156 MMcf/day of primary firm capacity to Ehrenberg
which it acquired from Southern California Gas Company under a temporary release
that expires on August 31, 2006; and (3) approximately 92 MMcf/day of capacity
on the Wilcox lateral that does not include any mainline rights.
9.2 To the extent that, on any day, Merchant is not using any of its
mainline capacity on EPNG to fulfill its settlement obligations or to serve
other obligations existing at the time of this Settlement Agreement as set forth
in Paragraph 9.1 above, it shall not unreasonably delay posting the capacity not
so used for release in accordance with the terms of EPNG's tariff, and upon
terms and conditions comparable to capacity release transactions occurring
contemporaneously among non-affiliated shippers on EPNG's system. Furthermore,
the Settling Parties agree that in its order approving the Settlement Agreement
the Commission must waive the applicability of Section 28.9(d) of
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the General Terms and Conditions of EPNG's Volume No. 1-A Tariff (which
prohibits the re-release of capacity acquired on a volumetric reservation charge
basis) to the extent necessary to enable Merchant to release any capacity it has
acquired in the secondary market in accordance with the provisions of this
Paragraph.
ARTICLE 10
EFFECTIVE DATE
10.1 It is stipulated and agreed that the various provisions of the
instant Settlement Agreement are not severable and that neither this Settlement
Agreement, nor any of the provisions hereof, shall become effective unless and
until each of the following has occurred: (a) the Commission shall have entered
an order approving the instant Settlement Agreement without condition or
modification; (b) such Commission order approving the instant Settlement
Agreement shall have waived compliance by the El Paso Settling Parties with the
requirements of the Commission's Rules and Regulations as necessary to carry out
the provisions of this Settlement Agreement; (c) the Stipulated Judgment
referenced in Article 12 has become fully effective pursuant to its terms; and
(d) the Master Settlement Agreement has become fully effective pursuant to its
terms. When conditions (a), (b), (c) and (d) are satisfied, including Paragraph
10.2 below if applicable, then this Settlement Agreement will become effective,
and such date will constitute the Effective Date. None of the provisions of this
Settlement Agreement will become effective prior to the Effective Date.
10.2 If the Commission issues an order modifying this Settlement
Agreement or approving it only subject to modification(s) or condition(s), then
this Settlement Agreement will not become effective unless each of the Settling
Parties expressly accepts
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the modification(s) or condition(s) in writing within thirty (30) days of the
date of the Commission's order requiring the modification(s) or condition(s),
and also not until conditions (b), (c) and (d) of Paragraph 10.1 are satisfied.
In the event any of the Settling Parties fails to accept a modification or
condition required by the Commission, then this Settlement Agreement and the
Master Settlement Agreement shall be void and of no effect.
10.3 If a party other than a Settling Party requests rehearing of a
Commission order approving the Settlement Agreement, or of a Commission order
that modifies and/or conditions the Settlement Agreement and that is accepted by
the Settling Parties pursuant to the provisions of Paragraph 10.2, and if in
that situation the Commission on rehearing reverses or otherwise modifies or
conditions the order, and that prevents any Settling Party from fully performing
its obligations under the Settlement Agreement, then the Settling Parties agree
to negotiate in good faith as to additional modifications to the Settlement
Agreement to reflect the material impact, if any, of the Commission's
modifications or conditions; provided, however, that if the parties are unable
to agree to additional modifications, then the parties shall present their
respective positions to the Special Master for resolution, which resolution
shall be taken to the Commission for review to the extent such review may be
required. The Settling Parties further agree that: (1) there shall be no
liability for any Settling Party's failure to perform as a result of any action
set forth in this paragraph, and (2) none of the Settling Parties will have the
right to terminate the Settlement Agreement as a result of any action set forth
in this paragraph.
10.4 If a party other than a Settling Party seeks judicial review of a
Commission order approving the Settlement Agreement pursuant to the provisions
of
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Paragraph 10.1, or of a Commission order that modifies and/or conditions the
Settlement Agreement and that is accepted by the Settling Parties pursuant to
the provisions of Paragraph 10.2, and if in that situation a reviewing court, or
the Commission on remand of an order from a reviewing court, reverses or
otherwise modifies or conditions the Commission's order, and that prevents any
Settling Party from fully performing its obligations under the Settlement
Agreement, then the Settling Parties agree to negotiate in good faith as to
additional modifications to the Settlement Agreement to reflect the material
impact, if any, of the Commission's or court's modifications or conditions;
provided, however, that if the parties are unable to agree to additional
modifications, then the parties shall present their respective positions to the
Special Master for resolution, which resolution shall be taken to the Commission
for review to the extent such review may be required. The Settling Parties
further agree that: (1) there shall be no liability for any Settling Party's
failure to perform as a result of any action set forth in this paragraph, and
(2) none of the Settling Parties will have the right to terminate the Settlement
Agreement as a result of any action set forth in this paragraph.
10.5 Nothing in this Article precludes any Settling Party from
requesting rehearing or seeking judicial review of any Commission order
regarding this Settlement Agreement; provided, however, that such rehearing
request or court appeal by a Settling Party shall not affect a Settling Party's
acceptance of a Commission order approving the Settlement Agreement as set forth
in Paragraphs 10.1 and 10.2 above.
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ARTICLE 11
TERMINATION OF OTHER PROCEEDINGS, MUTUAL
RELEASE AND WAIVER
11.1 The Settling Parties hereby agree that in its order approving this
Settlement Agreement the Commission must dismiss with prejudice the complaint in
Docket No. RP00-241-000 effective upon the Effective Date, and all claims or
issues raised in that proceeding by any of the California Settling Parties, and
in all subdockets, will be deemed finally resolved effective upon the Effective
Date.
11.2 The Settling Parties further agree that in its order approving
this Settlement Agreement the Commission must terminate with prejudice the
Docket No. RP00-241-000 proceeding and all subdockets effective upon the
Effective Date, and must vacate the October 9, 2001, and September 23, 2002
Initial Decisions of the Chief Administrative Law Judge in that proceeding
effective upon the Effective Date.
11.3 The California Settling Parties hereby agree that the issues and
claims settled herein, as described in Article 3 and Paragraph 11.6, are deemed
withdrawn with prejudice as to the Settling Parties in all other Commission
proceedings, including but not limited to the Capacity Allocation Proceeding and
Docket No. RP01-484-000 effective upon the Effective Date.
11.4 The California Settling Parties each further agree that none of
them, either directly or indirectly, in any current or future proceeding, forum,
formal or informal investigation, case or any other matter, will advocate any
position that is inconsistent with the terms of this Settlement Agreement,
including the release set forth in Paragraph
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5.2 of the Master Settlement Agreement, or take any action that materially
interferes with the El Paso Settling Parties' ability to perform under this
Settlement Agreement.
11.5 Notwithstanding the foregoing provisions, nothing in this
Settlement Agreement shall replace or supplant any remedy which the Commission
prospectively makes available to all shippers, including the California Settling
Parties, in the Capacity Allocation Proceeding, including the relief already
provided in the Commission's May 31, 2002, and September 20, 2002 Orders;
provided, that the California Settling Parties shall not be entitled to any
relief against the El Paso Settling Parties in that proceeding, or in any other
proceeding, which is covered by the scope of the release set forth at Paragraph
5.2 of the Master Settlement Agreement, and thus would be duplicative or
cumulative to the consideration that the El Paso Settling Parties have provided
to the California Settling Parties under this Settlement Agreement and the
Master Settlement Agreement; and provided further, that the Special Master is
empowered to require specific performance and impose reasonable injunctive
remedies as agreed to by the parties to ensure compliance with the contractual
commitments that are set forth in the Stipulated Judgment.
11.6 The release provisions set forth in Paragraphs 5.2 and 5.3 of the
Master Settlement Agreement, and the other provisions of Section 5 of the Master
Settlement Agreement as appropriate, are incorporated herein by reference, and
the instant Settlement Agreement is subject to said release provisions.
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ARTICLE 12
DISPUTE RESOLUTION
12.1 As more fully discussed in the Offer of Settlement, the Settling
Parties have agreed to an alternative dispute resolution process. Under that
process, compliance with certain of the terms of this Settlement Agreement shall
be enforced by a Special Master, as provided in a Stipulated Judgment that the
Settling Parties will file with a federal district court in California. In part,
the Stipulated Judgment will provide that, to the extent that the Settling
Parties disagree in the future as to whether particular compliance issues are
subject to the jurisdiction of this Commission, the parties agree that such
disputes will be submitted to the Commission for resolution. The Stipulated
Judgment will further state that in the event the Commission does not resolve
such a dispute within 60 days, the dispute will be submitted to the Special
Master for his/her immediate resolution, provided, however, that nothing in the
Stipulated Judgment is intended to deprive the Commission of the ability to
resolve any disputes or issues within its jurisdiction.
ARTICLE 13
TERM
13.1 The term of this Settlement Agreement will be five (5) years from
the Effective Date.
ARTICLE 14
GENERAL PROVISIONS
14.1 In entering this Settlement Agreement, the Settling Parties assume
the risk of any mistake of fact or law. If the Settling Parties, or any of them,
should later discover that any fact they relied upon in entering this Settlement
Agreement is not true, or that
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their understanding of the facts or law was incorrect, none of the Settling
Parties shall be entitled to seek rescission, termination or modification of
this Settlement Agreement on that basis. This Settlement Agreement is intended
to be final and binding upon the Settling Parties regardless of any mistake of
fact or law.
14.2 This Settlement Agreement shall be binding upon and for the
benefit of each of the Settling Parties, and their successors and assigns.
Nothing in this Settlement Agreement shall be construed or interpreted to impart
any rights or obligations to any third party (other than a permitted successor
or assignee bound to this Settlement Agreement).
14.3 Neither the provision of consideration in the form of the mutual
covenants contained herein, nor the performance of any such covenants contained
herein, nor anything contained or incorporated herein shall be deemed, nor shall
the negotiations, execution and performance of this Settlement Agreement
constitute, an admission or concession of liability or wrongdoing on the part of
any Settling Party, or any other form of admission with respect to any matter,
thing or dispute whatsoever.
14.4 Each Settling Party represents and warrants to each of the other
Settling Parties that, subject to this Paragraph: (a) it has the full power and
authority to enter into this Settlement Agreement and to perform all
transactions, duties and obligations set forth herein; (b) it has duly and
validly executed and delivered this Settlement Agreement and the other documents
and agreements provided for herein to be executed and delivered by such Settling
Party; and (c) this Settlement Agreement and the other documents and agreements
provided for herein to be executed and delivered by such Settling Party
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constitute the legal, valid and binding obligations of such Party, enforceable
against such Settling Party in accordance with their respective terms. The CPUC
and the Los Angeles City Council have not yet had an opportunity to conduct the
required votes on whether to approve the Settlement Agreement. Accordingly, this
Settlement Agreement is executed by counsel for the CPUC and the City of Los
Angeles subject to such approval. Not later than five (5) business days after
each such vote is taken, counsel for each of these Parties shall certify the
results of their respective votes in writing to each of the other Parties to the
Joint Settlement Agreement, and will notify the Commission in writing.
14.5 This Settlement Agreement, the Stipulated Judgment, and the Master
Settlement Agreement, along with the attachments thereto, constitute the entire
agreement between the Parties as to the issues specified herein and supersede
and replace all prior negotiations or proposed agreements, written or oral, with
respect to the subject matter thereof; provided, however, that nothing in this
Settlement Agreement shall be deemed to supersede, modify or replace the
provisions of the 1996 Settlement except with respect to those clarifying
revisions set forth in Article 8 relating to the recall of Block II capacity.
14.6 This Settlement Agreement may not be altered, amended, modified or
otherwise changed in any respect whatsoever except by writing duly executed by
an authorized representative of each of the Settling Parties.
14.7 The language of this Settlement Agreement shall be construed as a
whole, and not strictly for or against any Settling Party, regardless of who
drafted or was principally responsible for drafting the Settlement Agreement or
any specific terms or
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conditions hereof. This Settlement Agreement shall be deemed to have been
drafted by all Settling Parties, and no Settling Party shall urge otherwise.
14.8 The descriptive titles and headings of the Articles of this
Settlement Agreement are for reference purposes only. The titles and headings
are not to be construed or taken into account in interpreting any term or
provision of the Settlement Agreement and do not qualify, modify, or explain the
meaning or constriction of any term or provision of the Settlement Agreement.
ARTICLE 15
RESERVATIONS
15.1 This Settlement Agreement is entered into pursuant to Rule 602 of
the Commission's Rules of Practice and Procedure, 18 C.F.R. Section 385.602
(2002). Unless and until the provisions of the Settlement Agreement become
effective pursuant to its terms, the Settlement Agreement, the Offer of
Settlement, the Stipulated Judgment, the Explanatory Statement, and the tariff
sheets attached hereto shall be privileged and of no effect and shall not be
admissible in any proceeding before any court or regulatory body.
15.2 This Settlement Agreement is made upon the express understanding
that it constitutes a negotiated settlement of the subject proceeding. Neither
the Commission nor any of the Settling Parties shall be deemed to have approved,
accepted or otherwise consented to any legal principle, policy, methodology,
tariff modification or interpretation, or contract modification or
interpretation, except as expressly provided in this Settlement Agreement.
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/s/ Daniel F. Collins
--------------------------------
Kenneth M. Minesinger Daniel F. Collins
Lois K. Perrin Senior Vice President & Deputy
Christopher Cobb General Counsel
MORRISON & FORESTER, L.L.P. EL PASO CORPORATION
2000 Pennsylvania Avenue, N.W. 555 11th Street, N.W.
Washington, D.C. Suite 750
(202) 887-1500 Washington, D.C. 20004
(202) 637-3500
Judy A. Heineman
Vice President and General Counsel
EL PASO NATURAL GAS COMPANY
2 North Nevada Avenue
Colorado Springs, CO 80903
(719) 473-2300
Attorneys for
EL PASO NATURAL GAS COMPANY
/s/ Gregory W. Jones
--------------------------------
William S. Scherman Gregory W. Jones
Douglas G. Robinson Vice President and
David J. Hill Associate General Counsel
SKADDEN, ARPS, SLATE, EL PASO CORPORATION
MEAGHER & FLOM, L.L.P. 1001 Louisiana Street
1440 New York Avenue, N.W. Houston, TX 77002
Washington, D.C. 20005 (713) 420-4431
(202) 371-7060
Attorneys for
EL PASO MERCHANT ENERGY, L.P.
22
/s/ Stephen E. Pickett
--------------------------------
Kevin J. Lipson Stephen E. Pickett
Douglas L. Beresford Douglas Kent Porter
J. Patrick Nevins SOUTHERN CALIFORNIA EDISON COMPANY
HOGAN & HARTSON L.L.P. P.O. Box 800
555 13th Street, N.W. 2244 Walnut Grove Avenue
Washington, D.C. 20004 Rosemead, CA 91770
(202) 637-5614 (626) 302-3694
Attorneys for
SOUTHERN CALIFORNIA EDISON COMPANY
/s/ Joshua Bar-Lev
--------------------------------
Jon B. Streeter Joshua Bar-Lev
KEKER & VAN NEST L.L.P. Charles Middlekauff
710 Sansome Street PACIFIC GAS AND ELECTRIC COMPANY
San Francisco, CA 94111 P.O. Box 7442
(415) 391-5400 77 Beale Street, 30th Floor
San Francisco, CA 94120
(415) 973-2776
Attorneys for
PACIFIC GAS AND ELECTRIC COMPANY
/s/ Harvey Y. Morris
--------------------------------
Harvey Y. Morris
PUBLIC UTILITIES COMMISSION OF
THE STATE OF CALIFORNIA
505 Van Ness Avenue
San Francisco, CA 94102
(415) 703-1086
(Subject to formal approval by the
Public Utilities Commission of the
State of California)
Attorney for the
PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA
23
/s/ Rockard J. Delgadillo
------------------------------------
Regina Y. Speed-Bost Rockard J. Delgadillo
SULLIVAN & WORCESTER LLP City Attorney
1666 K Street, N.W. Terree Bowers
Suite 700 Executive Assistant
Washington, D.C. 20006 Mark L. Brown
Telephone: (202) 775-6816 Senior Assistant Attorney
Edward J. Perez
Assistant City Attorney
CITY OF LOS ANGELES, CALIFORNIA
1800 City Hall East
Los Angeles, CA 90012
Telephone: (213) 485-3160
(Subject to formal approval by the
Los Angeles City Council)
Attorneys for the
CITY OF LOS ANGELES, CALIFORNIA
24
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
THE PEOPLE OF THE STATE OF |
CALIFORNIA ex rel. BILL LOCKYER, |
ATTORNEY GENERAL OF THE STATE | CIVIL ACTION NO.
OF CALIFORNIA and THE STATE OF | ------------------
CALIFORNIA, PACIFIC GAS AND |
ELECTRIC COMPANY, AND SOUTHERN |
CALIFORNIA EDISON COMPANY, |
|
| [PRO FORMA] STIPULATION TO
Plaintiffs, | ENTRY OF JUDGMENT(1)
|
|
v. |
|
EL PASO NATURAL GAS COMPANY, |
EL PASO MERCHANT ENERGY COMPANY, |
EL PASO MERCHANT ENERGY - GAS, |
L.P., |
|
Defendants. |
|
- --------------------------------------
STIPULATION
The parties to these actions, plaintiffs, the People of the State of
California, ex rel. Bill Lockyer, Attorney General of the State of California
and the State of the California ("State of
- --------
(1) [Note: Prior to its actual filing, the Stipulated Judgment will be conformed
to the filing requirements of the United States District Court for the Central
District of California and the Federal Rules of Civil Procedure to ensure that
judgment is entered in accordance with the Parties' agreement. No changes to the
substantive commitments of the Parties will be made.]
1
California"),(2) Pacific Gas and Electric Company ("PG&E"), and Southern
California Edison Company ("Edison") (plaintiffs, and the CPUC, jointly referred
to herein as the "California Parties"), and defendants El Paso Merchant
Energy-Gas, L.P., El Paso Merchant Energy Company (together "Merchant"), and El
Paso Natural Gas Company ("EPNG") (defendants collectively referred to herein as
"El Paso") (California Parties and defendants collectively "Settling Parties"),
having agreed to a settlement of these actions on the terms as set forth in this
Stipulation to Entry of Judgment ("Stipulation"), hereby stipulate to the
following:
1. Entry of Judgment Under Federal Rule of Civil Procedure 58
Without any admission by El Paso of liability or fault, the Settling
Parties have entered into this Stipulation with the intent to fully and finally
compromise and settle all of plaintiffs' claims. In consideration of covenants
made in this Stipulation, the Settling Parties respectfully request that the
Court enter judgment in accordance with the terms of this Stipulation under
Federal Rule of Civil Procedure 58. For the purpose of enforcing the Settling
Parties' compliance with the Stipulated Judgment during the five (5) year period
following the effective date of the Stipulated Judgment, the Court shall retain
jurisdiction over the consolidated actions during said period. The Court's
jurisdiction shall terminate at the end of that period.
In addition to the filing of this Stipulation in this Court, filings
have been made in California Superior Court, and at the Federal Energy
Regulatory Commission ("FERC"), to resolve all claims covered by the release
provisions contained in those filings. The FERC settlement filing shall resolve
all claims and issues raised by the California Parties in the proceeding at
Docket No. RP00-241-000 and all subdockets, and all related claims and issues
raised in a number of other proceedings. The California Superior Court filing
("Master Settlement Agreement") shall resolve, inter alia, the class action
litigation and other cases pending in California Superior Courts in San Diego,
Los Angeles and San Francisco, and in Nevada.
Importantly, the effectiveness of this Stipulated Judgment shall be
contingent upon the
- --------
(2) It is stipulated that both the Attorney General of the State of California
and the Public Utilities Commission of the State of California ("CPUC") will
concurrently have the State of California's rights and obligations under this
Stipulated Judgment.
2
approval and effectiveness of the settlements filed with the California Superior
Court and at the FERC, and the five year term of the Stipulated Judgment shall
not commence until that time. This Stipulation shall become void and the
obligations of the Settling Parties thereunder will not arise if either of the
settlements filed with the California Superior Court and at the FERC do not
become effective in accordance with their terms. Accordingly, the Settling
Parties respectfully request that the Court enter this Stipulated Judgment now,
but defer its effective date until such time as the Settling Parties jointly
inform the Court that it should be implemented.
In addition, in the event that this Stipulation is not approved as
submitted and does not become effective as requested by the Settling Parties, or
becomes void, then the Settling Parties agree that: (1) it cannot be used in any
proceeding for any purpose; (2) El Paso retains and specifically reserves the
right to, within a reasonable time, file an answer and any other pleadings in
response to the plaintiffs' complaints (including dispositive motions) and/or
assert all applicable affirmative defenses and/or counter-claims against the
plaintiffs; and, (3) the plaintiffs retain and specifically reserve the right to
amend their complaints.
2. Order of Reference Under Federal Rule of Civil Procedure 53
The Settling Parties respectfully request that the Court approve a
Special Master in these actions under Federal Rule of Civil Procedure 53, for a
term of five (5) years, commencing upon the effective date of this Stipulation.
APPOINTMENT AND REMOVAL OF THE SPECIAL MASTER.
The Settling Parties shall use their best efforts to agree upon a
mutually acceptable Special Master within ten business days after the approval
of the Stipulation. If the Settling Parties are unable to agree to a Special
Master, the Settling Parties shall nominate a list of qualified, experienced,
neutral individuals with no conflicts of interest to be Special Master. The
nomination list shall be submitted to the Court no later than twenty days after
approval of the Stipulation. "No conflicts of interest," for purposes of Special
Master selection under this Stipulation, shall mean that the nominated
individual has no present employment, consulting or other professional
affiliation with any of the Settling Parties, and has no financial interest in
any of the corporate entities among the
3
Settling Parties. The nomination and selection procedure shall take place as
follows: (i) the California Parties and the El Paso shall simultaneously
exchange lists of five candidates each; (ii) the California Parties and the El
Paso shall each have three peremptory challenges; (iii) any name or names common
to both the California Parties' list and the El Paso's list shall be exempt from
peremptory challenges, (iv) within 48 hours of the initial exchange of names,
the California Parties and the El Paso shall simultaneously exercise their
peremptory challenges, (v) the remaining list of candidates, after exercise of
peremptory challenges, or the original list if no peremptory challenges have
been exercised, shall be submitted to the Court no later than twenty days after
approval of the Stipulation, (vi) the Settling Parties shall have the right to
address the qualifications of the remaining candidates before the Court prior to
the Court's selection, and (vii) the Special Master shall be selected by the
Court from the list of remaining candidates as soon as possible after it is
submitted. The Special Master shall have no authority to act until after the
Effective Date of the Master Settlement Agreement. A Special Master appointed by
the Court is subject to removal for bias, fraud, corruption or incapacity, but
only upon the standards that would apply to disqualification of a Federal
judicial officer, only if a motion for removal is brought expeditiously to the
Court after the moving Settling Party becomes aware of or should have become
aware of grounds for it, and subject to the proviso that, unless otherwise
directed by the Court, filing of a motion for removal shall not have the effect
of inhibiting, suspending or delaying any proceedings before the Special Master.
If during the five-year settlement period, the Special Master is removed, or if
the Special Master notifies the Settling Parties that he/she is unwilling or
unable to continue to serve, the position of Special Master shall be deemed
vacant upon the date the removal order issues of notice of unwillingness or
inability to serve. To fill a vacancy, the Settling Parties shall follow the
same procedures set forth above for initial selection, commencing from the date
of vacancy.
ASSISTANCE TO THE SPECIAL MASTER.
Subject to the agreement of the Settling Parties, the Special Master
may hire additional, qualified individuals as is reasonable and necessary on an
advisory basis to assist him/her. The Special Master shall notify the Settling
Parties of the need for assistance at least ten (10) business days prior to
obtaining assistance.
4
PAYMENT OF THE SPECIAL MASTER.
El Paso shall pay the reasonable fees and expenses associated with the
Special Master, as fixed by the Court pursuant to Federal Rule of Civil
Procedure 53(a). Each Settling Party, however, will bear the expense associated
with its participation in any proceedings before the Special Master or the Court
(including, but not limited to, its own attorneys' fees and costs of witnesses).
AUTHORITY OF THE SPECIAL MASTER.
The Settling Parties intend for the Special Master to have authority to
monitor and enforce the following commitments under the provisions of the Joint
Settlement Agreement attached hereto as Appendix A,(3) subject to the
acknowledged principle that the Special Master shall have no jurisdiction over
matters within FERC's jurisdiction:
o EPNG's commitment, as provided more fully in Article 5, Paragraph
5.1 of the Joint Settlement Agreement (and subject to the conditions
set forth in Article 5, Paragraphs 5.1.1, 5.1.2, and 5.1.3), to make
3290 MMcf/day of firm primary capacity available to its California
delivery points, and its commitment, as provided more fully in
Article 5, Paragraph 5.3, not to add new incremental load to its
system that would prevent it from making 3290 MMcf/day available;
provided, however, that EPNG will not be deemed to have violated its
obligations in Article 5 of the Joint Settlement Agreement if it is
unable to make available or schedule 3290 MMcf/day due to, for the
duration of, and to the extent of, events and factors beyond its
control, including but not limited to the events and factors listed
in Article 5, Paragraph 5.2.
o EPNG's commitments, as provided more fully in Article 6, Paragraph
6.2 of the Joint Settlement Agreement: (1) to construct its Power-Up
Project on a phased schedule with in-service dates as proposed in
its certificate application at Docket No. CP03-1-000,
- --------
(3) To the extent that there is any ambiguity and/or inconsistency between the
provisions summarized below and the actual language of the Joint Settlement
Agreement, the Settling Parties hereby agree that the language of the Joint
Settlement Agreement shall control. The Joint Settlement Agreement is identical
to the settlement that has been filed at the FERC in resolution of, inter alia,
FERC Docket No. RP00-241-000 and all subdockets.
5
assuming EPNG receives the necessary environmental and regulatory
approvals, and (2) to use all commercially reasonable efforts to
obtain all approvals on a timely basis necessary to meet the
above-referenced schedule.
o EPNG's commitments, as provided more fully in Article 7, Paragraph
7.1, and Article 8, Paragraph 8.2 of the Joint Settlement Agreement,
to obtain the tariff authority outlined therein.
o EPNG's commitment, as provided more fully in Article 7, Paragraph
7.1 of the Joint Settlement Agreement, to notify the California
Parties promptly upon agreeing to a shipper's request to move its
primary delivery point from a California point to a non-California
point.
o El Paso's commitments, as provided more fully in Article 9 of the
Joint Settlement Agreement, that: (1) no affiliate of EPNG will
enter into new contractual commitments to hold capacity on the EPNG
system for the term of the agreement, subject to certain exceptions
specified therein; and (2) Merchant shall not unreasonably delay
posting unused capacity for release in accordance with the terms of
EPNG's tariff and upon terms and conditions comparable to
contemporaneous capacity release transactions on EPNG's system. As
of the date of the Joint Settlement Agreement, existing capacity
held by Merchant is: (1) approximately 37 MMcf/day of firm capacity
which it acquired directly from EPNG and that has primary California
delivery rights; (2) approximately 156 MMcf/day of primary firm
capacity to Ehrenberg which it acquired from Southern California Gas
Company under a temporary release that expires on August 31, 2006;
and (3) approximately 92 MMcf/day of capacity on the Willcox lateral
that does not include any mainline rights.
In addition to the foregoing commitments, the Settling Parties intend
for the Special Master to have authority to enforce the following:
o EXPANSION COSTS: The California Parties' commit, as set forth more
fully in Article 6, Paragraph 6.4 of the Joint Settlement Agreement,
not to object to the recovery in EPNG's
6
rates in its next rate case of the costs reasonably incurred by EPNG
in connection with the increase of physical California delivery
capacity from 3290 MMcf/day to 3840 MMcf/day.
o COST ALLOCATION: EPNG agrees that, in its next FERC rate case, its
proposed rates will be based on a miles of haul approach for all
costs, including its Line 2000 Conversion and Power-Up costs,
consistent with the position advocated by Edison in the rate hearing
at Docket No. RP95-363-002, an approach that is representative of
the actual flows EPNG has experienced on its system in the recent
past. In EPNG's next rate case, the California Parties shall not be
prohibited from objecting to the allocation of costs reasonably
incurred by EPNG associated with the construction of the Power-Up
Project (Docket No. CP03-1-000) and the Line 2000 Conversion Project
(Docket No. CP00-422-000); provided, that in such rate case, the
California Parties shall not propose a cost allocation, rate design
or other methodology or proposal that would preclude EPNG from
recovering its reasonably incurred costs, including those costs
associated with the construction of the Power-Up Project (Docket No.
CP03-1-000) and the Line 2000 Conversion Project (Docket No.
CP00-422-000).
o REQUESTS FOR DATA: At any time that a majority of the California
Parties requests data to address compliance issues arising out of
the implementation of the Joint Settlement Agreement, including, but
not limited to, any computer simulations or models of the EPNG
system, EPNG shall comply with the request within seven business
days by providing information that it is lawfully able to provide
and that is not competitively sensitive for its other shippers;
provided, however, that the California Parties may request data not
more than four times per year; and provided, further, that all such
requests must be reasonable and not overly burdensome.
Prior to initiating proceedings with the Special Master, a Settling
Party must make a good faith effort to resolve the issue with the opposing
Settling Party. Specifically, any Settling Party seeking to initiate proceedings
before the Special Master shall first give the other Settling Party
7
written notice thereof, and may also provide a copy of such notice to the
Special Master. Such notice must: describe briefly the nature of the dispute;
describe briefly the notifying Settling Party's claim or position in connection
with the dispute; and identify an individual with authority to settle the
dispute on behalf of the notifying Settling Party.
Within ten (10) business days after service of any such notice, the
receiving Settling Party will give the other Settling Party a written reply (a
copy of which may also be provided to the Special Master) which describes
briefly the receiving Settling Party's responses and positions in connection
with the dispute and identifies an individual with the authority to settle the
dispute on behalf of the receiving Settling Party.
The individuals identified in the Settling Party's respective notices
will promptly make such investigation of the dispute as they deem appropriate.
Promptly and in no event later than fifteen (15) business days after the date of
the service of the initiating Settling Party's notice, such individuals will
commence discussions concerning resolution of the dispute, preferably in person.
If the dispute has not been resolved within ten (10) business days after
commencement of such discussions, then either Settling Party may submit the
dispute to the Special Master by filing a motion with the Special Master and
serving all of the Settling Parties.(4) Such motion shall state that it is a
notice initiating the Special Master procedures; identify the provisions of the
Stipulation that are the subject matter of the dispute; describe briefly the
nature of the dispute; describe briefly the notifying Settling Party's claim or
position in connection with the dispute; and provide adequate information
regarding the facts underlying the dispute to allow the other Settling Party to
respond.
The Special Master shall proceed promptly to set a briefing schedule,
and, upon due notice and opportunity for hearing, shall make a report under
Federal Rule of Civil Procedure 53(e). Any Report of the Special Master shall be
subject to review by this Court upon filing of objections thereto within
fourteen (14) days after service of the Report. Absent timely filing of
objections, a Report of the Special Master shall become final.
- --------
(4) In the event of a claim of irreparable harm, the Settling Parties agree to
immediately attempt to resolve the issue, and, if the parties are unable to
resolve the issue, the party claiming irreparable harm can seek immediate,
temporary injunctive relief before the Special Master pending a resolution of
the issue based upon a schedule to be established by the Special Master. The
other Parties shall have the right to oppose such request for temporary
injunctive relief.
8
The Special Master shall have all powers granted by Federal Rule of
Civil Procedure 53(c); provided, that the sole remedy the Special Master shall
be authorized to impose for breaches of the Settling Parties' commitments
identified herein shall be specific performance, and other reasonable injunctive
remedies to ensure compliance with such commitments. In addition, the Settling
Parties agree that the Special Master shall be the exclusive vehicle for
resolution of the commitments set forth above of the Settling Parties, without
prejudice to other claims or remedies that the Settling Parties may have in
other forums other than any claim or remedy for a breach or breaches of the
Stipulation.
To the extent that there is a dispute as to whether any matter
submitted to the Special Master is subject to the jurisdiction of the FERC, that
jurisdictional dispute shall be submitted to the FERC for resolution. The motion
before the Special Master giving rise to the jurisdictional dispute shall be
held in abeyance for 60 days pending the FERC's resolution of the matter, and
all deadlines relating to said motion before the Special Master shall be tolled.
Any Settling Party may appeal the FERC's determination of a jurisdictional
dispute concerning the Special Master to the United States Court of Appeals for
the District of Columbia Circuit ("D.C. Circuit").
1. Should the FERC and the D.C. Circuit determine within 60 days that
the FERC does not have jurisdiction, proceedings before the Special Master shall
resume;
2. Should the FERC determine within 60 days that it does not have
jurisdiction, but no appeal is taken, proceedings before the Special Master
shall resume;
3. Should the FERC determine that it does not have jurisdiction within
the 60 day period, but the D.C. Circuit has not had the opportunity to review
the FERC's determination, the proceedings before the Special Master shall
resume, subject to the outcome of the Court's review of the jurisdictional
issue;
4. In the event that FERC does not resolve the jurisdictional dispute
within 60 days, proceedings before the Special Master shall resume, provided,
however, that the resumption of the
9
Special Master proceedings shall not act to divest the FERC or the D.C. Circuit
of the authority to decide the jurisdictional dispute and the Special Master's
proceeding shall be subject to the outcome of the determination of the FERC or
the D.C. Circuit.
5. El Paso shall comply with orders issued by the Special Master after
proceedings before him or her resume, which orders will be subject to the
outcome of any FERC or D.C. Circuit proceedings.
ADMISSIBILITY IN SUBSEQUENT PROCEEDINGS.
Any findings, recommendations or decisions by the Special Master and
written products of the Special Master are not prohibited from submission or
admission in any subsequent proceeding before the Special Master under the terms
of this Stipulation. The Settling Parties further agree that they may use the
Special Master's (or, as the case may be, the District Court's) findings,
recommendations, decisions and written products (hereafter "Findings") as
evidence in FERC proceedings, but also agree that such Findings do not have any
preclusive effect or constitute binding precedent in such proceedings, and that
none of the Settling Parties will argue otherwise.
ATTORNEYS' FEES UNDER THE MASTER SETTLEMENT AGREEMENT
In addition to the remedial authority set forth herein, the parties
agree that the United States District Court or the Special Master shall have
authority to determine, by application or by stipulation, the amount of
attorneys' fees and costs to which the office of the Attorney General of the
State of California, the Public Utilities Commission of the State of California,
the California Department of Water Resources, the City of Los Angeles, Pacific
Gas and Electric Company, and Southern California Edison Company, respectively,
may claim out of the total settlement consideration paid by El Paso Corporation,
El Paso Natural Gas Company, and El Paso Merchant Energy, L.P. (collectively "El
Paso Parties") under the Master Settlement Agreement on which this Stipulated
Judgment is based. Any award of fees and costs hereunder shall not increase the
amount of consideration paid by the El Paso Parties under the Master Settlement
Agreement but shall simply be used as a basis for allocating the portions of
said consideration that are payable as fees and costs under the Master
Settlement Agreement to the office of the Attorney General of the State of
10
California, the Public Utilities Commission of the State of California, the
California Department of Water Resources, the City of Los Angeles, Pacific Gas
and Electric Company, and Southern California Edison Company, respectively.
Dated: , 2003 Respectfully submitted,
-----------------
Attorney General of the State of
California
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
Public Utilities Commission of the
State of California
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
(Subject to formal approval by the
Public Utilities Commission of the
State of California)
Pacific Gas and Electric Company
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
Southern California Edison Company
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
El Paso Natural Gas Company
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
11
El Paso Merchant Energy-Gas, L.P.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
El Paso Merchant Energy Company
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Date:
--------------------------------
The Settling Parties to the above-captioned action have informed the
Court that they have reached a settlement to fully and finally resolve all
matters relating to the above-captioned action without trial or adjudication of
any issue of fact or law, and without the settlement in this matter constituting
any evidence against or admission by any Settling Party regarding any issue of
fact or law.
Good cause appearing therefor, and by the agreement of the Settling
Parties, IT IS SO ORDERED.
DATED: , 2003
------------------
-------------------------------------
United States District Court Judge
12
El PasoNatural Gas Company
FERC Gas Tariff Tenth Revised Sheet No. 202B
Pro Forma Second Revised Volume No. 1A Superseding
Second Revised Sheet No. 202B
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
1. DEFINITIONS (Continued)
1.13 The term "business day" means Monday through Friday, excluding Federal
Banking Holidays for transactions in the United States.
1.14 The term "fuel" means the quantity of gas determined to be consumed
during the transportation of gas, including fuel and gas lost and
unaccounted for.
1.15 Samalayuca Lateral Line Facilities - Those facilities constructed
pursuant to the Commission's authorization at Docket No. CP93-252-000,
et al. Such facilities extend from the Hueco Compressor Station to the
International Border.
1.16 Out-of-Zone Daily Reservation Charge - For alternate receipts or
deliveries, Shippers shall pay an Out-of-Zone Daily Reservation Charge
to compensate El Paso for service using points not provided for in the
TSA. The Out-of-Zone Daily Reservation Charge shall be equal to the
higher of the Reservation Rate provided in the TSA, stated on a daily
basis, or the maximum rate applicable to the receipt and delivery zone
for which service is provided, unless El Paso agrees to discount such
rate(s).
1.17 Western Energy Settlement, for purposes of this tariff, means the
settlement between and among El Paso Natural Gas Company, El Paso
Merchant Energy Company, El Paso Merchant Energy-Gas, L.P., the Public
Utilities Commission of the State of California, Pacific Gas and
Electric Company, Southern California Edison Company, and the City of
Los Angeles, and approved by the Federal Energy Regulatory Commission
in Docket No. RP00-241.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Fourth Revised Sheet No. 218
Pro Forma Second Revised Volume No. 1A Superseding
Second Revised Sheet No. 218
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
4.5 Access to Receipt Points
(a) Effective January 1, 1998, for purposes of applying Sections 4.1
and 4.2, firm capacity having primary access to receipt points
shall consist of the following: (i) Shippers holding firm
Transportation Service Agreements on December 31, 1995 ("12-31-95
Shippers") only to the extent of the capacity actually covered by
such agreements from time to time; (ii) Shippers who acquire
Block I capacity from the Permian and Anadarko basins for the
maximum tariff rate as described in Section 4.5(b)(i); (iii)
Shippers who acquire Block II and Block III capacity as described
in Section 4.5(b)(ii) and (iii); and (iv) Shippers resubscribing
to capacity pursuant to Section 4.5(b)(iii) below.
(b) Beginning January 1, 1998, access of turned-back capacity to
system receipt points shall be administered as follows:
(i) Block I - A block of 500 MMcf/d of turned-back capacity
shall be given alternate receipt point access rights to all
system receipt points; provided, however, capacity sold from
Block I for the maximum tariff rate set forth in Rate
Schedule FT-1 shall have primary receipt point access rights
to system receipt points in the Permian and Anadarko Basins.
(ii) Block II - A block of 614 MMcf/d of turned-back capacity
shall be designated for primary point deliveries to TOPOCK
for PG&E or shipper(s) serving a market in PG&E's service
territory (collectively "Block II Shippers") and shall have
primary access rights to all system receipt points.
For the period January 1, 1998 through the effective date of
the Western Energy Settlement in Docket No. RP00-241, et
al., El Paso may market available Block II capacity to other
delivery points subject to recall by El Paso for Block II
Shipper(s) as follows: 350 MMcf/d within 48 hours (any
time), 150 MMcf/d within one month (72 hours prior to the
first of the month), and 114 MMcf/d within three months (72
hours prior to the first of the month); provided, however,
that to the extent Block II capacity has not been
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Third Revised Sheet No. 219
Pro Forma Second Revised Volume No. 1A Superseding
First Revised Sheet No. 219
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
4.5 Access to Receipt Points (Continued)
marketed, Block II Shipper(s) must acquire such unmarketed
capacity before requesting El Paso to recall capacity from
Block II. El Paso shall recall Block II capacity marketed to
other delivery points if Block II Shipper(s) requesting the
recall at least match the rate in the contract covering the
capacity to be recalled and subscribe such capacity for a
term of longer than one month. El Paso shall recall capacity
for terms of one month or less if Block II Shipper(s) agree
to pay the maximum tariff rate set forth in Rate Schedule
FT-1 for the capacity. Capacity recall shall comply with the
provisions of Section 28.14 of this Tariff. A Shipper may
elect to purchase capacity from Block III below to access
PG&E's service territory regardless of the availability of
Block II capacity. Beginning with the effective date of the
Western Energy Settlement in Docket No. RP00-241, et al.,
through December 31, 2005, the Block II recall provisions
detailed in Section 4.10 of the General Terms and Conditions
of this Tariff shall apply.
(iii) Block III - A block of 500 MMcf/d of turned-back capacity
shall have primary access rights to all system receipt
points. The capacity currently held by 12-31-95 Shippers,
excluding the capacity shown in Section 25.1 of this Tariff,
shall be added to Block III if such Shippers terminate their
firm agreements or reduce their Billing Determinants or
Contract Demand. Such terminating Shippers may resubscribe,
for a volume up to 53.7% of such Shippers' Docket No.
RP95-363-000 Settlement Billing Determinants or Contract
Demand, firm capacity having primary system receipt point
access for delivery points stated in the terminated
Transportation Service Agreement; provided, however, that
such Shippers may also acquire available capacity in this or
other blocks.
(c) If PEMEX Gas y Petroquimica Basica does not elect to exercise its
step down or contract reduction/termination rights as listed in
Section 25.1(a)(iii), Blocks I and III shall each be reduced
equally.
(d) Effective January 1, 1998, Shippers acquiring released firm
California capacity may, subject to Section 28.25 (2) of El Paso's
Volume No. 1-A Tariff, change the primary delivery point to TOPOCK
for deliveries into PG&E's service territory. This capacity shall
maintain its primary delivery point status for purposes of supply
basin receipt point access.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Original Sheet No. 219F
Pro Forma Second Revised Volume No. 1A
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
4.10 Block II Recall Provisions to be in effect from the effective date of
the Western Energy Settlement through December 31, 2005. The Block II
capacity that is subject to recall under these procedures is defined in
Section 4.5(b)(ii) of this Tariff and consists of 614 MMcf/day of
turned-back capacity.
(a) Conditions Precedent to Effectuating a Recall
(i) The Shipper requesting a recall of Block II capacity
must enter into a new firm Transportation Service
Agreement ("TSA") with El Paso for unsubscribed Block
II capacity up to the volume of capacity required by
such Shipper before El Paso will effectuate a recall
of subscribed Block II capacity. The term of the TSA
will be the term specified for the recall by the
Shipper requesting the recall.
(ii) On the day the recall becomes effective, the Shipper
requesting the recall must attempt to nominate all
Block II capacity it had under contract prior to the
effective date of the recall.
(b) Posting of Block II Capacity Information - El Paso will make
available on its website, at the conclusion of each scheduling
cycle described in Section 4.1 of this Tariff, information
identifying the Block II capacity contract holders, their
rates, and the volume of gas that each has scheduled to a
"non-PG&E TOPOCK" Delivery Point during that cycle. The
posting shall appear in the "Informational Postings, Capacity"
section of the website under a new sub-section entitled "Block
II Capacity".
(c) Notice Requirements for Block II Recall
(i) The first 350 MMcf/d of Block II capacity is subject
to recall upon 48 hours notice given at any time.
(ii) The next 150 MMcf/d of Block II capacity is subject to
recall within one month upon notice given not less
than 72 hours prior to the first of the month in which
the recall will be effectuated.
(iii) The final 114 MMcf/d of Block II capacity is subject
to recall within three months upon notice given not
less than 72 hours prior to the first of the month in
which the recall will be effectuated.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Original Sheet No. 219G
Pro Forma Second Revised Volume No. 1A
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
Section 4.10 (continued)
(d) Block II Recall Request Requirement - El Paso will process a request
for recall only upon receipt of a written request from a party
desiring to serve a market in PG&E's service territory. Such written
request can be received at the designated site by regular mail, fax or
electronic mail. The written request must include:
(i) The volume requested for recall.
(ii) The desired term including the beginning and ending date of such
recall.
(e) Determining the Sequence of Block II Capacity Subject to Recall - Upon
receipt by El Paso of a valid written request to recall Block II
capacity, El Paso will first notify Shipper if there is any
unsubscribed capacity that can serve the Shipper's need as required in
Section 4.10(a)(i) of this Tariff. If the request can not be satisfied
in total by the purchase of unsubscribed capacity, any Block II
capacity that has been marketed to a non-PG&E Topock Delivery Point,
either on a single primary delivery point or a dual primary delivery
point basis, is subject to recall except during the time such capacity
is being used to serve markets in PG&E's service territory. El Paso
will recall capacity from the following categories according to the
following sequence:
(i) Unused (i.e., not scheduled) capacity under any Block II
contracts with primary delivery point rights, either single or
dual, to non-PG&E Topock Delivery Points. The recall request
will be filled on a pro-rata basis from all Shippers meeting
these criteria.
(ii) Used (i.e., scheduled) capacity under any Block II Topock
contracts where the quantity scheduled is to a non-PG&E
alternate Delivery Point and where the single primary Delivery
Point under the contract is to PG&E Topock. The recall request
will be filled on a pro-rata basis from all Shippers meeting
these criteria.
(iii) Used (i.e., scheduled) capacity under any Block II contracts
other than those falling under Section 4.10(e)(ii) above where
the quantity scheduled is to a non-PG&E Topock Delivery Point.
The recall request will be filled on a pro-rata basis from all
Shippers meeting these criteria.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Original Sheet No. 219H
Pro Forma Second Revised Volume No. 1A
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
Section 4.10 (continued)
(f) Rate to be Paid for Recall of Block II Capacity - For recall
periods of one month or less, the recalling Block II Shipper
agrees to pay the maximum reservation Tariff rate for deliveries
to the California zone. For recall periods of longer than one
month, the rate paid shall be equal to the rate paid by the
Shipper whose capacity is being recalled. When the capacity
being recalled is held by converted Full Requirements
Shipper(s), the rate to be paid by the recalling Shipper shall
be the Effective Unit Rate(s) for capacity for the converted
Full Requirements Shipper(s) as stated in Section 9 of Rate
Schedule FT-1. The Effective Unit Rates displayed in that
Section of the Tariff have been determined by dividing the
annual cost responsibility of each converted Full Requirements
Shipper by the aggregate annual Contract Demand, both as
determined in the Docket No. RP00-336 proceeding. In the event
an extension of the recall period is requested pursuant to
Section 4.10(i), the rate payable during the extension period
shall be the rate paid during the initial recall period.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Original Sheet No. 219I
Pro Forma Second Revised Volume No. 1A
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
Section 4.10 (continued)
(g) Notification of Ability to Fulfill Recall Request - El Paso will
provide a written response to the recalling Block II Shipper
describing whether its request can be fulfilled and specifying the
capacity that is recallable and how the request is being evaluated by
El Paso. El Paso will provide the response to the request on the
following time schedule:
i) For a request received by 10:00 a.m., Pacific Clock Time ("PCT")
on a business day, a response will be provided no later than
3:00 p.m. PCT on the same business day.
(ii) For a request received after 10:00 a.m. PCT on a business day, a
response will be provided by 7:00 a.m. PCT the following
business day.
(iii) For a request received on a weekend or holiday, a response will
be provided by noon PCT on the next business day.
(h) Coordination with the Capacity Release System - After notification to
the recalling Block II Shipper, El Paso will use the capacity release
system described in Section 28.14 of the Tariff to provide notice of
the recall. The recall of Block II capacity will be treated as a
pre-arranged release with no open season requirement. The parties from
whom the capacity is recalled will have their contracts reduced by the
recalled amount through the capacity release system. When the recall
term has expired, the capacity will be returned to the original
holder(s) of the Block II capacity.
(i) Extension of a Recall. (i) For recalls of less than one month,
the term of the recall can be extended by the recalling Shipper
by providing El Paso notice of such request to extend no less
than 48 hours prior to the expiration of the current recall
term. (ii) For recalls with a term of one month or longer, the
term of a recall can be extended by the recalling Shipper by
providing El Paso notice of such request to extend no less than
ten days prior to the expiration of the current recall term.
(j) Block II Re-Recall Rights - The Shipper from whom the capacity
was recalled can re-recall the capacity at the beginning of a
gas day on 24 hours written notice to El Paso by fax or e-mail,
providing the original Shipper is re-recalling the capacity to
serve a market in PG&E's service territory.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff Second Revised Sheet No. 290A
Pro Forma Second Revised Volume No. 1A Superseding
First Revised Sheet No. 290A
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)
20.16 Right-of-First-Refusal (Continued)
(e) In the event there are no competing offers, then the existing
Shipper shall not be entitled to continue to receive
transportation service upon the expiration of its contract except
by agreeing to pay the maximum tariff rate unless El Paso and
such Shipper shall enter into a new firm transportation service
agreement providing otherwise.
20.17 Arbitration - El Paso agrees to include an arbitration provision in
Shipper's Transportation Service Agreement detailing the requirements
of this section if the following conditions are met: (1) if Shipper
is a foreign government, an agency of a foreign government, or an
entity created by them to conduct business and, (2) prior to
execution of such agreement, requests binding arbitration of any
dispute arising under a Transportation Service Agreement not subject
to the Commission's exclusive jurisdiction, Unless the parties agree
otherwise, such arbitration shall be conducted using the Rules of
Arbitration of the International Chamber of Commerce of Paris,
France.
20.18 Dual Primary Delivery Point Rights - Through the five-year term of
the Western Energy Settlement and as provided for in the Western
Energy Settlement, El Paso may sell up to, but no more than, 623
MMcf/d of the 3,290 MMcf/d of capacity committed by the Western
Energy Settlement to California under contracts with dual primary
delivery points, i.e., contracts with both a California primary
delivery point and non-California primary delivery point(s). The
specified contract demand shall apply to the dual primary delivery
points in the aggregate.
(a) Shippers holding TSAs with dual primary points will have sole
discretion to determine which point or points they will nominate
on any given day. (b) Converting Full Requirements Shippers with
dual Delivery Points shall pay the Effective Unit Rate for
deliveries to either point.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company
FERC Gas Tariff First Revised Sheet No. 290B
Pro Forma Second Revised Volume No. 1A
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)
20.18 (Continued)
(c) El Paso will notify Shippers with dual delivery point rights 60
days prior to the expiration of the Western Energy Settlement.
Each affected Shipper must designate one of the dual primary
points as the single delivery point for continued service.
Shipper must notify El Paso of its election within 30 days of El
Paso's notice.
(d) Changes in capacity under this section will not be permitted if
they would adversely affect or diminish the recall rights
associated with Block II Capacity described in Section 4.10 of
the Tariff.
- --------------------------------------------------------------------------------
Issued by: Catherine E. Palazzari, Vice President
Issued on: Effective on:
El Paso Natural Gas Company Tenth Revised Sheet No. 202B
Pro Forma Second Revised Volume No. 1A Eighth Revised Sheet No. 202B
Effective: November 1, 2002
Issued: October 4, 2002
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
1. DEFINITIONS (Continued)
1.13 The term "business day" means Monday through Friday, excluding
Federal Banking Holidays for transactions in the United States.
1.14 The term "fuel" means the quantity of gas determined to be
consumed during the transportation of gas, including fuel and
gas lost and unaccounted for.
1.15 Samalayuca Lateral Line Facilities - Those facilities
constructed pursuant to the Commission's authorization at Docket
No. CP93-252-000, et al. Such facilities extend from the Hueco
Compressor Station to the International Border.
1.16 Out-of-Zone Daily Reservation Charge - For alternate receipts or
deliveries, Shippers shall pay an Out-of-Zone Daily Reservation
Charge to compensate El Paso for service using points not
provided for in the TSA. The Out-of-Zone Daily Reservation
Charge shall be equal to the higher of the Reservation Rate
provided in the TSA, stated on a daily basis, or the maximum
rate applicable to the receipt and delivery zone for which
service is provided, unless El Paso agrees to discount such
rate(s).
1.17 Western Energy Settlement, for purposes of this tariff, means
the settlement between and among El Paso Natural Gas Company, El
Paso Merchant Energy Company, El Paso Merchant Energy-Gas, L.P.,
the Public Utilities Commission of the State of California,
Pacific Gas and Electric Company, Southern California Edison
Company, and the City of Los Angeles, and approved by the
Federal Energy Regulatory Commission in Docket No. RP00-241.
El Paso Natural Gas Company Fourth Revised Sheet No. 218
Pro Forma Second Revised Volume No. 1A Second Revised Sheet No. 218
Effective: July 1, 1997
Issued: June 9, 1997
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
4.5 Access to Receipt Points
(a) Effective January 1, 1998, for purposes of applying
Sections 4.1 and 4.2, firm capacity having primary
access to receipt points shall consist of the
following: (i) Shippers holding firm Transportation
Service Agreements on December 31, 1995 ("12-31-95
Shippers") only to the extent of the capacity actually
covered by such agreements from time to time; (ii)
Shippers who acquire Block I capacity from the Permian
and Anadarko basins for the maximum tariff rate as
described in Section 4.5(b)(i); (iii) Shippers who
acquire Block II and Block III capacity as described in
Section 4.5(b)(ii) and (iii); and (iv) Shippers
resubscribing to capacity pursuant to Section
4.5(b)(iii) below.
(b) Beginning January 1, 1998, access of turned-back
capacity to system receipt points shall be administered
as follows:
(i) Block I - A block of 500 MMcf/d of
turned-back capacity shall be given
alternate receipt point access rights to
all system receipt points; provided,
however, capacity sold from Block I for
the maximum tariff rate set forth in Rate
Schedule FT-1 shall have primary receipt
point access rights to system receipt
points in the Permian and Anadarko Basins.
(ii) Block II - A block of 614 MMcf/d of
turned-back capacity shall be designated
for primary point deliveries to TOPOCK for
PG&E or shipper(s) serving a market in
PG&E's service territory (collectively
"Block II Shippers") and shall have
primary access rights to all system
receipt points.
For the period January 1, 1998 through the
effective date of the Western Energy
Settlement in Docket No. RP00-241, et al.,
El Paso may market available Block II
capacity to other delivery points subject
to recall by El Paso for Block II
Shipper(s) as follows: 350 MMcf/d within
48 hours (any time), 150 MMcf/d within one
month (72 hours prior to the first of the
month), and 114 MMcf/d within three months
(72 hours prior to the first of the
month); provided, however, that to the
extent Block II capacity has not been
El Paso Natural Gas Company Third Revised Sheet No. 219
Pro Forma Second Revised Volume No. 1A First Revised Sheet No. 219
Effective: July 1, 1997
Issued: June 9, 1997
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
4.5 Access to Receipt Points (Continued)
marketed, Block II Shipper(s) must acquire
such unmarketed capacity before requesting
El Paso to recall capacity from Block II.
El Paso shall recall Block II capacity
marketed to other delivery points if Block
II Shipper(s) requesting the recall at
least match the rate in the contract
covering the capacity to be recalled and
subscribe such capacity for a term of
longer than one month. El Paso shall
recall capacity for terms of one month or
less if Block II Shipper(s) agree to pay
the maximum tariff rate set forth in Rate
Schedule FT-1 for the capacity. Capacity
recall shall comply with the provisions of
Section 28.14 of this Tariff. A Shipper
may elect to purchase capacity from Block
III below to access PG&E's service
territory regardless of the availability
of Block II capacity. Beginning with the
effective date of the Western Energy
Settlement in Docket No. RP00-241, et al.,
through December 31, 2005, the Block II
recall provisions detailed in Section 4.10
of the General Terms and Conditions of
this Tariff shall apply.
(iii) Block III - A block of 500 MMcf/d of
turned-back capacity shall have primary
access rights to all system receipt
points. The capacity currently held by
12-31-95 Shippers, excluding the capacity
shown in Section 25.1 of this Tariff,
shall be added to Block III if such
Shippers terminate their firm agreements
or reduce their Billing Determinants or
Contract Demand. Such terminating Shippers
may resubscribe, for a volume up to 53.7%
of such Shippers' Docket No. RP95-363-000
Settlement Billing Determinants or
Contract Demand, firm capacity having
primary system receipt point access for
delivery points stated in the terminated
Transportation Service Agreement;
provided, however, that such Shippers may
also acquire available capacity in this or
other blocks.
(c) If PEMEX Gas y Petroquimica Basica does not elect to
exercise its step down or contract
reduction/termination rights as listed in Section
25.1(a)(iii), Blocks I and III shall each be reduced
equally.
(d) Effective January 1, 1998, Shippers acquiring released
firm California capacity may, subject to Section 28.25
(2) of El Paso's Volume No. 1-A Tariff, change the
primary delivery point to TOPOCK for deliveries into
PG&E's service territory. This capacity shall maintain
its primary delivery point status for purposes of
supply basin receipt point access.
El Paso Natural Gas Company Original Sheet No. 219F
Pro Forma Second Revised Volume No. 1A
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
4.10 Block II Recall Provisions to be in effect from the effective date of
the Western Energy Settlement through December 31, 2005. The Block II
capacity that is subject to recall under these procedures is defined in
Section 4.5(b)(ii) of this Tariff and consists of 614 MMcf/day of
turned-back capacity.
(a) Conditions Precedent to Effectuating a Recall
(i) The Shipper requesting a recall of Block II capacity
must enter into a new firm Transportation Service
Agreement ("TSA") with El Paso for unsubscribed Block
II capacity up to the volume of capacity required by
such Shipper before El Paso will effectuate a recall
of subscribed Block II capacity. The term of the TSA
will be the term specified for the recall by the
Shipper requesting the recall.
(ii) On the day the recall becomes effective, the Shipper
requesting the recall must attempt to nominate all
Block II capacity it had under contract prior to the
effective date of the recall.
(b) Posting of Block II Capacity Information - El Paso will make
available on its website, at the conclusion of each scheduling
cycle described in Section 4.1 of this Tariff, information
identifying the Block II capacity contract holders, their
rates, and the volume of gas that each has scheduled to a
"non-PG&E TOPOCK" Delivery Point during that cycle. The
posting shall appear in the "Informational Postings, Capacity"
section of the website under a new sub-section entitled "Block
II Capacity".
(c) Notice Requirements for Block II Recall
(i) The first 350 MMcf/d of Block II capacity is subject
to recall upon 48 hours notice given at any time.
(ii) The next 150 MMcf/d of Block II capacity is subject to
recall within one month upon notice given not less
than 72 hours prior to the first of the month in which
the recall will be effectuated.
(iii) The final 114 MMcf/d of Block II capacity is subject
to recall within three months upon notice given not
less than 72 hours prior to the first of the month in
which the recall will be effectuated.
El Paso Natural Gas Company Original Sheet No. 219G
Pro Forma Second Revised Volume No. 1A
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
Section 4.10 (continued)
(d) Block II Recall Request Requirement - El Paso will process a
request for recall only upon receipt of a written request from
a party desiring to serve a market in PG&E's service
territory. Such written request can be received at the
designated site by regular mail, fax or electronic mail. The
written request must include:
(i) The volume requested for recall.
(ii) The desired term including the beginning and ending
date of such recall.
(e) Determining the Sequence of Block II Capacity Subject to
Recall - Upon receipt by El Paso of a valid written request to
recall Block II capacity, El Paso will first notify Shipper if
there is any unsubscribed capacity that can serve the
Shipper's need as required in Section 4.10(a)(i) of this
Tariff. If the request can not be satisfied in total by the
purchase of unsubscribed capacity, any Block II capacity that
has been marketed to a non-PG&E Topock Delivery Point, either
on a single primary delivery point or a dual primary delivery
point basis, is subject to recall except during the time such
capacity is being used to serve markets in PG&E's service
territory. El Paso will recall capacity from the following
categories according to the following sequence:
(i) Unused (i.e., not scheduled) capacity under any Block
II contracts with primary delivery point rights,
either single or dual, to non-PG&E Topock Delivery
Points. The recall request will be filled on a
pro-rata basis from all Shippers meeting these
criteria.
(ii) Used (i.e., scheduled) capacity under any Block II
Topock contracts where the quantity scheduled is to a
non-PG&E alternate Delivery Point and where the
single primary Delivery Point under the contract is
to PG&E Topock. The recall request will be filled on
a pro-rata basis from all Shippers meeting these
criteria.
(iii) Used (i.e., scheduled) capacity under any Block II
contracts other than those falling under Section
4.10(e)(ii) above where the quantity scheduled is to
a non-PG&E Topock Delivery Point. The recall request
will be filled on a pro-rata basis from all Shippers
meeting these criteria.
El Paso Natural Gas Company Original Sheet No. 219H
Pro Forma Second Revised Volume No. 1A
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
Section 4.10 (continued)
(f) Rate to be Paid for Recall of Block II Capacity - For recall
periods of one month or less, the recalling Block II Shipper
agrees to pay the maximum reservation Tariff rate for
deliveries to the California zone. For recall periods of
longer than one month, the rate paid shall be equal to the
rate paid by the Shipper whose capacity is being recalled.
When the capacity being recalled is held by converted Full
Requirements Shipper(s), the rate to be paid by the recalling
Shipper shall be the Effective Unit Rate(s) for capacity for
the converted Full Requirements Shipper(s) as stated in
Section 9 of Rate Schedule FT-1. The Effective Unit Rates
displayed in that Section of the Tariff have been determined
by dividing the annual cost responsibility of each converted
Full Requirements Shipper by the aggregate annual Contract
Demand, both as determined in the Docket No. RP00-336
proceeding. In the event an extension of the recall period is
requested pursuant to Section 4.10(i), the rate payable during
the extension period shall be the rate paid during the initial
recall period.
El Paso Natural Gas Company Original Sheet No. 219I
Pro Forma Second Revised Volume No. 1A
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(CONTINUED)
Section 4.10 (continued)
(g) Notification of Ability to Fulfill Recall Request - El Paso
will provide a written response to the recalling Block II
Shipper describing whether its request can be fulfilled and
specifying the capacity that is recallable and how the request
is being evaluated by El Paso. El Paso will provide the
response to the request on the following time schedule:
i) For a request received by 10:00 a.m., Pacific Clock
Time ("PCT") on a business day, a response will be
provided no later than 3:00 p.m. PCT on the same
business day.
(ii) For a request received after 10:00 a.m. PCT on a
business day, a response will be provided by 7:00 a.m.
PCT the following business day.
(iii) For a request received on a weekend or holiday, a
response will be provided by noon PCT on the next
business day.
(h) Coordination with the Capacity Release System - After
notification to the recalling Block II Shipper, El Paso will
use the capacity release system described in Section 28.14 of
the Tariff to provide notice of the recall. The recall of
Block II capacity will be treated as a pre-arranged release
with no open season requirement. The parties from whom the
capacity is recalled will have their contracts reduced by the
recalled amount through the capacity release system. When the
recall term has expired, the capacity will be returned to the
original holder(s) of the Block II capacity.
(i) Extension of a Recall.
(i) For recalls of less than one month, the term of the
recall can be extended by the recalling Shipper by
providing El Paso notice of such request to extend no
less than 48 hours prior to the expiration of the
current recall term.
(ii) For recalls with a term of one month or longer, the
term of a recall can be extended by the recalling
Shipper by providing El Paso notice of such request to
extend no less than ten days prior to the expiration
of the current recall term.
(j) Block II Re-Recall Rights - The Shipper from whom the capacity
was recalled can re-recall the capacity at the beginning of a
gas day on 24 hours written notice to El Paso by fax or
e-mail, providing the original Shipper is re-recalling the
capacity to serve a market in PG&E's service territory.
El Paso Natural Gas Company Second Revised Sheet No. 290A
Pro Forma Second Revised Volume No. 1A First Revised Sheet No. 290A
Effective: April 14, 2002
Issued: March 13, 2002
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)
20.16 Right-of-First-Refusal (Continued)
(e) In the event there are no competing offers, then the
existing Shipper shall not be entitled to continue to
receive transportation service upon the expiration of
its contract except by agreeing to pay the maximum
tariff rate unless El Paso and such Shipper shall enter
into a new firm transportation service agreement
providing otherwise.
20.17 Arbitration - El Paso agrees to include an arbitration provision
in Shipper's Transportation Service Agreement detailing the
requirements of this section if the following conditions are
met: (1) if Shipper is a foreign government, an agency of a
foreign government, or an entity created by them to conduct
business and, (2) prior to execution of such agreement, requests
binding arbitration of any dispute arising under a
Transportation Service Agreement not subject to the Commission's
exclusive jurisdiction, Unless the parties agree otherwise, such
arbitration shall be conducted using the Rules of Arbitration of
the International Chamber of Commerce of Paris, France.
20.18 Dual Primary Delivery Point Rights - Through the five-year term
of the Western Energy Settlement and as provided for in the
Western Energy Settlement, El Paso may sell up to, but no more
than, 623 MMcf/d of the 3,290 MMcf/d of capacity committed by
the Western Energy Settlement to California under contracts with
dual primary delivery points, i.e., contracts with both a
California primary delivery point and non-California primary
delivery point(s). The specified contract demand shall apply to
the dual primary delivery points in the aggregate.
(a) Shippers holding TSAs with dual primary points will
have sole discretion to determine which point or points
they will nominate on any given day.
(b) Converting Full Requirements Shippers with dual
Delivery Points shall pay the Effective Unit Rate for
deliveries to either point.
El Paso Natural Gas Company First Revised Sheet No. 290B
Pro Forma Second Revised Volume No. 1A
Page 1
- --------------------------------------------------------------------------------
TRANSPORTATION GENERAL TERMS AND CONDITIONS
(Continued)
20. OPERATING PROVISIONS FOR FIRM TRANSPORTATION SERVICE (Continued)
20.18 (Continued)
(c) El Paso will notify Shippers with dual delivery point
rights 60 days prior to the expiration of the Western
Energy Settlement. Each affected Shipper must designate
one of the dual primary points as the single delivery
point for continued service. Shipper must notify El
Paso of its election within 30 days of El Paso's
notice.
(d) Changes in capacity under this section will not be
permitted if they would adversely affect or diminish
the recall rights associated with Block II Capacity
described in Section 4.10 of the Tariff.