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PORTIONS OF THIS EXHIBIT IDENTIFIED BY "***" HAVE BEEN DELETED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AND THE FREEDOM OF INFORMATION ACT.
EXHIBIT 10(a)
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION AGREEMENT
THIS AGREEMENT is made and entered into as of this 18th day of
February, 1999 by and between MOBILE GAS SERVICE CORPORATION, an Alabama
corporation, with a mailing address of P. O. Box 2248, Mobile, Alabama 36652,
herein called "Mobile Gas," and ALABAMA POWER COMPANY, an Alabama corporation,
with a mailing address of 600 North 18th Street, Birmingham, Alabama, 35291,
herein called "Customer."
Whereas, Customer desires to use natural gas for the operation of
Customer's proposed electric and steam generation facilities to be located in
Theodore, Alabama (the "Plant"); and
Whereas, Mobile Gas operates a system for the distribution of natural
gas from natural gas transmission pipelines and processing plants and Customer
intends that it will purchase natural gas from third parties ("Customer's
Suppliers") who will deliver such gas to Mobile Gas for redelivery to the Plant.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I - TRANSPORTATION SERVICE
1.1 Mobile Gas shall transport volumes of natural gas up to the "Contract Demand
Volume" of Customer's gas, as defined in Exhibit A which is attached hereto and
made part of this Agreement. Customer will pay Mobile Gas for all natural gas
transported by Mobile Gas to the Plant and agrees to accept and pay for service
subject to the terms and conditions hereof:
1.2 The RATE for such transportation service and the minimum billings
hereunder are as specified in Exhibit A which is attached hereto and
made part of this Agreement. The rate is a special negotiated rate.
1.3 Customer may request that the Contract Demand Volume be increased by
delivering a written request to Mobile Gas for such increase. Mobile Gas may
approve or decline such request in its discretion (such request being deemed to
be declined if Mobile Gas does not approve the request within thirty (30) days
after the date of receipt thereof). In the event Mobile Gas approves such a
request, it may specify an effective date for the requested increase in the
Contract Demand Volume, such date to be not later than 24 months after the
approval date.
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1.4 Except as otherwise specified in this section, Mobile Gas shall be the sole
transporter of natural gas to the Plant during the term of this Agreement for
the Contract Demand Volume. If during the term of this Agreement Mobile Gas, due
to default by Mobile Gas or force majeure affecting Mobile Gas is unable to
deliver adequate volumes, Customer may obtain transportation of gas volumes from
other sources for the duration of such default or force majeure.
ARTICLE II - TERM OF AGREEMENT
2.1 The term of this Agreement shall be ***, beginning on the Commencement Date,
as herein defined, and shall be automatically extended for a period of *** from
each expiration date of such term or any automatic extension thereof unless
either party shall notify the other in writing not less than ninety (90) days
prior to the expiration date, or the expiration of any two year extension of
such expiration date, of its intention to terminate this Agreement.
2.2 The "Commencement Date" shall be the first day of the month following the
earlier of (i) the date Customer first takes redelivery of natural gas from
Mobile Gas at the Point of Redelivery, or (ii) six (6) months from the date of
this Agreement.
2.3 Notwithstanding the provisions of Section 2.1, the provisions of this
Agreement that by their sense and context are applicable to the parties' rights
and obligations under this Agreement prior to the Commencement Date, shall be
effective as of the effective date hereof. The provisions of this Agreement,
that by their sense and context survive the termination or expiration of this
Agreement, shall survive the same.
2.4 This Agreement may only be terminated prior to the expiration of the initial
term or a renewal term hereof, if any, as the case may be:
(a) by Mobile Gas, (i) in accordance with Section 5.3, or (ii)
after occurrence of any other material breach by Customer in
the performance of its obligations hereunder and the
continuance of such breach thirty (30) days after written
notice by Mobile Gas to Customer of such breach and demand by
Mobile Gas that Customer cure same.
(b) by Customer after occurrence of any material breach by
Mobile Gas in the performance of its obligations hereunder and
the continuance of such breach thirty (30) days after written
notice by Customer to Mobile Gas of such breach and demand by
Customer that Mobile Gas cure same. In the event of
termination by either party under this Section 2.4 Customer
shall not owe any minimum bill payments as provided for in
Exhibit A beyond the date of termination.
(c) by Customer if Mobile Gas fails to deliver
nominated gas at the Point of Redelivery for a period
of forty-five (45) consecutive days for any reason,
including the occurrence of force majeure.
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ARTICLE III - QUALITY
3.1 The volumes of natural gas delivered hereunder shall be measured at an
equivalent pressure base of 14.73 pounds per square inch absolute (psia) and an
assumed atmospheric pressure of 14.7 psia, and at a temperature base of 60
degrees Fahrenheit. The volume of natural gas determined hereunder shall be
adjusted to give effect to Boyle's Law in accordance with standard procedure.
3.2 The quality of the gas delivered by Customer's Suppliers to Mobile Gas shall
be pipeline quality, and:
(a) Shall be dehydrated and shall in no event have a water
content in excess of seven (7) pounds of water per million
(1,000,000) cubic feet of gas measured at a pressure base of
14.73 psi and at a temperature base of 60 degrees Fahrenheit,
as determined by dew point or other moisture measuring
equipment in general use in the industry.
(b) Shall not contain more than one (1) grain of hydrogen
sulfide per one hundred (100) cubic feet as determined by
quantitative methods in general use in the industry.
(c) Shall not contain more than twenty (20) grains of total
sulphur, including hydrogen sulfide, per one hundred (100)
cubic feet as determined by quantitative methods in general
use in the industry.
(d) Shall not contain in excess of:
(i) Three percent (3.0%) by volume carbon dioxide.
(ii) Two tenths percent (0.2%) by volume oxygen
(e) Shall be commercially free from dust, gum, gum-forming
constituents or other liquid or solid matter which might
become separate from the gas in the course of transportation
through pipelines.
(f) Shall be commercially free of water and other
objectionable liquids at the temperature and pressure at which
the gas is delivered. (g) Shall contain no less than 800 Btu
per cubic foot nor more than 1200 Btu per cubic feet at
standard temperature and pressure.
ARTICLE IV - POINTS OF DELIVERY AND REDELIVERY
4.1 The Points of Delivery by Customer's Suppliers to Mobile Gas shall be as
specified in Exhibit B. From time to time during the term of this Agreement,
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Customer may change the Primary Point(s) of Delivery hereunder by giving at
least thirty (30) days advance written notice of such change (the "Primary Point
Change"). Mobile Gas shall accept the Primary Point Change as long as sufficient
capacity is available in its Bellingrath Pipeline System, including but not
limited to the pipeline, meter station, and interconnects, to transport the
requested volume from the newly designated Primary Point(s) of Delivery to
Customer's Plant. If sufficient capacity is not available, Mobile Gas shall give
written notification to Customer within fifteen (15) days of receipt of
Customers notice of Primary Point Change of its non-acceptance of the Primary
Point Change.
4.2 The Secondary Point(s) of Delivery by Customer's Suppliers to Mobile Gas
shall be as specified in Exhibit B. Transportation service from Secondary Points
of Delivery shall be on an interruptible basis. Customer shall have no bumping
rights at Secondary Points of Delivery. Mobile Gas shall receive nominated gas
at one or more Secondary Points, as long as sufficient capacity is available in
its Bellingrath Pipeline System, including but not limited to the pipeline,
meter station, and interconnects, to transport the requested volume from the
designated Secondary Point(s) of Delivery to the Plant.
4.3 Customer's Suppliers shall make delivery to the Points of Delivery at a
minimum pressure of 650 pounds per square inch gauge to enable Mobile Gas to
redeliver gas to Customer. Mobile Gas shall not be obligated to redeliver gas at
the Point of Redelivery unless adequate pressures are available at the Points of
Delivery.
4.4 The Point of Redelivery of natural gas hereunder to Customer shall be the
Customer's weld connection downstream of the Mobile Gas Metering Facilities, as
such term is defined below. Maintenance by Mobile Gas of gas pressure of a
minimum of 450 and maximum of 500 pounds per square inch gauge at the Point of
Redelivery shall constitute redelivery of gas for purpose of this Agreement.
Customer shall not be obligated to accept gas at the Point of Redelivery unless
the gas is redelivered at a minimum of 450 pounds per square inch gauge.
4.5 The gas shall be redelivered by Mobile Gas to Customer in like good order
and condition and at quality in accordance with specifications as set forth in
Article III of this Agreement.
4.6 Customer shall be responsible for construction of its pipeline from the
Point of Redelivery to its Plant. Mobile Gas shall at its expense construct such
facilities as may be necessary to enable it to receive gas at the Point(s) of
Delivery stated on Exhibit B and to redeliver gas to Customer at the Point of
Redelivery at the Contract Demand Volume on the Commencement Date. Mobile Gas
shall construct, own, and operate a metering station and necessary monitoring,
and recording equipment to provide accurate measurement and custody transfer of
the gas from Mobile Gas to Customer (the "Metering Facilities.") The Metering
Facilities shall be constructed and operated in accordance with industry
standards. The Metering Facilities shall be located either on the Plant site or
at a mutually acceptable location outside the Plant, at the discretion of Mobile
Gas. If the Metering Facilities are located on the Plant site, Customer shall
provide, within thirty (30) days of this Agreement, Mobile Gas such easement or
easements, in form reasonably acceptable to Mobile Gas, for the Metering
Facilities covering approximately 100 feet by 100 feet of Customer's property,
and for construction of pipelines, including above and below ground facilities
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to the Point of Redelivery as shall cross property owned or leased by Customer,
as well as for maintenance of the Metering Facilities on Customer's premises.
ARTICLE V - BILLING
5.1 On or before the seventh (7th) working day of each calendar month Mobile Gas
shall render to Customer a statement of the amount of gas transported hereunder
by Mobile Gas to Customer during the preceding calendar month (and with respect
to the first such statement, for the portion of a month, if any, between the
date first gas is made available and the Commencement Date), and shall also
render a bill for all gas so transported. On or before the twenty-first (21st)
day of each calendar month, Customer shall make payment to the address stated in
Article X.
5.2 In the event that Customer disputes any amount shown on a statement issued
by Mobile Gas to Customer, Customer shall pay the undisputed amount, which shall
in no event be less than the minimum bill, and notify Mobile Gas of the disputed
amount and the reasons for the dispute at the time payment is due. Mobile Gas
shall not suspend further delivery as a result of Customer's failure to pay the
disputed amount. Mobile Gas and Customer shall endeavor to amicably resolve the
disputed amount prior to institution of arbitration. The parties are not
obligated to pursue amicable resolution for more than sixty (60) days, then the
matter shall be submitted to arbitration. If it is finally determined that
Customer has underpaid the amount actually due, Customer shall remit any amount
due, with interest equal to 2% in excess of the "prime rate" reported in the
Wall Street Journal or any successor thereto, within ten (10) days of the
earlier of the next monthly invoice or within thirty (30) days of dispute
resolution. If it is finally determined that Customer has overpaid the amount
actually due, Mobile Gas shall remit any refund, with interest equal to 2% in
excess of the "prime rate" reported in the Wall Street Journal or any successor
thereto, within ten (10) days of the earlier of the next monthly invoice or
within thirty (30) days after Customer's receipt of an adjusted billing
statement from Mobile Gas.
5.3 Should Customer fail to pay any amount due, and Customer has not notified
Mobile Gas of a disputed amount pursuant to Section 5.2 above (except for any
minimum billings as specified in Exhibit A falling due during any period of
force majeure invoked by Mobile Gas pursuant to Section 6.1) when the same is
due, Mobile Gas shall give notice and interest shall accrue on all unpaid
amounts from the date due until paid at a rate of interest equal to 2% in excess
of the "prime rate" reported in the Wall Street Journal or any successor
thereto. Should such failure to pay continue for ten (10) days, Mobile Gas may
suspend deliveries of gas hereunder, and the exercise of such right shall be in
addition to any and all remedies available to Mobile Gas. Should such failure to
pay continue for ninety (90) days after written notice is given by Mobile Gas to
Customer of such failure to pay, Mobile Gas may terminate this Agreement, and
the exercise of such right shall be in addition to any and all remedies
available to Mobile Gas. Such termination shall not relieve Customer of its
payment obligations hereunder.
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ARTICLE VI - FORCE MAJEURE
6.1 In the event Mobile Gas is rendered unable, wholly or in part, by reason of
force majeure to carry out its obligations under this Agreement, it is agreed
that Mobile Gas shall give notice and reasonably full particulars of such force
majeure, in writing by either mail, hand delivery, or facsimile, to Customer
within a reasonable time after the occurrence of the cause relied on, and the
obligations of Mobile Gas, so far as they are affected by such force majeure,
shall be suspended during the continuance of any inability so caused, but for no
longer period, and such cause shall, so far as possible, be remedied with all
reasonable dispatch.
6.2 In the event the Customer is rendered unable, wholly or in part, by reason
of force majeure to carry out its obligations under this Agreement (other than
the obligation to make payment of amounts due according to Article V, which
obligations shall not be affected by events of force majeure), it is agreed that
Customer shall give notice and reasonably full particulars of such force
majeure, in writing by either mail, hand delivery, or facsimile, to Mobile Gas
within a reasonable time after the occurrence of the cause relied on, and the
obligations of Customer, so far as they are affected by such force majeure,
shall be suspended during the continuance of any inability so caused, but for no
longer period, and such cause shall, so far as possible, be remedied with all
reasonable dispatch.
6.3 The term, "force majeure," as employed herein shall mean acts of God;
strikes, lockouts, or other industrial disturbances; conditions arising from a
change in governmental laws, orders, rules or regulations; acts of public enemy;
wars; blockades; insurrections; riots; epidemics; landslides; lightning;
earthquakes; fires; storms; floods; washouts; arrests and restraints of
governments and people; civil disturbances; explosions; breakage or accident to
machinery or lines of pipe; the necessity for making repairs, tests or
alterations to machinery or lines of pipe; freezing of wells or lines of pipe;
partial or entire failure of wells, processing or gasification and gas
manufacturing facilities; and any other causes, whether of the kind herein
enumerated or otherwise, not within the control of the party claiming
suspension, and which by the exercise of due diligence, such party is unable to
prevent or overcome. Such term shall likewise include: (a) those instances where
either Mobile Gas or Customer is required to obtain servitudes, rights-of-way,
grants, permits or licenses to enable such party to fulfill its obligations
under this-Agreement; such party is unable to acquire, at reasonable costs, and
after the exercise of reasonable diligence, such servitudes, rights-of-way,
grants, permits or licenses, and (b) those instances where either Mobile Gas or
Customer's suppliers or transporters or Customer is required to furnish
materials and supplies for the purpose of constructing or maintaining facilities
or is required to secure permits or permissions from any governmental agency to
enable such party to fulfill its obligations under this Agreement and such party
is unable to acquire, or is delayed in acquiring, at reasonable costs, and after
the exercise of reasonable diligence, such materials and supplies, permits and
permissions. Force majeure shall not include failure of gas supply due to
pricing considerations.
6.4 It is understood and agreed that the settlement of strikes or lockouts shall
be entirely within the discretion of the party having the difficulty, and that
the
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above requirement that any force majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes or lockouts by acceding to
the demands of the opposing party when such course is inadvisable in the
discretion of the party having the difficulty.
ARTICLE VII - LAW GOVERNING
7.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Alabama.
ARTICLE VIII - ARBITRATION
8.1 Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled exclusively by arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association.
8.2 All arbitration pursuant to this Agreement shall be held at Mobile, Alabama.
8.3 There shall be three arbitrators. One of the arbitrators shall be appointed
by Mobile Gas, the second by Customer, and the third shall be a neutral
arbitrator selected by these two arbitrators. Such neutral arbitrator shall be
chairman of the arbitration panel.
8.4 The arbitration shall be decided by a majority vote of the arbitration
panel. The cost of arbitration, including the fees of the arbitrators, shall be
borne by the losing party, unless the arbitrators decide otherwise.
ARTICLE IX - NOMINATION PROCEDURE
9.1 Customer shall provide to Mobile Gas an hourly and daily confirming
nomination to match the nomination made from Customer's Suppliers and/or
transporters. Customer's confirmation may be made by voice or fax prior to 3
P.M., Mobile Alabama time, the day before a weekday delivery and prior to 3
P.M., Mobile Alabama time, on the Friday before any weekend or Monday delivery.
A copy of Mobile Gas' standard nomination form to be used by Customer is
attached hereto as Exhibit C. If, within one hour of Mobile Gas receiving
Customer and supplier and/or transporter's nomination Customer does not receive
from Mobile Gas notice that Customer's nomination is not confirmed, then the
nomination shall be deemed accepted and confirmed. Mobile Gas shall have
personnel available to receive nominations and issue confirmations.
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9.2 Mobile Gas and Customer understand that maintaining gas balance between
receipts and deliveries is important to the success of both Customer's and
Mobile Gas' operations hereunder. Both parties agree to use their best efforts
to exchange information necessary to maintain gas balances. Customer agrees to
use all reasonable efforts to balance its deliveries to the Point(s) of Delivery
with its receipts at the Point(s) of Redelivery. If Customer fails to do so,
Mobile Gas may, in addition to its imbalance remedies set forth in 9.3, take
such action as may be necessary to maintain the integrity of its system.
9.3 The parties shall use all reasonable efforts to avoid imposition of
imbalance charges, penalties, or fees by any supplier or transporter. If, during
any month, Customer or Mobile Gas receives an invoice from a supplier or
transporter which includes imbalance charges, the parties shall use their best
efforts to promptly determine the validity as well as the cause of such
imbalance charges. If the parties determine that the imbalance charges were
incurred as a result of Customer's actions or inactions (which shall include,
but shall not be limited to, Customer's failure to accept quantities of gas at
the Point(s) of Redelivery equal to the nominated gas), then Customer shall pay
for such imbalance charges or reimburse Mobile Gas for such imbalance charges
paid by Mobile Gas to the transporter or supplier. If the parties determine that
the imbalance charges were incurred as a result of Mobile Gas's actions or
inactions, then Mobile Gas shall pay for such imbalance charges, or reimburse
Customer for such imbalance charges paid by Customer to the transporter or
supplier.
ARTICLE X - NOTICES
10.1 Whenever any notice, request, demand, statement or payment is required or
permitted to be given under any provision of this Agreement, unless expressly
provided otherwise, such shall be in writing, signed by or on behalf of the
person giving the same, and shall be deemed to have been given and received upon
the actual receipt (including the receipt of a telecopy or facsimile of such
notice) at the address of the parties as follows:
For Billing:
Mobile Gas: Customer:
Mobile Gas Service Corporation Alabama Power Company
P. O. Box 2248 600 N. 18th Street 5S-0104
Mobile, Alabama 36652 Birmingham, Alabama 35291
Attn: Rhonda Ashford
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For Contract Administration:
Mobile Gas: Customer:
Mobile Gas Services Corporation Southern Company Services, Inc.
P.O. Box 2248 P. O. Box 2641, 14N-8162
Mobile, Alabama 36652 Birmingham, Alabama 35202
Attn: Director, Industrial Services Attn: Vice President, Fuel
Services
with copy to:
Southern Company Services, Inc.
P. O. Box 2641, 14N-8162
Birmingham, Alabama 35202
Attn: Fuels Manager, Alabama
Power
For Operational Matters:
For Mobile Gas: For Customer:
Mobile Gas Services Corporation Southern Company Services, Inc.
P. O. Box 2248 P.O. Box 2641 , 14N-8162
Mobile, Alabama 36652 Birmingham, Alabama 35202
Attn: Gas Control Department Attn: Ken Damsgard
Telephone: (334) 476-2120 Telephone: (205) 257-5887
Telecopy: (334) 476-8292 Telecopy: (205) 257-6803
10.2 The parties may in addition, according to the procedure of 10.1, from time
to time designate and furnish to the other in writing the name(s), address(es),
and fax number(s), of the person or persons responsible for natural gas
nominations.
ARTICLE XI - ENTIRE AGREEMENT
11.1 This instrument embodies the entire Agreement and understanding between the
parties hereto. There are no Agreements, understandings, conditions, warranties,
or representatives, oral or written, express or implied, with reference to the
subject matter hereof that are not merged herein or superseded hereby.
ARTICLE XII - SPECIAL PROVISIONS
The following Special Provisions for TRANSPORTATION are made a part
hereof:
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12.1 A "day" when used in this Agreement shall mean a twenty-four (24) hour
period ending at 9:00 A.M. Mobile, Alabama Time.
12.2 (a) The accuracy of Mobile Gas' measuring equipment shall be verified at
reasonable intervals and, if required, Customer may have its representative
present. Mobile Gas shall not be required to verify the accuracy of such
metering equipment more frequently than once in any six-(6) month period. Mobile
Gas or Mobile Gas' representatives shall give Customer at least one (1) day
prior notice of any routine tests of the time of all tests of meters.
(b) In the event Customer shall notify Mobile Gas that it desires a
special test of any measuring equipment, the parties shall cooperate to secure a
prompt verification of the accuracy of such equipment. The expense of any
special test, if called for, shall be borne by Customer if the measuring
equipment tested is found to be in error not more than two percent (2%). If,
upon test, Mobile Gas' measuring equipment is found to be in error by not more
then two percent (2%), previous recordings of such equipment shall be considered
accurate in computing deliveries in gas, but such equipment shall be adjusted at
once to record accurately. If, upon test, Mobile Gas' measuring equipment shall
be found to be inaccurate by an amount exceeding two percent (2%) at a recording
corresponding to an average hourly rate of flow for the period since the last
preceding test, then any previous calculations based on recordings of such
equipment shall be corrected to zero error for any period that is known
definitely, but in case the period is not known or agreed upon, such correction
shall be for a period equal to one-half the time elapsed since the date of the
last test.
(c) In the event a Mobile Gas meter is out of service or registering
inaccurately, the volume of gas delivered shall be determined:
(1) By using the registration of check meter or
meters; if installed and agreed accurately
registering; or, in the absence of (1);
(2) By correcting the error if the percentage of
error is ascertainable by calibration, tests, or
mathematical calculation; or, in the absence of
(1) and (2), then;
(3) By estimating the quantity of delivery by
deliveries during periods of similar conditions
when the meter was registering accurately.
(d) Mobile Gas and Customer shall each preserve for a period of at
least two (2) years all test data, charts, and other similar records. Each
party, or their designated representatives, shall at all reasonable times have
the right to audit such records and accounts to verify all such costs, fees, and
charges including without limitation the gas balance, receipt and delivery
records.
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(e) Mobile Gas shall install, own, and operate types of meters and
chromatography in general use and acceptance in the industry to measure gas
redelivered hereunder.
(f) Mobile Gas shall provide a signal or signals, including gas flow,
pressure, and analysis data from its measurement equipment, such that the
Customer may monitor the gas flow.
12.3 (a) Mobile Gas agrees to protect, defend, indemnify, and hold harmless the
Customer, its officers, directors, agents, contractors and/or employees from and
against any claims, demands, losses, damages, suits and expenses, for damages
and/or injury to persons and/or property which may be brought against Customer,
its officers, directors, agents, contractors and/or employees arising out of, or
resulting from, the transportation of natural gas from the Point of Delivery to
the Point of Redelivery pursuant to the terms and conditions expressed herein,
excepting for damages and injuries caused by the sole negligence of Customer.
(b) Customer agrees to protect, defend, indemnify, and hold harmless Mobile Gas,
its officers, directors, agents, contractors, and/or employees from and against
any claims, demands, losses, damages, suits and expenses, for damages and/or
injury to persons and/or property which may be brought against Mobile Gas, its
officers, directors, agents, contractors and/or employees arising out of, or
resulting from, the transportation of natural gas by Customer or its agents or
contractors to the Point of Delivery and from the Point of Redelivery to and
through its Plant and facilities, excepting for damages and injuries caused by
the sole negligence of Mobile Gas.
12.4 (a) Customer warrants for itself, its successors and assigns, that it will
have at the time of delivery of gas for transportation hereunder good title or
valid right to deliver such gas hereunder; that the gas it delivers hereunder
shall be free and clear of all liens, encumbrances, or claims whatsoever; and
that it will indemnify Mobile Gas and save it harmless from all claims, suits,
actions, damages, costs and expenses arising directly or indirectly from or with
respect to the title to gas tendered to Mobile Gas hereunder.
(b) As between Customer and Mobile Gas, Customer shall be in control
and possession of the gas transported hereunder prior to delivery to Mobile Gas
at the Point of Delivery and after delivery by Mobile Gas to Customer at the
Point of Redelivery, and Mobile Gas shall be in control and possession of the
gas after the receipt of the same at the Point of Delivery and until delivery by
Mobile Gas to Customer at the Point of Redelivery. The risk of loss for all gas
transported hereunder shall be and remain with the party having control and
possession of the gas as herein provided.
12.5 The authorized agents of Mobile Gas shall have, at all reasonable times,
the right of access to the Plant premises for the purpose of examining,
maintaining and inspecting its meters. Mobile Gas representatives shall, at all
reasonable times, comply with Plant rules, including security rules and drug and
alcohol policy, updated copies of which will be furnished to Mobile Gas from
time to time. Mobile Gas shall be responsible for selecting and providing for
its employees suitable hard hats, safety glasses, protective hearing devices and
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steel toe footwear as may be required or approved by applicable rules or
regulations.
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12.6 So long as all amounts due and payable to Mobile Gas at such time have
been paid by customer, Mobile Gas agrees to transport additional volumes of gas
to Customer for a period of up to ten (10) days beyond the termination of this
Agreement in order to bring into balance any imbalance that exists at the
termination of this Agreement.
12.7 This Agreement shall not be assigned or transferred by either party
without prior written consent of the other party, which consent shall not be
unreasonably withheld. Provided, however, that either party may assign this
Agreement to an affiliate with equal or greater creditworthiness which is a
successor owner or operator upon written notice to, but without consent of the
other party. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the respective legal representatives, successors and
assigns of the parties hereto.
12.8 In the event one or more of the provisions contained herein shall for any
reasons be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other provision
hereof and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
12.9 Any changes, modifications or alterations of this Agreement shall not be
effective unless in writing, signed by authorized representatives of the parties
hereto in accord with Section 10.1, and no course of dealing between the parties
shall be construed to alter the terms hereof, except as expressly stated herein.
12.10 Mobile Gas shall at all times, for a period of at least three (3) years
from the month in which transportation service was provided, maintain accurate
books and accounts, in accordance with generally accepted accounting principles,
of its costs, fees and charges of any nature invoiced to Customer hereunder.
Customer or its designated representatives shall at all reasonable times have
the right to audit such books and accounts to verify all such costs, fees, and
charges including without limitation the gas balance, receipt and delivery
records. After three (3) years, all books and accounts are deemed final.
12.11 Customer has designated Southern Company Services, Inc. ("SCS") as its
agent for the purpose of locating, processing and arranging for delivery of gas
to Customer's plants. SCS shall act for Customer in giving and receiving notices
and nominations, negotiating and administering this Agreement, and for any other
purpose as may be authorized by Customer. Customer may designate a new agent
from time to time by giving Mobile Gas written notice in accordance with Article
X, and authorization of SCS to act as agent for Customer thereupon, shall cease
and the new agent shall have such authority.
12.12 Mobile Gas shall promptly pay its subcontractors for services rendered,
labor performed, or materials, equipment, supplies or tools used in the
performance of this contract, and shall promptly notify Customer of any claims
or any lien by or against Mobile Gas or any subcontractor for which, if
established, APC or any of its property might become liable.
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12.13 This Agreement is subject to the rules and orders of the Alabama Public
Service Commission.
12.14 This Agreement is contingent upon approval by the Alabama Public Service
Commission.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed by its officer thereunto dully authorized as of the date first above
written.
WITNESS: MOBILE GAS SERVICE CORPORATION
/s/ Randall W. Duke By: /s/ W. G. Coffeen, III
Its: Vice President
WITNESS ALABAMA POWER COMPANY
/s/ W. Kenneth Mooney By: /s/ Earl B. parsons, Jr.
Its: Sr. Vice President
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EXHIBIT A
MOBILE GAS SERVICE CORPORATION
TRANSPORTATION SERVICE CONDITIONS
1. Special Monthly Transportation Rate "A"
MMBtu per month RATE
If less than *** *** Per MMBtu
If over ***
First *** *** per MMBtu for the first
*** MMBtu transported
during the month
Next *** *** per MMBtu for all MMBtu
above *** MMBtu
transported during the month
Over *** *** per MMBtu for all MMBtu
over *** MMBtu during the
month.
2. Minimum Billing
The minimum monthly bill for such transportation will be *** of Contract
Demand Volume.
3. Contract Demand Volume
Contract Demand Volume shall be *** MMBtu per day, not to exceed *** MMBtu
per hour from the Commencement Date until August 16, 2000. Beginning August
16, 2000, the Contract Demand Volume shall be *** MMBtu per day, not to
exceed *** MMBtu per hour.
4. Rate Adjustment
The rates and minimum bill shall be adjusted by the annual percentage
(upward or downward) in the "CPI" on the anniversary date and year-to-year
thereafter for as long as this agreement shall remain in full force and
effect.
In no year shall the annual percentage change in the "CPI" be taken to be
more than 3 (three) percent upward or downward.
The term "CPI" means the Consumer Price Index (CPI) for All Urban Consumers
as published by the U. S. Department of Labor, Bureau of Labor Statistics,
or, in the event the CPI is discontinued during the term hereof, such
successor index as may be mutually agreed upon by the parties.
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EXHIBIT B
POINTS OF DELIVERY
The Points of Delivery under this Agreement are as follows:
Primary Delivery Point:
The Interconnect between the Williams Plant Tailgate and the
pipeline facilities of Mobile Gas Service Corporation in
Mobile County, Alabama, as this point becomes available.
Secondary Delivery Points:
The Interconnect between the Mobil Exploration and
Production Plant Tailgate and the pipeline facilities of
Mobile Gas Service Corporation in Mobile County, Alabama
The Interconnect between the Shell (Yellowhammer) Plant
Tailgate and the pipeline facilities of Mobile Gas Service
Corporation in Mobile County, Alabama
The Interconnect between the Koch Gateway Pipeline Company
pipeline and the pipeline facilities of Mobile Gas Services
Corporation in Mobile County, Alabama (SLN 17158)
Additional Secondary Points of Delivery may be added upon the parties'
mutual agreement in writing.
The parties acknowledge that Mobile Gas may use facilities of third
parties for transportation of Customer's gas at no additional costs to Customer.
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EXHIBIT C
Nomination To: Mobile Gas Service Corporation
Nomination From:
Daily
Nom Start End Volume Delivery Delivery Upstream
Type Date Date (MMBtu) Point Type Supplier Contract
- ----- ------ ------- ------- -------- ------------- -------- --------
Daily 1-1-99 1-31-99 *** *** Firm *** XXX
- ----- ------ ------- ------- -------- ------------- -------- --------
Daily 1-1-99 1-31-99 *** *** Interruptible XXX XXX
- ----- ------ ------- ------- -------- ------------- -------- --------
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Exhibit D
COMPLIANCE WITH LAWS
Customer is a government contractor under an Area-Wide Utilities Service
Contract with the General Services Administration of the United States
Government. Mobile Gas agrees that the provisions contained in the Federal
Acquisition Regulation referred to below shall, as if set forth herein in full
text, be incorporated into and form a part of this Contract and Mobile Gas shall
comply therewith, if the amount of such Contract and the circumstances
surrounding its performance meet the criteria set out in each of the provisions
referred to below, for incorporation of the provision(s) into contracts between
Customer and others:
(1) 52.203-6 Restrictions on Subcontractor Sales to the
Government
(2) 52.203-7 Anti-Kickback Procedures
(3) 52.222-26 Equal Opportunity
(4) 52.223-2 Clean Air and Water
(5) 52.223-14 Toxic Chemical Release Reporting.
Upon request, Customer will provide the full text of any of the above provisions
or clauses incorporated herein by reference.
Mobile Gas hereby warrants that Mobile Gas is not debarred, suspended or
proposed for debarment as a contractor or subcontractor to any department,
agency or other division of the U.S. Government.
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