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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(b)
FIRM AND INTERRUPTIBLE STORAGE SERVICE AGREEMENT
BY AND BETWEEN
BAY GAS STORAGE COMPANY, LTD.
AND
SOUTHERN COMPANY SERVICES, INC.,
as agent of Alabama Power Company, Georgia Power Company, Gulf Power Company,
Mississippi Power Company and Savannah Electric and Power Company
CONTRACT NUMBER FSMC99
DATED [AS OF]
April 1, 1999
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TABLE OF CONTENTS
ARTICLE PAGE
I. Gas to be Received, Stored and Delivered 2
II. Performance Obligation 3
III. Delivery Pressure 4
IV. Point(s) of Receipt and Delivery 4
V. Title and Risk of Loss 5
VI. Term 5
VII. Default and Termination 6
VIII. Rates 6
IX. Taxes 7
X. Notices 8
XI. Nominations 9
XII. General Terms and Conditions;
Statement of Conditions for Gas Storage;
Operational Procedures 10
XIII. Miscellaneous 10
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FIRM AND INTERRUPTIBLE STORAGE SERVICE AGREEMENT
THIS FIRM AND INTERRUPTIBLE STORAGE SERVICE AGREEMENT (this "Contract")
is made and entered into as of the 1st day of April, 1999, by and between BAY
GAS STORAGE COMPANY, LTD., an Alabama limited partnership ("Bay Gas") which is
the owner and operator of the Storage Facilities defined below, and SOUTHERN
COMPANY SERVICES, INC., as agent of Alabama Power Company, Georgia Power
Company, Gulf Power Company, Mississippi Power Company and Savannah Electric and
Power Company ("Shipper")(collectively referred to herein as Parties and
individually as Party).
W I T N E S S E T H:
WHEREAS, Bay Gas is the operator of certain underground gas storage
facilities located near McIntosh, Alabama (the "Storage Facilities"); and
WHEREAS, Shipper desires to contract for a portion of the storage
capacity of the Storage Facilities, and desires that Bay Gas receive at the
Point(s) of Receipt herein specified on Exhibit "A" attached hereto, certain
quantities of gas from the pipeline facilities identified therein for the
purpose of injecting and storing such gas for Shipper (or for its account) in
such Storage Facilities, and that Bay Gas deliver such gas into the pipeline
facilities identified on Exhibit "A" attached hereto at the Point(s) of Delivery
therein specified; and
WHEREAS, Bay Gas desires to perform such services for Shipper, all to
be provided pursuant and subject to the terms and conditions hereof.
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Bay Gas and Shipper hereby agree
as follows:
ARTICLE I
GAS TO BE RECEIVED, STORED AND DELIVERED
1.1 Contract Quantities. Subject to the terms and conditions
established herein and in Bay Gas Storage Company's Statement of Conditions
(notwithstanding the provisions of Paragraphs A.1 and A.2 of the Statement of
Conditions), Bay Gas shall provide the following capacities to Shipper, provided
that under no circumstances will Bay Gas be obligated to provide to Shipper
capacities in excess of the maximum quantities set forth below:
(a) Firm Withdrawal - a Firm Maximum Daily Withdrawal Quantity ("FMDWQ")
of *** MMBtu per day;
(b) Firm Storage - a Firm Maximum Storage Quantity ("FMSQ") in the Storage
Facilities equal to *** MMBtu.
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(c) (1) Firm Injection - a Firm Maximum Daily Injection Quantity ("FMDIQ")
of *** MMBtu per day and;
(2) Interruptible Injection - an Interruptible Maximum Daily Injection
Quantity ("IMDIQ") of *** MMBtu per day.
The FMDIQ and the IMDIQ will be known collectively as "Injection
Quantities".
1.2 Gas Tendered. Shipper shall tender or cause to be tendered to Bay
Gas at the Point(s) of Receipt herein specified on Exhibit "A" attached hereto
any gas which Shipper desires to have injected into storage hereunder. The
obligation of Bay Gas to receive gas shall not exceed: at any Point of Receipt
the lesser of the Injection Quantities for such Point of Receipt or the total
daily volume that Shipper or its designee is able and willing to tender at such
Point of Receipt; or the aggregate Injection Quantities for all Points of
Receipt. Shipper shall also receive or cause to be received gas requested to be
withdrawn from storage at the Point(s) of Delivery herein specified on Exhibit
"A" attached hereto upon tender for delivery by Bay Gas.
1.3 Gas Received and Delivered. Subject to the operating conditions of
the pipeline(s) delivering or receiving gas for Shipper's account, Bay Gas shall
receive gas for injection from Shipper at the Point(s) of Receipt and deliver
gas to Shipper at the Point(s) of Delivery herein specified on Exhibit "A"
attached hereto as scheduled by Shipper from time to time; provided that Bay Gas
shall not be obligated to receive for injection any quantity of gas if the
injection of the same would cause the quantity of gas stored in the Storage
Facilities for Shipper's account ("Shipper's Gas Storage Inventory") to exceed
the total of Shipper's FMSQ as stated above; nor shall Bay Gas be obligated at
any time to deliver more gas to Shipper than Shipper has in its then-current
Shipper's Gas Storage Inventory.
1.4 Gas to be Withdrawn on Termination. Shipper must have all of its
gas withdrawn by the end of the term of this Contract. If at any time service
pursuant to this Contract is canceled or terminated prior to the end of the term
specified herein, Shipper shall be required to withdraw its gas within a sixty
(60) day balancing period after the determination by Bay Gas that any
unwithdrawn volumes exist, the maximum number of days allowed for withdrawal to
be determined by dividing: (i) the volume of gas Shipper is required to
withdraw, by (ii) fifty percent (50%) of Shipper's FMDWQ. If Bay Gas is unable
to withdraw any volume requested by Shipper, up to fifty percent (50%) of
Shipper's FMDWQ, the period shall be extended accordingly. If the gas is not
withdrawn within the specified time period, Bay Gas shall take title to such gas
not withdrawn.
ARTICLE II
PERFORMANCE OBLIGATION
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2.1 Firm and Interruptible Service. All Firm service rendered under
this Contract shall be provided to Shipper except in the case of force majeure
as described in Section XIV in the General Terms and Conditions. All
Interruptible service rendered under this contract shall be fully interruptible.
Bay Gas shall not be obligated to provide capacities in excess of those stated
in Section I of this Contract.
2.2 Curtailed Capacity. During periods of curtailed capacity Bay Gas
shall, pursuant to Statement of Conditions Section "III.C", provide available
capacity pro rata based on Shipper's Maximum Daily Injection/Withdrawal Quantity
as applicable. Shipper's pro rata share shall be determined by comparing
Shipper's Maximum Daily Injection/Withdrawal Quantity to the lesser of 100% of
Bay Gas' daily capacities, or the total amount of daily capacity contracted to
firm customers of Bay Gas.
ARTICLE III
DELIVERY PRESSURE
Delivery Pressure. Shipper is obligated to deliver gas at the Point(s)
of Receipt identified in Exhibit "A" at a pressure sufficient for Bay Gas to
transport such gas to its storage facility recognizing that the amount of such
pressure required may vary based on the operations of the Bay Gas pipeline;
provided however, Shipper is not required to deliver gas at the Point(s) of
Receipt at pressure(s) greater than stated in Exhibit "A".
ARTICLE IV
POINT(S) OF RECEIPT AND DELIVERY
4.1 Point(s) of Receipt. The Point(s) of Receipt for all gas to be
tendered by Shipper to Bay Gas for injection into the Storage Facilities shall
be as specified on Exhibit "A" attached hereto, and the maximum daily quantity
of gas which Bay Gas is obligated to receive from Shipper at each individual
Point of Receipt shall not exceed the maximum stated thereon.
4.2 Point(s) of Delivery. The Point(s) of Delivery for all gas to be
tendered by Bay Gas to Shipper for delivery pursuant to the terms hereof shall
be as specified on Exhibit "A" attached hereto, and the maximum quantities of
gas which Bay Gas is obligated to deliver to Shipper at each such Point of
Delivery shall not exceed the maximum stated thereon.
4.3 Addition / Deletion of Point(s) of Receipt or Delivery. Bay Gas and
Shipper may add or delete Point(s) of Receipt or Delivery from time to time by
mutual agreement evidenced by a signed amendment to Exhibit "A".
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ARTICLE V
TITLE AND RISK OF LOSS
5.1 Title. Title to the natural gas stored by Bay Gas and delivered to
Shipper hereunder shall, at all times, be in Shipper's name. Bay Gas makes no
warranty of title whatsoever. Shipper warrants for itself, its successors and
assigns, that it will have at the time of delivery of gas for storage hereunder
good title or valid right to deliver such gas stored hereunder. Shipper warrants
for itself, its successors and assigns, that the gas it delivers hereunder shall
be free and clear of all liens, encumbrances, or claims whatsoever; and that it
will indemnify Bay 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 Bay Gas hereunder.
5.2 No Encumbrance on Stored Gas. Bay Gas covenants that it shall
neither cause nor allow any cloud or encumbrance of any nature to arise by,
through or under Bay Gas with respect to Shipper's title to any gas tendered to
Bay Gas for storage, and agrees to deliver such gas pursuant to this Agreement
free from all liens and adverse claims arising by, through or under Bay Gas, and
that it will indemnify, protect, and save Shipper harmless from all claims,
suits, actions, damages, costs and expenses arising directly or indirectly from
the same.
5.3 Control and Possession. As between Shipper and Bay Gas: Shipper
shall be in control and possession of the gas prior to delivery to Bay Gas for
injection at the Point(s) of Receipt and after delivery by Bay Gas to Shipper at
the Point(s) of Delivery, and, shall indemnify and hold Bay Gas harmless from
any damage or injury caused thereby except for damages and injuries caused by
the sole negligence of Bay Gas; and, Bay Gas shall be in control and possession
of the gas after the receipt of the same for injection at the Point(s) of
Receipt and until delivery by Bay Gas to Shipper at the Point(s) of Delivery,
and, shall indemnify and hold Shipper harmless from any damage or injury caused
thereby, except for damages and injuries caused by the sole negligence of
Shipper. The risk of loss for all gas injected into, stored in and withdrawn
from the Storage Facilities shall be and remain with the Party having control
and possession of the gas as herein provided.
ARTICLE VI
TERM
6.1 Primary Term; Renewal Term. This Contract shall be effective as of
April 1, 1999 and shall continue in full force and effect through *** ("Primary
Term"). At the end of the Primary Term the Parties have the option to extend the
Contract for an additional *** period pursuant to Section 8.2. This additional
*** period from *** through *** shall be defined as the "Renewal Term".
6.2 Cancellation. Notwithstanding any other provision of this Contract
or any Exhibits hereto, the Parties agree that if an event of Force Majeure
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occurs which causes Bay Gas to be unable to provide storage services for a
period of forty-five (45) consecutive days, Shipper may terminate this Contract
upon written notice to Bay Gas.
ARTICLE VII
DEFAULT AND TERMINATION
7.1 If either Party hereto shall fail to perform any of the covenants
or obligations imposed upon it by virtue of this Contract (except where such
failure shall be excused under any of the provisions hereof), then in such event
the other Party may, at its option, terminate this Contract by proceeding as
follows: the Party not in default shall cause a written notice to be served upon
the Party in default, stating specifically the cause for terminating this
Contract and declaring it to be the intention of the Party giving the notice to
terminate the same; whereupon, the in default shall have thirty (30) days after
receipt of the aforesaid notice which to remedy or remove the cause or causes of
default stated in the notice of termination and if, within said period of thirty
(30) days, the Party in default does so remedy and remove such cause or causes,
and fully indemnifies the Party not in breach, then such notice shall be
nullified and this Contract shall continue in full force and effect. In the
event the Party in default does not so remedy and remove the cause or causes of
default, or does not fully indemnify the Party giving the notice for such
Party's actual damages as a result of such breach within said period of thirty
(30) days, then this Contract shall become null and void from and after the
expiration of said period; provided, however, that if such default be remedied
but no indemnification therefor has been made due to a bona fide dispute between
the Parties as to the amount thereof, then this Contract shall not terminate,
but the Party not in default shall have the right to seek recovery of its actual
damages as provided by law. Notwithstanding any provision to the contrary in the
Statement of Conditions or the General Terms and Conditions, any termination for
breach of this Contract shall be carried out strictly in accordance with this
section.
7.2 Any cancellation of this Contract pursuant to the provisions of
this Article VII shall be without prejudice to the right of the Party not in
default to collect any amounts then due it and without waiver of any other
remedy to which the Party not in default may be entitled.
ARTICLE VIII
RATES
8.1 Storage Charges. In accordance with the billing procedures
described in Section X of the General Terms and Conditions, Shipper shall pay to
Bay Gas during the Primary Term of the Contract the following charges which
include all existing taxes:
(a) Firm Services Monthly Demand Charge - *** per MMBtu of Shipper's
FMSQ for each month of the Primary Term of the Contract; plus
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(b) Injection and Withdrawal Charges - *** for each MMBtu of gas
received by Bay Gas for injection into storage hereunder
("Injection Charge") and *** for each MMBtu of gas delivered by
Bay Gas to Shipper hereunder ("Withdrawal Charge") during the
Primary Term of the Contract. Bay Gas reserves the right to
exchange gas in lieu of physically injecting or withdrawing
nominated gas volumes, and gas so exchanged shall be accounted
and charged for as having been injected or withdrawn as
nominated.
(c) Fuel Charge - A Fuel Charge shall be paid by permitting Bay Gas
to retain *** of all volumes of gas tendered by Shipper for
injection at the Storage Facility during the Primary Term of the
Contract. Upon measurement of volumes tendered by Shipper for a
given day, *** of the total amount measured shall be applied to
satisfy Shipper's fuel cost obligation hereunder, and the
remaining *** shall be applied to computing compliance with the
applicable FMDIQ and FMSQ, and computing the amount of Shipper's
Gas Storage Inventory.
8.2 Renewal Term Rate. During the final year of the Primary Term of the
Contract the Parties shall agree on a rate for the Renewal Term of the Contract.
In the event the Parties can not agree on a rate for the Renewal Term the
Contract shall be terminated at the end of the Primary Term.
8.3 Suspension of Payments. In the event that Bay Gas is, due to an
event of force majeure as defined in the General Terms and Conditions, unable to
provide storage services, or a portion thereof, under this Contract for a
consecutive twenty (20) day period, then the obligation of Shipper to make
payment hereunder for such unavailable services, or a portion thereof, shall
thereafter be suspended until such service is again made available hereunder. In
the event that Bay Gas is, due to an event of force majeure or curtailment,
unable to provide storage services, or a portion thereof, under this Contract
for a consecutive twenty (20) day period within any calendar year, then any
subsequent curtailment or excused failure, during such calendar year, to provide
storage services hereunder shall result in a pro-rata reduction in the monthly
charges to be paid by Shipper for that month.
8.4 Rate Changes. The rates herein stated shall be effective for the
term of the Contract and shall not be changed in rate cases before the FERC or
other governing body, or by any other method.
ARTICLE IX
TAXES
9.1 Shipper agrees to pay to Bay Gas, by way of reimbursement, within
ten (10) days of receipt of an invoice for same, all taxes levied or imposed
upon Bay Gas after the date hereof; and any increases in existing taxes which
may be made effective after the date hereof, with respect to the storage of gas
hereunder. Bay Gas agrees to pass through to Shipper in its monthly billings any
savings resulting from decreases in existing taxes which may be made effective
after the date hereof, with respect to the storage of gas hereunder. In the
event that any
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additional taxes or increases in taxes are imposed and, should Bay Gas elect not
to challenge the same, then Shipper shall be subrogated to Bay Gas' rights to
challenge the same. In no event shall Shipper be required to pay any tax in a
greater amount than its pro-rata share.
9.2 The term "taxes" as used in Section 9.1 shall mean all taxes which
are now in existence or which may in the future be levied upon Bay Gas, or its
facilities or the storage of gas hereunder (other than ad valorem, capital
stock, income or excess profit taxes, or general franchise taxes imposed on
corporations on account of their corporate existence or on their right to do
business within the state as a foreign corporation and similar taxes),
including, but not limited to, gross receipts tax, street and alley rental tax,
licenses, fees and any other taxes, charges or fees of any kind levied, assessed
or made by any governmental authority on the act, right or privilege of
transporting, handling or delivering gas or using Bay Gas' Storage Facilities,
which is measured by the volume, heating value, value of the gas, or any fee in
respect to the gas or the storage, transportation or other handling thereof.
ARTICLE X
NOTICES
10.1 Whenever any notice, request, demand, statement, nominations or
payment is required or permitted to be given under any provision of this
Contract, 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:
Notices and Contract Matters:
Company: Contact
Bay Gas Storage Company, Ltd. Gordon Royce / Harris Oswalt
Post Office Box 1368 Telephone: (334) 450-4688
Mobile, Alabama 36633 Fax: (334) 476-1745
Shipper (notify both contacts
listed below):
Alabama Power Company Southern Company Services, Inc.
600 North 18th Street 14N-8162
Birmingham, AL 35291 600 North 18th Street
Attn: Senior Vice President - Southern Birmingham, AL 35203
Company Generation Attn: Vice President , Fuel Services
Invoices:
Company: Contact
Bay Gas Storage Company, Ltd. Gordon Royce / Harris Oswalt
Post Office Box 1368 Telephone: (334) 450-4688
Mobile, Alabama 36633 Fax: (334) 476-1745
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Shipper: Contact
Alabama Power Company Attn: Manager, Fuel Services
600 North 18th Street
Birmingham, AL. 35291-0480
Delivery Notifications, Nominations:
Company: Contact
Bay Gas Storage Company, Ltd. Gordon Royce / Harris Oswalt
Post Office Box 1368 Telephone: (334) 450-4688
Mobile, Alabama 36633 Fax: (334) 476-8292
Nights/Weekends: (334) 476-2120
Fax (334) 450-4758
Shipper: Contact:
Southern Company Services, Inc. Ken Damsgard: (205) 257-5887
600 North 18th Street Pager: (888) 391-7477
Birmingham, AL 35291 Vicki Gaston: (205)257-7194
Attn: Fuel Scheduling Shannon Neese: (205) 257-5803
Generation Desk: (205) 257-6301
10.2 Operating communications made by telephone or other mutually
agreeable means shall be confirmed in writing or by telecopy within two (2)
hours following same if confirmation is requested by either Party. To facilitate
such operating communications on a daily basis, lists of names, telephone and
telecopy numbers of appropriate operating personnel shall be exchanged by and
between Bay Gas and Shipper before commencement of service under this Contract.
Such lists shall be updated from time to time.
10.3 The addresses of the Parties may be revised upon written notice
given in accordance herewith, designating in such writing the new address of the
Party so affected.
ARTICLE XI
NOMINATIONS
11.1 Bay Gas shall use its best efforts to accept both verbal and
electronic changes in nominations twenty-four (24) hours per day in order to
accommodate Shipper's requests for such changes. Such changes shall be made as
soon as Bay Gas can practicably make such changes. Shipper shall confirm such
changes in writing or by telecopy within two (2) hours of requesting such
changes.
11.2 Bay Gas will maintain personnel and equipment available to receive
and act upon nomination changes and confirmations twenty-four (24) hours per
day.
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11.3 Written nominations and confirmations of verbal nominations will
be made on the nomination form attached hereto as Exhibit "D".
11.4 In the event that Bay Gas fails to obtain confirmation from
Shipper's transportation service of Shipper's nomination, Bay Gas shall notify
Shipper of such failure as soon as practicable.
ARTICLE XII
GENERAL TERMS AND CONDITIONS;
STATEMENT OF CONDITIONS FOR GAS STORAGE
The following are hereby incorporated herein and made a part of this
Contract as if fully set forth herein: (a) the General Terms and Conditions
attached hereto as Exhibit "B"; and the Statement of Conditions for NGPA Section
311(a)(2) Gas Storage Services attached hereto as Exhibit "C" (the "Statement of
Conditions"). Notwithstanding any provision to the contrary in Exhibit "B" or
"C", any conflict or inconsistency, either in construction or interpretation,
between the terms hereof and of such exhibits shall be resolved first in favor
of the terms hereof, and next in favor of the Statement of Conditions.
ARTICLE XIII
MISCELLANEOUS
13.1 Amendment. Neither this Contract nor any provisions hereof may
ever be amended, changed, modified or supplemented except by an agreement in
writing, duly executed by the Party to be charged with the same.
13.2 Assignment. Either Party may assign its rights, titles or
interests hereunder to any individual, bank, trustee, company or corporation
("Lender") as security for any note, notes, bonds or other obligations or
securities of such assignor. In the event of such an assignment by Bay Gas,
Shipper shall provide such financial information to the Lender, which is the
assignee of Bay Gas as may be reasonably requested by Bay Gas. Except as
specified in the first sentence of this Section 13.2, no assignment shall be
made without the written consent of the other Party hereto, which consent shall
not be unreasonably withheld; provided, however, that either Party may assign
this Agreement to a subsidiary with reasonably sufficient creditworthiness, as
the Parties shall agree, which is a successor owner or operator or agent upon
written notice to, but without the prior consent of, the other Party. Subject to
the foregoing, this Contract shall be binding upon and inure to the benefit of
the respective successors and assigns. No assignment provided for hereunder
shall in any way operate to enlarge, alter or change any obligation of the other
Party hereto nor shall the assignee be relieved of its obligations hereunder
without the express written consent of the non-assigning Party.
13.3 Invalid Provision. In the event one or more of the provisions
contained herein shall be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
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other provision hereof and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein, provided
that the deletion of such invalid, illegal or unenforceable provision does not
materially change the intended nature and risk of the services provided
hereunder.
13.4 General Services Administration Regulation. Bay Gas agrees to
comply with the provisions attached hereto as Exhibit "E" and made a part
hereof.
IN WITNESS WHEREOF, the Parties have executed this Contract in one or
more copies or counterparts, each of which shall constitute and be an original
of this Contract effective between the Parties as of the date first-above
written.
COMPANY:
ATTEST: BAY GAS STORAGE COMPANY, LTD.
By MGS Storage Services, Inc., its managing
general partner
/s/ G. Edgar Downing, Jr. By: /s/ W. G. Coffeen, III
Its: Vice President
SHIPPER:
ATTEST: SOUTHERN COMPANY SERVICES, INC., as agent
of Alabama Power Company, Georgia Power
Company, Gulf Power Company, Mississippi
Power Company and Savannah Electric and
Power Company
/s/ Tommy Chisholm
By: /s/ Charles D. McCrary
Its: Executive Vice President
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EXHIBIT "A"
TO STORAGE AGREEMENT ("CONTRACT") BETWEEN
BAY GAS STORAGE COMPANY, LTD. AND ALABAMA POWER COMPANY
MINIMUM
POINT(S) OF RECEIPT INJECTION QUANTITY PRESSURE
(MMBtus) (PSIG)
Interconnection between the Storage
Facilities and the pipeline facilities of
FGT in Mobile County, Alabama *** 625
(Interconnect ID: BG-1002)
Interconnection between the Storage
Facilities and the pipeline facilities of
KOCH GATEWAY in Mobile County, Alabama *** 575
(Interconnect ID: BG-1003)
Gas may be scheduled for delivery at either or all of the Points of Receipt, in
quantities up to the maximum quantities indicated for each such Point, but the
cumulative total of deliveries at all Points of Receipt shall not exceed the
maximum quantity indicated for any single Point, unless otherwise agreed by
Company.
FMDWQ
(MMBtus)
POINT(S) OF DELIVERY
Interconnection between the Storage Facilities and
the pipeline facilities of FGT in Mobile County, Alabama ***
(Interconnect ID: BG-1002)
Interconnection between the Storage Facilities and
the pipeline facilities of KOCH GATEWAY in
Mobile County, Alabama ***
(Interconnect ID: BG-1003)
Interconnection between the Storage
Facilities and the facilities of FGT at
Olin in Washington County, Alabama ***
(Interconnect ID: BG-1005)
The weld connection between the Storage Facilities and Alabama Power Company's
pipeline downstream of the Bay Gas metering facility at Plant Barry in
Mobile County, Alabama (Interconnect ID: BG-1006) ***
Gas may be scheduled for delivery at either or all of the Points of Delivery, in
quantities up to the maximum quantities indicated for each such Point, but the
cumulative total of deliveries at all Points of Delivery shall not exceed the
maximum quantity indicated for any single Point, unless otherwise agreed by
Company.
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EXHIBIT "B"
GENERAL TERMS AND CONDITIONS
TO
BAY GAS STORAGE COMPANY, LTD.'S
STORAGE AND TRANSPORTATION SERVICE AGREEMENTS
CONTENTS
SECTION DESCRIPTION PAGE
I. Definitions 1
II. Nominations, Balancing And 2
Excess Deliveries
III. Construction of Facilities 6
IV. Rate Adjustment 6
V. Regulatory Requirements 7
VI. Pressures 7
VII. Measurement 8
VIII. Measuring Equipment and Testing 9
IX. Quality 10
X. Billing, Accounting, Taxes and Reports 10
XI. Possession and Non-Odorization of Gas 12
XII. Warranty 13
XIII. Government Regulations 13
XIV. Force Majeure 13
XV. Notices 14
XVI. Creditworthiness 15
XVII. Miscellaneous 15
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SECTION I.
Definitions
A. The term, "gas", as used herein, shall mean natural gas as produced in its
natural state that meets the quality standards contained in these General
Terms and Conditions.
B. The term, "new taxes", as used herein, shall mean any tax, license, fee or
charge hereafter levied, assessed or made by any governmental authority on
the gas itself or on the act, right or privilege of producing, severing,
gathering, storing, transporting, handling, selling or delivering gas which
is measured by the volume, value, or sales price of the gas.
C. The term, "cubic foot of gas", as used herein, for the purpose of
measurement of the gas delivered hereunder is the amount of gas necessary
to fill a cubic foot of space when the gas is at an absolute pressure of
fourteen and seventy-three hundredths (14.73) pounds per square inch and at
a base temperature of sixty (60) degrees Fahrenheit.
D. The term, "BTU", as used herein, shall mean British Thermal Unit and, where
appropriate, the plural thereof, and the term, "MMBtu", shall mean one
million (1,000,000) BTU.
E. The term, "MCF", as used herein, shall mean one thousand (1,000) cubic feet
of gas.
F. The term, "day", as used herein, shall mean a period of twenty-four (24)
consecutive hours beginning and ending at 9:00 a.m., Central Clock Time.
G. The term, "thermally equivalent", as used herein, shall mean an equal
amount of heating value, expressed in BTU and measured under the
specifications and conditions contained hereunder.
H. The term, "month", as used herein, shall mean a period beginning on, and
including, the first (1st) day of the calendar month and extending to but
not including the first (1st) day of the following calendar month.
I. The term, "Storage Service Agreement", as used herein, shall mean an
agreement for the provision by Bay Gas of firm or interruptible storage
services; and the term, "Transportation Service Agreement", as used herein,
shall mean an agreement for the provision by Bay Gas of firm or
interruptible transportation services.
J. The term, "Maximum Daily Injection Quantity", as used herein, shall mean
the maximum volume of gas that Bay Gas will accept for injection into
storage for Shipper in any one day, as provided for in the Storage Service
Agreement.
K. The term, "Maximum Daily Withdrawal Quantity", as used herein, shall mean
the maximum volume of gas that Bay Gas will deliver from storage
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for Shipper in any one day, as provided for in the Storage Service
Agreement.
L. The term, "Maximum Storage Quantity", as used herein, shall mean the
maximum volume of gas that Bay Gas will store for Shipper at any one time,
as provided for in the Storage Service Agreement.
M. The term, "Maximum Daily Transportation Quantity", as used herein, shall
mean the maximum volume of gas that Bay Gas will take delivery of, and
transport for redelivery, in any one day, as provided for in the
Transportation Service Agreement.
N. The term, "processed gas", as used herein, shall mean natural gas from
which gas liquids have been extracted.
O. The term "Unit Rate", as used herein, shall be defined for interruptible
storage service Shippers as follows:
(i.) The Monthly Demand Charge ("MDC") times the Interruptible Maximum
Storage Quantity ("IMSQ") times (ii.),
(ii.) the lesser of 12 or the number of months specified as the
Primary Term ("PT") of the Agreement. The product of (i.) and
(ii.) then added to (iii.).
(iii.) All other storage revenues excluding Fuel Charges assessed for
interruptible services for the last 12 billed months ("Rev."),
(iv.) the result of (iii.) divided by the IMSQ.
(i.e. Unit Rate = {[ MDC x IMSQ x (12 or PT if < 12)] + Rev.} / IMSQ)
P. The term, "work day" or "working day", as used herein, shall mean the days
Monday through Friday, inclusive, but excluding any federal holidays.
SECTION II.
Nominations, Balancing And Excess Deliveries
A. Nominations. Shipper shall furnish to Bay Gas a nomination on a form
acceptable to Bay Gas. All quantities shall be expressed in MMBtu per Day
and shall separately state Points of Receipt, Points of Delivery or Points
of Redelivery.
1. Shipper must deliver the nominations to Bay Gas by 11:30 A.M. Central
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ClockTime the working day prior to gas flow. Shipper may submit
nominations after such deadline up to 1:00 P.M. Central Clock Time for
the upcoming gas day. However, if acceptance of Shipper's nomination
submitted between 11:30 and 1:00 P.M. Central Clock Time would exceed
Shipper's Maximum Daily Injection Quantity or Maximum Daily Withdrawal
Quantity or Maximum Storage Quantity or Maximum Daily Transportation
Quantity, or would cause interruption of another shipper's scheduled
service, then such nomination will be accepted or rejected by Bay Gas
at Bay Gas' sole discretion.
2. Shipper may submit, and Bay Gas will accept, nominations after 1:00
P.M. for the upcoming gas day or during the current gas day on a best
efforts basis. If acceptance of Shipper's nomination for service would
exceed Shipper's Maximum Daily Injection Quantity or Maximum Daily
Withdrawal Quantity or Maximum Storage Quantity or Maximum Daily
Transportation Quantity, or would cause interruption of another
shipper's scheduled service, then such nomination will be accepted or
rejected at Bay Gas' sole discretion.
3. Nominations made in accordance with this Section II A shall not become
effective until Bay Gas has confirmed the nominated storage receipts
(injections) and deliveries (withdrawals), or transportation
deliveries and redeliveries, with upstream and downstream parties.
Shipper shall designate the appropriate person(s) with authority to
confirm nominations and to resolve allocation issues on a
24-hour-basis.
4. The parties intend that the volumes of gas received or delivered or
redelivered will be equal to the confirmed nominations. To the extent
that gas quantities actually received or delivered or redelivered may
be greater than or less than the confirmed nominations, the parties
intend that such variance will be treated in accordance with an
Accounting Allocation Agreement entered into between the parties.
5. Bay Gas shall not be obligated, during any hour, to receive or to
deliver or to redeliver a total volume of gas in excess of one
twenty-fourth (1/24th) of the lesser of (a) Shipper's aggregate
Maximum Daily Injection Quantity or Maximum Daily Withdrawal Quantity,
or Maximum Daily Transportation Quantity or (b) Shipper's accepted
nomination volumes. The parties intend that from time to time Shipper
and Bay Gas may mutually agree to a flow rate above or below a uniform
hourly rate.
B. Balancing. Bay Gas will accept for storage injection or deliver for
withdrawal, or for transportation delivery and redelivery, on a daily
basis, volumes thermally equivalent to volumes nominated and scheduled,
less appropriate compressor fuel and lost-and-unaccounted-for gas
(collectively called "Company Use") charges, unless otherwise mutually
agreed to in writing. All imbalances between actual and nominated
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injection volumes or withdrawal volumes, or between delivery volumes and
redelivery volumes, shall be treated as imbalance under, and received in
accordance with, the Storage or Transportation Service Agreement(s) under
which the gas in question is delivered to or from the storage or
transportation facilities. Gas delivered to Bay Gas for withdrawal or
redelivery hereunder on each day shall be at constant uniform rates as
practicable throughout such day.
1. If Shipper is advised by any upstream third party of the need to
reduce or suspend deliveries of gas scheduled for delivery to or from
storage, or for transportation delivery and redelivery, Shipper shall
immediately notify Bay Gas orally, and shall confirm such notification
in writing, of such reduction or suspension.
2. Nothing in this Section II B shall limit Bay Gas' right to take action
as may be required to adjust injections or withdrawals of gas,
including suspending storage services or to adjust deliveries and
redeliveries, including suspending transportation services, in order
to alleviate conditions that threaten the integrity of its system.
3. In the absence of an executed Accounting Allocation Agreement between
Shipper and Bay Gas as described in Section II A. 4, balancing
procedures shall be as specified in this Section II B. If an
Accounting Allocation Agreement is in effect between Shipper and Bay
Gas, such Agreement shall take precedence over the provisions
specified in this Section II B.
4. If there is more than one supply source (whether at a single or at
multiple Points of Receipt or Delivery) nominated to be received for
Storage or Transportation, the nomination will identify how and which
supply source(s) should be allocated by means of a Receipt
Pre-Determined Allocation ("RPDA") specified in the nomination. In
accounting for the volumes delivered or redelivered by Bay Gas, in
circumstances where multiple services are provided at any Point of
Delivery or Redelivery, the sequence of volumes delivered shall be
determined by the Delivery Pre-Determined Allocation ("DPDA")
specified by Shipper in its most recent nomination. The nomination
will identify which supply source(s) should be allocated in the event
gas is not or cannot be delivered or redelivered as nominated.
5. To the extent feasible, all volumes received by or delivered to Bay
Gas at a Point of Receipt or Delivery shall be allocated in accordance
with the confirmed nominations for that point. In the event the actual
volumes received by Bay Gas do not equal the confirmed nominations for
that point, any underage or overage will be allocated as follows:
(a) First, in accordance with the effective RPDAs submitted by
Shipper (or Shipper's suppliers). Shipper agrees that such
an allocation is binding on Shipper.
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(b) Then, if there is no effective RPDA, pro rata to the extent
applicable based on confirmed nominations, as applicable.
Shipper agrees that such an allocation is binding on
Shipper.
6. To the extent feasible, all volumes delivered or redelivered by Bay
Gas at a Point of Delivery or Redelivery shall be allocated in
accordance with the confirmed nominations for that point. In the event
the actual volumes delivered by Bay Gas do not equal the confirmed
nominations for that point, any underage or overage will be allocated
as follows:
(a) First, in accordance with the effective DPDAs submitted by
Shipper (or Shipper's suppliers). Shipper agrees that such
an allocation is binding on Shipper.
(b) Then, if there is no effective DPDA, pro rata to the extent
applicable based on confirmed nominations, as applicable.
Shipper agrees that such an allocation is binding on
Shipper.
7. Each Shipper shall be responsible for ensuring that its suppliers
submit Pre-Determined Allocations ("PDAs", which include RPDAs or
DPDAs) as provided herein using a form acceptable to Bay Gas. Unless
otherwise agreed, all PDAs must be submitted to Bay Gas via facsimile
or other agreed upon electronic means on or before the date the PDA is
to be effective. Such PDA shall specify how any underage or overage
from the confirmed nominated volumes should be allocated among the
entities listed on the PDA. Bay Gas shall acknowledge receipt and
acceptance of the PDA by returning acknowledgment of the PDA to
Shipper via mutually agreeable means. Bay Gas acceptance is contingent
on Bay Gas being able to administer the allocation submitted by the
Shipper.
8. To the extent that actual injections or actual withdrawals, or actual
deliveries or actual redeliveries, for each Shipper do not exactly
match confirmed nominations for any day, Bay Gas will attempt to
balance any such differences among Bay Gas and the upstream or
downstream entities, without impacting Shipper, whenever possible. If
an upstream or downstream entity requires a Balancing Agreement for
which any fee is required, Shipper agrees to reimburse Bay Gas for any
incurred expenses.
C. Storage Balance Reconciliation. To the extent Shipper and Bay Gas agree, in
writing, that imbalances may be accounted for under the Shipper's Storage
Service Agreement, and to the extent Shipper has sufficient storage
capacity, Bay Gas will issue a formal storage balance notice to Shipper by
the 20th of the month following the injection/withdrawal month ("the Notice
Month"), reflecting the effect of Shipper's storage balance or any
imbalance. Shipper understands and
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agrees to contact or cause to be contacted, the parties that deliver
injection volumes to Bay Gas, or receive withdrawal volumes from Bay Gas,
for the Shipper's account to confirm any imbalance.
Following the termination of the Storage Service Agreement, Shipper shall
be required to either (a) transfer title to any volumes of gas in storage
to a third party with whom Bay Gas has a Storage Service Agreement, with
such transfer to be subject to any injection conditions or charges
applicable to such third party, or (b) withdraw such volumes from storage
within a sixty (60) day balancing period after the determination by Bay Gas
that any such volumes exist, or within such longer period of time mutually
agreed upon by Shipper and Bay Gas. Shipper agrees that at the end of the
above sixty (60) day balancing period, Bay Gas will, for any storage
volumes not withdrawn, take title to such gas and such title is to pass
automatically without cost to Bay Gas.
D. Excess Deliveries. In the event that Shipper, from time to time, desires to
have injected into or withdrawn from storage, or to have transported, or to
have transported, quantities of gas in excess of the Maximum Daily
Injection Quantity or Maximum Daily Withdrawal Quantity, or Maximum Daily
Transportation Quantity, respectively, which Bay Gas is obligated to accept
or deliver or redeliver under storage or transportation arrangements for
Shipper on any day under a Storage or Transportation Service Agreement,
Shipper may request injection or withdrawal or transportation of such
excess gas, and Bay Gas in its sole discretion may accept or deliver or
redeliver all or any part of such gas subject to the restrictions of these
General Terms and Conditions.
SECTION III.
Construction of Facilities
Under no circumstances shall Bay Gas be obligated to construct or add
facilities to receive or deliver or redeliver gas under a Storage or
Transportation Service Agreement, or to increase the capacity of Bay Gas'
pipeline system or storage or transportation facilities. Upon Shipper's written
request to evaluate connections of new facilities, Bay Gas will prepare and
submit to Shipper a construction cost estimate. All new or additional facilities
that may be required for the delivery of acceptable gas to Bay Gas, or for the
delivery or redelivery of gas to the receiving party or parties will be
constructed, maintained, owned and operated by Bay Gas, except as may otherwise
be expressly agreed in writing. The design and installation of all facilities
shall be in accordance with the specifications then used by Bay Gas for like or
similar facilities. Shipper shall bear the cost of all such new connections,
unless otherwise mutually agreed.
SECTION IV.
Rate Adjustment
A. Rates charged for services shall be negotiated between Bay Gas and Shipper.
Bay Gas reserves the right to seek authorization from the
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Federal Energy Regulatory Commission ("FERC") or other appropriate agency
to increase, decrease or restructure the rates (including market based
rates), and Company Use charges in effect at any time as may be found
necessary to assure Bay Gas' right to charge and collect fair and equitable
rates within the meaning of Section 311 (a)(2) of the Natural Gas Policy
Act of 1978 ("NGPA") and the FERC's rules and regulations thereunder.
Nothing herein contained shall be construed to deny any Shipper any rights
which it may have under FERC rules and regulations, including the right to
participate fully in rate proceedings by intervention or otherwise to
contest changes in rates and Company Use charges in whole or part. In
addition to the rates above, Shipper shall pay in advance all applicable
state and federal filing, reporting and application fees incurred by Bay
Gas for providing such services.
B. Bay Gas may at any time provide firm or interruptible storage services at
different rates from the market based rates approved by the FERC for Bay
Gas' NGPA Section 311(a)(2) services. Nothing herein shall obligate or
require, or be construed to obligate or require, Bay Gas to offer or
continue such different rates.
SECTION V.
Regulatory Requirements
Bay Gas' interstate services shall be in accordance with and subject to
the requirements of Section 311(a)(2) of the NGPA and the rules and regulations
of the FERC thereunder. Bay Gas' intrastate services shall be in accordance with
and subject to the laws, rules and regulations of the State of Alabama.
Bay Gas agrees to proceed with reasonable diligence during the term of
the Storage or Transportation Service Agreement with the filing for and
prosecution of any authorizations as may be required for the storage or
transportation of the gas hereunder or the rate(s) charged therefor. Bay Gas
reserves the right to pursue any necessary regulatory filings with FERC and any
other governmental or regulatory body having jurisdiction in such matter as it
deems to be in its best interest, including the right to file whatever pleadings
and motions it deems desirable. In the event Bay Gas has obtained such necessary
regulatory authorization, but the terms and conditions are significantly
different than those terms originally filed with the regulatory agency, or in
the event FERC rejects or modifies Bay Gas' Statement of Conditions for NGPA
Section 311(a)(2) Gas Storage and Transportation Services, as same may be
amended by Bay Gas from time to time, Bay Gas shall pursue other reasonable
options to continue providing such services or, at Bay Gas' option, shall
terminate such services as provided in Article VII, Right to Terminate Services,
of Bay Gas' Statement of Conditions.
SECTION VI.
Pressures
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Bay Gas shall operate its storage facilities at pressures which will
accommodate the withdrawal of gas in accordance with Bay Gas' outstanding firm
service storage commitments. Bay Gas shall operate its transportation facilities
at pressures which will accommodate the redelivery of gas in accordance with Bay
Gas' outstanding firm service transportation commitments. Shipper shall be
obligated to deliver gas for injection or for transportation, at a pressure
sufficient for Bay Gas to transport such gas to and inject into its storage
facility, or to transport such gas for redelivery, recognizing that the amount
of such pressure will vary based on the operation of the Bay Gas pipeline.
SECTION VII.
Measurement
A. The gas received for injection or delivered for withdrawal at the storage
facilities, or delivered or redelivered at the transportation facilities,
shall be measured with meters constructed and installed, and whose
computations of volume are made, in accordance with the provisions of
ANSI-API 2530-AGA-3, latest revision as adopted by Bay Gas.
B. The temperature of the gas shall be determined by a recording thermometer
so installed that it will record the temperature of the gas flowing through
the meters. The average of the record to the nearest one degree (1 degree)
Fahrenheit, obtained while gas is being delivered, shall be the applicable
flowing gas temperature for the period under consideration. For all
measurement of gas required in this Section, the BTU content per cubic foot
shall be determined for a cubic foot of gas at a temperature of sixty
degrees (60 degrees) Fahrenheit, at an absolute pressure of fourteen and
seventy-three hundredths (14.73) pounds per square inch on a dry basis.
C. The BTU, specific gravity, carbon dioxide, and nitrogen content of the gas
shall be determined by the use of an on-line chromatograph or by a
chromatographic analysis of the gas obtained by a continuous sample or spot
sampling method. The results of any sample taken with an on-line
chromatograph shall be applied to the month in which the sample was taken.
D. Adjustment for the effect of supercompressibility shall be made according
to the provisions of the latest version of either NX-19 or AGA Committee
Report No. 8, as required by Paragraph A. of this Section and as adopted by
Bay Gas, for the average conditions of pressure, flowing temperature, and
specific gravity at which the gas was measured during the period under
consideration and with the proportionate values of carbon dioxide and
nitrogen in the gas delivered included in the computation of the applicable
supercompressibility factors.
E. If at any time during the term hereof a new method or technique is
developed with respect to gas measurement or the determination of the
factors used in such gas measurement, such new method or technique may
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be substituted for the gas measurement set forth in this Section on the
date such method or technique is adopted by Bay Gas.
SECTION VIII.
Measuring Equipment and Testing
A. General. The construction, ownership, operation and maintenance of any
measuring equipment necessary to accomplish the storage receipt of gas for
injection by Bay Gas for the account of Shipper and the delivery of gas
withdrawn by Bay Gas for the account of Shipper, or the transportation
delivery of gas to Bay Gas for the account of Shipper and the redelivery of
gas by Bay Gas for the account of shipper shall be the responsibility of
Bay Gas. Shipper shall at all reasonable times have access to the premises
of Bay Gas for inspections, insofar as such premises are connected with any
matter or thing covered hereby. The operation of measuring equipment and
changing of charts shall be done only by the employees or agents of Bay
Gas.
B. Testing and Repair of Equipment.
1. Bay Gas shall keep its own measuring equipment accurate and in repair,
making periodic tests to verify the condition of meter tubes, orifice
plate, and chart recorder or flow computer. Bay Gas agrees to give
Shipper(s) seven (7) calendar days notice prior to such tests of the
measuring equipment so that, if desired, Shipper(s) may have its
representative present. Shipper(s) shall have the right to challenge
the accuracy of Bay Gas' equipment, and when challenged, the equipment
shall be tested, calibrated and, if required, repaired by Bay Gas, the
cost of such special test to be borne by Bay Gas if the percentage of
the inaccuracy is found to be more than two percent (2%), but if the
percentage of inaccuracy is found to be two percent (2%) or less, the
cost of such special test shall be borne by the Shipper(s). If upon
any test the percentage of inaccuracy is found to be in excess of two
percent (2%), registrations thereof shall be corrected for a period
extending back to the time such inaccuracy occurred, if such time is
ascertainable, and if not ascertainable, then back one-half (1/2) of
the time elapsed since the last date of calibration. Any measuring
equipment found to be measuring inaccurately by one percent (1%) or
more shall be adjusted at once to read accurately.
2. If, for any reason, the meter(s) are out of service or out of repair
so that the amount of gas received or delivered cannot be ascertained
or computed from the readings thereof, the gas received or delivered
during the period such meter(s) are out of service or out of repair
shall be estimated and agreed upon by the parties hereto by the use of
the first applicable of the following methods:
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(a) By comparative utilization of any like check measuring
equipment if such check measuring equipment can be proven
and verified to be measuring accurately; or
(b) By computing the error if the percentage of error is
ascertainable by calibration, test or mathematical
calculation; or
(c) By estimating the quantity received or delivered by
reference to actual receipts or deliveries during preceding
periods under similar conditions when Bay Gas' measuring
equipment was registering accurately.
C. Inspection of Charts and Records. The charts and records from the measuring
equipment shall remain the property of Bay Gas and shall be kept on file
for a period of time not less than two (2) years from the end of the
calendar year in which the charts and records were generated or prepared.
At any time within such period, upon written request by Shipper, records or
charts from the measuring equipment, together with calculations therefrom,
will be submitted for Shipper's inspection and verification subject to
return to Bay Gas within thirty (30) days from receipt thereof. All
inquiries regarding this Section VIII, including but not limited to,
measurement charts, records or audits of charts and records, shall be
directed to Bay Gas.
SECTION IX.
Quality
The gas delivered by either party to the other hereunder shall meet or
exceed the quality specifications of the transporting pipeline which receives or
delivers such gas to the other party hereunder.
SECTION X.
Billing, Accounting, Taxes and Reports
A. Billings and Payments.
1. For the purpose of billing and accounting for the gas delivered
hereunder, the day shall begin at 9:00 a.m. Central Clock Time and
extend to 9:00 a.m. the following day, and the month (hereinafter
called "billing month") shall begin at 9:00 a.m. Central Clock Time on
the first (1st) day of the calendar month and extend to 9:00 a.m. on
the first (1st) day of the following calendar month.
2. Bay Gas shall render to its Shippers, by mail or facsimile, on or
before the first (1st) day of each month an invoice setting forth the
demand charges as applicable. Within ten (10) days from the date of
the invoice, Shipper agrees to make payment to Bay Gas by wire
transfer to the AmSouth Bank of Alabama, crediting Bay Gas'
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account number 83794638 for such firm demand charges for the account
of Shipper at the Delivery Point(s) during the current month.
3. On or before the fifteenth (15th) day of each calendar month, Bay Gas
shall render or cause to be rendered, by mail or facsimile, to all
Shippers an invoice of the amount due for the preceding month setting
forth the total quantity of gas (1) received by Bay Gas from Shipper
for injection into the storage facilities, or delivered by shipper to
Bay Gas for transportation; (2) delivered by Bay Gas to Shipper for
withdrawal from the storage facilities, or redelivered by Bay Gas to
Shipper after transportation; (3) gas balance at the beginning and end
of the injection/withdrawal, or transportation, month and (4) the
rates and charges for storage or transportation services hereunder
during such billing month. Billings for volumes transported shall be
determined on a dry basis.
4. Within ten (10) days from the date of the fifteenth (15th) day
invoice, Shipper shall pay Bay Gas the amount due for all gas
injected, withdrawn or stored, or transported, by Bay Gas for the
account of Shipper during the injection/withdrawal, or transportation,
month. Payments to Bay Gas shall be made either by wire transfer to
the AmSouth Bank of Alabama, crediting Bay Gas' account number
83794638, or by check such that funds are available to Bay Gas on or
before the tenth (10th) day after the date of the invoice. If
rendering of an invoice by Bay Gas is delayed after the fifteenth day
of the month, then the time of payment shall be extended accordingly
unless Shipper is responsible for such delay.
B. Late Payment. In the event Shipper shall fail to pay any amount due Bay Gas
when the same is due, Bay Gas shall have the option of accruing interest at
a varying rate per annum (based on a year of 365 or 366 days, as the case
may be) which shall be one hundred fifteen percent (115%) of the prime rate
charged by the AmSouth Bank of Alabama to its largest and most creditworthy
commercial borrowers on ninety (90) day commercial loans (but in no event
greater than the maximum rate of interest permitted by law) with
adjustments in such rate, for any period during which the same shall be
overdue, such interest to be paid when the amount past due is paid. Shipper
shall not be required to pay interest on any amount billed which is in good
faith disputed in writing by Shipper and is ultimately determined to be in
error; provided, however, interest shall be due if such amount billed is
found not to be in error. If a portion of an invoice is disputed, Shipper
shall pay when due the portion of the invoice not in dispute. If such
failure to pay continues for thirty (30) days after the payment due date,
Bay Gas may suspend deliveries of gas, subject to Bay Gas providing
forty-eight (48) hours written notice, during normal working hours, of such
intention to suspend deliveries; provided, however, that if Shipper, in
good faith, disputes the amount of any such bill or part thereof and pays
to Bay Gas such amounts as Shipper concedes to be correct, and
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furnishes and maintains a good and sufficient surety bond in an amount, and
with sureties satisfactory to Bay Gas, conditioned upon the payment of any
amounts ultimately found due upon such bills after a final determination,
then Bay Gas shall not be entitled to suspend further delivery due to
failure to pay such bills. In the event Shipper's financial position
significantly deteriorates from that on the execution date of the Storage
or Transportation Service Agreement, advance cash payments or acceptable
security (including but not limited to an irrevocable letter of credit from
a financial institution in an amount acceptable to Bay Gas) shall be given
by Shipper upon demand of Bay Gas. Bay Gas may, without waiving any other
rights or remedies it may have, withhold further delivery until such
payment is received. In the event Bay Gas pursues collection on late
payment, Shipper shall be liable for all expenses and costs, including
court costs and attorneys' fees, incurred as a result of such failure to
pay on time.
C. Tax Reimbursement. Shipper agrees to reimburse Bay Gas for all new taxes
(federal, state, local or other) that may be levied upon or paid by Bay
Gas, with respect to the services performed hereunder.
D. Examination of Books, Records and Charts. Each party shall have the right
during reasonable working hours to examine the books, records and charts of
the other party to the extent necessary to verify the accuracy of any
statement, payment calculations or determinations made pursuant to the
provisions contained herein. If any such examination shall reveal, or if
either party shall discover, any error in its own or the other party's
statements, payment calculations or determinations, then proper adjustment
and correction thereof shall be made as promptly as practicable thereafter.
The accuracy of any statement, payment calculations or determinations made
pursuant to the provisions contained herein shall be conclusively presumed
to be correct after two (2) years from the end of the calendar year in
which the charts and records were generated or prepared if not challenged
in writing prior thereto.
SECTION XI.
Possession and Non-Odorization of Gas
As between Shipper and Bay Gas, Shipper shall be in exclusive control
and possession of the gas deliverable and responsible for any damage or injury
caused thereby until the same shall have been received by Bay Gas for injection
at the storage facilities, or until delivered at the transportation facilities,
and after delivery of the gas for the account of Shipper for withdrawal at the
storage facilities, or after redelivery for the account of Shipper at the
transportation facilities. After delivery of gas for injection or transportation
by Shipper to Bay Gas, and until delivery by Bay Gas to Shipper or Shipper's
designee upon withdrawal or until redelivery after transportation, Bay Gas shall
be in exclusive control and possession thereof and responsible for any injury or
damage caused thereby. Neither Bay Gas nor Shipper assume any obligation to
odorize any gas delivered to the other.
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SECTION XII.
Warranty
Shipper warrants that it will have and maintain good and marketable
title or the right to deliver for a third party owning good and marketable title
all gas tendered for injection, storage and withdrawal under a Storage Service
Agreement, and all gas delivered for transportation under a Transportation
Service Agreement, and that such gas shall be free and clear of all liens and
adverse claims; and each party agrees, with respect to the gas delivered by it,
to indemnify the other against all suits, actions, debts, accounts, damages,
costs (including attorney's fees), losses and expenses arising from or out of
any adverse claims of any and all persons to or against said gas.
SECTION XIII.
Government Regulations
A. All of the provisions of any Storage or Transportation Service Agreement
are hereby expressly made subject to all present and future applicable
federal or state laws, orders, rules and regulations of governmental
authorities having jurisdiction. Except as otherwise provided herein, in
the event any provision of a Storage or Transportation Service Agreement or
of these General Terms and Conditions is found to be inconsistent with or
contrary to any such law, order, rule or regulation, the latter shall be
deemed to control, and the Storage or Transportation Service Agreement and
these General Terms and Conditions, to the extent possible, shall be
regarded as modified accordingly and as so modified shall continue in full
force and effect.
B. The parties hereto recognize that a Storage or Transportation Service
Agreement has been entered into by Bay Gas in the good faith understanding
that all acts, obligations and services performed by Bay Gas hereunder, and
the charges therefor, are exempt from the regulation of FERC or any
successor federal governmental authority, except as presently provided by
Section 311(a)(2) of the NGPA and FERC's relevant regulations thereunder.
Bay Gas reserves the right to terminate a Storage or Transportation Service
Agreement immediately if, in the opinion of counsel for Bay Gas, any act
shall occur or be seriously threatened which is in any way inconsistent
with such understanding.
C. Equal Employment Opportunity. Bay Gas and Shipper agree to comply with any
and all applicable executive orders and acts pertaining to equal employment
opportunity.
SECTION XIV.
Force Majeure
A. In the event of either party being rendered unable, wholly or in part, by
reason of force majeure to carry out its obligations under any
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Storage or Transportation Service Agreement (other than the obligation to
make payment of amounts due hereunder), it is agreed that such party shall
give notice and reasonably full particulars of such force majeure, in
writing or by facsimile, to the other party within a reasonable time after
the occurrence of the cause relied on, and the obligations of the party
giving such notice, 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.
B. 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 Bay Gas or Shipper is
required to obtain servitudes, rights-of-way, grants, permits or licenses
to enable such party to fulfill its obligations under a Storage or
Transportation Service Agreement; the inability of such party in acquiring,
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 Bay Gas or Shipper 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 a Storage or
Transportation Service Agreement; the inability of such party to acquire,
or the delays on the part of such party 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.
C. 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 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.
SECTION XV.
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Notices
Except as herein otherwise provided, any communication, notice,
request, demand, statement or bill provided for in a Storage or Transportation
Service Agreement which any party may desire to give to any other party shall be
made in writing and mailed by first class mail to the post office address of the
party intended to receive the same, as the case may be, at the addresses each
respective party shall designate in the Storage or Transportation Service
Agreement or change by subsequent formal written notice to the other. Routine
communications, including monthly statements and payments, may be mailed by
either certified or ordinary first class mail.
SECTION XVI.
Creditworthiness
Bay Gas shall not be required to commence service or, subject to the
following timing provisions, to continue to provide service under a Storage or
Transportation Service Agreement with any Shipper, that (a) is or has become
insolvent; (b) has applied for bankruptcy under Chapter 11 of the Bankruptcy
Code, or which is subject to similar proceedings under state or federal law; or
(c) when requested by Bay Gas to demonstrate creditworthiness, fails to do so in
Bay Gas' reasonable judgment, in light of previous payment experience and the
prudent credit analysis of information available; provided, however, that any
such Shipper that is receiving service shall continue to receive service for a
period of fifteen (15) days after written notice by Bay Gas of any such
circumstance, and shall continue thereafter to receive service if, within such
fifteen (15) day notice period, such Shipper (a) deposits with Bay Gas and
maintains, on account, an amount which would be due for three (3) months service
at the full Maximum Daily Withdrawal Quantity, or the full Maximum Daily
Transportation Quantity, including an amount of the current gas imbalance plus,
an amount equal to the three (3) highest cashout payments, if any, incurred
during the previous twelve months, or (b) furnishes good and sufficient
security, which may include an acceptable standby letter of credit, or monthly
prepayment agreement or other security as reasonably determined by Bay Gas, of a
continuing nature and in an amount equal to such amounts which would be due for
service. If such payment on account or payment security is not received within
such fifteen (15) day notice period, Bay Gas may, without waiving any rights or
remedies it may have, suspend further service for a period of ten (10) days. If
such payment on account or a payment security is not received within such ten
(10) day suspension period, then Bay Gas shall no longer be obligated to
continue to provide service to such Shipper. Further, if such payment on account
or a payment security is not received within sixty (60) days after the end of
such suspension period, Bay Gas may terminate its obligations to provide service
under all agreements between Shipper and Bay Gas, which termination shall not
affect any of Bay Gas' claims or remedies it may have under any Storage or
Transportation Service Agreement.
SECTION XVII.
Miscellaneous
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A. Headings and Subheadings. The headings and subheadings contained in the
Storage or Transportation Service Agreement are used solely for convenience
and do not constitute a part of the Storage or Transportation Service
Agreement between the parties hereto, nor should they be used to aid in any
manner in construing the Storage or Transportation Service Agreement.
B. Successors and Assigns. The Storage or Transportation Service Agreement
shall be binding upon and inure to the benefit of the respective successors
and assigns of the parties hereto, but no assignment shall relieve any
party of its obligations hereunder unless such party is expressly released
in writing from said obligations by the party to which it is obligated.
C. Entire Agreement. The Storage or Transportation Service Agreement, the
Statement of Conditions for NGPA Section 311(a)(2) for Gas Storage and
Transportation Services, and these General Terms and Conditions constitute
the entire agreement of the parties hereto as to the matters contained
herein, and there are no oral promises, agreements or warranties affecting
same.
D. Non-Waiver. The waiver of any default or right to require performance under
a Storage or Transportation Service Agreement shall not operate as a waiver
of any future default or right to require performance, whether of like or
different character or nature.
E. Jurisdiction and Venue. The parties agree that a Storage or Transportation
Service Agreement shall be governed by and construed in accordance with the
laws of the State of Alabama, excluding any conflicts of law, rule or
principle that might refer such construction to the laws of another state
and that venue shall be in the State of Alabama for services performed in
Alabama, with respect to any cause of action brought under or with respect
to a Storage or Transportation Service Agreement.
F. Confidentiality. The terms of any Storage or Transportation Service
Agreement shall be kept confidential by the parties except to the extent
that any information must be disclosed to a third party as required by law,
for either party's financial needs or for the purpose of effectuating any
Storage or Transportation Service Agreement.
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EXHIBIT "C"
BAY GAS STORAGE COMPANY's
STATEMENT OF CONDITIONS FOR
NGPA SECTION 311 (a)(2) GAS
STORAGE AND TRANSPORTATION SERVICES
Dated December 22, 1998.
Bay Gas Storage Company, Ltd. ("Bay Gas"), a natural gas storage public
utility that qualifies as an intrastate pipeline company providing services
within the meaning of Natural Gas Policy Act of 1978 ("NGPA") Section 2 (16) and
Section 284.1 (a) of the Federal Energy Regulatory Commission's ("Commission")
regulations, files this amended Statement of Conditions For NGPA Section 311
(a)(2) Gas Storage and Transportation Services, pursuant to the Commission's
regulations. 18 C.F.R. Section 284.123 (e). Firm and interruptible gas storage
and transportation-only services, on terms and conditions authorized by the
Commission and accepted by Bay Gas, shall be provided by Bay Gas pursuant to
NGPA Section 311 (a)(2), 15 U.S.C. Section 3371 (a)(2), and the Commission's
implementing Orders, Rules and Regulations, to qualified Shippers that comply
with the conditions set forth in this Statement and with the terms and
conditions contained in Bay Gas' Storage or Transportation Service Agreement
executed with Shipper.
I.
BAY GAS' BASIC STATUS AND FUNCTION
Bay Gas is a gas storage public utility, certificated by the Alabama
Public Service Commission and subject to regulation by that Commission, which
qualifies as an intrastate pipeline company providing storage and transportation
services within the meaning of NGPA Section 2 (16) and Section 284.1 (a) of this
Commission's regulations. Any such NGPA Section 311 (a)(2) services that Bay Gas
provides will be consistent with, and shall not infringe on, Bay Gas' status and
function as a non-Federal-jurisdictional intrastate pipeline, and shall not
subject Bay Gas to this Commission's Natural Gas Act jurisdiction. 18 C.F.R.
Section 284.3.
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II.
QUALIFIED SHIPPERS
Besides other conditions contained in this Statement, Bay Gas' services
are available only to a Shipper that enters into a Service Agreement mutually
acceptable to Bay Gas and Shipper. All transactions for storage or
transportation of gas that has flowed, or will flow, in interstate commerce must
qualify under NGPA Section 311 (a)(2) and 18 C.F.R. Part 284 of Subchapter I.
If, in the opinion of Bay Gas' counsel, such qualified status of Shipper or its
proposed transaction is in doubt, then Shipper must apply for and receive a
final, non-appealable ruling from this Commission, or successor agency thereto,
affirming such qualifying status of Shipper and its proposed transaction, prior
to commencement of services by Bay Gas.
III.
CAPACITY AVAILABILITY, SCHEDULING AND ALLOCATIONS
AND CURTAILMENTS
A. Capacity Availability
1. Storage service shall be conditioned on availability of sufficient
injection rate capacity, field storage capacity and withdrawal rate
capacity (collectively called "Capacity," and including pipeline
transportation service capacity) to perform the service in accordance
with the terms and conditions set forth in this Statement of
Conditions without detriment or disadvantage to services by or for the
account of Bay Gas. Transportation service shall be conditioned on
availability of sufficient Capacity to perform the service in
accordance with the terms and conditions set forth in this Statement
of Conditions without detriment or disadvantage to services by or for
the account of Bay Gas. Bay Gas reserves all rights to retain
sufficient Capacity for its intrastate, non-Federal-jurisdictional
firm and interruptible services and for its operational swings
attributable to firm and interruptible storage services prior to
making Capacity available
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by contract to NGPA Section 311 (a)(2) Shippers. Once Capacity is made
available to NGPA Section 311 (a)(2) Shippers, such Capacity shall be
scheduled, allocated or curtailed only as set forth in Sections III. B
and C here.
2. Storage service availability further shall be conditioned on Bay Gas
receiving an acceptable market value, in Bay Gas' sole judgment, for
such storage services, determined when a request for storage service
is received. Bay Gas reserves all rights to refuse a request for
storage service that, in Bay Gas' sole judgment, might provide less
than market value. Apart from such Bay Gas judgment as to market
value, Bay Gas' judgment shall be exercised on a non-discriminatory
basis.
3. Criteria applied to requests for NGPA Section 311 (a)(2) services
shall be the same as criteria applied to requests for intrastate,
non-Federal-jurisdictional services.
4. Shipper shall be responsible for making all arrangements for its
transportation of gas to be injected into or withdrawn from storage
through Bay Gas' storage services. Bay Gas reserves all rights to
refuse storage service for any otherwise qualified Shipper if Bay Gas
determines that such storage would be detrimental to Bay Gas' storage
operations in any way, including, without limitation, Bay Gas' storage
compression and affected processing operations.
B. Scheduling and Allocations
Bay Gas shall schedule contracted services according to these
principles:
1. Nomination deadlines shall be as prescribed in Bay Gas'
General Terms and Conditions.
2. Bay Gas will be under no obligation to schedule the
injection of gas into storage or the withdrawal of gas from
storage until Bay Gas has confirmed the availability of
Shipper's transportation
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service to or from Bay Gas' storage services for the gas concerned.
Subject to the foregoing subsection "1." and this subsection "2.",
firm storage and transportation services shall be scheduled before
interruptible services in all instances, regardless of the relative
service rates to be paid.
3. In-field transfer of title (transfer of gas balances in the storage
field between storage service agreements) may be made only with Bay
Gas' approval.
4. Interruptible storage service Shippers paying a higher Unit Rate, as
defined in Bay Gas' General Terms and Conditions, shall be scheduled
ahead of interruptible storage service Shippers paying a lower Unit
Rate. If, because of changes in available Capacity at any time, Bay
Gas is required to reschedule interruptible Shippers that are
injecting, storing or withdrawing gas and are paying the same Unit
Rate, then the Capacity shall be rescheduled pro rata based on
applicable contract quantities for said Shippers.
5. Bay Gas reserves the right to interrupt service to an interruptible
Shipper injecting, storing or withdrawing gas, in order to enable Bay
Gas to provide service to another, bumping, interruptible Shipper
injecting, storing or withdrawing gas, if such Shipper is paying a
higher Unit Rate to Bay Gas.
6. All overrun volumes in excess of a storage service Shipper's contract
quantities nominated for delivery by Shipper shall be scheduled
according to the above subsections "4." and "5." only after all other
storage service Shippers' nominated volumes equal to or less than each
Shippers' Maximum Daily Injection Quantity or Maximum Daily Withdrawal
Quantity are scheduled.
7. Bay Gas may reschedule Capacity on a daily basis, or on such other
periodic basis as is necessary for Bay Gas to recognize the priority
of new storage or transportation service Shippers or any changes in
the priorities of existing such Shippers, and to
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conform to its storage system operational requirements. Such
priorities or changes will include, but will not be limited
to, those instances involving a storage service Shipper paying
a higher Unit Rate for interruptible service and firm storage
service Shippers changing volumes within their Maximum Daily
Injection Quantity or Maximum Daily Withdrawal Quantity.
However, such changes in scheduling shall not at any time bump
any existing firm Shipper.
C. Curtailments
1. General. If curtailment of storage or transportation service is
required, volumes shall be curtailed in the reverse order of the
priority in effect at the time of curtailment established during
scheduling as set forth in Section "III. B" above. Intrastate,
non-Federal-jurisdictional firm and interruptible services shall be
curtailed in a manner determined solely by Bay Gas, but in no event
shall such curtailments have a different priority than similar
types of services for NGPA Section 311 (a)(2) Shippers.
2. Reduction of Services. Without limitation to the foregoing, Bay Gas
shall have the right to reduce receipts, deliveries, injections or
withdrawals of gas on any day below a storage service Shipper's
Maximum Daily Injection Quantity or Maximum Daily Withdrawal
Quantity, or below the storage rights applicable, for repair,
overhaul, replacement or construction of pipelines, compressors,
metering, regulating or other production, gathering and
transmission facilities and equipment, or to maintain system
integrity; provided, however, that with respect to routine repair
and maintenance, Bay Gas will implement restrictions for scheduling
purposes only, not for curtailment, and will attempt to schedule
such activity during a period when it will not result in limitation
of firm service or when such limitation will be
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minimized, and after consulting with the Shippers that could be
affected.
3. Notice of Curtailment. For shippers under all firm services, Bay Gas
shall provide notice of any curtailment as far in advance as feasible.
Services reserved by Bay Gas for system operations shall be curtailed
last, in consideration of the need to preserve system integrity. If
capacity is curtailed and two or more firm Shippers have the same
priority according to this Section "III. C", firm Shippers shall be
allocated their pro rata share of capacity based on their Maximum
Daily Injection Quantity or Maximum Daily Withdrawal Quantity or
Maximum Daily Transportation Quantity, as applicable. If firm Shippers
nominate fewer than their respective curtailment period entitlements,
the difference shall be allocated pro rata among those firm Shippers
with unsatisfied nominations. All non-firm Shippers shall be allocated
their pro rata share of Capacity based on their nominations in effect
at the time of the curtailment.
4. Limitation of Firm Services. While firm services are not ordinarily
interrupted by nominations for firm service within Shipper's Maximum
Daily Injection Quantity or Maximum Daily Withdrawal Quantity or
Maximum Daily Transportation Quantity, Bay Gas may decline to schedule
firm service for any of the following reasons:
(a) if Shipper tenders gas which does not conform to applicable
pressure requirements of the Storage or Transportation
Service Agreement
(b) if Shipper tenders gas which does not conform to the gas
quality requirements of both the upstream and downstream
entities' gas quality requirements
(c) for reasons of force majeure
(d) due to routine repair and maintenance to be reasonably
determined by Bay Gas
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(e) due to delinquency in payment by Shipper
(f) to rectify imbalances or to conform physical flows to
nominations
(g) to maintain system integrity, or
(h) if there is a dispute over title, ownership or right to
tender, receive or deliver gas.
IV.
MINIMUM STORAGE SERVICE VOLUME
Bay Gas shall not be obligated to furnish storage service to any
Shipper whose average daily gas volume tendered for storage in a given month is
less than 100 MMBtu per day. Such storage Shipper's obligation to tender gas for
delivery shall be suspended and modified for the time and to the extent that Bay
Gas does not accept deliveries due to Shipper's inability to deliver such
minimum average daily volume. If the amount of gas subsequently tendered for
delivery once again is less than such minimum average daily volume, Bay Gas
shall have the right to cancel the Storage Service Agreement at any time on
thirty (30) days written notice to Shipper. Bay Gas shall be deemed released
from all obligations and liabilities, direct or indirect, under such Storage
Service Agreement on the effective date of such a cancellation.
V.
RECEIPT AND DELIVERY
Bay Gas shall have sole operational control over the injection of gas
into, the retention of gas within, and the withdrawal of gas from, Bay Gas'
system storage facilities. A Shipper seeking to direct gas into storage shall
nominate "Storage" as the Point of Delivery on Bay Gas' system and shall
identify the number of the Storage Service Agreement to be used for the receipt
of such gas into storage. A Shipper seeking to withdraw gas from storage shall
nominate "Storage" as the Point of Redelivery from Bay Gas' system and shall
identify the number of the Storage Service Agreement under which the gas is to
be withdrawn from storage. Bay Gas shall have sole
38
operational control over the transportation of gas on Bay Gas' system from the
Point of Delivery to the Point of Redelivery. For transportation service,
"Delivery" shall mean the act of causing gas to be transported to the Points of
Delivery, and "Redelivery" shall mean the transportation of gas from the Points
of Delivery to the Points of Redelivery.
VI.
GENERAL TERMS AND CONDITIONS
FOR GAS STORAGE AND TRANSPORTATION
Amended General Terms and Conditions to Bay Gas Storage Company, Ltd.'s
Storage and Transportation Service Agreements, dated December 22, 1998, are
incorporated by reference as part of this Statement of Conditions. Shipper's
failure to comply with the provisions in Section II, Nominations, Balancing And
Excess Deliveries, of such General Terms and Conditions shall relieve Bay Gas of
its obligation to perform services, and, if such failure to comply unreasonably
interferes, in Bay Gas' judgment, with Bay Gas' control over its system
facilities, then Bay Gas may, at its option, cease services and terminate any
related Service Agreements or other agreements, without limitation of Bay Gas'
rights or remedies at law or in equity.
VII.
RIGHT TO TERMINATE SERVICES
Bay Gas reserves the right to discontinue, on a non-discriminatory
basis, all services that subject Bay Gas to the non-discriminatory access
requirements of 18 C.F.R. Part 284, and any subsequent Commission Orders, Rules
or Regulations applicable to such services. Bay Gas may cancel the affected
Service Agreements at any time on ninety (90) days prior written notice to
Shippers if Bay Gas has no other reasonable options available that will allow
the continuation of such Service Agreements. Bay Gas shall be relieved of all
obligations and liabilities on the effective date of such
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notice of discontinuance and cancellation. Bay Gas additionally reserves the
right to terminate any interruptible Service Agreement if the Shipper either has
not executed the Service Agreement within thirty (30) days of receiving such
Agreement, or has failed to nominate service under such Agreement within one (1)
year after execution of the Agreement.
VIII.
COMPLIANCE WITH LAW AND SURVIVABILITY
If any part of this Statement of Conditions conflicts with, or
violates, any Commission or other Judicial, Governmental or Regulatory Body's
Orders, Rules or Regulations, such part shall be deemed void, but shall not
affect the remaining provisions of this Statement. Bay Gas shall not be liable
to any party with a Service Agreement subject to this Statement that loses
priority status or any other rights enumerated in this Statement because of the
issuance by the Commission or other Judicial, Governmental or Regulatory Body of
any Orders, Rules or Regulations affecting this Statement of Conditions.
IX.
CHANGES TO THIS STATEMENT OF CONDITIONS
Bay Gas reserves the right to add to, delete or modify the conditions
in this Statement without prior notice.
X.
AUTHORITY OF STATEMENT OF CONDITIONS
This Statement of Conditions, and the incorporated General Terms and
Conditions (see Section "VI." above) take precedence over conflicting language
in any of Bay Gas' Service Agreements or amendments thereto, unless such
language specifically states that it is an exception to this Statement, and then
only to the extent of such stated exception.
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EXHIBIT "D"
Nomination To: Bay Gas Storage
Nomination From: Southern Company Services
Daily
Nom Start End Volume Delivery Delivery Upstream
Type Date Date (MMBtu) Pipe Point Contract
- ---------------- ------------- ------------- ------------------- ------------------ ---------------------- ----------------------
Inject
DAILY
TOTAL:
- ---------------- ------------- ------------- ------------------- ------------------ ---------------------- ----------------------
Daily
Nom Start End Volume Delivery Delivery Upstream
Type Date Date (MMBtu) Pipe Point Contract
- --------------------- ------------ ------------- ------------------- ------------------ ---------------------- --------------------
Withdrawal
DAILY
TOTAL:
- --------------------- ------------ ------------- ------------------ ------------------ --------------------- --------------------
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EXHIBIT "E"
COMPLIANCE WITH LAWS
Shipper is a government contractor under an Area-Wide Utilities Service Contract
with the General Services Administration of the United States Government. Bay
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 Bay 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 Shipper 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.
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Bay Gas hereby warrants that Bay 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.