Contract #: 820009
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
This Service Agreement, made and entered into this day of
November, 1996, by and between TEXAS EASTERN TRANSMISSION CORPORATION, a
Delaware Corporation (herein called "Pipeline") and CONNECTICUT NATURAL GAS
CORPORATION (herein called "Customer", whether one or more),
W I T N E S S E T H:
WHEREAS, Customer and Pipeline currently are parties to two service
agreements under Pipeline's Rate Schedule CDS (Pipeline Contract Nos. 800380
and 800423) which specify an MDQ of 30,000 dth and 644 dth, respectively;
and
WHEREAS, Customer and Pipeline desire to enter into this service
agreement to supersede and combine Customer's existing Rate Schedule CDS
service agreements (Pipeline Contract Nos. 800380 and 800423);
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, the parties do covenant and agree
as follows:
ARTICLE I
SCOPE OF AGREEMENT
Subject to the terms, conditions and limitations hereof, of Pipeline's
Rate Schedule CDS, and of the General Terms and Conditions, transportation
service hereunder will be firm. Subject to the terms, conditions and
limitations hereof and of Sections 2.3 and 2.4 of Pipeline's Rate Schedule
CDS, Pipeline shall deliver to those points on Pipeline's system as
specified in Article IV herein or available to Customer pursuant to Section
14 of the General Terms and Conditions (hereinafter referred to as Point(s)
of Delivery), for Customer's account, as requested for any day, natural gas
quantities up to Customer's MDQ. Customer's MDQ is as follows:
Maximum Daily Quantity (MDQ) 30,644 dth
provided, however, that Customer and Pipeline shall have
six (6) options to reduce the MDQ under this Service
Agreement as set forth below. Such options to reduce
the MDQ under this Service Agreement require two (2)
years prior written notice. Such options to reduce the
MDQ under this Service Agreement: (1) shall not be
cumulative; (2) must be exercised sequentially; and (3)
are available to reduce the MDQ by any amount not in
excess of the following quantities: (i) First Option--up
to 7,355 Dth with such reduction becoming effective on
November 1, 1999, or any November 1 thereafter but prior
to and including November 1, 2004; (ii) Second Option--
up to 4,290 Dth with such reduction becoming effective
on November 1, 2000, or any November 1 thereafter but
prior to and including November 1, 2004; (iii) Third
Option--up to 4,290 Dth with such reduction becoming
effective on November 1, 2001, or any November 1
thereafter but prior to and including November 1, 2004;
SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
(iv) Fourth Option--up to 4,290 Dth with such reduction
becoming effective on November 1, 2002, or any November
1 thereafter but prior to and including November 1,
2004; (v) Fifth Option--up to 4,290 Dth with such
reduction becoming effective on November 1, 2003, or any
November 1 thereafter but prior to and including
November 1, 2004; and (vi) Sixth Option--up to 6,129 Dth
with such reduction becoming effective on November 1,
2004. In the event either Customer or Pipeline exercises
its right to reduce the MDQ of this Service Agreement as
set forth in this ARTICLE I, any such reduction(s) will
be subject to Pipeline's right of pregranted abandonment
or Customer's right of first refusal, as applicable, as
set forth in ARTICLE II of this Service Agreement.
Subject to variances as may be permitted by Sections 2.4 of Rate
Schedule CDS or the General Terms and Conditions, Customer shall deliver to
Pipeline and Pipeline shall receive, for Customer's account, at those points
on Pipeline's system as specified in Article IV herein or available to
Customer pursuant to Section 14 of the General Terms and Conditions
(hereinafter referred to as Point(s) of Receipt) daily quantities of gas
equal to the daily quantities delivered to Customer pursuant to this Service
Agreement up to Customer's MDQ, plus Applicable Shrinkage as specified in
the General Terms and Conditions.
Pipeline shall not be obligated to, but may at its discretion, receive
at any Point of Receipt on any day a quantity of gas in excess of the
applicable Maximum Daily Receipt Obligation (MDRO), plus Applicable
Shrinkage, but shall not receive in the aggregate at all Points of Receipt
on any day a quantity of gas in excess of the applicable MDQ, plus
Applicable Shrinkage. Pipeline shall not be obligated to, but may at its
discretion, deliver at any Point of Delivery on any day a quantity of gas in
excess of the applicable Maximum Daily Delivery Obligation (MDDO), but shall
not deliver in the aggregate at all Points of Delivery on any day a quantity
of gas in excess of the MDQ.
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
In addition to the MDQ and subject to the terms, conditions and
limitations hereof, Rate Schedule CDS and the General Terms and Conditions,
Pipeline shall deliver within the Access Area under this and all other
service agreements under Rate Schedules CDS, FT-1, and/or SCT, quantities up
to Customer's Operational Segment Capacity Entitlements, excluding those
Operational Segment Capacity Entitlements scheduled to meet Customer's MDQ,
for Customer's account, as requested on any day.
ARTICLE II
TERM OF AGREEMENT
The term of this Service Agreement shall commence on November 1,
1996 and, subject to the provisions of ARTICLE I of this Service Agreement,
shall continue in force and effect until October 31, 2004 and year to year
thereafter unless this Service Agreement is terminated as hereinafter
provided. This Service Agreement may be terminated by either Pipeline or
Customer upon two (2) years prior written notice to the other specifying a
termination date of October 31, 2004, or any October 31 thereafter. Subject
to Section 22 of Pipeline's General Terms and Conditions and without
prejudice to such rights, this Service Agreement may be terminated at any
time by Pipeline in the event Customer fails to pay part or all of the
amount of any bill for service hereunder and such failure continues for
thirty (30) days after payment is due; provided, Pipeline gives thirty (30)
days prior written notice to Customer of such termination and provided
further such termination shall not be effective if, prior to the date of
termination, Customer either pays such outstanding bill or furnishes a good
and sufficient surety bond guaranteeing payment to Pipeline of such
outstanding bill.
THE TERMINATION OF THIS SERVICE AGREEMENT WITH A FIXED CONTRACT TERM OR
THE PROVISION OF A TERMINATION NOTICE BY CUSTOMER TRIGGERS PREGRANTED
ABANDONMENT UNDER SECTION 7 OF THE NATURAL GAS ACT AS OF THE EFFECTIVE DATE
OF THE TERMINATION. PROVISION OF A TERMINATION NOTICE BY PIPELINE ALSO
TRIGGERS CUSTOMER'S RIGHT OF FIRST REFUSAL UNDER SECTION 3.13 OF THE
GENERAL TERMS AND CONDITIONS ON THE EFFECTIVE DATE OF THE TERMINATION.
Any portions of this Service Agreement necessary to correct or cash-out
imbalances under this Service Agreement as required by the General Terms and
Conditions of Pipeline's FERC Gas Tariff, Volume No. 1, shall survive the
other parts of this Service Agreement until such time as such balancing has
been accomplished.
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
ARTICLE III
RATE SCHEDULE
This Service Agreement in all respects shall be and remain subject to
the applicable provisions of Rate Schedule CDS and of the General Terms and
Conditions of Pipeline's FERC Gas Tariff on file with the Federal Energy
Regulatory Commission, all of which are by this reference made a part
hereof.
Customer shall pay Pipeline, for all services rendered hereunder and
for the availability of such service in the period stated, the applicable
prices established under Pipeline's Rate Schedule CDS as filed with the
Federal Energy Regulatory Commission, and as same may hereafter be legally
amended or superseded.
Customer agrees that Pipeline shall have the unilateral right to file
with the appropriate regulatory authority and make changes effective in (a)
the rates and charges applicable to service pursuant to Pipeline's Rate
Schedule CDS, (b) Pipeline's Rate Schedule CDS pursuant to which service
hereunder is rendered or (c) any provision of the General Terms and
Conditions applicable to Rate Schedule CDS. Notwithstanding the foregoing,
Customer does not agree that Pipeline shall have the unilateral right
without the consent of Customer subsequent to the execution of this Service
Agreement and Pipeline shall not have the right during the effectiveness of
this Service Agreement to make any filings pursuant to Section 4 of the
Natural Gas Act to change the MDQ specified in Article I, to change the term
of the agreement as specified in Article II, to change Point(s) of Receipt
specified in Article IV, to change the Point(s) of Delivery specified in
Article IV, or to change the firm character of the service hereunder.
Pipeline agrees that Customer may protest or contest the aforementioned
filings, and Customer does not waive any rights it may have with respect to
such filings.
ARTICLE IV
POINT(S) OF RECEIPT AND POINT(S) OF DELIVERY
The Point(s) of Receipt and Point(s) of Delivery at which Pipeline
shall receive and deliver gas, respectively, shall be specified in
Exhibit(s) A and B of the executed service agreement. Customer's Zone
Boundary Entry Quantity and Zone Boundary Exit Quantity for each of
Pipeline's zones shall be specified in Exhibit C of the executed service
agreement.
Exhibit(s) A, B and C are hereby incorporated as part of this Service
Agreement for all intents and purposes as if fully copied and set forth
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
herein at length.
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
ARTICLE V
QUALITY
All natural gas tendered to Pipeline for Customer's account shall
conform to the quality specifications set forth in Section 5 of Pipeline's
General Terms and Conditions. Customer agrees that in the event Customer
tenders for service hereunder and Pipeline agrees to accept natural gas
which does not comply with Pipeline's quality specifications, as expressly
provided for in Section 5 of Pipeline's General Terms and Conditions,
Customer shall pay all costs associated with processing of such gas as
necessary to comply with such quality specifications. Customer shall
execute or cause its supplier to execute, if such supplier has retained
processing rights to the gas delivered to Customer, the appropriate
agreements prior to the commencement of service for the transportation and
processing of any liquefiable hydrocarbons and any PVR quantities associated
with the processing of gas received by Pipeline at the Point(s) of Receipt
under such Customer's service agreement. In addition, subject to the
execution of appropriate agreements, Pipeline is willing to transport
liquids associated with the gas produced and tendered for transportation
hereunder.
ARTICLE VI
ADDRESSES
Except as herein otherwise provided or as provided in the General Terms
and Conditions of Pipeline's FERC Gas Tariff, any notice, request, demand,
statement, bill or payment provided for in this Service Agreement, or any
notice which any party may desire to give to the other, shall be in writing
and shall be considered as duly delivered when mailed by registered, certi-
fied, or regular mail to the post office address of the parties hereto, as
the case may be, as follows:
(a) Pipeline: TEXAS EASTERN TRANSMISSION CORPORATION
5400 Westheimer Court
Houston, TX 77056-5310
(b) Customer: CONNECTICUT NATURAL GAS CORPORATION
P.O. BOX 1500
100 Columbus Boulevard
Hartford, CT 06144
or such other address as either party shall designate by formal written
notice.
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
ARTICLE VII
ASSIGNMENTS
Any Company which shall succeed by purchase, merger, or consolidation
to the properties, substantially as an entirety, of Customer, or of
Pipeline, as the case may be, shall be entitled to the rights and shall be
subject to the obligations of its predecessor in title under this Service
Agreement; and either Customer or Pipeline may assign or pledge this Service
Agreement under the provisions of any mortgage, deed of trust, indenture,
bank credit agreement, assignment, receivable sale, or similar instrument
which it has executed or may execute hereafter; otherwise, neither Customer
nor Pipeline shall assign this Service Agreement or any of its rights
hereunder unless it first shall have obtained the consent thereto in writing
of the other; provided further, however, that neither Customer nor Pipeline
shall be released from its obligations hereunder without the consent of the
other. In addition, Customer may assign its rights to capacity pursuant to
Section 3.14 of the General Terms and Conditions. To the extent Customer so
desires, when it releases capacity pursuant to Section 3.14 of the General
Terms and Conditions, Customer may require privity between Customer and the
Replacement Customer, as further provided in the applicable Capacity Release
Umbrella Agreement.
ARTICLE VIII
INTERPRETATION
The interpretation and performance of this Service Agreement shall be
in accordance with the laws of the State of Texas without recourse to the
law governing conflict of laws.
This Service Agreement and the obligations of the parties are subject
to all present and future valid laws with respect to the subject matter,
State and Federal, and to all valid present and future orders, rules, and
regulations of duly constituted authorities having jurisdiction.
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
ARTICLE IX
CANCELLATION OF PRIOR CONTRACT(S)
This Service Agreement supersedes and cancels, as of the effective date
of this Service Agreement, the contract(s) between the parties hereto as
described below:
Service Agreements dated, November 17, 1993 and 11/15/96 between
Pipeline and Customer under Pipeline's Rate Schedule CDS (Pipeline's
Contract Nos. 800380 and 800423.
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SERVICE AGREEMENT
FOR RATE SCHEDULE CDS
(Continued)
IN WITNESS WHEREOF, the parties hereto have caused this Service
Agreement to be signed by their respective Presidents, Vice Presidents or
other duly authorized agents and their respective corporate seals to be
hereto affixed and attested by their respective Secretaries or Assistant
Secretaries, the day and year first above written.
TEXAS EASTERN TRANSMISSION CORPORATION
By Robert B. Evans
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Vice President
ATTEST:
Robert W. Reed
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Robert W. Reed
Corporate Secretary
CONNECTICUT NATURAL GAS CORPORATION
By Edna M. Karanian
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Vice Pres.
ATTEST:
R.L. Babcock
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