TRANSCONTINENTAL GAS PIPE LINE CORPORATION
PRECEDENT AGREEMENT
THIS PRECEDENT AGREEMENT ("Precedent Agreement") is entered into this
28th day of April 1999, by and between TRANSCONTINENTAL GAS PIPE LINE
CORPORATION ("Transco"), a Delaware corporation, and ATLANTA GAS LIGHT COMPANY
("Shipper). Transco and Shipper are sometimes referred to individually as
"Party" and jointly as "Parties".
WITNESSETH:
WHEREAS, Transco conducted an open season from July 22, 1998 through
August 24, 1998, during which it accepted requests for firm transportation
service to be made available under its SouthCoast Expansion Project
("SouthCoast"); and
WHEREAS, Shipper desires firm transportation service under SouthCoast
for 61,160 dekatherms of gas per day ("dt/d") from the primary receipt point(s)
specified in Exhibit A hereto to the primary delivery point(s) specified in
Exhibit B hereto; and
WHEREAS, subject to the terms and conditions of this Agreement, Transco
is willing to provide such firm transportation service for Shipper under
SouthCoast pursuant to the terms of this Precedent Agreement and the Service
Agreement (as hereinafter defined) commencing as soon as all rights and
regulatory approvals are received and accepted by Transco and all of the
necessary facilities are constructed and ready for service, as further set forth
herein below.
NOW THEREFORE, in consideration of the mutual covenants herein assumed,
Transco and Shipper hereby agree as follows:
1. Rights and Approvals. Following the execution by Transco and Shipper of this
Precedent Agreement, Transco shall seek such contract rights, property rights,
financing arrangements and regulatory approvals, including, without limitation,
the requisite authorizations from the FERC ("FERC Authorizations"), including
rates based on a rolled-in cost of service, as may be necessary to provide firm
transportation service for Shipper of 61,160 dt/d from point(s) of receipt set
forth in Exhibit A hereto to point(s) of delivery set forth in Exhibit B hereto.
Transco reserves the right to file and prosecute applications for any required
authorizations, any supplements or amendments thereto (including the right at
any time to withdraw any application for required authorizations or not to
accept such authorizations), and, if necessary, court review, in such manner as
it deems to be in its best interest.
Shipper agrees to use its good faith efforts to cooperate with and
support Transco in obtaining the necessary regulatory approvals for SouthCoast
and to provide Transco with any necessary information reasonably requested in
order to obtain the regulatory approvals and financing arrangements for
SouthCoast. In that regard, (i) Shipper shall file with the FERC in support of
Transco's FERC application(s) for NGA Section 7(c) certificate authorization of
SouthCoast, (ii) Shipper shall not oppose any filing made with the FERC (whether
made by Transco or another party) to roll into Transco's systemwide cost of
service (a) the costs of SouthCoast, (b) the costs of the incrementally priced
projects approved by the FERC in Docket Nos. CP96-16, CP97-328, and CP97-331,
and/or (c) the costs of the incrementally priced projects for which rolled-in
rate treatment has been sought in Docket Nos. RP97-71 and RP95-197 (which
include, without limitation, the incrementally priced projects approved by the
FERC in Docket Nos. CP88-92, CP88-760, CP89-6, CP89-7, CP89-710, CP90-687,
CP94-68, and CP94-109), provided, however, that the foregoing shall not
constitute a waiver of Shipper's right to oppose cost allocation and rate design
for rolled-in rate treatment of the incrementally priced projects referred to in
the foregoing clauses (b) and (c), and (iii) to the extent that the FERC
determines that information relating to Shipper's gas supply arrangements or
markets is required from Transco, Shipper shall provide Transco with such
information in a timely manner to enable Transco to respond within the time
required by the FERC. To the extent that such information is considered
confidential, proprietary or privileged by Shipper, Transco and Shipper shall
negotiate in good faith acceptable protective arrangements. 2. Service
Agreement. Within thirty (30) days (or within such shorter time frame as may be
required for timely commencement of construction of SouthCoast) after Transco's
receipt and acceptance of the FERC Authorizations in a form and substance
satisfactory to Transco in its sole opinion, as reasonably determined, Transco
and Shipper shall execute and deliver a service agreement under Transco's Rate
Schedule FT ("Service Agreement") substantially in the form attached as Exhibit
C hereto; provided, however, that neither Party shall be obligated to execute
the Service Agreement if the FERC Authorizations adversely impact the character
of service and/or the receipt and delivery points agreed to in this Precedent
Agreement; provided, further, that the Parties shall not be obligated to execute
the Service Agreement if this Precedent Agreement shall have been previously
terminated in accordance with Paragraph 5 below. The Service Agreement shall
provide for the firm transportation by Transco for Shipper of 61,160 dt/d from
point(s) of receipt set forth in Exhibit A hereto to point(s) of delivery set
forth in Exhibit B hereto. Notwithstanding the Parties' execution of the Service
Agreement, Transco's obligation to provide firm transportation service to
Shipper is expressly made subject to Transco's receipt and acceptance of any
remaining necessary contract rights, property rights, financing arrangements and
regulatory approvals in a form and substance satisfactory to Transco, as
reasonably determined in its sole opinion, and Transco's completion of
construction and placement into service of Transco's facilities necessary to
provide service to Shipper under SouthCoast. 3. Rates. For the firm
transportation service under the Service Agreement, Shipper shall pay the
maximum reservation rate and all applicable commodity charges, reservation and
commodity surcharges and fuel applicable under Transco's Rate Schedule FT for
SouthCoast firm transportation service unless otherwise agreed to by the
Parties. 4. Service and Reservation Charge Commencement; Term of Service. The
firm transportation service for Shipper under SouthCoast and Shipper's
obligation to pay Transco reservation charges for such service shall commence on
the later of: (i) November 1, 2000; or (ii) the date on which Transco's
facilities necessary to provide firm service to Shipper under SouthCoast have
been constructed and are ready for service as reasonably determined in Transco's
sole opinion. Such firm transportation service shall continue for a primary term
of fifteen (15) years from the date that the firm transportation service
commences, and year-to-year thereafter subject to termination after such primary
term by either Party upon one (1) year prior written notice to the other Party.
5. Termination of Agreements. If the FERC has not issued a preliminary
determination on non-environmental issues by May 1, 2000 or if Transco has not
received and accepted the necessary FERC Authorizations on or before November 1,
2000, then at any time thereafter until Transco receives and accepts such FERC
Authorizations, either Party shall have the right to terminate this Precedent
Agreement and Service Agreement by giving thirty (30) days advance written
notice to the other Party; provided, however, that such termination shall not be
effective if during the 30-day period Transco receives and accepts the necessary
FERC Authorizations. Further, if as a result of orders or actions taken by the
Georgia Public Service Commission ("PSC"), Shipper concludes, in Shipper's sole
opinion, as reasonably determined, that Shipper's ability to include the firm
transportation service from the SouthCoast Expansion project in its array of
capacity supply contracts is at unreasonable risk, then Shipper may terminate
this Precedent Agreement by giving twenty-four (24) hours advance written notice
to Transco: provided that such right to terminate must be exercised on or before
September 1, 1999 or such right shall be waived. Additionally, if Transco has
not commenced the firm transportation service contemplated herein to Shipper on
or before November 1, 2001, either Party shall have the right to terminate this
Precedent Agreement and the Service Agreement by giving twenty-four (24) hours
advance written notice to the other Party; provided that such right must be
exercised on or before November 15, 2001, or else such right shall be waived.
Termination of this Precedent Agreement and/or the Service Agreement in
accordance with the terms of this Paragraph 5 shall be without liability for
costs or expenses to the terminating Party or its partners, shareholders,
officers, employees or agents. 6. Construction. After both Parties' execution of
the Service Agreement pursuant to Paragraph 2 above and Transco's receipt and
acceptance of all other necessary contract rights, property rights, financing
arrangements and regulatory approvals in a form and substance satisfactory to
Transco, as reasonably determined in its sole opinion, Transco shall proceed
with the construction of the SouthCoast facilities so as to begin firm
transportation service for Shipper by a proposed in-service date of November 1,
2000. If Transco is unable to complete such construction and place such
facilities into operation by such proposed in-service despite its exercise of
due diligence, Transco shall provide notice thereof to Shipper, with such notice
including the revised projected in-service date unless Shipper has exercised its
right to terminate in accordance with Paragraph 5 above, and shall continue to
proceed with due diligence to complete such construction, place such facilities
in operation and commence service for Shipper at the earliest practicable date
thereafter. Transco shall not be liable in any manner to Shipper, nor shall this
Precedent Agreement or the Service Agreement be subject to termination, except
as provided in Paragraph 5 above, if despite Transco's exercise of due
diligence, Transco is unable to complete the construction of such facilities and
commence firm transportation service contemplated herein by the proposed
in-service date. 7. Prepayment Refund. Transco and Shipper agree that the
$10,000 prepayment submitted by Shipper during the open season for SouthCoast
plus any interest that accrues on the prepayment amount (any interest on the
prepayment amount calculated hereunder shall be at the interest rate set forth
in the billing and payment provisions of the General Terms and Conditions of
Transco' FERC Gas Tariff) prior to the in-service date of the project will be
applied to Shipper's reservation charges due for the first month of firm
transportation service under the project. In the event that service commences on
a date other than the first day of the month, the reservation charge will be
prorated and the prepayment plus accrued interest will be applied to such
prorated reservation charge. In the event that Shipper terminates this Precedent
Agreement pursuant to Paragraph 5 above, Transco shall refund Shipper's
prepayment plus accrued interest. 8. Remedies. Shipper recognizes that Transco
will be required to incur material expenses to construct SouthCoast facilities
by a proposed in-service date of November 1, 2000. In the event that Shipper
fails to perform its obligations under this Precedent Agreement or terminates
this Precedent Agreement in a manner inconsistent with Paragraph 5 above,
Transco shall have the right to retain Shipper's prepayment (plus accrued
interest) made in accordance with Shipper's request for firm transportation
service under SouthCoast and to seek any other legal remedies available to
Transco, provided that any such legal remedy which is a monetary remedy shall be
reduced by an amount equal to the prepayment (plus accrued interest) retained by
Transco. 9. Notices Notices under this Precedent Agreement shall be in writing
and shall be addressed as follows:
If to Shipper:
Vice President, Gas Services
Atlanta Gas Light Company
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Fax: 404/▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
If to Transco:
Transcontinental Gas Pipe Line Corporation
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Attention: Vice President, Customer Service and Rates
Fax: 713/▇▇▇-▇▇▇▇
Notices may be given by hand, electronic transmission, mail or courier. Notices
shall by deemed given upon the date the notice is sent. Either Party may change
its address or telecopy number for notices hereunder by providing written notice
of such change to the other Party. 10. Assignment. This Precedent Agreement
shall be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors, whether successors shall succeed to the business
and operation of the parties by share purchase, share exchange, merger,
consolidation or otherwise. 11. Governing Law. This Precedent Agreement and any
actions, claims, demands or settlements hereunder shall be governed by and
construed in accordance with the laws of the State of Texas, excluding, however,
any conflicts of law, rules or principles which might require the application of
the laws of another jurisdiction. 12. Third Persons. Except as expressly
provided in this Precedent Agreement, nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any person not a Party
hereto any rights, remedies or obligations under or by reason of this Precedent
Agreement. 13. Laws and Regulatory Bodies. This Precedent Agreement and the
obligations of the Parties hereunder are subject to all applicable laws, rules,
orders and regulations of governmental authorities having jurisdiction and, in
the event of conflict, such laws, rules, orders and regulations of governmental
authorities having jurisdiction shall control. 14. Captions. The titles to each
of the paragraphs in this Precedent Agreement are included for convenience of
reference only and shall have no effect on, or be deemed as part of the text of,
this Precedent Agreement. 15. Severablity. Any provision of this Precedent
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of that prohibition or
unenforceablity without invalidating the remaining provisions hereof or
affecting the validity or enforceability of that provision in any other
jurisdiction. 16. Waiver. No waiver by either Party of any default by the other
Party in the performance of any provision, condition or requirement herein shall
be deemed to be a waiver of, or in any manner release the other Party from,
performance of any other provision, condition or requirement herein, nor shall
such waiver be deemed to be a waiver of, or in any manner release the other
Party from, future performance of the same provision, condition or requirement.
Any delay or omission of either Party to exercise any right hereunder shall not
impair the exercise of any such right, or any like right, accruing to it
thereafter. 17. Further Assurances. Each Party agrees to execute and deliver all
such other and additional instruments and documents and to do such other acts as
may be reasonably necessary to effectuate the terms and provisions of this
Precedent Agreement. 18. Joint Preparation. The terms, conditions and provisions
of this Precedent Agreement shall be considered as prepared through the joint
efforts of the Parties and shall not be construed against either Party as a
result of the preparation or drafting thereof.
IN WITNESS WHEREOF, duly authorized representatives of the Parties have executed
this Precedent Agreement as of the date first above written.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Vice President
Customer Service and Rates
ATLANTA GAS LIGHT COMPANY
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Vice President, Gas Services
EXHIBIT A
Receipt Point(s) Maximum Daily Quantity at
Each Receipt Point1 (dt/d)
Point of Interconnection between
Transco's mainline and Mobile Bay 61,160
Lateral at milepost 784.66 in Choctaw
County, Alabama
Exhibit B
Delivery Point(s) Maximum Daily Quantity at Each
Suwanee Delivery Point in ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇▇/▇)
▇▇▇▇▇▇ , ▇▇▇▇▇▇▇
61,160
Exhibit C
SERVICE AGREEMENT
between
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
and
Buyer
SERVICE AGREEMENT
THIS AGREEMENT entered into this ____ day of ___________, 19___, by and
between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware Corporation,
hereinafter referred to as "Seller," first party, and _______________,
hereinafter referred to as "Buyer," second party,
WITNESSETH
WHEREAS.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of Seller's
Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to
Seller gas for transportation and Seller agrees to receive, transport
and redeliver natural gas to Buyer or for the account of Buyer, on a
firm basis, a Transportation Contract Quantity ("TCQ") of ______ dt per
day (at Seller's system BTU as of the date of this Agreement and as
provided in Section 23(b) of the General Terms and Conditions of
Seller's FERC Gas Tariff) per day.
2. Transportation service rendered hereunder shall not be subject to
curtailment or interruption except as provided in Section 11 of the
General Terms and Conditions of Seller's FERC Gas Tariff.
Article II
Point(s) of Receipt
Buyer shall deliver or cause to be delivered gas at the point(s) of receipt
hereunder at a pressure sufficient to allow the gas to enter Seller's pipeline
system at the varying pressures that may exist in such system from time to time;
provided, however, the pressure of the gas delivered or caused to be in the
event the maximum operating pressure(s) of Seller's pipeline system, at the
point(s) of receipt hereunder, is from timeto time increased or decreased, then
the maximum allowable pressure(s) of the gas delivered or caused to be delivered
by Buyer to Seller at the point(s) of receipt shall be correspondingly increased
or decreased upon written notification of Seller to Buyer. The point(s) of
receipt for natural gas received for transportation pursuant to this agreement
shall be:
See Exhibit A, attached hereto, for point(s) of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas transported
hereunder at the following point(s) of delivery and at a pressure(s) of:
See Exhibit B, attached hereto, for points of delivery and pressures.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of _____ __, 19__ and shall remain
in force and effect until 9:00 a.m. Central Clock Time _____ __, 20__ and year
to year thereafter until terminated by Seller or Buyer upon at least one (1)
years' written notice; provided, however, this agreement shall terminate
immediately and, subject to the receipt of necessary authorizations, if any,
Seller may discontinue service hereunder if (a) Buyer, in Seller's reasonable
judgement fails to demonstrate credit worthiness, and (b) Buyer fails to provide
adequate security in accordance with Section 32 of the General Terms and
Conditions of Seller's Volume No. 1 Tariff. As set forth in Section 8 of Article
II of Seller's August 7, 1998 revised Stipulation and Agreement in Docket No.
RP88-68 et. al., (a) pregranted abandonment under Section 284.221 (d) of the
Commission's Regulations shall not apply to any long term conversions from firm
sales service to transportation service under Seller's Rate Schedule FT and (b)
Seller shall not exercise its right to terminate this service agreement as it
applies to transportation service resulting from conversions from firm sales
service so long as Buyer is willing to pay rates no less favorable than Seller
is otherwise able to collect from third parties for such service.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder
in accordance with Seller's Rate Schedule FT and the applicable provisions of
the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the
Federal Energy Regulatory Commission, and as the same may be legally amended or
superseded from time to time. Such Rate Schedule and General Terms and
Conditions are by this reference made a part hereof. In the event Buyer and
Seller mutually agree to a negotiated rate and specified term for service
hereunder, provisions governing such negotiated rate (including surcharges) and
term shall be set forth on Exhibit C to the service agreement.
2. Seller and Buyer agree that the quantity of gas that Buyer delivers
or causes to be delivered to Seller shall include the quantity of gas retained
by Seller for applicable compressor fuel, line loss make-up (and injection fuel
under Seller's Rate Schedule GSS, if applicable) in providing the transportation
hereunder, which quantity may be changed from time to time and which will be
specified in the currently effective Sheet No. 44 of Volume No. 1 of this Tariff
which relates to service under this agreement and which is incorporated herein.
3. In addition to the applicable charges for firm transportation
service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall
reimburse Seller for any and all filing fees incurred as a result of Buyer's
request for Service under Seller's Rate Schedule FT, to the extent such fees are
imposed upon Seller by the Federal Energy Regulatory Commission or any successor
governmental authority having jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This Agreement supersedes and cancels as of the effective date
hereof the following contract(s) between parties hereto: None.
2. No waiver by either party of any one or more defaults by the other
in the performance of any provisions of this agreement shall operate or be
construed as a waiver of any future default or defaults, whether of a like of
different character.
3. The interpretation and performance of this agreement shall be in
accordance with the laws of the State of Texas, without recourse to the law
governing conflicts of laws, and to all present and future valid laws with
respect to the subject matter, including present and future orders, rules and
regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit of
the parties' hereto and there respective successors and assigns.
5. Notices to either party shall be in writing and shall be considered
as duly delivered when mailed to the other party at the following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
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Attention:
(b) If to Buyer
Such addresses may be changed from time to time by mailing appropriate
notice thereof to the other party by certified or registered mail.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
signed by their respective officers or representatives thereunto duly
authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
(Seller)
By:_________________________________________
Name:
Title:
(Buyer)
By:_________________________________________
Name:
Title:
Exhibit A
Point(s) of Receipt Maximum Daily Quantity
at Each Receipt Pt. (dt/d)1
Exhibit B
Point(s) of Delivery and Pressures2 Maximum Daily Quantity
at Each Delivery Pt. (Dt/d)3
Exhibit C
Specifications of Negotiated Rate and Term
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1 These quantities do not include the additional quantities of gas to
be retained by Transco for compressor fuel and line loss make-up.
Therefore, Shipper shall also deliver or cause to be delivered at the
receipt points such additional quantities of gas to be retained by
Transco for compressor fuel and line loss make-up. 1 These quantities
do not include the additional quantities of gas to be retained by
Seller for compressor fuel and line loss make-up. Therefore, Buyer
shall also deliver or cause to be delivered at the receipt points such
additional quantities of gas in kind to be retained by Seller for
compressor fuel and line loss make-up.
2 Pressure(s) shall not be less than fifty (50) pounds per square inch
gauge or at such other pressures as may be agreed upon in the
day-to-day operations of Buyer and Seller.
3 Deliveries to or for the account of Shipper at the delivery point(s)
shall be subject to the limits of the Delivery Point Entitlements
("DPE's") of the entities receiving the gas at the delivery point(s),
as such DPE's are set forth in Transco's FERC Gas Tariff, as amended
from time to time.