EXHIBIT 10(i)
SERVICE AGREEMENT UNDER SOUTHERN COMPANIES,
FEDERAL ENERGY REGULATORY COMMISSION
ELECTRIC TARIFF VOLUME NO.4
MARKET-BASED RATE TARIFF
THIS SERVICE AGREEMENT is entered into as Of November 21, 1996, by and
among Gulf Power Company (the "Company"), Southern Company Services,
Inc. ("SCS"), as agent for the Company, and Florida Public Utilities
Company, on behalf of its Marianna division ("FPUC"). The Company, FPUC
and SCS are sometimes hereinafter referred to collectively as the
"parties" and individually as a "party".
W I T N E S S E T H:
That in consideration of the mutual covenants and agreements hereinafter
contained, the parties hereto for themselves, their successors and
assigns, have mutually agreed with each other as follows:
1. Scope of Service.
1.1 The Company agrees, during the term of this Service
Agreement to provide FPUC's ▇▇▇▇▇▇▇▇ division its full requirements for
electric service, and FPUC agrees to pay for such service, all in
accordance with Southern Companies' Electric Tariff Volume No.4 -
Market-Based Rate Tariff ( the "Tariff") on file with the Federal Energy
Regulatory Commission ("FERC") and the rate schedule set forth on
Appendix A hereto.
1.2 The terms and conditions of such service shall be
governed by (1) the Tariff, as it exists at the time of this Service
Agreement or as subsequently amended or superseded and (2) the terms and
conditions set forth herein. The Tariff as it exists or as subsequently
amended or superseded is incorporated herein by reference. To the extent
the terms and conditions of the Tariff are inconsistent with those set
forth herein, the provisions of this Service Agreement shall control.
1.3 Service -under -his Service Agreement supersedes
service provided by Company to FPUC -under the Company's FERC Electric
Tariff, Second Revised Volume No. as amended from time to time.
1.4 FPUC shall not purchase electric energy elsewhere
without the written consent of the Company unless (1) the Company fails
to furnish energy to FPUC in accordance with the terms of this
Agreement, or (2) FPUC is legally obligated to accept energy from a
cogenerator or small power producer under the rules of any agency having
such jurisdiction.
2. Term and Termination of Service Agreement.
This Service Agreement shall be effective upon the date above written.
Electric service under this Service Agreement shall commence on January
1, 1997 (the "Commencement Date") and shall continue for an initial term
of eleven (11) years after the Commencement Date. Thereafter, this
Agreement shall automatically renew for additional, successive 12-month
periods. Notwithstanding the foregoing, (1) FPUC may terminate this
Service Agreement upon --two (2) years prior written notice; provided,
however, no notice of termination may be given prior to the end of the
fifth (5th) year of the initial. term and (ii) Company may terminate
this Service Agreement upon two (2) years prior written notice after the
ninth (9th) year of the initial term.
In the event FPUC provides the Company notice of termination of this
Service Agreement because FPUC has received a good faith offer from a
third party to serve FPUC, the Company shall have a right of first
refusal to match such offer and to continue to serve FPUC -under a
revised rate and applicable terms and conditions.
3. Demand and Energy Rates
3.1 The demand and energy rates for the sale of capacity
and energy hereunder are set forth on Appendix A which is incorporated
herein by reference. The parties agree that these rates are fixed for
the term of this Service Agreement; provided, however, that the Company
shall have the right to modify -he rates set forth on Appendix A for
increases in cost due to changes in Legal Requirements. For the purposes
of this Section 3.1, "Legal Requirements" shall mean any law, code,
statute, regulation, rule, ordinance, judgment, injunction, order or
other requirement of a governmental authority having jurisdiction over
"the matter in question, which is valid and applicable to the matter in
question at the time of the execution of this Service Agreement or
anytime thereafter during the term.
3.2 If pursuant to Section 3.1, Company elects to modify
the rates set forth on Appendix A for increases in cost due to changes
in Legal Requirements, FPUC may terminate this Service Agreement upon at
least two (2) years prior written notice to the Company.
4. Payments.
Payments and billing for the service rendered hereunder shall be made in
accordance with the terms of the Tariff.
5. Company and FPUC Facilities.
5.1 FPUC will exercise diligence to use the electric
service furnished by the Company with a view to securing efficiency of
the Company's apparatus and system in keeping with generally accepted
good operating standards and will maintain a power factor as near unity
as practicable consistent with good engineering practices. FPUC and the
Company will construct their facilities in accordance with
specifications at Least equal to those prescribed by the National
Electrical Safety Code of the United States Bureau of Standards, and
will maintain their said facilities at all times in a safe operating
condition and will use electric service equally from the three chases as
nearly as practicable.
5.2 If a differential of more than 15% between the
current flowing in any two phases exists at the time of FPUC's maximum
monthly demand, FPUC, upon notice from the Company, will take reasonable
action to correct such condition as soon as practicable.
5.3 In order to insure safe operating practices in the
event FPUC shall receive electrical energy from a supplier different
from the Company, adequate provision shall be made to insure that under
no circumstances, can the other supplier's system be interconnected so
as to operate in parallel with that of the Company, except with the
consent of the Company.
5.4 FPUC will give the Company as much prior notice as
is reasonably practicable of temporary switching of load between
delivery points. Temporary switching will be undertaken by the FPUC only
after consultation and coordination with the Company.
6. Service Locations.
The electric energy to be furnished by the Company under this Service
Agreement shall be delivered to FPUC at the following delivery points:
Altha substation, Blountstown substation, Caverns Road substation,
Chipola substation and the Marianna substation.
7. Service Specifications
7.1 The Company shall furnish electric service of the
characteristics at the points of delivery:
Phase: 3
Wire: 3
Cycles: 60
Voltage: 12,470
Current: Alternating
KVA Capacity:
Altha: 4,000 KVA
▇▇▇▇▇▇▇▇▇▇▇: ▇,▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇: 13,300 KVA
Chipola: 24,000 KVA
Marianna: 24,000 KVA
Total: 70,300 KVA
7.2 FPUC shall use reasonable diligence to take and use
electric energy hereunder from each of the phases in such a manner that
the total energy shall be divided equally between the three phases.
7.3 In the event FPU's maximum capacity requirement at
any delivery point at any time exceeds the contract capacity by more
than ten (10) percent at such delivery point FPU shall be liable for any
resulting damage to the Company's facilities and equipment. If damage
does result from an excess of more than ten (10) percent then a new
contract supplement shall be executed reflecting the increased capacity
requirement as contract capacity.
7.4 if FPU desires that the Company establish service to
an additional point of delivery, the parties agree to use reasonable
best efforts to establish such service and to allocate responsibility
for any associated costs.
8. Measurement of Energy
8.1 The electric energy to be supplied by the Company
hereunder will be measured by appropriate meters as the Company may
select which together with metering equipment, shall be Installed, owned
and maintained by the Company at its expense in a suitable place or
building upon the FPUC's premises.
8.2 FPUC will at its expense provide a suitable place or
building, in accordance with plans approved by the Company, for the
proper housing of meters and other electrical equipment furnished by the
Company. The Company will make all final connections to its system at
the point of delivery.
8.3 Al1 meters, wires and other appliances furnished by
the Company will remain in the property of -the Company and FPUC will
use reasonable diligence to protect the property of the Company on its
premises.
9. Meter Test.
9.1 Each meter used in determining the demand for or
amount of electric energy supplied hereunder shall, by comparison with
accurate standards, be tested and calibrated by the Company at intervals
of not to exceed twelve (12) months. Upon request of FPUC, the Company
shall notify FPUC of such tests so that FPUC may have a representative
present. If a meter shall be found incorrect or inaccurate, it shall be
restored to an accurate condition or a new meter shall be substituted.
9.2 FPUC shall have the right to request that a special
meter test be made at any time. If any test made at FPUC's request
discloses that the meter tested is registering correctly, or within 2%
of normal, FPUC shall bear the expense of such test. The expense of all
other test shall be borne by the Company.
9.3 The results of all such . Tests and calibrations
shall be open to examination by FPUC and a report of every test shall be
furnished to FPUC as soon as reasonably practical. Any meters tested and
found to be not more than 2% normal above or below normal shall be
considered to be correct and accurate insofar as correction of billing
is concerned. If, as a result of any test, any meter is found to
register in excess of 2% either above or below normal, then the readings
of such meter previously taken for billing purposes shall be corrected
according to the percentage of inaccuracy so found, but no such
correction shall extend beyond ninety (90) days previous to the day on
which the inaccuracy is discovered by such test.
9.4 For any period that a meter f ailed to register, it
shall be assumed that the demand, or electric energy delivered, as the
case may be, during said period is the same as that for a period of like
operation to be agreed upon by the Company and FPUC during which such
meter was in service and operating.
10. Change in Load.
Whenever possible, reasonable notice shall be given by FPUC to the
Company respecting any material changes proposed in the connected load
or In the characteristics of such load at the service locations.
11. Continuity of Service and Consumption.
The Company does not guarantee *that the supply of electric service will
be free from temporary interruptions, or from reasonable restrictions
upon the use of energy to assure service reliability throughout the
Southern company electric system; provided, however, such restrictions
shall be no more stringent than the Company imposes on service to other
customers in like circumstances. Such temporary interruptions of or
restrictions upon the Company's service shall not constitute a breach of
this Service Agreement on the part of the Company, and the Company shall
not be liable to FPUC for damages resulting therefrom. In the event of
interruptions or restrictions upon service, the Company will restore
normal service as soon as it can reasonably do so, and will, at all
times, exert itself toward the end of supplying as nearly constant
service as is reasonably practicable. In the case of impaired or
defective service, FPUC shall be immediately give notice to the nearest
office of the Company by telephone, confirming such notice in writing on
the same date such notice Is given.
12. Access to Service Locations.
Each party shall give ail necessary permission to each other to enable
the agents of the other party to carry out this Service Agreement and
will give each other the right by their duly authorized agents and
employees to enter the premises of the other at all reasonable times for
the purposes of reading or checking meters; for inspecting, testing,
repairing, renewing or exchanging any or all of its equipment which may
be located on the property of the other; or performing any other work
incident to rendering the service hereby contracted for.
13. Liability for Accidents.
13.1 The electric energy supplied hereunder is supplied
upon the express condition that after it passes the metering equipment
of the Company, or other point of delivery, it becomes the property of
FPUC and the Company shall not be liable for loss or damage to any
person or property whatsoever, resulting directly or indirectly from the
use, misuse or presence of said electric energy on FPUC's premises, or
elsewhere after it passes the point of delivery to FPUC, except where
such loss or damage shall be shown to have been 3ccasioned by the
negligence of the Company, its agents or employees in operating and
maintaining the Company's property used in supplying service hereunder.
13.2 FPUC agrees to keep its lines, apparatus,
appliances and all other equipment in safe condition and will and does
hereby agree to indemnify and save harmless the Company from the payment
of any sum or sums of money to any person whomsoever, including
attorney's fees and court costs, which, it may be called upon to pay on
account of damages to property or fatal or personal injuries to
individuals resulting from or which may be in any way caused by the
condition, operation and maintenance of the lines, apparatus, appliances
and other equipment belonging to FPUC. Provided, however that this
agreement to indemnify and save harmless the Company shall not apply to
damages or injuries caused or contributed to by the negligence of the
Company.
13.3 It is understood and agreed that FPUC will deliver
to the Company, at least fifteen (15) days prior to the beginning of
service hereunder, certificate of insurance issued by a reputable
insurance company authorized to do business in the State of Florida,
jointly protecting and indemnifying the Company and FPUC against all
Liability and expense on account of claims and suits for injuries or
damages to persons or property arising out of the service rendered to or
by FPUC which shall be in form and substance reasonably acceptable to
the Company.
13.4 FPUC agrees to pay all premiums and other charges
due on said policies and keep said policies in force during the entire
life of this Agreement. Provided, however, that the Company agrees to
pay that part of the premiums on the above policies which is in excess
of the amount that FPUC would be charged if it were the sole beneficiary
thereunder.
14. Default.
14.1 Whenever FPUC has violated any of the terms of this
Service Agreement, or has failed to pay any ▇▇▇▇ accruing on or before
the fifteenth (15th) day after the due date of such billing, the Company
may discontinue the supply of electric energy provided at least
fifteen(15) days written notice has been given of such intention to
discontinue the service, unless the FPUC shall correct such violation or
shall pay such ▇▇▇▇, before the expiration of such fifteen (15) days
notice provided, however, that the foregoing shall not be applicable to
the extent that a bona fide dispute exists. No delay by the Company in
enforcing any of its rights hereunder shall be deemed a waiver of such
rights, nor shall a waiver by the Company of one of FPUC's defaults be
deemed a waiver of any other or subsequent default.
14.2 Where service is discontinued for cause, as set
forth above, the Company reserves the right to terminate service upon
giving thirty (30) days written notice of its intent to do 30. Upon such
--termination, FPUC shall pay the Company, in addition to any unpaid
charges for service, an amount equal to the difference between the
original cost, depreciated at the annual rate of 3.0%, and the net
salvage value on such date of any utility plant installed and completed
within five years of such termination to provide service at any delivery
point. The "utility plant installed" includes the Company's incremental
investment in (a) transmission investment required solely for FPU's
service at such delivery point and 'b) distribution and transformation
investment required solely for FPU's service at such delivery point or
the proportionate share of such investment for service to such delivery
point in the event the Company's investment is devoted in part to
service to others at such delivery point.
14.3 Upon the termination of service for cause, Company
may proceed by appropriate proceedings, judicial, administrative or
otherwise at Law, in equity or otherwise, to protect and enforce its
rights, to recover any damages to which it may be entitled, and to
enforce performance by FPUC, including specific performance of FPUC's
obligations hereunder.
15. Transfer of Service Agreement and Assignment of Claim.
Neither this Service Agreement nor any interest herein nor any claim
arising hereunder shall be transferred or assigned by the Company or by
FPUC to any party or parties without the prior written consent of the
other party hereto.
16. Regulation.
The provision of -service under this Service Agreement and the Tariff is
subject to the jurisdiction of the Federal Energy Regulatory Commission
and any other governmental authorities having jurisdiction over the
matters set forth herein.
17. Successors and Assigns.
This Service Agreement shall be binding upon the successors or legal
assigns of either of the parties hereto.
18. Sole Agreement.
This Service Agreement supersedes, as of the effective date hereof, all
previous agreements or representations, whether written or oral, hereto
in effect between the Company and FPUC with respect to matters herein
contained, and constitutes the sole agreement by the parties hereto
concerning these matters.
19. Confidentiality.
The Parties agree to keep confidential and not to disclose to third
parties the terms and conditions of this Service Agreement for the term
hereof; provided however, each party shall have the right to disclose
such information to the extent required or appropriate to comply with
the requirements of law and to obtain the requisite approvals needed for
the consummation of this Service Agreement.
(Remainder of Page intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereunto have caused this Service
Agreement to be executed by their duly authorized officers.
SOUTHERN COMPANY SERVICES, INC. an agent for the Company
By: /s/ Signature of file
Title: Vice President
Date: November 22, 1996
THE FLORIDA PUBLIC UTILITIES CO.
on behalf of its Marianna division
By: /s/ ▇▇▇▇ ▇. English
Title: Senior Vice President
Date: December 2. 1996
APPENDIX A
RATE SCHEDULE
For each billing month, the Customer Charge will be calculated as
follows:
Customer Charge = Demand Charge plus Energy Charge plus
Transformation Charge plus Delivery
Point Charge: where
Demand Charge
The Demand Charge includes a Transmission Services Fee, an
Ancillary Services Fee and a Generation Services Fee.
The Transmission Services Fee will be determined in accordance
with Network Integration Transmission Service under Southern
Companies Open Access Transmission Tariff.
The Ancillary Services Fee includes Scheduling, System Control
and Dispatch Service and Reactive Supply and Voltage Control. at
the rates set forth in Southern Companies Open Access
Transmission Tariff. Regulation and Frequency Response Service,
Energy Imbalance Service, Operating Reserve - Spinning Reserve
Service and Operating Reserve - Supplemental Reserve Service are
not required under Southern Companies Open Access Transmission
Tariff.
The Generation Services Fee of the Demand Charge will be
calculated as follows:
Generation Services Fee = (Billing Demand times Demand Rate)
minus (Transmission Services Fee plus Ancillary Services Fee); where
Billing Demand = sum of the integrated hourly demands
of the points of delivery during the hour coincident
with the southern Electric System Territorial Peak Demand.
Demand Rate has the values set forth in the chart below:
Monthly Rates Monthly Rates
Year Rate Year Rate
1997 * 2003 *
1998 * 2004 *
1999 * 2005 *
2000 * 2006 *
2001 * 2007 *
2002 *
[*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.]
After December 31, 2007, the Demand Rate will increase annually at
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.]
Energy Charge
The Energy Charge will be calculated as follows:
Energy Charge = Energy Usage times Energy Rate; where
Energy Usage = the total KWh of energy used at the delivery
points.
Energy Rate has the values set forth in the chart below:
Monthly Rates Monthly Rates
Year Rate Year Rate
1997 * 2003 *
1998 * 2004 *
1999 * 2005 *
2000 * 2006 *
2001 * 2007 *
2002 *
[*CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.]
After December 31, 2007, the Energy Rate will increase
annually at the [CONFIDENTIAL PORTION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
Transformation Charge
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.] per KVA
FPUC will be billed based on the product of the above rate and
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.] The Company shall have the right to adjust the
Transformation Charge in the event of modifications to or
additions of capability of the existing delivery points or the
addition of new delivery points, if any.
Delivery Point Charge
[CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION.] per delivery point per month.