EXHIBIT 10.18
Contract #: 400227
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SERVICE AGREEMENT
FOR RATE SCHEDULE SS-1
This Service Agreement, made and entered into this 31st day of May,
2000, by and between TEXAS EASTERN TRANSMISSION CORPORATION, a Delaware
Corporation (herein called "Pipeline") and UNITED CITIES GAS COMPANY, a division
of Atmos Energy (herein called "Customer," whether one or more),
WITNESSETH:
WHEREAS, Pipeline and Associated Natural Gas Company ("Associated") are
parties to an existing service agreement dated April 11, 1994, under Pipeline's
Rate Schedule SS-1 (Pipeline's Contract No. 400184); and
WHEREAS, Customer entered into a permanent capacity release transaction
on May 26, 2000, as reflected on the Addendum ("Addendum") to Customer's
Capacity Release Umbrella Agreement (Pipeline's Contract No. 900483, Capacity
Release Deal No. 016807), pursuant to which Associated permanently assigned
certain of its capacity rights under Pipeline's Contract No. 400184 to Customer;
and
WHEREAS, Pipeline and Customer desire to enter into this Service
Agreement which supersedes the Addendum and reflects that Customer has taken
permanent assignment of the capacity specified in the Addendum;
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 and of
Pipeline's Rate Schedule SS-1, Pipeline agrees to provide firm service for
Customer under Rate Schedule SS-1 and to receive and store for Customer's
account quantities of natural gas up to the following quantity:
Maximum Daily Injection Quantity (MDIQ) 3,876 dth
Maximum Storage Quantity (MSQ) 753,969 dth
SERVICE AGREEMENT
FOR RATE SCHEDULE SS-1
(CONTINUED)
Pipeline agrees to withdraw from storage for Customer, at Customer's
request, quantities of gas up to Customer's Maximum Daily Withdrawal Quantity
(MDWQ) of 11,303 dekatherms, or such lesser quantity as determined pursuant to
Rate Schedule SS-1, from Customer's Storage Inventory, plus Applicable
Shrinkage, and to deliver for Customer's account such quantities. Pipeline's
obligation to withdraw gas on any day is governed by the provisions of Rate
Schedule SS-1, including but not limited to Section 6.
ARTICLE II
TERM OF AGREEMENT
The term of this
Service Agreement shall commence on June 1, 2000 and
shall continue in force and effect until April 30, 2012 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
five (5) years prior written notice to the other specifying a termination date
of April 30, 2012 or any April 30 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 ▇▇▇▇ 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 ▇▇▇▇
or furnishes a good and sufficient surety bond guaranteeing payment to Pipeline
of such outstanding ▇▇▇▇.
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.
In the event there is gas in storage for Customer's account on April 30
of the year of termination of this Service Agreement, this Service Agreement
shall continue in force and effect for the sole purpose of withdrawal and
delivery of said gas to Customer for an additional one-hundred and twenty (120)
days.
2 400227
SERVICE AGREEMENT
FOR RATE SCHEDULE SS-1
(CONTINUED)
ARTICLE III
RATE SCHEDULE
This Service Agreement in all respects shall be and remain subject to
the applicable provisions of Rate Schedule SS-1 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 SS-1 as filed with the Federal Energy
Regulatory Commission and as the same may be hereafter revised or changed.
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
SS-1, (b) Pipeline's Rate Schedule SS-1, pursuant to which service hereunder is
rendered or (c) any provision of the General Terms and Conditions applicable to
Rate Schedule SS-1. 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 MDIQ, MSQ and
MDWQ specified in Article I, to change the term of the service 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 natural gas received by Pipeline for Customer's account for storage
injection pursuant to this Service Agreement shall be those quantities scheduled
for delivery pursuant to Service Agreements between Pipeline and Customer under
Rate Schedules CDS, FT-1, SCT, PTI or IT-1 which specify as a Point of Delivery
the IISS-1 Storage Point". For purposes of billing of Usage Charges under Rate
Schedules CDS, FT-1, SCT, PTI or IT-1,
3 400227
SERVICE AGREEMENT
FOR RATE SCHEDULE SS-1
(CONTINUED)
deliveries under Rate Schedules CDS, FT-1, SCT, PTI or IT-1 for injection into
storage scheduled directly to the SS-1 Storage Point" shall be deemed to have
been delivered 60% in Market Zone 2 and 40% in Market Zone 3. In addition, at
Customer's request any positive or negative variance between scheduled
deliveries and actual deliveries on any day at Customer's Points of Delivery
under Rate Schedules CDS, FT-1, SCT, or IT-1 shall be deemed for billing
purposes delivered at the Point of Delivery and shall be injected into or
withdrawn from storage for Customer's account. In addition to accepting gas for
storage injection at the SS-1 Storage Point, Pipeline will accept gas tendered
at points of interconnection between Pipeline and third party facilities at
Oakford and ▇▇▇▇▇ Storage Fields provided that such receipt does not result in
Customer tendering aggregate quantities for storage in excess of the Customer
MDIQ.
The Point(s) of Delivery at which Pipeline shall deliver gas shall be
specified in Exhibit A of the executed service agreement.
Exhibit A and B are hereby incorporated as part of this Service
Agreement for all intents and purposes as if fully copied and set forth herein
at length.
ARTICLE V
QUALITY
All natural gas tendered to Pipeline for Customer's account shall
conform and be subject to the provisions of Section 5 of the 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.
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, ▇▇▇▇ 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,
4 400227
* SERVICE AGREEMENT
FOR RATE SCHEDULE SS-1
(CONTINUED)
certified, or regular mail to the post office address of the parties hereto, as
the case may be, as follows:
Pipeline: Texas Eastern Transmission Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Customer: United Cities Gas Company,
A Division of Atmos Energy
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ 75:240
or such other address as either party shall designate by formal written notice.
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.
5 400227
SERVICE AGREEMENT
FOR RATE SCHEDULE SS-1
(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:
The Addendum to Customer's Capacity Release Umbrella Agreement
(Pipeline's Contract No. 900483, Pipeline's Capacity Release Deal No.
016807) which reflects the permanent assignment from Associated to
Customer of certain of the capacity rights specified in Pipeline's
Contract No. 400184 dated April 11, 1994.
6 400227
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: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Vice President, Marketing pmr
ATTEST:
/s/ [ILLEGIBLE]
---------------------------------
Assistant Secretary
UNITED CITIES GAS COMPANY,
A DIVISION OF ATMOS ENERGY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
ATTEST:
Contract #: 40022.
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EXHIBIT A, POINT(S) OF DELIVERY, (con't.)
UNITED CITIES GAS COMPANY, A DIVISION OF ATMOS ENERGY
provided, however, that until changed by a subsequent Agreement between Pipeline
and Customer, Pipeline's aggregate maximum daily delivery obligations at each of
the points of delivery described above, including Pipeline's maximum daily
delivery obligations under this and all other Service Agreements existing
between Pipeline and Customer, shall in no event exceed the following:
Aggregate Maximum
Point of Delivery Daily Delivery Obligation
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No. 1 19,260 dth
No. 2 2,595 dth
No. 3 18,826 dth for no more than 20 days
during the period of November 16
through April 15 of each year-otherwise,
11,346 dth
No. 4 519 dth
SIGNED FOR IDENTIFICATION
PIPELINE: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ CBA
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CUSTOMER: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
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PJD
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SUPERSEDES EXHIBIT A DATED: [ILLEGIBLE]
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A-2