FIRM NATURAL GAS STORAGE SERVICE AGREEMENT
THIS NATURAL GAS STORAGE AGREEMENT dated as of April 15, 1997,
by and between New York State Electric & Gas Corporation ("NYSEG" or
"Owner") and PG Energy Inc. ("Customer"), (singularly, "Party," and
collectively, the "Parties").
W I T N E S S E T H
WHEREAS, Owner has received all necessary approvals necessary to
develop, construct, own and operate a Phase I and II of a bedded salt
subsurface natural gas storage facility in ▇▇▇▇▇▇▇ ▇▇▇▇, New York
(the "Storage Facility") along with other associated transmission
pipelines. Phase I was placed in service in July 1996. Phase II was
placed in service in December 1996. Dewatering of the Storage
Facility for Phase I service is underway. Phases I and II are
expected to have a capability to inject 40,000 dekatherms ("Dth") per
day over a twenty (20) day period and to withdraw 80,000 Dth per day
over a ten (10) day period; and
WHEREAS, Owner plans to develop, construct, own and operate a
Phase III of a subsurface natural gas storage facility and associated
transmission pipelines at the Storage Facility in ▇▇▇▇▇▇▇ ▇▇▇▇, New
York (the "Phase III Storage Facility" or "Phase III") which will
have an incremental injection capability of 32,500 Dth per day over a
twenty (20) day period and will have an incremental withdrawal
capability of 65,000 Dth per day over a ten (10) day period; and
WHEREAS, prior to committing to the expenditures necessary to
develop, construct, own and operate the Phase III Storage Facility,
Owner requires certain firm and binding commitments from parties that
have expressed an interest in utilizing the capacity for Phase III of
the Storage Facility at certain minimum prices; and
WHEREAS, Customer is at this time willing to commit to use the
Phase III Storage Facility and associated services upon its
completion on terms and conditions set forth in this Agreement, as
provided below; and
WHEREAS, Customer desires to purchase firm storage service to
enable it to meet the requirements of its various customers; and
WHEREAS, Owner is willing to provide services to Customer in
accordance with the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter contained, Owner and Customer agree as
follows:
PART I
DEFINITIONS AND PRE-OPERATIONAL ACTIVITIES
Section 1
DEFINITIONS
1.1 "Agreement" means this Firm Natural Gas Storage Agreement
(including all Exhibits identified in the Schedule of Exhibits
attached hereto) as it may be amended and supplemented from time to
time.
1.2 "Approved" or "Approval" means approved by or approval of
Owner unless otherwise stated.
1.3 "Authorized Overrun Quantities" means quantities of Gas
which Owner agrees to inject or withdraw for Customer, in excess of
Customer's Maximum Daily Injection or Withdrawal Quantity, as
established pursuant to Section 4.3.
1.4 "Base Gas" means the gas required in the storage reservoir
necessary to provide the pressure to cycle the working storage
volumes.
1.5 "Commencement Date" shall mean November 1, 1997, in the
event a Notice of Readiness is given by Owner to Customer on or
before September 1, 1997. In the event the Notice of Readiness is
given after September 1, 1997, but before February 1, 1998, the
Commencement Date shall be April 1, 1998.
1.6 "Contract Year" means (i) for the initial year of
operations, the period beginning on the Commencement Date and
continuing through March 31, (ii) for each successive year of
operations, a one-year period from April 1 of one year through March
31 of the following year, For the first and last Contract Year, if
less than 365 Days, any calculation in this Agreement determined by
reference to a Contract Year shall be adjusted by multiplication of
the appropriate figure by a fraction the numerator of which shall by
the number of Days in that Contract Year and the denominator of which
shall be 365.
1.7 "Day" shall mean a period of twenty-four (24) consecutive
hours, beginning and ending at 9:00 AM (Central Clock Time),
including Saturdays, Sundays and holidays, except that in the event
that an obligation falls due on a Saturday, Sunday or a Federal
Banking holiday, the obligation shall be due on the next business
day.
1.8 "Facility" means the structure and facilities to be
designed and constructed by owner for purposes of providing the
Services contemplated by this Agreement, including any Phase I or
Phase II facilities that are necessary to the operations of Phase
III.
1.9 "FERC" shall mean Federal Energy Regulatory Commission or
any federal commission, agency or other governmental body or bodies
succeeding to the powers of such commission.
1.10 "Force Majeure" means an event of Force Majeure as
specified in Section 13.
1.11 "Fuel Retention" means the amount of Customer's Gas
tendered for injection which is retained by Owner as reimbursement
for compressor fuel used in the provision of service provided in
conjunction with the Agreement, as set forth in the Agreement.
1.12 "Gas" means natural Gas of a quality at least equal to the
quality specified in Section 7.
1.13 "Governmental Approvals" means all authorizations,
consents, exemptions, permits, certificates and approvals from any
federal, state, municipal, local or other bodies in the United States
having jurisdiction or potential jurisdiction in relation to the
construction and operation of the Facility or the performance of the
obligations contemplated by this Agreement.
1.14 "Maximum Daily Injection Quantity" means the maximum
quantity of Gas which Customer is entitled to inject into the
Facility on any Day, plus Fuel Retention.
1.15 "Maximum Daily Withdrawal Quantity" means the maximum
quantity of Gas which Customer is entitled to withdraw on any Day.
1.16 "Maximum Storage Capacity" means the maximum quantity of
Gas which Customer is entitled to store at the Facility at any given
time.
1.17 "Month" means a period beginning at 9:00 AM Central Clock
Time on the first Day of the calendar month and ending at 9:00 AM
Central Clock Time on the first day of the following Month.
1.18 "Notice of Readiness" shall be defined for purposes of this
Agreement as the notice to be issued by Owner specifying that the
Facility will be ready to provide service under this Agreement on the
Commencement Date.
1.19 "Owner" means New York State Electric & Gas Corporation.
1.20 "Point(s) of Delivery" means the point(s) where Customer
shall inject Gas into the Facility or withdraw Gas from the Facility,
as specified in Exhibit "B".
1.21 "Point(s) of Redelivery" means the point(s) where Owner
shall provide Gas withdrawn from the Facility to Customer, as
specified in Exhibit "B".
1.22 "Price Terms" means the prices attached as Exhibit "A", as
Exhibit "A" may be adjusted from time to time in accordance with this
Agreement, which sets forth the payment obligations of Customer for
the Services provided pursuant to this Agreement.
1.23 "Project" means the Seneca Lake Storage Project, pursuant
to which Governmental Approvals will be secured, contracts will be
entered, the Facility will be constructed, Gas will be injected and
withdrawn for Customers' accounts, and related tasks will be
accomplished.
1.24 "Services" means the injection, storage and withdrawal of
Gas, and any ancillary activities, to be performed by Owner for
Customer pursuant to this Agreement.
1.25 "Site" means the parcel of land located at ▇▇▇▇▇▇▇ ▇▇▇▇,
New York, under or through which Services are to be provided pursuant
to this Agreement.
1.26 "Term" means the period of time specified in Section 17.1.
1.27 "Transporter" means any upstream or downstream third party
which provide services required to effectuate delivery/redelivery of
Gas to/from Owner's Facilities, as set forth in Exhibit "B".
1.28 "Working Gas" means all Gas that Customer has in storage
that is not Base Gas.
Additional terms indicated by capitalization and utilized in
this Agreement shall have the meaning ascribed to them where first
utilized.
Section 2
PRE-OPERATIONAL ACTIVITIES
2.1 Approvals. This Agreement and the respective obligations
of the Parties hereunder are subject to all valid laws, orders, rules
and regulations of duly constituted authorities having jurisdication
("Applicable Law").
a. Owner's Required Approvals and Conditions
(i) Receipt by Owner of all approvals required to develop,
install, own and operate the Phase III Storage Facility and to
effecuate the proposed storage services including, without
limitation, all necessary approvals from federal, state, local or
municipal agencies or other governmental authorities having
jurisdiction. It is expressly understood that such approvals shall
be in a form and substance reasonably satisfactory to Owner,
including, without limitation, the jurisdictional status of the Phase
III Storage Facility (and the ratemaking treatment of its rate and
charges) by such agencies or governmental authorities. Owner shall
have no obligation to accept any regulatory
approval(s) where such approval(s) are not in a form and substance
that are reasonably satisfactory to Owner, in its sole discretion.
In the event all such approvals are not granted in form and substance
reasonably satisfactory to Owner on or before August 31, either Party
may terminate this Agreement after August 31, 1997. After August 31,
1997, a Party's right to terminate the Agreement due to failure to
receive all such approvals before August 31, 1997, shall cease at the
time such approvals are received and accepted by Owner.
Notwithstanding the other provisions of this Agreement, in the event
any regulatory body at any time issues an order requiring Owner to
charge a rate less than the rate agreed to by the parties, Owner may
terminate this Agreement on ten (10) days prior written notice to
Customer; provided, however, that prior to the resale of the Maximum
Daily Withdrawal Quantity hereunder or any portion thereof to a thrid
party, Customer shall have the right to retain such capacity by
agreeing to enter into a service agreement upon substantially similar
terms and conditions as Owner is willing to enter into with such
third party.
(ii) Owner shall have the right to terminate this Agreement
prior to February 1, 1998, provided that Ower has not given the
Notice of Readiness, if Owner, in its sole discretion, determines not
to proceed with Phase III of the Storage Facility on the basis that
Phase III of the Storage Facility is or will be uneconomical for any
reason. If Owner terminates this Agreement under this subparagraph,
Owner shall not provide any Phase III service to any third party(s)
unless the economics of the Project have changed subsequent to the
termination date. In the event Owner provides Phase III service to
any third party(s) prior to April 1, 1999, Customer shall have the
right to reinstate the service provided for in this Agreement by
reexecuting this Precedent Agreement and/or the Firm Storage Service
Agreement.
(iii) In the event Owner elects to hold an open season
for Phase III capacity, such open season shall not include the Phase
III capacity contracted for by Customer pursuant to this Agreement.
Until such time as a final order has been issued by the involved
regulatory body that is no longer appealable to that regulatory body,
Owner shall make filings before the involved regulatory body to
vigorously oppose any proposal or requirement (whether by a
regulatory body, its Staff or any third party) that seeks to require
Owner to conduct an open season that includes the Phase III capacity
contracted for by Customer pursuant to this Agreement. In the event
FERC or any other regulatory body which has general jurisdiction over
Owner requires Owner to conduct an open season that makes available
the Phase III capacity contracted for by Customer pursuant to this
Agreement, Owner or Customer may terminate this Agreement upon
written notice to the other Party. Customer may participate in such
open season with the same rights as any other party and if Customer
elects to do so and Customer's bid is successful, the Parties shall
negotiate a new precedent agreement incorporating the price terms and
quantities contained in Customer's successful bid.
(iv) In the event the operational capabilities of Phases I,
II and III are insufficient on any given day(s) to supply the
requirements of all of the Phase I, II and III customers, then
current Phase I and II customers shall receive priority, up to 80,000
dekatherms, over other customers.
(v) Customer agrees it will not directly or indirectly
object in any forum to the prices agreed to herein.
(vi) Customer agrees that, subject to the provisions of
Section 3.3, Customer shall begin to pay the demand charges and other
applicable charges as set forth in Exhibit "B" beginning on the
Commencement Date.
(b) Customer's Required Approvals and Conditions
(i) If any of the regulatory approvals granted to Owner
pursuant to Section 2 materially and adversely affect the service
that is contemplated to be provided to Customer herunder, Customer
shall have the right to terminate this Agreement within thirty (30)
days of the grant of any such approval.
PART TWO - SERVICES
Section 3
STORAGE SERVICES
3.1 Firm Storage. Specific volumetric commitments, price
commitments, the injection and withdrawal fee, Maximum Daily
Withdrawal Quantity ("MDWQ"), Maximum Daily Injection Quantity
("MDIQ") Working Gas and Base Gas Requirements, Fuel Retention and
Authorized Injection and Withdrawal Overrun Fees are set forth and
attached hereto at Exhibit "A" to this Agreement, subject to the
provisions of the FERC approved Operating Statement or other
applicable Rate Schedules.
3.2 Term. The term of the Firm Storage Service Agreement shall
commence on the date of execution of the Firm Storage Service
Agremeent and shall terminate on March 31, 2002. If on or before
September 1, 1997, Owner cannot in good faith issue the Notice of
Readiness for the full Maximum Daily Withdrawal Quantity set forth in
Exhibit "A", Owner shall either (1) state in the Notice of Readiness
the level of service Owner can in good faith provide on and after
November, 1997; or (2) not issue the Notice of Readiness, in Owner's
sole discretion. If Owner elects to provide the Notice of Readiness
for a reduced level of service, Customer shall within ten (10)
business days notify Owner whether Customer agrees to accept such
reduced service for the period from November 1, 1997, to March 31,
1998. If Customer accepts such reduced service, the maximum daily
withdrawal quantity set forth in the Notice of Readiness shall be
provided by Owner between November 1, 1997, and March 31, 1998,
subject to the terms of this Agreement. If Customer does not accept
such reduced service, then the Notice of Readiness will be deemed not
to have been given and Customer shall have no obligation to accept
service prior to April 1, 1998. If Owner receives a Bona Fide Offer,
as defined below, Owner may terminate the Firm Storage Service
Agreement effective on March 31, 2000, or on March 31, 2001, by
giving Customer seven (7) months prior written notice; provided,
however, that Owner may not so terminate if Customer elects to match
the Bona Fide Offer in writing within fifteen (15) days of the date
that Owner informs Customer of the Bona Fide Offer. The term "Bona
Fide Offer" as used in this section shall mean an offer or more than
one offer which either individually, or taken together, yield a
higher net present value for the remaing term and contain
substantially similar terms and conditions as contained in the Firm
Storage Service Agreement. In no circumstance shall a Bona Fide
Offer include any offer for capacity made by an entity in which Onwer
holds a controlling interest.
3.3 Payment Schedule. Customer shall pay Owner for services
provided pursuant to this Agreement in accordance with the provisions
of Section 8 of the FERC approved Operating Statement or other
applicable Rate Schedules.
3.4 Partial Service.
(a) Except as otherwise provided in Section 3.4(b) of this
Agreement, Customer shall pay a reservation charge applied only to
the actual maximum daily withdrawal quantities that Owner is
operationally capable of providing. "Operationally capable" shall
mean the level of service that Owner is capable of providing in
Owner's sole discretion. In the event Owner provides Customer with
less than the Maximum Daily Withdrawal Quantity set forth in Exhibit
"A", consistent with this Agreement, the Maximum Daily Injection
Quantity, Base Gas Requirement and Maximum Working Gas Storage
Capacity set forth in Exhibit "A" shall be in the same proportion as
they are currently set forth in Exhibit "A". If Owner, at any time
after April 1, 1998, provides Customer with less than seventy percent
(70%) of the Maximum Daily Withdrawal Quantity, Customer may
terminate this Agreement and/or the Firm Storage Service Agreement
except in the case when the provision of less than seventy percent
(70%) of the Maximum Daily Withdrawal Quantity is the result of a
force majeure event(s), in which case Customer may terminate the
Agreement if the force majeure extends for a period of greater than
ninety (90) consecutive days and except in the cases where the
provision of less than seventy (70%) percent of the Maximum Daily
Withdrawal Quantity is either (1) the result of planned or routine
maintenance; or (2) compliance with applicable regulatory
requirements as set forth in the Operating Statement.
(b) Beginning on April 1, 1998, if Owner is not
operationally capable of providing the Maximum Daily Withdrawal
Quantity as set forth in Exhibit "A", and Customer does not exercise
its right to terminate pursuant to section 3.4(a) above, then Owner
and Customer will use their best efforts to increase service to
Customer up to the Maximum Daily Withdrawal Quantity set forth in
Exhibit "A". Owner may provide Customer with a written notice ten
(10) days prior to the first day of any month during the period May,
1998 through November, 1998, setting forth the additional capacity
that can be made operationally available, and such increased quantity
shall become the new maximum daily withdrawal quantity to which
Customer is thereafter entitled effective on the first day of the
subsequent month. Customer's demand charges shall be calculated
based on the level of service provided until such time as the full
Maximum Daily Withdrawal Quantity is provided.
3.5 Cavern Dewatering and Initial Year Contingencies.
(a) Customer and Owner have agreed to a schedule according
to which Customer shall tender and Owner shall accept injections of
Base Gas and Working Gas which shall be applicable to this Agreement
prior to the Commencement Date.
(b) Subject to the provisions of subparagraph (c) below,
if on or before November 1, 1997, Owner gives notice to reduce the
Maximum Daily Withdrawal Quantity, the monthly reservation charge
will be calculated from the Reduced Maximum Daily Withdrawal
Quantity. However, if the injection shortfall is the result of
Customer's failure to tender gas for injection pursuant to the
schedule mutually agreed upon by Customer and Owner, the Maximum
Daily Withdrawal Quantity used for billing purposes will be the
maximum daily withdrawal quantity that Owner would have made
operationally available if Customer had injected gas pursuant to the
schedule, not to exceed the Maximum Daily Withdrawal Quantity set
forth in Exhibit "A"; provided, however, that if Customer's failure
to tender gas for injection is in whole or in part due to force
majeure causes beyond Customer's control, then for purposes of
calculating the monthly reservation charge the Maximum Daily
Withdrawal Quantity shall be reduced pursuant to Owner's notice.
(c) If Customer tenders and Owner accepts additional gas
for injection after November 1, 1997, and as a result of these
additional injections Owner is able to increase the previously
Reduced Maximum Daily Withdrawal Quantity, Owner shall notify
Customer of the new Reduced Maximum Daily Withdrawal Quantity and
payments shall thereafter be based upon the new Reduced Maximum Daily
Withdrawal Quantity.
(d) In the event the Notice of Readiness is not issued on
or before February 1, 1998, Customer may terminate this Agreement.
Section 4
INJECTIONS AND WITHDRAWALS
4.1 Injections. Customer hereby reserves and Owner hereby
agrees to provide facilities and capacity to support the injection of
Gas owned by Customer into the Facility on each Day in an amount up
to Customer's Maximum Daily Injection Quantity, so long as injection
of such quantities cause Customer to exceed its Maximum Storage
Capacity.
4.2 Withdrawals. Customer hereby reserves and Owner hereby
agrees to provide facilities and capacity to support the withdrawal
of Gas owned by Customer from the Facility on each Day in an amount
up to Customer's Maximum Daily Withdrawal Quantity, so long as
withdrawal of such quantities does not cause Customer to incur a
negative Working Gas Balance.
4.3 Authorized Overrun Quantities. If, within the sole
discretion of Owner, operating conditions permit and Customer will
neither exceed its Maximum Storage Capacity nor incur a negative
Working Gas balance, Owner may authorize Customer to inject or
withdraw quantities in excess of Customer's Maximum Daily Injection
and Withdrawal quantities. The charge for such Authorized Injection
and Withdrawal Overrun Service is set forth in Exhibit "A".
Section 5
SCHEDULING
5.1 Points of Delivery and Points of Redelivery. Owner and
Customer shall designate as Exhibit "B", attached hereto and made a
part hereof, a list of the currently available Points of Delivery and
Points of Redelivery.
5.2 Customer Scheduling of Transportation. Customer shall by
solely responsible for making all arrangements and paying for the
transportation of the Gas to the Point of Delivery for injection into
the Facility, and for making all arrangements and paying for the
transportation of Gas from the Point of Delivery for Gas for
withdrawal from the Facility. Owner shall have no obligation to
inject Gas for Customer, or to withdraw Gas for Customer, unless and
to the extent that Transporter confirms the transport of equivalent
quantities, as the case may be.
5.3 Scheduling of Storage Volumes and Intra-Day Changes in
Nominations. Owner and Customer agree that the obligations of Owner
and Customer for scheduling and changing nominations hereunder and
responsibility for any penalties, imbalance or other charges
associated with non-compliance with each of the party's respective
obligations shall be in accordance with the provisions of Section 6
of the FERC approved Operating Statement or other applicable Rate
Schedules.
PART III
GAS PRESSURE, QUALITY AND MEASUREMENT
Section 6
PRESSURE
Owner and Customer agree that the obligations of Owner and
Customer as to the pressure of Gas injected and withdrawn from NYSEG
shall be in accordance with the provisions of Section 7 of the FERC
approved Operating Statement or other applicable Rate Schedules or
tariffs that may be in place and applicable.
Section 7
QUALITY
Owner and Customer agree that the obligations of Owner and
Customer as to the quality of the Gas injected and withdrawn from
NYSEG shall be governed by Section 7 of the FERC approved Operating
Statement or other applicable Rate Schedules.
Section 8
MEASUREMENT
Owner and Customer agree that the obligations of Owner and
Customer as to the measuring of Gas shall be governed by the
provisions of Section 7 of the FERC approved Operating Statement or
other applicable Rate Schedules.
PART IV
Section 9
BILLING AND PAYMENT
Owner and Customer agree that the obligations of Owner and
Customer as to billing and payment shall be governed by the
provisions of Section 8 of the FERC approved Operating Statement or
other applicable Rate Schedules.
Section 10
TAXES
Customer agrees to reimburse Owner within fifteen (15) Days of
invoice for all taxes attributable to the injection, storage or
withdrawal of Customer's Gas, or payments made by Owner pursuant to
this Agreement.
PART V
MISCELLANEOUS
Section 11
BASE GAS
11.1 Customer Shall Provide Base Gas. The amount of Customer's
Base Gas contribution shall be as set forth in Exhibit "A". Customer
shall retain title to such base gas at all times and shall be
entitled to withdraw such contribution of Base Gas upon the
expiration of Customer's contract term in the event such contract is
not extended or renewed.
11.2 Customer Withdrawal of Base Gas. Customer shall be
required to withdraw all of its Base Gas within sixty (60) days of
the end of the Contract Year when Customer's contract expires or
terminates, unless otherwise as mutually agreed by the parties.
Customer shall be entitled to withdraw up to its MDWQ to the extent
it is operationally feasible for Owner to allow Customer to do so,
provided, further, however, that withdrawals of Base Gas shall be
interruptible by Owner. To the extent of any such interruptions, the
sixty (60) day withdrawal period shall be extended for a like period.
All Base Gas not withdrawn during the required withdrawal period
shall be forfeited to Owner.
Section 12
RATE SCHEDULES AND GENERAL TERMS AND CONDITIONS
This Agreement and all terms and provisions contained or
incorporated herein are subject to the provisions of Owner's
applicable FERC-approved Operating Statement or other applicable
Schedules or tariffs that may be in place and applicable from FERC or
other duly constituted authorities having jurisdiction, and as the
same may be legally amended or superseded, which Operating Statements
and other applicable schedules or tariffs are by this reference made
a part hereof.
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▇▇▇▇▇ ▇▇▇▇▇▇▇
Owner and Customer agree that force majeure shall be defined in
accordance with the provisions of Section 10 of the FERC approved
Operating Statement or, in the absence of such schedule, based upon
other applicable Rate Schedules.
Section 14
POSSESSION, TITLE, RISK OF LOSS AND WARRANTY
14.1 Possession, Title and Risk of Loss. Owner and Customer
agree that the obligations of Owner and Customer as to possession,
title and risk of loss shall be governed by the provisions of Section
11 of the FERC approved Operating Statement or other applicable Rate
Schedules
14.2 Warranty. Owner and Customer agree that the obligations of
Owner and Customer as to warranty of title to Gas shall be governed
by the provisions of the FERC approved Operating Statement or based
upon other applicable Rate Schedules or tariffs that may be in place
and applicable.
Section 15
CREDITWORTHINESS
15.1 Owners Obligations Contingent on Creditworthiness. Owner
shall have the right from time to time to request such credit
documentation as may be appropriate in its commercially reasonable
discretion. Further, in the event there is a material adverse change
in Customer's or any Guarantor's financial status, Owner may request
such additional credit documentation or security or guarantee of
payment as may be required by Owner in its commercially reasonable
discretion. If Customer does not provide such credit documentation
or security or guarantee of payment within thirty (30) days of
Owner's request, Owner may terminate this Agreement, without any
further liability to Customer whatsoever. At such time as a FERC-
approved Operating Statement is in place and effective, Customer's or
its assigns' satisfaction of the creditworthiness provisions shall be
as set forth in Owner's FERC-approved Operating Statement.
15.2 Non-Discriminatory Treatment. All of Owner's
creditworthiness review standards and requirements shall be imposed
on a non-discriminatory basis. Security shall no longer be required
where Owner deems that security is no longer needed or when the
Customer is no longer receiving Services from Owner.
Section 16
DEFAULT
16.1 Termination for Default. If (i) either Party shall fail in
any material respect to comply with, observe, perform or shall
default in any material respect upon any obligation under this
Agreement, except due to causes excused by Force Majeure or
attributable to the other's wrongful act or failure to act, and such
failure materially and adversely affects the ability of either Party
to deliver or accept Gas and (ii) after written notice thereof from
the Party claiming a right to terminate this Agreement, such failure
shall continue for a period of thirty (30) Days, then the Party
claiming the right to terminate may, by notice in writing, terminate
this Agreement as of the date of the notice of termination; provided,
however, that if such failure cannot be reasonably cured within such
thirty (30) Days, the Party claimed to be in default shall be
entitled to such further time as shall reasonably be required to
effect such cure, provided that such Party commences within such
thirty (30) Days substantial efforts to effect such cure and at all
times thereafter proceeds diligently to complete such cure.
16.2 Other Rights Preserved. The availability or exercise of
the right to terminate this Agreement pursuant to this Section shall
not serve to diminish or effect the right of the Parties to seek
damages or specific performance, for breach of this Agreement, as
provided in Section 16.1 hereof.
16.3 Non-Performance/Liquidation. The occurrence at any time with
respect to either party of any of the following events constitutes an
event of default hereunder and the non-defaulting party shall be
entitled to suspend its performance hereunder and/or liquidate and
terminate this Agreement in the event of such default:
(a) the failure by a party to make, when due, any payment under
this Agreement if the failure is not remedied within five Business
Days after receipt of a notice of such failure from the other party;
(b) a party:
(i) is generally not paying its debts as they become due;
(ii) files, or consents by answers or otherwise to the
filing against it of, any petition or case seeking relief
under any federal, state or foreign bankruptcy or
insolvency (collectively "Bankruptcy Laws"),
(iii) makes a general assignment for the benefit of its
creditors,
(iv) applies for or consents to the appointment of a
custodian, receiver, trustee, conservator, or other officer
with similar powers ("Custodian")
(v) takes corporate action for the purpose of any of the
foregoing;
(c) a court or governmental authority, agency, instrumentally
or official of competent jurisdiction enters or issues an order
or decree with respect to a party:
(i) appointing a Custodian;
(ii) constituting an order for relief under, or approving
a petition or case for relief or reorganization of any
other petition or case to take advantage of, any Bankruptcy
Laws, or
(iii) ordering its dissolution, winding-up or
liquidation;
(d) a petition or case for any purpose specified in the
Paragraph directly above is filed against a party and is not
dismissed within thirty (30) days;
(e) a party fails to perform, observe or comply with any other
material term, covenant or provision contained in this Agreement
and the failure continues for thirty (30) days after receipt of a
notice of such failure from the other party.
Section 17
LEGAL RELATIONS
17.1 Entire Agreement. This Agreement, including all Exhibits
hereto, contains the entire understanding of the Parties with respect
to the subject matter hereof, and supersedes all prior agreements and
commitments with respect thereto. Neither Party has relied upon any
representation expressed or implied not contained in this Agreement.
There are no oral understandings or other terms or conditions.
17.2 Applicable Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the State of New
York, exclusive of conflicts of laws provisions.
17.3 Agreement Subject to Law and Regulatory Orders. This
Agreement is subject to all valid laws orders, rules and regulations
of all governmental authorities having jurisdiction.
17.4 Amendments. No change, amendment or modification of this
Agreement shall be valid or binding upon the Parties unless such
change, amendment or modification shall be in writing and duly
executed by the Parties. The Operating Statement, when approved by
FERC, shall become part of the Agreement. FERC-approved changes to
the Operating Statement covering these services shall also become
part of the Agreement.
17.5 Captions. The captions and subheadings contained in this
Agreement are for convenience and reference only and in no way
define, describe, extend or limit the scope or intent of this
Agreement or the intent of any provision contained herein.
17.6 Notice. Any notice, demand, offer or other written
instrument required or permitted to be given pursuant to this
Agreement, except for those provisions in owner's Operating Statement
requiring otherwise, shall be in writing signed by the Party giving
such notice and shall be hand-delivered or sent by registered letter,
overnight courier provided a receipt signed by the addressee is
obtained, or telexed to the other Party. Unless otherwise
specifically provided in this Agreement, any written notice or other
communication shall be sufficiently given or shall be deemed given on
the third business day following the date on which the same is mailed
by registered or certified mail, postage prepaid, addressed:
(a) if delivered to Owner:
New York State Electric & Gas Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ East, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Senior Vice President, Gas Business Unit
(b) if delivered to Customer:
PG Energy Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Director of Gas Supply
Each Party shall have the right to change the place to which
notice shall be sent or delivered by similar notice or like manner to
the other Party. The effective date of notice issued pursuant to
this Agreement shall be the earlier of the date of addressees receipt
of such notice or the third business day following the date on which
the same is mailed by registered or certified mail, postage prepaid.
17.7 Severability. The invalidity of one or more phrases,
sentences clauses, or Articles contained in this Agreement shall not
affect the validity of the remaining portion of the Agreement so long
as the material purposes of this Agreement can be determined and
effectuated. In the event that one or more phrases, sentences,
clauses, or Articles is held to be invalid and such invalidity
affects the remaining portion of the Agreement to alter its material
purposes, the parties shall negotiate in good faith to amend this
Agreement to have the same force and effect as if such phrase,
sentence clause, or Section were not invalid.
17.8 Assignment. This Agreement shall be binding upon, shall
inure to the benefit of, and may be performed by, the successors and
assigns of the parties, except that no assignment, pledge, or other
transfer of this Agreement shall operate to release the assignor,
pledgor, or transferor from any of its obligations under this
Agreement unless consent to the release is given in writing by the
other Party, with such consent not to be unreasonably withheld, or
such transfer is incident to a merger or consolidation with, or
transfer of all or substantially all of the assets of the transferor
to another person or business entity which shall, as part of such
succession, assume all the obligations of the transferor under this
Agreement.
17.9 No Waiver. The failure of any party to enforce any of the
provisions of this Agreement or to require compliance with any of its
terms, at any time during the pendency of this Agreement, shall in no
way affect the validity of this Agreement, or any part hereof, and
shall not be deemed a waiver of the right of such Party thereafter to
enforce any provision of this Agreement.
17.10 Exhibits. All exhibits referenced in this Agreement
shall be incorporated into this Agreement by such reference and shall
be deemed to be an integral part of this Agreement.
17.11 Liability of Owner and Customer. In the event of a
breach of this agreement by one Party, the other Party shall be
entitled to the remedies available at law or in equity, provided in
no event shall Owner or Customer be liable to the other for exemplary
or punitive damages.
17.13 Valid Termination. In the event Owner or Customer
validly terminate this Agreement pursuant to its terms, the
terminating Party shall not thereafter have any further liability or
further obligation to the other Party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives effective as of the
date first written above.
ATTEST: NEW YORK STATE ELECTRIC & GAS CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Manager - Market Development By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
ATTEST: PG ENERGY INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Secretary By: /s/ ▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Title: Vice President, Financial Services
Exhibit "A"
PRICE TERMS, BASE GAS CONTRIBUTION AND
WORKING GAS REQUIREMENT
1. Price of Services. For each of the services to be provided
hereunder, Customer agrees to pay and shall pay the following charge:
(a) Monthly Demand Charge. Customer agrees to pay and shall
pay the following charge to Owner:
$4.00 per month per Dth x the Maximum Daily Withdrawal Quantity
The Monthly Demand Charge is calculated on a per unit of
deliverability basis.
(b) Maximum Daily Withdrawal Quantity. 30,000
Dth/d
(c) Maximum Daily Injection Quantity. 15,000
Dth/d
(d) Base Gas per Agreement. 186,000
Dth
(e) Maximum Working Gas Storage Capacity. 300,000
Dth
(f) Commodity Injection Charge. For each Dth injected and
stored for Customer's account, Customer agrees to pay and shall pay
the following charge:
$.01/Dth
An injection fee shall not be payable on Base Gas but shall be
payable on all other gas injected.
(g) Commodity Withdrawal Charge. For each Dth of Gas withdrawn
from Customer's account, Customer agrees to pay and shall pay the
following charge:
$. 0l/Dth
(h) Authorized Injection and Withdrawal Overrun Charge. For
Authorized Injection and Withdrawal Overrun Service rendered by Owner
to Customer pursuant to Section 4.3, Customer agrees to pay and shall
pay the following charge (in addition to the otherwise applicable
injection and withdrawal charges specified in Articles sections l(b)
and (c) of this Exhibit):
$.13 /Dth
2. Fuel Retention. The amount of Customer's Gas tendered for
injection which is returned by Owner as reimbursement for
compressor fuel used in the provision of service provided in
conjunction with this Agreement. Customer agrees that Fuel
Retention shall be as follows:
One and one half percent (1.5%) of the quantities tendered
for injection by Customer to Owner in kind at time of
injection. Fuel Retention shall be assessed on all volumes
tendered for injection.
Exhibit "B"
DELIVERY AND REDELIVERY POINT
CNG Transmission Corporation ▇▇▇▇▇▇ Road Metering and Regulator
Station in Big Flats, New York
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