Exhibit 10(b)(b)(b)
PG&E Energy Trading-Gas Corporation is not the same company as Pacific
Gas and Electric Company, the utility. PG&E Energy Trading-Gas
Corporation is not regulated by the California Public Utilities
Commission, and you do not have to buy PG&E Energy Trading-Gas
Corporation's products in order to continue to receive quality
regulated services from the utility.
MASTER FIRM PURCHASE/SALE AGREEMENT
between
PG&E ENERGY TRADING-GAS CORPORATION
("Company")
and
BLUEFIELD GAS COMPANY
("Customer")
Gas
dated
November 1, 1999
PG&E ENERGY TRADING-GAS CORPORATION
MASTER FIRM PURCHASE/SALE AGREEMENT
PG&E ENERGY TRADING-GAS CORPORATION, a California corporation ("Company"), and
BLUEFIELD GAS COMPANY, a __________________________________ ("Customer"),
referred to collectively as the 'Parties,' enter into this Master Firm
Purchase/Sale Agreement (together with all Transactions, collectively, this
'Agreement') effective as of the 1st day of November, 1999 (the 'Effective
Date'). The PG&E Energy Trading-Gas Corporation General Provisions set forth in
Appendix "1" shall apply to this Agreement.
ARTICLE 1. TERM This Agreement shall govern all Transactions for the firm
purchase or sale of gas and be in effect for a term of one year from the
Effective Date. It shall then continue in effect from Month to Month, unless
terminated by either Party upon 30 Days prior written notice to the other Party;
provided, this Agreement shall continue to apply to all Transactions then in
effect until all Transactions are completed. Termination of this Agreement in
all instances shall be subject to Section 8.4.
ARTICLE 2. SCOPE OF AGREEMENT 2.1. Scope of Agreement. Company and Customer from
time to time during the term hereof may, but are not obligated to, enter into
Transactions for the firm purchase and sale of Gas to which this Agreement shall
apply. Each Transaction shall be effectuated and evidenced as set forth in this
Article 2 and shall constitute a part of this Agreement and all Transactions,
together with this Agreement, shall constitute a single integrated agreement. It
is acknowledged that the Parties are relying upon the fact that all
Transactions, together with this Agreement, will form a single integrated
agreement and that the Parties would not otherwise enter into any Transactions.
Each Transaction shall be construed as one with this Agreement and any
discrepancy between this Agreement and a Transaction shall be resolved in favor
of the Transaction. Each Transaction shall provide whether the Transaction is
based upon DCQ quantity obligations or MinMQ or MinDQ and MaxDQ quantity
obligations, in which case the applicable alternative definitions and provisions
set forth in this Agreement shall apply.
2.2. Transaction Procedures. It is the intent of the Parties to facilitate
Transactions in accordance with the agreed procedures in this Article 2 and
assure that such Transactions are valid and enforceable as a result of the use
of these procedures for the mutual benefit of the Parties. Any Transaction may
be formed and effectuated (i) by a written paper-based Transaction Agreement in
the form of a Confirmation as set out on Exhibit B-1 executed by the Parties
(including by facsimile and/or counterparts) or (ii) in a recorded telephone
conversation between the Parties occurring on any Business Day during the
Pricing Hours whereby an offer and acceptance shall constitute the agreement of
the Parties to a Transaction as evidenced by the Transaction Tape; provided,
each Party may stipulate by prior notice to the other Party that any particular
contemplated Transaction may be effectuated and formed only by means of
procedure (i) above. The Parties shall be legally bound by each Transaction from
the time they agree to its terms in accordance with this Article 2 and
acknowledge that each Party will rely thereon in doing business related to the
Transaction. The Transaction Tape is adopted by the Parties as a means by which
a Transaction is reduced to tangible form, and the Parties to a Transaction are
identified and authenticate a Transaction. Any Transaction formed and
effectuated pursuant to the foregoing shall be considered to be a .writing' or
'in writing' and to have been 'signed' and any Transaction Tape shall be
considered to constitute an 'original' document evidencing the Transaction. Each
Party consents to and has obtained any necessary consent of its employees to the
recording of its employees' telephone conversations without any further notice.
2.3. Equipment and Transaction Tape. Company shall at its expense maintain
equipment necessary to regularly record Transactions on Transaction Tapes and
retain Transaction Tapes in such manner as to protect its business records from
improper access; provided, Company shall not be liable for any malfunction of
equipment or the operation thereof in respect of any Transaction WITHOUT REGARD
TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT LIMITATION, THE
NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT,
OR ACTIVE OR PASSIVE. No Transaction shall be vitiated should a malfunction
occur in equipment regularly utilized for recording Transactions or retaining
Transaction Tapes or the operation thereof, and in such event, the Transaction
shall be evidenced by the written and computer records of the Parties concerning
the Transaction made contemporaneously with the telephone conversation.
2.4. Confirmations. In addition to, but not in lieu of, the foregoing, the
Parties agree that Company may confirm a recorded telephonic Transaction by
forwarding to Customer a facsimile Confirmation in the form set out on Exhibit B
and that a reasonable time for the receipt by Customer of a Confirmation is
within 24 hours of the Transaction formation. Company does hereby adopt its
letterhead, including its address, as its signature on any Confirmation as the
identification of Company and authentication by Company of the Confirmation, and
such letterhead shall be sufficient to verify that Company originated the
Confirmation. The Parties agree that any objections to the contents of the
Confirmation shall be made in writing on or before the Confirm Deadline for all
purposes hereunder and at law. Upon issuance of a Confirmation and the passage
of the Confirm Deadline, if no objection to the Confirmation has been then
received, the Confirmation shall be conclusive evidence of the Transaction made
the subject matter thereof and the final expression of all of its terms.
2.5. Enforcement of Transactions. The Parties agree not to contest or assert a
defense to the validity or enforceability of telephonic Transactions entered
into in accordance with this Agreement under laws relating to (I) whether
certain agreements are to be in writing or signed by the Party to be thereby
bound or (ii) the authority of any employee of the Party if the employee name is
stated in the Transaction Tape.
ARTICLE 3. QUANTITY OBLIGATIONS 3.1. Seller's Sales Obligation. Seller shall
Schedule, or cause to be Scheduled, at the Delivery Point(s) on a firm basis
each Gas Day a quantity of Gas equal to the quantity property requested by Buyer
up to the DCQ or MaxDQ, if applicable (" Requested Quantity"). Unless otherwise
agreed nothing in this Agreement, and in particular this Article 3, shall
require or permit either Party to Schedule Gas at a point other than a Delivery
Point or in excess of the DCO, Maximum Daily Delivery Point Quantity or MaxDQ,
as applicable.
3.2. Seller's Failure to Schedule. If on any Gas Day Seller fails to Schedule
Buyer's Requested Quantity, then such occurrence shall constitute a "Deficiency
Default" and "Seller's Deficiency Quantity" shall be the numerical difference
between Buyer's Requested Quantity and the amount of Gas Scheduled for such Gas
Day. In the event of a Seller's Deficiency Default, Seller shall pay Buyer the
sum of the following: (1) an amount equal to the product of the Seller's
Deficiency Quantity multiplied by the Replacement Price Differential, plus (ii)
liquidated damages equal to $0.15 per MMBtu multiplied by Seller's Deficiency
Quantity to cover Buyer's administrative and operational costs. During any Month
in which Settees nonperformance continues for a period of five consecutive Gas
Days Buyer may elect upon notice to Seller, without liability, not to recommence
Scheduling Gas hereunder for the remainder of such Month, but for no longer
period. Subject to offset pursuant to Section 3.5, payment to Buyer shall be
made on the later of the 25th Day of the Month or ten days after Seller receives
Buyer's statement for same.
3.3. Buyer's Purchase Obligation. Buyer shall Schedule, or cause to be
Scheduled, at the Delivery Point(s) on a firm basis each Gas Day a quantity of
Gas equal to the DCQ; provided, (I) if the MinMQ is applicable to a Transaction,
Buyer shall Schedule, or cause to be Scheduled, at the Delivery Point(s) on a
firm basis each Month a minimum quantity of Gas equal to the MinMQ and (ii) if
the MinDQ is applicable to a Transaction, Buyer shall
Schedule, or cause to be Scheduled, at the Delivery Point(s) on a firm basis
each Day a minimum quantity of Gas equal to the MinDQ.
3.4. Buyer's Failure to Schedule. If on any Gas Day Buyer fails to Schedule the
DCQ or MinDQ, if applicable, then such occurrence shall constitute a "Buyer's
Deficiency Default" and "Buyer's Deficiency Quantity" shall be the numerical
difference between the DCQ or MinDQ, if applicable, and the quantity of Gas
Scheduled for such Gas Day; provided, if the MinMQ is applicable to a
Transaction, (i) the Buyers Deficiency Default shall occur if Buyer fails to
Schedule the MinMQ for any Month and (ii) the Buyer's Deficiency Quantity shall
be the numerical difference between the MinMQ and the quantity of Gas Scheduled
for such Month. In the event of a Buyers Deficiency Default, Buyer shall pay
Seller the sum of the following: (i) an amount equal to the product of Buyer's
Deficiency Quantity multiplied by the Replacement Price Differential, plus (ii)
liquidated damages equal to $0.15 per MMBtu multiplied by Buyer's Deficiency
Quantity to cover Seller's administrative and operational costs. With respect to
DCQ and MinDQ obligations, during any Month in which Buyer's nonperformance
continues for a period of five consecutive Gas Days Seller may elect upon notice
to Buyer, without liability, not to recommence Scheduling Gas for the remainder
of such Month, but for no longer period. Subject to offset pursuant to Section
3.5 payment to Seller shall be made in accordance with the Financial Matters
provisions set forth in Appendix "l".
3.5. Netting. In the event that Buyer and Seller are each required under this
Agreement to pay an amount in the same Month hereunder, then such amounts with
respect to each Party may be aggregated and the Parties may discharge their
obligations to pay through netting, in which case the Party, if any, owing the
greater aggregate amount may pay to the other Party the difference between the
amounts owed.
ARTICLE 4. DEFAULTS AND REMEDIES 4.1. Early Termination. If a Triggering Event
(defined in Section 4.2) occurs with respect to either Party at any time during
the term of this Agreement, the other Party (the "'Notifying Party") may (i)
upon two Business Days written notice to the first Party, which notice shall be
given no later than 60 Days after the discovery of the occurrence of the
Triggering Event, establish a date on which any or all Transactions selected by
it and this Agreement in respect thereof will terminate ("Early Termination
Date") except as provided in Section 8.4, and (ii) withhold any payments due in
respect of such Transactions; provided, upon the occurrence of any Triggering
Event listed in item (iv) of Section 4.2 as it may apply to any party, all
Transactions and this Agreement in respect thereof shall automatically
terminate, without notice, as if an Early Termination Date had been immediately
declared except as provided in Section 8.4. If an Early Termination Date occurs,
the Notifying Party shall in good faith calculate its damages, including its
associated costs and attorneys' fees, resulting from the termination of the
terminated Transactions (the 'Termination Payment"). The Termination Payment
will be determined by (i) comparing the value of (a) the remaining term,
quantities and prices under each such Transaction had it not been terminated to
(b) the equivalent quantities and relevant market prices for the remaining term
either quoted by a bona fide third party offer or which are reasonably expected
to be available in the market under a replacement contract for each such
Transaction and (ii) ascertaining the associated costs and attorneys' fees. To
ascertain the market prices of a replacement contract the Notifying Party may
consider, among other valuations, any or all of the settlement prices of NYMEX
Gas futures contracts, quotations from leading dealers in Gas swap contracts and
other bona fide third party offers, all adjusted for the length of the remaining
term and the basis differential. All terminated Transactions shall be netted
against each other and upon the netting of all terminated Transactions, if the
calculation of the Termination Payment does not result in damages to the
Notifying Party, the Termination Payment shall be zero. The Notifying Party
shall give the Affected Party (defined in Section 4.2) written notice of the
amount of the Termination Payment, inclusive of a statement showing its
determination. The Affected Party shall pay the Termination Payment to the
Notifying Party within 10 Days of receipt of such notice. At the time for
payment of any amount due under this Article 4, each Party shall pay to the
other Party all additional amounts payable by it pursuant to this Agreement, but
all such amounts shall be netted and aggregated with any Termination Payment
payable hereunder. If the Affected Party disagrees with the calculation of the
Termination Payment, the issue shall be submitted to arbitration pursuant to
this Agreement and the resulting Termination Payment shall be due and payable
within three Days after the award.
4.2. Triggering Event shall mean, with respect to a Party (the "Affected Party")
(i) the failure by the Affected-Party to make, when due, any payment required
under this Agreement ff such failure is not remedied within five Business Days
after written notice of such failure is given to the Affected Party; provided,
the payment is not the subject of a good faith dispute as described in the
Billing and Payment provisions or (ii) any representation or warranty made by
the Affected Party in this Agreement shall prove to have been false or
misleading in any material respect when made or deemed to be repeated or (iii)
the failure by the Affected Party to perform any covenant set forth in this
Agreement (other than its obligations to make any payment or obligations which
are otherwise specifically covered in this Section 4.2 as a separate Triggering
Event), and such failure is not excused by Force Majeure or cured within five
Business Days after written notice thereof to the Affected Party or (iv) the
Affected Party shall (a) make an assignment or any general arrangement for the
benefit of creditors, (b) file a petition or otherwise commence, authorize or
acquiesce in the commencement of a proceeding or cause under any bankruptcy or
similar law for the protection of creditors, or have such petition filed against
it and such proceeding remains undismissed for 30 Days, (c) otherwise become
bankrupt or insolvent (however evidenced) or (d) be unable to pay its debts as
they fall due or (v) Sellers unexcused failure to Schedule the Buyer's Requested
Quantity requested by Buyer for a cumulative period of 30 or more Gas Days in a
12 Month period in any one Transaction or (vi) Buyers unexcused failure to
Schedule the DCQ or MinDQ for a cumulative period of 30 or more Gas Days in a 12
Month period in any one Transaction, or, if applicable, the MinMQ for a
cumulative period of three Months in a 12 Month period in any one Transaction,
or (vii) the occurrence of a Material Adverse Change of the Affected Party;
provided, such Material Adverse Change shall not be considered ff the Affected
Party establishes, and maintains throughout the term hereof, a Letter of Credit
(naming the Notifying Party as the beneficiary) in an amount equal to the sum of
(in each case rounding upwards for any fractional-amount to the next $100,000)
(a) the Notifying Party's Termination Payment plus (b) if the Notifying Party is
Seller, the aggregate of the amounts Seller is entitled to receive under each
Transaction for Gas Scheduled during the 60 Day period preceding the Material
Adverse Change (the amount of said Letter of Credit to be adjusted quarterly to
reflect amounts owing at that point in time) or (viii) the Affected Party fails
to establish, maintain, extend or increase a Letter of Credit when required
pursuant to this Agreement, or after reasonable notice fails to replace the
issuing bank with another bank acceptable to the beneficiary or (ix) with
respect to Company, at any time, Company shall have defaulted on its
indebtedness to third parties resulting in an acceleration of obligations of
Company in excess of $20,000,000 or with respect to Customer, at any time,
Customer shall have defaulted on its indebtedness to third parties, resulting in
an acceleration of obligations of Customer in excess of $500,000.
4.3. Other Events. In the event Buyer under a Transaction is regulated by a
federal, state or local regulatory body, and such body shall disallow all or any
portion of any costs incurred or yet to be incurred by Buyer under any provision
of this Agreement, such action shall not operate to excuse Buyer from
performance of any obligation nor shall such action give rise to any right of
Buyer to any refund or retroactive adjustment of the Contract Price provided in
any Transaction. Notwithstanding the foregoing, if the Affected Party's
activities hereunder become subject to regulation of any kind whatsoever under
any law (other than with respect to New Taxes) to a greater or different extent
than that existing on the Effective Date and such regulation either (i) renders
this Agreement illegal or unenforceable or (ii) materially adversely affects the
business of the Affected Party, with respect to its financial position or
otherwise, then in the case of (i) above, either Party, and in the case of (ii)
above, only the Affected Party, shall at such time have the right to declare an
Early Termination Date in accordance with the provisions hereof; provided,
notwithstanding the rights of the Parties to declare an Early Termination Date
as above stated, the Affected Party shall be liable for payment of the
Termination Payment calculated by the non-Affected Party as provided in Section
4.l.
4.4. Offset. Each Party reserves to itself all rights, set-offs, counterclaims
and other remedies and defenses consistent with Section 8.3 (to the extent not
expressly herein waived or denied) which such Party has or may be entitled to
arising from or out of this Agreement. All outstanding Transactions and the
obligations to make payment in connection therewith or under this Agreement may
be offset against each other, set off or recouped therefrom.
4.5. Collateral Requirements/General. It is understood and agreed by the Parties
that either Party may request a Letter of Credit or other collateral prior to
consummating any Transaction hereunder; provided, nothing herein shall obligate
any Party to provide such a Letter of Credit or other collateral without having
made an agreement so to do in respect of such Transaction.
ARTICLE 5. FORCE MAJEURE This Article 5 is the sole and exclusive excuse of
performance permitted under this Agreement and all other excuses at law or in
equity are WAIVED to the extent permitted by law. Except with respect to payment
obligations, in the event either Party is rendered unable, wholly or in part, by
Force Majeure to carry out its obligations hereunder, it is agreed that upon
such Party's giving notice and full particulars of such Force Majeure to the
other Party as soon as reasonably possible (such notice to be confirmed in
writing), the obligations of the Party giving such notice, to the extent they
are affected by such event, shall be suspended from the inception and during the
continuance of the Force Majeure for a period of up to 60 Days in the aggregate
during any 12 Month period, but for no longer period. The Party receiving notice
of Force Majeure may immediately take such action as it deems necessary at its
expense for the entire 60 Day period or any part thereof. The Parties expressly
agree that upon the expiration of the 60 Day period Force Majeure shall no
longer apply to the obligations hereunder and both Buyer and Seller shall be
obligated to perform. The cause of the Force shall be remedied with all
reasonable diligence and dispatch; provided, unless otherwise agreed no
provision herein shall require or permit Seller or Buyer to Schedule quantities
of Gas (i) in excess of the DCQ, Maximum Daily Delivery Point Quantity or MaxDQ,
as applicable, or (ii) at points other than the Delivery Point(s).
ARTICLE 6. TAXES 6.1. Allocation of Taxes. The Contract Price includes, and
Seller is liable for and shall pay, cause to be paid, or reimburse Buyer if
Buyer has paid, all Taxes applicable to the Gas upstream of the Delivery
Point(s). In the event Buyer is required to remit such Taxes, the amount thereof
shall be deducted from any sums becoming due to Seller hereunder. The Contract
Price does not include, and Buyer is liable for and shall pay, cause to be paid,
reimburse Seller if Seller has paid or pay to Seller if Seller is required by
law to pay to a taxing authority, all Taxes applicable to the Gas downstream of
or at the Delivery Point(s), including, but not limited to, any Taxes imposed or
collected by a taxing authority with jurisdiction over Buyer and any Taxes
imposed on the sale of Gas to Buyer, on Buyer's purchase, possession,
transportation, consumption, use, sale or other disposition of Gas, or on any
payment by Buyer to Seller.
6.2. New Taxes. A. If (i) New Tax occurs and (ii) Buyer or Seller would be
responsible for such New Tax if it were a Tax under Section 6.1 and (iii) such
New Tax is, due to and on the basis of laws, regulations and applicable
contracts of Buyer in effect as of the effective date of the Now Tax, of the
type which Buyer can pass directly through to, or be reimbursed by, another
person or entity in the chain of Gas supply, such Buyer shall pay or cause to be
paid, or reimburse Seller if Seller has paid, all such New Taxes; provided, if
Buyer does not identify its contracts for long-term fixed sourcing in the
ordinary course of its business and cannot identify applicable contracts, this
Paragraph A shall not apply. B. If (i) a New Tax occurs and (ii) either Buyer or
Seller would be responsible for such New Tax if it were a Tax under Section 6.1,
and (iii) Paragraph A does not apply, such responsible Buyer or Seller (the
"Taxed Party") shall be entitled to declare an Early Termination Date in
accordance with the provisions of this Agreement subject to the following
conditions; provided, prior to and including the initial Agreement Period (below
defined) invoked under this Section 6.2, New -Taxes shall be allocated as if
they were Taxes as provided in Section 6.1: (a) the Taxed Party must give the
nonTaxed Party at least 30 Days prior written notice (the "Agreement Period") of
its intent to declare an Early Termination Date (and which notice shall be given
no later than 90 Days after the later of the enactment or effective date of the
relevant New Tax), and prior to the proposed Early Termination Date Buyer and
Seller shall attempt to reach a mutual agreement as to the sharing of the New
Tax, (b) ff a mutual sharing agreement is not reached, the non-Taxed Party shall
have the right, but not the obligation, upon written notice to the Taxed Party
within the Agreement Period, to pay the New Tax for any continuous period it so
elects on a Month to Month basis, and in such case the Taxed Party shall not
have the right during such continuous period to declare the Early Termination
Date on the basis of the New Taxes, (c) should the nonTaxed Party at its
election agree to pay the New Tax on a Month to Month basis, then upon 30 Days
prior written notice to the Taxed Party of its election to cease payment of such
New Tax, the Taxed Party shall then be liable for the payment of the New Tax and
the Parties shall again be subject to this Section 6.2 as if the New Tax had an
effective date as of the date the non-Taxed Party ceases payment of such New
Tax, (d) if a mutual sharing agreement is not reached and the non-Taxed Party
does not elect to pay the New Tax for any period of time within the Agreement
Period, the Early Termination Date shall take effect and all Transactions must
be terminated and be subject to the same Early Termination Date, (e) the Early
Termination Date shall be effected as if a Triggering Event had occurred and the
Termination Payment calculated as set forth in Section 4.1 shall be payable;
provided, both Seller and Buyer pursuant to Section 4.1 shall calculate their
respective Termination Payments resulting from the termination of all
Transactions as if they each were a Notifying Party; provided further, if the
calculation of the Termination Payments results in either the non-Taxed Party's
or the Taxed Party's having either a gain or loss (after netting its gains
against its losses), the Parties shall share equally such net gain due, or be
responsible to pay to the Party having the net loss, one-half of the Termination
Payment and (f) such Termination Payment shall be payable as provided in Section
4.1 and its calculation shall be subject to arbitration as provided in the PG&E
Energy Trading-Gas Corporation General Provisions.
6.3. Documentation Supporting Exemptions or Deductions. If Buyer asserts that an
exemption or deduction from Taxes applies, or if Seller requests in writing that
Buyer provide documentation in support of the application of an exemption or
deduction, Seller shall claim the exemption or deduction only after Buyer has
timely provided to Seller all documents required by law in order for the
exemption or-deduction to apply; provided, however, Seller shall have no duty or
obligation: (i) to request such documentation; or (ii) to file a claim for
refund for any Taxes paid for any prior period. Seller's failure to request such
documentation shall not alter the rights and obligations of the Parties under
this Article 6.
6.4. Billing and Payment of Taxes and Governmental Fees. All Taxes and/or
Governmental Fees which a Party is obligated to pay hereunder shall be billed
and paid in accordance with the Financial Matters provisions set forth in
Appendix "l".
ARTICLE 7.-- TITLE, RISK OF LOSS, INDEMNITY AND BALANCING 7.1. Title, Risk of
Loss and Indemnity. As between the Parties, Seller shall be deemed to be in
exclusive control and possession of Gas Scheduled hereunder and responsible for
any damage or injury caused thereby prior to the time the same shall have been
delivered to Buyer at the Delivery Point(s). After delivery of Gas to Buyer at
the Delivery Point(s), Buyer shall be deemed
to be in exclusive control and possession thereof and responsible for any injury
or damage caused thereby. Title to Gas Scheduled hereunder and risk of loss
therefor shall pass from Seller to Buyer at the Delivery Point(s). Seller and
Buyer each assumes all liability for and shall indemnify, defend and hold
harmless the other Party from any Claims, including injury to and death of
persons, arising from any act or incident occurring when title to the Gas is
vested in the Indemnifying Party; provided, however, no Party shall have any
obligation under this Article 7.1 with regard to Taxes, the entire obligation of
any Party regarding Taxes being fully set forth under Article 6; and provided
further, however, Company shall have no obligation under this Article 7.1 with
regard to Governmental Fees, the entire obligation of Customer regarding
Governmental Fees being fully set forth in the Section entitled "Transportation"
in Appendix "1" IT IS THE INTENT OF THE PARTIES THAT THIS INDEMNITY AND THE
LIABILITY ASSUMED UNDER IT BE WITHOUT REGARD TO THE CAUSE OR CAUSES THEREOF,
INCLUDING, WITHOUT LIMITATION, THE NEGLIGENCE OF ANY INDEMNIFIED PARTY, WHETHER
SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE; PROVIDED,
NEITHER PARTY SHALL BE LIABLE IN RESPECT OF ANY CLAIM TO THE EXTENT SAME
RESULTED FROM THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR BAD FAITH OF THE
INDEMNIFIED PARTY.
7.2. Correction of Imbalances, Cashouts and Penalties. Differences between
Scheduled quantities and actual quantities delivered and received hereunder
("Imbalances") will be corrected or settled in cash or Gas or by offset as the
Parties agree. Additionally, in the event of (i) an Imbalance on Buyer's
Transporters system caused by Seller or Seller's Transporter's delivery of less
or more than the Scheduled quantity for any Gas Day (in which case Seller shall
be the "Responsible Party") or (ii) an Imbalance on Settees Transporter's system
caused by Buyer or Buyer's Transporter's receipt of more or less than the
Scheduled quantity for any Gas Day (in which case Buyer shall be the
"Responsible Party"), the Responsible Party shall be liable for and reimburse to
the other Party any associated Transporter penalties or cashout costs and losses
incurred by such other Party. In the event the tariff of either Buyer's or
Seller's Transporter provides for cashouts on the basis of the aggregation of
all overdeliveries and underdeliveries between such Transporter and Buyer or
Seller, respectively (the "Aggregate Transporter Imbalance"'), and the nature of
the Imbalance (overdelivery or underdelivery) attributable to the Responsible
Party is the same as the Aggregate Transporter Imbalance (overdelivery or
underdelivery), the Responsible Party shall participate in the other Party's
cashout settlement of the Aggregate Transporter Imbalance on the basis of only
the Responsible Party's pro-rata share thereof.
ARTICLE 8. MISCELLANEOUS 8.1. Notices. All notices, including, without
limitation, consents, and communications made pursuant to this Agreement shall
be made as specified in Exhibit "A" Notices required to be in writing shall be
delivered in written form by letter, facsimile or other documentary form. Notice
by facsimile or hand delivery shall be deemed to have been received by the close
of the Business Day on which it was transmitted or hand delivered (unless
transmitted or hand delivered after close in which case it shall be deemed
received at the close of the next Business Day) or such earlier time confirmed
by the receiving Party. Notice by overnight mail or courier shall be deemed to
have been received two Business Days after it was sent or such earlier time
confirmed by the receiving Party. Any notices given hereunder in respect of the
declaration of an Early Termination Date shall be also sent to the address or
facsimile number so specified in Exhibit "A." Any Party may change its addresses
by providing notice of same in accordance herewith.
8.2. Transfer. This Agreement, including, without limitation, each
indemnification, shall inure to and bind the permitted successors and assigns of
the Parties; provided, neither Party shall transfer this Agreement without the
prior written approval of the other Party which may be withheld entirely at the
option of such Party; provided further, either Party may transfer its interest
to any parent or affiliate by assignment, merger or otherwise or transfer, sell,
pledge encumber or assign this Agreement or the accounts, revenues or proceeds
hereof in connection with any financing or other financial arrangements without
the prior approval of the other Party, but no such transfer shall operate to
relieve the transferor Party of its obligations hereunder or the obligations of
the transferor Party's assignee. Any Party's transfer in violation of this
Section 8.2 shall be void.
8.3. Limitation of Remedies, Liability and Damages and Mitigation. THE PARTIES
DO HEREBY CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN
THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY
PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS HEREIN PROVIDED,
SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY
HEREUNDER, THE OBLIGORS LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH
PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF
NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY HEREIN PROVIDED, THE OBLIGOR'S
LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL
DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY HEREUNDER AND ALL OTHER REMEDIES
OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED,
NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY
OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, IN
TORT, CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. NOTWITHSTANDING ANY
OTHER PROVISION IN THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY PENALTIES OR CHARGES ASSESSED BY ANY TRANSPORTER OR OTHER ENTITY FOR THE
UNAUTHORIZED RECEIPT OF GAS BY THE OTHER PARTY. IT IS THE INTENT OF THE PARTIES
THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE
WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT
LIMITATION, THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT
OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE
PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE
DIFFICULT OR IMPOSSIBLE TO DETERMINE, OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT AND THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE APPROXIMATION OF
THE HARM OR LOSS. BUYER ACKNOWLEDGES THAT IT HAS ENTERED INTO THIS AGREEMENT AND
IS CONTRACTING FOR THE GOODS TO BE SUPPLIED BY SELLER BASED SOLELY UPON THE
EXPRESS REPRESENTATIONS AND WARRANTIES HEREIN SET FORTH AND SUBJECT TO SUCH
REPRESENTATIONS AND WARRANTIES, ACCEPTS SUCH GOODS "AS-IS" AND "WITH ALL FAULTS"
SELLER EXPRESSLY NEGATES ANY OTHER REPRESENTATION OR WARRANTY, WRITTEN OR ORAL,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR
WARRANTY WITH RESPECT TO CONFORMITY - TO MODELS OR SAMPLES, MERCHANTABILITY, OR
FITNESS FOR ANY PARTICULAR PURPOSE. EACH PARTY HEREBY WAIVES ALL RIGHTS UNDER,
ARISING OUT OF OR ASSOCIATED WITH TEXAS & BUSINESS COMMERCE CODE SECTIONS 17.41
THROUGH 17.63 KNOWN AS THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT TO
THE EXTENT ALLOWED BY LAW. The Parties acknowledge the duty to mitigate damages
hereunder. In this connection, the Parties recognize that the ability to
effectuate arrangements for the sale or purchase of Gas is conditioned upon the
volatility of Gas markets, the creditworthiness and reliability of potential
customers, the complexity and size of the portfolios of contracts managed by
each Party and the need to conduct market business in an orderly manner.
Therefore, the Parties agree that (i) three Business Days is a commercially
reasonable period to purchase or sell Gas in respect of a Seller's or Buyer's
Deficiency Default and (ii) three Business Days after the end of the Month in
which the Early Termination Date occurs is a commercially reasonable period
after the establishment of an Early Termination Date to determine the
Termination Payment; provided, notwithstanding the foregoing, if Gas volumes
made the
basis of a Sellers or Buyers Deficiency Default or a Party's determination of
the Termination Payment are in excess of 20,000 MMBtu/Gas Day, the Parties
recognize that a longer period may ordinarily be required to effectuate cover or
determine the Termination Payment in an orderly manner so as not to adversely
affect the Gas market. Each Party may utilize its discretion, with commercially
reasonable foresight, to adjust the timing and staggering of the purchases or
sales of Gas volumes in its efforts to mitigate damages. No claim that a Party
failed to mitigate damages shall be grounded solely on the basis of counter Gas
market movement.
8.4. Winding Up Arrangements. Upon the expiration of the Parties' sale and
purchase obligations under this Agreement, any monies, penalties or other
charges due and owing shall be paid, any corrections or adjustments to payments
previously made shall be determined, and any refunds due shall be made within 60
Days. Any Imbalances in receipts or deliveries shall be corrected to zero
balance within 60 Days. Notwithstanding the preceding provisions of this Article
8.4, all indemnity and confidentiality obligations, audit rights, and any rights
and obligations with regard to Taxes pursuant to Article 6 and to Governmental
Fees described in the Section entitled 'Transportation' in Appendix "1" shall
survive the termination of this Agreement. The Parties' obligations provided in
this Agreement shall remain in effect for the purpose of complying herewith.
8.5. Applicable Law. THIS AGREEMENT AND EACH TRANSACTION AND THE RIGHTS AND
DUTIES OF THE PARTIES ARISING OUT OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE THAT
THIS AGREEMENT AND ALL TRANSACTIONS SHALL BE ACCEPTED AND FORMED IN THE STATE OF
TEXAS ACCORDING TO THE PROCEDURES HEREIN SET FORTH.
8.6. Document Record Retention and Evidence. This Agreement, the Exhibits and
Appendices hereto, if any, and each Transaction, constitute the entire agreement
between the Parties relating to the subject matter contemplated by this
Agreement. There are no prior or contemporaneous agreements or representations
(whether oral or written) affecting the subject matter other than those herein
expressed. Other than with respect to Transactions entered into in accordance
with the procedures set forth in this Agreement and as otherwise herein
expressly stated (the 'Transaction Procedures'), no amendment or modification to
this Agreement shall be enforceable, unless reduced to writing and executed by
both Parties. The conduct of the Parties in accordance with the Transaction
Procedures shall evidence a course of dealing and a course of performance
accepted by the Parties in furtherance of this Agreement and all Transactions
entered into by the Parties. The provisions of this Agreement shall not impart
rights enforceable by any person, firm or organization not a Party or not bound
as a Party, or not a permitted successor or assignee of a Party bound to this
Agreement. Except as otherwise herein stated, any provision, article or section
declared or rendered unlawful by a court of law or regulatory agency with
jurisdiction over the Parties or deemed unlawful because of a statutory change
will not otherwise affect the lawful obligations that arise under this
Agreement. The headings used for the Articles herein are for convenience and
reference purposes only. All Exhibits and Appendices referenced in this
Agreement, if any, are incorporated. Any original executed Agreement or
Transaction Agreement may be photocopied and stored on computer tapes and disks
(the 'Imaged Agreement.). The Imaged Agreement, if introduced as evidence on
paper, the Confirmation, if introduced as evidence in automated facsimile form,
and the Transaction Tape, if introduced as evidence in its original form and as
transcribed onto paper, and all computer records of the foregoing, if introduced
as evidence in printed format, in any judicial, arbitration, mediation or
administrative proceedings, will be admissible as between the Parties to the
same extent and under the same conditions as other business records originated
and maintained in documentary form. Neither Party shall object to the
admissibility of the Transaction Tape, the Confirmation or the Imaged Agreement
(or photocopies of the transcription of the Transaction Tape, the Confirmation
or the Imaged Agreement) on the basis that such were not originated or
maintained in documentary form under either the hearsay rule, the best evidence
rule or other rule of evidence.
8.7. Confidentiality. Each Party shall not disclose the terms of any Transaction
to a third party (other than the Party's and its affiliates' employees, lenders,
counsel, accountants or prospective purchasers of any rights under any
Transactions who have agreed to keep such terms confidential) except in order to
comply with any applicable law, order, regulation or exchange rule; provided,
each Party shall notify the other Party of any proceeding of which it is aware
which may result in disclosure and use reasonable efforts to prevent or limit
the disclosure. The provisions of the Agreement other than the terms of any
Transaction are not subject to this confidentiality obligation. The Parties
shall be entitled to all remedies available at law or in equity to enforce, or
seek relief in connection with, this confidentiality obligation; provided, all
monetary damages shall be limited in accordance with Section 8.3.
The Parties have executed this Agreement in multiple counterparts to be
construed as one effective as of the Effective Date.
PG&E ENERGY TRADING-GAS CORPORATION
By: s/▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
BLUEFIELD GAS COMPANY
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President & COO
APPENDIX "1"
PG&E ENERGY TRADING-GAS CORPORATION GENERAL PROVISIONS Usage and Definitions.
All references to Articles and Sections are to those set forth in this
Agreement. Reference to any document means such document as amended from time to
time and reference to any Party includes any permitted successor or assignee
thereof. The following definitions and any terms defined internally in this
Agreement shall apply to this Agreement and all notices and communications made
pursuant to this Agreement.
"Btu" means the amount of energy required to raise the temperature of
one pound of pure water one degree Fahrenheit from 59 degrees
Fahrenheit to 60 degrees Fahrenheit. The term "MMBtu" means one
million Btus.
"Buyer" means the Party to a Transaction who is obligated to purchase
Gas during a Period of Delivery.
"C.T." means Central Time.
"Claims" means all claims or actions, threatened or filed and whether
groundless, false or fraudulent, that directly or indirectly relate to
the subject matters of the indemnity, and the resulting losses,
damages, expenses, attorneys' fees and court costs, whether incurred
by settlement or otherwise, and whether such claims or actions are
threatened or filed prior to or after the termination of this
Agreement.
"Confirmation" means a written notice confirming the specific terms of
a Transaction which may be in any form adequate at law; an example of
a Confirmation which may be utilized hereunder is shown in Exhibit B.
"Confirm Deadline" means two (2) business days after a Party receives
a 'Confirmation; provided, if the Confirmation is not received during
a Business Day it shall be deemed received at the open of the next
Business Day.
"Contract Price" means the price for the purchase or sale of Gas
pursuant to a Transaction.
"Daily Contract Quantity" ("DCQ") means the quantity of Gas to be
Scheduled each Gas Day pursuant to a Transaction.
"Day" means a period of 24 consecutive hours, beginning at midnight
C.T. on any calendar Day. "Business Day" means a Day on which Federal
Reserve member banks in New York City are open for business and a
Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local
time. "Gas Day" means a period of 24 consecutive hours beginning at
the time of the applicable Transporter's gas day.
"Delivery Point(s)" means the agreed point(s) of delivery pursuant to
a Transaction.
"Force Majeure" means an event not anticipated as of the Effective
Date, which is not within the reasonable control of the Party, or in
the case of third party obligations or facilities, the third party,
claiming suspension, and which by the exercise of due diligence such
Party, or third party, is unable to overcome or obtain or cause to be
obtained a commercially reasonable substitute performance therefor;
provided, neither (i) the loss of Buyer's markets nor Buyer's
inability economically to use or resell Gas purchased hereunder nor
(ii) the loss or failure of Seller's Gas supply, including, without
limitation, depletion of reserves or other failure of production, nor
Seller's ability to sell Gas to a market at a more advantageous price,
shall constitute an event of Force Majeure. "Force Majeure" shall
include an event of Force Majeure occurring with respect to the
facilities or services of Buyer's or Settees Transporter.
"GAAP" means generally accepted accounting principles, consistently
applied.
"Gas" means methane and other gaseous hydrocarbons meeting the quality
standards and specifications of Buyer's Transporter.
"Governmental Fees". means any and all privilege, franchise fees,
charges, user fees or rentals levied by governmental entities in
exchange for the grant of privileges relating to use of land or
improvements thereon.
"Indemnified Party" and "Indemnifying Party" means the Party receiving
and providing an indemnity, respectively.
"Interest Rate" means, for any date, two percent over the per annum
rate of interest announced as the "Prime Rate" from time to time for
commercial loans by Citibank, N. A. as established by the
administrative body of such bank charged with the responsibility of
establishing such rate, as same may change from time to time;
provided, the Interest Rate shall never exceed the maximum lawful rate
permitted by applicable law.
"Letter of Credit" means an irrevocable standby letter of credit
established by a Party (the "Account Party") and issued or confirmed
in a form and by a commercial bank acceptable to the Party in whose
favor it is issued (the "Beneficiary Party").
"Material Adverse Change" means (i) with respect to Customer, in the
reasonable opinion of Company, a material change in the
creditworthiness, financial condition or ongoing business of Customer
that may adversely affect Customer's ability to perform hereunder, or
(ii) with respect to Company, in the reasonable opinion of Customer, a
material change in the creditworthiness, financial condition or
ongoing business of Company that may adversely affect Company's
ability to perform hereunder.
"MaxDQ" means the maximum quantity of Gas that Seller is required to
Schedule per Gas Day pursuant to a Transaction, if applicable.
"Maximum Daily Delivery Point Quantity" means the maximum quantity of
Gas which may be Scheduled per Gas Day at each Delivery Point where
there are multiple Delivery Points applicable to a Transaction.
"MinDQ" means the minimum quantity of Gas that Buyer is required to
Schedule per Gas Day pursuant to a Transaction, ff applicable.
"MinMQ" means for any Month the minimum quantity of Gas per Gas Day
that Buyer is obligated to Schedule times the number of Days in the
Month pursuant to a Transaction, if applicable.
"Month" means a period of time beginning at midnight C.T. on the first
Day of any calendar Month and ending at midnight C.T. on the first Day
of the following calendar Month.
"New Taxes" means (i) any Taxes enacted and effective after the
Effective Date, including, without limitation, that portion of any
Taxes or New Taxes that constitutes an increase, or (ii) any law,
order, rule or regulation, or interpretation thereof, enacted and
effective after the Effective Date resulting in the application of any
Taxes to a new or different class of parties."
"Period of Delivery" means -the period from the date Scheduling
obligations are to commence to the date same are to terminate under a
Transaction.
"Pipeline" means a company authorized to ship Gas on behalf of itself
or others on physical Gas transmission facilities.
"Pricing Hours" means the hours C.T. from 8:00 a.m. to 5:00 p.m. of
each Business Day.
"Replacement Price Differential" means (i) in the event of a Seller's
Deficiency Default, the positive difference, if any, obtained by
subtracting the Contract Price from the of (a) the cost to Buyer,
including incremental transportation costs and other basis
adjustments, to replace Settees Deficiency Quantity for such Gas Day
(but excluding penalties or charges for unauthorized receipts of Gas
by Buyer) or (b) the Spot Price for the Gas Day in which Sellers
Deficiency Default occurred, and (if) in the event of a Buyer's
Deficiency Default, the positive difference, ff any, obtained by
subtracting the of (a) the price obtained by Seller in an incremental,
arms-length sale(s) to a third party of a quantity equal to Buyer's
Deficiency Quantity for such Gas Day, less incremental transportation
charges to Seller, and including other basis adjustments, or (b) the
Spot Price for the Gas Day in which Buyer's Deficiency Default
occurred (or if the MinMQ is applicable, the Spot Price for the middle
Gas Day of the Month in which Buyer's Deficiency Default occurred),
from the Contract Price.
"Scheduling" or "Schedules" when used in reference to Seller, means to
make Gas available, or cause Gas to be made available, at the Delivery
Point(s) for delivery to or for the account of Buyer, including making
all Pipeline nominations, and when used in reference to Buyer, means
to cause Buyer's Transporter to make available at the Delivery
Point(s) transportation capacity sufficient to permit Buyer's
Transporter to receive on a firm basis the quantities Seller has
available at such Delivery Point(s), including making all Pipeline
nominations. Gas shall be deemed to have been Scheduled when confirmed
by Transporter.
"Seller" means the Party to a Transaction who is obligated to sell Gas
during a Period of Delivery.
"Spot Price" means the price set forth in as Gas Daily (Pasha
Publications, Inc.), or successor publication, in the column 'Daily
Price Survey' under the listing applicable to the geographic location
agreed pursuant to a Transaction for the relevant Gas Day. If there is
no single price published for that particular Gas Day, but there is
published a range of prices under the above column and listing, then
the Spot Price shall be the average of such high and low prices. In
the event that no price or range of prices is published for that
particular Gas Day, then the Spot Price shall be the average of the
following: the price (determined as stated above) for each of the
first Gas Day immediately preceding and following the Gas Day in which
the default occurred for which a Spot Price can be determined.
"Taxes" means any or all ad valorem, property, occupation, severance,
production, extraction, first use, conservation, Btu or energy,
gathering, transport, Pipeline, utility, gross receipts, gas or oil
revenue, gas or oil import, privilege, sales, use, consumption,
excise, transaction, and other taxes or New Taxes, governmental
charges or fees, licenses, fees, permits and assessments, or increases
therein, and any interest or penalties on such taxes, charges,
licenses, fees, permits, New Taxes and assessments, other than taxes
based on net income or net worth, and Governmental Fees.
"Transaction" means an agreement and any amendment or modification
thereof made in accordance herewith for the purchase or sale of Gas to
be performed hereunder.
"Transaction Agreement" means a written paper-based agreement executed
by the Parties to form and effectuate a Transaction which may be
substantially in the form set forth in Exhibit B-1.
"Transaction Tape" means the tape recording of a recorded Transaction
effectuated in accordance with Article 2.
"Transporter" means either the Pipeline delivering or receiving Gas at
a delivery Point in a Transaction.
* Representations and Warranties As a material inducement to entering into
this Agreement, including each Transaction, each Party, with respect to
itself, hereby represents and warrants to the other Party continuing
throughout the term of this Agreement as follows: (i) there are no suits,
proceedings, judgments, rulings or orders by or before any court or any
governmental authority that materially adversely affect its ability to
perform this Agreement or the rights of the other Party under this
Agreement, (ii) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation, and it has the legal
right, power and authority and is qualified to conduct its business, and to
execute and deliver this Agreement and perform its obligations under the
same and each Transaction, and all regulatory authorizations have been
maintained as necessary for it to legally perform its obligations
hereunder, (iii) the making and performance by it of this Agreement is
within its powers, has been duly authorized by all necessary action on its
part, and does not and will not violate any provision of law or any rule,
regulation, order, writ, judgment, decree or other determination presently
in effect applicable to it or its governing documents, (iv) each of this
Agreement and each Transaction when entered into constitutes a legal, valid
and binding act and obligation of it, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, reorganization and other
laws affecting creditors rights generally, and with regard to equitable
remedies, to the discretion of the court before which proceedings to obtain
same may be pending, (v) there are no bankruptcy, insolvency,
reorganization, receivership or other arrangement proceedings pending or
being contemplated by it, or to its knowledge threatened against it, (vi)
it has assets of $5,000,000 or more according to its most recent financial
statements prepared in accordance with GAAP and knowledge and experience in
financial matters that enable it to evaluate the merits and risks of this
Agreement, and (vii) it is not in a disparate bargaining position with the
other Party.
* Operations and Delivery Scheduling Requests. Not later than two Business
Days prior to the earlier of Buyer's or Settees Transporters nomination
deadline for the first Gas Day of each Month during a Period of Delivery,
Buyer agrees to provide to Seller facsimile notice of the quantities Buyer
requests Seller to Schedule for each Gas Day of such Month. Should Buyer
desire to change the requested quantities Scheduled, Buyer shall provide to
Seller facsimile notice thereof not later than one Business Day prior to
the earlier of Buyer's or Sellers Transporter's nomination deadline for the
applicable Gas Day. In the event the nomination or Scheduling deadline of a
Transporter conflicts with these notification dates, Buyer and Seller agree
to modify the notification dates accordingly. Scheduling requests to Seller
will be accepted at the telephone number and shall be confirmed by
facsimile as set forth in Exhibit "A."
Transportation. Seller shall obtain, or cause to be obtained,
transportation to the Delivery Point, and Buyer shall obtain, or cause to
be obtained, transportation from the Delivery Point. Customer shall pay,
cause to be paid, or reimburse Company if Company has-Paid, all
Governmental Fees which are imposed on Company or Company's Transporter.
Gas Specifications. Seller represents that all Gas delivered hereunder
shall meet or exceed the specifications of Buyer's Transporter.
Multiple Delivery Point Utilization. In the event a Transaction shall
contain more than one Delivery Point, the Parties shall specify a Maximum
Daily Delivery Point Quantity for each Delivery Point. The Delivery Points
which shall be utilized for delivery of Gas and the quantities of Gas to be
Scheduled for delivery at such Delivery Points shall be determined by
Seller in its sole discretion within each applicable Maximum Daily Delivery
Point Quantity. Seller shall provide to Buyer a list of Delivery Points and
quantities determined by it within a period of time necessary to permit
Buyer to make nominations.
Operational Flow Orders. Should either Party receive an operational flow
order or other order or notice from a Transporter requiring action to be
taken in connection with this Agreement or Gas flowing under this Agreement
("OFO"), such Party shall immediately notify the other Party of the OFO and
provide the other Party a copy of same by facsimile. The Parties shall take
all actions required by the OFO within the time prescribed. Each Party
shall indemnify, defend and hold harmless the other Party from any Claims,
including, without limitation, all non-compliance penalties and attorneys'
fees, associated with an CFO (i) of which the Indemnifying Party failed to
give the Indemnified Party the notice required hereunder or (ii) under
which the Indemnifying Party failed to take the action required by the OFO
within the time prescribed.
* Financial Matters Billing, Invoice Date, Charges and Payment. By the 10th
Day of each calendar Month following the Month in which Gas was Scheduled
under a Transaction, Seller shall provide Buyer with a written statement
setting forth Gas Scheduled during the preceding Month, and other charges
due Seller, including, without limitation, deficiency charges under Article
3, and any Taxes for which Buyer has an obligation to pay Seller pursuant
to Article 6. If Seller becomes aware, at a later time, of any Taxes for
which Buyer has an obligation to pay Seller pursuant to Article 6. Seller
shall render to Buyer a written statement setting forth such Taxes, and
Buyer shall render payment of such statement in accordance with this
Financial Matters provision. Billing and payment will be based on Scheduled
quantities. If Company pays, or becomes aware at a later time of any
Governmental Fees for which Customer has an obligation to pay Company
pursuant to the Section entitled 'Transportation' in this Appendix "1",
Company shall render to Customer a written statement setting forth such
Governmental Fees, and Customer shall render payment of such statement in
accordance with this Financial Matters provision, Within five Business Days
of the request of either Party, the other Party shall provide, to the
extent it has a legal right of access thereto and/or such statement is then
available, a copy of the Transporter's allocation or imbalance statement
applicable to Gas sold hereunder for the requested period. The difference,
ff any, between Scheduled and actual quantities delivered or accepted shall
be treated as Imbalances under Article 7. Buyer shall remit any amounts due
on the later of the 25th Day of the Month in which Sellers statement was
received or ten days after receipt of Seller's invoice. If the due date for
any payment to be made under this Agreement is not a Business Day, the due
date for such payment shall be the following Business Day. Payment of all
funds shall be made in U. S. currency and as indicated in Exhibit "A" in
such manner that funds are immediately available to the payee on the
applicable due date. Each Party shall take all actions necessary to effect
payments in accordance with the process stated in "A." If Buyer or Seller
should fail to remit any amounts in full when due hereunder, interest on
the unpaid portion shall accrue from the date due at a
rate equal to the Interest Rate. ▇▇▇▇▇▇▇▇, payments and statements shall be
made to the accounts or the addresses / facsimiles specified in Exhibit
"A."
Suspension of Performance. If either Party fails to make a timely payment
and such failure is not remedied within two Business Days after such Party
receives written notice of default, the nondefaulting Party, in addition to
other remedies, may suspend the Scheduling of Gas until such amount,
including interest, is paid; provided, if the defaulting Party, in good
faith, shall dispute the amount of any such billing or part thereof and
shall pay such amounts as it concedes to be correct, no suspension shall be
permitted.
Audit Rights. During the term of this Agreement and for a period of two
years from the date of termination of a Transaction, Buyer or Seller or any
third party representative thereof shall have the right, upon reasonable
notice and at reasonable times, to examine the books and records of the
other to the extent reasonably necessary to verify the accuracy of any
billing statement, payment demand, charge, payment or computation made
under this Agreement. The records of the Parties shall be retained in
accordance with Section 8.6 for a like period to facilitate the audit
rights of the Parties.
Financial Information. If requested by Customer, Company shall deliver (i)
within 120 Days following the end of each fiscal year, a copy of the annual
report of PG&E Corporation containing consolidated financial statements for
such fiscal year certified by independent certified public accountants and
(ii) within 60 Days after the end of each of its first three fiscal
quarters of each fiscal year, a copy of the quarterly report of PG&E
Corporation containing unaudited consolidated financial statements for such
fiscal quarter. If requested by Company, Customer shall deliver (i) within
120 Days following the end of each fiscal year, a copy of its annual report
containing consolidated financial statements for such fiscal year certified
by independent certified public accountants and (ii) within 60 Days after
the end of each of its first three fiscal quarters of each fiscal year, a
copy of its quarterly report containing unaudited consolidated financial
statements for such fiscal quarter. In all cases the statements shall be
for the most recent accounting period and prepared in accordance with GAAP;
provided, should any such statements not be timely due to a delay in
preparation or certification, such delay shall not be considered a default
so long as such Party diligently pursues the preparation, certification and
delivery of the statements.
* Warranty of Title to Gas Seller in any Transaction warrants that title to
Gas to be Scheduled by Seller is free from all production burdens, liens
and adverse claims and warrants its right to sell the same. Seller agrees
to indemnify, defend and hold harmless Buyer against all Claims to or
against the title of said Gas. In the event any Claim is asserted to said
Gas, Buyer, in addition to other remedies, may suspend its obligation to
pay for said Gas up to the amount of such Claim.
* Alternate Price Redetermination If any or all of the indices used to
determine the Spot Price or the Contract Price are not available in the
future. the Parties agree to promptly negotiate a mutually satisfactory
alternate index for the Spot Price or Contract Price (each an "Alternate
Price"). If the Parties cannot agree by the end of the first Month for
which the Spot Price or Contract Price could not be determined, then Seller
and Buyer shall each prepare a prioritized list of up to five alternative
published reference postings or prices representative of spot prices for
Gas delivered in the same geographic area. Each Party shall submit its list
to the other within 10 Days after the end of the first Month for which the
price could not be determined. The first listed index appearing in Settees
list that also appears in Buyer's list shall constitute the replacement
index. If no common indices appear on the lists, each Party shall submit a
new list adding two indices within 10 Days. If either Party fails to
provide timely a list, such Party's list shall not be considered. From and
after the "Renegotiation Date," which shall be the date the Spot Price or
Contract Price is no longer available, until the Alternate Price is
determined, the Alternate Price shall be the average of the Spot Price(s)
or Contract Price(s) in effect during the 12 Months preceding the Month in
which the Renegotiation Date occurred, which price shall be effective until
the Alternate Price is determined. Upon determination of a new Alternate
Price, the Spot Price or Contract Price, as applicable, will be adjusted
retroactively to the Renegotiation Date.
* Effect of Waiver or Consent No waiver or consent by either Party, express
or implied, of any one or more defaults by the other Party in the
performance of any provision of this Agreement shall operate or be
construed as a waiver or consent of any other default or defaults whether
of a like or different nature. Failure by a Party to complain of any act of
the other Party or to declare the other Party in default with respect to
this Agreement, regardless of how long that failure continues, shall not
constitute a waiver by that Party of its rights with respect to that
default until the applicable statute of limitations period has run.
* Indemnifications With respect to each indemnification included in this
Agreement the indemnity is given to the extent authorized by law and the
following provisions shall be considered applicable. The Indemnified Party
shall promptly notify the Indemnifying Party in writing of any Claim and
the Indemnifying Party shall have the right to assume the investigation and
defense thereof, including the employment of counsel, and shall be
obligated to pay the related attorneys' fees; provided, the Indemnified
Party shall have the right to employ separate counsel and participate in
the defense of any Claim, however, the attorneys' fees of such counsel
shall be paid by the Indemnified Party unless the employment of such
counsel has been consented to in writing by the Indemnifying Party or the
Indemnifying Party has failed to assume the defense and employ counsel in a
timely manner; provided further, if the named parties to any Claim include
both Parties, and the Indemnified Party shall have been advised by counsel
that there may be a legal defense available to it which is different from
those available to the Indemnifying Party, the Indemnified Party may elect
to employ separate counsel at the expense of the Indemnifying Party, in
which case the Indemnifying Party shall pay all attorneys' fees of such
counsel and shall not have the right to assume the defense of the Claim on
behalf of the Indemnified Party. The Parties shall use reasonable efforts
to cooperate in the defense of any Claim. The Indemnifying Party shall not
be liable for any settlement of a Claim without its express written consent
thereto. The Indemnified Party shall reimburse the Indemnifying Party for
payments made or costs incurred in respect of-an indemnity with the
proceeds of any judgment, insurance, bond, surety or other recovery made
with respect to an event covered by the indemnity.
* Arbitration Disputes to be Arbitrated. Any and all claims, demands, causes
of action, disputes, controversies, and other matters in question arising
out of or relating to this Agreement, any of its provisions, or the
relationship between the Parties created by this Agreement, whether
sounding in contract, tort, or otherwise, whether provided by statute or
the common law, for damages or any other relief, including, without
limitation, all Claims (all of which are referred to herein as "Disputes"),
shall be resolved by binding arbitration pursuant to the Federal
Arbitration Act. The arbitration may be initiated by either Party by
providing to the other a written notice of arbitration specifying the
Disputes to be arbitrated. If a Party refuses to honor its obligations to
arbitrate, the other Party may seek to compel arbitration in either federal
or state court. The arbitration proceeding shall be conducted in Houston,
Texas, or other location mutually agreed upon by the Parties. Within 30
Days of the notice initiating the arbitration procedure, each Party shall
designate one arbitrator, who need not be impartial. If a Party fails to
designate an arbitrator, the other Party may have an arbitrator appointed
by applying to the senior active United States District Judge for the
Southern District of Texas. The two arbitrators shall select a third
arbitrator. If the two arbitrators chosen by the Parties fail to agree upon
the third arbitrator, both or either of the Parties may apply to the senior
active United States District Judge for the Southern District of Texas for
the appointment of a third arbitrator. The third arbitrator shall take an
oath of neutrality.
* Arbitration Procedures. The three arbitrators shall make all of their
decisions by majority vote. The enforcement of this Agreement to arbitrate,
the validity, construction, and interpretation of this Agreement to
arbitrate, and all procedural aspects of the proceeding pursuant to this
Agreement to arbitrate, including, without limitation, the issues subject
to arbitration, the scope of the arbitrable issues, allegations of 'fraud
in the inducement' to enter into this entire Agreement or to enter into
this Agreement to arbitrate, allegations of waiver, delay or defenses to
arbitrability, and the rules governing the conduct of the arbitration,
shall be governed by and construed pursuant to the Federal Arbitration Act.
In deciding the substance of the parties' Disputes, the arbitrators shall
apply the substantive laws of the State of Texas (excluding Texas choice-of
law principles that might call for the application of some other
State's law). The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association,
except as modified in this Agreement. It is contemplated that although the
arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, the arbitration
proceeding will be selfadministered by the Parties; provided, if a Party
believes the process will be enhanced if it is administered by the American
Arbitration Association, such Party shall have the right to cause the
process to become administered by the American Arbitration Association by
applying to the American Arbitration Association and, thereafter, the
arbitration shall be conducted pursuant to the administration of the
American Arbitration Association. In determining the extent of discovery,
the number and length of depositions, and all other prehearing matters, the
arbitrators shall endeavor to the extent possible to streamline the
proceedings and minimize the time and cost of the proceedings. There shall
be no transcript of the hearing. The final hearing shall be conducted
within 120 days of the selection of the third arbitrator. The final hearing
shall not exceed 10 Business Days, with each Party to be granted onehalf of
the allocated time to present its case to the arbitrators. All proceedings
conducted hereunder and the decision of the arbitrators shall be kept
confidential by the Parties.
Arbitration Award. Only damages allowed pursuant to this Agreement may be
awarded. IT IS EXPRESSLY AGREED THAT THE ARBITRATORS SHALL HAVE NO
AUTHORITY TO AWARD TREBLE, EXEMPLARY OR PUNITIVE DAMAGES OF ANY TYPE UNDER
ANY CIRCUMSTANCES REGARDLESS OF WHETHER SUCH DAMAGES MAY BE AVAILABLE UNDER
TEXAS LAW. THE PARTIES HEREBY WAIVE THEIR RIGHT, IF ANY, TO RECOVER TREBLE,
EXEMPLARY OR PUNITIVE DAMAGES IN CONNECTION WITH ANY DISPUTE, EITHER IN
ARBITRATION OR IN LITIGATION. The arbitrators shall render their final
decision within 20 Days of the completion of the final hearing fully
resolving all of the Disputes that are the subject of the arbitration
proceeding. The arbitrators' ultimate decision after final hearing shall be
in writing. The arbitrators shall certify in their decision that no part of
their award includes any amount for treble, exemplary or punitive damages
not allowed hereunder. The arbitrators' decision shall be final and
non-appealable to the maximum extent permitted by law. Any and all of the
arbitrators' orders and decisions may be enforceable in, and judgment upon
any award rendered in the arbitration proceeding may be confirmed and
entered by, any federal or state court having jurisdiction.
* Authority for Transactions Each Party represents to the other Party that
each of its employees has authority to enter into Transactions pursuant to
this Agreement on its behalf. Identification and authority of a Party's
employee engaging in a recorded telephonic Transaction shall be
conclusively established for all purposes by a statement on the Transaction
Tape by the employee of the employee's name; provided, failure to state the
employee name shall not evidence any lack of authority of the employee to
effectuate and form a Transaction.
* Trigger Pricing During the Period of Delivery for a Transaction expressly
providing for "Trigger Pricing" in the Confirmation, either Party may
request a price other than the original Contract Price, being a Fixed
Price, Fixed Basis Price or Floating Basis Price (each below defined) by
contacting the other Party during Pricing Hours requesting any such price
for a specified quantity of Gas to be Scheduled during selected Months
within the Period of Delivery; provided, such request must be made prior to
12:00 CT on the last trading day of the applicable exchange (NYMEX Gas
futures contract for the selected Month or KCBT Gas futures contract for
the selected month). The terms of this Agreement, including, without
limitation, Article 2. shall apply to Trigger Pricing in respect of any
Transaction hereunder. A Confirmation may be sent by Company to Customer
confirming the Trigger Pricing agreement in accordance with Section 2.4.
"Fixed Price" means a fixed dollar amount agreed to by the Parties. "Fixed
Basis Price" means a price agreed to by the Parties on the basis of the Gas
futures contract for the applicable exchange then trading for the
applicable Month, or (unless otherwise indicated in the Confirmation) if no
such price is agreed prior to the Trigger Deadline as set out on the
Confirmation, the price shall be the last posted price by the applicable
exchange for any contract month for Gas futures contracts then trading on
the applicable exchange plus a fixed dollar amount basis adjustment agreed
to by the Parties. 'Floating Basis Price' means a price equal to the sum of
a fixed dollar amount agreed to by the Parties plus the difference between
the selected reference price for the Delivery Point(s) and the Average
Settlement Price for the applicable Month. The price for all Gas for which
a Flexible Price has not been agreed by the Parties shall be the original
Contract Price applicable to the Transaction.
EXHIBIT"A"
PG&E ENERGY TRADING-GAS CORPORATION
MASTER FIRM PURCHASE/SALE AGREEMENT
NOTICE / COMMUNICATION / PAYMENT
TO COMPANY:
Notices/Correspondence:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Contract Administration
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Termination Notice Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Duns No.: ▇▇-▇▇▇-▇▇▇▇
Fed. Tax I.D. No.: ▇▇-▇▇▇▇▇▇▇
Invoices:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Accounting
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Payments:
Boston Safe Deposit & Trust
Medford, MA
For the account of PG&E Energy Trading-Gas Corporation
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 101036
Confirmations:
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Nominations:
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
TO CUSTOMER:
Notices / Correspondence:
Nominations:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Telephone No.:
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Facsimile No.:
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Duns No.: 005849393
Fed. Tax I.D. No.:
Invoices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Accounting
Payments: -
Bank Name: First Union National Bank
City & State: Roanoke, VA
For the account of: Bluefield Gas Company
ABA No.: ▇▇▇▇▇▇▇▇▇
Account No.: 2001008895748
Confirmations:
Facsimile No.:
TRANSACTION CONFIRMATION
FOR IMMEDIATE DELIVERY
EXHIBIT B
Date:
PG&E Energy Trading - Gas Corporation Transaction Confirm No.:
This Transaction Confirmation is subject to the Master Contract between Seller
and Buyer dated __________________. The terms of this Transaction Confirmation
are binding unless disputed in writing on or before the "Confirm Deadline"
specified in the Master Contract. PG&E Energy Trading-Gas Corporation adopts the
confirming letterhead as its signature on this Transaction Confirmation.
Seller: Buyer:
Attn: Attn:
Phone: Phone:
Fax: Fax:
Contract No.: Contract No.:
Pricing Terms:
Delivery Period: Begin: Delivery Point:
End:
Performance Obligation and Contract Quantity:
Firm (Fixed Quantity):
____________ MMBtus/day (DCQ)
[ ] EFP
Special Conditions:
TRANSACTION CONFIRMATION
EXHIBIT B-1
PG&E Energy Trading - Gas Corporation Date: October 25, 1999
PG&E Energy Trading is not the same company as
Pacific
Transaction Confirm No.:
Gas and Electric Company, the utility; see attached
PG&E Energy Trading is not regulated by the
California Public Utilities Commission; and
you do not have to buy PG&E Energy Trade Date: October 8, 1999
Trading's products in order to continue to
receive quality regulated
services from the utility.
Seller: Buyer:
PG&E Energy Trading-Gas Corporation ("PG&E ET") Bluefield Gas ("BG")
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇ 000 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇ Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
Pricing Terms:
Baseload Supply
BGC will be charged for the monthly baseload based upon an average of relevant
(points) published prices in Inside F.E.R.C.'s Gas Market Report. The relevant
points are based upon an average of BGC's current transportation entitlements.
In effect, PG&E ET will supply an "Index Basket" of baseload supply at IFERC
"Index Basket" flat.
Winter baseload deliveries will be priced according to the following rates:
Commodity Supply: Weighted average of the following Indices
50% Inside F.E.R.C. Gas Market Report's FOM Columbia Gulf
Transmission Co. - Louisiana index
50% Gas Daily Monthly Contract index for Columbia, Mainline
Variable Charges: $.04185 Commodity Charges
5.3209% Fuel Retainage
Summer baseload deliveries will be priced according to the following rates:
Commodity Supply: Same as Winter Commodity Supply (see above)
Variable Charges: Same as Winter Variable Charges (see above)
Deliveries TO Columbia Gas Storage will be priced according to the following
rates:
Commodity Supply: Weighted average of the following Indices
50% Inside F.E.R.C. Gas Market Report's FOM Columbia Gulf
Transmission Co. - Louisiana index
50% Gas Daily Monthly Contract index for Columbia, Mainline
Variable Charges: $.04185 Commodity Charges
5.3209% Fuel Retainage
Pricing Terms (continued):
Swing Supply
PG&E ET will supply additional swing supply at the Midpoint of Gas Daily's -
Daily Price Survey - Columbia, App. flat. The Gas Daily price billed to BGC will
be dependent upon the day in which the additional supply is actually purchased
by PG&E ET. In addition to the commodity price paid, BGC will also be
responsible for the variable transportation costs (commodity and fuel retainage
rates) associated with the Columbia, App. Supply.
PG&E ET will purchase excess baseload supply from BGC at the lower of the
Midpoint of Gas Daily's - Daily Price Survey - Louisiana, Onshore -Columbia flat
or IFERC Columbia Gulf Louisiana flat. The price paid to BGC will be based upon
the day in which the additional supply is actually re-sold in the market by PG&E
ET. PG&E ET will reimburse BGC for any variable transportation costs charged on
the monthly baseload quantity which is sold back to PG&E ET under the
aforementioned method.
Delivery Period: Begin: November 1, 1999 Delivery Point: Bluefield Gas citygate
End: October 31, 2000
Performance Obligation and Contract Quantity:
Full Requirements, not to exceed 15,740 MMBtus/day (DCQ)
Baseload Deliveries (Fixed Quantity):
Nov99 - 1,647 MMBtus/day May00 - 3,596 MMBtus/day
Dec99 - 2,866 MMBtus/day Jun00 - 3,211 MMBtus/day
Jan00 - 2,847 MMBtus/day Jul00 - 3,079 MMBtus/day
Feb00 - 2,734 MMBtus/day Aug00 - 3,171 MMBtus/day
Mar00 - 2,154 MMBtus/day Sep00 - 3,019 MMBtus/day
Apr00 - 4,679 MMBtus/day Oct00 - 4,498 MMBtus/day
Swing Deliveries/Purchases:
On any day in which the net natural gas requirements of BGC exceed the monthly
baseload as determined by PG&E ET, PG&E ET will supply the necessary additional
supply up to the Contract Quantity of 15,740 MMBtus/day.
On any day in which the net natural gas requirements of BGC are less than the
monthly baseload established by PG&E ET, PG&E ET will purchase the excess
baseload supply from BGC.
Special Conditions:
Asset Release: BGC will (i) appoint PG&E ET as its agent for all
of its storage capacity (see Exhibit A, First Amendment)
and (ii) release its transportation contracts to PG&E ET
(see Exhibit C). To facilitate BGC's release of its
transportation contracts, PG&E ET will pay all pipeline
demand charges, but will be subsequently reimbursed by
BGC. At the expiration of the transaction, all storage
assets will be returned to the control of RGC with
inventory levels equal to those that existed on 10/31/99.
Supply Contracts: BGC will sell all existing supply contracts to
PG&E ET. PG&E ET will reimburse BGC for their costs
associated with this supply, exclusive of demand charges
(see Exhibit D). BGC will pay all supply invoices.
Demand Payment: Throughout the term of the deal, PG&E ET will pay a
monthly demand charge to BGC equal to $10.882.58.
Extension of Term PG&E ET will have the unilateral right to extend
the term of this transaction through October 31, 2001.
Should PG&E ET wish to exercise this right, BGC must be
notified prior to the close of business on February 29,
2000. Should the term of the transaction be extended and
BGC so desire, PG&E ET will work in good faith to develop
a plan which would provide for PG&E ET to take assignment
of BGC's storage capacity and own BGC's storage gas until
delivery of aforementioned storage gas to the BGC
city-gate.
Storage Billing BGC will be billed monthly for a ratable storage
withdrawal/injection. During the winter, the total daily
withdrawals billed will be equal to a citygate delivery of
2,951/dth (TCO). During the summer, the total daily
injections billed will be equal to 2,145 (TCO).
Storage Costs: In addition to the variable cost charged to BGC for
deliveries to storage, BGC will be responsible for any
variable charges associated with delivery into storage.
BGC will not pay for the commodity when it is withdrawn
from storage but will be responsible for the variable
transportation costs associated with delivering the
storage commodity to their citygate. It is the intent of
the parties to keep PG&E ET whole with respect to variable
transportation costs incurred as a result of daily
balancing activity in storage.
Variable Charges All variable charges associated with this
transaction are based upon the current commodity and fuel
rates as presented in the applicable pipeline tariff.
These rates will be adjusted to continuously reflect the
most up to date tariff rates.
Non-Performance Notwithstanding any other provisions in this Transaction
Confirmation, BGC shall have a unilateral right to
terminate the Agreement between the parties as evidenced
hereby, before March 31, 2000, upon 10 days' notice to
ENERGY TRADING, for inadequate performance. "Inadequate
performance" shall only mean ENERGY TRADING's failure to
supply the firm citygate natural gas volumes to BGC, as
contracted by the parties, unless ENERGY TRADING's
performance is excused under the Master Firm Agreement.
Seller: PG&E Energy v Trading-Gas Corporation Buyer: Bluefield Gas
By: By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Name/Title: Name/Title: VP, Sec & Treas.
Date: Date: 12/6/99
The following are the Transaction Confirm No.'s for the attached Transaction
Confirmation Exhibit B-1 dated October 26,1999 between PG&E Energy Trading-Gas
Corporation as Seller and Bluefield Gas as Buyer.
BLUEFIELDGAS-P/S-01-RMS181531
BLUEFIELDGAS-P/S-01-RMS181538
BLUEFIELDGAS-P/S-01-RMS181545
BLUEFIELDGAS-P/S-0l-RMS181667
BLUEFIELDGAS-P/S-01-RMS181678
BLUEFIEIDGAS-P/S-01-RMS181680
BLUEFIELDGAS-P/S-01-RMS181682
BLUEFIELDGAS-P/S-01-RMS181767
BLUEFIELDGAS-P/S-01-RMS181781
BLUEFIELDGAS-P/S-01-RMS181968
BLUEFIELDGAS-P/S-01-RMS181970
BLUEFIELDGAS-P/S-01-▇▇▇▇▇▇▇▇▇
BLUEFIELDGAS-P/S-01-RMS182482
BLUEFIELDGAS-P/S-01-RMS182487
BLUEFIELDGAS-P/S-01-▇▇▇▇▇▇▇▇▇
BLUEFIELDGAS-P/S-01-RMS182489
BLUEFIELDGAS-P/S-01-RMS182491
BLUEFIELDGAS-P/S-01-RMS182493
BLUEFIELDGAS-P/S-01-RMS182731
BLUEFIELDGAS-P/S-01-RMS182732
BLUEFIELDGAS-P/S-01-RMS182811
BLUEFIELDGAS-P/S-01-RMS182812
EXHIBIT C
EXHIBIT C TO MASTER AGREEMENT
Bluefield Gas Company - Commodity Pricing and Associated Variable Charges
*Winter baseload deliveries will be priced according to the following rates:
Winter Fuel Winter Fuel Winter Fuel Cumulative Commodity Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Winter Fuel pipeline 1 pipeline 2
-------------- --------- ---------- ---------- ---------- ----------- ---------- ----------
Columbia Gulf-La. 50% CGT FTS2 to FTS1 to TCO to RGC 0.590% 2.988% 2.116% 5.601% $0.0039 $0.0170
Columbia Mainline* 50% CGT FTS1 to TCO to RGC 2.988% 2.116% 5.041% $0.0170 $0.0229
(GD-Monthly Contract Index) Winter Index Basket - Variable Charges 5.3209% FUEL
Commodity Total
pipeline 3 Commodity
---------- ----------
$0.0229 $0.0438
$0.0399
$0.04185 Commodity
-----------------------------------------------------------------------------
*Summer baseload deliveries to the citygate will be priced according to the
following rates:
Summer Fuel Summer Fuel Summer Fuel Cumulative Commodity Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Summer Fuel pipeline 1 pipeline 2
-------------- --------- ---------- ---------- ---------- ----------- ---------- ----------
Columbia Gulf-La. 50% CGT FTS2 to FTS1 to TCO to RGC 0.590% 2.988% 2.116% 5.601% $0.0039 $0.0170
Columbia Mainline* 50% CGT FTSI to TCO to Roanoke 2.988% 2.116% 5.041% $0.0170 $0.0229
Summer Index Basket - Variable Charges 5.3209% FUEL
Commodity Total
pipeline 3 Commodity
---------- ---------
$0.0229 $0.0438
$0.0399
$0.04185 Commodity
------------------------------------------------------------------------------
*The commodity price of storage injections will be based upon the following
rates:
1) Columbia Gas Storage
Summer Fuel Summer Fuel Summer Fuel Cumulative Commodity Commodity
IFERC Location Weighting pipeline 1 pipeline 2 pipeline 3 Summer Fuel pipeline 1 pipeline 2
-------------- --------- ---------- ---------- ---------- ----------- ---------- ----------
Columbia Gulf-La. 50% CGT FTS2 to FTS1 to TCO to RGC 0.590% 2.988% 2.116% 5.601% $0.0039 $0.0170
Columbia Mainline* 50% CGT FTS1 to TCO to Roanoke 2.988% 2.116% 5.041% $0.0170 $0.0229
(GO-Monthly Contract Index)*
Variable Charges to Storage 5.3209% FUEL
(Variable charges into Storage will be based on actual Storage Service injected to)
Commodity Total
pipeline 3 Commodity
---------- ---------
$0.0229 $0.0438
$0.0399
$0.04185 Commodity
EXHIBIT D
EXHIBIT D TO TRANSACTION CONFIRMATION
Bluefield Gas
Capacity Detail
Pipeline Type Contract# Recpt. No Recpt Name Receipt Vol Delivery No Delivery Name Delivery Volume
-------- ---- --------- ---------- ---------- ----------- ----------- ------------- ---------------
Columbia Gulf FTS-2 40432 434 Tennessee 345
433 CGT-▇▇▇▇ A 1000
624 ▇▇▇▇▇ 1000
2700010 CGT-Rayne 2345
Columbia Gulf FTS-1 38026 2700010 CGT-Rayne 2083
801 Tco-▇▇▇▇▇ 2083
Columbia FTS 38098 ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇ 3
801 Tco-▇▇▇▇▇ 2028
62 BGC 2058
Columbia SST 38085 STOW Storage With 8682
62 BGC 8682
BPC-intrastate n/a Gather&well *5000
(Phoenix) varies with pipeline operating conditions 62 BGC 5000
EXHIBIT E
EXHIBIT E TO MASTER AGREEMENT
Gas Supply Contracts
Bluefield, Natural Gas
Supplier Receipt Term Max Volume Min Volume
Pipeline Point Start End Dth/day Dth/day Price
TNF Sales Phx Gathering/ 12/1/98 11/30/13 5,000 150 IFGMR FOM CNG Appl. GDA same 1=flat YES 10 calendar days before
Well eom. ▇▇▇▇ Strazleka
412-854-5108
Coral Cgt On Pool 12/1/98 11/30/01 1,100 1,100 IFGMR FOM, CGT LA 1+0075
6,100 1,250 10 day notification is not
strictly enforced BGC
system may require takes
above min. BGC will
communicate with supplier
on our behalf.
*** Special Note: Phoenix Pipeline supply. Supply comes into BGC system at a
strategic point (in terms of maintaining system pressure). Supply is
nominated monthly, any takes over the monthly nom are priced at the average
of GD for the month.