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SERVICE AGREEMENT FOR FIRM TRANSPORTATION SERVICE NO. 0989 THIS AGREEMENT entered into this 12th day of December , 19JQ, by and between Florida Gas Transmission Company, a Corporation of the state of Delaware (herein called "Transporter"), and City of Clearwater, Florida, (herein called "Shipper"). WIT N E SSE T H : WHEREAS, Shipper wishes to purchase firm natural gas transportation service from Transporter and Transporter wishes to provide firm natural gas transportation service to Shipper; and WHEREAS, Shipper has completed and submitted to Transporter a valid request for firm transportation service ("Request"); and WHEREAS, in accordance with such Request, such service will be provided by Transporter for Shipper in accordance with the terms hereof. NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the sufficiency of which is hereby acknowledged, Transporter and Shipper do covenant and agree as follows: ARTICLE I Definitions In addition to the definitions incorporated herein through Transporter's Rate Schedule FTS-2, the following terms when used herein shall have the meanings set forth below: &/r~~ V, 7Jl~, (ii) . ,,_/ I I 1.1 The term "Gas" shall mean pipeline quality natural gas which complies with the quality provisions set forth in the General Terms and Conditions of Transporter's effective FERC Gas Tariff, Volume No.1, and includes gas well gas, casinghead gas and residue gas remaining after processing thereof. 1.2 The term "Rate Schedule FTS-2" shall mean Transporter's Rate Schedule FTS-2 as filed with the FERC as changed and adjusted from time to time by Transporter in accordance with section 3.3 hereof or in compliance with any final FERC order affecting such rate schedule. 1.3 The term "FERC" shall mean the Federal Energy Regulatory commission or any successor regulatory agency or body, including the Congress, which has authority to regulate the rates and services of Transporter. ARTICLE II Ouantitv 2.1 The Maximum Daily Transportation Quantity ("MDTQ") shall be set forth in Exhibit B attached hereto. The applicable MDTQ shall be the largest daily quantity of gas Shipper may tender for transportation in the aggregate to all Points of Receipt, exclusive of Transporter's Fuel, and receive at all Point(s) of Delivery as specified on Exhibits A and B hereto on any day. 2.2 Shipper may tender natural gas for transportation to Transporter on any day, up to the MDTQ plus Transporter's Fuel. Transporter agrees to receive the aggregate of the quantities of natural gas that Shipper tenders for transportation at the Receipt - 2 - I I Points, up to the maximum daily quantity specified for each such Point on Exhibit A hereto, and to transport and deliver to Shipper at each Delivery Point specified on Exhibit B, up to the maximum daily quantity specified for each such point on Exhibit B, the amount tendered by Shipper less Transporter's Fuel, (as provided in Rate Schedule FTS-2), provided, however, that Transporter shall never be required to transport and deliver on any day more than the MDTQ. ARTICLE III Rate Schedule 3.1 Upon the commencement of service hereunder, Shipper shall pay Transporter, for all service rendered hereunder, the rates established under Transporter's Rate Schedule FTS-2 as filed with the FERC and as said Rate Schedule may hereafter be legally amended or superseded. 3.2 This Agreement in all respects shall be and remain subject to the provisions of said Rate Schedule and of the applicable provisions of the General Terms and Conditions of Transporter's effective Gas Tariff on file with the FERC (as the same may hereafter be legally amended or superseded), all of which are made a part hereof by this reference. 3.3. Transporter shall have the unilateral right to file with the appropriate regulatory authority and make changes authorized by such authority in (a) the rates and charges applicable to its Rate Schedule FTS-2, (b) Rate Schedule FTS-2 pursuant to which this service is rendered; provided, however, that the firm character of service shall not be subject to change hereunder, or (c) any - 3 - I I provisions of the General Terms and Conditions applicable to Rate Schedule FTS-2. Transporter agrees that Shipper may protest or contest the aforementioned filings, or seek authorization from duly constituted regulatory authorities for such adjustment of Transporter's existing FERC Gas Tariff as may be found necessary in order to assure that the provisions in (a), (b), or (c) above are just and reasonable. ARTICLE IV Term of Aqreement 4.1 This Agreement shall become effective upon the "in- service date of the Phase III Facilities", which shall be deemed to be the first day of the month following the date on which Transporter gives notice to the Commission that the Phase III Facilities, as defined in Article X of this Agreement, are in- service, and shall continue in effect for a primary term (which shall not be less than a period of twenty years) of 20 years. 4.2 Termination for Non-Payment. In the event Shipper fails to pay for service provided pursuant to this Agreement, Transporter, in addition to any other rights it may have, shall also have the right to suspend or terminate service as permitted by the applicable provision of the General Terms and Conditions to Transporter's FERC Gas Tariff. - 4 - I I ARTICLE V pointCs) of ReceiDt and Deliverv and Maximum Dailv Quantities 5.1 The Point(s) of Receipt and maximum daily quantity for each point(s) for all gas delivered by Shipper into Transporter's pipeline system under this Agreement shall be at the Point(s) of Receipt on the pipeline system of Transporter or any Transporting Pipeline as set forth in Exhibit A attached hereto. 5.2 The Point(s) of Delivery and maximum daily quantity for each point(s) for all gas delivered by Transporter to Shipper, or for the account of Shipper, under this Agreement shall be at the Point(s) of Delivery as set forth in Exhibit B. ARTICLE VI Notices All notices, payments and communications with respect to this Agreement shall be in writing and sent to the addresses stated below or at any other such address as may hereafter be designated in writing: ADMINISTRATIVE MATTERS Transporter: Florida Gas Transmission Company P. O. Box 1188 Houston, Texas 77251-1188 Attention: Contract Management Department Shipper: City of Clearwater, Florida P. O. Box 4749 Clearwater, Florida 34618 Attention: Mr. Terry Neenan PAYMENT BY WIRE TRANSFER Transporter: Florida Gas Transmission Company NCNB National Bank Account No. 001658806 Charlotte, North Carolina - 5 - I I ARTICLE VII Facilities Subsequent to commencement of service under this Agreement, Transporter shall not be obligated to, but may, at its reasonable discretion, subject to the written agreement of Shipper, construct or acquire new facilities, or expand existing facilities, in order to perform service under this Agreement. For purposes of this Agreement and Rate Schedule FTS-2, an expanded facility shall be deemed to be a new facility. If in Transporter's reasonable judgment it is necessary to construct or acquire new facilities, or to expand existing facilities, in order to enable Transporter to receive or deliver Shipper's MDTQ at the Point(s) of Receipt and Delivery, and Transporter determines as provided herein to construct, acquire, or expand such facilities, then Transporter shall notify Shipper of the additional cost required, and such facilities shall, subject to the receipt and acceptance by Transporter of any necessary authorizations, permits and approvals, be constructed, acquired or expanded to permit the receipt and delivery of gas as provided for herein. Shipper agrees to reimburse Transporter, promptly upon receipt of Transporter's invoices, for all costs and expenses incurred under this Article VII by Transporter for any pipeline and related facilities including but not limited to the cost of any tap, electronic measurement equipment or data communications equipment for new meters, and appurtenant equipment and materials, and overhead expenses. To the extent such reimbursement qualifies as a contribution in aid of construction under the Tax Reform Act of - 6 - I I 1986, P.L. 99-514 (1986), Shipper also shall reimburse Transporter for the income taxes incurred by Transporter as a direct result of such contribution in aid of construction by Shipper, as calculated pursuant to the Commission's order in Transwestern Pipeline Company, 45 FERC P 61,116 (1988). Transporter shall have title to and the exclusive right to operate and maintain all such facilities. ARTICLE VIII Reoul.torv Authorizations and ADDrovals 8.1 Transporter's obligation to provide service is conditioned upon receipt and acceptance of any necessary regulatory authorization that is acceptable in form and substance to Transporter to provide Firm Transportation Service to Shipper in accordance with the terms of Rate Schedule FTS-2, or any successor thereto which is substantially similar in form and content, and this Service Agreement. Shipper agrees to reimburse Transporter for all reporting and/or filing fees incurred by Transporter in providing service under this Service Agreement. ARTICLE IX Pressure 9.1 The quantities of gas delivered or caused to be delivered by Shipper to Transporter hereunder shall be delivered into Transporter's pipeline system at a pressure sufficient to enter Transporter's system, but in no event shall such gas be delivered at a pressure exceeding the maximum authorized operating pressure or such other pressure as Transporter permits at the Point(s) of Receipt. - 7 - I I 9.2 Transporter shall have no obligation to provide compression and/or alter its system operations to effectuate deliveries at the Point(s) of Delivery hereunder. ARTICLE X Other provisions 10.1 Prior to Transporter's execution of this Agreement, Shipper must demonstrate creditworthiness satisfactory to Transporter. In the event Shipper fails to establish creditworthiness within fifteen (15) days of Transporter's notice, Transporter shall not execute this Agreement and this Agreement shall be deemed null and void. 10.2 Service pursuant to this Agreement is expressly SUbject to the following conditions: (a) The issuance, and acceptance by Transporter, of all necessary authorizations from the FERC pursuant to the Natural Gas Act or Natural Gas Policy Act permitting Transporter to construct, own and operate the Phase III facilities as described in Transporter's certificate application, as it may be amended or supplemented from time to time, and to effectuate the proposed service hereunder (hereinafter "Phase III Facilities"). All such authorizations shall be in form and substance satisfactory to Transporter, and shall be final before the respective governmental authority and no longer subject to appeal or rehearing; provided, however, that Transporter may waive the condition that such authority be final and/or no longer subject to appeal or rehearing. - 8 - ) I Such authorization shall include approval of a capacity allocation methodology acceptable to Transporter in the event requests for service for the proposed Phase III Facilities exceed the availability of the expanded capacity which Transporter, in its sole discretion, is willing to build; (b) Receipt and acceptance by Transporter of all other approvals required to construct the Phase III Facilities including all necessary authorizations from federal, state, local, and/or municipal agencies or other governmental authorities. All such approvals shall be in form and substance satisfactory to Transporter, and shall be final before the respective governmental authority and no longer subject to appeal or rehearing; provided, however, that Transporter may waive the condition that such authority be final and/or no longer subject to appeal or rehearing. (c) The receipt of executed firm transportation service agreements from other shippers sufficient to economically justify construction of the Phase III Facilities, in Transporter's sole opinion. (d) The approval of rates by the Commission for transportation services provided on the Phase III Facilities that are acceptable to Transporter, in Transporter's sole opinion. Shipper agrees to support a levelized rate methodology for the Phase III Facilities - 9 - ) I in any proceeding before the Commission during the term of this Agreement. (e) Receipt by Transporter of all necessary right-of-way easements or permits in form and substance acceptable to Transporter; (f) Transporter obtaining financing to construct the Phase III Facilities that is satisfactory to Transporter, in Transporter's sole opinion. Shipper agrees to provide reasonable cooperation in Transporter's effort to obtain financing; (g) Transporter's and Shipper's obligations hereunder shall be subject to the provisions of any final FERC order determining an allocation of capacity of Transporter's Phase III Facilities. However, in the event such allocation of capacity does not provide Shipper with the MDTQs set forth in the Subscription Quantity Form, which is required to be completed and signed by Shipper and which is incorporated herein by reference, Shipper shall have the option to terminate this Agreement within fifteen (15) days of notice by Transporter of Shipper's allocation. If Shipper agrees to accept service for a lesser amount, Transporter shall have the option to provide service at such lesser amount in the event all other conditions set forth in this Article X are satisfied. - 10 - J I (h) Shipper is obligated to reimburse Transporter for the construction of taps, meters, receipt and delivery point upgrades, construction of supply and delivery laterals not included in the description of the Phase III Facilities and any other construction necessary to receive Shipper's gas into, and deliver Shipper's gas from, Transporter's Phase III Facilities. To the extent such reimbursement qualifies as a contribution in aid of construction under the Tax Reform Act of 1986, P.L. 99-514 (1986), Shipper also shall reimburse Transporter for the income taxes incurred by Transporter as a direct result of such contribution in aid of construction by Shipper, as calculated pursuant to the Commission's order in Transwestern Pipeline Company, 45 FERC P 61,116 (1988) . Transporter shall have title to and the exclusive right to operate and maintain all such facilities. (j) In the event that all requisite approvals necessary to effectuate the proposed service hereunder are not granted in satisfactory form on or before December 31, 1993, then at such time either party shall have the right to terminate this Agreement upon sixty (60) days written notice; provided, however, that if such approvals are obtained prior to the expiration of the sixty day notice period, such notice shall be of no further force or - 11 - I I effect and this Agreement shall continue in accordance with the terms herein. (k) Transporter agrees to make all reasonable efforts to obtain the necessary authorizations, financing service commitments and all other approvals necessary to effectuate service under this Agreement. Shipper agrees to exercise good faith in the performance of this Agreement by supporting Transporter's efforts to obtain all necessary authorizations, financing and other approvals necessary to effectuate service under this Agreement; provided, however, Shipper is not precluded from exercising its right to contest specific provisions in Transporter's certificate application in Docket No. CP92-182, as may be amended. (I) At any time prior to Transporter's acceptance of all authorizations necessary to construct the Phase III Facilities, Transporter retains the right to terminate this Agreement, and to withdraw any requests or applications for regulatory approvals, and to terminate this project, at any time Transporter determines in its sole discretion that the project is no longer economical to pursue. In the event the conditions set forth in this Article X are not satisfied, this Agreement shall be deemed null and void upon written notice by Transporter to Shipper. - 12 - I I ARTICLE XI Miscellaneous 11.1 This Agreement shall bind and benefit the successors and assigns of the respective parties hereto; provided, however, neither party shall assign this Agreement or any of its rights or obligations hereunder without first obtaining the written consent of the other party, which shall not be unreasonably withheld, and any other regulatory authorizations deemed necessary by Transporter. 11.2 No waiver by either party of anyone or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any future defaults of a like or different character. 11. 3 This Agreement contains Exhibits A and B which are incorporated fully herein. 11.4 This Agreement shall not be binding upon Transporter until executed by Transporter. - 13 - I I 11.5 THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized officers effective as of the date first written above. TRANSPORTER SHIPPER FLORIDA GAS TRANSMISSION COMPANY By: t!L rAJJR, .{tS By: FLORIDA r~ Title: Vice President. Business Development By: ATTEST: By: ~ g~~ !dQ- . ~=deau T1tle: D-ty G:t@rK ~.>-:--. Date: ,r;.3'b,~ ,~"~ .P~ - Title: Date: f~Sig ed, Rita Garvey Mayor-Commission Approved as to form and correctness: M. A. Galbrait , City Attorney ~ - 14 - I I FORM OF SERVICE AGREEMENT Firm Transportation Service (continued) EXHIBIT A TO FIRM GAS TRANSPORTATION AGREEMENT BETWEEN FLORIDA GAS TRANSMISSION COMPANY AND CITY OF CLEARWATER, FLORIDA DATED December 12 , 19~ Maximum Daily Quantity (MMBtu) * (including fuel)** Point(s) of Receipt Description of Point of Receipt POI November-April May-October Compressor Station 11 25309 1020 1102 * The MDQ set forth above is subject to any allocation of capacity approved by the Commission, and accepted by Transporter, that may be required in the event that requests for service for the Phase III Facilities exceeds the availability of expanded capacity available, which Transporter, in its sole discretion, is willing to build. ** Fuel reimbursement shall be 3% of the daily quantities received by Transporter at each receipt point. Such percentage is subject to final determination in the Phase III certificate proceeding. Date of this Exhibit A: December 12. 1991 - 15 - ~ J I I FORM OF SERVICE AGREEMENT Firm Transportation Service (continued) EXHIBIT B TO FIRM GAS TRANSPORTATION AGREEMENT BETWEEN FLORIDA GAS TRANSMISSION COMPANY AND CITY OF CLEARWATER, FLORIDA DATED DeCembf>r 1? , 19 ....9.1 Point(s) of Delivery Maximum DailY Ouantity (MMBtu) Description of Point of Delivery POI November-April May-october CLEARWATER CLEARWATER CLEARWATER 16204 16205 16206 341 395 254 369 428 273 Maximum Daily Transportation Quantity*: 990 1070 * The MDTQ set forth above is subject to any allocation of capacity approved by the Commission, and accepted by Transporter, that may be required in the event that requests for service for the Phase III Facilities exceeds the availability of expanded capacity available, which Transporter, in its sole discretion, is willing to build. Date of this Exhibit B: December 12, 1991 - 16 - I I 0"9 Attachment A-5 Florida Gas Transmission Phase III Expansion Subscription Quantity Form Customer: Clearwater, City of FGT Request No: 989 Request Quantity Season Oct Nov-Mar April May-Sept 1) MMBTU/D o 990 o 1,070 Phase III Subscription Nov-April May-Oct 2) 3) 4) Annual Quantity (MMBTU/D) Seasonal Quantity (MMBTU/D) Total (MMBTU/D) 990 o 990 990 80 1070 Total of the greatest season on line 4 may not exceed the greatest requested quantity on line 1. The quantity on line 4 above must be used to complete Exhibit B of the Service Agreement. By: 1 Title: Date: /CJj23/7'} { , fiL. I I Attachment A-6 07 ?cr Florida Gas Transmission Phase III Expansion Supply Area Capacity Form Customer: Clearwater, city of FGT Request No: 989 Parties subscribing to Phase III capacity are requested to provide us with a description of their desired supply area capacity. If you desi~pacity in proportion to FGT's proposed design please initial here ~, otherwise please fill in the desired capacity by compressor s tion location. Supply Area Location Upstream of Compressor Station 6 Between Station 6 and 7 Between station 7 and 8 Between station 8 and 9 Desired Capacity (MMBTU/Day) Mainline FGT SNG Receipt Points Between station 9 and 10 Between Station 10 and 11 Mobile Bay (1) other Mainline FGT Total (1) The composite desired capacity from Mobile Bay will be utilized to assess the feasibility of including a 100% owned FGT line to the Mobil Bay processing plants (estimated cost - $50 MM) in the Phase III expansion. ..