AMENDMENT FIRM TRANSPORTATION SERVICES AGREEMENT RATE SCHEDULE FTS-2
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AMENDMENT
FIRM TRANSPORTATION SERVICE AGREEMENT
RATE SCHEDULE FTS-2
THIS AMENDMENT is entered into on the 12th day of November,
1993, between Florida Gas Transmission Company ("Transporter"), a
Delaware corporation and city of Clearwater, Florida ("Shipper"),
a Florida municipality.
WIT N E SSE T H
WHEREAS, Transporter and Shipper are parties to two Firm
Transportation Service Agreements dated December 12, 1991, for
service under Rate Schedule FTS-2 of Transporter's F.E.R.C. Gas
Tariff (hereinafter referred to individually as "Contract No. 3610"
and "Contract No. 3611" and collectively as "FTS-2 Service
Agreements") and Shipper is a Phase III Shipper; and,
WHEREAS, solely for administrative purposes, Transporter and
Shipper desire to combine the rights, obligations, and liabilities,
including the Maximum Daily Transportation Quantities, of the FTS-2
Service Agreements into one FTS-2 service agreement by cancelling
Contract No. 3611 and revising Contract No. 3610 to include all
rights, obligations, and liabilities previously covered by Contract
No. 3611; and,
WHEREAS, Transporter and Shipper are parties to the Offer of
Settlement filed on August 25, 1992, in Docket No. CP92-182, et
~ which represented the agreement between the parties resolving
all non-environmental issues, including but not limited to, rate
design, levelized rate methodology, cost allocation, supply area
capaci ty, allocation of receipt point capacity, and terms and
conditions of firm transportation service through Transporter's
Phase III Expansion ("Settlement"); and
WHEREAS, the parties agreed, pursuant to paragraph 3 of
Article II (Neqotiated Allocation of Risk Amonq FGT And The
Siqnatorv Parties) of the Stipulation and Agreement contained in
the Settlement, to execute, within sixty (60) days of Transporter's
acceptance of an order from the Federal Energy Regulatory
Commission ("Commission"), an amendment to the FTS-2 Service
Agreements between Transporter and each Phase III Shipper that (i)
incorporates the Rate Caps elected by such Phase III Shipper; and
(ii) deletes any pre-existing termination rights of the Phase III
Shipper under the FTS-2 Service Agreements or any related
agreements between Transporter and Shipper; and,
WHEREAS, on September 15,1993, the Commission issued an
order, satisfactory to Transporter, in Docket No. CP92-182, et al.,
approving and accepting the Settlement without modification
("Order"); and,
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WHEREAS, Transporter accepted the certificate issued by the
Order on october 14, 1993; and,
WHEREAS, Transporter and Shipper desire to implement the
amendment process agreed to in the Settlement, as approved by the
Order.
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, Transporter and Shipper agree as
follows:
1. section 3.1 of the FTS-2 Service Agreements is hereby deleted
and replaced in its entirety with the following provisions:
During the first twenty (20) years of service under this
Agreement, Shipper shall pay Transporter the lower of (1) the
rates established under Transporter's Rate Schedule FTS-2, as
filed with and approved by the FERC and as said Rate Schedule
may hereafter be legally amended or superseded, or (2) the
Final Rate Cap as determined below:
(i) For the first two years of service, the Rate Cap
shall be $0.80 per MMBtu.
(ii) commencing on the third year of service and
extending for a period of one year, the Rate Cap
shall be $0.82 per MMBtu.
(iii) commencing on the fourth year of service and
extending for a period of one year, the Rate Cap
shall be $0.84 per MMBtu.
(iv) commencing on the fifth year of service and
extending to the end of the eighth year of
service, the Rate Cap shall be $0.86 per MMBtu.
(v) commencing on the ninth year of service and
extending to the end of the twentieth year of
service, the Rate Cap shall be calculated as
follows:
On each Anniversary ("Anniversary Date"), the Final Rate
Cap to be effective for the subsequent twelve-month
period shall be determined as the sum of (a)
seventy percent (70%) of the Rate Cap which was effective
for the eight year of service
("Base Rate Cap") and (b) thirty percent (30%) of the
Base Rate Cap escalated (but not decreased) through use
of the GDP Implicit Price Deflator (or any substitute
index that the parties mutually agree to in writing)
determined by multiplying thirty percent (30%) of the
Base Rate Cap by a fraction, the numerator of which is
the GDP Implicit Price Deflator for the last calendar
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quarter immediately preceding the Anniversary Date and I
the denominator of which is the GDP Implicit Price
Deflator for the calendar quarter immediately preceding
the fist month of the eighth year of service.
The Initial Base Rate Cap and all Final Rate Caps to be
calculated hereunder are stated in nominal dollars and
are 100 percent load factor rates , exclusive of all
applicable surcharges and fuel. The Initial Base Rate
Cap assumes the levelized rate methodology which
Transporter filed for approval in the Offer of Settlement
and stipulation and Agreement of the parties in Docket
No. CP92-182, et al. , on August 25, 1992 ("Settlement").
The Initial Base Rate Cap and any subsequent Rate Cap
used in the calculation of a Final Rate Cap hereunder
shall be adjusted for the impact of changes in state and
Federal income tax rates by adding or subtracting from
the applicable Rate Cap the difference between the
applicable Commission approved rate and such rate as
adjusted to include changes in State and/or Federal
income tax rates utilizing the cost of service underlying
such rate. In the event of changes in State and/or
Federal income tax rates prior to the effectiveness of
initial FTS-2 rates, the Rate Cap adjustment shall be
determined by adding or subtracting the difference
between the initial rates and the initial rates as
recalculated to include the State and Federal income tax
rates as included in the April 15, 1992 filing in Docket
No. CP92-182-001.
Rate Cap adjustments shall be implemented on the date of
effectiveness of tariff sheets filed by Transporter
incorporating changes in State and/or Federal income tax
rates.
The initial Base Rate Cap is based on $23.5 million of
pipeline rehabilitation costs allocated to the existing
cost-of-service. In the event more than $23.5 million
of rehabilitation costs are allocated to the existing
cost-of~service, then the Initial Base Rate Cap and any
subsequent Rate Cap used in the calculation of a Final
Rate Cap shall be adjusted downward by $.0006 per every
$1 million (or portion thereof) allocated to the existing
cost-of-service over and above the $23.5 million. In the
event less than $23.5 million of rehabilitation costs are
allocated to the existing cost-of-service, then the
Initial Base Rate Cap and any subsequent Rate Cap used in
the calculation of a Final Rate Cap shall be adjusted
upward by $.0006 per every $1 million (or portion
thereof) less than the $23.5 million currently allocated
to the Phase III cost-of-service.
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Shipper agrees that it shall not avail itself of any
other Rate Cap that may be made available to it by the
Commission.
2. section 10.2 (g) of Article 10 (Other Provisions) of the FTS-2
Service Agreements regarding Shipper's right to terminate in the
event the Maximum Daily Transportation Quantity allocation was less
than the amount stated in Shipper's Subscription Quantity Form is
no longer applicable and shall be deleted in its entirety.
3. Letter Agreement dated December 18, 1991, providing assurances
on capacity cost mitigation measures, protection on initial rates
of service, and FGT's execution of the FTS-2 Service Agreements, is
no longer applicable or has been satisfied; therefore, the Letter
Agreement shall be terminated in its entirety.
4. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
5. Upon execution by both parties, this Amendment shall be deemed
effective for all purposes as of the date of the FTS-2 Service
Agreements.
6. Transporter and Shipper each represent and warrant to the
other, applicable, that it is either (i) a corporation duly
organized and validly existing under the laws of the State of its
incorporation and has the power and authority to execute, deliver,
and carry out the terms and provisions of the FTS-2 Service
Agreements, as amended herein and in the Settlement; or (ii) has
received all authorizations, consents, and approvals of
governmental bodies, state or local agencies, committees, boards,
or councils having jurisdiction, necessary to execute, deliver, and
carry out the terms and provisions of the FTS-2 Service Agreements,
as amended herein and in the Settlement.
7. Upon execution of the revised Exhibits A and B attached hereto
by both parties to reflect the transfer of Maximum Daily
Transportation Quantity form Contract No. 3611 to Contract No.
3610, Contract No. 3611 will be terminated in its entirety
effective as of the date such was executed and Contract No. 3610
shall remain in full force and effect, as amended herein and in the
Settlement.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date written above by their duly
authorized officers and representatives.
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CITY SIGNATURE PAGE
Countersigned:
CITY OF CLEARWATER, FLORIDA
By:
Deptula
Manager
Rita Garvey
Mayor-Commissioner
Approved as to form and
correctness:
Attest:
M.A.
city
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C thia E. Goudeau
ci y Clerk
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RECEIVED
JAN 3 1 1995
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Florida Gas Transmission Company
P. O. Box 1188 Houston, Texas 77251-1188 (713) 853-6161
CITY CLERK DEPT.
January 23, 1995
City of Clearwater
Attn: Mr. Charles Warrington, Jr.
400 North Myrtle
Clearwater, FL 34615
Re: Construction and Reimbursement Agreement
Dated June 9, 1994
Dear Mr. Warrington:
I am returning for your files one (1) fully executed
original of the referenced Agreement.
If you have any questions, please call me at (713) 853-
3108.
Sincerely,
~~J.~
Linda S. Bryan
Marketing Administration
LSB/mll
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Enclosure
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cc: CR #3610
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