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GAS SUPPLY AND TRANSPORTATION AGREEMENT ..r GAS SUPPLY AND TRANSPORTATION AGREEMENT This Gas Supply and Transportation Agreement (the "Agreement") is made and entered into as of the 2nd day of December, 2004, by and between Peoples Gas System, a Division of Tampa Electric Company, a Florida corporation ("PGS"), and Clearwater Gas System, a department of the City of Clearwater, Florida, a municipal corporation organized and existing under the laws of the State of Florida ("CGS"), W !IN~~~ EI H: WHEREAS, each of the parties is a natural gas distribution utility owning and operating distribution systems for the delivery of natural gas to customers within its respective selVice territory within the State of Florida; WHEREAS, CGS intends to provide retail natural gas selVice to consumers within an area located east of the Suncoast Parkway ("Parkway") which generally includes new developments in Pasco County, Florida, known as Bexley Ranch Land Trust ("Bexley") and Connerton LLC ("Connerton") (collectively, the "Developments"), and desires that PGS deliver natural gas to CGS through a series of meter transfer points to be located near the Developments; and WHEREAS, PGS is willing to provide such selVice to CGS on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the premises, the mutual promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows: ARTICLE I - DEFINITIONS Section 1.1 Defintions. As used herein, the following terms shall have the meanings set forth below. "Absolute Pressure" means atmospheric pressure of 14.73 psia plus gauge pressure. "Actual Takes" means the difference between the current and previous meter reading for each PGS meter facility within the Developments. "Business Dav" means Monday through Friday (excluding federal banking holidays). "Bexley" means the residential development known as Bexley Ranch Land Trust, located in Pasco County, Florida, as more particularly shown on the map attached hereto as Appendix A. ' "British Thermal Unif means the quantity of heat required to raise the temperature of one pound of water from 59 OF to 60 OF at a constant pressure of 14.73 psia. "BTU" means British Thermal Unit "CGS Installation" means all pipe, fittings, appliances and apparatus of every type (except metering, regulating and other similar equipment which remains the property of PGS) located on CGS's side of the Point of Delivery and used in connection with or forming a part of an installation for utilizing Gas for any purpose. "Connerton" means the residential development known as Connerton LLC, located in Pasco County, Florida, as more particularly shown on the map attached hereto as Appendix A. "Corridors" means (i) easterly along State Road 52, from the intersection of its centerline with the easternmost boundary of the Original 1995 Clearwater Territory described in the Territorial Agreement near Hays Road, to its intersection with Land 0' Lakes Boulevard (US 41), and (ii) in Section 30, Township 26 South, Range 18 East, from the intersection ofthe centerline of State Road 54 and the centerline of the future entrance road to Bexley, northerly along the centerline ofthe future entrance road to Bexley to the northern boundary of Section 30, Township 26 South, Range 18 East. 1 "Cubic Foot of Gas" means gas delivered at a Standard Delivery Pressure, a Cubic Foot of Gas is the volume of Gas, which, at a temperature and pressure existing in the Meter, occupies one cubic foot. For Gas delivered at other than Standard Delivery Pressure, a Cubic Foot of Gas is that volume of Gas, which at a temperature of 60 of and an Absolute Pressure of 14.98 pounds per square inch occupies one cubic foot. "Develooments" means both Bexley and Connerton. "FPSC" means the Florida Public Service Commission or any successor agency. "Gas" means natural gas or a mixture of gases suitable for fuel, delivered through either PGS or CGS distribution system, having a heating value of not less than 950 BTU's per cubic foot. "Gas Service Facilities" means the service line, meter, and all appurtenances thereto necessary to convey Gas from the gas main to the Point of Delivery and which are owned by PGS. "Meter" means any device or instrument used to measure and indicate volumes of Gas, which flow through it. "Parkwav" means the Suncoast Parkway (Florida State Toll Road 589). "Point of Deliverv" means the point at which PGS's Gas Service Facilities are connected to CGS Installation. "Suoolier(s )" means a party or parties, other than PGS, from which CGS purchases Gas for delivery to PGS for transportation hereunder. " erritorial Aareemenf' means the Agreement dated March 17, 1995 between CGS and PGS establishing the service areas of each within Pasco County, Florida, as the same may be amended from time to time. ARTICLE II - TERM Section 2.1 Effective Date, The Parties hereto agree that this Agreement and all duties and obligations hereunder are wholly contingent upon an amendment to the Territorial Agreement allowing CGS to enter upon and service a portion of the Pasco County territory which was previously awarded to Peoples in the Territorial Agreement and which includes the Developments and the Corridors. Upon satisfaction of the above contingency, this Agreement shall become effective on the date first written above. The term of this Agreement shall commence on said date and continue for so long as CGS (or its permitted successors or assigns) provides natural gas service to customers within the Developments or areas adjacent to the Corridors. ARTICLE III - GAS SUPPLY SERVICE Section 3.1 Services. PGS desires to sell and CGS desires to purchase Gas from PGS for use in providing natural gas service to customers within the Developments and areas adjacent to the Corridors until such time as CGS provides notice of its intent to utilize transportation only services as permitted hereunder. Sales or transportation service, if CGS elects such service pursuant to Section 3.4, shall be governed by PGS's FPSC Tariff and this Agreement. If there is a conflict between the tariff and this Agreement, the provisions of this Agreement shall control. Section 3.2 Full Reauirements. During the term of this Agreement, CGS agrees that all Gas delivered to customers within the Developments and areas adjacent to the Corridors will be purchased from or, if CGS elects to transport pursuant to Section 3.4, transported by, PGS. Should CGS elect transportation only service from PGS, CGS shall, in its sole discretion, be permitted to purchase its Gas from other Supplier(s). However, PGS, recognizing that its facilities are the only facilities allowing for the transportation of Gas hereunder, shall remain obligated to provide such transportation service for the duration of the Term of this Agreement. Section 3.3 Meterina Eauipment and Locations. PGS agrees to install all facilities used to provide sales service to CGS hereunder and all such facilities shall be owned, operated and maintained by PGS. Such facilities shall include two (2) meter stations to serve CGS customers east of the Parkway, which meters shall be generally located at or near (i) the intersection of Hays 2 , , Road and State Road 52 and (ii) the Bexley entrance road just east of the intersection of the Parkway and State Road 54, as indicated in Appendix A. In addition, PGS shall provide a temporary compressed natural gas (CNG) facility near Connerton (to enable CGS to serve customers in Connerton), as indicated in Appendix A. PGS shall provide such temporary CNG facility until PGS has installed Gas Service Facilities capable of providing natural gas service to Connerton, which Gas Service Facilities shall be installed and ready for use no later than the earlier to occur of (x) June 2007 or (y) the completion of 150 homes within Connerton. If CGS elects to receive transportation only service pursuant to Section 3.4, CGS shall (i) on receipt of PGS's invoice therefore, reimburse PGS for all costs incurred for telemetry and other equipment which PGS must install in connection with providing transportation service, and (ii) provide, pay for and set up telecommunications lines required for telemetry, Unless the parties agree otherwise, all facilities used to provide transportation service to CGS hereunder shall be installed, owned, operated and maintained by PGS. Section 3.4 Transportation Service Option. CGS has stated its intent to purchase Gas from PGS pursuant to this Agreement in lieu of receiving transportation only service for CGS's Gas, however, if CGS elects to receive transportation only service for Gas to be delivered to customers within the Developments, CGS shall deliver not less than 30 days' written notice to PGS of such election. Unless otherwise agreed between PGS and CGS, on and after the day for which CGS first Nominates a quantity of Gas for transportation only hereunder, PGS shall have no obligation to make sales to CGS in lieu of the transportation of Gas contemplated by this Agreement. Such transportation service shall be provided pursuant to PGS's FPSC Tariff and this Agreement. Section 3.5 Distribution Charaes. Until such time as the aggregate annual quantity of Gas sold and/or transported by PGS pursuant to the Agreement exceeds the minimum annual quantity required for the applicability of PGS's Rate Schedule GS-5, CGS shall pay PGS each Month for transportation service rendered by PGS (if CGS elects transportation service pursuant to Section 3.4), and/or for Gas purchased from PGS, in accordance with PGS's Rate Schedule WHS filed with and approved by the FPSC. On and after such time as the aggregate annual quantity of Gas sold and/or transported by PGS to CGS pursuant to this Agreement exceeds the minimum annual quantity required for the applicability of PGS's Rate Schedule GS-5, such Rate Schedule GS-5 shall become applicable to the service provided by PGS to CGS pursuant to this Agreement. CGS shall not be liable to PGS for the Customer Charges set forth in Rate Schedule WHS until the Month in which service hereunder is first provided by PGS under Rate Schedule WHS for each metered location. Should PGS's rate schedule be subsequently modified as to categorize rates differently, a comparable rate shall apply. ARTICLE IV. BILLING AND PAYMENT Section 4.1 Billina. PGS will bill CGS each Month for all Actual Takes during the preceding Month, and for any other amounts due hereunder. If CGS has elected to receive transportation service pursuant to Section 3.4 and, during the preceding Month, PGS has purchased Gas from CGS pursuant to an interruption, such bill shall show a credit for the estimated amount due CGS for such purchase(s). If the estimated amount owed by PGS to CGS exceeds the amount CGS owes PGS, PGS shall pay CGS the net amount estimated to be due CGS at the time PGS bills CGS. Section 4.2 Payment: Disputes. CGS shall pay such bills, minus any disputed amounts, to PGS at the address specified in the invoice in accordance with the provisions of the Florida Prompt Payment Act, Sections 218.70 et seq., which shall govern the rights and obligations of the parties. All sums not so paid by CGS (or credited or paid by PGS) shall be considered delinquent. Section 4.3 Errors or Estimates. If an estimate is used to determine the amount due CGS for purchases by PGS pursuant to an interruption or curtailment order, PGS shall make any adjustment necessary to reflect the actual amount due CGS on account of such purchases in the next bill 3 . j rendered to CGS after determination of the actual amount due. An error in any bill, credit or payment shall be corrected in the next bill rendered after the error is confirmed by PGS, ARTICLE V. FAILURE TO MAKE PAYMENT Section 5.1 Late Payment Charae. Charges for services due and rendered which are unpaid as of the past due date are subject to a Late Payment Charge of 1.5%, except the accounts of federal, state, and local governmental entities, agencies, and instrumentalities. A Late Payment Charge shall be applied to the accounts of federal, state, and local governmental entities, agencies, and instrumentalities at a rate no greater than allowed, and in a manner permitted by applicable law. Section 5.2 Other Remedies. If CGS fails to remedy a delinquency in any payment within five (5) Days after written notice thereof by PGS, PGS, in addition to any other remedy may, without incurring any liability to CGS and without terminating this Agreement, suspend further deliveries to CGS until the delinquent amount is paid, but PGS shall not do so if the failure to pay is the result of a bona fide billing dispute, and all undisputed amounts have been paid. If PGS fails to remedy a delinquency in providing a credit (or making payment) to CGS for PGS purchases pursuant to an interruption or curtailment order within five (5) Days after CGS's written notice thereof, CGS, in addition to any other remedy, may, without incurring liability to PGS and without terminating this Agreement, suspend PGS's right to retain and purchase CGS's Gas pursuant to an interruption or curtailment order, but CGS shall not do so if PGS's failure to provide a credit (or make payment) is the result of a bona fide billing dispute, and all undisputed amounts have been credited or paid by PGS. ARTICLE VI . MISCELLANEOUS Section 6.1 Assianment and Transfer. Neither party may assign this Agreement without the prior written consent of the other Party. Section 6.2 Governina Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of Florida and shall be subject to all applicable laws, rules and orders of any Federal, state or local governmental authority having jurisdiction over the parties, their facilities orthe transactions contemplated. Venue for any action, at law or in equity, commenced by either party against the other and arising out of or in connection with this Agreement shall be in a court, located within the State of Florida, having jurisdiction. Section 6.3 Severability. If any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable orvoid, this Agreement shall continue in full force and effect without said provision. Section 6.4 Entire Aareement: ADDend ices. This Agreement sets forth the complete understanding of the parties as of the date first written above, and supersedes any and all prior negotiations, agreements and understandings with respect to the subject matter hereof. Appendix A attached hereto is an integral part hereof. Section 6.5 Waiver. No waiver of any of the provisions hereof shall be deemed to be a waiver of any other provision whether similar or not. No waiver shall constitute a continuing waiver. No waiver shall be binding on a party unless executed in writing by that party, Section 6.6 Notices. (a) All notices and other communications hereunder shall be in writing and be deemed duly given on the date of delivery if delivered personally or by a recognized overnight delivery service or on the fifth day after mailing if mailed by first class United States mail, registered or certified, return receipt requested, postage prepaid, and properly addressed to the party as set forth below. 4 , 1 PGS: CGS: Administrative Matters: Peoples Gas System 702 North Franklin Street P. O. Box 2562 Tampa, FL 33601-2562 Attention: Contractor Administrator Telephone: (813) 228-1559 Facsimile: (813) 228-1268 Administrative Matters: Clearwater Gas System 400 North Myrtle Avenue Clearwater, FL 33755 Attention: Gas Supply & Technology Engineer Telephone: (727) 562-4911 Facsimile: (727) 562-4903 Payment: Peoples Gas System 702 North Franklin Street P. O. Box 2562 Tampa, FL 33601-2562 Attention: Customer Accounting Telephone: (813) 813-228-4149 Facsimile: (813)813-228-4194 Invoices: Clearwater Gas System 400 North Myrtle Avenue Clearwater, FL 33755 Attention: Gas Supply & Technology Engineer Telephone: (727) 562-4911 Facsimile: (727) 562-4903 Section 6.7 Amendments. This Agreement may not be amended except by an instrument in writing signed by duly authorized representatives of both parties. A change in (a) the place to which notices hereunder must be sent or (b) the individual designated as Contact Person shall not be deemed nor require an amendment hereof provided such change is communicated pursuant to Section 6.6. Section 6.8 Leaal Fees. In the event of litigation between the parties hereto arising out of or in connection with this Agreement, then the reasonable attorneys' fees and costs ofthe party prevailing in such litigation shall be paid by the other party. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the date first above written. PEOPLES GAS SYSTEM, a division of TAMPA ELECTRIC COMPANY B~wV Name: /nAi.. -A> ".Qr~"..Jo Title: \(.t:::S ~,Or.&r,Po?Vr-~AJY," Y '" ~tr'-~Y' CITY OF CLEARWATER, FLORIDA By: ~A__t.~JJ: William B. Horne, II City Manager Approved as to form: Attest: -' Laura powski Assist nt City Attorney 5 APPENDIX A