GAS SALES AND PORTFOLIO ADMINISTRATION AGREEMENT
THIS GAS SALES AND PORTFOLIO ADMINISTRATION AGREEMENT
("Agreement") is entered into and effective the 31st day of October, 2000, for
services to begin November 1st, 2000, by and between VECTREN ENERGY DELIVERY OF
OHIO ("Buyer") and PROLIANCE ENERGY, LLC ("Seller") (collectively, the "Parties"
or individually "Party"). Buyer and Seller agree as follows:
RECITALS
1. Seller is a limited liability company created and existing under
the laws of the State of Indiana, with its registered office at
000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, Xxxxxxx.
2. Buyer is a corporation incorporated and existing under the laws
of the State of Ohio with its principal place of business in
Dayton, Ohio.
3. This Agreement contains the mutual promises and covenants
pursuant to which Buyer as a purchaser of natural gas and
portfolio administration services, and Seller as a merchant of
natural gas and portfolio administration services, shall perform
the transactions described herein.
4. Under this Agreement, Seller agrees to provide natural gas and
portfolio administration services consistent with the terms and
conditions contained herein.
5. Buyer has informed Seller that it is committed to the development
and implementation of a customer choice program. Seller agrees to
use its expertise to assist Buyer on gas supply issues during its
transition to customer choice.
DEFINITIONS
The following terms shall have the following definitions for this
Agreement and its Appendices:
1. The term "ANR" shall mean ANR Pipeline Company.
2. The term "Balancing Quantities" shall mean the quantity of Gas
which satisfies the difference between the Gas quantities
scheduled for delivery to Buyer's Delivery Points and the actual
physical flow of Gas taken by Buyer at the Delivery Points.
3. The term "Btu" shall mean British thermal unit, as defined in
Transporter's Tariff
4. The term "CGT" shall mean Columbia Gulf Transmission Corporation.
5. The term "DOM" shall mean Dominion Pipeline Company.
6. The term "customer choice program" refers to implementation of an
approved program for the unbundling of Buyer's gas supply sales
from its local distribution services to its residential and small
volume customers.
7. The term "Contract Month" shall mean a calendar month during the
effectiveness of this Agreement, as interpreted in light of
Transporter's Tariff.
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8. The term "Contract Rates" shall be the demand rates as described
in Appendix C.
9. The term "Day" shall be defined as it is defined in
"Transporter's Tariff," or as applied by "Transporter".
10. The term "Delivery Points" shall mean the points of delivery of
Gas from Seller to Buyer as specified in Appendix A.
11. The term "FERC" shall mean the Federal Energy Regulatory
Commission.
12. The term "Gas" shall mean natural gas.
13. The term "Maximum Daily Quantities" or "MDQ" shall mean the
maximum quantity of Gas which Seller shall be obligated to supply
on a firm basis to Buyer's Delivery Points on a particular day.
14. The term "Maximum Portfolio Entitlement" shall mean the maximum
deliverability that Buyer is entitled to under the contracts
identified on Appendix C.
15. The term "Maximum Seasonal Quantities" or "MSQ" shall mean the
maximum quantity of Gas which Seller shall be obligated to supply
on a firm basis to Buyer's Delivery Points in a Summer or Winter.
16. The terms "MMBtu", "Dekatherm" or "DTH" shall mean one million
(1,000,000) BTUs.
17. The term "Nominated Daily Quantities" shall mean the quantity of
Gas nominated on a particular day for delivery to Buyer's
Delivery Points, including deliveries to storage for Buyer.
18. The term "PEPL" shall mean Panhandle Eastern Pipe Line Company.
19. The term "Portfolio Contracts" shall mean all of the contracts
that may be utilized to deliver Gas to buyer, and which are
identified on Appendix C.
20. The term "Summer" shall mean the summer season months of April
through October, inclusive.
21. The term "TCO" shall mean Columbia Gas Transmission Corporation.
22. The term "TETCO" shall mean Texas Eastern Transmission
Corporation.
23. The term "Texas Gas" shall mean Texas Gas Transmission
Corporation.
24. The term "Transportation Credit" shall mean the Gas cost credit
specified in Appendix C.
25. The term "Transporter" shall mean the transporting pipeline(s)
interconnected with Buyer, including without limitation ANR, CGT,
PEPL, TETCO, Dominion or Texas Gas, as applicable to the
transaction involved.
26. The term "Transporter's Tariff" shall mean the tariff provisions
of Transporter, as approved by the FERC, or any successor
thereto, and Buyer's or Seller's contractual arrangements with
Transporter, including changes to such tariff and arrangements
made after this Agreement is effective.
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27. The term "TL" shall mean Trunkline Pipeline Company.
28. The term "Winter" shall mean the winter season months of November
through March, inclusive.
4
ARTICLE 1- GAS SALES
1.1. Seller represents, agrees and warrants that Seller can and shall
stand ready to provide on a firm basis for Buyer's purchase at Buyer's Delivery
points the daily and seasonal quantities of gas set forth herein.
1.2. During the term of this Agreement, unless Seller is unable to
meet Buyer's Gas requirements, Buyer agrees that Seller shall be its supplier of
Gas, either as its agent or as a vendor.
1.3. The Maximum Daily Quantities, which Seller shall be obligated to
provide on a firm basis at Buyer's Delivery Points, are specified in Appendix B.
1.4. The Maximum Seasonal Quantities during Winter or Summer, which
Seller shall be obligated to provide on a firm basis at the Delivery Points, are
specified in Appendix B.
1.5. Buyer shall cause to be assigned to Seller, and Seller shall
accept, subject to the terms and conditions of the applicable assignment and
this Agreement, all of the Portfolio Contracts. In the event a third party
consent for the assignment of any Portfolio Contract cannot be obtained, Seller
is hereby appointed as agent for all purposes to administer such contracts until
such time as such an assignment is effected. Under this Agreement, Seller may
fulfill its obligation to provide Gas to Buyer by using both the Portfolio
Contracts and contracts entered into by and between Seller and third parties,
including suppliers, pipelines and other service providers. Seller shall not be
obligated to enter into commitments with suppliers, pipelines, or other service
providers, which extend beyond the term or scope of this Agreement.
1.6. If FERC should determine that Transporter's Tariff shall cease to
apply, in whole or in part, to transactions hereunder, the Parties will promptly
meet to determine and negotiate mutually acceptable replacement guidelines and
standards. In that event, until an agreement is reached, the most recently
effective Transporter's Tariff shall continue to apply for all purposes under
this Agreement. Upon acceptance of the replacement guidelines and standards,
Buyer and Seller agree to apply the replacement guidelines and standards
retroactively to the cessation date of Transporter's Tariff. Any resolution
shall be implemented within thirty (30) days of the acceptance of the
replacement guidelines and standards.
ARTICLE 2- GAS SALES CHARGES
2.1. For all Maximum Portfolio Entitlements, Buyer shall pay Seller
each Contract Month the then-applicable Contract Rates specified in the
contracts listed in Appendix C in order for Seller to stand ready to deliver Gas
to Buyer's Delivery Points on a firm basis. Seller shall provide Buyer the
Transportation Credit specified in Appendix C.
2.2. Buyer shall pay Seller each Contract month the applicable supplier
reservation costs specified in Appendix D, as updated from time to time, as
provided in Article 6.
2.3. For all commodity quantities, Buyer shall pay Seller each Contract
Month an amount determined by multiplying the applicable Nominated Daily
Quantities and Balancing Quantities for the Contract Month, by the applicable
price per MMBtu as determined pursuant to the commodity pricing provisions of
Appendix E. These pricing provisions shall reflect pricing methods for Gas
supply, and all other variable costs incurred by Seller as provided in Appendix
E. The other variable costs shall include all applicable costs, including,
without limitation, transportation commodity or usage charges, injection and
withdrawal costs, volumetric surcharges, and fuel as reflected in each
Transporter's Tariff and the applicable service agreements.
5
2.4. Buyer will pay taxes, if any, which are imposed with respect to
Gas delivered hereunder and which are not reflected in the pricing methods in
Appendix E; provided, however, Buyer shall have no obligation to pay any sales
or use taxes for which it delivers to Seller an appropriate exemption
certificate.
ARTICLE 3- BALANCING
3.1. Seller shall provide Buyer with Balancing Quantities as part of
its gas sales and portfolio administration services. Balancing procedures shall
be agreed to by the Parties.
ARTICLE 4- PORTFOLIO ADMINISTRATION SERVICES
4.1. Seller's provision of portfolio administration services shall
include without limitation Gas acquisition, scheduling receipt and delivery
quantities with Gas suppliers and pipeline transporters, scheduling pipeline
storage inventory quantities, providing delivered Gas supplies, supply and
portfolio planning assistance, and periodic portfolio reporting. Buyer shall
retain complete unilateral control of its physical Gas delivery, distribution,
and transportation facilities.
4.2. Supply planning/gas control procedures agreed to by the Parties
will govern the preparation and implementation of supply plans.
4.3. Seller and Buyer shall review periodically Buyer's supply
requirements and determine the need for potential adjustments. All adjustments
are subject to Buyer's prior approval. Seller agrees that it will provide firm
pipeline transportation deliveries and Gas supply that will fully meet the MDQ
and MSQ of Buyer as set forth in the agreed upon supply plans. Replacement of
Portfolio Contracts shall be accomplished through an RFP process overseen by
Buyer.
4.4. As set forth in the recitals, Seller will administer the
Portfolio Contracts in a manner designed to minimize capacity costs in order to
reduce gas costs and potential stranded costs. In order to assist Buyer with its
implementation of a Customer Choice Program, Seller agrees to provide Buyer with
the opportunity to reduce its Maximum Daily Quantities and Maximum Seasonal
Quantities in accordance with the Portfolio Reduction Rights specified in
Appendix B.
4.5. Seller acknowledges that it will accept the assignment of
Portfolio Contracts under Section 1.5 subject to any existing rights of
transportation customers or other third parties to use that capacity, and
subject to any and all tariff obligations to assign or release capacity to
transportation customers or other third parties, including as part of a Customer
Choice Program. In the event this Agreement is terminated for any reason, Buyer
shall meet with Seller within five (5) days of notice of termination to reach
agreement on the timely return of capacity rights to Buyer. During such a
wind-up period, Seller shall continue to provide Buyer with necessary supply
services.
4.6. As compensation for these services, Buyer shall pay Seller those
fees set out in Appendix F of this Agreement.
6
ARTICLE 5- TERM
5.1. The services described above shall commence upon the date of
transfer of the gas distribution assets of Dayton Power & Light Company to
Buyer. The initial term of this Agreement shall be through October 31, 2005. If
neither Party terminates this Agreement by written notice at least twenty-four
(24) months prior to expiration of the initial term, the Agreement will remain
in effect for an additional one (1) year after the original expiration date.
Thereafter, the Agreement will continue year to year unless terminated by
written notice given at least twenty-four (24) months prior to the expiration
date of the then current Agreement.
5.2. The continuation of some or all of the Seller's services during
the term shall be subject to and contingent upon changes in Buyer's supply
requirements as a result of its implementation of a customer choice program.
ARTICLE 6- CHANGES TO APPENDICES
6.1. The Parties agree to make changes to Appendix A as necessary to
reflect changes in Buyer's Delivery Points.
6.2. The Parties agree to make changes, after timely notice, to
Appendix B as necessary to reflect changes in Buyer's MDQ and MSQ. Buyer agrees
to pay any appropriate cost increases resulting from these changes.
6.3. The Parties agree that Appendices C, D, E, and F will be subject
to change from time to time as provided in those Appendices.
6.4. The Parties agree that changes in Appendix G can be made by either
party at any time. Buyer or Seller may change the notice information in Appendix
G by providing new designations to the other party by registered or certified
mail.
6.5. The Parties agree that changes to Appendix H will occur only upon
mutual written agreement.
ARTICLE 7- OPERATIONS
7.1. Buyer and Seller agree to accept for purposes of this Agreement
the applicable quality, delivery pressure, measurement and other applicable
rules, procedures, guidelines, tariff provisions, contractual arrangements and
policies of suppliers or Transporters, as the same may change from time to time.
ARTICLE 8- FORCE MAJEURE
8.1. All obligations of the Parties to this Agreement shall be
suspended while and only for so long as compliance is prevented by a cause
beyond the control of the Party claiming force majeure, such as an Act of God,
war, civil disturbance, operational or performance failure or declaration of
force majeure by a supplier, leased storage field operator, transporter, or
other service provider, operational flow order(s), federal or state or local
law, or binding order of a court or governmental agency, provided the suspension
shall be only to the extent performance was prevented by the event of force
majeure and provided the Party claiming force majeure provides notice by
telephone or by telecopy with reasonably full particulars to the other Party at
or near the time the Party becomes aware of the force majeure. A Party claiming
force majeure hereunder shall have the duty to make all reasonable efforts to
remedy the force majeure condition as promptly as possible.
8.2. Notice of force majeure must be provided to the designated
representatives for Buyer or Seller designated in Appendix G.
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ARTICLE 9- PENALTIES
9.1. Seller shall be liable for all imbalance or other penalties,
cash-outs, or other costs imposed on Buyer or Seller by any third party,
including without limitation Seller's upstream or other transporters and
Transporters, to the extent that such penalties, cash-outs or other costs are
caused by Seller's actions or inaction. Buyer shall be liable for all imbalance
or other penalties, cash-outs, or other costs imposed on Buyer or Seller by any
third parties, including without limitation Seller's upstream or other
transporters and Transporters, to the extent that such penalties, cash-outs or
other costs are caused by Buyer's actions or inaction.
ARTICLE 10- BILLING AND PAYMENT
10.1. Following each Contract Month, Seller shall furnish, or have
furnished, an itemized statement to Buyer stating the amounts due Seller
pursuant to this Agreement (the "Statement"). Following the receipt of Seller's
Statement, Buyer shall make Payment by the due date. Invoice date, due date, and
payment method shall be as specified in Appendix H.
10.2. Interest shall accrue on all late payments commencing on the
applicable due date at the then current prime rate of Key Bank, Indianapolis,
Indiana, or its successor, or the maximum lawful rate, whichever is lower.
ARTICLE 11- REMEDIES
11.1. If Seller fails to deliver scheduled Gas and such failure to
deliver is not excused under this Agreement, then Seller shall reimburse Buyer
for the amount of increased cost to Buyer of acquiring replacement Gas. The
amount owed by Seller to Buyer hereunder shall be calculated as the product of
(a) the difference, if positive, between (i) the price paid for replacement Gas,
including any additional transportation, fuel and other variable costs incurred
to receive such replacement Gas, and (ii) the then applicable commodity charge,
and (b) the difference between the scheduled Gas and the quantity of Gas
actually delivered by Seller. Buyer and Seller agree to act in good faith with
respect to purchases of such replacement Gas so as to minimize Seller's
obligations to Buyer under this Section.
11.2. If Buyer fails to receive scheduled Gas and such failure to
receive is not excused under this Agreement, then Buyer shall reimburse Seller
in an amount calculated as the product of (a) the difference, if positive,
between (i) the then applicable commodity charge and (ii) the price received
from a third party purchaser, including any additional penalties,
transportation, fuel and other variable costs incurred to deliver Gas to a third
party purchaser, and (b) the difference between the scheduled Gas and the
quantity of Gas actually received by Buyer. Seller and Buyer agree to act in
good faith with respect to sales of such Gas to a third party purchaser so as to
minimize Buyer's obligations to Seller under this Section.
11.3. The Parties agree that the actual losses incurred by a Party as
a result of the other Party's failure to deliver or receive quantities of Gas
would be uncertain and impossible to determine with precision. As a result, the
remedies provided in Article 11 for the failure to deliver or receive certain
quantities of Gas, respectively, shall be the failing Party's entire and sole
liability to the non-failing Party, and the right to recover such remedies shall
be the non-failing Party's sole and exclusive remedy for the failing Party's
failure or breach of its obligation to deliver or receive the scheduled Gas
under this Agreement. The remedies provided pursuant to this Article are in lieu
of and exclude any and all other liabilities of the failing Party as may be
provided by contract, equity, or law for any such failures or breaches,
including, without limitation, the obligation of either Party to deliver or
receive quantities hereunder in relation to the sale or purchase of Gas to or
from other parties.
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ARTICLE 12- CORRESPONDENCE
12.1. Except as provided in Section 8.2, any notice, statement or xxxx
shall be in writing and shall be duly delivered when (a) mailed, postage
prepaid, by registered, certified, or first-class mail, or (b) sent by prepaid
overnight delivery to the applicable address, or (c) sent by hand delivery, or
(d) sent by facsimile directed to the appropriate person and facsimile number
with hand copy also delivered as in (a), (b), or (c) above. Addresses, telephone
numbers, and facsimile numbers are specified in Appendix G.
ARTICLE 13- MISCELLANEOUS
13.1. This Agreement is subject to all applicable laws, orders, rules,
and regulations of any state or federal governmental body or official having
jurisdiction and both Seller and Buyer agree that the transactions agreed to
hereunder shall be conditioned upon compliance with all such laws, orders, rules
and regulations.
13.2. Seller and Buyer expressly agree that laws of the State of Ohio
shall govern the validity, construction, interpretation, and effect of this
Agreement.
13.3. Either Party may pledge, mortgage, or assign its rights
hereunder as security for indebtedness. This Agreement is otherwise
non-assignable except with the prior written consent of Buyer and Seller.
13.4. This Agreement is conditioned on the continued solvency of Buyer
and Seller. If one Party becomes insolvent or seeks bankruptcy relief, the other
party may prospectively terminate this Agreement on prior written notice without
further obligation other than to pay for services or Gas previously provided.
Parties will implement wind-up provisions that are designed to reallocate the
Portfolio Contracts assigned in this Agreement in a fashion that will
re-establish the parties to as close as possible to their condition prior to the
execution of this Agreement.
13.5. Notwithstanding any other provisions herein, the Parties hereto
waive any and all rights, claims, or causes of action arising under this
Agreement for incidental, consequential or punitive damages.
13.6. Neither Buyer nor Seller intends for the provisions of this
Agreement to benefit any third party. No third party shall have any right to
enforce the terms of this Agreement against Buyer or Seller.
13.7. The Parties acknowledge that their respective business records
and information are confidential in nature and may contain proprietary and trade
secret information. Notwithstanding the foregoing, Seller agrees to provide
Buyer access to those records required to verify Seller's Statements to Buyer.
Confidential records and information in the possession of either Party shall not
be divulged to third parties without prior consent of the other Party.
13.8. No waiver by either Party of one or more defaults or breaches by
the other in performance of any of the terms or provisions of this Agreement
shall operate or be construed as a waiver of any future default or breach,
whether of a like or of a different character.
13.9. The terms and conditions contained in this Agreement and its
Appendices herein constitute the full and complete agreement between the Parties
and any change to be made must be submitted in writing and executed by both
Parties.
9
13.10. Each Party represents that it has all necessary power and
authority to enter into and perform its obligations under this Agreement and
that this Agreement constitutes a legal, valid and binding obligation of that
Party enforceable against it in accordance with its terms, except as such
enforceability may be affected by any bankruptcy law or the application of
principles of equity.
13.11. In the event any of the terms, covenants or conditions of this
Agreement, or any amendment hereto, or the application of any such terms,
covenants or conditions shall be held invalid as to any Party or circumstance by
any court having jurisdiction, all other terms, covenants, or conditions of this
Agreement, or any amendment hereto, and their application, shall not be affected
thereby and shall remain in full force and effect.
13.12. If any provision of this Agreement is declared or rendered
unlawful by a court of law or regulatory authority with jurisdiction over either
of the parties or deemed unlawful because of a statutory or other change in the
law, or if either Party suffers a substantial economic detriment due either to a
determination relating to this Agreement by such an authority, or as a result of
fundamental changes in the marketplace or other substantial changes in existing
circumstances, the Parties will promptly meet to determine and negotiate a
mutually acceptable agreement on such replacement provisions necessary to
maintain the benefits and obligations that arise under this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in
duplicate originals.
"SELLER"
PROLIANCE ENERGY, LLC
By:/s/ Xxxxx X. Peak
------------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
"BUYER"
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Interim President
10
Gas Sales And Portfolio Administration Agreement
APPENDICES INDEX
Buyer's Primary Delivery Points A
Buyer's Maximum Quantities B
Portfolio Information C
Supplier Reservation Costs D
Commodity Purchases E
Portfolio Administration Service Fees F
Notices G
Invoice/Payment Data H
11
Gas Sales And Portfolio Administration Agreement
Appendix A Original Page No. 1
APPENDIX A - Buyer's Primary Delivery Points
Buyers Delivery Points - Appendix A
Meter Number Name Pipeline
124974 Farmersville ANR
153871 Lebanon/Xxxxxxx ANR
108796 Lebanon/Red Lion ANR
33 Dayton Power and Light Columbia Gas Transmission
02830 Xxxx Xxxx Panhandle Eastern
2559 Hollansburg Panhandle Eastern
DAYPL Rurals Panhandle Eastern
00000 Xxxx Xx. Xxxxx Xxxxxxx
00000 Farmersville Texas Eastern
72906 Xxxxxxx Texas Eastern
72909 Red Lion Texas Eastern
72902 Xxxx Xxxx Texas Eastern
1720 Lebanon-Dayton Texas Gas
Amendment
Seller and Buyer Agree that this Appendix A may be amended as provided
in this Agreement, which amendment ultimately will be memorialized in a revised
Appendix A.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
--------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
----------------------
Xxxxxxx X. Xxxxxx
Interim President
12
Gas Sales And Portfolio Administration Agreement
Appendix B Original Page No. 1
APPENDIX B - Buyer's Maximum Quantities
Maximum Daily Quantities (DTH)
April 295,901
----------------------------------------
May 117,269
----------------------------------------
June 81,056
----------------------------------------
July 46,146
----------------------------------------
August 34,730
----------------------------------------
September 76,591
----------------------------------------
October 201,074
----------------------------------------
November 387,740
----------------------------------------
December 559,798
----------------------------------------
January 559,798
----------------------------------------
February 559,798
----------------------------------------
March 417,016
----------------------------------------
13
Gas Sales And Portfolio Administration Agreement
Appendix B Original Page No. 2
APPENDIX B - Buyer's Maximum Quantities
Maximum Seasonal Quantities (DTH)
Summer (Projected) 12,098,902
Winter (Projected) 37,470,267
---------------------------------
Annual 49,569,169
Reduction Rights
In order to assist Buyer with the implementation of its Customer Choice
Program, Seller agrees to provide Buyer with the ability to reduce the amount of
capacity under contract for its system supply requirements, thereby mitigating
the level of gas costs and the amount of stranded capacity costs. Prior to
October 31st of each of the years listed below, and effective twelve (12) months
after the notification date , the Parties will determine whether the level of
system supply demand has been or will be reduced, and based upon this
evaluation, the Buyer shall have the right to notify Seller of its request to
reduce the amount of capacity and storage services received and paid for under
this Agreement up to or equal to the percent reductions listed:
Year Reduction Amount Cumulative Rights
---- ---------------- -----------------
October 31, 2002 5% 5%
October 31, 2003 8% 13%
October 31, 2004 10% 23%
Any reduction shall be in the amount of peak and average day
deliverability to Buyer's system provided by the Portfolio Contracts at that
time, and shall include appropriate reductions for both storage deliverability
and firm transportation. The reductions shall also be spread between Buyer's
various pipeline portfolio delivery entitlements in a manner agreed to by the
Parties. Buyer shall provide written notice to Seller in accordance with this
Agreement. Pursuant to the Cumulative Rights, if Buyer does not exercise its
full reduction rights in a given year, it may in a succeeding year exercise
reduction rights up to the amount of the cumulative rights provided for above.
Amendment
Seller and Buyer Agree that this Appendix B may be amended as provided
in this Agreement, which amendment ultimately will be memorialized in a revised
Appendix B.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
--------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Interim President
14
Gas Sales And Portfolio Administration Agreement
Appendix C Original Page No. 1
APPENDIX C - Portfolio Information
I. Contracts and Contract Rates
The applicable demand costs shall be determined based upon the rates
and charges specified in each Transporter's Tariff including any applicable
direct bills, surcharges, or as other costs specified by the sheets identified
below, or other applicable sheets, as all of those sheets may be in effect from
time to time, and costs arising under applicable agreements, including the
agreements identified below, as well as this Agreement. While Seller and Buyer
agree that the identified tariff sheets and agreements are intended to be a
complete listing of the applicable tariff sheets and applicable agreements, they
further agree that the omission of the reference of one or more sheets or
agreements from that list will not affect Buyer's obligation to Seller for
rates, charges and costs incurred thereunder. Seller shall provide to Buyer all
Transporter refunds that are derived from rate case settlements or
administrative adjudications that are received by Seller relative to Contracts
or Contract Rates referenced below or relative to any agreements referencing the
contracts below.
Contracts and Contract Rates
Pipeline Contract Contract Type Contract Rate
ANR
99914 FTS-1 Sheet No. 7
99915 GF-1 Sheet No. 68G
Columbia Gas
37995 FSS Sheet Xx. 00
00000 XXX Sheet No. 26
38097 FTS Sheet No. 25
57908 FTS Sheet Xx. 00
Xxxxxxxx Xxxx
00000 XXX-0 Xxxxx Xx. 00
Xxxxxxxxx
00000 XXX Sheet Xx. 0
00000 XXX Xxxxx Xx. 0
00000 XXX Tariff Letter
15567 FS Sheet No. 11
Texas Eastern
830027 FT-1 Tariff Letter
870170 LLFT Tariff Letter
870173 LLFT Tariff Letter
870172 LLFT Tariff Letter
Texas Gas
T006057 FT Sheet No.11
Trunkline
14878 EFT Tariff Letter
15435 EFT Tariff Letter
15
Gas Sales And Portfolio Administration Agreement
Appendix C Original Page No. 2
II Transportation Credit
1. Seller shall provide to Buyer, as a credit against the Contract Rates, a
Transportation Credit ("TC") for the sale from the Buyer to Seller of
projected available annual portfolio entitlements.
2. For purposes of determining the TC, the value of projected available
entitlements sold to Seller has been agreed to based upon publicly reported
pricing data from Inside FERC and Gas Daily publications at applicable
supply and delivery points. The base year amount of projected available
entitlements is based upon the 2000/2001 gas supply plan.
3. The Transportation Credit shall be recalculated once per year prior to
October 31st, to reflect changes in projected available annual
entitlements, based on the following formula:
TC Base TC x Projected Available Annual Entitlements
Base Available Annual Entitlements
Where: a. Base TC = $1,388,609
b. Base Available Annual Entitlements = 19,045,012 Dth
c. Projected Available Annual Entitlements = Total Entitlements -
Normal Demand
(i) Total Entitlements are the sum of the quantities of long haul
pipeline transportation entitlements reserved by Buyer.
(ii) Normal Demand is the projected normal weather quantity of
Buyer's firm long haul pipeline deliveries for firm customers.
4. The TC shall be divided among months based upon the projected available
monthly entitlements.
Amendment
Seller and Buyer Agree that this Appendix C may be amended as provided
in this Agreement, which amendment ultimately will be memorialized in a revised
Appendix C.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
--------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Interim President
16
Gas Sales And Portfolio Administration Agreement
Appendix D Original Page No. 1
APPENDIX D - Supplier Reservation Costs
I. Reserved Commodity Quantities
a. Monthly Baseload Reserved quantity (DTH)
b. Daily Swing Reserved quantity (DTH)
II. Applicable Reservation Rates ($____ DTH/day)
Winter Months Summer Months
------------- -------------
Monthly Index Daily Index Monthly Index Daily Index
Reserved Quantity Reserved Quantity Reserved Quantity Reserved Quantity
Amendment
Seller and Buyer Agree that this Appendix D may be amended as provided in
this Agreement, which amendment ultimately will be memorialized in a revised
Appendix D.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
---------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Xxxxxxx X. Xxxxxx
Interim President
17
Gas Sales And Portfolio Administration Agreement
Appendix E Original Page No. 1
APPENDIX E -Commodity Purchases
This Appendix E addresses the gas supply and other variable costs
applicable to Nominated Daily Quantities and Balancing Quantities as identified
below.
Monthly Baseload Purchases:
Buyer shall pay to Seller each Contract Month an amount determined by
multiplying the monthly baseload quantities of Gas scheduled for Buyer's
purchase under this Agreement during the Contract Month, by a price per MMBtu
determined using the first monthly index from Inside FERC's GAS MARKET REPORT in
the table "PRICES OF SPOT GAS DELIVERED TO INTERSTATE PIPELINES" for the
applicable zone, specified below, for the applicable month, plus all other
applicable variable costs as identified below shall apply.
o ANR Pipeline Co. - Louisiana
o Columbia Gas Transmission Corp. - Appalachia
o Columbia Gulf Transmission Corp. - Louisiana
o Panhandle Eastern Pipeline Co. -Oklahoma
o Trunkline Gas Co. -Louisiana
o Texas Gas Transmission - Zone SL
o Texas Gas Transmission - Zone 1
o CNG Transmission Corp. - Appalachia
Daily Swing Purchases:
Buyer shall pay to Seller each Contract Month an amount determined by
summing all applicable "Daily Amounts" for the Contract Month. A "Daily Amount"
shall be calculated for each day during the Contract Month for which daily swing
quantities of Gas have been confirmed for purchase. The "Daily Amounts" shall be
determined by multiplying (a) the confirmed swing quantities of gas scheduled
for the particular day of the Contract Month, by (b) a price per MMBtu
determined using the arithmetic average of the high and low prices in the price
range reported in Gas Daily, in the table "DAILY PRICE SURVEY," for the
applicable zone, specified below, for the applicable day. As to any day for
which Gas Daily for any reason (e.g. holidays and weekends) does not publish the
above referenced prices, the applicable prices shall be that utilized for the
last prior day such is published. In addition, all other applicable variable
costs as identified below shall apply.
o Louisiana Onshore South - ANR
o Louisiana Onshore South - Columbia, Mainline
o Louisiana Onshore South - Texas Gas SL
o Louisiana Onshore South - Trunkline ELA
o Oklahoma - PEPL
o Appalachia - CNG South Point
o Appalachia - Columbia, App.
o East Texas - North Louisiana Area - Texas Gas (entire Z1)
18
Optional Diversified Pricing:
For any purchases of monthly or daily supplies that Buyer decides to
purchase at prices based on fixed or collared contracts, or using other
alternative pricing methods, pricing shall be at market terms as negotiated by
the Parties.
For Summer Storage Refill:
For summer refill of leased storage, Buyer shall pay to Seller an
amount based on averaging the seven summer monthly indices for the applicable
supply area, and based upon presuming storage refill quantities to be equally
split between the summer months.
19
Gas Sales And Portfolio Administration Agreement
Appendix E Original Page No. 2
For Storage Withdrawals:
For quantities of storage withdrawals for which Buyer has previously
paid for commodity, applicable storage withdrawal variable costs as identified
below shall apply.
For Applicable Indices:
System Applicable Monthly Indices
-------------------------------- ---------------------------------------------
ANR Pipeline Co. IF - ANR Pipeline Co. - Louisiana
-------------------------------- ---------------------------------------------
Columbia Gas Transmission IF - Columbia Gas Transmission Corp. -
Appalachia
-------------------------------- ---------------------------------------------
Columbia Gulf Transmission IF - Columbia Gulf Transmission Corp. -
Louisiana
-------------------------------- ---------------------------------------------
Panhandle Eastern Pipeline Co. IF - Panhandle Eastern Pipeline Co. -Oklahoma
-------------------------------- ---------------------------------------------
Trunkline Gas Co. IF - Trunkline Gas Co. -Louisiana
-------------------------------- ---------------------------------------------
Texas Gas Transmission IF - Texas Gas Transmission - Zone SL
-------------------------------- ---------------------------------------------
Texas Gas Transmission IF - Texas Gas Transmission - Zone 1
-------------------------------- ---------------------------------------------
20
Gas Sales And Portfolio Administration Agreement
Appendix E Original Page No. 3
APPENDIX E- Commodity Purchases - Other Variable Costs
The other variable costs applicable to Nominated Daily Quantities and
Balancing Quantities shall be determined based upon the rates and charges
applicable under each transporter's tariff including the sheets identified
below, as well as other applicable sheets, as all of those sheets may be in
effect from time to time, and costs arising under applicable agreements,
including the agreements identified below, as well as this Agreement.
PEPL Contract No. Contract Rate
ANR Contract No. Contract Rate
Texas Gas Contract No. Contract Rate
Texas Eastern Contract No. Contract Rate
While Seller and Buyer agree that the identified tariff sheets
and agreements are intended to be a complete listing of the applicable tariff
sheets and applicable agreements, they further agree that the omission of the
reference of one or more sheets or agreements from that list will not affect
Buyer's obligation to Seller for rates, charges and costs incurred thereunder.
Amendment
Seller and Buyer Agree that this Appendix E may be amended as provided
in this Agreement, which amendment ultimately will be memorialized in a revised
Appendix E.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
-------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Interim President
21
Gas Sales And Portfolio Administration Agreement
Appendix F Original Page No. 1
APPENDIX F - Portfolio Administration Service Fees
Portfolio Administration Service Fee
In each month of year one of the initial term of this Agreement, Buyer
shall pay to Seller a fee equal to one-twelfth of $450,000, which shall be
referred to as the "Base Year Amount". For purposes of this Appendix F, year one
shall be the twelve-month period beginning October 1, 2000. In year two, the
Base Year Amount shall be adjusted to reflect the annual effect of the
application of the Consumer Price Index for the preceding year, minus a
productivity factor of one percent, provided that, in no event shall the
adjustment be a negative number. The Base Year Amount shall be similarly
adjusted each year during the initial term of the Agreement, each annual
adjustment being cumulative of all prior adjustments.
The Parties agree that in the event there occurs a material change in
the circumstances which resulted in the execution of this Agreement, e.g.,
fundamental change in the natural gas market place or a significant change in
the nature or extent of the services to be provided or received hereunder, and
which materially impacts the portfolio administration service costs, the Parties
will negotiate in good faith to account for that material change in the
circumstances and to adjust the portfolio administration service fee
accordingly.
Amendment
Seller and Buyer agree that this Appendix F may be amended from time to
time by mutual agreement of the Parties, which ultimately will be memorialized
in a revised Appendix F.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
-------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTRON ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Interim President
22
Gas Sales And Portfolio Administration
Appendix G Original Page No. 1
APPENDIX G - Notices
--------------------------------- ------------------------------------
Invoice Information:
-------------------
Buyer: Seller:
----- -------
Vectren Energy Delivery of Ohio X. Xxxxx
Corporate Accounting ProLiance Energy, LLC
Attn: Xxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxx Xxxxxxxx Xxxxxx Xxxxxxxxxxxx, XX 00000-0000
Xxxxxxxxxxxx, XX 00000 (000) 000-0000
(000) 000-0000
---------------------------------- -----------------------------------
Payments:
--------
Buyer: Seller
----- -------
National City Bank Bank One
For the Account of: For the Account of
Vectren Energy Delivery of Ohio ProLiance Energy, LLC
---------------------------------- -----------------------------------
Supply Plans/Operational/Force Majeure:
Buyer: Seller:
----- -------
Supply Plans Xxxxx Xxxxx
Xxxxx Xxxxxxxx (000) 000-0000
(000) 000-0000
---------------------------------- ----------------------------------
Operational Operational
----------- -----------
Xxxxx Xxxx Xxxxx Xxxxx
(000) 000-0000 (000) 000-0000
---------------------------------- ---------------------------------
23
Gas Sales And Portfolio Administration
Appendix G Original Page No. 2
APPENDIX G - Notices
-------------------------------------- -------------------------------
Force Majeure Force Majeure
------------- -------------
Xxxxx Xxxx (000) 000-0000 Xxxxx Xxxxx
Xxxxx Xxxxxxx (000) 000-0000 (000) 000-0000
Gas Controller on Duty (000) 000-0000 ProLiance Energy, LLC
Vectren Energy Delivery of Ohio 000 Xxxxxxxx Xxxxxx, Xxxxx 0000
0000 Xxxxx Xxxxxxxx Xxxxxx Xxxxxxxxxxxx, XX 00000-0000
Xxxxxxxxxxxx, XX 00000 (000) 000-0000 (Telecopy)
(000) 000-0000 (Telecopy)
-------------------------------------- -------------------------------
All Other Notices: All Other Notices:
Buyer: Seller:
------- -------
Gas Control Department ProLiance Energy, LLC
Attn: Xxxxx Xxxx Attn: Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxxxx 000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000-0000
-------------------------------------- -------------------------------
Amendment
Seller and Buyer agree that this Appendix H may be amended from time to
time by mutual agreement of the Parties, which amendment ultimately will be
memorialized in a revised Appendix H.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Peak
-----------------------------
Xxxxx X. Peak
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Xxxxxxx X. Xxxxxx
Interim President
24
Gas Sales And Portfolio Administration Agreement
Appendix H Original Page No. 1
APPENDIX H- Invoice/Payment Data
Invoice Date - On or before the tenth (10th) day after the Contract Month.
Due Date - Ten (10) days after receipt of invoice.
Payment Method - By wire transfer to account specified on invoice.
Amendment
Seller and Buyer agree that this Appendix H may be amended from time to
time by mutual agreement of the Parties, which amendment ultimately will be
memorialized in a revised Appendix H.
PROLIANCE ENERGY, LLC
By: /s/ Xxxxx X. Xxxxxx
----------------------------
Xxxxx x. Xxxxxx
Its: Senior Vice President
Trading and Gas Supply
VECTREN ENERGY DELIVERY OF OHIO
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
Interim President