AQUILA, INC. d/b/a AQUILA NETWORKS LARGE VOLUME TRANSPORTATION SERVICE AGREEMENT (Iowa)
Exhibit 10.10
AQUILA, INC. d/b/a AQUILA NETWORKS
LARGE VOLUME TRANSPORTATION
(Iowa)
This Agreement is entered into effective at the date shown below, by and between Aquila, Inc.,
d/b/a Aquila Networks (“Company”) and Customer, whose name and service address are identified
below.
Whereas, Customer has obtained or will obtain supplies of natural gas and desires Company to
receive such natural gas and transport and deliver such gas to Customer, and to provide certain
other related services to Customer; and
Whereas, Company is willing to provide natural gas transportation and related services to
Customer, subject to the terms and conditions set forth herein.
Now, therefore, in consideration of the above premises and the covenants contained herein,
Company and Customer agree as follows:
1. Availability: Service under this Agreement is available to any large volume
customer as defined in accordance with Company’s then current rate schedules. Customers with
multiple service locations may include premises served under the Company’s Small Volume and General
Service rate schedules if other premises are served under the Large Volume rate schedules.
2. Character of Service. Service hereunder shall be offered on a non-discriminatory
firm and/or interruptible basis contingent upon adequate system capacity.
3. Confirmation Regarding Interruptible Service Customers electing interruptible
service hereby confirm the customer has an alternate fuel capacity or is willing to discontinue gas
service during periods of curtailment. Customer represents that it meets the service requirements
for transportation service under this Agreement.
4. Pipeline Capacity Assignment. Large volume customers who convert to transportation
service may be required to take assignment to pay for, at the option of the Company, firm
interstate natural gas pipeline capacity and supplies designated by Company for a period of up to
one year. Service will be provided on a firm basis only if Customer has arrange firm
transportation for such gas supplies on the interstate pipeline serving Company’s distribution
system.
5. Governing Tariff. Service hereunder is provided by Company pursuant to its
Transportation Rate Schedule, and pursuant to the General Rules, Regulations, Terms and Conditions,
including but not limited to provisions governing pipeline charges, nominations, payment and
penalties, all as contained in Company’s Gas Tariff on file with the Iowa Utilities Board (“IUB”),
as the same may be amended, modified or superseded from time to time (the “Tariff”).
6. Customer Obligations for Firm Service: Customer agrees to provide and
maintain the following:
A. Firm Transportation Rights. Customer represents to Company that it has and will
maintain, or will have and maintain at all relevant times, firm transportation pipelines
upstream of Company’s natural gas distribution system in the community(ies) of service to
deliver on a firm basis all volumes of gas to Company for Customer’s accounts identified on
Exhibit “A” attached hereto. In the event any such firm transportation rights are
terminated or limited in any manner so that Customer is unable to deliver gas to Company’s
natural gas distribution system as required herein, then Customer shall immediately notify
Company in writing sent by facsimile to the fax number provided in Section 16.
B. Telemetry. Customers must install telemetry equipment acceptable to Company. Customer
must reimburse Company for the cost of all on-site plant investments, including telemetry
equipment, installed by Company to provide transportation service to Customer. The
telemetry equipment and any other improvements shall remain the property of Company and will
be maintained by the Company. Customer shall also provide telephonic access and service to
this telemetry equipment acceptable to Company.
7. Optional Aggregation Service: A Marketer may combine a group of transportation Customers
that (a) have the same balancing provisions (b) are located on the same interstate pipeline system
and (c) are within the same interstate pipeline operational zone. If the Marketer purchases this
aggregation service, the aggregated group will be considered as one Customer for purposes of
calculating the daily scheduling penalties and monthly imbalances, i.e., individual Customer
nominations and consumption will be summed and treated as if they were one Customer. This does not
include aggregation of fixed costs of customer charges. The cost of this aggregation service is
$0.04 per Mcf of gas delivered to the aggregated group.
8. Charges: Customer shall be responsible for and shall pay to Company the following
charges for the periods indicated or as otherwise applicable:
Transportation
Administration
Charge:
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$150 per month per facility for administrative costs relating to transportation service. Facility shall include all meters under common ownership behind the same town border station (TBS). | |
Customer Charge:
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The applicable sales tariff basic monthly charge for which Customer would otherwise qualify, subject to change as may be approved by the IUB from time to time. | |
Capacity Charge:
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If applicable, the amount is set forth in Customer’s then current regular sales tariff schedule. |
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Delivery Charge:
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All volumes received by Customer hereunder shall be charged a rate equal to the tariff volumetric delivery omponent of Company’s rate then in effect under its sales rate schedule for such Customer. In addition, Customer must pay for all fixed gas costs assigned to Customer in the regular sales tariff rate. Fixed gas costs could include, but are not limited to: Daily Firm Capacity Charges and Annual Cost Adjustment Charges. Additional costs will be assigned as they are authorized by the FERC or the IUB to be charged for transportation services, including but not limited to take-or-pay costs, TCR costs, and GRI costs. In addition, all volumes delivered from system gas supply shall be charged the rate set forth in the appropriate Company’s sales tariff schedule. | |
Optional Services:
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The following service, described in Company’s Tariff are available at Customer’s option: Aggregation Service |
Customer has elected and agreed to purchase the optional services designated in Section...herein,
if any. Customer agrees to pay the charges associated therewith according to and as set forth in
Company’s Tariff as amended from time to time. Customer shall, upon request of Company, execute
such agreements as Company deems necessary or appropriate to effectuate the applicable services.
9. Term:
This Agreement shall remain in effect for a primary term of
five W.A.S. years from
the date service commences hereunder, and thereafter from year to year until canceled by either
party with notice as required in Company’s then current tariffs.
10. Pipeline Charges; Capacity Assignment: Any charges that Company incurs from a
pipeline on behalf of Customer will be passed through to Customer.
11. Regulatory Commission Authority: The provisions of this Agreement are subject to
Company’s Tariff, including but not limited to force majeure provisions, all valid legislation with
respect to the subject matter hereof and to all present and future orders, rules, and regulations
of the Iowa Utilities Board (“IUB”) and any other regulatory authorities having jurisdiction over
(i) the transportation of natural gas contemplated hereunder, or (ii) the construction and
operation of any facilities required to deliver said natural gas. Customer agrees that Company
shall have the right to unilaterally make and to file with any and all regulatory bodies exercising
jurisdiction, now or in the future, changes in rates or new rates or any other changes to Company’s
Tariff, and that Customer shall be bound by such changes or new rates as are approved by such
regulatory bodies. In the event of any conflict between the terms of this Agreement and the
Tariff, the Tariff shall control.
12. Acknowledgment of Transportation Risks: Customer hereby acknowledges and accepts
the following risks and requirements associated with transporting gas:
| A. | the risk that Customer may incur penalties for unauthorized takes, balancing and scheduling charges, and any charges Company incurs from the pipeline on behalf of Customer; and |
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| B. | The Risk that Customer must stop using gas when notified by Company or by Customer’s gas supplier of any interruption affecting Customer’s gas supply of transportation service. |
13. Indemnification: In addition to indemnifications included above, Customer (the
“Indemnifying Party”) will indemnify, hold harmless and defend Company and its officers, directors,
shareholders, agents, employees, and representatives (collectively, the “Indemnified Party”) from
all claims, liabilities, fines, interest, costs, expenses and damages (including reasonable
attorneys’ fees) incurred y the Indemnified Party (collectively the “Indemnified Losses”), for any
damage, injury, death, loss or destruction of any kind to persons or property, to the extent the
damage, injury, death, loss or destruction arises out of or is related to the conduct, negligence,
willful misconduct, misrepresentation, or other breach of this Agreement on the part of the
Indemnifying Party or any of its representatives, agents, employees or contractors.
14. Assignment: Customer may not assign this Agreement, in whole or in part, or
delegate any of its obligations under this Agreement with the prior written consent of Company.
15. Entire Agreement: This Agreement and Company’s tariff constitute the entire
agreement of the parties with respect to the subject matter hereof, and supersedes and replaces all
other prior or contemporaneous agreements between the parties regarding such subject matter.
16. Notices: Notices required or otherwise given under this Agreement, except notices
specifically allowed to be provided by facsimile, shall be given in writing and mailed by first
class mail to the other party at the addresses provided below:
Company:
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Customer: | |
Aquila, Inc. d/b/a Aquila Networks Attention: Xxxxx X. Xxxxxxx 0000 Xxxxx Xxxxx Xx. Xxxxxxx, XX 00000 Telephone: 000-000-0000 x00 Fax: 000-000-0000 Gas Supply Services Division Attention: GSS 0000 Xxxxxxx Xxxxxx Xxxxx, XX 00000 Telephone: 000-000-0000 Fax: |
Company: Western Dubuque BioDiesel Attention: Xx Xxxxxx, Manager Address: 00000 Xxxxxxxxx Xxxx Xxxx, Xxxxx: Farley, IA ZIP Code: 52046 Telephone: 000-000-0000 Fax: |
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17. Customer Elections
Election of Interruptible and Firm Units
Daily Interruptible Xxxxx 0 XXXxx
Daily Firm Units: 500 MMBtu
Daily Interruptible Xxxxx 0 XXXxx
Daily Firm Units: 500 MMBtu
Election of Optional Services
Aggregation Service X
Aggregation Service X
The parties have executed this Agreement effective the date first above written.
| Aquila, Inc., d/b/a | ||||||||
| Aquila Networks | Amaizing Energy Corp., L.L.C.
(Print customer name) |
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By: Name: |
/s/ Xxxxx X. Xxxxxxx
|
By Name: |
/s/ Xxxxxxx X. Xxxxxxxxx
|
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Title:
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Customer Relations | Title: | Chairman | |||||
Date:
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12-16-06 | Date: | 12/15/06 | |||||
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This Addendum is made and entered into effective the 10th day of January, 2007, by and
between Aquila, Inc., d/b/a Aquila Networks (“Company”) and Western Dubuque BioDiesel, LLC.
(“Customer”).
WHEREAS, Company and Customer have entered into an Large Volume Transportation Service
Agreement dated December 15, 2006 (the “Transportation Agreement”) pursuant to which Company agreed
to transport on its distribution system quantities of gas on behalf of Customer on an interruptible
basis, on the terms and conditions specified in the Transportation Agreement; and
WHEREAS, Company and Customer desire to amend certain provisions of the Transportation
Agreement.
NOW THEREFORE, the parties agree as follows:
1. Minimum Annual Throughput and Rate. Customer agrees to transport, under the
Transportation Agreement, an annual total of at least 110,000 MMBtu (“Minimum Annual Throughput”)
during the period June 1, 2007 through May 31, 2012. Customer shall be responsible and shall pay
to Company the following charges for the periods indicated or as otherwise applicable:
Customer Charge:
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$150.00 per month | |
Monthly Transportation Charge:
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$150.00 per month | |
Firm Demand Charge:
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$250.50 per month (Maximum Daily Quantity of 000 XXXxx times $0.501) | |
Commodity Charge:
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For all gas transported by Customer under the Transportation Agreement, including the Minimum Annual Throughput, Customer shall pay Company the Company’s applicable approved Large Volume transportation rate (“Commodity Charge”). |
All other charges applicable to transportation service provided to Customer, as set forth in
Company’s tariff, shall apply to gas transported under the Transportation Agreement. If Customer
does not transport at least the Minimum Annual Throughput during the appropriate throughput
periods, Customer will pay at the end of each year to Company the appropriate rate multiplied by
the difference between the actual throughput and the Minimum Annual Throughput. Such payment shall
not be used as a credit for any gas transported in years subsequent to the throughput period.
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2. Transportation of Additional Quantities. Subject to the Transportation Agreement,
Company agrees to transport to Customer additional quantities of gas delivered to
Company by or on behalf of Customer to Company at such times that there is adequate
distribution system capacity, and according to Company’s currently effective tariff.
3. Term. The Transportation Agreement shall remain in effect for five year(s) from the
date service commences hereunder (“Original Term”). The terms of this addendum shall remain in
effect after the Original Term until a new agreement can be executed by both parties. The parties
agree to negotiate, in good faith, a replacement Transportation Agreement to be effective upon the
expiration of the Original Term.
4. Regulatory Jurisdiction. If any regulatory body directly or indirectly asserts
jurisdiction and significantly changes the rules and regulation applicable to the Transportation
Agreement, which thereby makes performance hereunder commercially impracticable by either Party,
then the party so affected shall have the right to terminate the Transportation Agreement upon
thirty (30) days written notice to the other.
5. Creditworthiness. As part of this agreement, Customer will post a performance bond
or irrevocable Letter of Credit to Company in the amount of $145,165 to guarantee the financial
obligations to Aquila for any unrecovered construction costs incurred on behalf of Customer. This
credit protection will be reduced annually to reflect the volumes delivered by Customer. For each
year the Customer consumes the Minimum Annual Throughput described herein, commencing June 1, 2008
the performance bond of Letter of Credit will be reduced, twenty percent (20%), At such time as
445,000 MMBtu are delivered to and paid for by Company, there will no longer be a bond or Letter of
Credit required. In the event Customer does take the minimum 445,000 MMBtu or does not pay for
such volumes during the term of this Agreement, Company may draw down the entire remaining balance
of the bond or Letter of Credit.
6. Capacity. For a period of five years from the execution of this addendum, Aquila will not
require an additional contribution in aid of construction (CIAC) for delivery of natural gas up to
76 dekatherms per hour to Customer on Aquila’s line that runs from the town border station (TBS) to
Company’s plant at 00000 Xxxxxxxxx Xxxx, Xxxxxx, XX 00000. If an increase above 76 dekatherms per
hour is requested, Aquila reserves the right to require an additional CIAC for the increase in load
over 76 dekatherms per hour. Aquila does not and will not represent or guarantee that the town
border station will have all or part of the capacity to serve the additional load.
7. Effect of Addendum. Except as otherwise provided herein, the Transportation
Agreement shall remain in full force and effect according to their respective terms.
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IN WITNESS WHEREOF, the parties have executed this Addendum as of the date first above
written.
| Aquila, Inc., d/b/a | ||||||||
| Aquila Networks | Western Dubuque BioDiesel, LLC (Print customer name) |
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By: Name: |
/s/ Xxxxx X. Xxxxxxx
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By Name: |
/s/ Xxxxxxx X. Xxxxxxxxx
|
|||||
Title:
|
Customer Relations Mng | Title: | Chairman | |||||
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