Columbia Gas Transmission, LLC FERC NGA Gas Tariff Baseline Tariffs Proposed Effective Date: September 1, 2011 Service Agreement No.

Transcription

1 Columbia Gas Transmission, LLC FERC NGA Gas Tariff Baseline Tariffs Proposed Effective Date: September 1, 2011 Service Agreement No Washington Gas Light Company Option Code A

2 SST SERVICE AGREEMENT Service Agreement No Revision No. 1 THIS AGREEMENT is made and entered into this 1 day of September, 2011, by and between COLUMBIA GAS TRANSMISSION, LLC ("Transporter") and WASHINGTON GAS LIGHT COMP ANY ("Shipper"). WITNESSETH: That in consideration of the mutual covenants herein contained, the paities hereto agree as follows: Section 1. Service to be Rendered. Transpo11er shall perfo1m and Shipper shall receive service in accordance with the provisions of the effective SST Rate Schedule and applicable General Tem1s and Conditions of Transporter's FERC Gas Tariff, Fomth Revised Volume No. 1 ("Tariff'), on file with the Federal Energy Regulatory Commjssion ("Commission"), as the same may be amended or superseded in accordance with the rules and regulations of the Commission. The maximum obligation of Transpo11er to deliver gas hereunder to or for Shipper, the designation of the points of delive1y at which Transp011er shall deliver or cause gas to be delivered to or for Shipper, and the points of receipt at which Shipper shall deliver or cause gas to be delivered, are specified in Appendix A, as the same may be amended from time to time by agreement between Shjpper and Transporter, or in accordance with the rules and regulations of the Commjssion. Section 2. Te1m. Service under this Agreement shall conm1ence as of September 1, 20 11, and shall continue in full force and effect until March 31, Pre-granted abandonment shall apply upon termination of this Agreement, subject to any right of first refusal Shipper may have under the Conm1ission's regulations and Transpo11er's Tariff. Section 3. Rates. Shipper shall pay Transporter the charges and furnish the Retainage as described in the amendment attached hereto as Attaclunent A. The provisions of Attachment A are incorporated herein by reference with full force and effect and are made a pai1 of thjs Service Agreement as though restated herein verbatim. Section 4. Notices. Notices to Transporter under this Agreement shall be addressed to it at 5151 San Felipe, Suite 2500, Houston, Texas 77056, Attention: Customer Services and notices to Shipper shall be addressed to it at Washington Gas Light Company, 6801 Industrial Road, Springfield, VA 22151, Attention: Nimrnie Hickman, until changed by either pai1y by written notice. Section 5. Superseded Agreements. This Service Agreement supersedes and cancels, as of the effective date hereof, the following Service Agreement(s): SST 6800 Revision 0.

3 Section 6. Credit Annex. The credit requirements appended hereto as Attachment B are incorporated herein by reference with full force and effect and are made a part of this Service Agreement as though restated herein verbatim. COLUMBIA GAS TRANSMISSION, LLC By %~ Title svp Date ~1'2-~' I~!> _

4 Revision No. 1 Appendix A to Service Agreement No Under Rate Schedule SST between Columbia Gas Transmission, LLC ('Transporter") and Washington Gas Light Company ("Shipper") Transpo1i ation Demand Begin Date September 1, 2011 September 1, 2011 End Transportation Recurrence Date Demand Dth/day Interval March 31, , /31 March 31, ,000 4/1-9/30 Primary Receipt Points Begin Date End Date Scheduling Point No. Scheduling Point Name Maximum Daily Quanti ty (Dth/day} September I, March 31, RP Storage STOR Point TCO 50,000 Sep tern ber I, March 31, RP Storage STOR PointTCO 25,000 Recurrence Interval 10/J - 3/ /30 Prima1y Delivery Points Begin Date End Date September I, March 31, September 1, March 31, Maximum Daily Design Daily Scheduling Scheduling Measuring Measuring Delivery Obligation Quantity Point No. Point Name Point N o. Point Name (Dth/dav) 1/ (Dth/dav) 11 Washington Washington Gas Gas-30 50,000 Washington Washington Gas Gas-30 25,000 Min imum Delivery Pressure Obligation (psi g} I/ Recurrence Interval /31 4/1-9/30

5 l! Application ofmddos, DDQs and ADQs, minimum pressure and/or hourly flowrate shall be as follows: The Master List of Interconnects ("MLI") as defined in Section l of the General Terms and Conditions of Transporter's Tari ff is incorporated herein by reference for purposes of listing valid secondary receipt and delivery points. _ Yes _X_ No (Check applicable blank) Transporter and Shipper have mutually agreed to a Regulatory Restructuring Reduction Option pursuant to Section 42 of the General Terms and Conditions of Transporter's FERC Gas Tariff. _X_ Yes _ No (Check applicable blank) Shipper has a contractual right of first refusal equivalent to the right of first refusal set forth from time to time in Section 4 of the General Terms and Conditions of Transporter's FERC Gas Tariff. _X_ Yes _ No (Check applicable blank) The MDDOs, ADQs, and/or DDQs set forth in Appendix A to Shi pper's SST Service Agreement No. I are incorporated herein by reference. _ Yes _X_ No (Check applicable blank) This Service Agreement covers interim capacity sold pursuant to the provisions of General Terms and Conditions Section 4. Right of first refusal rights, if any, applicable to this interim capacity are limited as provided for in General Terms and Conditions Section 4. _Yes _X_ No (Check applicable blank) This Service Agreement covers offsystem capacity sold pursuant to Section 47 of the General Terms and Conditions. ~ Right of first refusal rights, if any, applicable to this offsystem capacity are limited as provided for in General Terms and Conditions Section 47. ~ if-tf-- WASIDN~/U::ANY COLillffeIA GAS TRANSMISSION, LLC ~~:: l e 1:::~; ~h~~~an - :: I~ Date ff /!J Date._ 4 -'-"" \2."-- l3_... _ ~

6 ATTACHMENT A TO SST SERVICE AGREEMENT The demand rates for Eastern Market Expansion SST service shall be fixed for the primary term of Shipper's Service Agreement and shall equal the ''Ultimate Demand Rates," calculated as set forth below, established by the Commission for the Rate Schedule SST services to be rendered hereunder, less five percent (5%). The "Ultimate Demand Rates" are (1) the initial maximum demand rates for Rate Schedule SST services established by the Commission in the NGA Section 7 certificate proceeding, and (2) the initial maximum demand rates for Rate Schedule SST services established by the Commission in the NGA Section 7 certificate proceeding as adjusted in a limited NGA Section 4 proceeding to reflect actual costs. 1 In addition to the five percent (5%) reduction referenced immediately above, Shipper will receive an additional $.0025 per Dth per day ($.076 per Dth per month) off of the Rate Schedule SST negotiated demand rate. Customer shall also be responsible for all maximum demand surcharges, maximum commodity rates, and maximum commodity surcharges, as such rates and surcharges may thereafter change from time to time, and in whatever form those rates and surcharges may take. Shipper shall also provide to Transporter the maximum applicable then existing Commission-approved Transpo1tation Retainage percentage as set fmth in Transporter's FERC Gas Tariff from time to time. Shipper will be solely responsible for acqmnng any necessary services for Shipper to transport natural gas into and from Transporter's pipeline system as set forth in General Terms and Conditions Section 9.4 of Transporter's FERC Gas Tariff. Although the negotiated demand rates applicable to Rate Schedule SST se1vice as set forth above will be fixed for the primary term of service hereunder, the demand rates applicable to non-negotiated rate Eastern Market Expansion shippers will be subject to change from time to time pursuant to Sections 4 and 5 of the Natura] Gas Act, 15 U.S.C. 717c-d (2005). Shipper reserves all rights to protest or take any position in any Section 4 rate increase filed by Transporter applicable to non-negotiated rate shippers. Transp01ter is precluded from seeking to recover from Shipper at any tin1e any construction cost ovenuns that Transpmter absorbs pursuant to Section 2(b)(4) of the Precedent Agreement between the two parties dated December 1, 2005, as such Precedent Agreement was amended on December 21, 2005, October 23, 2006, December 6, 2006 and March 12, Transporter shall have the right, after the In-Service date for this SST service, to adjust the illtimate Demand Rates for this SST service in a limited NGA Section 4 filing to reflect the actual Facilities costs of th.e Eastern Market Expansion project resulting in tills SST Senrice, subject to the limitations set forth in Section 2(b)(4) of the Precedent Agreement between the two parties dated December 1, 2005, as such Precedent Agreement was amended on December 21, 2005, October 23, 2006, December 6, 2006 and March 12, 2007.

7 Transpo1ter and Shipper will comply with the provisions of Section 4(c) reflected in the Amendment to Precedent Agreement and Attached Credit Annex dated March 9, 2007 (and effective March 12, 2007), and said Section 4(c) is incorporated herein by reference with full force and effect and is made a part of this Service Agreement as though restated herein verbatim.

8 Washington Gas Light COLUMBIA GAS TRANSMISSION CORPORATION CREDIT ANNEX TO THE PRECEDENT AGREEMENT 24

9 Colwnbia Gas Transmission Corporation ("TCO") and \/ub}n11m (J.., l ~J~/' ("Customer") hereby agree effective as of the } ir day of Ot~'-'/2005, to the following Credit Annex (the "Annex") to the Precedent Agreement dated and effective as 2005 (the "Precedent Agreement"). All capitalized terms not otherwise defined herein shall have the meaning set forth in the Precedent Agreement. (TCO and Customer may be referred to herein individually as "Party", or collectively as "Parties"). WITNESS ETH: WHEREAS, TCO and Customer entered into the Precedent Agreement relating to EASTERN MARKET EXPANSION capacity on TCO that will be made available by adding storage, compression and pipeline facilities to TCO's existing system (the "Facilities"); and WHEREAS, Section 3 of the Precedent Agreement provides that Customer will enter into Service Agreements with TCO for storage service under TCO's Rate Schedule FSS and associated Rate Schedule SST, with a primary term of fifteen (15) years, respectively, and with demand quantities as set forth in the Precedent Agreement {the "Service Agreements") at the completion of the project; and WHEREAS, Section 5(c) of the Precedent Agreement provides that Customer shall enter into this Annex; NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, TCO and Customer agree as follows: 25

10 I. In addition to other requirements set forth herein and without effecting a waiver or compromise of any right or entitlement which may be available to TCO herein, including but not limited to Section 4 below, Customer shall at all times throughout the term hereof and for the term of the Service Agreements comply with the following creditworthiness requirements; provided, however, that if the Customer is rated by Standard and Poor's, Fitch Inc. ("Fitch") and/or Moody's Investor Service ("Moody's), and Customer's rating for minimum senior unsecured debt (not supported by third party credit enhancement) by either Standard and Poor's, Fitch or Moody's is no lower than BBB- (Standard and Poor's/Fitch) or Baa3 (Moody's), respectively, then Customer shall not be obligated to the conditions set forth below; provided further, that if Customer's credit rating at any of the three rating agencies, Standard and Poor's, Fitch or Moody's, falls below BBB- (Standard and Poor's/Fitch) or Baa3 (Moody's), the following conditions set forth below shall become immediately applicable: (a) If Customer is rated by Fitch, Standard and Poor's or Moody's, then Customer shall maintain: (i) minimum senior unsecured debt rating (not supported by third party credit enhancement) of BBB- by Fitch and Standard and Poor's, and Baa3 by Moody's; or (ii) if subpart (i) above is not applicable, then a minimwn issuer credit rating or corporate credit rating (or underlying rating, if applicable) shall apply. If the existing ratings in parts (i) and (ii) result in split ratings, then Customer must maintain an investment grade rating from any two of the three investment rating agencies mentioned above. 26

11 (b) Customer shall deliver to TCO within three (3) business days of any request by TCO, Customer's Financial Information. For pwposes of this provision, Financial Information includes (i) within 120 days following each fiscal year, a copy of Customer's annual reports containing audited consolidated financial statements for such fiscal year and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of Customer's quarterly reports, if available, containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles; provided, however, that if any such statements are not available on a timely basis due to a delay in preparation or certification, that delay shall not be an Event of Default so long as Customer diligently pursues the preparation, certification and delivery of the statements. Provided however, if Customer provides access to such identified information on its publicly available and accessible internet website (in downloadable format), the physical delivery of such information is waived. Any non-public Financial Information delivered by Customer shall be treated as confidential by TCO, and circulated internally only to those employees of TCO whose duties involve credit evaluation. 2. If Customer does not comply with and maintain all of the requirements set forth in Section 1 above, and subject to Section 4 herein, throughout the term of this Annex and the term of the Service Agreements, then Customer may be deemed uncreditworthy and shall post one of the following forms of credit assurance within three (3) business days after Customer's receipt oftco's demand therefor. 27

12 (a) A guaranty issued by a creditworthy guarantor, the determination of which shall be in TCO's sole reasonable discretion, in a form, for an amount equal to the revenues Customer would pay to TCO for two full years of Rate Schedules FSS and SST service as contemplated hereunder at the Recourse Rates as set forth in TCO's FERC Gas Tariff at the time Customer is deemed uncreditworthy pursuant to this section; or (b) A letter of credit to be effective through the term hereof and the Service Agreements in a form, for an amount equal to the revenues Customer would pay to TCO for two full years of Rate Schedules FSS and SST service as contemplated hereunder at the Recourse Rates as set forth in TCO's FERC Gas Tariff at the time Customer is deemed uncreditworthy pursuant to this section and from a financial institution approved by and acceptable to TCO, in TCO's sole reasonable discretion; or (c) A cash prepayment in an amount equal to the revenues Customer would pay to TCO for two full years of Rate Schedules FSS and SST service as contemplated hereunder at the Recourse Rates.as set forth in TCO's FERC Gas Tariff at the time Customer is deemed uncreditworthy pursuant to this section. Within three (3) business days or as soon as reasonably practicable after TCO determines that Customer has come back into compliance with the requirements of this Credit Annex, TCO shall refund the remaining prepayment or return to Customer the guaranty or the letter of credit. 28

13 3. If at any time during the term of any guaranty provided pursuant to Section 2, above, TCO determines in its sole reasonable discretion that the guarantor does not meet all of TCO's creditworthiness requirements set forth in Section l(a) and l(b) and Section 4, then Customer shall within three (3) business days after TCO's demand therefor provide a letter of credit or a cash prepayment pursuant to Section 2(b) and Section 2(c) above. 4. Notwithstanding anything to the contrary in this Credit Annex, iftco at any time throughout the tenn hereof has reasonable grounds for insecurity regarding (1) the performance by Customer, or by the guarantor, of any obligation hereunder, (2) the guaranty with respect to the guarantor, or (3) the Customer's performance under the terms and provisions of the Precedent Agreement (whether or not then due), including without limitation and in TCO's sole reasonable discretion, the occurrence of a material change in the creditworthiness of Customer or the guarantor, then TCO may demand credit assurance in one or more of the forms set forth above so long as the total credit assurance demand does not exceed the amounts determined in Section 2 above. If Customer fails to provide such credit assurance within three (3) business days after written demand therefor, TCO may suspend performance under the Precedent Agreement or the Service Agreements immediately upon written notice in accordance with Section 11 of this Credit Annex in addition to any and all other remedies set forth in the Precedent Agreement or the Service Agreements or otherwise available to TCO at law or in equity. 29

14 5. Tenn. This Annex becomes effective on the date first written above and shall tenninate on the later of the tennination of the Precedent Agreement or the FSS and SST Service Agreements to be executed between TCO and Customer. 6. Authorization. Each of the persons executing this Annex represents and warrants that it has authority to act for and bind the entity on whose behalf he or she purports to act and to talce the actions contemplated herein. 7. Effect of Agreement and Amendment. This Annex shall inure to the benefit of and be binding upon each of the Parties and their pennitted successors and assigns. This Annex, the Precedent Agreement, and the Service Agreements to be executed in accordance with the Precedent Agreement, constitute the entire agreement and understanding between the Parties hereto with respect to the subject matter herein and therein, and supersedes all prior agreements and understandings with respect thereto, and may be amended, restated or supplemented only by a written agreement of the Parties. This Annex, the Precedent Agreement, the Service Agreements and any other agreement or annex executed in conjunction herewith can only be amended, modified, or supplemented by the written agreement of TCO and Customer. 8. Waivers. The waiver by any Party of a breach or violation of any provision of this Annex shall not operate as or be construed to be a waiver of any subsequent breach hereof. 9. Governing Law. This Annex shall be governed by the laws of the State of West Virginia without reference to conflicts of law provisions. 10. Counterparts. This Annex may be executed in multiple counterparts, each of which shall be an original, and all of which shall constitute one and the same instrument. 30

15 11. Notices. Notices under this Annex shall be in writing and shall be addressed as follows: Washington Gas Light COLUMBIAGAS TRANSMISSION CORPORATION Attention.e tj 'J fit~e Ls~~ Fair Lakes Parkway...,~ '* '\! ~"'\ o rv ~ L \ c...,t;tpaijfax VA ~ ~O' :X:: )-..I 0 <.! S\(2.,1 1\-t- r4) _ > s> P '2-1 µ"--~ 'ec...o ll A ~;;, l Attention: Vice President Marketing Phone '1. O ~-"\So ' \...\...\ eg; Phone: (703) Fax: "l o 2' ""'S 1:1 =\"\ "".S Fax: (703) Notices may be given by hand, facsimile, mail or courier. Notices shall be deemed given upon the date the notice is sent. Either Party may change its address or facsimile number for notices hereunder by providing written notice of such change to the other Party. 12. Assignment. (a) Any entity that succeeds by purchase, merger, or consolidation of title to or assignment of the properties, substantially as an entirety, of Customer will be entitled to the rights and will be subject to the obligations of Customer under this Annex. Otherwise, no assignment or transfer by Customer of its rights and obligations under this Annex shall be made without the prior written consent of TCO which shall not be unreasonably withheld or delayed. TCO agrees to release Customer from its obligations of the assigned rights and obligations under this Annex if (i) those obligations have been assumed by the assignee, and (ii) at the time of the assignment the assignee reasonably demonstrates to TCO that it is financially capable of meeting the obligations assumed, has a creditworthiness rating no less than that described in Section l(a) above and meets the requirements of Section 4 above. 31

16 (b) TCO may assign its rights and obligations under this Agreement without Customer's prior written consent and, to the extent required, pursuant to a Commission order. Customer reserves any and all rights in its sole reasonable discretion to comment on any assignment filing with the Commission and associated Commission order. (c) Customer and TCO acknowledge and agree that Customer and TCO shall have the right to assign, mortgage, or pledge all or any of its rights, interests, and benefits under this Annex, the Precedent Agreement and/or the Service Agreements to secure payment of any indebtedness incurred or to be incurred in connection with the development and construction of the Facilities. Customer shall execute all reasonable consents to assignment and reasonable acknowledgments requested by TCO in connection with any credit assurance interests created hereunder in favor oflenders of TCO. 13. No Drafting Presumption. No presumption shall operate in favor of or against any Party as a result of any responsibility that any Party may have had for drafting this Annex. IN WITNESS WHEREOF, the duly authorized representatives of the Parties hereto have executed this Annex. COLUMBIA GAS TRANSMISSION CORPORATION 32

17 Its: Date: Washing ton Gas Light Its: Date: 33