HomeMy WebLinkAbout10-25-1983
(2) The Base Price of gas to be purchased by Buyer from Seller
hereunder shall be as follows)
(a) Beginning with the effective date hereunder and
anding December 31, 1983 the lease Price per one thousand
(1,000) cubic feet of gas shall be thirty-seven cents
(370) .
(b) During each month throughout the period beginning
January 1, 1984, and ending December 31, 1984, the Base
Price per one thousand (1,000) cubic feet of gas shall be
the greater of (i) a price determined by multiplying the
Base Price in effect during December, 1963, by the
percentage change in the Base Price Adjustment
Calculation, as defined in subparagraph (2)(g) of this
Article and herein referred to as the "BPAC", for 1983
over the BPAC for 1982, and adding the result thereof to
the Base Price in effect during December, 1983, provided,
however, such determined Base Price shall not exceed the
Base Price in effect during December, 1983 by more than
five cents (5q) or (ii) thirty-nine cents (399).
(c) During each month throughout the period beginning
January 1, 1985, and ending December 31, 1985, the Base
Price per one thousand (1,000) cubic feet of gas shall be
the greater of (i) a price determined by multiplying the
Base Price in effect during December, 1984,-by the
percentage change in the BPAC for 1984 over the BPAC for
1983, and adding the result thereof to the Base Price in
effect during December, 1984, provided, however, such
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determined Base ,Price shall not exceed the rase Price in
effect during December, 1984 by more than five cents (5o)
or (ii) forty-one cents (41e).
(d) During each month throughout the period beginning
January 1, 1986, and ending December 31, 1986, the BtAse
Price per one thousand (1,000) cubic feet of gas shall be
the greater of (i) a price determined by multiplying the
Base Price in effect during December, 1985, by the
percentage change in the BPAC for 1985 .over the BPAC for
1984, and adding the result thereof to the Base Price in
effect during December, 1985, provided, however, such
determined Base Price shall not exceed the Base Price in
effect during December, 1985 by more than five cents (5c)
or (ii) forty-throe cents (43c),
(e) During each month throughout the period beginning
January 1) 1987, and ending December 31, 1987, the Base
Price per one thousand (1,000) cubic feet of gas shall be
the greater of (i) a price determined by multiplying the
Base Price in effect during December, 1986, by the
percentage change in the BPAC for 1986 over the BPAC for
1985, and adding the result thereof to the Base Price in
effect during December, 1986, provided, however, such
determined Base Price shall not exceed the Base Price in
effect during December, 1986 by more than five cents (5~)
or (ii) forty-five cents (45c),
(f) During each month throughout the period beginning
January 10 1988 and ending December 31, 1988, the Base
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Price per one thousand (1,000) cubic feet of gas shall be
the greater of (i) a price determined by multiplying the
Base Price in effect during December, 1987, by the
percentage change in the BPAC for 1987 over the BPAC for
1986, and adding the result thereof to the Base Price in
effect during December, 1987, provided, however, such
determined Base Price shall not exeeod the Base Price in
offect during December, 1987 by more than five cents (5C)
or (ii) forty-sicven cents (470,
(g) The formula for determining the BPAC is as followsi
BPAC - A - B - C+D
The amounts applicable to the above formula are as
reported to the Railroad Commission of Texas (or any
corresponding reports to any subsequent or replacement
Regulatory Authority) and are more fully described as
followsl
A a The "Total Operation and Maintenance Expenses"
for Total Operations of both Lone Star Gas Company and
L nle Star Gas Company of Toxas, Inc, (for reference only,
these amounts for 1982 are shown on line 43 of the pages
titled "Gas Operating Revenues and Expenses" of Lone Scar
Gas Company's and Lone Star Gas Company of Texas, Inc,'s
General Annual Reports for 1982 to the Railroad
Commission of Texas which are hereby attached as Exhibits
I and II),
B ■ The "Purchased Gas Expenses" for Total
Operations for Lone Star Gas Company (for reference only
this amount for 1982 is shown on line 34 of the attached
Exhibit,I).
"Revenutis
for Transportation
Gas Company of
Texas, Inc, (for reference only this amount for 1982 is
shown on line 20 of the attached Exhibit II),
D - The "Total Net Utility Plant" for Lone Star Gas
Company and Lone Star Gas Company of Texas, Inc, (for
reference only these amounts for 1982 are shown on line
20 on the pages titled "Balance Sheet" of Lone Star Gas
Company's and Lone Star Gas Company of Texas, Inc.'s,
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General Annual Reports for 1982 to the Railroad
Cowmission of Texas which sucli pages are hereby attached
as Exhibits III and IV),
(h) Seller, to encourage Buyer to purchase additional
quantities of gas hereunder may, at its sole option,
reduce the Base Price as otherwise established herein for
gas to be delivered to Buyer during any month of any
Calendar Year of the term hereof by giving notice to
Buyer of such Base Price reduction on or before the fifth
(5th) working' day prior to the beginning of such month,
The Base Price reduction will only apply to gas purchased
hereunder at Buyer's Plants, exclusive of gas transported
under that said Gas Transfer Agreement during such month,
in excess of a Base Volume for any such month as such
Base Volume is established in writing by Seller,
Seller's establishment of a Base Volume shall be at
Seller's sole discretion and shall accompany such
aforementioned notice of a Base Price reduction.
(1) If Seller gives Buyer notice that it elects to
reduce the Base Price for any month as provided in the
preceding subparagraph (h), then the Base Price as
established by Seller shall be an amount lower than the
Base Price as otherwise provided herein in effect for
such month, but not less than twenty-five cents (25C) per
one thousand (1,000) cubic feet, If for any month Seller
does not give notice to Buyer that it has reduced the
,
Base Price as provided in the preceding subparagraph (h),
then all volumes purchased during such months shall be
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Paid for at the price as otherwise provided in this
agreement as though such Base Price reduction had never
occurred, Nothing herein, however, shall prevent Seller
and Buyer from mutually agreeing in writing to reduce the
Base Price as provided herein for such gas in excess of
the base Volumes at any time subsequent to the fifth
(5th) working day prior to the beginning of any month for
gas that is to be delivered to buyer during said month,
(,j) Notwithstanding anything to the contrary contained
herein, any reduced Baso Price as determined in
subparagraphs (h) and (i) of this paragraph (2) shall not
apply to the determination of the base Price as set forth
in subparagraphs (a) through (f) of this paragraph (2)
and the Base Price that would otherwise he in effect in
lieu of the aforementioned reduced Base Price shall be
utilized in the determination of the Base Price as set
forth in subparagraphs (a) through (f) of this paragraph
(2),
(3) For the purpose of this agreement, the term "Weighted Average Price"
of gas purchased by Seller shall mean the weighted average price per one
thousand (1,400) cubic feet of all, gas purchased by Seller during any month,
computed to the nearest one-hundredth of one cent, and shall be determined by
dividing the total dollar amount paid or accrued on Seller's books for all
gas purchased by Seller during such month by the total number of thousands of
cubic feet of gas purchased by Seller during such month, adjusted to the same
pressure base as gas sold hereunder, and shall include, in addition to the
cost of the gas itself, all Class A Taxes, as hereinafter defined in Article
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P111 hereof; provided, that if any portion of the cost 'of gas accrued on
Sell(,r's books during any month is not paid by Seller to the party or parties
entitled thereto because of the fhct that such accrual is canceled, or if any
portion of the cost of gas or of any Class A Tax which haf, been paid by
Seller is refunded to Seller, or if Seller is required by the terms of any
gas purchase contract, or of any agreed sottloment of a disputed claim, or by
a determination or judgment of a regulatory body or court having or asserting
jurisdiction, to make retroactive payments with respect to gas previously
purchased by Seller, then appropriate adjustments to compensate therefore
shall be made in the price payable for sales gas delivered by Seller to Buyer
hereunder as soon as practicable after the time of such cancellation, refund
or retroactive payment, provided, that the period during which such
adjustments are to be made shall be determined by Seller subject only to the
condition that the same shall be made within a reasonable period of time
taking into consideration the total amount of any such cancellation, refund
or retroactive payment, but no adjustments as provided for herein shall be
made after this agreement has terminated except with respect to items
caucelod, refunded or paid prior to the date of such termination, It is
recognized that some of the gas delivered by Seller to Buyer hereunder during
any month may be gas owned in place and produced by Seller or may be gas
previously purchased or produced by Seller which is taken from one of its
underground storage reso.rvoirs, but such gas shall not be considered in
determining the Veighted Average Price of gas purchased by Seller during such
month; provided, however, that gas placed in storage by Seller for later
delivery to Buyer or other customers of Seller shall be accounted for as gas
purchased during the month in which it was actually purchased.
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(4) Buyer shall pay Seller for the exchange services hereunder each
billing Month an amount per one thousand (1,000) cubic feet of exchange gas
delivered to Buyer hereunder as followst
(a) From the effective date hereof through December 31,
1983 an amount equal to thirty cents (30o),
(b) During each month throughout the period beginning
January 1, 1984 and ending December 31, 1984, the
exchange fee shall be determined by multiplying the
exchange fee in effect during December, 1983 by the ratio
of the Base Price as determined in Paragraph (2),
subparagraph (b) of this Article to the Base Price as
determined in Paragraph (2), subparagraph (a) of this
Article, t„
(c) During each month throughout the period beginning
January 1, 1985 and ending December 31, 1985, the
exchange fee shall be determined by multiplying the
exchange fee in effect during December, 1984 by the ratio
of the Base Price as determined in Paragraph (2),
subparagraph (c) of this Article to the Base Price t.s
determined in Paragraph (2), subparagraph (b) of this
Article.
(d) During each month throughout the period beginning
January- 1, 1986 and ending December 31, 1986) the
exchange fee shall be determined by multiplying the
exchange fee in effect during Decomber, 1985 by the ratio
of the Base Price as determined in Paragraph (2),
subparagraph (d) of this Article to the Base price as
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determined in Paragraph (2), subparagraph (c) of this
Article,
(e) During each month throughout the period beginning
January 1, 1987 and ending December 31, 1987, the
exchange foe shall be determined by multiplying the
exchange fee in effect during December, 1986 by the ratio
of the Vase Price as determined in Paragraph (2),
subparagraph (e) of this Article to the Base Price as
determined in paragraph (2), subparagraph (d) of this
Article,
(f) During each month throughout the period beginning
January 1, 1988 and ending December 31, 1988, the
exchange foe shall be determined by multiplying the
exchange fee in effect during December, 1987 by the ratio
of the Base Price as determined in Paragraph (2),
subparagraph (f) of this Article to the Base Price as
determined in Paragraph (2), subparagraph (e) of this
Article,
ARTICLE VII
ADJUSTMENT FOR HEATING VALUEr
If the weighted average halting value of the gas delivered by
Seller to Buyer during any month is less than one thousand (1,000) British
Thermal Units par cubic foot, the exchange fee and the price payable by Buyer
per one thousand (1,000) cubic feet of gas computed as provided in Article VI
hereof shall be decreased one-tenth of one percent (0.1%) for each British
Thermal Unit below one thousand (1,000) British Thermal Units per cubic foot;
and if the weighted average heating value of the gas so delivered during any
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month is more than one thousand (1,000) British Thermal Units per cubic foot,
the exchange fee and the price payable by Buyer per one thousand (4,000)
cubic foot of gas computed as provided in Article VI hereof shall be
increased one-tenth of one percent (0.1%) for each British Thermal Unit above
one thousand (1,000) British Thermal Units per cubic foot for such gas so
delivered during such nonth,
ARTICLE VIII
k1:MBURSDIMT FOR TAXES AND RVNTALSI
(l) The term "tax" or "taxes," as used in this agreement, shall
mean any kind or character of tax (other than ad valorem, capital stock,
general property, income or excess profits taxes), license, fee, rental or
charge, including specifically, without limitation by enumeration, any
production, severance, gathering, exchange, transportation, processing,
compression, dedication, use, sales, delivery or gross receipts tax, now or
hereafter lawfully levied, assessed or made by any governmental authority on
the gas itself or on the act, right or privilege of production, severance,
gathering, exchange, transportation, processing, compression, dedication,
use, sale or delivery of gas which is measured by gross receipts or by the
volume, value or sales price to Seller or Buyer of the gas in question, but
shall not include any value attributable to the liquid hydrocarbons in said
gas; provided, however, thit the terra "tax" or "taxes" shall not be deemed to
include any general franchise tax imposed on corporations on account of their
corporate existence or on their right to do business within the state as a
foreign corporation,
(2) The tvve3s "Class A Taxes", "Class B Taxes", and "Class C
Taxes", as used in this agreement, shall have the following meanings, to wits
(a) The term "Class A Taxes" shall be construed to mean
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1 all taxes, as heroin defined, which seller pays for the
account of or by way of reimbursement to its gas
suppliers with respect to all gas purchased by Seller,
(b) The term "Class 8 Taxes" shall be construed to mean
all taxes, as heroin defined, which are or may be levied
upon and/or paid by Seller with respect to the gas sold
or exchanged by Seller to Buyer hereunder, exclusive of
any Class A Taxes or Class C Taxes,
(c) The term "Class C Taxes" shall be construed to mean
any license, fee, rental or charge which is or may be
lovied or imposed on Seller by any governmental authority
for the use of its public streets, alleys and
thoroughfares in the conduct of Seller's business, with
t„
respect to the gas sold or exchanged by Seller to Buyer
hereunder and/or the gross receipts received by Seller
from the sale or exchange of gas to Buyer hereunder, or
any sales or delivery tax which is or may be levied or
imposed on and/or paid by Seller, with respect to the gas
sold or exchanged by Seller to Buyer hereunder and/or the
gross receipts received by Seller from the sale or
exchange of gas to Buyer hereunder.
(3) All Class A Taxes shall be included, in addition to the cost
of the gas itself, in computing the Weighted Average Price of all gas
purchased by seller, in accordance with the provisions of Article VT hereof.
Buyer agrees to reimburse Seller, with respect to Class B Taxes and Class C
Taxes as heroin defined, for the full amount of Class B Taxes and Class C
Taxes which are or may be levied upon and/or paid by Seller, with respect to
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the gas sold or exchanged by seller to Buyer hereunder including any billing
for deficient volumes as set forth in Article lI hereunder,
(G) It is understood and agreed that the amount of reimbursement
for any existing, new, or additional Class B Taxes and/or Class C Taxes, or
any increase in Class B Taxes and/or Class C taxes, shall be determined by
applying the rate, or the increase in the rate, of any such tax measured by
gross receipts, units of volume, value or sales price to seller's gross
receipts hereunder or to the volume, value or sales price, respectively, of
the gas delivered hereunder; provided, that in the event such increase cannot
be directly related to the gas delivered hereunder or the gross receipts
received by Seller, as hereinabove provided, the ,.mount of reimbursement to
Seller shall be the same proportion to the volume of gas sold hereunder as
the total amount of such increase is to the total volume of gas s(3ld by
Seller,
(5) It is understood and agreed that in the event any tax, charge
or rental for which Seller ties been reimbursed or paid by Buyer hereunder is
subsequently declared unlawful. Seller, upon recovery of the amount of such
unlawful tax, charge or rental, shall refund to Buyer the entire amount of
such reimbursement or payment made by Buyer to Seller which is so recovered
by Seller; provided, however, that Seller shall not be required to make a
refund to Buyer with respect to any amount so recovered two years after this
agreement has terminated,
(b) Any amounts due from Buyer to Seller as reimbursement for
taxes, charges or rentals, in accordance with the provisions of this Article,
shall be paid by Buyer to Seller at the time and in the manner that bills for
gas delivered hereunder are payable, as provided in Article IX hereof.
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ARTICLE Ix
1'A1',1F:n'Tt
(1) For the purpose of billing and accounting for gas delivered
and exchanbed hereunder, the day shall begin at twelve o'clock (12100)
midnight and extend to the next twelve o'clock (12100) midnight, and the
month (herein sometimes called the "Billing Month") shall begin at twelve
o'clock (12100) midnight on the last day of the calendar month and extend to
twetvc o'clock (12100) midnight on the last day of the following calendar
mouthl provided, however; that in Seller's determination of the Weighted
Average Price for the Billing Month, or for any month, Seller will use its
normal fiscal month calculations, and noth'ng herein shall be construed so as
to require Seller to change such procedure,
(2) Each party shall read all meters daily at eight o'clock (8100)
a,m, as nearly as practicable, and Seller shall report to Buyer the results
of such moter readings,
(3) On or before the tenth (10th) day of each calendar month,
Seller shall render to Buyer at its office in Denton, Texas, statements
.of the amount of gas delivered hereunder by Seller to Buyer at each point of
delivery during the preceding Billing Month, and shall also render a bill for
the gas so delivered. In computing such bill for gas sold hereunder Seller
shall, in the event that Seller has not completed the determination of the
Weighted Average Price of gas purchased by Seller for such Billing Month,
compute such bill using its beat estim:*e of the "Weighted Average price"i
provided, however, that the bill for the Billing Month next following the
Billing Month for which such estimate is employed shall be adjusted upward of
downward by an amount which, if added or subtracted, as appropriate, to or
from the amount of the bill for the Billing Month for which such estimate was
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employed, would yield and equal the amount that would have been billed Buyer
had the actual Weighted Average Price been used in computing such bill, on
or before the twentieth (200) day of each calendar month Buyer shall make
payment to Seller at Seller's office in Denton, Texas, for all gas
delivered hereunder to Buyer during the praceding Billing Month,
(b) if for any Calendar Year the actual amounts necessary to
determine the BPAC used in any Calendar Year's Base Price calculations
hereunder are not available prior to the preparation of Buyer's billing for
the January and/or February billing months for such Calendar Year, Seller
shall estimate such amounts, use such estimates in determining the BPAC, and
use the resulting estimated Base Price and Exchange fee in such billings,
Once the actual amounts necessary to determine the BPAC used in any Calendar
Year's Base Price calculations hereunder are available, the next subtsequent
billing for sales and exchange hereunder shall be adjusted upward or downward
by an amount which, if added or subtracted, as appropriate, to or from the
bill(s) for such billing month(s) for which an estimated Base Price and
Exchange fee was used, would yield th, billing amount(s) that would have been
billed Buyer had the actual amounts applicable to the BPAC been used,
(S) If Buyer should fail to pay any amount owing to Seller when
the same is due, interest thereon shall accrue at the rate of eighteen per
cent (18%) per annum from the date when such amount is due until same is
paid. If such failure to pay continues for sixty (60) days, Seller may, in
the absence of any bona fide dispute as to the amount or the time when same
was due, suspend deliveries of gas hereunder, and the exercise of such right
shall be in addition to any and all other remedies available to Seiler,
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(6) 1:11ch party shall have, during the term of this agreement and
the two (2) }ear period immodiatoly following its termination, the right at
rce.sonable hours to examine the books, records and charts of the other party
to the oxtent necessary to verify the accuracy of any statement, payment,
calculation or determination made pursuant to the provisions of any Article
hereof, if any such examination shall reveal, or if either party shall
discover any error or inaccuracy in its own or the other party's statements,
payments, calculations or determinations, then proper adjustments and
correction shall be made' as promptly as practicable thereafter; provided,
however, that no adjustment or correction shall be made wits, respect to any
error or inaccuracy which occurred more then two ~2) ye,°s prior to the
discovery thareof,
ARTICLE X
TERMi
(1) Subject to the other terms and provisions hereof, this
agreement shall be effective from twelve clone (1201) a,m, central standard
time on the first day of the calendar month immediately following the
execution of this agreement and shall thereafter continue and remain in full
force and effect for a period and term extending to twelve o'clock (12100)
midnight on December 31, 1988,
(2) Prior to October 1, 1987, Buyer shall submit to Seller a
description of the gas supply services, if any, Buyer may desire for the five
(S) year period beginning January 1, 1989, through December 31, 1993, Upon
rer,eipt of such description, Seller will proceed to evaluate the nature and
extent of services, and Seller shall submit a proposal including price
provisions to Buyer of such services prior to December 31, 1987, Prior to
March 31, 1988, the parties will proceed to formalize the terms and
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conditions under which such services, if any, will be provided, Upon written
acceptanco of Soller's proposal to Buyer or written mutual agreement to
different provisions, this agreement will continue for the five (5) year
period beginning lanuars- I, 1989 through December 31, 1993, If the parties
cannot agree in writing on the proposed or amended terms and conditions of
such services by March 31, 1988, then this agreement shall terminate on
December 31, 1968,
ARTfCf,E XI
FORCE MAJEU M '
(1) In the event of either party hereto being rendered unable
wholly or in part by force ma,jeure to carry out its obligations under this
agreement, other than to make payments due hereunder, it is agreed that on
such party giving notice and full particulars of such force maj(ura in
writing to the other party as soon as possible after the occurrence of the
cause relied on, then the obligations of the party giving such notice, so far
as they are affected by such force ma,jeure, shall be suspended from the
inception and during the continuance of any inability so caused but for no
longer period, and such cause shall be as far as possible remedied with all
roasonable dispatch. The term "force majeure" as employed herein shall mean
acts of God, atrikes, lockouts or other industrial disturbances, acts of the
public enemy, wars, blockades, insurrections, riots, epidemics, ,landslides,
lightning, earthquakes, fires, storms, floods, washouts, e.rrests and
restraints of the governments and people, civil disturbances, explosions,
breakage or accident to machinery or linen of pipe, the necessity for making
repairs to or alterations of machinery, equipment or lines of pipe, breakage
of transmission lines, failure of electric equipment due to sleet, ice or
other unavoidable causes, accidents to or failures of electric substations,
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tranfifUYlfier5 or switchiug devices, shortage of water, freezing of gas wells
or lines of pipe, parr.t•1 or entire failure Of wells and~'or sources of gap
supply and and othar causes, whether of the kind herein enumerated or
otherwise not within the control of the ;arty claiming suspension and which
by tho exercise of due diligence such party is unable to prevent or overcome
(2) It is understood and agreed that the settlement of strikes or
lockouts shall be entirely within the discretion of the party having tha
difficulty, and that the above requirement that any force majeure shall be
remedied with all reasonable dispatch shall not require the settlement of
strikes or lockouts by acceding to the demands of the opposing party when
such course is inadvisable in the discretion of the party having the
difficulty,
ARTICLE RII
CURTAILMENT OF DELIVERIM
(1) Seller does not guarantee a continuous, uninterrupted supply
of gas to Buyer hereunder, and Seller reserves the right, subject to the
limitations hereinafter set forth in Paragraph (2) of this Article, to
curtail or discontinue the supply of gas hereunder, if in the judgment of
Seller a continuance of the supply of gas to Buyer under this agreement
would jeopardize or thre,ten adequate service to Seller's domestic,
commercial cr industrial customers who are accorded by Seller a higher
priority of service; provided, however, such judgment shall not be
arbitrarily or capriciously exercised.
(2) Buyer and Seller recognize the fact that each is engaged in
rendering a service which is essential to the public health and safety and
both consider the continuity of Buyer's fuel supply essential to the public
welfare; that each serves domestic, commercial and industrial customers and
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that in many cases, use of gas by Sol lo rIs domestic, commercial and
industrial customers is dependent on Buyer's ability to render continuous
eloctric service; therefore, Btiyer agrees that it will provide a reasonable
quantity of statidby fuel and equipment to meet its fuel requirements during
periods when the gas supply hot -nder may be ourtailed or interrupted, and
Seller agrees to exercise due diligence in making reasonable advance
preparations to enable it to provide reasonably continuous service to Buyer.
As soon as reasonably possible after Seller has knowledge of a pending
curtailment of service' to Buyer, Seller will notify Buyer of such
curtailment.
(3) If during any Calendar Year or Years of the term hereof Seller
curtails or discontinues, for any reason, the supply of gas to Buyer
hereunder to the oxtertt that Seller does not. supply ninety percent (P,9%) or
more of the Buyer's Fuel Requirements hereunder during any such Calendar
Year, up to but not in excess of Buyer's Estimated Annual Fuel Requirements
for any such Calendar Year duo to such curtailments or discontinuances, then
Buyer may elect to cancel this agreement by giving notice of intention to
cancel as hereinafter provided in thin paragraph. In the event Buyer should
have and exercise the right to cancel this agreement, written notice of such
election to cancel shall be given to Seller by Buyer within six (6) months
after the end of the Calendar Year during which such curtailment occurred;
and such cancellation shall become effective at the end of two (2) years from
and after the date of such notice..
(4) Before the second billing period subsequent-to any curtailment
of gas deliveries by Seller, Buyer shall notify Seller in writing regarding
the amount of gas which was actually curtailed for any reason, including
force majeure, and the details of the computation of such amount, provided
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that all notices for curtailments of gigs occurring in any Calendar Year must
he sent. within five (5) days after the end of such Calendar Year, Buyer's
determination of the amount of such curtailment shall become final and
binding on both parties unless protested in writing by Seller within twenty
(20) days after receipt by Seller of such notification. Should Seller so
protest Buyer's determination, Buyer shall submit to Seller sufficient
information as requested by Seller to substantiate such a determination,
(5) In case of interruption or curtailment of service, as provided.
for in this Article, including curtailment by reason of force majeure as
defined in Article XI hereof, the amount by which Buyer's Fuel Requirements
up to but not in excess of its Estimated Annual Fuel Requirements, are
curtailed during any Calendar Year, shall, for the purpose of determining
whether Buyer has complied with its Minimum Volume obligation pursuant to
Article II heraof, be added to the amount of sales gas actually purchased and
received by Buyer during such Calendar Yearl provided, however, interruption
or -discontinuance of any exchange deliveries hereunder shall not be included
in the aforesaid determination of any credit applicable to Buyer's Minimum
.Volume obligation hereunder.
(6) Buyer and Seller recognize the fact that Buyer requires six
hundred thousand (600,000) cubic feet of gas each day for plant protection
gas, and Buyer and Seller agree that during periods of curtailment Buyer
shall be allowed to take six hundred thousand (600,000) cubic feet per day
for plant protection gasl provided, however, that Buyer shall not be allowed
to take such gas during periods of time in which it is necessary for Seller
to curtail the supply of gas to other industrial customers of Seller in the
same curtailment zone in which Buyer's Plants are located who are accorded by
Seller a priority of service equal to that provided in Railroad Commission of
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a
Texas Gas Utilities Docket No, 496 for service to 11(2), large commercial
(100 MCF or more on a peak day) and industrial requirements for pilot l.ighte
and plant protection gas" under catagory "B, Industrial Rate 1,"
ARTICLE XIII
GXGIIAA;C1:~
(1) It is recognized that from time to time Buyer may desire for
Seller, by way of a simultaneous daily exchange, to receive and redeliver
volumes of gas purchased by Buyer from another party or parties to cover a
portion of buyer's Fuol. Requirements and Seller agrees to receive and
redeliver volumes of exchange gas in accordance with all of the terms and
provisions hereof,
(2) Seller agrees to exchange, during any Calendar Year of the
term hereof, a volume of gas not to exceed thirty percent (30%) of Buyer'
Estimated Annual Fuel Requirements as provided in Article II herein for such
lalendar Year. Seller's obligation to deliver exchange gas hereunder. to
Buyer shall in no event increase Seller's total delivery obligation to Buyer
on an annual, daily or hourly basis as provided in Article lI of this
agreement,
(3) Notwithstanding anything to the contrary contained herein,
Seller's obligation to exchange gas hereunder is subject to Seller's existing
or future pipeline capacity, system transmissibility and operating
capabilities; and Seller may refuse to exchange gas hereunder if in the
reasonable opinion of Seller to do so would adversely affect Seller'a service
to its customers or the conduct of its utility business,
(4) It is recognized that a day-to-day balance of exchange gas
received by Seller and delivered to Buyer may not be possible due to the
inability of the parties to control precisely such receipts or deliveries,
31
however, Seller, to the axtont practicable, will deliver to Buyer each day a
quantity of exchange gas equivalent (in terms of Millions of British Thermal
Units) to the quantity received from Buyer (or its designee) that day.
Wbalanees shall be corrected insofar as practicable during the month
following the month in which they occurs provided, however, either part)' may
restrict its &.Aivary of gas to the other party on a daily basis to match the
quantities of gae delivered by the other party on such day.
(5) Gas to be delivered to Seller by or for the account of Buyer
shall he delivered at point(s) of receipt which shall be mutually agreed to
in writing by the parties, Seller's obligation to exchange gas hereunder is
subject to the parties' aforesaid written mutual agreement to the points of
receipt including tha volumes, rates of delivery and allocation of volumes
among other parties' gas (if necessary) relating thereto, j„
(6) if any points of receipt are mutually agreed upon, Buyer shall
commence, or cause to be commenced, procedure for the construction of the
necessary pipeline taps and related pipeline facilities required for it to
make delivery of gos hereunder to Seller at the agreed upon point(s) of
receipt and to complete, or cause to be completed, such facilities with due
diligence, and Seller shall commence, or caused to be commenced, procedure
for the construction of the necessary pipeline, measurement and related
facilities required for it to receive gas hereunder from Buyer or its agent
at such point(s) of receipt and to complete, or cause to be completed, such
facilities with due diligence, Upon the completion of the pipeline and
measurement facilities required herein, the respective facilities of each
party will be connected with the facilities of the other and the delivery and
reception of gas shall commence as provided herein. Title to and ownership
of the gas delivered shall pass to and absolutely vest in the party receiving
32
such gas, Buyor agrees to reimburse Seller, within twenty (20) days of
invoicing by Seller for the cost of installina or having installed, the
necossary taps, measurement and rolntod facilities required hereunder at
Tnutu,01), agroed upon point(s) of receipt; provided, however, the title to
such facilities shall vest in Seller, Seller shall operate and maintain said
measurement and receipt facilities at the points of receipt,
(7) It is recognized that the facilities for delivery of exchange
gas by Seller to Buyer aro in existence at Buyer's plants covered hereundar,
(8) The measurement of gas exchanged hereunder at the points of
receipt and delivery shall be in accordance with the terms of Article V of
this agreement,
(9) The exchange of gas hereunder is based on the British Thermal
Unit heat content of one thousand (1,000) British Thermal Units pert,cubic
foot of gas. Therefore, if the weighted average heating value of any gas
delivered by one party to the other during any month should be more or less
than one thousand (1,000) British Thermal Units per cubic foot of gas, then
the volume so delivered shall be adjusted by calculation to a base of one
thousand (1,000) British Tl;rmal Units per cubic foot of gas.
(10) Each party warrants to the other that its or its agent's
facilities utilized for the delivery and acceptance of gas hereunder are
wholly intrastate facilities and are not subject to the Natural Gas Act of
1938) as heretofore amended. As a material representation, without which
bath parties would not have been willing to execute this agreement, each
prirty warrants to the other party that it will take no aefton or commit an
ar.t of omission which will subject its facilities, this transaction, or the
other party's facilities, to the ;Jurisdiction of the Federal Energy
Regulatory Commission or its successor governmental agency under the terms of
33
the Natural Gas Act of 1938, as amended, The gas delivered and accepted
hereunder shall not have boon nor shall be sold, transported or otherwise
uti].ized in interstate commerce in a manner which w'fll subjoct either party
to the terms of the Natural Gas Act of 1938, as amended, In addition to and
without excluding any remedy the aggrieved party may have at law or in
equity, the party who breaches the above warranties and representations sha11.
be liable to the aggrieved party for all damages, injury and reasonable
expense the aggrieved parry may sustain by reason of any breach hereof,
(11) The gas' delivered to Seller hereunder at any point(s) of
receipt shall meat those quality specifications sot forth in Article III of
this agreettlont, Natural gas delivered to Seller by Buyer or Buyer's agent
shall have an interchangeability range within plu,: or minus five percent (57)
of the interchangeability of the gas then being transported in facilities at
the point(s) of receipt applicable hereunder, Interchangeability, as defined
for the purpose of this agreement, shall be. determined by the daily average
heating value content of one thousand (10000) cubic feet of gas expressed in
British Thermal Units divided by the square root of the daily average
specific gravity of the gas. If at any time the gas fails to meet the
quality specifications enumerated herein, Seller shall notify buyer and Buyer
shall immediately correct such failure,
(12) Buyer, or its agent, shall deliver gas to Seller at the
paint(s) of receipt at pressures sufficient to enter Seller's facilities at
such point(s).
(13) The points of delivery to Buyer for exchange gas hereunder
shall be at Buyer's Plants covered hereunder which are outside corporate
limits and served directly from Seller's Transmission Division facilities.
34
fhe parties may, from time ro time, mutually agree to establish other points
of delivery to Buyer for the exchange of gas hnreunder,
(14) For the purpose of determ$.ning the quantity of gas exchanged
and sold hereunder during any Billing Month, it is agreed that the
accumulated daily volumes of gas received by Seller from Buyer or its agent
at the receipt points will be considered to be the volumes of gas redelivered
to Buyer hereunder as exchange gas and such quantity shall be subtracted from
the total quantity of gas delivered by Seller to &uyer's Plnnts hereunder
during such Billing Month in determining the quantity of gas sold under this
contract,
(15) The exchange volumes delivered to Buyer hereunder shall not
apply toward Buyer's minimum purchase obligation as set forth in Article II
pf this contract,
ARTICLE XIV
REGULATORY BODIES:
(1) This agreement and all operations hereunder are subject to the
applicable federal and state laws and the applicable ordinances, orders,
rules and regulations of any local, state or federal governmental authority
having or asserting jurisdiction) but nothing contained herein shall be
construed as a waiver of any right to question or contest any such law,
ordinance, order, rule or regulation in any forum having jurisdiction in the
premises.
(2) In the event either Buyer or Seller shall be required by a
judgement or order of any governmental authority having or asserting
jurisdiction to either pay or charge prices for gas sold or exchanged by
Seller to Buyer hereunder which are higher or lower than the prices
stipulated or provided for herein with respect to gas sold or exchanged by
35
Seller ec• Buyer hereunder, the party adversely affected shall have the optior,
of cancollin,g this agreement by giving the other party written notice of its
intention to do so within six (6) months after the date of such judgement or
order, which cancellation shall become effective at the end of one (1) year
from and after the date of such notice,
ARTICLE XV
RR r NATION PRIVILECESI
(1} If either party hereto shall fail to perform any of the
covenants or obligations imposed upon it under and by virtue of this
agreement (except where such failure shall be excused under any of the
provisions of this agreement), then in such event the other party may, at its
option, terminate this agreement by proceeding as followst The party,not in
default shall. cause a written notice to be served on the party in default,
stating specifically the cause for terminating this agreement and declaring
it to be the intention of the party giving the notice to terminate the same;
whereupon the party in default shall have thirty (30) days after the service
of the aforesaid notice in which to remedy or remove the cause or causes of
default stated in the notice of termination, and if within said period of
thirty (30) days the party in default does so remedy and remove said cause or
causes, then such notice shall be nullified and this agreement shall continue
in full force and effect. In case the party in default does not so remedy
and remove the cause or causes of default within said period of thirty (30)
days, then this agreement shall terminate (become null and void) upon the
expiration of said period.
(2) If the average price per one thousand (1,000) cubic feet of
gas paid by Buyer under this agreement for gas over each month of six (6)
consecutive months exceeds by more than twenty percent (20%), the average of
36
the monthly price on a Million British Thermal Units basis of No, 6 fuel oil,
0.7% sulphur, Estimated U.S. Gulf Coast spot, as determined from Platt's
Oilgram, over the same period of six (6) months, then Buyer may, within
thirty (30) days following such six (6) consecutive month period at its sole
discretion, elect to terminate this agreement by giving Seller six (6)
months' written notice of the termination.
(3) Neither Buyer nor Seller shall have any right to any damages
against the other for termination of this agreement or termination of gas
service under any provisions contained herein, and should Buyer obtain from
any court, administrative or regulatory authority, an order directing Seller
j to continue gas service after Seller's termination of this agreement or
Seller's termination of gas service, under any provision contained herein,
such service shall be at a price mutually agreeable between Buyer and Seller.
(4) Any termination or cancellation of this contract under any
provisions contained herein shall be Githout prejudice to the right of the
party not in default to collect any amounts due it and without waiver of any
other penalty to which the party not in default may be entitled for violation
of this agreement.
ARTICLE XVI
GErERAL;
(1) Warranty., Each party hereto warrants the title to the gas
delivered hereunder, its right to sell same, and that same is free from all
liens and adverse claims.
(2) Right-of-Way; Buyer hereby grants to Seller the right to lay
and maintain pipelines and install metering stations and other necessary
equipment on Buyer's Plant sites, as provided for in Article IV hereof, only
for the purpose of supplying gas hereunder, and such lines and other
37
,
equipment placed by Seller on said plant site shall remain the personal
property of Seller and, subject to the terms of this agreement, may be
removed by Seller at any time.
(3) Indemnityt As between the parties hereto, each party shall be
in control and in possession of the gas deliverable by it hereunder and
responsible for any damages or injuries caused thereby until the same shall
have been delivered to the other party at the points of delivery or points of
receipt, except injuries and damages which shall be occasioned solely and
proximately by the negligence of the party receiving such gas. After such
delivery of gas, receiving party shall be deemed to be in exclusive control
and possession thereof and responsible for any injuries or damages caused
thereby, except injuries and damages which shall be occasioned solely and
proximately by the negligence of the party delivering such gas,
(4) Waiver of Breach: The waiver by either party of any breach of
any of the provisions of this agreement shall not constitute a continuing
waiver of other breaches of the some or other provisions of this agreement.
(5) Noticest All notices provided for herein shall be in writing
and shall be deemed to be delivered to Seller when addressed to tote Star Gas
Company, Attentiont Industrial Gas Sales Department, 301 South Harwood
Street, Dallas, Texas 75201, and deposited in the United States mail, postage
prepaid, and shall be deemed to be delivered to Buyer when addressed to City
Manager, City of Denton, Denton, Texas 76201 and deposited in the United
States mail, postage prepaid, provided that either party may, by notice to
the other, change its address used for the purpose of recoiving notices,
(6) Captions or Headings: The captions or headings preceding the
various parts of this agreement are inserted and included solely for
convenience and shall never be considered or given any effect in construing
38
this agreement or any part of this agreetent, or in connection with the
intent, duties, obligations or liabilities of the respective parties hereto,
(7) Assignmentt This agreement shall be binding upon the parties
hereto and their respective successors and assigns. All or any part of the
rights or obligations of either party hereto may be at any time assigned, but
any such assignment, unless accepted in writing by the other party hereto,
shall not relieve the assignor of its obligations hereunder, in the event the
assignee shall fail to perform the same in accordance with the terms hereof,
ARTICLE XV11
REPLACEMENT OF PRIOR CONTRACTI
This agreement, effective as provided herein, shall replace and
supersede that. certain Gas Sales Contract between Seller and Buyer) dated
November 7, 1977, relating to Buyer's Plants, together with any amendments or
supplements to said contract except that any retroactive adjustments to the
weighted average price determination as provided in paragraph (3) of Article
VI of such Gas Sales Contract shall continue for a pariod of two (2) years
following such termination of said Gas Sales Contract,
f
39
IN WITNESS MIERF,OP, this agreement has been executed in duplicate
originals by the parties hereto on this the day of
!^S3, effective as of twelve o'one (12101) a.m. central standard time on the
first day of the month immediately following such execution date.
ATTESTi LONE STAR GAS COMPANY
By
Tice President
"Seller"
ATTEST: CITY OF DENTON, TEXAS
A
By
Mayor
"Buyer"
40 ,
(M) BIT I)
GAS OPERATING REVENUES AND EXPENSES Rrvi+ed 933 01
If solely engaged in intrastate operations complete column (c) only. 02
03
Texas 04
Particulars Intrastate Total 05
Operations Operations 06
(c) 07
OPERATING REVENUES
08
Sales of Gas 09
(480) Residential Sales 422 164 g2G $ _4}LZE 10
(481) Sm, Cormnercial and Industrial Sales 2~ 11 .36A 179 (481) Lg. Commercial and Industrial Sales )7+ 40) 4f~ 179 0 12
(482) Other Sales to Public Authorities 2L-053 739 23 053 734 13
(4$3) Sales for Resale 9 570 QL _ 2 14
(484) Interdepartmental Sales 15
TOTAL SALES OF GAS (Lns. 10 thru 15) S 0-
26 4 $2 1, 7,0,q 7?2 16
Other Onerating Revenues 17
t4S)5 ('orfeited piscounts j $ q80 044 5 9m n49 18
(488) H%scellaneous Service Revenues E 219
(489) Revenues from Transportation of Gas of Others 528 Qp 20
(490) Sales of Products Extracted from Natural Gas 21
(491) Revenues from Natural Gas Processed by Others r96 q2-
27 A
„ 22
(49>) lr.:id^r,tal Gasoline and Oil Sales 4 SZ3 S5~ 23
(41)3) Ren% from Gas Property
('•94) Interdepartmental Rents - ~ ~ 3 ?oa 4h~ 24
25
(495) Other Gas Revenues 10 4 a n a 1 n l 26
TOTAL OTHER OPMATING REVENUES (Lns, 18 thru 26) $ a A h $ r,M 1 27
TOTAL OPERATING REVENUES (Ln. 16 plus 27) 52 'a M ~~6ISo "z~4 41o 28
OPERATING EXPENSES 29
Opetntion and haintenance Expenses ~0
(700.742) Manu£kc ured Gas Production Expenses $ $ 3)
(750.791) Natural Gas Production Expenses 13 b64 360 135.8 32
(795-798) Exploration and Development Expenses 33
(800-805) Purchased Cat, Expenses 1-782 245 n l ,844 S~ ZIL 34
(806-813) Other Gas Supply Expenses G 980 6 4 4 4 35
(814-837) Underground Storage Expenses 361 2$y 3 998 gyp 36
(840-84843) Other Storage Expenses 37
(850.867) Transmission Expenses 50 81 5 22 70 38
(870-894) Distribution' Expenses 1 k4-6-Z5~- 32 4 6839
(901-905) Customer Accounts Expenses 24 668 212) 2s 55~ 862 40
(909-918) Customer Service & Sbles Promotion Expense 8 6 091 7 41
(920-932) Administrative and Geri era 1. Expe'nse' 5 4 051 6aO 42 181 TOTAL.OPERATION A1,11) PWINTENANCE EXPENSES $ 4 $I ) o
h 43
(Lns. 31 thru 42) 44
OtYlier 0 eratin Expenses 45
(403) Depreciation Expenses $ 20 n q 160 $ 20 y9A2 46
(404-407 2) Combined Amortization Expenses I Oil 518 1 0 LL 47
(408,1) Taxes Other Than Income Taxes 62 S95 1494. 6~ S 48
(409,1) Income Taxes 22 997 D 91) 49 '
(410,1) Provisions for Deferred Income Taxes 10 61 26a- 10 01 268 50
(411,1) Income Taxes Deferred in Prior Years - Credit o 9 51
(412.1-412.2) Investment Tax Credits o 66 4 o" 1a 52
TOTAL OTHER OPERATING EXPENSES (Lns, 46 thru 52) $ II! 22 4,) $ 53
TOTAL OPERATING EXPENSES (Ln, '43 plus 53) $2 012 Sf, f4, a 0 4 54
4T T GAS OPERATING INCOME (Line 28 minus line 54) $ 112 38 5F. $ 11 tn~ oSr 55
GAS OPERATING R.EVEh'UES AND EXPENS£s
' of
If solely engaged In intrastate operations complete column (c) only,
02
Particulars Texas 04
Intrastate Total 05
(a) Operations operations 06
opElwTltic REt2 NUES (c)
Sales of Gas (b) 07
03
(480) Residential Sales 09•
(481) Sm, commercial and Industrial Sales $ 10
(481) Lg. Commercial and Industrial Sales 11
(452) Other Sales to Public Authorities 12
(463) Sales for Resale 13
(484) Interdepartmental Sales 14
TOTAL MALES OF GAS (Lns, 10 thru 15) 15
16
Other 0~ era_ ting Revenues
(487)' forfeited Discounts $ i17
s
(488) Hiscellaneow, Service Revenues 8
(489) Revenues from Transportation of Gas of Others 19
(490) Sales of Products Extracted from Natural Gas 1 835 18 20
(491) Revenues from Notural Gas Processed by Others 21
(492) Incidental Gasoline and Oil Sales 22
(493) Rent from Oat Property 23
(494) Interdepartmental Rents 24
(495) Other Gas Revenues 25
TOTAL OTHER OPERATING REVENUES (Lns, 18 thru 26) g 26
TOTAL OPERATING REVENUES (Ln, 16 plus 27) 5 S 11 835 In 27
S > 35 ino 28
OPERATING EXPENSES
0 erat ion and Naintenauce Ex erases 29
700-742) ,ati}ra cLured Gas Production Expenses $ 30
(150-79)) Natural Gas Production Expenses $ 31
(795-795) Exploration and Development Expenses 32
(800.805) Purchased Gas Expenses 33
(806-8)3) Other Gas Supply Expenses 34
(814.837) Underground Storage Expenses 35
(840-848,3) Other Storage Expenses 36
(850-867) Transmission Expenses 37
(810-894) Distribution Expenses 1 3 I 38
(901.905) Customer Accounts Expenses 39
(909.918) Customer Service & Sales Promotion Expense 40
(920-932) Administrative and General Expenses 41
TOTAL' OPERATION WD KAINTENP.NCE EXPENSES 565 597 42
(Lns. 31 thru 42) S S 100 $99 43
44
Other O eratin Ex erases
403) epreciation Expenses 45
(404-407,2) Combined Amortization Expenses $ 2 648 324 46 (408,)) Taxes Other Than Income Taxes 47
(409,1) Income Taxes 1 4 11 48
654 68
(410,1) provisions for Deferred!Income Taxes 2 l 4 411 49 76
(411.1) Income Taxes Deferred in Prior Years - Credit 8 190 50
(4)2,1.412,2) Investment Tax Credits 51
TOTAL OTIIER OPERATING EXPENSES (Lns, 46 thru 52) $ 66 432 52
6 217 Ibl 53
TOTAL OPERATING EXPENSES (Ln, 43 plus 53) $ $ 80 50
S 11 31 54
NET GAS OPERATING INCOME (Line 28 minus line 54) $
S 6 17 049 5,5
( EXHIBIT III )
01 BALANCE SHEET
02 _
03 Assc s andnd Other bebits Lference Balance at
D (C
05 04 RDecember 31
07 UTILITY PLA)1'f
08 (1O1) Utility Plant in Service P. 16, Ln, 44('e) $ 840 1 0 9
09 (102) Utility Plant Purchased or Sold
10 (103) Util, Plant in Process of Reclassification
11 ()04) Utility Plant Leased to Others
12 (105.105.1) Properties Held for Future Use
13 (106) Completed Construction Not Classified
14 (107) Construction Work in Progress c
15 (109-1)3,2) Accumulated ;'rov, for Depr. 6 Amort, Z
k-L333 211 104)
16 (114) Utility Plant Ac-luisition Adjustments
17 (115) Ac. Prov, for Amort, of Otil, Plant Acq, Adj.
30 AIM
18 (116) Other Utility Plant Adjustments
l9 (10) Gas Stored Underground Non-current
20 TOTAL NET UTILITY PLANT (Lines 8 thru )9) 11 o4S
S 591 9 056
55
21 OT}{ER PROPERTY AND
11;1T.ST11E\TS
"22 7}21) Nonutility Property $ 535 634
23 ()22) Accum, Prov, for Deprec, and Amorti, IS 596
24 (123) Investment in Associated Companies
25 (124) Other Investments
26 (125) Sinking Funds 82 IR 158
27 (126) Depreciation Fund q
28 ()28) Other Special Funds 40 135
29 TOTAL NET OT= PROPERTY L IVESTNENTS
30 (Lines 22 thru 28) S 83 Oi5 3}
31 CURRENTS AND ACCRUED ASSETS
32 (131)' Cash
33 (132-134) Special Deposits $ 3 500 834
34 (135) Working Funds
35 (136) Temporary Cash Investments 284 5
36 (141) Notes Receivable p, 13, Ln, 17(e)
37 (142) Customer Accounts Receivable b
38 (143) Other Accounts Receivable 1 4 446 31
39 (144) Accum, Prov, for Uncollect, Accts,-Cr, G
40 ()45) Notes Receivable from Assoc, Companies 4
41 (146) Accounts Receivable from Assoc, Companies p, 13, L Lnn, 34(b)
42 (1a1) Fuel Stock p 13, , 34(c)
43 (152) Fuel Stock Expenses
44 (153) Residuals and Extracted Products
45 (154) Plant Materials and Operating Supplies 16 47
46 (155) Merchandise 11 ; 6
47 (156) Other Materials and Supplies 1 OS S
48 (163) Stores Expense '
49 (164) Gas Stored Underground - Current
,t50 (165) Liquefied Natural Gas Stored 132 410 441
51 (166) Prepayments
52 (10-168) Advance Payments 1 435 852
S3 (171) Interest and Dividends Receivable 1 786 480
54 (172) Rents Receivable
55 (173) Accrued Utility Revenues b 946
5 (174) Miscellaneous Current and Accrued Assets
TOTAL CURRENT AND ACCRUED ASSETS 8 687 8781
5A
58 (Lines 32 thru 56) S 357 119 856
( EXHIBIT IV
BALANCE SHEET
02 ~
0 Assets and Other Debits Cross Balance at
04 Reference December 31
05 (b Dr. (Cr.)
06 (a) 07 UTILITY PLANT
08 (101) Uti.kity Plant in service p, 16, Ln, 44(e) $ 96414693
09 (102) Utility Plant Purchased or Sold
10 (103) Util, Plant in Process of Reclassification
11 (104) Utility Plant Leased to Others
)2 005-105,1) Properties Held for Future Use 134160 _
13 (106) C opleted Construction Not Classified 329307
14 (107) Cinstruction Work in progress 2 7 7694
15 (106.1)3,2) Accumulated Prov, for Depr, & Awort, 21 7456)
16 0)4) Utility Plant Acquisition Adjustments
17 (115) Ac, Prov, for Amort, of Util, Plant Acq, Ad,),
18 (116) Other Utility Plant Adjustments
)9 (117) Gas Stored Underground - Non-current
20 TOTAL PET UTILITY PLANT (Lines 8 thru )9) 5 1609 69
21 OTHER PROPERTY AIM INVESTMENTS
22 (121) Nonutility Property $
23 (122) Accum, Prov, for Deprec, and Amort,
24 (123) Investment in Associated Companies
2S ()24) Other Investments
26 (125) Sinking Funds
27 (126) Depreciation Fund 6
28 (126) Other Special Funds
29 TOTAL NET OTHER PROPERTY & INVEST`0?TS
30 (Lines 22 thru 28)
31 CURRENT AM ACCRUED ASSETS
32 (131) dash S 1403
33 (132-134) Special Deposits
34 (135) Working Funds
35 (136) Temporary Cash Investments
36 (141) Notes Receivable p. 13, In. )7(e)
37 (142) Customer Accounts Receivable
38 (143) Other Accounts Receivable 131672
39 0 44)'Accum, Prov, for Uncollect, Accts,-Cr, r
40 (145) Notes Receivable from Assoc, Companies p, 13, Ln. 34(b)
41 (146) Accounts Receivable from Assoc, Companies p, 13, Ln. 34(c) 723,5117
42 ()5)) Fuel Stock.
43 (152) Fuel Stock Expenses
44 (153) Residuals and Extrwr d Products
45 (154), Plant Materials and Operating Supplies 193314
46 05S) Merchandise
47
(156) Other Materials and Supplies
48 (163) Stores Expense
49 (164) Gas Stored Underground - Current
50 (165) Liquefied Natural Gas Stored
51 (166) Prepayments 7 10
52 (167.168) Advance Payments
S3 (171) Interest and Dividends Receivable
54 (112) Rents Receivable
55 (173) Accrued Utility Revenues
56 (174) Miscellaneous Current and Accrued Assets
57 TOTAL CURRENT ANA ACCRUED ASSETS S 668816
58 (Lines,32 thru 56) "
AFFIDAVIT AND STATEMENT
OF CONSE14T TO CONTRACT RATE
THE STATF, Of TEXAS X
COUNTY Or X
BEFORE ME, the undersigned authority on this day personally appeared
Mayor, City of Denton, Texas, and after being sworn stated
as followsl
City of Denton, Texas (Denton) states that it has voluntarily
agreed to the r.ste for gas service set out in the Gas Sales
and Exchange Contract with Lone Star Gas Company, dated
, Denton stipulates that the rates
in its contract with Lone Star are just and reasonable
because at least one of the following conditions was metr
(1) neither Lone Star nor Denton had an unfair advantage
during contract negotiations; or (2) the rates in the
contract are substantially the same as rates contained in
contracts between Lone star and two or more customers
contracting under the same or similar conditions of service;
or (3) competition exists either with another gas utility,
another supplier of natural gas or a supplier of an alternate4
form of energy in regard to similar service provided in thei'
agreement,
CITY OF DENTON, TEXAS
By
Mayor
SWORN AND SUBSCRIBED BEFORE ME this day of ,
19____ , to certify which witness my hand and seal of office,
Notary Public in and for
County, Texas
RAILROAD COlfAIISSION OF TEXAS
GAS UTILITIES DIVISION
114 REI PETITION OF LONE STAR X
GAS COMPANY FOR APPROVAL OF X CAS UTILITIES DOCKET NO
WAIVER
TO THE HONORABLE RAILROAD COMISSION OF TCXASf
City of Denton, Texas hereby gives notice the corporation will not make an
appearance in the subject docket and hereby waives its right to any hearing or
proposal for decision in this proceeding as it relates to the original tariffs
attached to and made a part of the Gas Sales and Exchange Contract dated
_ 1983 between City of Denton, Texas and Lone Star Gas Company, a
Division of CNSERCH CORPORATION.
Respectfully submitted,
CITY OF DENTON, TEXAS
By
Mayor
~G4
• ENSBRGH
EXPLORATIONiNo
1817 Wood street R. M. Urwronce
Dallas. Texas 75201 Voce Pl"k*nl
214.748.1114 MuxebnQ
Mailing Address
D
0 Box 2648
Dallas. Texas 75221
October 21, 1983 I
C~
City of Bryan
Bryan, Texas 77801
City of Denton
Denton, Texas 76201
City of Garland
Garland, Texas 75040
City of Greenville
Greenville, Texas 75401
Res Natural Gas Purchase
Agreement
Gentlemen:
Enserch Exploration, inc. (seller) and the City of
Bryan, Texas, et al, collectively referred to hereafter
as Buyer, desire to enter into a Natural Gas Purchase
Agreement (Agreement) providing for the sale and purchase
of such quantities of surplus natural gas which seller
has available and the right to sell on any given day.
Buyer shall have the right but not the obligation to pur-
chase up to twenty (20) million cubic feet of gas per
day, subject to Seller having such surplus gas available
for sale on any given day, said surplus gas production
will be made available to Buyer or to Lone Star Gas Com-
pany (Buyer's Accent) under this Agreement on a monthly
basis at the Delivery Point(s) hereunder. Both Buyer and
Seller hereby mutually agree to the following:
I.
Delivery Point. The Point(s) of Delivery for all
surplus gas e`~"lf-v-ered hereunder shall be at the inlet
flange of Buyer's Agent's meter(s) located at various
supply sources within the State of Texas. Title to all
gas delivered hereunder shall pass from Seller to Buyer
at said Point(s) of Delivery. Buyer shall arrange and
City of Bryan, et al
Page Two
October 21, 1983
pay for the transportation of the gas covered hereunder
fro-, the delivery point to its final destination, Buyer
and Seller shall not allow the gas hereunder to become
subject to the provisions of the Natural Gas Act of 1938,
as amended, through any action or inaction while said gas
is in their respective physical possession.
Seller shall be in control and possession of the gas
sold and purchased hereunder and be responsible for and
shall indemnify and hold Buyer and Buyer's Agent harmless
from any damage or injury caused thereby until the same
shall have been delivered to Buyer or Buyer's Agent at
the Point(s) of Delivery, Buyer shall be in control and
possession of the gas sold and purchased hereunder and be
responsible for and shall indemnify Seller from any
damage or injury caused thereby once the same has been
delivered to Buyer or Buyer's Agent at the Point(s) of
Delivery,
Ix,
TERM. The term of this Agreement shall commence and
the provisions contained herein shall become effective on
the date of initial delivery and continue thereafter in
full force and effect until November 1, 19841 and from
month to month thereafter until terminated by either
Buyer or Seller giving the other party written notice
thirty days prior to the date of termination.
III,
PRICE AND PAYMENT. For all of Seller's gas
delivers to Buyer's Agent and purchased hereunder, Buyer
agrees to pay Seller and seller agrees to accept $3,13
per MMBTU.
Heating value is to be calculated at a pressure of
14.65 psis on a dry basis and temperature of 600F. The
unit of measurement shall be one (1) cubic foot of gas at
14.65 psia and 600F.
Buyer and seller acknowledge that the present sever-
ance, production, gathering or similar taxes amount to
seven and one-half percent (7-1/28) of the purchase
price. Buyer agrees to reimburse Seller monthly for one
hundred percent (1008) of the aggregate amount of all
severance, production, gathering, or similar taxes (not
including excess profits, capital stocks, franchise or
City of Bryan, et al
Page 't'hree
October 21, 1983
general property taxes) levied, assessed or fixed by any
taxing authority or authorities and paid by Seller with
respect to gas sold and delivered hereunder which exceeds
the aforesaid amount in effect on the date hereof,
Seller shall invoice each individual City which is a
signatory party hereto for its proportionate share of the
total quantity of gas delivered each month in accordance
with a schedule to be provided each month by Buyer or
Buver's Agent. Seller shall invoice each City by the
15th day of each month for gas delivered for its account
the previous month and each City shall pay Seller the
amount invoiced by the 25th day of the month in which the
amount is invoiced.
IV.
Quality, Seller shall deliver for receipt by
Buyer's Agent natural gas which is of merchantable qual-
ity and reasonably free from water and other objection-
able fluids and solids and which contains not more than
one-half percent (.5%) by volume of oxygen, and not more
than five (5) grains of total sulphur nor more than
one-quarter (.25) grain of hydrogen sulphide per one
hundred (100) cubic feet of gas, nor more than three per-
cent (38) by volume carbon dioxide and nitrogen, and not
more than seven pounds (7#) of water per one million
(1,000400) cubic feet of gas and which has a heat con-
tent of not less than nine hundred fifty (950) British
Thermal Units per cubic foot under the conditions of
measurement contained herein.
V.
,Quantit . Seller shall endeavor to deliver to Buyer
such quant es of gas as Buyer desires to purchase on
any given day up to the quantity specified in paragraph
one, however Seller dogs not warrant the delivery of any
specified quantity of gas at any time. In order to
facilitate the availability of such quantities of gas as
Buyer may desire to purchase, Buyer shall designate a
representative to provide Seiler not less than thirty
(30) days prior to the beginning of each calendar month,
a notice of quantities which Buyer desires to purchase
from Seller, if available, during that calendar month.
Buyer agrees to hold Seller harmless, including
attorney's fees incurred by Seller, which result from any
disputes arising between the cities as to the proper
allocation of gas between the cities.
City of Bryan, et al
Page Four
October 21, 1983
VI,
warranty, Seller hereto warrants to Buyer that at
the time_-67-delivery of gas hereunder it will have good
title or the right to deliver such gas, and that such gas
will be free and clear of all liens and adverse claims,
and Seller agrees with respect to the gas delivered by
it, to indemnify Buyer against all suits, actions, debts,
accounts, damages, costs ( including Attorney's fees),
losses and expenses arising from or out of any adverse
claims relating to Seller's title of any and all persons
to or against said gas.
VII,
Recitals and Covenants. The intent and purpose of
this Agreement is to enable Buyer to purchase gas from a
source other than its traditional utility source of
supply. Buyer is not relying on and will not rely on any
expectation of sales or service from Seller except as
specifically provided in this Agreement. It is intended
that Seller's furnishing of gas to Buyer be solely and
strictly under the quantity, terms, and other provisions
of this Agreement,
Buyer believes that it is in its best interest to
purchase gas under the terms and conditions of this
Agreement and without the benefit of the duties, obliga-
tions, and conditions of sale and service wh' could
apply to seller were Seller deemed to be a '.lity.
Buyer recognizes and agrees that in purchasing gas under
these conditions it will not have available certain legal
remedies against Seller which it would have were Seller
to be a utility or, even if Seller were deemed to be a
utility, were gas to be purchased from Seller under cir-
cumstances and conditions other than under this Agree-
ment.
c
Buyer agrees and stipulates that, in making sales to
Buyer under this Agreement, seller is neither the sole
nor exclusive source of supply of gas to Buyer nor will
Seller be engaged in the making of a city gate sale to
Buyer.
Buyer hereby waives any and all rights to assert or
claim that Seller has any obligations whatsoever to pro-
vide natural gas sales or service to Buyer other than
under the terms and conditions of this Agreement, or that
any obligations will accrue by virtue of sales or service
under this Agreement. This waiver specifically includes,
Ci tv Of Bryan, et al
Page Five
October 21, 1983
but is not limited to, any claim or assertion that any
cessation of sales or service provided ry Seller to
Buyer, provided such cessation is in conformance with the
provisions of this Agreement, constitutes abandonment of
Buyer or that Seller must receive permission for such
cessation from any governmental authority,
Should, for any reason, Seller ever be deemed to
require the permission of any governmental authority for
the cessation of service and sales to Buyer, except to
the extant such cessation as strictly provided for in
this Agreement, Buyer agrees that such cessation is in
the public interest and that such permission should be
granted and/or deemed granted at the time of execution of
this Agreement,
The parties hereto agree that this Agreement may be
executed in one or more copies, or counterparts, each of
which, when executed by Seller and any of the parties
listed below, as Buyer, shall constitute and be an origi-
nal effective agreement between such Seller and Buyer(s)
executing same as of the date of execution by seller,
whether or not this copy or any counterparts is signed by
all the parties named herein.
pleasef exethis cutes this u letter eT on a1bdehalf o of our Agreement,
return two copies for execution by our company, City and
Yours very truly,
R. M, Lawrenc
1 114
RML/vw
"BUYER" "SELLER"
AGREED TO AND ACCEPTED THIS AGREED TO AND ACCEPTED THIS
'DAY OF , 1983.
DAY OF , 1983.
CITY OF BRYAN, TEXAS ENSERCH EXPLORATION, INC.
By
Title G, R• Bryan
Senior Vice President
` City of Bryin, et al
page six
October 21, 1983
AGREED TO AND ACCEPTED THIS
,,,_-DAY OF , 1983.
CITY OF DENTON, TEXAS
B Y .T_ - -
Ti tl e
AGREED TO AND ACCEPTED THIS
DAY OF , 1983,
CITY OF GARLAND, TEXAS
By
Title
AGREED TO AND ACCEPTED THIS
DAY OF , 1963,
CITY OF GREENVILLE, TEXAS
BY-,-
Title
i
i'.
' 1 I U~~/i.•3
IRAN SF " 01' GAS AGREEMENT t~
1 1
THIS AGREEMENT, made and entered into by and between the CYfY
OF BRYAN, the CITY OF DENTON, the CITY OF GARLAND, and the CITY OF
GREENVILLE, each of which is a vtunioipal corporation, hereinafter
collectively referred to as "Cities," and LONE STAR GAS COMPANY,
hereinafter reforred,to as "Lone Star,"
I I A E Ei HI
WHEREAS, Lone Star Gas Company and the Cities of Bryan, Denton,
Garland, and Greenville made and entered into the following "Gas Sales
and Exchange Contracts,"
a) Under date of 1983, for the sale, purchase and
exchange of natural gas for use as fuel for the City'of Bryan's'
electric generation purposes, and
b) Under date of , 1983, for tha sale
purchase and
exchange of natural gas for use as fusi for the City of
Denton's electric generation purposes, and
c) Under date of , 1983, for the sale
purchase and
exchange of natural gas for use as fuel for the City of
Garland's electric generation purposes, and
d) Under .iate of , 1983, for the sale
purchase and
exchange of natural gas for use as fuel for the City of
Greenville's electric generation purposes, and
1 WHEREAS, Lone Star and Cities desire to enter into a "Transfer
of Gas Agreement" as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and the sum of
Ten Dollars ($10,00) cash in hand paid to each party by the other party
hereto, the receipt and sufficiency of which is hereby acknowledged, and
of the mutual convenants and agreements herein contained, Cities and
Lone Star do hereby contract and agree with each other as followsi
ARTICLE I
SUBJECT MATTER
it is agreed that from time to time one or more individual
Cities may elect to take and receive a quantity of gas that is less than
the daily or annual maximum quantities provided in the respective "Gas
Sales and Exchange Contract" or "Contracts" or is less than the quantity
that may be allocated under Lone Star's curtailment program, or may
elect instead to receive an equal quantity of gas at any other one or
more individual Cities' plants, which shall be hersinafter referred to
as "transfer of gas" subject to the following conditionsi
a. Cities shall notify Lone Star by telephone through normal
dispatching procedures a reasonable amount of time in advance of
its desire to make such a transfer of gas and shall designate the
quantity of Ise by sales and exchange category and the City or
Cities transferred from and to, and the period of time during which
such transfer shall take place, and
b. Lone Star shall agree to such a transfer of gas except when
Lone Star determines that to do so would interfere with Lone
1 1
f
Star's curtailment program or with 'one Star's ability to
provide adequate service to customers accorded an equal or
higher priority than Cities by Lone Star, and
Any individual City shall never, by virtue of this agreement
have the right to take and receive in excess of the daily or
hourly maximum quantities provided for any City by the Gas
Sales and Exchange Contract in effect for such plant, and
d, All quantities of gas, transferred from any individual Cities'
plants as provided herein, shall apply toward maximum and
minimum quantities of the Gas Sales and Exchange Contract in
effect for the plant from which such transfer of gas was made
provided, however, exchange quantities transferred do not apply
to any of the Cities minimum volume obligations,'and
e. Cities may terminate such a transfer of gas at any time by
giving reasonable advance notice to Lone Star of its desire to
do so and Lone Star may likewise termiate a transfer of gas by
giving Cities reasonable advance notice if Lone Star has
determined that to continue a transfer would interfere with
Lone Star's curtailment program or with Lone Star's ability to
provide service to customers accorded an equal or higher
priority than Cities by Lone Star.
ARTICLE 11
TERM
Subject to the other terms and provisions hereof, this
agreement shall be effective from 1201 a.m. on the _
day of,
1983 and shall thereafter continue and remain in full force
and effect for a period and term extending until the termination of any
three of the aforesaid Gas Sales and Exchange Contracts,
ARTICLE III
PAYMENT
All quantities of gas transferred from City, as provided for
herein, shall be deemed to have been purchased or exchanged by the City
to which such transfer of gas was made except that the quantities
transferred shall not apply toward the maximum and minimum quantities of
the Gas Sales and Exchange Contract for the City to which the transfer
is made, price of gas, rendering of statements and bills, and payments
shall be according to the terms and conditions of the Gas Sales and
Exchange Contract in effect for the City to which such transfer of gas
was made,
ARTICLE IV
NOTICES
1, The parties hereto recognize that in u?der to determine sales
volumes delivered each billing month under the aforesaid contracts, it
is necessary for Lone Star to deduct the exchange volumes delivered
under such contracts at each plant during each billing month from total
deliveries at each plant. Therefore, the Cities agree to furnish to
Lone Star at itrl office in Dallas, Texas, a written report of all
exchange gas transferred hereunder during any billing month within four
(4) working days following the end of such billing month. Only volumes
so reported each month shall be considered as exchange volumes
transferred hereunder, The Cities will notify Lone Star in writing of
the sales volumes transferred hereunder each billing month within thirty
(30) days following the end of such billing month; provided, however, to
facilitate Lone Star's determination of each of the Cities compliance
with their respective minimum volume obligations, the Cities will notify
Tone Star of the sales volumes transferred during each December by the
fourth (4th) working day of the following January, An individual City's
transfer volumes for any calendar year shall apply to such City's
contract maximum and minimum volume determination under such City's Gas
Sales and Exchange Contract only i£ such transfer volumes are reported
in writing to Lone Star by the fourth (4th) working day following the
end of such Calendar Year,
2, If, during any billing month, Lone Star elects to reduce the
Base Price to an individual City, as provided in Article VI, paragraph
(2), subparagraph (h) and (i) of each City's Gas Sales and Exchange
Contracts, then such City agrees to furnish to Lone Star, at'its office
in Dallas, Texas, a written report of the sales and exchange volumes
transferred hereunder during each billing month within four (4) working
days following the end of such billing month. Only volumes so reported
shall be considered as sales and exchange volumes transferred hereunder
during such billing month,
ARTICLE V
AGENT FOR CITIES
Cities %hereby appoint Texas Municipal Power Agency their agent
for the purpose of receiving and giving notices, statements, and
carrying on normal operating and dispatching communication hereunder.
Lone Star is hereby authorized by Cities to so deal with such agent with
the same reliance as if it were dealing with Cities and Cities shall be
bound by all tho acts of its agent; provided that Cities, oollectivaly,
may by written notice actually delivered to Lone Star designate a
different agent; provided, however, such different agent is acceptable
to Lone Star,
IN WITNESS WHEREOF, this agreement has been executed in
sextuplicate originals by Lone Star and Cities on the day of
1963,
ATTESTt LONE STAR GAS COMPANY
- By t
Assistant Corporate Secretary
"LONE STAR"
ATTEST; CITY OF BRYAN
Byt
City Secretary >
ATTESTt CITY OF DENTON
By r
City Secretary
ATTESTI CITY OF GARLAND
Byt
City Secretary
ATTEM CITY OF GREENVILLE
Syt
City Secretary
"CITIES"
GAS EXCHANGE AGREEMUT
THIS AGREENEN'r made and entered into on this the / daof
19 by and bsrween LONE STAR GAS COMPANYa Division of
ENSERCII CORPORATION, a Texas corporation, heroinafter referred to al "Lone Star"
and the CITY OF BRYAN, TEYASI CITY OF GARLAND, TEXASI CITY OF GREENVILLE, TEXASI
and CITY OF DENTON, TEXAS) each of which is a municipal corporation, hereinafter
collectively referred to as "Cities"I
W I T N E S S E T It i
WHEREAS, Cities own or control certain quantities of natural gas and
desire that Lone Star receive such gas from Cities (or its designee) at the
points of receipt as hereinafter set forth and deliver equivalent quantities of
gas to the points of deliver), as hereinafter set forth, and
WHEREAS, Lone Star owns and operates s pipeline system and is willitilg
to exchange gas for Cities as hereinafter set forthl
NOW, THEREVORE, in consideration of the mutual covenants and conditions
heroin contained, Lone Star and Cities hereby agree and covenant as follows,
ARTICLE I,
QUANTITY
1,1 Cities represents that from time to time it may desire for Lone
Star to receive and deliver gas at the points of receipt and delivery ns set
forth hereunder in quantities as agreed to by the parties. It is agreed that the
volume of gas to be exchanged under this contract: will not exceed a daily volume
of twenty thousand (20,000) Mcf, Both parties recognize that gas delivered at
the points of delivery as set forth hereunder may be commingled with gas
delivered under other Lone Star agreements with Cities, therefore, Lone Star and
Cities agree that exchange deliveries to Cities hereunder shall be co-1*4dared,
subject to the terms and conditions set forth herein, as the first gas ddlitvered
during any month at the Olinger point of delivery as hereinafter defined and if,
1
r
during any month, the accumulated daily quantities of exchange gas received
hereunder by Lone Star from Cities or its designee exceed the total quantity of
all gas delivered by Lone Star to such Olinger paint, such excess amount of
exchange gas hereunder shall be considered the first volumes delivered at the
uansby point of delivery as hereinafter defined. The exchange of gas hereunder
to each of the Cl.tieS shall not serve to increase Lone Star's annual, daily or
hourly delivery obligations as set forth in the existing Gas Sales Contracts or
the successor Gas Sales and Exchange Contracts.
1,2 Lone Star'c receipt and delivery of such gas exchange volumes will
be done on a best efforts basis subject to Lone Star's existing or future
pipeline capacity, system transmissibility and operating capabilities; and Lone
Star may refuse to exchange gas hereunder if in the reasonable opinion of Lone
Star to do so would adversely affect Lono Star's service to its customers or the
conduct of its utility business.
1.3 It is recognized that a day-to-day balance of gas received by Lone
Star and delivered to Cities (or for its account) may not be possible duo to the
inability of the parties to control precisely such receipts or deliveries.
However, Lone Star, to the extent practicable, will deliver to Cities (or for its
account) each day a quantity of gas equivalent (in terms of MA Btu) to the
quantity received from Cities (or its designee) that day, Imbalances shall be
corrected insofar as practicable during the month following the month in which
they occur; provided, however, either party may restrict its delivery of gas to
the other party on a daily basis to match the quantities of gas delivered by the
other party on such day.
1,4 Lone Star and Citiee recognize and agree thvt 54.6% of each
individual City's prorated portion of exchange gas delivered hereunder during
each month, as determined in Section 6, paragraph (a) of the General Terms and
2
1 ~
Conditions of this Contract, shall be credited toward such City's applicable
minimum annual volume requirements pursuant to Article 11, paragraph (2) of the
Gas Sales Contracts between each of the Cities and Lone Star dated November 7,
1977, or any successor Gas Sales and Exchange Contracts, Both parties also agree
that each City's prorated portion of exchange gas hereunder shall reduce hone
Star's obligation to exchange gas under the successor Gas Sales and Exchange
Contracts, its set forth in such Contracts' Article XIII, paragraph (2), by an
equivalent amount.
ARTICLE II,
LOCATION OF POINT OF RECEIPT AND DELIVERY
2,1 Points of Receipts Gas delivered by Cities (or its designee) to
Lone Star hereunder shall be delivered at the inlet flange of Lone Star's
existing rooters located at various mutually agreeable supply sources within the '
State of Texas from a mutually agreeable third party,
2.2 Points of Doliveryt Gas exchanged by Lone Star hereunder shall be
delivered to Cities at Bryan's Roland C, Dansby Power PlanC, located in Brazos
County, Texas (herein "Dansby" plant"); and City of Garland's Ray Olinger (on
Lavon Lake) Power Plant, located in Collin County, Texas (herein "Olinger"
point).
2.3 Additional Pointst Nothing shall prevent Cities and Lone Star
from establishing o*,her receipt and delivery points hereunder by mutual
agreement.
ARTICLE III.
PRESSURES AT POINTS OF RECEIPT AND DELIVERY
3.1 Cities, or its designee, shall deliver gas to Lone Star at the
Receipt Points at pressures sufficient to enter Lone Star's pipeline system at
such paints,
3
1 ~
3,2 Lone Star shall deliver gas hereunder to Cities at the points of
delivery at such reasonably steady pressures as may be designed by Citieal
provided, however, Lone Star shall not be required to deliver gas at a pressure
in excess of fifty (50) psi.g at the Dansby point of delivery and seventy-five
(75) prig tit the Olinger point of delivery.
ARTICLE TV,
RATFS
411 Cities shall pay Lone Star for services rendered hereunder at the
rates set forth below commencing with initial. delivories of exchange gas
hereunder,
(a) Prorated in accordance with Section 6 of the General Terms and
Conditions hereunder, Cities shall pay Lone Star for exchange services rendered
hereunder each month, an amount equal to the followings ,
(i) Beginning with the effective date hereunder and ending
December 31, 1983, the amount due Lone Star for each IWtu of
exchange gas delivered to CitioA shall be 5144
(ii) For any exchange deliveries hereunder subsequent to
December 31, 1983, the amount due Lone Star for each IOMtu of
gas delivered hereunder shall be an amount equal to the Base
Price in effect during such month, as such price is
determined to Article VI, paragraph (2), subparagraphs (b)
through (g) and Article IX, paragraph (4) of the succdssor
Gas Sales and Exchange Contracts between each of the Cities
and Lone Star which supercede those certain Gas Sales
Contracts between each of the Cities and Lone Star dated
November 7, 1977,
4
1 ~
(~fi) Notwithatanding anything to the contrary, if all such
successor Gas Sales and Exchange Contracts a-e not executed
prior to November 25, 1983, then the amount due Lone star for
each MMRtu of gas delivered hereunder after January 1, 1984
shall be an amount equal to 39c, provided that Lone Star has
not yet terminated this agreement, as provided in Article V
herein,
(b) It is understood and agreed by the parties hereto that the rates
provided for herein have been reached through arms length negotiations and that
neither party had an unfair advantage during the negotiations thereon, However,
should the appropriate regulatory agency find such rates to be unreasonable for
any reason or in any way in violation of any provision of law, and determine a
rate lower than that provided for herein, Lone Star may terminate this agreement
by giving Cities sixty (60) days notice, Should the agency determine a rate
higher than that provided for herein, Cities may terminate this agreement by
giving Lone Star sixty (60) days notice,
(e) Cities agree to reimburse Lone Star for any taxes as defined in
Section 5 of the GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX "A",
ARTICLE V.
TERM
5.1 This Agreement is effective as of the date of execution or the
date gas is first delivered hereunder, whichever occurs first, and shall remain
in full force and effect for a primary term continuing until November. 1, 1984 and
from month to month thereafter until cancelled by either party giving the other
party thirty (30) days prior written notice of its intention to do so. In the
event any gas purchase or sales agreement, which is necessary for the performance
of this agreement by either party hereto, is terminated by either party or a
5
third party, then upon such occurrence, either party may elect to terminate this
agreement prospectively upon ten (10) days prior written notice, Notwithstanding
the above, if an imbalance in deliveries exists on the date of termination hereof
between the quantities theretofore delivered at the Receipt Points and Deliver},
Points, the term shall be extended for a period sufficjent W allow the party
whose deliveries are in arrears to eliminate promptly any deficit,
5.2 Both parties recognize that the delivery and receipt of exchange
gas hereunder is contingent upon each of the Cities thereto and Lone Star
executing successor contracts for the existing Gas Sales Contracts between each
of the Cities and Lone Star dated November 7, 1977, Such successor contracts
(herein called "Gas Sales and Exchange contracts") will provide for the sale and
exchange of gas at oath of the delivery points provided for in the November 7,
1977 Gas Sales Contracts, if all of the successor Gas Stiles 'end Exchange
Contracts are not executed priov to November 25, 1983, Lone Star shall have the
option thereafter to cancel this agreement with thirty (30) days prior written
notice to cities,
ARTICLE VI,
LAWS AND REGULATIONS
6,1 This agreement shall be subject to all applicable State and
Federal laws, and orders, directives, rules and regulations of any Governmental
body, official or agercy having Jurisdiction,
6,2 Each party warrants to the other that its or its agent's
facilities utilized for the delivery and acceptance of gas hereunder are wholly
intrastate facilities and are not subject to the Natural Gas Act of 1938, as
heretofore amended. As a material representation, without which both parties
would not have been willing to execute this agreement, each party warrants to the
other party that it will take no action or commit an act of omission which will
subject its facilities, this transaction, or the other party's facilities, to
6
jurisdiction of the Federal Energy Regulatory Commission or its successor
governmental agency under the terms of the Natural Gas Act of 1938, as amended,
The gas delivered and accepted hereunder shall not have been nor shall be sold,
transported or otherwise utilized in interstate commerce in a manner which will
subject either party to the terms of the Natural Gas Act of 1938) as amended, In
addition to and without excluding any remedy the aggrieved party may have at law
or in equity, the party who broaches the above warranties and representations
shall be liable to the aggrieved party for all damages,, injury and reasonable
expense the aggrieved party may sustain by reason of any breach hereof. Further,
should either parry perform any act, or cause any not to be performed, at any
time, that results in arty gas covered hereunder being regulated by or aol)ject to
the jurisdictional consequences of the FERC or successor governmental authority
oontrary to this contract, this contract, without negating reservation of rights
under this paragraph, shall be d"wed of its own terms to terminate on the day
prior to the data of such occurrence,
ARTICLE VII,
GENERAL TERMS AND CONDITIONS
7,1 The GENERAL TERMS AND CONDITIONS attached hereto as A"ENDIX "A"
are incorporated herein by this reference,
ARTICLE VIII.
MISCELLANEOUS
8.1 No waiver by either Lone Star or Cities of any default of the
other under this Agreement shall operate as a waiver of any future default,
whether of like or different character or nature,
8.2 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be transferred or assigned by any party
7
Without the prior written consent of all other parties herein, and any purported
transfer or assignment without such consent shall be null and void and shall not.
operato to reloaae the transforer(s) or assignor(s) from It t; obligations
hereunder,
8.3 Any notice, request., demand, statement or payment provided for in
this Agreement may be given in writing, directed to the party to whom given, Lind
mailed or doli.verod at such party's address or addresses as £ollowsi
Citiesi City Managor
City Manager
City of Bryan City of Garland
Bryan, Texas 77801 Garland, Texas 75040
City Manager City Manager
City of. Greenville City of Denton
Greenville, Texas 75401 Denton, Texas 76201
Lone Star
Noticesi Payments:
Lone Star Gas Company Lone Star Gas Company
301 South Harwood St. 301 South Harwood St,
Dallas, Texas 75201 Dallas, Texas 75201
Attn, Industrial Gas Attni Utility Related
Sales Department Credit Group
or at such address as each party may give to the other. Such mailed notices
shall be deemed to have been given when forwarded by first class mail, postage
prepaid, or in the case of hand delivery, when accepted by a representative of
either party from a representative of the other party,
8
8,4 This Agreement constitutes the entire agreement between the
parties covering the subj act matter hereof, and there are no agreements,
modifications, conditions or understandings, written or oral, expressed or
implied, pertaining to the subject matter hereof which are not contained herein,
8.S Modifications of this Agreement shall be or becomr <ffective only
upon the due and mutual execution of appropriate supplemental agreements or
amendments hereto by duly authorized representatives of the respective parties.
8,6 The parties hereto agree that this Agreement may be executed in
one or worn copies, or counterparts, each of which, when executed by Lone Star
and any of the parties listed below, as Cities, shall constitute and be an
original effective agreement between such Lone Star and Cities provided that all
four (4) of the Cities executes same,
9
i
ACCEPTED AND AGREED to this the day of 1983,
LANE STAR GAS COMPANY) a Division CITY OF BRYAN, TEXAS
of EN5ERCH CORPORATION
By By
Title
Title _
Attests Attesti
By,
By
"LANE ,STAR"
CITY OF GARLAND, TEXAS
By
Title
Attest)
CITY OF GREENVILLE, TEXAS
BY
T',t le
AtteW
CITY OF DENTON, TEXAS
By
Title
Atteeti
"CITIES"
10
SHUT No, 1
APPPNDIX "A"
GAS EXCHANGE AGREEMENT
GENERAL TERhfS AND COA'llITIONS
nefin~ itions
(a) "Gas" shall mean natural gas produced from gas wells, vaporized natural
gas liquids, gas produced fn association with oil (casinghead gas) and/or
the residue gas resulting from processing casinghead gas and/or gas well
gas,
(b) "Day" shall moan the 24-hour period beginning at 1200 midnight,
central standard time, on one calendar day and ending at 12t00 midnight,
central standard time, on the following calendar day,
(c) "Month" shall mean the period beginning at 12100 midnight, central
standard time, on the first day of a calendar month end' ending at 12400
midnight, central standard time, on the first day of the succeeding calendar
month.
(d) "Year" shall mean a period of twelve (12) consecutive months beginning
at 12100 midnight, central standard time, on the first day of a calendar
month and ending at 12100 midnight, central standard time, on the same date
of each succeeding year during the term hereof,
(a) "Mcf" shall mean one thousand (1,000) cubic feet,
(f) The term ,"Btu" as used herein, shall mean British Thermal Unit and,
where appropriate, the plural thereof, The term "MMBtu" shall mean one
million (100000000) Btu,
(g) "Heating Value" or "Heat Content" shall mean the total heating value
expressed in Btu per cubic foot (groat heating value) of the gas delivered
hereunder, and shall be determined at a temperature of sixty (60) degrees
Fahrenheit, saturated with water vapor and under a pressure equivalent to
SHEET NO, 2
Chat of thirty (30) inches of mercury at thirty-two (32) degrees Fahrenhelt
converted to base conditions of sixty (60) degrees Fahrenheit and an
absolute pressure of fourteen and sixty-fivo one hundredths (14,65) pounds
per square inch and adjusted to a dry basis,
(h) "Psis" shall mean pounds per square inch absolute,
(i)) "Psig" shall mean pounds per square inch gauge,
0) "Points of Receipt" or "Receipt Points" shall mean the points where
Lone Star receives gas delivered to it by Cities or by others for Cities'
account,
(k) "Points of Delivery" or "Delivery Points" shell mean the points where
Lone Star delivers gas to Cities,
2. Measurinfi Equipment and Testing
(a) Gas delivered hereunder to Lone Star at the Receipt Points or gas'
delivered hereunder to cities at the Delivery Points shall be measured by means
of existing meters of standard type which shall be operated and maintained by
Lone Star (or its designee) unless both parties mutually agree in writing to
allow another party to measure gas delivered or received herein. Nothing
contained herein shall require Lone Star to install any metering facilities at
the Receipt or Delivery Points herein unless tone Star, at its sole discretion,
agrees to install such additional facilities. The meter and other measurement
instruments and equipment shall he tested and adjusted for accuracy on a monthly
basis by Lone Star,
(b) Cities or its designee shall have access to Lone Star's metering
equipment at all times, but the calibration and adjustment thereof shall be done
only by the employees or agents of Lone Star. Charts and records from such
metering equipment shall remain the property of Lone Star and shall be kept on
file by said party for a period of not less than four (4) years, However, upon