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HomeMy WebLinkAbout2001-251AN ORD NANCE ESTABLISHING MAXIMUM PERMITTED RATES AND CHARGES THAT T GAS DISTRIBUTION MAY ASSESS RESIDENTIAL AND COMMERCIAL CUSTOM RS IN THE CITY OF DENTON, APPROVING RATES FOR INDUSTRIAL CUSTOM RS IN THE CITY OF DENTON ESTABLISHED BY CONTRACT BETWEEN TXU GA S DISTRIBUTION AND SUCH INDUSTRIAL CUSTOMERS, ADOPTING DECL TIONS AND FINDINGS RELATED TO RATES AND CHARGES ASSESSED TO RESIDEN rIAL, COMMERCIAL AND INDUSTRIAL CUSTOMERS IN THE CITY OF DENTON PROVIDING FOR RECOVERY OF RATE CASE EXPENSES, REPEALING ORDINANCE NO 99-059, PROVIDING A SEVERABILITY CLAUSE, AND PROVIDING AN EFFE TIVE DATE W�-IEREAS, on or about February 26, 2001, TXU Gas Distribution ("TXU Gas"), a division o TXU Gas Company (formerly Lone Star Gas Company), filed with the City Secretary a "Statement of Intent to Change Rates"under which higher rates charged by TXU Gas would go into effect in the City of Denton (Denton) effective March 23, 2001, and EREAS, pursuant to Section 104 107 of the Texas Utilities Code, on March 6, 2001, the City ouncil passed Resolution No 2001-010 suspending implementation of TXU Gas's proposed ate schedule from March 23, 2001 until June 21, 2001, and WHEREAS, the City Council authorized Denton to loin the Northwest Metro Mid -Cities Distribution System Coalition of Cities (Cities) and authorized the hiring of rate consultants and an attorney and further authorized the retention of Diversified Utility Consultants, Inc to assist Denton in its review of the TXU Gas's proposed rate schedule, and REAS, on April 3, 2001, TXU Gas filed an updated rate filing ("Rate Filing") with the Cities and Denton, incorporated herein by reference for all purposes, and REAS, TXU Gas agreed,to extend the date for implementation of TXU Gas's updated r to schedule from June 21, 2001 to July 21, 2001, and REAS, pursuant to Chapters 103 and 104 of the Texas Utilities Code, the Cities and Denton x a required to (i) analyze TXU Gas's Rate Filing, as updated, (n) conduct a public hearing ir order to determine the propriety of the proposed rate increase (the "Public Hearing'), and (in) Take a reasonable determination of TXU Gas's rate base, expenses, investment and rate of return in Denton, and REAS, the Public Hearing,was conducted on July 17, 2001 before the enactment of this ordi ance at which all interested parties were given a full opportunity to comment on the Rate Fih g, NOW, THEREFORE, s wu� uommmuwm�wncannnrxu aw aw aeulmnm� ao� THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION 1 FINDINGS That the City Council, pursuant to its exclusive original jurisdictional authority over the rates, operations and service of TXU Gas within Denton and in the exercise of its sound legislative discretion, after reasonable notice and hearing, makes the following findings of fact 1 1 TXU Gas filed with Denton's City Council a Statement of Intent to change residential, commercial and industrial rates charged to consumers within Denton and also filed the Tariff for Gas Service in the Northwest Metro Mid -Cities Distribution System ("Tariff for Gas Service") and the supporting cost of Service Schedules ("Schedules") TXU Gas has agreed to an overall Northwest Metro Mid -Cities Distribution System Rate Settlement The agreed residential customer class annual increase is $2,511,718 and the commercial customer class annual increase of $1,034,951 throughout the System That TXU Gas has agreed that the maximum general service revenues for sales of natural gas rendered to residential customers (without the cost of gas included) will be $2,327,483 and for commercial customers will be $902,589 (without the cost of gas included) within the city limits of Denton, Texas, in annual revenue for service charges to customers The Gas Cost Adjustment clause, Weather Normalization Adjustment Clause, Tax Adjustment Clause, Miscellaneous Service Charges Clause required by TXU Gas as more fully set forth in Section 2 of this Ordinance are found to be just and reasonable 12 Denton does not have evidence of any unfair advantage by either TXU Gas or its industrial customers in Denton with regard to contract negotiations for industrial gas rates, and therefore, in accordance with Section 104 003(b) of the Texas Utilities Code, contractual industrial gas rates are considered to be just and reasonable 1 3 Based on the above facts, the City Council finds that rates for residential customers in Denton, as requested by TXU Gas in its Rate Filing, are unreasonable and shall be changed as hereafter ordered 14 Based on the above facts, the City Council finds that rates for commercial customers in Denton, as requested by TXU Gas in its Rate Filing, are unreasonable and shall be changed as hereafter ordered 1 5 Based on the above facts and in accordance with the mandates of Section 104 003(b) of the Texas Utilities Code, the City Council approves rates for industrial customers in Denton established by contract between TXU Gas and such industrial customers Therefore, Denton declines to establish rates for industrial customers in the City as requested by TXU Gas in its Rate Filing 16 Based on the above facts, the City Council finds that the changed rates for residential and commercial customers determined as a result of TXU Gas and the Cities' Settlement are just and reasonable Page 2 of 9 S�rD UmentA MW ocat ATW On Rom SmllmnemE SECTION 2 RATES AND CHARGES ORDERED That based on the finding of fact set forth in Section 1 of this Ordinance and in accordance with the schedules set forth in this Section 2, TXU Gas is hereby authorized to assess the following maximum permitted rates and charges for customers in Denton, which rates and charges the City Council hereby determines to be fair, Just and reasonable on all consumption of gas on and after July 21, 2001 21 Residential Gas Rates The following rates are the maximum permitted rates and charges applicable to residential customers per meter per month or for any part of a month for which gas service is available to the same location Customer Charge $7 00 All Consumption @ $0 8335 If the service period is less than twenty-eight (28) days in a given month, the customer charge shall be $0 25 times the number of days' service 22 Commercial Gas Rates The following rates are the maximum permitted rates and charges applicable to commercial customers per meter per month or for any part of a month for which gas service is available at the same location Customer Charge $12 00 First 20 Mcf @ $ 1 1371 per Mcf Next 30 Mcf @ $ 8371 per Mcf Over 50 Mcf @ $ 6871 per Mcf If the service period is less than twenty-eight (28) days in a given month, the customer charge shall be $0 4286 times the number of days' service 23 Gas Cost Adjustment Each monthly bill at the rates and charges set forth in Sections 2 1 and 2 2 shall be adjusted for gas cost as follows 2 3 1 The City gate rate increase or decrease applicable to current billing month residential and commercial sales shall be estimated to the nearest $0 0001 per Mcf based upon (a) The City gate rate estimated to be applicable to volumes purchased during the current calendar month, expressed to the nearest $0 0001 per Mcf ("Re" in the summary below), less Page 3 of 9 S War umwi diom IXTXU GU SetftmwtJ (b) The base City gate rate of $0 00 per Mcf, multiplied by (c) A volume factor of 10117 determined in establishing the above rates for the distribution system 2 3 2 Correction of the estimated adjustment determined by Section 2 3 1 shall be included as part of the adjustment for the second following billing month The correcting factor ("C" in the summary below) shall be expressed to the nearest $0 0001 per Mcf based upon (a) The corrected adjustment amount based on the actual City gate rate, less (b) The estimated adjustment amount billed under Section 2 3 1, divided by (c) Distribution system residential and commercial sales Mcf recorded on TXU Gas's books during the prior year for the month that the correction is included as part of the adjustment In summary, the gas cost adjustment ("GCA" in the summary below) shall be determined to the nearest $0 0001 per Mcf by Section 2 3 1 plus Section 2 3 2 as follows GCA = ((1 0117) (Re - $0 00) + C] 24 Weather Normalization Adjustment Effective with bills rendered during the October 2001 through May 2002 billing months, and annually thereafter for the October through May billing months, the residential and commercial consumption rates for gas service, as adjusted, shall be subject to a weather normalization adjustment each billing cycle to reflect the impact of variations in the actual heating degree days during the period included in the billing cycle from the normal level of heating degree days during the period included in the billing cycle The weather normalization adjustment will be implemented on a per Mcf basis and will be applicable to the heating load of each customer during the period included in the billing cycle It will be determined separately for residential and commercial customers based on the heating degree data recorded by the DFW Airport weather station The adjustment to be made for each billing cycle will be calculated according to the following formula NDD — ADD WNA = ADD x M x AHL Where WNA = Weather normalization adjustment NDD = Normal heating degree days during the period covered by the billing cycle ADD = Actual heating degree days during the period covered by the billing cycle Page 4 of 9 S WurOwumm�e`9NImucM011TXU On Rau BaWemmlOrc M = Weighted average margin per Mcf included in the commodity portion AHL = Actual heating load per customer The heating load to which the weather normalization adjustment is to be applied for residential and commercial customers is determined by subtracting the base load for the customer from the total volume being billed to the customer The base load of a customer is the average level of non-heatii}g consumption The weather normalization adjustment is subject to a 50% limitation factor based on temperatures being fifty percent warmer or colder than normal The weather normalization adjustment will be calculated to the nearest $0 0001 per Mcf 25 Tax Adjustment Each monthly bill, as adjusted above, shall be adjusted for municipal franchise fees (street and alley rental taxes) and the state gross receipts taxes imposed by Section 182 021— 182 025 of the Texas Tax Code Municipal franchise fees are determined by each city's franchise ordinance Each monthly bill, as adjusted above shall also be adjusted by an amount equivalent to the proportionate part of any new tax, or an tax increase or decrease, or any increase or decrease of any other governmental imposition, rental fee, or charge (except state, county, city and special district ad valorem taxes and taxes on net income) levied, assessed or imposed subsequent to September 30, 2001, upon or allocated to the Company's distribution operations, by any new or amended law, ordinance or contract Municipal franchise fees (street and alley rental taxes) and the state gross receipts taxes imposed by Sections 182 021 — 182 025 of the Texas Tax Code shall continue to be collected pursuant to individual industrial contracts 26 Rate Case Expenses TXU Gas's initial "Statement of Intent to Change Rates", filed with Denton on February 26, 2001, and the subsequent Rate Filing, constitute a ratemaking proceeding Pursuant to Section 103 002(4) of the Texas Utilities Code, the Northwest Metro Mid -Cities Distribution System was authorized to hire rate case consultants and an experienced utility attorney and Denton was authorized to engage Diversified Utility Consultants, Inc to assist Denton in its analysis of this ratemaking proceeding Pursuant to Section 103 022(b) of the Texas Utilities Code, the Cities rate case expenses are found to be reasonable and TXU Gas shall reimburse the Cities the reasonable cost of services of the rate case consultants and utility attorney (Geoffrey Gay) and Denton's'rate case expenses are found to be reasonable and TXU Gas shall reimburse Denton the additional sum of $12,500 00, which is the actual and reasonable cost of services rendered by Diversified Utility Consultants, Inc on behalf of Denton during the course of this ratemalung proceeding ("Rate Case Expenses") TXU Gas shall make such reimbursement in full to the Page 5 of 9 S\ VT OocummuWNinmw,\01\T%fl au Poles 1.1A Cities and Denton within thirty (30) calendar days following receipt of an itemized statement from the Cities and Denton TXU Gas is authorized to recover rate case expenses reimbursed to Denton and the Cities and also may recover TXU's rate case expenses (at an amount not to exceed $85,000 for all the Cities including (Denton) through a per MCF surcharge based upon total system sales as set forth in Rider 4106 as a part of their revised Tariff for Gas Service to be attached and made a part of this ordinance It is hereby ordered that if TXU Gas elects to recover, in whole or in part, the costs of this reimbursement (including Diversified Utility Consultants, Inc 's rate case expenses, Denton's portion of the Cities and TXU's rate case expenses as set forth above) through a surcharge to its customers in Denton, it shall do so through a surcharge designed for a six (6) month nominal recovery period The surcharge per Mcf shall be calculated by dividing the Rate Case Expenses to be recovered by one-half of the adjusted annual sales volume to residential and commercial customers When a surcharge is applicable, monthly status reports will be provided to Denton to account for the collections TXU Gas shall refund to its customers any over collection of rate case expenses that may occur 27 Miscellaneous Service Charges 2 7 1 Connection Charge (Residential & Commercial) The following connection charges apply Schedule Charge Business Hours $35 00 After Hours $52 50 For each reconnection of gas service where service has been discontinued at the same premises for any reason, for the initial inauguration of service, and for each inauguration of service when the billable party has changed, with the following exceptions (a) For a builder who uses gas temporarily during construction or for display purposes (b) Whenever gas service has been temporarily interrupted because of system outage or service work done by Company, or (c) For any reason deemed necessary for company operations 2 7 2 Read For Change Charge (Residential & Commercial) Page 6 of 9 s wUr w smnmm ft A read for change charge of $12 00 is made when it is necessary for a company employee to read the meter at a currently served location because of a change in the billable party 2 13 Returned Check Charges (Residential & Commercial) A returned check handling charge of $16 25 is made for each check returned to the Company for any reason 2 7 4 Delinquent Notification Charge (Residential, Commercial, & Industrial) A charge of $4 75 shall be made for each trip by a Company employee to a customer's residence or place of business when there is an amount owed to the Company that is past due This charge shall not be made when the trip is required for safety investigations or when gas service has been temporarily interrupted because of system outage or service work done by Company 2 7 5 Main Line Extension Rate The charge for extending mains beyond the free limit established by Franchise for residential, commercial, and industrial customers shall be based on the actual costs per foot of the extension 2 7 6 Charge for Installing and Maintaining and Excess Flow Valve (Residential) A icustomer may request the installation of an excess flow valve on a new service line or on a service line being replaced provided that the service line will serve a single residence and operate continuously throughout the year at a pressure of not less than 10 pstg The customer will pay the actual costs incurred to install the excess flow valve That cost will include the costs of the excess flow valve, the labor costs required to install the excess flow valve and other associated costs The estimated total costs to install an excess flow valve is $50 00 This cost is based on installing the excess flow valve at the same time a service line is installed or replaced The excess flow valve will be installed on the service line upstream of the customer's meter and as near as practical to the main Al customer requiring maintenance, repair, or replacement of an excess flow valve will be required to pay the actual cost of locating and repairing or replacing the excess flow valve The cost to perform this service will normally range from $200 00 to $2,000 00, depending on the amount of work required This cost will be determined on an individual project basis This tariff is being filed in accordance with the U S Department of Transportation rule requiring the installation of an excess flow valve, if requested by a customer, on new or replaced service Imes that operate continuously throughout the year at a pressure of not less than 10 psig and that service a single residence The rule further states that the customer will bear all costs of installing and maintaining the excess flow valve Page 7 of 9 S wur OacumenlewNioenceo\01\TXU OM IUb SWII..'E 2 7 7 Recovery of Connection Costs Associated with Certain Stand -By Gas Generators (Commercial) Commercial customers installing stand-by gas generators to provide service in the event of an interruption in electric service in facilities where gas service is not otherwise provided will reimburse TXU Gas Distribution for the actual cost of acquiring and installing the regulator, service line, and meter required to provide gas service for the stand-by generators Gas service provided for the stand-by generators will be billed at the applicable commercial rate 28 Filing of Rates TXU Gas shall file with Denton within ten days of the effective date of this ordinance tariffs consistent with the rates authorized by this ordinance, which tariffs shall be attached to and made apart of this ordinance for all purposes The rates established thereby shall be those under which TXU Gas shall be authorized to render gas services and collect charges from its customers on and after July 21, 2001 All other rate relief requested by the Company is hereby denied SECTION 3 RESERVATION OF RIGHTS In order to ensure that rates and charges assessed by TXU Gas in Denton are just and reasonable to both TXU Gas and its customers, Denton reserves the right and privilege at any time to increase, decrease, alter change or amend this Ordinance or the rates established herein or to enact any ordinance or adopt any rates and charges which would effectuate that purpose In this connection, Denton further reserves the right and privilege to exercise any authority and power granted to it under any applicable law, ordinance or administrative rule or regulation SECTION 4 REHEARING BY CITY COUNCIL If TXU Gas disputes all or any portion of this Ordinance, prior to filing an appeal with the Railroad Commission of Texas, TXU Gas shall file with the City Secretary a request for rehearing on the merits by the City Council and shall comply with the procedures established for such a rehearing as set forth tin this Section 4 Upon receipt of a request for rehearing, the City Council will promptly provide a forum during a public hearing on an open meeting in order for TXU Gas to set forth the aspects of this Ordinance which TXU disputes The City Council shall have sixty (60) calendar days following the date of such rehearing to render a final decision Action of the City Council shall not be considered final for purposes of appeal to the Railroad Commission of Texas until a final decision on nay motion for rehearing has been rendered The provisions of this Ordinance shall remain in full force and effect from and after its adoption unless modified by a subsequent ordinance adopted by the City Council as a result of a final decision following a rehearing SECTION 5 SEVERABILITY If any portion, section or part of a section of this Ordinance is subsequently declared invalid, inoperative or void for any reason by a court of competent jurisdiction, the remaining portions, sections or parts of sections of this ordinance shall be and remain in full force and effect and shall not in any way be impaired or affected by such decision, opinion or judgment Page 8 of 9 SW Oocu =w Wwww WTW OU Ptlae IMOQLd SECTI N 6 REPEALER That all conflicting sentences, clauses, paragraphs and sections of Ordinance No 99-059 passed and approved by the City Council on February 23, 1999, and any other conflicting ordinances and resolutions are hereby repealed to the extent of that conflict SECTION 7 Unless otherwise noted herein, other than TXU Gas (a named party), no person or entity has been admitted as a party to this rate proceeding SECTION 8 It is hereby found and determined that the meeting at which this ordinance was passed was open to the public, as required by Texas law, and that advance public notice of the time, place and purpose of the meeting was given SECTION 9 EFFECTIVE DATE This ordinance shall take effect and be in full force and effect from and after the date of its adoption The City Secretary is hereby directed to deliver a certified copy of this Ordinance to TXU Gas by sending the ordinance by U S Mail to the Company's authorized representative, Autrey Warren, Regulatory Financial Manager, TXU Business Services, 1601 Bryan Street, Dallas, Texas 75201-3411 PASSED AND APPROVED this the � day of 2001 X , s . /o T" RONI BEASLEY MAYGIRPRO TEM ATTEST JENNIFER WALTERS, CITY SECRETARY BY APPROVED AS TO LEGAL FORM HERBERT L PROUTY, CITY ATTORNEY M. Page 9 of 9 0 TXU TXU Electric & Gas Steve Taylor 100 West Mulberry Street Area Manager Denton T% 76201 Tel 940 320 6501 Fax 940 320 6503 August 2, 2001 `7 Honorable Mayor Eulme Brock City of Denton�� 215 East McKinney St Denton, Texas 76201 Re TXU Gas Distribution — Tariff for Gas Service in the Northwest Metro/Mid- Cities Distribution System - Dear Mayor Brock Enclosed please find the compliance tariffs recently approved for implementation in the City of Denton Sincerely,_ S� I a-�- Steve Taylor Area Manager Enclosures Receipt Acknowl dged by Name « — Title Date s?/7g%1 TXU TARIFF FOR GAS SERVICE IN THE NORTHWEST METRO/MID CITIES DISTRIBUTION SYSTEM TXU GAS DISTRIBUTION Tariff for Gas Service TXU Gas Distribution RATE CHEDULE: Index of Rates 6 List of Cities" No 4100 APPLICABLE TO NW Metro/Mid Cities Distribution System REVISION 0 DATE 07120101 EFFECTIVE DATE: 07120101 PAGE 1 of 2 HATESI 4100 Index of Rates and List of NW Metro/Mid Cities Distribution System Cities 4101 Residential Service 4102 Commercial Service 4104 Industrial Transportation 4109 Commercial Service - Carrollton 4110 Commercial Service • Farmers Branch 4121-4123 Industrial Sales 4131 Industrial Saks and Transportation RATE ADJUSTMENT PROVISIONS' Gas Cost Adjustment 4108.4 4108-5 Tax & Franchise Fee Adjustment 4109.6 Weather Normalization Adjustment MISC LLANEOUS SERVICE CHARGES' 9001 Connection Charge 9002 Read for Change Charge 9003 Returned Check Charges 9004 Delinquent Notification Charge 9008 Main Line Extension Rate 9000 Excess Flow Volvo Charge 9007 Certain Stand-by Gas Generators SURCHARGES: 4116 Surcharge Rider Tariff for Gas Service TXU Gas Distribution RATE CHEDULE Index of Rates & List of Cities No 4100 APPLICABLE TO NW Metro/Mid Cities Distribution System REVISION 0 DATE 07120/01 EFFECTIVE DATE: 07120101 PAGE 2 OF 2 Addison, Texas Argyle, Texas Arlington, Texas Aubrey, Texas Bedford, Texas Carrollton, Texas Colleyville, Texas Coppell, Texas Copper Canyon, Taxes Cross Roads, Texas Delworthington Gardens, Texas Denton, Texas Double Oak, Texas Euless, Texas Farmers ,Branch, Texas Flower Mound, Texas Grapevine, Texas Hickory Creek, Texas Highland Village, Texas Hurst, Texas Irving, Texas Justin, Texas Keller, Texas Krum, Texas Lake Dallas, Texas Lewisville, Texas Mansfield, Texas Marshall, Creek, Texas Northlake, Texas Pantego, Taxes Pilot Point, Texas Ponder, Texas Roanoke, Texas Sanger, Texas Shady Shores, Texas Southla4e, Texas Trophy Club, Texas Westlake, Texas Tariff for One Service TXU Gas Distribution RATE SCHEDULE. Residential Service No 4101 APPLICABLE TO NW Metro/Mid Cities Distribution System REVISION 0 DATE 07/20101 EFFECTIVE DATE 07/20101 PAGE 1 OF 1 Monthly Rate Subject to applicable adjustments, the following rates are the maximum applicable to residential consumers per meter per month or for any part of a month for which gas service is available at the some location Customer Charge $ 70000 All Consumption 0 8335 Per Mcf If the service period is less then 28 days in a month the customer charge is $0 25 times the number of days service If the consumption contains a portion of an Mcf, a prorate portion of the per Mcf charge will be made Bills are due and payable when rendered and must be paid within fifteen days from monthly billing date Rate Adjustment Provisions 4108-4 Gas Cost Adjustment 4108-6 Tax & Franchise Fee Adjustment 4108.8 Weather Normalization Adjustment MiscelloneouefService Charges 9001 Connection Charge 9002 Read for Change Charge 9003 Returned Check Charges 9004 Delinquent Notification Charge 9008 Main Line Extension Rate 9006 Excess Flow Valve Charge Surcharges 4116 Surcharge Rider Tariff for Gas Service TXU Gas Distribution RATE SCHEDULE. Commercial Service No 4102 APPLICABLE TO NW Metro/Mid Cities Distribution System" REVISION 0 DATE 07120/01 EFFECTIVE DATE 07120/01 PAGE 1 OF 1 Monthly Rate Customer Charge $ 120000 First 20 Mof @ 1 1371 Per Mcf Next 30 Mcf Q 0 8371 Per Mcf Over 50 Mcf a 0 6871 Per Mcf If the service period is less than 28 days in a month the customer charge is $ 4286 times the number of days service If the consumption contains a portion of an Mcf, a prorate portion of the per Mcf charge will be made Bills are due and payable when rendered and must be paid within fifteen days from monthly billing date Rate Adjustment Provisions, 4108-4 Gas Cost Adjustment 4108-5 Tax & Franchise Fee Adjustment 4108-6 Weather Normalization Adjustment Miscellaneous/Service Charges 9001 Connection Charge 9002 Read for Change Charge 9003 Returned Check Charges 9004 Delinquent Notification Charge 9006 Mein Line Extension Rate 9006 Excess Flow Valve Charge 9007 Certain Stand -By Gas Generators Surcharges 4116 Surcharge Rider *Not Applicable in Carrollton and Farmers Branch See Rate Schedule Nos 4109 & 4110 Tariff for Gas Service TXU Gas Distribution RATE JCHEOULE. Industrial Traneg2ftation No 4104 APPLICABLE TO, NW Metro/Mid Cities Distribution system REVISION 0 DATE 07120101 EFFECTIVE DATE: 07120/01 PAGE 1 OF ll Monthly Rates The maximum fee for Industrial transportation service on the NW Metro/Mid Cities Distribution System is $1 2551 per MMSTU delivered plus applicable taxes exclusive of the backup fee The Above transportation fees include both the fees Incurred to move the gas from the receipt point on the transmission system to the city gate and the fee incurred to move the gas from the city gate to the customer's facility If the fees for transportation service on the transmission system change, the revised fees will be included In the overall transportation rate charged to customers 100% of the increase in transportation fees incurred to move the gas from the city gate to the customer's facility is to accrue to the benefit of TXU Gas Distribution Rate Schedule No 4104 is closed to new customers as of the effective date of this tariff Current customers taking service pursuant to this tariff will no longer be eligible for this service upon contract termination Current customers may convert their existing contract to new Rate Schedule No 4131 When the final contract subject to Rate Schedule No 4104 expires or is terminated, Rate Schedule No 4104 will be cancelled Rate Adjustment Provisions 4108-5 Tax & Franchise Fee Adjustment Surcharges 4118 Surcharge Rider Tariff for Gas Service TXU Gas Distribution RATE C"EDULE: Commercial Service - Carrollton No 4109 APPLICABLE TO Carrollton REVISION 0 DATE, 07120101 EFFECTIVE DATE- 07/20101 PAGE, 1 OF 1 MonthlyRab• Customer Charge $ 120000 First 20 Mcf (M 1 1552 Per Mcf Next 30 Mcf @ 0 8652 Per Mcf Over 60 Mcf Q 0 7052 Per Mcf If the service period Is less than 28 days in a month the customer charge is $ 4286 times the number of days service If the consumption contains a portion of an Mcf, a prorata portion of the per Mcf charge will be made Bills are due and payable when rendered and must be paid within fifteen days from monthly billing date Rate Adjustment Provisions, 4100-4 Gas Cost Adjustment 4108-5 Tax & Franchise Fee Adjustment 4100-6 Weather Normalization Adjustment Miscellaneous/Service Charges, 9001 Connection Charge 9002 Read for Change Charge 90011 Returned Check Charges 9004 Delinquent Notification Charge 9006 Main Line Extension Rate 9000 Excess Flow Valve Charge 9007 Certain Stand -By Gas Generators Surcharges 4116 Surcharge Rider Tariff for Gas Service TXU Gas Distribution RATESCHEDULE Commercial Service - Fanners Branch No 4110 APPLICABLE TO, Farmers Branch REVISION 0 DATE, 07120101 EFFECTIVE DATE. 107120101 PAGE 1 OF 1 Monthly Rate, Customer Charge $ 120000 First 20 Mof @ 1 1393 Per Mcf Next 30 Mcf @ 0 8393 Per Mof Over 60 Mcf @ 0 6893 Per Mcf If the service period is less than 28 days in a month the customer charge is $ 4286 times the number of days service If the consumption contains a portion of an Mcf, a prorate portion of the per Mcf charge will be made Bills are due and payable when rendered and must be paid within fifteen days from monthly billing date Rate Adjustment Provisions 4108-4 Gas Cost Adjustment 4108.5 Tax & Franchise Fee Adjustment 4108-6 Weather Normalization Adjustment MiscellarimmelServics Charges 9001 Connection Charge 9002 Read for Change Charge 9003 Returned Check Charges 9004 Delinquent Notification Charge 9006 Main Line Extension Rate 9006 Excess Flow Valve Charge 9007 Certain Stand -By Gas Generators Surcharges, 4116 Surcharge Rider Tariff for Gas Service TXU Gas Distribution RATE CHEDULE Industrial Sales No 4121.4123 APPLICABLE TO: NW Metro/Mid Cities Distribution System REVISION 0 DATE' 07120101 EFFECTIVE DATE. 07120101 PAGE 1 OF 1 Monthly Rates. Industrial Rates-N Is hereby amended and revised as follows Subjectto Company's limitations on the availability of each rate, Customer shall receive service under Its choice of one of the following rates in accordance with the rate selected by Customer as provided in the contract RATE 4121 First 125 Mcf or less $ 23882 All over 125 Mof $ 1 864 per Mcf RATE 4122 Fire 600 Mcf or less $ 1,068 21 All over 600 Mcf $ 1 718 per Mcf MATE 4123 First 1,250 Mcf or less $ 2,062 78 All over 1,250 Mcf @ $ 1 658 per Mcf In all other respects, Industrial Rates-N shall remain in effect as filed with the Cities in the NW Metro/ Mid Cltlee Dlstributlon System 100% of the increase in industrial margin is to accrue to the benefit of TXU Gas Distribution Industrial Rate N is closed to new customers as of the effective date of this tariff Current customers taking service pursuant to this tariff will no longer be eligible for this service upon contract termination Current customers may convert their existing contract to new Rate Schedule No 4131 When the final oontractsubjectto Industrial Rate N expires or is terminated, Industrial Rate N schedule will be cancelled Rafe Adjustment Provisions 4108-5 Tax & Franchise Fee Adjustment Surcharges: 4110 Surcharge Rider Tariff fort Gas Service TXU Gas Distribution RATE CHEDULE• Industrial Sales & Trans ortation No 4131 APPLICABLE TO NW Metro/Mid Cities Distribution System REVISION 0 DATE- 07120101 EFFECTIVE DATE. 07120101 PAGE 1 OF 1 MonthyiRates Customer Charge (Minimum Bill) $200 00 per meter Btu transported per month Rate/MMBtu First 600 MMBtu $0 5476 Next 660 MMBtu $0 4061 Next48,760 MMBtu $0 3466 Over 50,000 MMBtu $0 2647 Availability These rates are available to gas customers who elect to take service under the terms and conditions of this Optional Industrial Gas Sales or Gas Transportation Contract and all schedules applicable to the service selected, attached as Optional Industrial Gas Sales or Gas Transportation Contract and Schedules A, B, C, and D Adjustment for Gas Coat Each industrial sales customers monthly bill shall be adjusted for gas cost as follows The city gets rate referenced in Rate Schedule 4108-4 less all approved charges in excess of the commodity cost of gas, as adjusted from time to time • 8111111 Rate Adjustment Provisions 4108.4 Gas Cost Adjustment 4108-5 Tax & Franchise Fee Adjustment Surcharges 4116 Surcharge Rider 1S-M¢# (For Certain Industrial Customers Served Inside a City Through Distribution System Only) Th Co pact is entered into effective the der r of - 20_ u n aCustonler:" TXU Gas Distribution, a division of SEND NOTICOS TO TXU Gas Company, f°1 WGD:" Address SEND NOTICES TO 301 S Harwood Street, Suite 460 South Attention Dallas, Texas 75201 Arm Contract Administration Fax (214) 875-3584 Fax email _ SEND INVOICES TO Address email SEND PAYMENTS TO P 0 Box 910255 Attention entail Dallas, Texas 75391 fri55 SERVICE 0 ON, For the find tdtact Year Customer may chow, 96JM to TXUOD's agteearent, aaas service with or without plant protection supply service or transportation service with or without plant protection supply service, and the quantities of gas to be purchased or transported each relevant period, as set out in the Seleodon of Service Form attached hereto as Schedule "A," subJsct to the teams set out herein Each annual Sebcdon of Service Form agreed upon by Customer and TXUGD will become part of this Contract TERM This Commit will be effective for a Primary Term of one (1) Contract Year, and will continue from contract Year to Contract Year thereafter, subject to termination under terns out out in Schedule "B "The first Contract Year win commence at 9 00 A M central clock dine on the first day of the month after initial deliveries of gee to Customer are matured through TXUOD's measurement facilities and will end at 9 00 A M co agal clock time on the same month and day one yea thereafter, or at 9,00 A.M central clock time on the day of 20 —, whichever is later Each Contras Year after the first Contrw Year will consist of twelve (12) bills monihs' SALES Sat CE RATE. Customer will pay TXUGD for the volumes of gas purchased and received by Customer and sold end delivered by TXUGD at tholDelivery Point at the latest effective Schedule of Optional Industrial Rates for gas sales service established for the city in which the Delivery P int is located as they may be changed from dine to dame. In addition Customer will pay TXUGD the Monthly Meter Charge and tax reimbursement as described in Schedule "B " TRANSPORT 77ON SERVICE RATE Customer will pay TXUGD for gas delivered at the Delivery Point each billing month at the latest effective Schedule of Optional Industrial Rates for gas transportation service established for the city in which the Delivery Point is located as they may be ahenged Bum time to dine In addition Customer will pay TXUGD the Monthly Meter Charge, retention of a percentage of the gasretxsived f as dawdbed below and reimbursement as described in Sehedule'B " PLANT PR ON SUPPLY RATE Customer I pay OD for t: Plant Protection Supply Volume of gas at the latest effective Schedule of oral Industrial Rates for gas Was service established for the city in which the Delivery Point is located as they may be chansted from to time whether Customer takes volume of as or not MONTHLY PROTEC ION SUPPLY CHARGE, Customer will pay TXUGD for Plant Protection Supply Service a monthly charge calculated by multiplying the Plain Protection Supply Volume lima the number of days In We billing month times the difference between the margin in the Ora block of the Commercial Rare and the margin in the first block of the Opdonal Industrial Rate for gas odes service established for city in which the Doldvery Point is located a such difference may from time to dine. RETENTION TXUGD may retain a percentage of the gas received for Irenspon (due "Retention Volume") and will take dtle to such volume of gas as a partlof the Transportation Service Rine Such percentage will be TXUOD's most recently established companywide distribution lost and unaccounted for gas percentage calculated as provided in 16 TAC Section 7 52(3XB) !rearing all TXUOD distribution systems as one e slam. MONTHLY METER, CHAROE, Customer will pay TXUGD 20000 per meter per month as a part of the Saes Service Rate and the Transportation ceRatio. RECEIPT POI S) The Receipt Point for gas transportation service will be at the Receipt Point as defined in paragraph 8 of Schedule D for the City of - Taxas, located at and at an active cityon such distribution stem hereafter mutual to in writing TXUOD and Customer DELIVERY PGV4rThe Delivery Point for gas sold or transported will be inside the City of on TXUGD's distribution system downstream from the above city gate at the point of Interconnection between TXUGD's measummat facilities and Custome''s facilities at Customer's Facility located at COST OP W FACILITIES Customer will pay TXUGD S for any rod new or addldonal facilities prior to commencement of any service under this Contras [Customer's Company Namel By. Signame Printed Name Tide TXU Gus Distribution, a division of TXU Gas Company By. Signature Printed Name as Attomey-in-Fact for TXU Gas Distribution Signature Pogo REVISION: 5/25/01 ATTACHMENT TO RATE SCHEDULE 4131 1 Cu txutral 20_,1 20_,1 [ ] notice to TXU [ ] Sales Soma with Plant to SCHEDULE"A"TO Selection of Service Form Won ("IXUOD") that Customer, during the Contract Year beginning at 9 00 A M 20_, and ending at 9 00 A.M central clock time on the _ day of . Industrial Oars Sales or On Thaneppradon Contract, dated tiro _ day of 'onkacP7, alum to receive [CHECK ONLY ONE] xioo Bupply 8erdca Customer agrees ro purchase, necalve end pay for gas during the KUOD'e fateet ofPxdive Schoduk oPOptlonel Induebiel Rotas fur gas asks eervica in ie loaatad (which echeduto is incetporated by reference end made a part hereoQ, uga�Iof owthat4 provided for in this Contract Having wlactad sales service without plant d sarvioa�orP cureilmen provided andssin cite Bchedule o Options duani Raor otion to provide plans protection supply gas or standby gue supply for Cusmmor 280 Service. Customer agrees to purchase, receive and pay for gas during the KUOD'a kteu effective Schedule of Optional Industrial Rates for gas Bales service in Is located (which schedule is incorporated by reference and mado a put hereof), to pay b Charge, to pa the Plain Protection Supply Rue for the Plans Protection Supply I relaled fees. c5c and caste provided for in this Contract. Customer a�eB that the viceprovided under the terns of this Convect will be subject ro the prI city of service dule of Optlonal Industrial Rome, except that Plant Protection Supply Volumes will be reasons of force mejeare Ice with Plant tract Year in I In the city In v and in die city in which son. and to vary all JOD will have no duty or obligation to provide Customer or standby gat supply," a "back-up" gat supply or any other gas transportation terms of this Contract reference and mtract. to pay the Plant Protection Supply Volumes win be subject to curtailment for masons of force majeum 2 The undersigned Customer does hereby propose, abject to die agreement of 77CUOD expressed by its execution of this Selection of Service Form, the following contract quand as Minimum Monthly Quantity (MIn1dQ) -125 dacetherms. Maximum Annual Quantity [Per Contract Yea] (MAQ) . decetherms. Maximum DAY Quantity (MDQ) ` decathemn. Maximum Hourly Quantity (MHQ) m decathemu, and Plant Protection Supply Volume = decatherne per day 3 Custoner understands, acknowledges and agrees that TXUOD cannot and does no guarantee a constant delivery of awes gas under this Contact. 4 The present Optional industrial Rate for get aides service is $0._ (_ 4) per decathemn for the first 60o decatherms, $0 _ C) per decatbum for the neat 650 decetherms. $0 — (_ e) per decatherm for the next 48,750 docatherms, $0— (_ 0) per deaatherm for gas transported in excess of 50,00o decathemu, plus adjusted gas costs as described therein, plus the charge to TXUOD to have the gat transported to the applicable city gate J 71ne present Optional Industrial Rate for transportation games is $0 _ (_ e) per decathum for the first 600 decathemts, $0—( e) per deca0tum for the next 650 decatherms. $0 _ (_ 0) per deoatherm for the next 48,750 decatherme, $0—( 0) per decatherm for sea transported In excess of 50,00D decatharms 6 The present difference between the margin in the Sat block of the Commercial Rate and the margin in the Oran block of the Industrial Date used in the calculation of the Monthly Plant Protection Supply Charge as such difference may change from time to time The Present difference in such margins is 7 RETEN nON TXUGD rosy retain a percentage of the gas received for transport (the "Retention Volume") and will take title to such volume of ges as a pan of the Transportation Service Rate Such percentage will be TXUGD's most recently established companywide distribution lost and unaccounted for gas percentage calculated as provided in 16 TAC Section 7 52(3)(B) heating all TXUGD distribution systems as one system The presently established percentage is % 8 if Customer elect# transportation service hereunder, Customer agrees (a) that TXUGD's receipt and delivery of transport gas under the Were and provisions of this Contract is subject to dtNtation. interruption or discominuadon and TXUGD will never be liable In damages or oth irwhis on account of having so Interrupted or discontinued such receipts or deliveries of gas, (b) to assume any and all risks, including, but not limited to, lost profits, damaged or destroyed faciTrbes, lost or damaged production, damaged or destroyed machinery and/or equipment, and the Muse of Custonn's facility and/or business due to an intenuplon or discontinuance of Customer's transport gas supply or of the transportation of such gas under this Contract, and (c) to indemnify and hold TXUGD harmless from and against any and all damages, coats, losses and expenses (including reasonable attorneys' fees) that may be sustained by TXUGD due to any elelm, demand, sub or action brought against MOD (whether or not the claim, demand, suit or action is Joined to be valid) by any person or entity arising out of, resulting from or connected, in whole or in pen, with an intemiption or discaiHnuatlon of the supply of transport gas or she transportation of such gas 9 TXUGD's latest effective Schedule of Optional Ltdusiriai Rates In the city In which the Delivery Point is located, including the terms of the signature page, Schedule °Ai' Seliedde "B" sad Schedule "C" for gas aides service. and the signature page, Schedule "A," Schedule "B" and Schedule "D" for gas transportation service, are hereby incorporated by reference and made a part of this Contract TXU Gas Distribution, a division of (Cestou er's Compmy hams] TXU Gas Company By Signuure By Srpudue Pdnted Name Printed None a8 ea Attorney -in Pest for TXU On Dinrltnubn Tide rrr END OF SCHEDULE "A" rrr '1 1 I QjWifi=on (a) In Order to qualify as a Customer and receive service under this Contract a customer must (i) be served from a connection to a TXUGD distribution system downstream from a city gate and inside the boundaries of a city, (u) be served without exceeding the capacity of TXUGD's existing facilities, and (tit) qualify to receive service as an industrial customer under TXUGD's Rate Schedule No 200 issued in April of 19", however, such customer may not be an electric gemination customer, and must consume at least 1500 decatherms as an annual average instead of not less than 125 mef per month of its Contract Year (b) A customer, other then a residential customer, that is otherwise qualified, but does not have a minimum gas usage of 1St)0 decatherms as an annual average, may choose commercial class gas sales service (c) Service under this Contract will not be available to a customer that has another existing gas sales or transportation contract or agreement related to those facilities described on the signature page of this contract for gas service from TXUGD's distribution facilities Natural gas transportation or sales service under this Contract will only be available to such customers upon the termination of such other contracts (d) Customer must have entered a written agreement with TXUGD in the form of the Contract that is a part of the approved tantiapplicable hereto (a) Customer must have selected one of the service options and other variable terms and provisions that are agreeable to TXUGD, as provided on the signature page of this Contract and on the Selection of Service Form, which is included as Schedule "A " Such a signature page and such Selection of Service Form will, when agreed to by TXUGD, become a part of this Contract and incorporated heroin (1) This Contract, including all applicable Schedules and tariffs, constitutes the entire contract between Customer and TXUGD with respect to Customer's facilities described on the signature page for the purposes heroin designated (g) Service under this Contract will only be available where Optional Industrial Rates are in effect 7 (a) "Agreement" or "mutual agreement" as used in this Contract in regard to an agreement of the parties on a variable term or provision of this Contract, at Inception or in the future, mean an agreement that will not be unreasonably withheld by either party, however, the agreement of TXUGD will necessarily be dependent upon the relevant distribution system operating conditions, which TXUGD will not be required to change, and TXUGD will not be required to change the capacity of its system or add now facilities (b) "Billing month" menus that period of time beginning at 9 00 A M central clock time on the fist calendar day of a calendar month and ending at 9 00 A M central clock time, on the first calendar day of the following calendar month fbr which TXUGD subtruts a statement to Customer for the services, fees, tax reimbursement. costs, charges and compensation due to TXUGD under the provisions of this Contract. (c) "Contract Year" means the period of time beginning at 9 00 AM central clock time on the first day of the month after initial deliveries of gas to Customer are measured through TXUGD's measurement facilities and ending at 9 00 A M central clock time on the same day and month one (1) year thereafter, or as otherwise set forth on the signature page of this Contract (d) "Day" means die period of nine beginning at 9 00 A M central clock time on one calendar day and ending at 9 00 A M central clock ume on the following calendar day (a) "Decatherm" has the meaning set forth in paragraph S(a) of this Schedule "B " (i) "Delivery Point" has the maiming set forth on the signature page of this Contract (g) "ass means natural gas produced from gas wells, vaporized natural gas liquids, gas produced in association with oil (castnghead gas) and/or the residue gas resulting from processing casinghead gas and/or gas well gas (h) "Hour" means a sxitymmute period of time "Hourly" will mean within an hour or over the period of an hour, as may be appropriate in the context W "Incorporated heroin by reference," "made apart of dus Contract" and other words to the same effect mean incorporated within and made a part of this Contract. 0) "Margin" man= die par unit charge in the fast step or block of TXUOD's effective Commercial Rate for gas sales or in die first step or block of TXUOD's Optional Industrial Rate for gas sales, exclusive of any gas coats (k) "Maximum Daily Quantity" has the meaning sot forth in the effective Selection of Samoa Form (1) "Mal" has the meamng set forth in paragraph 8(f) of this Schedule "B " (m) "Month" maxis the period of ume beginning at 9 00 A M central clock time on the first day of a calendar month and ending at 9 00 A M central clock time on the first day of the succeeding calendar month (n) "Monthly Plant Protection Supply Charge" has the meaning set forth on the signature page of this Contract (o) "Plant Protection Supply Volumes" means the quantity of gas agreed upon in the applicable Selection of Service Form (p) "Plant Protection Supply Rate" has the meaning set forth on the signature page of this Contract (q) "Retention Volume" has the meaning set forth on the signature page of this Contract. (r) "Taxes" has the meaning set forth in paragraph l l(b) of this Schedule "B " (a) "Variable terms and provisions" means those two and provisions of this Contract agreed upon by TXUOD and an individual Customer, that may be unique to that Customer, in order to complete the blanks in the form of the signature page or a Selection of Service Porm, attached as Schedule "A," that becomes a part of this Contract (t) "Year" means the period of time beginning at 9,00 A M central clock time on any day of a calendar month and ending at 9 00 A M central clock time on the same day of the succeeding calendar year 3 QRtltm Customer will have the option for the first Contract Year and each Contract Year thereafter, subject to the agreement of TXUOD, to choose between sales service with or without plant protection supply service and transportation Samoa with or without plant protection supply service subject to the terms of this Contract, as provided in the Selection of Service Form in the form set out in Schedule "A," at least ninety (90) days prior to the begiamng of such subsequent Connect Yssr If Customer falls to make such a selection, or fails to make a timely selection for such a subsequent Contract Year, die type of service provided by TXUOD during the subsequent Contract Year will, subject to the agreement of TXUOD, remain the same as the service provided during the prior Contract Year 4 PPl qt, Protection Suooly Serncc (a) A Customer selecting plant protection supply service, as may be mutually agreed to by TXUOD in Schedule "A," may take up to the Plant Protection Supply Volume as purchased plant protection supply gas each day during the term of this Contract, except to the extent that TXUOD is unable to deliver such gas for reasons of force m{leum, however. Customer will pay TXUOD for a volume of plant protecuon supply gas equal to the Plant Protection Supply Volume agreed to in Schedule "A" for each day during the term of this Contract whether such volume of gas is actually taken by Customer or not. The volume of plant protection supply gas actually taken by Customer may be leas than, but my not exceed the Plant Protection Supply Volume mutually agreed upon by TXUOD and Customer in Schedule "A " (b) Customer will pay for plant protection supply gas at a rate equal to the per unit charge in the latest effective Schedule of Optional lidustrial Rates for gas supply service established for the city in which the Delivery Point is located as they may change from time to time (c) The term "plant protection" means the protection of Customer's Facility described on the signature page of this Contract and the production and processes in Customer's Facility, during the period of any curtailment of sales service or Interruption of transportation service, to the extent necessary to avoid damage to (1) Customar's Facility, (2) the product during the manufacturing process, (3) or the material used to manufacture the product dung the manufacturing process "Manufacture;' "manufacturing," and production" may include processes involving Customer's uses of the gas sold or transported that make a product suitable for sale or use and may not be limited to the making of a product from raw materials (d) For measurement, accounting and billing Purposes the last volumes of gas delivered each day am deems to be plant protection supply gas The remainder of the gas delivered, if any, is deemed to be gas transported transportation service provisions of this Contract, giving due consideration to the Retention Volume, for a transportation service Customer and deemed to be gas sold and delivered under the sales service provisions of this Contract for a sales service Customer (e) The delivery and sale of plant protection supply gas will only be curtailed to lees than the Plant Protection Supply Volume by TXUOD for reasons of force majeure as provided in Schedule "B," paragraph 13 (f) During periods In which a curtailment of gas sales service or interruption of gas transportation service is in effect, a customer receiving plant protection supply service that has standby fuel must use the standby fuel unless by reasons of force majeure such Customer is unable to do so During such a period, in which such a Customer is unable to use its standby fuel for reasons of force mgjeure, TXUOD will provide Customer with plant protection supply service gas, except to tie extent TXUOD is unable to do so for reasons of force majeure (g) Notwithstanding any other provision of this Contract, to the extent a Customer receiving plant protection supply service takes lea than the Plant Protection Supply Volume during a period of curtailment of gas sales service, a period of interruption of gas transportation service or a period in which TXUOD is unable to deliver plant protection supply gas far masons of force mgjeure, Customer well not be required to pay for the portion of the Plant Protection Supply Volume that TXUGD did not deliver and the Customer did not take (h) Customer will not have a right to take or purchase plant protection supply gas in excess of the Plant Protection Supply Volume during any day (u) If Customer should take gas in excess of the Plant Protection Supply Volume during a day in a period when TXUOA has no force mglame in effect, but has placed a curtailment down to or below plant protection levels in effect for other reasons, Customer will pay TXUOD for such volumes In excess of the plant Protection Supply Volume at a rate equal to the greater of the highest price paid for go by TXUOD during that monthly period or 20D% of the highest daily Houston Ship Channel price during that monthly period, as reported in Gins Daily (I) if the reasons of force mujame that prevent the sale or delivery of plant protection supply gas to a transportation service Customer by TXUOD are such that TXUOD remains capable of transporting a transportation Customer's gas from the Receipt Point(s) to the Delivery Point, TXUOD well transport such gas to the extent it is capable, giving due regard to the Retention Volume (k) Plant protection supply gas actually taken and the Plant Protection Supply Volume will not be considered in any calculation of an imbalance in transportation volumes except in order to exclude such purchased volumes from having an effect upon such transportation imbalances (1) Billing for the ales and purchases of plant protection supply gas will be in the manner described In Schedule "B „ I»graph 12 (a) This Contract will be subject to all applicable state and federal laws, orders, directives, rules and regulations of any governmental body, official or agency having jurisdiction over the subject matter hereof, therefore, TXUOD's obligations and liabilities hereunder will be limited accordingly (b) TXUOD's Schedule of Optional hdustrial Rates may be revised or replaced from time to time in the future by a regulatory authority with jurisdiction Any such revised or new Schedule of Optional industrial Rates, when lawfully established, will immediately become effective and be applicable to gas sales service, gas transportation service and plant protection supply service under this Contract commencing with gas delivered after the effective date of such change Should new or different rates, or terms and conditions of service, be established for any service under this Contract by a regulatory, authority with jumsdiction, such rate(s) or terms and conditions of service will supersede conflictog provisions of this Contract. Company wiU give Customer nonce of any such change, together with a copy of the revised Schedule of Optional Industrial Rates• The notice harem provided for will be deemed to have been given when forwarded by the party giving the same addressed to Customer at the address shown in this Contract by first class mail, postage prepaid, separately or in Customer's billing statement. (c) Customer warrants to TXUGD that its or its agent's facilities uulixed for the acceptance, receipt, transportation or delivery of gas hereunder are not subject to the Natural Gas Act of 1938, as amended, (the "NGA") Asa material representation, without which TXUGD would not have been willing to execute this Contract, Customer warrants to TXUGD that Customer and its agents will take no action nor commit any act of omission that will subject this transaction, the facilities of TXUGD, or gas that TXUGD has title to or possession of to the jurisdiction of the Federal Energy Regulatory Commission ("FERC") or its successor governmental agency under the terms of the NGA, the Natural Gas Policy Act of 1978, as amended (the "NGPA"), or any other law The gas accepted, received, transported or delivered hereunder shall not have been nor shall be purchased, said, transported or otherwise utilized in a manner that will subject TXUOD, its gas, its facilities or gas it has possession of, to the terms of the NGA or the NGPA or any other act causing TXUGD, its gas, its facilities or gas it has possession of to become subject to the jurisdiction of the PBRC or a similar federal agency In addition to, and without excluding any remedy that TXUGD may have at law or in equity, if Customer broaches the above warranties and reprereonsdons Customer will be liable to TXUGD for all damages, injury and reasonable expense that TXUGD may sustain by town of any broach hereof Further, should Customer or its agents through any act or omission cause say gas or facilities involved in the performance of this Contract to become regulated by or subject to jurisdictional authority of the FERC, a successor governmental authority or the jurisdiction of any other federal regulatory agency, under the [suss of the NGA or NGPA or any other law affecting the benefits or value of this Contract, this Contract will automatically terminate on the day before the date of such occurrence, provided, however such termination will never be construed so as to impair say rights of TXUGD with regard to such breach of contract Customer hereby waives any defense for breach of this paragraph that TXUGD could avoid NGA jurisdiction under the provisions of Section I(c) of such Act. i IV 177117, (a) This Contract will remain in full force sad effect, subjoct to the terms and provisions hereof, for a primary term as specified on the signature page of this Contract, and from Contract Year to Contract Year thereafter uwl canceled by eithar party giving the other party written notice at least thirty (30) days prior to the end of the primary term or prior to the and of any Contract Year after the and of the primary term However, any termination, caneefiation or expiration of this Contract will never operate to extinguish the obligation to make payment for momes due hereunder (b) Service will not commence under this Contract until after 9 00 A M on the day of installation of the electronic measurement facilities, related telemetry equipment and an operational telephone line for and compatible with TXUGt)'s electronic gas measurement facilities and related telemetry equipment at the Delivery Point 7 Emililwat at Pow ints of Receipt and Delivery (a) Customer (or its designee) will deliver gas to TXUGD at the Receipt Pomt(s) at pressures sufficient to enter TXUGD's pipeline system at such point(s), provided, however, that Customer's delivery pressure into TXUGD's system at the Receipt Point(s) will not exceed TXUGD's maatmum allowable operating pressure, as such may vary from time to time, at any such polaris), or cause the pressure at such point(,) to exceed TXUGD's maximum allowable operating pressure (b) TXUGD will deliver gas to Customer at TXUGD's operating pressure, as such may vary from time to unit, at the Delivery Point 8 (a) The unit of measurement of gas for all purposes will be the "decetherm." The term "decatherm" as used in this Contract means a volume of gas that contains a sufficient number of British thermal units ("Buts") per cubic foot of gas such that the product of the volume multiplied by the number of Btu per cubic foot of gas equals one million (1,000,000) Btu, or one (1) MMBtu, determined at a temperature of sixty (60) degrees Fahrenheit, saturated with water vapor and under a pressure equivalent to that of durty (30) inches of mercury at thirty two (32) degrees Fahrenheit converted to base conditions of sixty (60) degrees Fahrenheit and an absolute pressure of fourteen and sixty-five one hundredths (14 65) pounds per square inch and adjusted to reflect actual water vapor content. Gas measurements will be computed by an measuring perry into such units in accordance with the Ideal Gas Laws for volume variations due to metered pressure and corrected for deviation using average values of recorded relative density and flowing temperature, or by using the calculated relative density determined by the method mentioned in paragraph (c) below In no circumstance will the average value of flowing temperature or relative density be determined for a period of less than one day (b) The facilities installed for measurement of gas hereunder will be installed and operated, and gas measurement computations will be made, in accordance with currant industry standards Gnfice metering will be done in accordance with tie latest version of A G A Report No 3 - ANSUAPI 2530 Positive displacement and turbine metering will be done in accordance with the latest version of A G A Report No 7 Electronic Gas Measurement (EGM) will be done in accordance with the latest version of AN Manuel of Petroleum Measurement Standards Chapter 21-Row Measurement Using Electronic Metering Systems (c) TXUGD may at its expense properly install and operate a device of standard make to continuously determine or record flowing temperature The temperature values shall be used in gas measurement computations With respect to relative density (specific gravity) of the gas, such shall be determined by (t) [on -site) sampling and laboratory analysis, or (it) any other method which is of standard industry practice, (114 provided, however, that either party may at its own expense properly install and operate a recording relative density instrument of standard make and in this event ilia relative density as recorded shall be used in the gas measurement computations (d) The average heating value (in Btu) and relative density of the gas delivered hereunder by either party maybe determined by the use of recording instruments of standard type, which may be installed and operated by TXUGD at the measuring point, or at such other point or points as are mutually agreeable to both parties, provided, however, if there is no Btu/ralative density instrument at a particular Receipt or Delivery Point spectfied herein or agreed upon hereunder, than the heating value and relative density of the gas at such point may be determined by [on -sic] sampling and laboratory analysis (a) The terms "decatheW' and'9NMBtu" maybe used interchangeably in this Contract as a measure of volume or heat content under the conditions stated in paragraph 8(a), and may be converted from one to the other in accordance with the Ideal Gas Laws under those conditions when necessary (i) The term "Mcf' means one thousand (1,000) cubic feet of gas under the conditions stated in paragraph 8(a) (g) in gas measurement computations the determinations for the average values for meter pressure, relative density and flowing temperature values will be determined only during periods of unit when gas is actually flowing through the measuring facilities (a) The gas delivered to TXUGD (or its designee) at the Receipt Potnt(s) for transportation by TXUGD will be measured by means of gas measuring devices of standard type that will be installed, operated and maintained by TXUGD (or its designee) and gas delivered to Customer at the Delivery Point, whether sold or transported, will be measured by deotronic gas measurement facilities of standard type that will be installed, operated and maintained by TXUGD (or its designee) Gas measurement devices and equipment will be tested and adjusted for accuracy on a regular schedule by TXUGD (or its designee) (b) If adequate measuring facilities are already in existence at the Receipt Point(s) and adequate electronic measunpg facilities are already in existence at the Delivery Point hereunder, such existing measuring facilities will be used for so long as, in TXUGD's sole opinion, they remain adequate and the party having title to such facilities will retain title to such facilities (c) It is agreed that it will be necessary for TXUGD to install electronic gas measurement facilities at the Delivery Point in order to comply with the various measurement and monitoring provisions of this Contract, if, in TXUGD's sole judgement, adequate electronic gas measurement facilities are not already located at the Delivery Point (d) If new or additional faciltues are required to effectuate the receipt or delivery of gas hereunder, Customer agrees to reimburse TXUGD, within thirty (30) days from the date of receipt of TXUGD's invoice, for the cost of any tap valves, measuring facilities and associated equipment and all labor and overhead expenses (including applicable federal income tax imposed as a result of installation of such facilities), attributable to the installation of such equipment If the invoiced amount is not paid when due, interest on all unpaid amounts will accrue at the rate of one and one-half percent (1.1/2%) per month, or the highest rate allowed by law, whichever is less, from the date such amount is due TXUGD If TXUGD does not receive total reimbursement through the payment of such invoice within sixty (60) days from Customer's receipt of TXUGD's invoice, TXUGD may suspend and/or terminate this Contract (a) It to agreed that it will be necessary for TXUGD to install electronic gas measurement facilities at the Delivery Point is order to comply with the various measurement and monitoring provisions of this Contract, if, in TXUGD's sole judgement, adequate electronic gas mossumment facilities am not already located at the Delivery Point. (f) If TXUGD mstalls any new electrome gas measurement facilities, related communisations equipment or telemetry equipment, Customer agrees to pay TXUGD the amount specified in the Cost of Now Facilities section of the signature page of this Contract within nitety (90) days of the date of initial deliveries under this Contract, to cover the initial cost of all such facilities (including applicable federal income tax imposed as a result of installation of such facilities) and related set-up expenses related to all such new facilmes All such facilities will be the sole property of TXUGD and will be operated and maintained by TXUGD at TXUGD's expense If any amounts due under this paragraph are not paid when due, interest on all unpaid amounts will accrue at the rate of one and one-half peroentl(1-1/2%) per month, or the highest rate allowed by law, whichever is less, from the data such amount is due TXUGb If TXUGD installs new electronic gas measurement facilities, TXUGD agrees to provide and maintain a telephone connection to, and a compatible and operational telephone line for, TXUGD's electronic gas measurement facilities (g) If at any time after the date of initial deliveries hereunder TXUGD determines that additional facilities are required to effectuate, the receipt or delivery of gas hereunder, Customer will reimburse MOD, within 30 days from the date of receipt of TXUGD's invoice, for the cost of any tap valves, measuring facilities and associated equipment and all labor and overhead expenses (including applicable federal income tax imposed as a result of installation of such facilities), attributable to the installation of such equipment If the invoiced amount is not paid when due, interest on all unpaid amounts will accrue at the rate of 1-1/2% per month, or the highest rate allowed by law, whichever is less, from the date such amount is due TXUGD If TXUGD does not receive tool mtmbtreement through the payment of such invoice within 60 days from Customer's receipt of TXUGD's invoice, TXUGD may suspend and/or terminate this Contract (h) It is understood and agreed that although Customer will reimburse TXUGD for any tap valves, measuring facilities and all associated costs (including income taxes) incurred by TXUGD in establishing any Receipt Point(s) and/or the Delivery Point hereunder, Customer may, in such event, receive only the ownership of such measuring facilities, but TXUGD will receive ownership of all tap and tap valve installations and all associated equipment. TXUGD will be solely responsible for all activities in connection with said manuring facdmes and all tap and tap valve installations and all associated equipment, including, but not limited to, operation, testing, calibration, adjusting, repair and replacement (at Custousn s expense), and maintenance, necessary for performance of this Contract until TXUGD disconnects and removes the measuring facilities after termination of Out Contract. After such disconnection and removal, Customer will have the right to claim and take possession of such measuring facilities (previously paid for by Customer) from TXUGD Customer's failure to so claim and take possession of such mounting facilities within ninety (90) days of TXUGD's notice of disconnection and removal thereof, will constitute a waiver by Customer of any right, title or interest in and to such measuring facilities and the transfer of all right, title and interest therein toTXUGD TXUGD will retain ownership of all equipment associated with tap and tap valve installations (i) The Customer will have access to observe TXUGD's Delivery Point measuring facilities at all times, but all maintenance, calibration and adjustment of the Delivery Point measuring facilities will be done only by the employees or agents of TXUGD Records from all such measuring facilities will remain the property of TXUGD and will be kept on flit by TXUGD for a period of not lea than two (2) years However, upon request of Customer within such two (2) year period, TXUGD will make the measurement records from the measuring facilities, together with any calculations therefrom, available to Customer for inspection and verification, subject to return by Customer to TXUGD within thirty (30) days after receipt thereof 0) Customer may, at its option and expense, install and operate measuring facilities, check meters and related instruments and equipment, In a manner which will not interfere with TXUGD's equipment, to check TXUOD'a Delivery Point measuring facilities, instruments and equipment, but the measurement of gas for the purpose of this Conte both at the Delivery and Receipt Points, will be by the facilities of TXUGD (or its designee) only, except as hereinafter specifically provided The gas measurement facilities, check meters, instruments, and equipment installed by each party at the Delivery Point will be subject at all reasonable times to inspection or examination by the other party, but the calibration and adjustment thereof, as well as those at the Receipt Poings), will be done only by the installing party (it) TXlIGD will, at costotaer's written request, give to Customer notice of the time of all tests of the Receipt Point or Delivery Point electronic ges measuring facilities, u may be applicable, sufficiently in advance of such tests so that Customer may convemendy have its representatives present, provided, however, that if TXUGD has given such notice to Customer and Customer is not present at the time specified, then TXUGD may proceed with the casts ore though Customer were present TXUGD will give notice to Customer's Receipt Point or Delivery Point Designee (who is responsible for the physical receipt or delivery of gas at the point), as may be applicable, of the time of all tests of such electronic gas measuring facilities sufficiently in advance of such was so that Customer's designee may conveniently be present, provided, however. that if TXUGD has given such notice to Customer's designee and Customer's designee is not present at the tied specified, then TXUGD may proceed with the test as though Custowes designed were present. (1) Ono measurements computed by TXUGD (or its designee) will be deemed to be correct except whore the gas measurement facilities are found to be inaccurate by more than one percent 0%), fast or slow, or to hove failed to register, in either of which cases TXUGD "I repair or replace the measurement facilities The quantity of gas delivered while the measurement facilities were inaccurate or failed to register will, at TXUGD's discretion be determined by (i) de readings of Customer's check meter, if installed and in good operating condition, (i) by correcting die error if the percentage of error is ascertainable by calibration or mathematical calculation, or (in) by estimating the quantity on a basis of deliveries under similar conditions when the measurement facilities were registering accurately (m) It is understood and agreed that Customer's transportation gas will be part of and will be measured as apart of a commingled stream of gas by the measuring party at the Receipt Points) such that the quantity of gas delivered by Customer to TXUGD (or its designse) at the Receipt Points) for transportation under dus Contract may be determined by an allocation methodology provided for in balancing provisions in this Contract or in another agreeohem between. (A) Customer and Customer's transporter that delivers such gas to the Receipt Pomt(s), (B) TXUGD and Customer's transporter that delivers such gas to the Receipt Point(s), or (C) TXUGD and Customer 10 Customer will provide, in accordance with TXUGD'a specifications, the necessary service Imes on Custom es premises to connect with TXUGD's lines and suitable space and an easement for TXUOD's lines and other equip- ment, including, but not limited to, a telephone line and associated equipment related to electronic gas measurement facilities and telemetry equipment Customer will use due can to protect TXUGD's property that is located on Customer's promisee from damage and will permit no person other than an agent of TXUGD, or a person otherwise lawfully authonxed, to tamper with, inspect or remove same All property belonging to TXUGD and located on Customer's premises will be removable by TXUOD at any bee during the term of this Contract and within a reasonable dine after its temunadon or after reasonable notice of Customer's desire to have such property removed, tide thereto remaining in TXUGD at all times TXUGD will have full and free ingress to and ogress from Customer's promises for the construction, inspection, maintenance, repair and removal of TXUGD's property thereonlor for any purpose connected with the service provided under this Contract 11 Zgl{pa (a) Customer agrees to pay TXUGD. by way of reimbursement, all Taxes paid by TXUGD with respect to the sales sarvice,, the transportation service, die plant protection supply service and any other commodity or service provided hereunder, and that may be related to any associated facilities involved in the performance of this Contract If any such Taxes paid by TXUGD to any governmental authority we calculated based upon the value of or price paid for the gas transported hereunder, Customer will disclose to TXUGD the purchase price of such gas to enable TXUGD to calculate and pay all such fees and taxes to appropriate govemmental authorities in a timely manner If Customer fails ort� fuses to disclose the purchase price of such gas within sixty (60) days from the date thus related transpo�tntion service is provided, TXUGD will have the right to pay such fees and taxes based upon the highest prices r parted for the period in Gar Daily for gas purchased or gas sold in the State of Texas and to be reimbursed by custgmer In any event, Customer agrees to indemnify TXUGD for, and hold TXUGD harmless from, any and all claims, demands, losses or expenses, including attorneys' foes, which TXUGD may incur as a result of Customer's failure or refusal to disclose the purchase price of gas transported hereunder (b) The term 'Taxes" as used herein means all taxes and fees levied upon "or paid by TXUOD [other than ad valorem, capital stock, income or excess profit taxes (except as provided herein), general franchise taxes unposed on corporations on account of their corporate existence or on their right to do business within the state as a foreign corporation and shinier taxes], including, but not limited to, gas utility tax, street and alley rental fees set out in franchise ordinances, licenses, fees and other charges levied, assessed or made by any governmental authonty on the act, ngl�t or privilege of selling, transporting, handling or delivering gas, which taxes or fees arc based upon the volumat heat content, value or sales/purohase price of the gas, or transportation fee payable hereunder, any other fee, charge or payment hereunder and applicable federal income tax imposed as a result of installation of equipment at the Delivery Point or Receipt Point(s) under the to = of this Contract Any income tax coats of TXUOD that have been reimbursed to TXUOD by Customer under paragraphs 9(d) and 9(f) will not be reimbursed to TXUQD by Customer under this paragraph 11 12 (a) On approximately the fifteenth (15th) day of each month, TXUOD will render to Customer a statement for compensation for all fees, charges, costs, tax roumburaonent and services payable under this Contract for the preceding month, showing either the number of Btu or the number of decatherma delivered at the Receipt Point(s) and Delivery point, the amount of compensation due to TXUOD under this Contract, including tax reimbursement, other reasonable and pertinent information that is necessary to explain and support the same and any adjustments made by TXUOD in determining the amount billed TXUOD may deliver to Customer such statements of amounts owed to TXUOD by United States mail (flat claw, registered or carolled), postage prepaid, fax, electronic medium, or ul or delivery service at the mailing address or electronic medium address provided on the signature page of this Contract The fax, email, muting address and electronic medium address provided on the signature page of this Contract may be changed at any time by either pony upon thirty (30) days prior written notice to the other party (b) Customer will pay TXUOD withma period often (10) days from the date TXUOD's statement setting out the compensation due under this Contract for all fees, charges, costs its deposited prepaid in the United States mail, or as to paymtent which Is otherwise due, according to the measurements, computations and rates herein provided TXUOD hereby agrees, however, that Customer may pay any such statement by bank wire transfer by dimcung the bank wire transfer to TXUOD at Chaco Texas Bank, Dallas, Texas, ABA No 113000609, for deposit to TXUOD Account No 08805016795 To assure proper credit, Customer should designate the company nuns, invoice number and amount being paid in the Pedwire Text Section If the invoiced amount of any payment due is not paid when due, interest on all unpaid amounts will accrue at the rate of one and one half percent 0-1/2%) per month, or the highest rate allowed by law, whichever is law, from the date such amount is due TXUOD, provided, however no interest will accrue on unpaid amounts when fa0ure to make payment is the result of a bona fide dispute between the parties hereto regarding such amounts (and Customer timely pays all amounts not in dispute), unless and until it is ultimately determined that Customer owes such disputed amount, whereupon Customer will pay TXUOD that amaunq plus interest computed back to the original payment due date, immediately upon such determination The designated banks, addresses and accounts for wire transfer may be changed at any time by TXUOD upon thirty (30) days prior written notice to Customer (c) Notwithstanding any other provision of this Contrast, Customer will make payments for all gas service under this Contract beginning with initial deliveries (d) If Customer fails to pay bills for service within twenty (20) days from the ditto they are rendered hereunder or otherwise defaults under tins Contract, Company may suspend service and deliveries of gas and such suspension will not prevent enforcement by Company of any of its legal rights Waiver by Company of a particular default hereunder will not be deemed a waiver of subsequent defaults whether similar or dissimilar (a) Each party hereto will have the right at all reasonable times to examine the measurement records and charts of the other party, or its agent/designee if any, to the extent necessary to verify the accuracy of any statament, charge, computation or demand made under or pursuant to any of the provisions in this Contract If any such exammation reveals any inaccuracy in such previous billing, the necessary adjustments in such billing and payment will be made, provided, that no adjustments for any billing or payment will be made for any inaccuracy churned gfser the !apse of twenty five (25) months from the renddon of the bmice relating thereso (0 If tie ctadit worthiness or financial responsibility of Customer should, in the sole opinion of T)UOD, ever becomes unsatisfactory, then upon request by TXUOD at any time and from time to time during the term of this Contract, Customer will deposit with TXUOD (i) such amount of money requested by TXUOD, or (it) it letter of credit in a form acceptable to TXUOD from a financial institution acceptable to TXUOD in an amount requested by TXUOA, to guarantee the payment of statements and invoices hereunder, as well as any possible imbalances hereunder. Upon the termination of this Contract, any money so deposited, leas any amount due TXUGD by Customer, will be refunded to Colonist 13 Force Maiaure (a) In the event either party is rendered unable, wholly or in pan, by force maleure to carry out its obligations under this Contract, except the obligation to pay monies due hereunder, it is agreed that, on such paty's giving notice and reasonably full particulars of such forts ma)eure, In writing or by fax, email, electronic transfer or telecopy, to the other patty witbtn a reasonable nine after the occurrence of the cause relied on, the obligations of the party giving such notice, to the extent they ate affected by such force mgjeure, will be suspended during the continuance of any mabihty so caused, but for no longer period, and such cause will, so far as possible, be remedied with all reasonable dispatch Inability or failure of TXUGD to deliver or TXUGD to receive gas or perform under this Contract may not be On basis of claims for damages sustained by either party or for breach of contract when due to force rna)ehae (b) The tarn "force mq,oure," as employed herein, means acts of God, the elements, stakes, lockouts or other labor troubles or industrial disturbances, acts of the public enemy, wars, blockades, insurrections, civil disturbances and dots, and epidemics, landslides, lightning, earthquakes. Ores, stomps, floods and washouts, acts. arrests, orders, directives, restraints and requirements of the government and governments! agencies, whether federal, state, civil or military, accidents, explosions, breakage, accident or obstructions involving a pipeline, machinery or lines of pipe, repairs or outages (shutdowns) of power plant equipment or Imes of pipe for inspection, maintenance, change or repair, freezing of lines of pipe, depletion or failure of TXUGD's gas supply, fluctuations m gas pressure, demands in excess of the capacity of TXUGD's equipment, pipelines or TXUGD's sources of gas supply, and any other causes, whether of the kind enumerated or otherwise, not reasonably within the control of the parry claiming suspension It is understood and agreed that the handling of litigation with third parties of any fact or issue and the settlement of stakes or lockouts will be entirely within the discretion and control of the party involved, and that the above reasonable dispatch will not require any particular aouon or the settlement of strikes or lockouts by acceding to the demand of the opposing party when such comae is deemed to be inadvisable or inappropriate in the discretion of the party involved 14 Wa err of Brae rea L131anIM or!Caere ranormanco uwu,r uQawuu No waiver by either party hereto of any one or more breaches, defaults or rights under any provision of this Contract will operate or be construed as a waiver of any other broaches, defaults or rights, whether of a like or of a different character By providing written notice to the other party, either party may assert any right not previously asserted hereunder or may assort its right to object to a default not previously protested Except as specifically provided herein, in the event of any dispute under this Contract, the parties will, notwithstanding the pendency of such dispusi diligently proceed with the performance of this Contract without prejudice to the rights of either party 15 Remedy for Breech Except as otherwise specifically provided heroin, if either party fails to perform any of the covenants or obligations imposed upon it in this Contract (except where such failure is excused under the Force Ma)eure provisions hereof), then the other party may, at its option (without waiving any other remedy for breach hereof), by notice in writing specifying the facts giving rise to the default has occurred, indicate such party's election to tertminate this Contract due to such failure However, Customees fwluro to pay TXUGD within a period of ten (10) days following Customer's receipt of written notice from TXUGD advising of such failure to make payment in full within the time specifcid previously herein, will be a default that will give TXUGD the right to immediately terminate this Contract, unless such failure to pay such amounts is the result of a bona fide dispute between the parties hereto regarding such amounts hereunder and Customer tritely pays all amounts not in dispute With respect to any other nunters, the party its default wilt have thirty (30) days from receipt of such nonce to remedy such default, and upon failure to de so, the party aendIng the notice of default may [erwnae this Contract from and slier the expuauon of such thirty (30) day period by setting the other petty a notice of tarminauon within thirty (30) days hem the end of the prior thirty (30) day period Such temdnatiM will bean additional remedy and will not prejudice the nght of the party not in default to colh ct any amounts due ilemundor for any damage or loss suffered by it and wk not waive any other remedy to which the party not m dafaull may be entitled for breach of this Contract LM)= 77 =7777 Pursuant to the FedaW Arbitration Act, the parties hereby agree that any controversy, claim or alleged breach, insisting but not limited to torts and statutory claims, arising oat of or related to this Contract shall be settled by binding arbitration administered by the American ArbWadon Association ("AAA") In acco*nce With As Commercial Arbitration Rules. Demand for arb*%Won may be made no hater than the three that such action would be permuted under the applicable Texas statute of UntUation. Any disputes regarding the dineWwas of the demandfor arbitration shall be decided by the arburator(O Judgment upon the award rendered by the w*ftrator(s) may be entered in any Court having Jurisdiction thereof in order to obtain compliance therewith. Any case in which any claim, or combination of claims, exceeds B500,000 will be subject to the AAA Is Large, Complex Case Procedures EMNSEM y the dorU! of a panel of three (3) neutral arbibatom In rendering the award, the will dele►mine the rights and obUgallons of the parties accordhug to the liras of the State cluding any cor{�lict 4f bra principles), but punitive and exemplary damages may not be he arbitation proceedings and hearings will be conducted at the Dallis Regional OBIce of rt such other place as mrq be selected by mutual agreement No parry nor the arbilrawr(s) the existence, content or results ojany arburallon hereunder wuhout the prior wratten consent of all partles. _On I MIT.r� . Iw xT+l Customer's piping and facilities downstream from or connected to the Delivery Point may be subject to potential hazardelsuch as corrosion and leakage Consequently, such piping and facilities should be inspected periodically for leaks and damsgo If metallic materials amused, they should be regularly inspected for corrosion damage If any deterioration or unsafe conditions are discovered, they should be repaired or the affected facility replaced Additio'taliy, when any excavation work is planted, all buried facilities and piping in the area should be located before beginning such work. Operators of underground facilities and piping on Customer's property, including TXUOp, should be notified of the planted excavation activities by contacting the Texas "One Can" service at (800) 34"317 If the excavation is in the vicinity of any gas piping or faerltues, they should be located prior to beginning work and excavation am the piping or facilities should be accomplished by hand digging Plumbers and heating contractors can mist in locating, inspecting and repairing Customer's buried piping and facilities is CcQuridiniialrty TXUOD and Customer agree to keep the terms and provisions of this Contract confidential and to not disclose the terms of this contact m any third parties If disclosure is sought through process of a court, a government or a city, state relfederal regulatory agency, the party from whom disclosure is sought will resist disclosure through all reasonable means and will immediately notify the other party to allow it the opportunity to participate in such proceedings However, each party will have the tight to make such disclosures, if any, to governmental agencies and to its own attorneys, sudtton, accountants and shemboldera that will in turn maintain its confidentiality TXUOD and Customer agree to cooperate to maintain confidentiality of this Contract and to obtain a reasonable protective order or agreement to maintain that confidentiality under circumstances in which disclosure becomes necessary 19 h jscallancoui (a) A4 undoes, requests, demands and statements provided for in tin Contract must be given in writing, directed to the party to whom given, and mailed to, or delivered at, such parry's address as specified on the signature page of this Contractor at such address as each parry may by like notice later give to the other Such matted notices will be deemed to have been given when deposited in the United States mail (first class, registered or certified), postage prepaid, or sent by fax, electronic medium, email or independent delivery service at the matting address provided harem In the ease of hand delivery, notices will be deemed to have been given when delivered to a representative of either party by a representative of the other party (b) Tpis Contract constitutes the entire agreement between the parties covering the subject matter hereof, and theta are no agreements, modifications, conditions or understandings, written or oral, express or implied, pertaining to the subject matter hereof that are not contained harem No representation or statement of any representative of TXUOD will be a part of tin Contract nor an inducement to the execution hereof unless incorporated fully herein and this Contract may not be amended except in writing duly executed by the parties (c) Modifications of this Contract will be or become effective only upon the mutual execution of appropriate supplemental agreements or amendments hereto in writing by duly authorized representatives of the respective Parties (d) The captions or headings preceding the various parts of this Contract are inserted and included solely for convenience and will never be considered or given any effax in construing this Contract or any pan of this Contract, or in connection with the intent, dudes, obligations or liabilities of the parties hereto (e) This Contract will be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that this Contract may not be transferred or assigned by Customer without the prior written consent of TXUOD, and such consent may not be unreasonably withhold Any purported transfer or assignment without such consent will be null and void and will not operate to release any obligation of Customer under tau Contract (f) TXUOD and Customer intend to be legally bound by the terms and provisions set out in this Contract Both TXUOD and Customer intend, acknowledge and agree that this Contract is entered Into solely for the respecuve benefit of TXUOD and Customer No provision of this Contract, either express or implied, will be interpreted or construed as conferring any rights, remedies or claims upon any person or entity not a party to this Contract, except for a suooasor or assignee consented to as provided herein (g) Thb Contract Is trade In the State of Terri and will be governed by the laws of the State of Texas, without regard to conflict of laws provisions. (h) H aoy dispute under this Contract Isom resolved by arbitration and results in litigation In the courts, Dallas County, Taros, will be the proper venue for such liUgatten. (1) TXUOD will not be liable for any lose, damage or injury resulting from the gas or its use after it flows out of facilities or equipment owned by TXUOD, or its agent or designee, and into faedma or equipment owned by Customer, or its agent or designee, at the Delivery Point, all risks thereof and therefrom being hereby assumed by Customer •** END OF SCHEDULE uB„ •rw 11 SCHEDULE TO D,i�i' ► a,n �4 ► I TXUGD agrees to all and deliver natural gas to Customer and Customer agrees to purchase and receive such gas from TXUGD to meat Customer's natural gas requirements at Customer's premtsae described on the signature page of this Contract. Customer agrees to pay for such volumes of gas at TXUGD's latest effective Schedule of Optional Industrial Rates for gas sales service established for the city in which the Delivery Point is located, subject to and in accordance with all the terms and conditions contained in this Contract 2 This Contract covers Customer's entire natural gas requirements at the aforesaid promises, and Customer will not use gas tinder this Contract for service other rhea that classified so that Customer is qualified for semce under this Contract 3 TXUGIYs Schedule of Optional Industrial Rates for gas sales service maybe revised from time to time in the future and the rates contained in any such revised or new Schedule of Optional Industrial Rates for gas sales service, when lawfully established, will be applicable to gas purchased and sold under this Contract commencing with gas delivered after the effective date of such change Company will give Customer written nonce of any such change, together with a copy of the revised Schedule of Optional Industrial Rates for gas sales service The notice herein provided for will be deemed to have been given when sent by Company to Customer at the address shown on the signature page of this Contract by first class mail, postage prepaid, or included with a monthly statement 4 Customer agrees to keep its gas -using or burning equipment and appurtenances located on the aforesaid premises in good condition and in conformity with the requirements of any applicable city ordinance, state or federal law or rule and any applicable order or regulation of any governmental authority having jurisdiction. Customer agrees to comply with all of Company's reasonable rules and regulations S Title to and ownership of the gas sold and delivered by TXUGD to Customer at the Delivery Point will vest in Customer at that point. 6 TXUGD will have the right at any and all times to immediately discontinue, in whole or in part, the supply of gas hereunder, with or without notice, if in the opwon of TXUGD a continuation of the supply under this Contract would adversely affect, jeopardize or threaten adequate service to TXUGD's domestic or commercial customers or hazard, adversely affect, jeopardize or threaten adequate service to other customers having priority of service under TXUGD's latest effenuve Schedule of Optional Industrial Rates, and Customer hereby authorizes TXUGD to do so Further, Customer agrees that TXUGD will never be liable in damages or otherwise on account of having exercised such rights 7 When notified by TXUOD to do so, Customer agrees to minted or discontinue the use of gas hereunder in con- formity with the service priority provided for in this Contract and in the latest effective Schedule of Optional Industrial Rates If Customer classifies its business and operations as being essential to the public health and safety and considers continuity of its fuel service essential to the public welfare, then Customer will provide stand-by fuel and equipment adequate to meet its fuel requirements during periods of interruption of gas service under this Contract TXUGD cannot and does not guarantee a constant supply of gas hereunder S In the event during any day Customer purchases or takes volumes in excess of the Maximum Daly Quantity, in addition to all other fees and charges provided for in this Contract, Customer well pay TXUGD $l 00 for each decatherm received by Customer in excess of the Maximum Daily Quantity *** END OF SCHEDULE "C" r** SCHWULR,9Y,TO r. 7:c,.. „ u . TXUGD agrees to transport gas for Customer and Customer agrees to purchase and receive gas transportation service from TXUGD to meet Customer's natural gas requirements at Customer's promises described on the signature page of this Contract, subject to and in accordance with all the terms and conditions contained in this Contract. 2 Definitio (a) "Contract" means the signature page of this Contract, the effective Selection of Service form executed by Customer and TXUGD. Schedule "B" of this Contract and this Schedule "D " (b) "Day" means the period of time begu mns at 9 00 A M central clock time on one calendar day and ending at 9-00 A M central clock time on the following calendar day (c) "Decatherm" has the meaning set forth in paragraph 8(s) of schedule "B" of this Contract (d) "Delivery Point" has the meaning set forth on the signature page of this Contract (e) "Gas" means natural gas produced from gas wells, vaporized natural gas liquids, gas produced in association with oil (cashiShead gas) and/or the residue gas resulting from processing casinghead gas and/or gas well gas (f) "Maximum Daily Quantity" has the meaning set forth in the applicable Selection of Service Form (g) "Month" meads the period of time beginning at 9,00 A M central clock time on the first day of a calendar month and ending at 9 00 A M central clock time on the first day of the succeeding calendar month (h) "Receipt Point" has the meaning set forth on the signature page of this Contract (i) "Retention Volume" has the meaning set forth on the signature page of this Contract (1) "Taxes" bee the meaning set forth in paragraph 11(b) of Schedule "B" of this Contract (k) "Transportation" as used in this Contract includes the movement of gas by displacement and backhaul, and as such, the term "transportation" or "transport" as used herein includes the delivery of gas by TXUGD that is not the same gas received by TXUGD (1) "Transport gas" means that volume of gas received by TXUGD for transportation to Customer less the Retention Volume 3 Qllandty Customer represents that it owns or controls certain quantities of natural gas. and Customer desires that TXUGD receive such gas from Customer (or its designee) at the Receipt Pomt(s), and deliver gas to the Delivery Point in quantities as agreed to by the parties heroin R is agreed that the quantity of gas to be transported under this Contract will not exceed the maximum annual, daily or hourly quantities specified on the effective Selection of Service Form 4 Customer warrants that at the time of delivery of gas hereunder to TXUGD for transportation, Customer 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 Customer agrees to Indemnify TXUGD for, and hold TXUGD harmless from, all suits, actions, debts, accounts, damages, costs (including attorneys' teas), losses and expenses arising from or out of any adverse claims of any and all persons to oragainst acid gas Further, neither TXUGD nor Customer will take any action that changes or jeopardizes Customer's title to the gas transported hereunder 5 Quift (a) The neutral gas delivered by Customer to TXUGD for transportation under thus Contract will be of merchantable quality and commercially free fiom water, hazardous substances, hydrocarbon liquids, bacteria and other o4fectlonable liquids, solids or gas components In addition, any such gas will specifically contain not more than (i) five one hundredths of one percent ( 05%) oxygen, (it) ffve(5) grams of total sulphur, consisting of not mom than one quarter (114) grain of hydrogen sulfide and one(]) grain of mercaptan sulphur per one hundred (100) cubic feet of gas, (ill) two percent (2%) by volume of carbon dioxide, (Iv) four percent (4%) by volume of total non -hydrocarbon and inert gases (including carbon dioxide, nitrogen, oxygen, helium, etc ), and (v) seven pounds (7#) of water vapor per one million (1,000,000) cubic feet of gas The gas will be at temperatures not in excess of one hundred twenty (120) degrees Fahrenheit nor less than forty (40) digress FahrenheU, provided that the gas will have a hydrocarbon dew point nor ro exceed fort' (40) degrees Fahmnhelt at the delivoty treasure, and will have a heat contain of not less than nine hundred j Jty (ps0) or more thanslsven hundred (l,]00) Btu per oubic foot ands the conditions of measurement contained harem TXUGD will not be obligated to ecoept any gas doff m by CuBtomor (or Its designee) hereunder that ha not interchangeable with other gqe in TXUGD'e distribution system at rho epplicablo Receipt Point hereunder TXUGD's determination of such iakrclhangeebI ty will he based upon a factor that is eq I I of to the quotient obtained by ding the total heating value of Bach gee, expmsead m Btu, by the equare mot of the specific gravity of such gas Such factor must be within 7S ethe interchange factor astablished by TXUGD for Its Bystam at the applicable Receipt Point hereunder (b) If at any time the gas fails to meat the quality specifications enumerated herein, TXUGD will notify Customer, and Customer will immediately correct such failure If Customer is unable or unwilling to deliver gas according to such specifications, TXUGD may refuse to accept delivery of gas hereunder for so long as such condition exists (c) Notwithstanding anything contained herein. TXUGD reserves the right, at any time and from time to time, to unilaterally amend, on a nondiscriminatory basis, the quality specifications set forth above to conform with standard industry practices upon giving Customer at beet tarty (30) days prior written notice of any such change(a) 6 Customer or Customer's designee will be in control and possession of the gas to be transported and will be respone�bla for and will tmlamnity TXUGD for, and hold TXUGD harmless from any damage or injury caused thoroby prior to such gas being delivereA into a facility owned by TXUGD at the Receipt PomUe) and after such gas is delivered by TXUGD into a facility owned by Customer or Customer's designee et the Delivery Point, except for Igtunea,and dertiagea caused by the negligotae of TXUGA TXUGD will ba m control and poeaeseion of the gas it vanepotte hereunder, and will ba responsible for and wi0 iidemnhfy Customer for, and hold Customer harmless from any damage orlgjury caused thereby after receipt of the gas by TXUGD into a facility owned by TXUGD at We Receipt Points) aced untl such gee is delivened into a facility of the Customer or Customer's deBhgnae at the Delivery Poem except for itgunos and damagae caused by the negligence of Customer or Customer's designee However, gas will ba received by TXUGD after it hie passed out of tin meter at a Receipt Point end until it is dahvered by TXUGD to Customer or Cliemmer'a designee after it her passed out of the meter at a Delivery Point The meter will be considered to be the meter tube for purposes of this provision u (a) Commencing with initial deliveries of gas hereunder, Customer will pay to TXUGD each month the Transportation Service Rate set forth on the signature page of this Contract for transportation services provided hereunder duping such month, at the rate(s) set forth on the signatory page of this Contract, which will include TXUGD's right to retain and become the owner of the Retention Volume and the fees, charges, tax reimbursements and costs provided for in this Contract. (b) Customer agrees to reimburse TXUGD for any Taxes as herein defined 8 (a) Gas delivered by Customer (or its designee) to TXUGD hereunder will be delivered at the outlet of a city gate meter, referred to harem as the "Recerpt Point," described on the signature page of tins Contract The Receipt Point will be at an active city gate on the TXUGD's distribution system, described on the signature page of this Contract, provided, that if TXUGD owns the applicable city gate, the Receipt Point will be the mist of the city gate It is agreed that Customer and TXUGD may mutually agree to additional receipt points under this Contract that will also be at active city Sam on such distribution system (b) Notwithstanding anything contained in this Contract that might be construed to the contrary, in the event of unfavorable operating conditions (as determined by TXUGD in its sole opinion), or a change of ownership of a specific Receipt Point or appurtenant facilities, or if, in TXUGD's sole opinion, the receipt of gas from a specific Receipt Point ever becomes uneconomical for any roman whatsoever, then TXUGD will have the right (i) to immediately discontinue the receipt of gas from any such Receipt Point and/or (ii) upon thirty (30) days' prior written notice to Customer, to delete any such Receipt Point from this Contract However, Customer and TXUGD may amine to perform this Contract with reduced volumes, or Customer and TXUGD may agree that Customer will pay for the necessary increase in capacity of the facilities involved Customer hereby acknowledges that TXUGD's receipt and delivery of gas volumes hereunder will be on a wholly interruptible basis and subject to (1) the most efficient and econonuc utilization of MOD's pipeline capacity as determined by TXUGD in its sole discretion, (11) pipeline capacity necessary to serve existing or future sides custotrpra under tariffs filed with applicable regulatory authorities or under negotiated contracts as determined by TXUOD in its sole discretton, and (tit) the other terms and conditions contained in this Contract Customer agrees that such transportation service may be interrupted, in whole or in part, from time to time, without notice, however, TXUGD's dispatcher will endeavor to advise (by telephone or electronic medmm) Customer's dispatcher or authorised representative of an interruption as soon as practicable, either before or after such interruption, but TXUGD will have no liability for any failure to give such notice In no event will an interruption of transportation service pursuant to the terms, conditions and contingencies of this Contract constitute a breach of this Contract, and TXUGD will not be liable to Customer or third parties in damages or otherwise because of any interruption of such service Customer agrees to indemnify TXUGD for, and bold TXUGD harmless from, any damages, causes of actions or claims asserted by any third parties as a result of any termination, suspension, or interruption of services hereunder by TXUGD for any reason 10 Nondnations (a) Customer will provide TXUGD with its first of the month nomination of volumes for receipt and delivery by TXUGD during a month no later than 1130 a nm central clock time on the second business day prior to the first calendar day of each month, giving due consideration to the Retention Volume (b) Each such nomination by Customer will contain the nominated quantities for each Receipt Point and the Delivery Point, designation of the appropriate contract(s) covering such gas, and the identity by name and telephone number of individual(s) who have authority to confirm the gas volumes nominated at each Receipt Point and the Delivery Point. (c) Customer may change nominated volumes for the remainder of a month on any business day, provided such nomination change must be received by TXUGD prior to 10 00 Lin central clock time of any business day to be effective the next business day (d) If Customer fails to nominate volumes for receipt and delivery by TXUGD under this Contract for any month, TXUGD may suspend transportation service under this Contract for such month Such interruption of service by TXUGD will not prevent enforcement by TXUGD of any of its other legal rights or remedies nor will the same be construed as a broach of the obligations of TXUGD under thus Contract (a) If Customer falls to nominate volumes for receipt and delivery by TXUGD under this Contract for three(3) consecutive months during the term of this Contract. TXUGD may upon thirty (30) days prior written notice to Customer terminate this Contract, provided, the obligations to make payment for monies due under this Contract, including payments for any land of imbalances, will not be extinguished (f) Customer understands and agrees that TXUGD may for operational reasons prorate and/or totally refuse to accept now nominations or honor then existing nominations at any existing Receipt Points and/or proposed Receipt Points, at any thou and from time to dine and for any specified or unspecified time period(s) TXUGD will endeavor to notify Customer or Customer's designee of such refusal to accept or honor any nomination or nominations as soon as practicable, but TXUGD will not be liable for any failure to do so (g) Notwithstanding the foregoing, Customer will not attempt to utilize the nomination process under tins Contract to reserve or gain additional pipeline capacity by over nomination In the event TXUGD, in its sole discretion, determan is that Customer has attempted to res urve or On additional pipeline capacity by over nomination, Customer agrees that TXUGD will have the right, with or without prior notice, to (r) revise the nomination, GO suspend service under this Contract, and/or (III) terminate this Contract I I h shighmoes of Nominations and Volumes (a) It is recognized and understood that (i) an exact day -today balance of the volute of gas nominated for receipt and delivery by TXUGD and the volume of gas delivered to (taken or used by) Customer at the Delivery Point may not be possible due to the inability of Customer to precisely predict or control such receipts or deliveries, and (ii) an exact day -today balance of the volume of gas delivered to TXUGD at the Receipt Points for transportation, less the Retention Volume, and the quantity of gas delivered to (taken or used by) Customer at the Delivery Point by TXUOD may not be possible due to the inability of Customer to control precisely such receipts or deliveries However. Customer will endeavor to nominate and deliver to TXUOD at the Receipt Point the volume of gat that is delivered to (taken or used by) Customer at the Delivery Point, plus the Retention Volume, during any applicable period (b) Customer will be obligated to monitor on both an hourly and a daily basis and, d necessary, adjust, or cause to be adjusted (i) the volume of gas delivered to TXUGD at the Receipt Points for transportation, and (it) the volume of transportation gas taken or received by Customer, or its designee, from TXUGD at the Delivery Point, in order to maintain both an hourly and a daily balance of receipts and deliveries at consistent flow rates throughout each day, giving due consideration to the related Retention Volume Customer will advise TXUGD of any situation wherein any kind of imbalance has occurred or may occur Customer will endeavor to adjust its receipts and/or deliveries of transportation gas to the extent necessary to avoid any ldr f of imbalance, and promptly notify TXUGD of such adjustments Any adjustments to receipts and/or deliveries by Customer, whether or not pursuant to notification from either party, will be coordinated with TXUGD's gas control personnel (c) TXUGD will not be obligated to receive or deliver quantities of gas on any day in excess of the lesser of p) those quantities nominated by Customer for transportation hereunder on such day, giving due consideration to the Retention Volume, or (u) those quantities received by TXUGD at the Receipt Points for transportation hereunder on such day, giving due consideration to the Retention Volume However, TXUGD, to the extent practicable, will endeavorto deliver to Customer each day a quantity of gas equivalent to the quantity of gas received by TXUGD from Customer (or is designee) at the Receipt Pons on such day, less the Retention Volume (d) T*OD will retain and become the owner of such Retention Volume to replace the normal gas lost, gas used as fuel and gas used in is day -today pipeline operations related to the volumes delivered by Customer to TXUGD (a) Notwithstanding anything contained heroin that might be construed to the contrary, TXUGD will always have the total and unrestricted right, but with no obligation whatsoever, at any time and from time to time, to restrict, interrupt or reduce is receipt and/or delivery of transport gas hereunder in order to maintain both an hourly and a daily balance of receipts and deliveries at consistent flow rates throughout each day or to correct any imbalance between receipts and deliveries hereunder (I) Olhpr provisions of this Contract notwithstanding, inthe event the transportation of volumes of gas delivered to the Receipt Point are interrupted by TXUGD during any day for any reason, the volume interrupted, up to the Maximum Daily Quantity, will not be considered as a part of any imbalance for that day under the terms of this Contract 12 Nomination ImbalancePayments (a) A nomination imbalance will exist under this Contract when, during any applicable period of the term hereof, there is a numerical difference between (i) the quantity of gas delivered by TXUGD to Customer, and (it) the quantity of go nominated for that period by Customer (b) To the extent Customer fails to avoid a monthly nommauon imbalance [as described in paragraph 12(a) above], and Customer's nomnations for deliveries to TXUGD at the Receipt Point(s) during such monthly period are in excess of the transportation quantities actually. or deemed by allocation, delivered to TXUGD for transportation to Customer at the Delivery Point during said monthly period ("over nomination by Customer") i) if the imbalance is greater them 0%, but 5% or less during such month, Customer will pay to TXUGD a sum of money determined by the product of (A) $015 (15 cents) per deoatherm multiplied by (B) the number of decath rims in such monthly imbalance, thereby eliminating such imbalance, (ii) if the imbalance is greater than 5%, but 10% or less during such month, Customer will pay to TXUGD a sum of money determined by the product of (A) $0 30 (30 cents) per decathermt multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such unbalance, (id) If the imbalance is greeter than 10%, but 15% or less during such month, Customer will pay to TXUGD a sum of money determined by the product of (A) $0 45 (45 cents) per decatherm multiplied by (B) the number of deeather ms in such monthly imbalance, thereby eliminating such imbalance, (iv) if the imbalance is greater than 15%, but 20% or less during such month, Customer will pay to TXUGD a sum of money determined by the product of (A) $0 60 (60 cents) per decatherm multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such imbalance, or (v) if the imbalance is greater than 20% during such month, Customer will pay to TXUGD a sum of money determined by the product of (A) $0 75 (75 cents) per decatherm multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such imbalance. (c) To the extent Customer fails to avoid a monthly nomination imbalance [as described in paragraph 12(a) above], and Customises nomination for deliveries to TXUGD at the Receipt Point(s) during such monthly period are leas than the transportation quantities actually, or deemed by allocation, delivered to TXUGD for transportation to Customer at the Delivery Point during said monthly period ("under nomination by Customer"), Customer will pay TXUGP,1 a sum of money determined by the product of (A) $0 05 (5 cents) per decatharm multiplied by (B) the number of deealharms in such monthly imbalance, thereby eliminating such imbalance (d) TXUGD will bill Customer for any such amounts owed to TXUGD by Customer under this paragraph 12 by including such amounts in the monthly statement(s) rendered to Customer under paragraph 12 of Schedule "B" of thus Contract, or by a separate statement whether or not this Contract has terminated 13 Volume Imbalance Pavmants (a) A volume imbalance will exist under this Contract when, during any month of the term hereof, there is a numerical difference between (i) the volume of gas delivered by TXUGD to Customer at the Delivery Paint, and (ii) the volume of gas received by TXUGD from Customer (or its designee) at the Receipt PoinKs),1ess the Retention Volume Volumes received or delivered will for purposes of this Contract include volumes that are not separately metered, but are deemed received or delivered by allocation in situations in which Customer's gas is commingled with gas owned by others (b) To the extent Customer fads to avoid a monthly volume imbalance [as described in paragraph 13(a) above], and Customer's deliveries to TXUGD at the Receipt Point(s) during such monthly period, less the Retention Volumes, are in excess of the transportation quantities delivered by TXUGD to Customer at the Delivery Point during said monthly period Cover deliveries by Customer creating an imbalance 'due' Customer") h) if the imbalance is greeter than 0%, but 5% or lass, of the total gas volumes delivered to Customer at the Delivery Point during such month, Customer will sell to TXUGD and TXUGD will purchase from Customer the decatherms of such monthly imbalance for a sum of money determined by the product of (A) the leaser of the lowest price paid for gas by TXUGD during that monthly period or die lowest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such monthly imbalance, ii) if the imbalance is greater than 5%, but 10% or leas, of the total gas volumes delivered to Customer at the Delivery Point during such month, Customer will sell to TXUOD and TXUGD will purchase from Customer the docalherms of such monthly imbalance for a sum of money deternned by the product of (A) the lesser of the lowest price paid for gas by TXUGD during that monthly period or 80% of the lowest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating suchmonthly Imbalance, III) if the imbalance is greater than 10%, but 15% or less, of the total gas volumes delivered to Customer at the Delivery Point during such month, Customer will sell to TXUGD and TXUGD will purchase from Customer the decatherms of such monthly imbalance for a sum of money determined by the product of (A) the lesser of the lowest price paid for gas by TXUGD during that monthly period or 70% of the lowest daily Houston Ship Channel price dining that monthly period, as reported in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating suchmonthly imbalance. iv) if the imbalance is greater than 15%, but 20% or less, of the total gas volumes delivered to Customer at the Delivery Point during such month, Customer will sell to TXUOD and TXUOD will purchase from Customer the decatherms of such monthly imbalance for a sum of money determined by the product of (A) the lesser of the lowest price paid for gas by TXUGD during that monthly period or fi0% of the lowest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating suchmonthly imbalance, and v) if the imbalance is greater than 20% of the total gasvolumes delivered to Customer at the Delivery Point during such month, Customer will sell to TXUGD and TXUGD will purchase from Customer the decatherms of such monthly unbalance for a sum of money determined by the product of (A) the lesser of the lowest price paid for gas by TXUGDduring that monthly period or 50% of the lowest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily multiplied by (B) the number of decathorms in such monthly imbalance, thereby eliminating such monthly imbalance (c) To the extent Customer does not avoid a monthly volume imbalance [as described in paragraph 13(a) above], and Customer's deliveries to TXUGD at the Receipt Point(s) during such monthly period are less than the transportation quantities dehveredby TXUGD to Customer at the Delivery Point during said monthly period ("under deliveries by Customercreating an Imbalance 'due' TXUGD") i) if the imbalance is greater than 0%, but 5% or less, of the total gas volumes delivered Customer at the Delivery Point during such month, Customer will purchase such imbalance gas volumes from TXUGD, and TXUOD will have the right to collect from Customer, a sum of money determined by the product of (A) the greater of the highest price paid for gas by TXUGD during that monthly period or 100% of the highest daily Houston Ship Channel price during that monthly period, as repotted in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such monthly imbalance, it) if the imbalance is greater than 5%, but 10% or less, of the total gas volumes delivered to Customer at the Delivery Point during such month, Customer will purchase such imbalance gas volumes from TXUOD, and TXUGD will have the right to collect from Customer, a sum of money determined by the product of (A) the greater of the highest price paid for gas by TXUGD during that monthly period or 125% of the highest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such monthly imbalance. In) if the imbalance is greater thanl096, but15% or less, of the total gas volumes delivered Customer at the Delivery Point during such month, Customer will purchase such imbalance gas volumes from TXUGD, and TXUGD will have the right to collect from Customer, a sum of money determined by the product of (A) the greater of the highest price paid for gas by TXUGD during that monthly period or 150% of the highest daily Houston Ship Channel price during dim monthly period, as reported in the publication Gas Daily, multiplied by (B) the number of decatherms in such monthly imbalance, thereby eliminating such monthly imbalance, tv) if the imbalance is greater thonl5%, but 20% or less, of the total gas volumes delivered to Customer at the Delivery Point during such month, Customer will purchase such imbalance gas volumes from TXUGD, and TXUGD will have the right to collect from Customer, a sum of money determined by the product of (A) the greater of the highest price paid for gas by TXUGD during that monthly period or 175% of the highest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily, multiplied by (B) this number of decatherms in such monthly imbalance, thereby eliminating such monthly imbalance, and v) if the imbalance is greater then 20% of the total gas volumes delivered to Customer at" Delivery Point during such month, Customer will purchase such unbalance gas volumes from TXUGD, and TXUGD will have the right to collect from Customer, a sum of money determined by the product of (A) the greater of the highest price paid for gas by TXUGD during that monthly period or 200% of the highest daily Houston Ship Channel price during that monthly period, as reported in the publication Gas Daily, multiphed by (B) the number of decatherms in such monthly imbalance, thereby eliminating suchmonthly imbalance (d) TXUGD will bill Customer for any such amounts owed to TXUGD by Customer under this paragraph 13 by including such amounts in the monthly statements) rendered to Customer under paragraph 12 of Schedule "B" of this Contract, or by a separate statement whether or not this Contract has terminated TXUGD will credit Customer for any such amounts owed to Customer by TXUGD under this paragraph 13 by crediting such amounts against amounts owed to TXUOD by Customer in any such statements) tendered to Customer Otherwise, such amounts will be paid to Customer within thirty (30) days from the date Contract has terminated if the not account balance is an amount owed to Customer by TXUGD 14 Customer will not attempt to utilize the tmbolance provisions hereunder to provide standby or backup service or plant protection supply gas for its Fac0ity in the event its thud party supplter(s) fail to deliver sufficient volumes of gas to TXUGD for redelivery hereunder to Customer's Facility for such purposes, with due consideration to the Retention Volume, or for any other purpose not expressly contemplated in the terms of this Contract In the event TXUGD ever determines that Customer has attempted to do so, Customer agrees that TXUGD will have the right to suspend andicr terminate this Contract. 15 (a) In the event no Gas Daily is published or no "highest daily price" is published in the Gas Daily, the price used therefore will be the highest price published in Inside F F R C s Gas Market Report for gas sold during the month in Texas In the event no Gas Daily is published or no 'lowest daily price" is published in the Gas Daily, the price used thereforwill be the lowest price published in the Inside F F R C 's Gar Market Report for gas sold during the month in Texas (b) In the event no Gas Daily and no Inside FF R Cs Gas Market Report is published or no'lughest daily price" is published in the Gar Daily or in the "Inside FERC," the price used therefore will be the highest price published by the New York Mercantile Exchange (NYMEX) for gas sold during the month in Texas In the event no Gas Daily and no Inside F ER Cs Gas Market Report is published or no "lowest daily pried' is published in the Gas Daily or in rhe'lnside FERC;' the price used therefor will be the lowest price published by the New York Mercantile Exchange (NYMEX) for gas sold during the month in Texas (c) In the event Gas Daily, Inside F F R Cs Gas Market Report and the New York Mercantile Exchange (NYMEX) all throe fail to report a highest or lowest price for the mouth for use under the respective provisions of this Contract the parties may mutually agree upon the price or prices to be used However, if the parties cannot agree on such a price or prices within thirty (30) days of such an event the appropriate price or pnces will be established by arbitration as provided in this Contract 16 tnt option. Reduction or Termination of Service Customer agrees that: (a) in the event of any interruption, reduction or termination of service under this Contract TXUUqs personnel may enter Customer's facility s promises and physically turn off the gas serving such facility, and (b) no one other than TXUGD's personnel will be permitted to turn the gas hack on ***END OF SCHEDULE "D" *** Tariff for Gas Servlos TXU Gas Distribution RATE SCHEDULE' Gas Cost Ad ustment No 4108-4 APPLICABLE TO: NW Metro / Mid Cities Distribution Systam REVISION 0 DATE 07/20/01 EFFE TIWE DATE 07/20/01 PAGE 1 OF 1 4108.4 GAS COST ADJUSTMENT Each residential and commercial monthly bill shall be adjusted for gas cost as follows (1) The city gate rate increase or decrease applicable to current billing month residential and commercial sales shall be calculated to the nearest $0 0001 per Mot based upon (a) A volume factor of 1 0117 determined In establishing the above rate for the distribution system as the ratio of adjusted purchased volumes divided by adjusted sales volumes Said factor shall be adjusted annually following determination of the actual lost and unaccounted for gas percentage based upon year ended June 30 (b) The city gate rate applicable to volumes purchased during the current calendar month, expressed to the nearest $0 OD01 per Mcf (shown below as "Re") (a) A base city gate rate of $0 0000 per Mcf In summary, the gas cost adjustment (GCA) shall be determined to the nearest $0 0001 per Mcf as follows GCA = [(1 0117) (Re - $0 0000)) Tariff for Gas Service TXU Gas Distribution RATE CHEDULE' Tax & Franchise Fee Ad ustment No 4108-8 APPLICABLE TO, NW Metro / Mid Cities Distribution system REVISION 0 DATE 07/20101 EFFECTIVE DATE. 07120101 PAGE. 1 OF 1 :__. 921111,111114 . hi 4108-6 TAX & FRANCHISE FEE ADJUSTMENT Each monthly bill, as adjusted above, shall be adjusted for municipal franchise fees (street and alley rental assessments) and the state gross receipts taxes imposed by Sections 182 021 -182 025 of the Texas Tax Code Municipal franchise fees are determined by each city's franchise ordinance Each monthly bill, as adjusted above shall also be adjusted by an amount equivalent to the proportionate part of any new tax, or any tax Increase or decrease, or any increase or decrease of any other governmental imposition, rental fee, orcharge (except state, county, city and special district ad valorem taxes and taxes on net income) levied, assessed or Imposed subsequent to September 30, 2000, upon or allocated to the Company's distribution operations, by any new or amended law, ordinance or contract Municipal franchise fees (street and alley rental assessments) and the state gross receipts taxes Imposed by Sections 182 021 - 182 025 of the Texas Tax Code shall continue to be collected pursuant to individual Industrial contracts Tariff for Gas Service TXU Gas Distribution RATE SCHEDULE Weather Normalization Ad uetment No 4108.6 APPLICABLE TO- NW Metro / Mid Cities Distribution System REVISION 0 DATE 07/20/01 EFFE IVE DATE. 07/YO/01 PAGE 1 OF 1 4108.8 WEATHER NORMALIZATION ADJUSTMENT Effective with bills rendered during the October 2000 through May 2001 billing months, and annually thereafter for the October through May billing months, the residential and commercial consumption rates for gas service, as adjusted, shall be subject to a weather normalization adjustment each billing cycle to reflect the Impact of variations In the actual heating degree days during the period included in the billing cycle from the normal level of heating degree days during the period included in the billing cycle The weather normalization adjustment will be implemented on a per Mcf basis and will be applicable to the heating load of each customer during the period included in the billing cycle It wili be determined separately for residential and commercial customers based on heating degree data recorded by either the DFW Airport weather station The adjustment to be made for each billing cycle will be calculated according to the following formula WNA = NOD ADD x M x AHL ADD Where WNA= Weather normalization adjustment NDD - Normal heating degree days during the period covered by the billing cycle ADD - Actual heating degree days during the period covered by the billing cycle M - Weighted average margin per Met included In the commodity portion of the rates effective during the October through May billing months AHL - Actual heating load per customer The heating bad to which the weather normalization adjustment is to be applied for residential and commercial customers is determined by subtracting the base load for the customer from the total volume being billed to the customer The base load of a customer is the average level of nonheating consumption The weather normalization adjustment Is subject to a 500/6 limitation factor based on temperatures being fifty percent warmer or colder than normal The weather normalization adjustment will be calculated to the nearest $ 0001 per Mot Tariff for Gas Service TXU Gas Distribution RATE CHEDULE. Miscellaneous Service Charges Nos 9001 thru 9007 APPLICABLE TO, As Referenced REVISION 0 EFFECTIVE DATE, As Referenced PAGE 1 OF 2 MISCELLANEOUS SERVICE CHARGES: 9001 Connection Charge (Residential & Commercial) The following connection charges apply Schodul Chorus Business Hours $ 3500 After Hours 5250 For each reconnection of gas service where service has been discontinued at the same premises for any reason, for the initial inauguration of service, and for each inauguration of service when the billable party has changed, with the following exceptions (a) For a builder who uses gas temporarily during construction or for display purposes (b) Whenever gas service has been temporarily Interrupted because of system outage or service work done by Company, or (c) For any reason deemed necessary for company operations 9002 Read For Change Charge (Residential & Commercial) A read for change charge of $12 00 is made when It is necessary for a company employee to read the meter at a currently served location because of a change In the billable party 9003 Returned Check Charges (Residential & Commercial) A returned check handling charge of $16 25 Is made for each check returned to the Company for any reason 9004 Delinquent Notification Charge (Residential & Commercial) A charge of $4 75 shall be made for each trip by a Company employee to a customer's residence or place of business when there Is an amount owed to the Company that is past due This charge shall not be made when the trip Is required for safety Investigations or when gas service has been temporarily Interrupted because of system outage or service work done by Company 9005 Main Line Extension Rate (Residential & Commercial) The charge for extending mains beyond the free limit established by Franchise for residential and commercial customers shall be based on the actual cost per foot of the extension Tariff for Gas Service TXU Gas Distribution RATE HEDULE Miscellaneous Service Charges Nos. 9001 thru 9007 APPLICABLE TO As Referenced REVISION 0 EFFEgIIVE DATE As Referenced PAGE 2 OF 2 9006 Charge for Installing and Maintaining and Excess Flow Valve (Residential) A customer may request the installation of an excess flow valve on a new service line or on a service line being replaced provided that the service line will serve a single residence and operate continuously throughout the year at a pressure of not less than 10 paig The customer will pay the actual cost incurred to install the excess flow valve That cost will Include the cost of the excess flow valve, the labor cost required to install the excess flow valve, and other associated costs The estimated total cost to install an excess flow valve is $50 00 This cost is based on installing the excess flow valve at the some time a service line Is Installed or replaced The excess flow valve will be installed on the service line upstream of the customer's meter and as near as practical to the main A customer requiring maintenance, repair, or replacement of an excess flow valve will be required to pay the actual cost of locating and repairing or replacing the excess flow valve The cost to perform this service will normally range from $200 00 to $2,000 00, depending on the amount of work required This cost will be determined on an individual project basis This tariff Is being filed in accordance with the U S Department of Transportation rule requiring the Installation of an excess flow valve, If requested by a customer, on new or replaced service lines that operate continuously throughout the year at a pressure of not less than 10 pslg and that serve a single residence The rule further states that the customer will bear all costs of installing and maintaining the excess flow valve 9007 Recovery of Connection Costs Associated with Certain Stand -By Gas Generators (Commercial) Commercial customers installing stand-by gas generators to provide service in the event of an Interruption in electric service in facilities where gas service is not otherwise provided will reimburse TXU Gas Distribution for the actual cost of acquiring and installing the regulator, service line, and meter required to provide gas service for the stand-by generators Gas service provided for the stand-by generators will be billed at the applicable commercial rate Tariff for f Gas Service TXU Gas Distribution RIDER 8urohar a No 4110 APPLICABLE TO: NW Metra/Mid Cities Distribution System REVISION 0 DATE- 07/20/01 EFFECTIVE DATE: 07/20/01 PAGE 1 OF 1 SURQUARGES Rate Case Expense Surcharge Rider TXU Gas Distribution is authorized to recover the current rate case expense through a surcharge designed for a six-month nominal recovery period The surcharge per Mcf will be calculated by dividing the rate case expense to be recovered by one-half of the adjusted annual sales volume to residential, commercial, Industrial Sales, and Industrial Transportation customers TXU Gas Distribution will provide monthly status reports to the City to account for the collection of rate case expense The surcharge for the company's rate case expenses shall be pro -rated over the system as a whole The cities rate case expenses shall be pro -rated among the cities who hired outside Consultants and/or attorneys to represent them in this case Other Surcharges TXU Gas Distribution will recover other surcharges as authorized by the relevant municipality, the Railroad Commission of Texas or the Texas Utilities Code