File No. 70-___
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM U-1
APPLICATION-DECLARATION
under the
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
- -----------------------------------------------------------
National Fuel Gas Company National Fuel Gas
10 Lafayette Square Distribution Corporation
Buffalo, NY 14203 10 Lafayette Square
Buffalo, NY 14203
National Fuel Gas Seneca Resources Corporation
Supply Corporation 10 Lafayette Square
10 Lafayette Square Buffalo, NY 14203
Buffalo, NY 14203
Utility Constructors, Inc. Highland Land & Minerals,Inc.
East Erie Extension 10 Lafayette Square
Linesville, PA 16424 Buffalo, NY 14203
Leidy Hub, Inc. Data-Track Account
10 Lafayette Square Services, Inc.
Buffalo, NY 14203 10 Lafayette Square
Buffalo, NY 14203
National Fuel Horizon Energy
Resources, Inc. Development, Inc.
165 Lawrence Bell Drive 10 Lafayette Square
Suite 120 Buffalo, NY 14203
Williamsville, NY 14221
Seneca Independence Niagara Independence
Pipeline Company Marketing Company
10 Lafayette Square 10 Lafayette Square
Buffalo, NY 14203 Buffalo, NY 14203
(Names of companies filing this statement
and address of principal executive offices)
- ----------------------------------------------------------
NATIONAL FUEL GAS COMPANY
(Name of top registered holding company)
- -----------------------------------------------------------
Richard Hare James R. Peterson,
Senior Vice President Assistant Secretary
Seneca Independence National Fuel Gas Company
Pipeline Company 10 Lafayette Square
10 Lafayette Square Buffalo, NY 14203
Buffalo, NY 14203
(Names and addresses of agents for service)
OUTLINE
Item 1. Description of Proposed Transactions.
A. DESCRIPTION OF JURISDICTIONAL TRANSACTIONS
1. Interest in Independence Pipeline Company
2. Interest in DirectLink Gas Marketing Company
3. Short-Term Loans (Money Pool)
4. Credit Support
B. DESCRIPTION OF NON-JURISDICTIONAL TRANSACTIONS
1. Acquisition of Stock in Seneca Independence and
Niagara Independence
2. Future Capital Contributions or Open Account
Advances
3. Short-Term Loans
4. Subscriptions to Firm Transportation Services
5. Natural Gas Transactions
6. License Agreement
7. Option Agreement
8. Other Services
C. ANALYSIS
1. Satisfaction of Requirements of Section 10(b) and
10(c)
2. Applicability of the Gas Related Activities Act
D. RULE 16 EXEMPTIONS
(1) Pipeline Partnership's Rule 16 Exemption
(2) Marketing Partnership's Rule 16 Exemption
E. FOREIGN UTILITY COMPANIES AND EXEMPT
WHOLESALE GENERATORS
Item 2. Fees, Commissions and Expenses.
Item 3. Applicable Statutory Provisions.
Item 4. Regulatory Approval.
Item 5. Procedure.
Item 6. Exhibits and Financial Statements.
Item 7. Information as to Environmental Effects.
SIGNATURES
National Fuel Gas Company ("National"), is a public utility
holding company registered under the Public Utility Holding Company
Act of 1935, as amended ("Act"). National and its wholly-owned
subsidiaries National Fuel Gas Distribution Corporation
("Distribution"), National Fuel Gas Supply Corporation ("Supply"),
Seneca Resources Corporation ("Seneca"), Utility Constructors, Inc.
("UCI"), Highland Land & Minerals, Inc. ("Highland"), Leidy Hub, Inc.
("Leidy"), Data-Track Account Services, Inc. ("Data-Track"), National
Fuel Resources, Inc. ("NFR"), Horizon Energy Development, Inc.
("Horizon"), Seneca Independence Pipeline Company ("Seneca
Independence") and Niagara Independence Marketing Company ("Niagara
Independence") have joined this application-declaration to the
Securities and Exchange Commission (the "Commission"). Shortly
before filing this application-declaration, National acquired all of
the outstanding capital stock of Seneca Independence and Niagara
Independence in transactions exempt from section 9(a) of the Act
because Seneca Independence and Niagara Independence are both
"gas-related companies" as defined in Rule 58.
All references herein to a Rule (for example, "Rule 58") refer
to a rule of the Commission under the Act, codified in 17 C.F.R. Part
250 (for example, 17 C.F.R. Section 250.58).
Item 1. DESCRIPTION OF PROPOSED TRANSACTIONS.
A. Description of Proposed Jurisdictional Transactions
The applicants are proposing and asking for Commission
approval of the following transactions (the "Proposed Transactions"),
which essentially consist of the acquisition of interests in two
partnerships which are gas-related companies, plus various related
loans and credit support:
1. Interest in Independence Pipeline Company
Seneca Independence, as the purchaser, has entered into a
Partnership Interest Purchase and Sale Agreement (the "Purchase
Agreement", copy attached as Exhibit A-6). The sellers under the
Purchase Agreement are ANR Independence Pipeline Company ("ANRIP", a
subsidiary of The Coastal Corporation), and Transco Independence
Pipeline Company ("TIP", a subsidiary of The Williams Companies).
When and if this Commission approves this
application-declaration, the Purchase Agreement provides that Seneca
Independence would acquire a general partnership interest in
Independence Pipeline Company (the "Pipeline Partnership", a Delaware
general partnership now owned equally by ANRIP and TIP). Seneca
Independence would become an equal partner in the Pipeline
Partnership, and expects to acquire a 25% interest. At the closing,
Seneca Independence would pay to each of the sellers an amount equal
to the portion of that seller's capital account attributable to the
partnership interest being transferred. Each seller's capital
account will reflect the appropriate share of Pipeline Partnership
profits or losses from the formation date in September 1997.
Seneca Independence could have, without prior Commission
approval, acquired an interest in the Pipeline Partnership as a
"gas-related company" pursuant to Rule 58. However, Seneca
Independence seeks Commission approval of this acquisition so that
the Pipeline Partnership may satisfy the requirement of Rule 16(a)(4)
and be exempt from various obligations pursuant to Rule 16.
The Pipeline Partnership would construct and operate
interstate natural gas transportation facilities (the "Independence
Pipeline"). The Pipeline Partnership's rates, services, facilities,
construction and operations would be comprehensively regulated by the
Federal Energy Regulatory Commission ("FERC"). The Independence
Pipeline would consist of (i) about 370 miles of 36-inch diameter
pipe with an initial transmission capacity of about 900 million cubic
feet of gas per day, running from Defiance, Ohio to Leidy,
Pennsylvania, (ii) 60,000 horsepower of compression facilities, and
(iii) auxiliary facilities.
Unless and until the Pipeline Partnership votes to proceed
with construction, the Pipeline Partnership's activities will be
funded entirely from capital contributions of the partners (including
Seneca Independence after it becomes a partner). The Pipeline
Partnership currently plans to finance its construction and operation
70% with debt borrowed by the Pipeline Partnership from commercial
project finance sources, and 30% with capital contributed by the
partners. The financial statements attached to this
application-declaration reflect that planned capital structure.
During the pendency of this application-declaration, Seneca
Independence will have the right to direct the voting of at least 25%
of the votes on the Management Committee and other committees of the
Pipeline Partnership, and will pay into escrow any money which Seneca
Independence would have had to pay, if it were a partner, in response
to Pipeline Partnership requests for capital (see Escrow Agreement
attached as Exhibit A-8). If this Commission failed to approve this
application-declaration, all funds in that escrow account would be
returned to Seneca Independence.
Seneca Independence, as a partner in the Pipeline Partnership,
might have opportunities in the future to (i) purchase additional
interests in the Pipeline Partnership (until registered holding
company affiliates achieved 50% ownership) from other partners, via
rights of first refusal or otherwise, and (ii) make loans to the
Pipeline Partnership at negotiated rates of interest. Because any
such transactions would be negotiated at arms-length with the seller
or borrower, and no funds of National's utility or regulated
interstate pipeline subsidiaries would be involved, Seneca
Independence requests authority to take advantage of such
opportunities as they may arise.
2. Interest in DirectLink Gas Marketing Company
Niagara Independence has entered into a Marketing Partnership
Agreement (the "Marketing Partnership Agreement", Exhibit A-9), by
which Niagara Independence became a 25% general partner in DirectLink
Gas Marketing Company (the "Marketing Partnership", a Delaware
general partnership). Niagara Independence acquired its interest in
the Marketing Partnership subject to approval of the transaction by
this Commission, as provided in Rules 16 and 58. The Marketing
Partnership is a "gas-related company" pursuant to Rule 58. The
other 25% partners in the Marketing Partnership are unaffiliated with
National, and are identified on Exhibit A-9. Niagara Independence
seeks approval of that acquisition in order that the Marketing
Partnership may satisfy the requirement of Rule 16(a)(4) and be
exempt from various obligations pursuant to Rule 16.
The Marketing Partnership will buy, sell and trade natural gas
and pipeline capacity in interstate commerce, and as such will
generally not be regulated by FERC.
Niagara Independence, as a partner in the Marketing
Partnerships, might have opportunities to (i) purchase additional
interests in the Marketing Partnership (until registered holding
company affiliates achieved 50% ownership) from other partners, via
rights of first refusal or otherwise, and (ii) make loans to the
Marketing Partnership at negotiated rates of interest. Because any
such transactions would be negotiated at arms-length with the seller
or borrower, and no funds of National's utility or regulated
interstate pipeline would be involved, Niagara Independence requests
authority to take advantage of such opportunities as they may arise.
3. Short-Term Loans (Money Pool)
National proposes to make short-term loans to Seneca
Independence and/or Niagara Independence to finance their activities
pursuant to, and in accordance with, the current money pool
arrangement between National and its subsidiaries (the "Money Pool
Arrangement") (see SEC File No. 70-8729 for the current Money Pool
Arrangement). Such loans to Seneca Independence shall not exceed in
the aggregate $180 million in principal amount at any one time
outstanding. Such loans to Niagara Independence shall not exceed in
the aggregate $180 million in principal amount at any one time
outstanding.
National, Supply, Distribution, Seneca, UCI, Highland, Leidy,
Data-Track, NFR, Horizon, Seneca Independence and Niagara
Independence request that Seneca Independence and Niagara
Independence be added to the group of subsidiary companies of
National which can make short-term borrowings pursuant to the
authorization in File No. 70-8729.
4. Credit Support
National proposes to enter into guarantee arrangements, obtain
letters of credit, and otherwise provide credit support
(collectively, provide "Credit Support") with respect to obligations
of Seneca Independence and/or Niagara Independence. National and/or
Seneca Independence may provide Credit Support with respect to
obligations of the Pipeline Partnership, but only in proportion to
Seneca Independence's percentage interest in the Pipeline
Partnership. National and/or Niagara Independence may provide Credit
Support with respect to obligations of the Marketing Partnership, but
only in proportion to Niagara Independence's percentage interest in
the Marketing Partnership.
Any Credit Support is proposed to be made under the same
terms, conditions and limitations described in the current credit
support arrangement between National and its subsidiaries (see SEC
File No. 70-8251 for the current credit support arrangement). The
maximum aggregate limit on all Credit Support by National to Seneca
Independence and/or the Pipeline Partnership will be $180 million at
any one time outstanding. The maximum aggregate limit on all Credit
Support by National to Niagara Independence and/or the Marketing
Partnership will be $180 million at any one time outstanding.
National, Seneca Independence and Niagara Independence request
that, to the extent Seneca Independence, Niagara Independence, the
Pipeline Partnership or the Marketing Partnership require Credit
Support from National, such Credit Support may be made under the same
terms, conditions and limitations described in the current credit
support arrangement between National and its subsidiaries (see SEC
File No. 70-8251 for the current credit support arrangements).
National further requests that Seneca Independence and/or Niagara
Independence, either by itself or together with National, be
permitted to provide such Credit Support to the Pipeline Partnership
and/or the Marketing Partnership, respectively, each up to the $180
million limit at any one time outstanding, with such Credit Support
limited to its percentage interest in such partnership.
National specifically undertakes that it will not seek
recovery through higher rates to National system utility company
customers to compensate it for any possible loss that it might
sustain by reason of the Proposed Transactions, or for any inadequate
returns on such investment.
B. Description of Non-Jurisdictional Transactions
In addition to the Proposed Transactions, other related
transactions will occur, or have occurred. These transactions do not
require Commission approval in this proceeding, but are described
here to provide the context within which the Proposed Transactions
would occur. To the extent the Commission finds that any of these
transactions require the Commission's approval, the
applicants/declarants request such approval.
1. Acquisition of Stock in Seneca Independence and Niagara
Independence
In September 1997, National acquired all of the outstanding
capital stock of Seneca Independence and Niagara Independence
pursuant to Rule 58. Both Seneca Independence and Niagara
Independence are gas-related companies for purposes of Rule 58, as
discussed below under the heading "Applicability of the Gas Related
Activities Act".
2. Future Capital Contributions or Open Account Advances
As required from time to time, National would make capital
contributions or open account advances, without interest, to Seneca
Independence and Niagara Independence, and Seneca Independence and
Niagara Independence would make capital contributions or open account
advances, without interest, to the Pipeline and Marketing
Partnerships, respectively. Pursuant to Rule 45(b)(4), such
contributions and open account advances do not require specific
Commission approval. The financial statements attached to this
application-declaration reflect (i) the capital contributions to
Seneca Independence and the Pipeline Partnership relating to
construction of the Independence Pipeline based on current plans and
projections, (ii) minimal start-up contributions of capital to
Niagara Independence, and (iii) minimal start-up contributions of
capital from Niagara Independence to the Marketing Partnership.
3. Short-Term Loans
As required from time to time, until Seneca Independence and
Niagara Independence are added to the Money Pool, National expects to
make short-term loans to Seneca Independence and/or Niagara
Independence. Such short-term loans would be made under the
authority of Rule 52(b) and (d) in transactions whereby the interest
rates and maturity dates of the loans are designed to parallel
National's effective cost of capital. The amount of such loans to
Seneca Independence and Niagara Independence are not expected to
exceed $10 million to each in principal amount at any one time
outstanding.
4. Subscriptions to Firm Transportation Service
The Marketing Partnership has executed a Precedent Agreement
(copy attached as Exhibit A-10) pursuant to which the Marketing
Partnership would, upon satisfaction of various conditions, purchase
firm natural gas transportation services from the Pipeline
Partnership, at the maximum tariff rate approved by FERC. Other
affiliates of National may also purchase FERC-regulated
transportation services from the Pipeline Partnership at
FERC-regulated rates. The Marketing Partnership may also purchase
regulated transportation or storage services from other regulated
interstate natural gas pipeline companies, which may or may not be
affiliated with the owners of the Pipeline Partnership and/or the
Marketing Partnership. The Marketing Partnership may also engage in
transactions whereby the Marketing Partnership and other entities,
including affiliates and non-affiliates of National, release firm
transportation capacity to each other in accordance with applicable
FERC regulations, pipeline tariffs, state regulations or utility
tariffs. Pursuant to Rule 81, none of these sales of regulated
transportation services subject to public regulation would require
specific Commission approval.
5. Natural Gas Transactions
It is possible that the Marketing Partnership may buy gas from
or sell gas to National affiliates. Because natural gas is not
"goods" pursuant to Rule 80(b), such transactions would not trigger
the application of Section 13 of the Act, or require specific
Commission approval.
6. License Agreement
In September 1997, Supply granted a license to the Pipeline
Partnership to utilize certain environmental studies and other
information Supply had developed regarding a portion of the route
along which the Pipeline Partnership plans to construct its
facilities. The Pipeline Partnership will pay Supply for that
license by November 1997, which payment reimburses Supply for its
actual costs incurred in developing the information and is reflected
in the financial statements attached to this application-declaration.
Because the intangible rights granted to the Pipeline
Partnership are not "goods" pursuant to Rule 80(b), the granting of
this license would not trigger the application of Section 13 of the
Act, or require specific Commission approval.
7. Option Agreement
In September 1997, Supply and Seneca granted an option to the
Pipeline Partnership which, if exercised, would allow the Pipeline
Partnership to construct part of its facilities on certain
rights-of-way owned by Supply and land owned by Seneca. Upon
exercising that option, the Pipeline Partnership would pay Supply and
Seneca for the right to utilize Supply's rights-of-way and Seneca's
land, and would reimburse Supply and Seneca for their costs and
damages to be incurred accomodating the Pipeline Partnership. The
financial statements attached to this application-declaration reflect
the payments to Supply and Seneca in the event the Pipeline
Partnership exercises its option.
Because the interests in land granted to the Pipeline
Partnership are not "goods" pursuant to Rule 80(b), and because any
reimbursement for costs and damages would be "at cost" pursuant to
Rules 90 and 91, the granting and performance of this option would
not trigger the application of, and/or would be consistent with,
Section 13 of the Act. In any event, the granting and performance of
this option do not require specific Commission approval.
8. Other Services.
In connection with the Pipeline Partnership's development and
construction of its facilities, various employees or contractors of
Supply or other National affiliates may perform services for the
Pipeline Partnership. For example, Supply land agents and surveying
personnel may assist the Pipeline Partnership in connection with the
pipeline route through areas with which Supply is familiar, or Supply
employees may inspect and supervise the clean-up phase of the project
on Supply's rights-of-way and Seneca's land. Supply or the
appropriate affiliate would be reimbursed by the Pipeline
Partnership, "at cost" as defined in Rules 90 and 91, for all such
services, and therefore would be consistent with Section 13 of the
Act.
Similarly, it is possible that the Marketing Partnership might
reimburse Niagara Independence or another affiliate for services
rendered to the Marketing Partnership. Again, any such reimbursement
would be "at cost" as defined in Rules 90 and 91, and therefore
consistent with Section 13 of the Act.
C. ANALYSIS
The applicants seek the Commission's approval of the
acquisition of interests in the Pipeline Partnership and the
Marketing Partnership, as well as other loan and credit support
transactions described above. Section 9(a)(1) of the Act requires
that this acquisition of a security or an interest in a business is
subject to the Commission's approval under the standards set out in
Sections 10(b) and (c) of the Act.
1. Satisfaction of Requirements of Section 10(b) and 10(c)
Section 10(b)(1) - The activities of Seneca Independence,
Niagara Independence, the Pipeline Partnership and the Marketing
Partnership do not involve the acquisition of "utility assets" as
defined under Section 2(a)(18) of the Act. Neither Seneca
Independence, Niagara Independence, the Pipeline Partnership nor the
Marketing Partnership will be "gas utility compan[ies]" as defined in
Section 2(a)(4) of the Act, in that none of them will "own or operate
facilities used for the distribution at retail of natural or
manufactured gas for heat, light or power." Accordingly, the
acquisition of interests in the Pipeline Partnership and the
Marketing Partnership cannot possibly tend "towards interlocking
relations or the concentration of control of public-utility
companies," the concern of Section 10(b)(1) of the Act.
Section 10(b)(2) - As discussed above, the proposed activities
of Seneca Independence, Niagara Independence, the Pipeline
Partnership and the Marketing Partnership do not involve the
acquisition of utility assets or an interest in a gas utility
company. The acquired partnership interests might be thought to be
"securities", in which case Section 10(b)(2) would be applicable.
The Applicants submit that the total consideration (which includes no
fees, commissions or other remuneration not disclosed in this
application-declaration) to be paid directly by Seneca Independence
to ANRIP and TIP (no consideration being paid indirectly) in
connection with the acquisition of an interest in the Pipeline
Partnership is reasonable, reflecting the appropriate portions of
capital actually contributed by the sellers to the Pipeline
Partnership. The total consideration (which includes no fees,
commissions or other remuneration not disclosed in this
application-declaration) paid directly by Niagara Independence to the
Marketing Partnership (no consideration being paid indirectly) in
connection with the acquisition of an interest in the Marketing
Partnership is reasonable, because it is a nominal amount, with
future capital contributions to be determined by a unanimous vote of
the partners (unless otherwise unanimously agreed). The Applicants
further submit that the acquisitions will not unduly complicate the
capital structure of National (the holding company) or be detrimental
to the public interest or the interest of investors or consumers or
the proper functioning of National's holding company system. See
Item 1(C)(2) below for additional discussion of the benefits to
consumers of the Proposed Transaction.
Section 10(b)(3) - The proposed investments in the Pipeline
and Marketing Partnerships will have a de minimis effect on the
capital structure of the National Fuel System. Further, as discussed
at Item 1(C)(2) below, these Proposed Transactions will not be
detrimental to the public interest or the interest of investors or
consumers or the proper functioning of such holding company system.
Section 10(c)(1) - Since this filing does not involve the
acquisition of utility assets or securities of a gas or electric
company, Section 8 of the Act is not applicable. Also, as discussed
at Item 1(C)(2) below, investments in the Pipeline and Marketing
Partnerships are not detrimental to the provisions of Section 11 of
the Act.
Section 10(c)(2) - Again, as this filing does not involve the
acquisition of utility assets or securities of a public utility or
holding company, this section is not applicable.
An exemption from competitive bidding is available because no
underwriting or public sale of securities is involved, and
competitive bidding is not necessary or appropriate in the public
interest or for the protection of investors or consumers.
2. Applicability of the Gas Related Activities Act
National and its subsidiaries (the "National Fuel System" or
the "System") are engaged principally in the exploration, production,
purchasing, gathering, transmission, storage, marketing and
distribution of natural gas. The passage by Congress of the Gas
Related Activities Act in 1990, Pub. L. No. 101-572 (1990)
(hereinafter referred to as the "GRAA") simplified the decisions
which the Commission is required to make under Section 11(b) of the
Act. Under the Section 11(b) of the Act, all proposed investments by
Public Utility Holding Companies and their subsidiaries are
scrutinized by the Commission to insure that the investments are
necessary or appropriate to the operation of an integrated public
utility system.
Section 2(a) of the GRAA provides in effect that the
investment by Seneca in the Partnership, and the activities of the
Partnership involving the transportation and storage of natural gas
are deemed, for purposes of Section 11(b)(1) of the Act, to be
reasonably incidental or economically necessary or appropriate to the
operation of the National Fuel System. The interstate gas
transportation services which the Partnership will provide will
comprise virtually all of its business. Under Section 2(a) of the
GRAA, the proposed investment by Seneca Independence in the Pipeline
Partnership, and the transportation activities of the Partnership,
therefore automatically satisfy Section 11 of the Act.
Section 2(b) of the GRAA provides in effect that the
acquisition by Niagara Independence of an interest in the Marketing
Partnership, and the activities of the Marketing Partnership related
to the supply of natural gas, including marketing or other similar
activities, are deemed, for purposes of Section 11(b)(1) of the Act,
to be reasonably incidental or economically necessary or appropriate
to the operation of the National Fuel System if the Commission
determines that such acquisition:
is in the interest of consumers of National's
subsidiaries, including Distribution; and
will not be detrimental to the interests of
consumers of National's subsidiaries (including Distribution)
or to the proper functioning of the National Fuel System.
The activities of the Marketing Partnership are expected to
benefit utility customers, including Distribution's customers, by
making the market for natural gas more efficient and competitive.
Regardless of whether the Marketing Partnership sells gas to
Distribution or to others, the Marketing Partnership will be selling
substantial quantities of gas at Leidy Pennsylvania and at other
places where Distribution buys gas, and where marketers who will sell
gas to Distribution's retail customers buy gas. Improved competition
in the market should result in Distribution and its retail customers
paying less for natural gas.
D. RULE 16 EXEMPTIONS
In order for a Rule 16 exemption to be applicable, the entity
seeking the exemption and its affiliates must satisfy four
conditions. These conditions are:
(i) the entity must not be a "public utility
company" as defined in Section 2(a)(5) of
the Act;
(ii) the entity must be engaged primarily in
the exploration, development, production,
manufacture, storage, transportation or
supply of natural gas;
(iii) no more than 50% of the entity's voting
interest can be "owned, directly or
indirectly, by one or more registered
holding companies"; and
(iv) the Commission will have approved the
acquisition of the interest pursuant to
the application-declaration.
Rule 16(c) requires that annual reports of companies acquired
pursuant to Rule 16 be included in National's annual report on Form
U5S. As discussed in Item 5 (Procedure), National requests a waiver
of that requirement, and requests that the Commission accept and give
confidential treatment to Rule 24 Certificates containing the
information which would have been in those annual reports.
(1) The Pipeline Partnership's Rule 16 Exemption
Because Seneca Independence, a wholly-owned subsidiary of
National, will control more than 10% of the voting interests of the
Pipeline Partnership, the Pipeline Partnership will be a "subsidiary"
of Seneca Independence under Section 2(a)(8) of the Act, and as a
subsidiary will be a part of National's "holding company system"
under Section 2(a)(9), and therefore an "associate company" of
National under Section 2(a)(10) of the Act. However, the Pipeline
Partnership and its affiliates, as defined in Section 2(a)(11) of the
Act, in particular ANRIP and TIP, will be exempt from all
obligations, duties and liabilities otherwise imposed upon it by the
Act, as a result of Rule 16 promulgated under the Act.
Upon the Commission's approval of this
application-declaration, the Pipeline Partnership would satisfy all
four conditions set forth for the applicability of a Rule 16
exemption. The Pipeline Partnership is not a utility, it will be
engaged primarily in the transportation of gas, no more than 50% of
it can be owned by holding company affiliates, and the Commission
would have approved the acquisition.
2 The Marketing Partnership's Rule 16 Exemption
Because Niagara Independence, a wholly-owned subsidiary of
National, controls more than 10% of the voting interests of the
Marketing Partnership, the Marketing Partnership will be a
"subsidiary" of Niagara Independence under Section 2(a)(8) of the
Act, and as a subsidiary will be a part of National's "holding
company system" under Section 2(a)(9), and therefore an "associate
company" of National under Section 2(a)(10) of the Act. However, the
Marketing Partnership and its affiliates, as defined in Section
2(a)(11) of the Act, will be exempt from all obligations, duties and
liabilities otherwise imposed upon it by the Act, as a result of Rule
16 promulgated under the Act.
Upon the Commission's approval of this
application-declaration, the Marketing Partnership would satisfy all
four conditions set forth for the applicability of a Rule 16
exemption. The Marketing Partnership is not a utility, it will be
engaged primarily in the supply of gas, no more than 50% of it can be
owned by holding company affiliates, and the Commission would have
approved the acquisition.
E. FOREIGN UTILITY COMPANIES AND EXEMPT WHOLESALE GENERATORS
Fifty percent of National's average consolidated retained
earnings for the last four quarters is $231 million as of June 30,
1997. National's current Aggregate Investment (as defined in Rule
53(a)(1)(i)) in exempt wholesale generators ("EWGs") and foreign
utility companies ("FUCOs") (as defined in Sections 32 and 33 of the
Act) is less than $1 million, thereby satisfying Rule 53(a)(1).
National and its subsidiaries maintain books and records to identify
investments in and earnings from EWGs and FUCOs in which they
directly or indirectly hold and interest. In addition, the books and
records and the financial statements of the only such entity in which
National currently has an interest are kept in conformity with the
requirements of Rule 53(a)(2)(iii)(A) and (B), and National
undertakes to provide the Commission access to such books and records
and financial statements that are available to National upon the
request of the Commission. Thus, the Rule 53(a)(2) requirements are
satisfied. No more than 2% of the employees of National's domestic
public-utility company render services, at any one time, directly or
indirectly, to the EWGs or FUCOs in which National directly or
indirectly holds and interest, thereby satisfying Rule 53(a)(3). All
of the documents required to be filed under Rule 53(a)(4) with
federal, state and local regulators having jurisdiction over the
retail rates of National's domestic public-utility company have been
submitted.
None of the conditions described in Rule 53(b) exist with
respect to National, thereby satisfying Rule 53(b) and making Rule
53(c) inapplicable.
Item 2. Fees, Commissions and Expenses.
It is estimated that the expenses to be incurred by National
and Seneca in connection with the herein Proposed Transactions are as
follows:
Fees and Expenses of Counsel Estimated
(a) Stryker, Tams & Dill $2,000
Item 3. Applicable Statutory Provisions
Sections 9(a), 10, 11(b) and 12(b) of the Act and Rules 16,
23, 24, 45, 51, 52, 80(b) and 81 and the Gas Related Activities Act
of 1990 are all considered applicable to the Proposed Transactions.
The applicability of each of the sections and rules to each of
the Proposed Transactions are set out as follows:
Proposed Transaction Applicable Provisions of the Act
Seneca Independence's Section 9(a), 10, 11(b) and
acquisition of an the Gas Related Activities Act
interest in the Rules 16, 23, 24, 51
Pipeline Partnership
Niagara Independence's Section 9(a), 10, 11(b) and
acquisition of an the Gas Related Activities Act
interest in the Rules 16, 23, 24, 51, 58
Marketing Partnership
Seneca Independence's Section 12(b)
and Niagara Independence's Rules 23, 24, 45 and 52
possible loan(s)to the
Pipeline Partnership and
the Marketing Partnership
Credit Support by National, Section 12(b)
Seneca Independence and/or Rules 23, 24 and 45
Niagara Independence
regarding obligations of
the Pipeline Partnership
and/or the Marketing
Partnership
To the extent that any Proposed Transaction is considered by
the Commission to require authorization, approval or exemption under
any section of the Act or provision of the rules or regulations other
than those specifically referred to herein, request for such
authorization, approval or exemption is hereby made.
Item 4. Regulatory Approval.
No federal regulatory authority, other than the Commission,
has jurisdiction over the Proposed Transactions, except that the FERC
has jurisdiction over the Pipeline Partnership's construction and
operation of its facilities and services. The Pipeline Partnership
has applied to FERC for Certificates of Public Convenience and
Necessity at Docket Nos. CP97-315, CP97-320 and CP97-321.
No state regulatory authority has jurisdiction over the
proposed transactions.
Item 5. Procedure.
Pursuant to the provisions of Rule 62, the Commission is
requested to issue an Order permitting the Declaration to become
effective as soon as possible with respect to consummation of the
transactions described herein. The Purchase Agreement provides for a
closing in January 1998, and for Seneca Independence to forfeit its
rights to purchase if the closing does not occur by February 27,
1998. The applicants/declarants therefore respectfully request the
Commission to issue its order no later than January 1998.
Pursuant to Rule 24, Applicant-Declarants will provide on a
quarterly basis, requesting confidential treatment, an income
statement and balance sheet reflecting the activities of Seneca
Independence and Niagara Independence, bearing the File Number of
this proceeding. Those Rule 24 filings will display Seneca
Independence's allocated share of the profits/losses of the Pipeline
Partnership and Niagara Independence's allocated share of the
profits/losses of the Marketing Partnership. Applicant-Declarants
request permission to file such information within 45 days after the
end of each quarter. If Seneca Independence's or Niagara
Independence's income statement reflects a net loss for a consecutive
twelve (12) month period, at the request of the Commission, more
detailed income statements and balance sheets would be provided in
the form as mutually agreed by Seneca Independence or Niagara
Independence and the Commission Staff.
Rule 16(c) requires that annual reports of companies acquired
pursuant to Rule 16 (which would include Niagara Independence and
Seneca Independence) be included in National's annual report on Form
U5S. National requests a waiver of that requirement, in light of the
above commitment to provide financial information on a quarterly
basis.
Seneca Independence and Niagara Independence ask (partly at
the request of other partners of the Partnerships) that the
Commission not require the Applicant-Declarants to provide ongoing
income statements and balance sheets for the Pipeline and Marketing
Partnerships because (i) the Partnerships do not otherwise intend to
make their financial statements publicly available except as such
disclosure may be required by laws and regulations administered by
the Federal Energy Regulatory Commission; (ii) the Partnerships will
be the owners of highly competitive businesses in which information
such as that displayed on the Partnerships' financial statements will
have commercial value; and (iii) Seneca Independence and Niagara
Independence would be only minority owners of the Partnerships
without any actual control over the persons who will generate the
Partnerships' financial statements.
Within six months after the effective date of the order,
Seneca Independence and Niagara Independence shall file with the
Commission, in accordance with Section 15 of the Act and pursuant to
Rule 24, a copy of the accounting system maintained by them and the
Partnerships as well as any cost allocation methodology, work order
procedures and cost accounting procedures needed to collect and
account for the income and expenses of the activities of Seneca
Independence, Niagara Independence and the Partnerships. This is to
include the allocation of the Partnerships' profits to Seneca
Independence, Niagara Independence and the other Partners.
Applicant/Declarants respectfully request that the
Commission's Order herein be entered pursuant to the provisions of
Rule 23. If a hearing be ordered, Applicant/Declarants waive a
recommended decision by a Hearing Officer, or any other responsible
officer of the Commission, agree that the Division of Investment
Management may assist in the preparation of the Commission's decision
and request that there be no waiting period between the issuance of
the Commission's Order and the date on which it becomes effective.
The Applicants-Declarants hereby request that (i) certain
information contained in the Exhibits hereto, as indicated in the
index to Exhibits, and (ii) the Rule 24 Certificates described above
(collectively, the "Information") be kept confidential pursuant to
Rule 104(b).
Public disclosure of the Information is not necessary or
appropriate in the public interest or for the protection of investors
or consumers. The Information describes the purchase price of the
interests in the Pipeline Partnership and the Marketing Partnership,
and other financial information on those Partnerships, and the
financial effect of the proposed transactions on Seneca Independence,
Niagara Independence and on the National Fuel System.
The amounts involved are too small to be material to either
investors or consumers. Seneca Independence expects to invest about
3.3% of National's capitalization in its interest in the Pipeline
Partnership. Niagara Independence and the Marketing Partnership will
not own any transmission plant or significant physical facilities,
and will instead trade in transportation services and gas in
competition with other gas marketers and traders.
The people who would be most interested in the Information
would be other natural gas pipeline owners, operators and marketers
in competition with the Partnerships. Marketers especially can
operate with a minimal capital investment and very tight margins in a
highly competitive environment. In this environment, information on
a competitor's costs, margins, plans and projections is a valuable
trade secret, and is treated by all the competitors as confidential,
proprietary information.
These competitors can not obtain the Information anywhere else
in a timely manner. The Applicants cannot obtain similar information
about their competitors in a timely manner. (Note that regulated
interstate pipelines, including the Pipeline Partnership, must
disclose certain information as and when required by FERC
regulations, but much disclosure is delayed until an annual report;
the Pipeline Partnership wishes to be on the same footing as its
competitors.) The Applicants firmly believe that the investing and
consuming public would be best served by allowing the Information to
remain confidential, thereby permitting the Pipeline and Marketing
Partnerships to compete on an equal basis with their competitors.
Item 6. Exhibits and Financial Statements.
The following exhibits and financial statements are made part
of this application-declaration:
(a) Exhibits
A-1 Restated Certificate of Incorporation of
National Fuel Gas Company, dated March 15, 1985
(Incorporated by Reference to Exhibit A-4 in File
No. 70-6667).
A-2 Certificate of Amendment of Restated
Certificate of Incorporation of National Fuel Gas
Company, dated March 9, 1987 (Incorporated by
Reference to Exhibit A-3 in File No. 70-7334).
A-3 Certificate of Amendment of Restated
Certificate of Incorporation of National Fuel Gas
Company, dated February 22, 1988 (Incorporated by
Reference to Exhibit B-5 in File No. 70-7478).
A-4 Certificate of Amendment of Restated
Certificate of Incorporation, dated March 17, 1992.
(Incorporated by Reference to Exhibit A-4 in File
No. 70-8109).
A-5 Bylaws of National Fuel Gas Company, as amended
(designated as Exhibit EX-3 for EDGAR purposes).
A-6 Purchase and Sale Agreement. (Note that
Exhibit A to this Purchase and Sale Agreement is the
unsigned form of Exhibit A-7, and Exhibit C to the
Purchase and Sale Agreement is the unsigned form of
Exhibit A-8). THIS AGREEMENT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
A-7 General Partnership Agreement of Independence
Pipeline Company. THIS AGREEMENT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(B).
A-8 Escrow Agreement. THIS AGREEMENT IS SUBJECT TO
A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE
104(B).
A-9 Marketing Partnership Agreement of DirectLink
Gas Marketing Company. THIS AGREEMENT IS SUBJECT TO
A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE
104(B).
A-10 Precedent Agreement between DirectLink Gas
Marketing company as shipper and Independence
Pipeline Company as transporter (Designated as
Exhibit EX-10 for EDGAR purposes).
F-1 Opinion of Stryker, Tams and Dill (Designated
as Exhibit EX-5 for EDGAR purposes). (to be provided
by amendment)
F-2 Opinion of James R. Peterson (Designated as
EX-5 for EDGAR purposes). (to be provided by
amendment)
G-1 Financial Data Schedules (omitted because
confidential treatment is requested for all the
financial statement exhibits).
H-1 Proposed form of public notice (Designated as
Exhibit EX-99 for EDGAR purposes).
(b) Financial Statements
S-1 National Fuel Gas Company and Subsidiaries Pro
Forma Consolidated Balance Sheet at June 30, 1997,
Pro Forma Consolidated Statement of Income and
Earnings Reinvested in the Business for the twelve
months ended June 30, 1997, and Pro Forma Adjusting
Entries. THIS EXHIBIT IS SUBJECT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-2 National Fuel Gas Company Pro Forma Balance
Sheet at June 30, 1997, Pro Forma Statement of
Income and Earnings Reinvested in the Business for
the twelve months ended June 30, 1997, and Pro Forma
Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-3 National Fuel Gas Supply Corporation Pro Forma
Balance Sheet at June 30, 1997, Pro Forma Statement
of Income and Earnings Reinvested in the Business
for the twelve months ended June 30, 1997, and Pro
Forma Adjusting Entries. THIS EXHIBIT IS SUBJECT TO
A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE
104(b).
S-4 Seneca Resources Corporation Pro Forma Balance
Sheet at June 30, 1997, Pro Forma Statement of
Income and Earnings Reinvested in the Business for
the twelve months ended June 30, 1997, and Pro Forma
Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-5 Seneca Independence Pipeline Company Pro Forma
Balance Sheet at June 30, 1997 and Pro Forma
Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-6 Niagara Independence Marketing Company Pro
Forma Balance Sheet at June 30, 1997 and Pro Forma
Adjusting Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-7 Notes to Consolidated Financial Statements.
THIS EXHIBIT IS SUBJECT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-8 Independence Pipeline Company Pro Forma Balance
Sheet at June 30, 1997 and Pro Forma Adjusting
Journal Entries. THIS EXHIBIT IS SUBJECT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 104(b).
S-9 DirectLink Gas Marketing Company Pro Forma
Balance Sheet at June 30, 1997 and Pro Forma
Adjusting Journal Entries. THIS EXHIBIT IS SUBJECT
TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE
104(b).
There have been no material changes not in the
ordinary course of business since June 30, 1997.
Item 7. Information as to Environmental Effects.
The proposed transactions outlined herein involve no major
action which will significantly affect the quality of the human
environment.
No federal agency has prepared or is preparing an
environmental impact statement with respect to the transactions
proposed in this Declaration.
SIGNATURES
Pursuant to the requirements of the Public Holding Utility
Company Act of 1935, the undersigned company has duly caused this
Statement to be signed on its behalf by the undersigned thereunto
duly authorized.
National Fuel Gas Company National Fuel Gas
Distribution Corporation
By:/s/ James R. Peterson By:/s/ Philip C. Ackerman
James R. Peterson Philip C. Ackerman
Assistant Secretary President
National Fuel Gas Seneca Resources Corporation
Supply Corporation
By:/s/ William A. Ross By:/s/ James A. Beck
William A. Ross James A. Beck
Vice President President
Utility Constructors, Inc. Highland Land & Minerals, Inc.
By:/s/ David F. Smith By:/s/ Philip C. Ackerman
David F. Smith Philip C. Ackerman
Secretary President
Leidy Hub, Inc. Data-Track Account
Services, Inc.
By:/s/ Walter E. DeForest By:/s/ David F. Smith
Walter E. DeForest David F. Smith
President Secretary
National Fuel Horizon Energy
Resources, Inc. Development, Inc.
By:/s/ Robert J. Kreppel By:/s/ Bruce H. Hale
Robert J. Kreppel Bruce H. Hale
President Vice President
Seneca Independence Niagara Independence
Pipeline Company Marketing Company
By:/s/ William A. Ross By:/s/ James A. Beck
William A. Ross James A. Beck
Vice President President
Dated: October 6, 1997
EXHIBIT A-5
(Designated as EX-3 for EDGAR purposes)
Amended 2/21/85
6/19/86
7/07/88
6/14/90
6/18/92
12/8/93
6/09/94
1/01/97
3/20/97
6/19/97
9/18/97
NATIONAL FUEL GAS COMPANY
BY-LAWS
ARTICLE I
Meeting of Stockholders
1. Meetings of stockholders may be held at such place,
within or without the State of New Jersey, as may be fixed by the
Board of Directors and stated in the notice of the meeting.
2. In 1999 and thereafter, the annual meeting of
stockholders shall be held on the third Thursday in February in each
year beginning at ten o'clock in the forenoon, local time, unless
such day shall be on a holiday, in which event such meeting shall be
held at the same hour on the next succeeding business day. In 1998,
the Annual Meeting of Stockholders shall be held on Thursday,
February 26, 1998 at ten o'clock in the forenoon, local time.
3. Except as otherwise provided by New Jersey law,
written notice of the time, place and purpose or purposes of every
meeting of stockholders shall be given not less than 10 nor more than
60 days before the date of the meeting, either personally or by mail,
to each stockholder of record entitled to vote at the meeting.
4. Unless otherwise provided by statute, all Special
Meetings shall be called upon the written request of three or more
directors or of stockholders owning one-fourth of the capital stock
issued and outstanding.
5. Unless otherwise provided in the Company's
Certificate of Incorporation or in New Jersey law, (i) the holders of
shares entitled to cast a majority of the votes at
any meeting of stockholders shall constitute a quorum at such meeting
except that the votes that holders of any class or series of shares
are entitled to cast shall not be counted in the determination of a
quorum for action to be taken at a meeting with respect to which such
class or series has no vote, and (ii) the holders of shares of any
class or series entitled to cast a majority of the votes of such
class or series entitled to vote separately on a specified item of
business shall constitute a quorum of such class or series for the
transaction of such specified item of business.
If a quorum shall not be so represented, the
stockholders present at any meeting of stockholders shall have power
to adjourn the meeting to another time at the same or at another
place. If the time and place to which the meeting is adjourned are
announced at the meeting at which the adjournment is taken and at the
adjourned meeting only such business is transacted as might have been
transacted at the original meeting, it shall not be necessary to give
notice of the adjourned meeting unless after the adjournment the
Board of Directors fixes a new record date for the adjourned meeting.
In the event the Board of Directors fixes such a new record date, a
notice of the adjourned meeting shall be given to each stockholder of
record at the new record date entitled to notice under Article I
paragraph 3 of these By-Laws.
6. At each election of Directors, the proxies and
ballots shall be received and all questions respecting the
qualification of voters shall be decided by two inspectors, who shall
be appointed by the presiding officer of the meeting; provided
however, that no candidate for election as Director shall act as
inspector. Such inspectors shall be sworn faithfully to perform
their duties and shall report in writing the results of the ballot.
ARTICLE II
Board of Directors
1. The Board of Directors shall consist of (i) such
number of directors, not less than seven nor more than eleven, as may
be determined from time to time by resolution adopted by the
affirmative vote of a majority of the entire Board of Directors, and
(ii) such directors as may be elected by vote of the holders of
shares of preferred stock, when and as provided in the Certificate of
Incorporation of the Company. In order to qualify for election as a
director, a nominee must be a shareholder of the Company.
2. Subject to the provisions of the Statutes of the
State of New Jersey, the Certificate of Incorporation, and the
By-Laws of the Corporation, the Board of Directors shall have full
and complete management and control of the business and affairs of
the Corporation.
3. The Board of Directors may hold its meetings or any
adjournment thereof either in the State of New Jersey or elsewhere
and keep the books of the Corporation at such places within or
without the State of New Jersey as the Board of Directors may from
time to time determine.
4. Meetings of the Board of Directors may be called at
the direction of the Chairman of the Board, the President, or any
three of the Directors for the time being in office.
5. Notice of any meetings of the Board of Directors
shall be given to each Director by mailing the same to him at his
last known address, as the same appears upon the records of the
Corporation at least five days before the meeting or by telegraphing,
telephoning or delivering the same to him personally at least one day
before the meeting.
6. At any meeting of the Board of Directors, there may
be transacted without special notice, any business within the powers
of the Directors to transact, except that of which the Statutes of
the State of New Jersey expressly require special notice shall be
given.
7. A majority of the Directors in office shall
constitute a quorum for the transaction of any business which may
properly come before them. If a majority of said Directors shall not
be present at any meeting, the Directors present shall have power to
adjourn to a day certain, and notice of the adjourned meeting shall
be given by mailing the same addressed to each Director at his
address as the same appears upon the records of the Corporation, at
least two days prior to the adjourned meeting, or by telegraphing,
telephoning or delivering the same to him personally at least one day
before said adjourned meeting. But, if a majority of the Board of
Directors are present, the said meeting, or any adjourned meeting
thereof, may be adjourned to a subsequent day; such adjournment may
be without notice of such adjournment if such notice is not required
by New Jersey Law (as of June 1997, N.J.S.A. 14A:6-10(2)).
8. A. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any pending,
threatened or completed civil, criminal, administrative or
arbitrative action, suit or proceeding, and any appeal therein and
any inquiry or investigation which could lead to such action, suit or
proceeding ("Proceeding") by reason of the fact that such person is
or was a director or officer of the Corporation, or, while a director
or officer of the Corporation, is or was serving at the request of
the Corporation as a director, officer, trustee, employee or agent of
another foreign or domestic corporation, or of any partnership, joint
venture, sole proprietorship, employee benefit plan, trust or other
enterprise, whether or not for profit, to the fullest extent
permitted and in the manner provided by the laws of the State of New
Jersey.
B. Nothing in this paragraph 8 shall restrict or
limit the power of the Corporation to indemnify its employees, agents
and other persons, to advance expenses (including attorneys' fees) on
their behalf and to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the
Corporation in connection with any Proceeding.
C. The indemnification provided by this paragraph 8
shall not exclude any other rights to which a person seeking
indemnification may be entitled under the Certificate of
Incorporation, By-Laws, agreement, vote of shareholders or otherwise.
The indemnification provided by this paragraph 8 shall continue as to
a person who has ceased to be a director or officer, and shall extend
to the estate or personal representative of any deceased director or
officer."
9. A. Except with respect to directors whose service as
such ceases on or before February 20, 1997, who will continue to
receive the previously-effective Director compensation until such
time, each Director who is not a regular full-time employee of the
Corporation or one or more of its subsidiaries, shall be paid an
annual fee of $12,000 in cash and 400 shares of the common stock of
the Corporation, payable in equal quarterly increments, in advance
(i.e., as of the first business day of the quarter). There will be
proration of payments during quarters in which such Director has only
partial service. Each such share of stock of the Corporation will be
nontransferable until the later of two years from its issuance or six
months after such Director's cessation of service.
B. Each Director of the Corporation who is not a
regular full-time employee of the Corporation or one or more of its
subsidiaries shall also receive a fee of $1,000 for attendance at any
meeting of the Board of Directors and a fee of $800 for attendance at
any meeting of any committee of the Board of Directors, except that
if a Director participates in a committee meeting by telephone, the
fee shall be $500. Each Director shall be reimbursed for the travel
expenses incurred by him or her in attending any meeting of the Board
of Directors or any committee of the Board of Directors.
10. Any contract or other transaction between the
Corporation or a subsidiary of the Corporation and any other entity
shall not be void or voidable because a Director of the Corporation
is interested therein if the Corporation has complied with the
provisions of any then-applicable New Jersey statute(s) necessary or
sufficient to make the transaction not void or voidable, including,
as of June 1997, N.J.S.A. 14A:6-10(2)14A:6-8(1).
ARTICLE III
Officers
1. At the first meeting after the annual election, the
Board of Directors shall choose a Chairman of the Board and a
President, both of whom shall be members of the Board of Directors,
and one or more Vice Presidents, a Secretary, a Treasurer and a
Controller, who need not be members of the Board of Directors, and
who shall hold their respective offices until others are chosen and
qualify in their stead. The offices of Secretary and Treasurer may
be filled by the same person.
2. In its discretion, the Board of Directors may leave
unfilled for such period as it may determine, any office except the
offices of the President, Treasurer and Secretary.
3. The Chairman of the Board shall be the Chief
Executive Officer of the Corporation. He shall preside at all
meetings of the Board of Directors and shall, during the recess of
the Board of Directors, have general control and management of the
affairs and business of the Corporation. In the absence of the
President, he shall preside at stockholders' meetings.
4. In addition to the duties and responsibilities
specified in the laws of the State of New Jersey and these By-Laws,
the President shall preside at all stockholders' meetings and shall
perform such other duties as from time to time may be assigned to him
by the Board of Directors. In the absence of the Chairman of the
Board, or in the event that there is a vacancy in the office of the
Chairman of the Board, the President shall be the Chief Executive
Officer of the Corporation and shall perform all the duties of the
Chairman of the Board as well as those of President.
5. Each Vice President shall perform such duties as
shall from time to time be assigned to him by the Board of Directors,
the Chairman of the Board, or the President.
6. The Secretary, in addition to his statutory duties,
shall give proper notice of all meetings of the stockholders and of
the Board of Directors. He shall act as Secretary of all meetings of
the stockholders and shall perform such other duties as shall from
time to time be assigned to him by the Board of Directors or
President.
7. The Treasurer, in addition to his statutory duties,
shall keep full and accurate accounts of receipts and disbursements
of the funds belonging to the Corporation, and shall cause to be
deposited all moneys and other valuable effects in the name and to
the credit of the Corporation in such depositories as may from time
to time be designated by the Board of Directors. He shall disburse
the funds of the Corporation as may be ordered by the Board, taking
proper vouchers for such disbursements, and shall render to the
President and Directors whenever they may require it, account of all
his transactions as Treasurer, and of the financial condition of the
Corporation. He shall perform such other duties as shall be assigned
to him by the Board or President, and shall give a bond for the
faithful discharge of his duties in such sum and with such surety or
sureties as the Board of Directors may from time to time require.
8. The Controller shall see that adequate records of all
assets, liabilities and transactions of the Corporation are
maintained; that adequate audits thereof, are currently and regularly
made, and in conjunction with other officers, initiate and enforce
measures and procedures whereby the business of the Corporation shall
be conducted with maximum efficiency, safety and economy. He shall
also perform all such other duties as usually pertain to the office
of Controller. He shall be in all matters subject to the control of
and responsible to the Board of Directors alone.
9. The Board of Directors may from time to time appoint
such other officers and agents as they may deem necessary or
advisable for the transaction of the business of the Corporation, who
shall hold their offices during the pleasure of the Board of
Directors and perform such duties as may from time to time be
designated or assigned to them by said Board of Directors.
10. If the office of the Chairman of the Board, the
President, Vice President, Secretary, Treasurer, or Controller or one
or more of them becomes vacant for any reason whatsoever, the Board
of Directors at any duly convened meeting may, by a majority vote of
those present, fill such vacancy and the person elected shall hold
office for the unexpired term of such office and until his successor
shall be chosen.
11. All officers and agents chosen or appointed by the
Board of Directors shall be subject to removal by the Board of
Directors at any time with or without cause, and in the case of the
absence of any officer or agent of the Corporation, or for any other
reason that may seem sufficient to the Board of Directors, the said
Board of Directors subject to the limitations herein contained and
the statutes in such case made and provided, may, without removal,
delegate his powers and duties to any other officer or suitable
person for such period as it shall deem proper.
12. All duly authorized bonds and debentures of the
Corporation shall be signed on behalf of the Corporation by its
Chairman of the Board or its President, or one of its Vice Presidents
or, if so provided by resolution of the Board of Directors, by one or
more of such officers and such other officer or officers designated
by the Board of Directors; any or all such signatures may be manual
or facsimile signatures, the signature on interest coupons attached
to any said bonds or debentures shall be a facsimile signature; and
the corporate seal or a facsimile of such seal may be impressed,
affixed, imprinted or otherwise reproduced on said bonds and
debentures and, if attested, shall be attested by the Corporation's
Secretary or Assistant Secretary by manual or facsimile signature.
In case any person whose signature (manual or facsimile) appears upon
any said bond or debenture or coupons attached thereto shall cease to
be an officer of the Corporation, or shall cease to be the officer
specified thereon, before the bonds or debentures so signed shall
have been authenticated by the trustee under the indenture or other
instrument pursuant to which the bonds or debentures are delivered or
sold, such bonds or debentures or coupons may nevertheless be adopted
by the Corporation, without further action by the Board of Directors,
and authenticated and delivered and sold as though the person or
persons who so signed or attested such bonds or debentures or coupons
had not ceased to be an officer of the Corporation or the officer
specified thereof; and any bonds or debentures may be signed as
aforesaid; and the seal of the Corporation impressed, affixed,
imprinted or otherwise reproduced thereon may be attested on behalf
of the Corporation as aforesaid, and coupons attached may be signed
as aforesaid by such persons as at the actual date of the execution
of the bonds or debentures or coupons shall be the proper officers of
the Corporations, although at the time of the date of the bonds or
debentures, such persons may not have been officers of the
Corporation.
ARTICLE IV
Executive Committee
1. The Directors may appoint an executive committee and
one or more other committees of not less than three members to be
chosen from among the members of the Board of Directors. Such
committees may meet at such times and places as the committee shall,
by resolution, determine and it shall make its own rules of
procedure. A majority of the members of any such committee shall
constitute a quorum.
2. Except as otherwise provided by Board resolution or
statute (as of June 1997, N.J.S.A. 14A:6-9(1)), each such committee
shall have and may exercise the power of the Board of Directors in
the management of the business and affairs of the Corporation at any
time when the Board of Directors are not in session. Each such
committee shall, however, be subject to the specific directions of
the Board of Directors.
3. Each such committee shall keep regular minutes of
their transactions and shall cause them to be recorded in books to be
kept for that purpose in the office of the Corporation, and shall
report the same to the Board of Directors at their regular meetings.
ARTICLE V
Transfer of Shares
1. Except as otherwise provided by statute, shares shall
be transferred on the books of the Corporation only by the holder
thereof in person or by his attorney upon the surrender and
cancellation of the certificate or certificates of a like number of
shares, except in case of lost or destroyed certificates, and in that
case only after the receipt of a satisfactory bond if required by the
Board of Directors.
2. The Board of Directors may appoint a transfer agent
and a registrar of transfers, and may require all stock certificates
to bear the signatures of either or both.
ARTICLE VI
Fiscal Year
1. The fiscal year of the corporation shall begin on the
1st day of October in each calendar year and end on the 30th day of
September of the next succeeding year.
ARTICLE VII
Dividends and Working Capital
1. Before declaring any dividends or making any
distribution of profits, the Directors may set apart out of the net
profits or out of the surplus of the Corporation as a reserve fund to
be used as working capital or for any other proper purpose, such sum
or sums as the Directors shall in their discretion deem just and
proper and most for the benefit of the Corporation.
2. Dividends upon the capital stock of the Corporation
when declared shall be payable on dates to be determined by the Board
of Directors.
ARTICLE VIII
Closing of Transfer Books and
Fixing A Record Book
The Board of Directors may close the stock transfer books
of the Corporation for a period not exceeding sixty days preceding
the date of any meeting of stockholders or the date for payment of
any dividend, or the date for the allotment of rights, or the date
when any change or conversion or exchange of capital stock shall go
into effect.
In lieu of so closing the stock transfer books, the Board
of Directors may fix, in advance, a date, not exceeding sixty days
preceding the date of any meeting of stockholders, or the date for
the payment of any dividend, or the date for the allotment of rights,
or the date when any change or conversion or exchange of capital
stock shall go into effect, as a record date for the determination of
the stockholders entitled to notice of, and to vote at, any such
meeting, or entitled to receive payment of any such dividend, or any
such allotment of rights, or to exercise the rights in respect to any
such change, conversion or exchange of capital stock, and in such
case only stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend, or allotment of rights or exercise
of such rights, as the case may be, and notwithstanding any transfer
of any stock on the books of the Corporation after any such record
date fixed as aforesaid.
ARTICLE IX
Waiver of Notice
1. Any notice required to be given by these By-Laws may
be waived by the person entitled thereto.
ARTICLE X
Seal
1. The common corporate seal is and until otherwise
ordered by the Board of Directors shall be an impression upon paper
or wax bearing the words - "NATIONAL FUEL GAS COMPANY, NEW JERSEY,
INCORPORATED 1902".
ARTICLE XI
Amendment of By-Laws
1. Except as otherwise provided by statute, the Board of
Directors shall have power to make, alter or repeal the By-Laws of
the Corporation by a vote of a majority of all the Directors at any
duly convened meeting of the Board, but any By-Laws so made or
otherwise promulgated may be altered or repealed and new By-Laws made
by the stockholders at any duly conveyed meeting thereof.
EXHIBIT A-10
(Designated as EX-10 for EDGAR purposes)
PRECEDENT AGREEMENT
This Precedent Agreement ("Agreement"), is made and entered into
as of this 23rd day of September, 1997, by DirectLink Gas Marketing
Company, a general partnership formed under the laws of the State of
Delaware ("Shipper"), and Independence Pipeline Company, a general
partnership formed under the laws of the State of Delaware
("Independence") (hereinafter Shipper and Independence are sometimes
referred to individually as a "Party" or collectively as the
"Parties").
WITNESSETH:
WHEREAS, Independence has filed with the Federal Energy
Regulatory Commission ("FERC") in Docket Nos. CP97-315-000 et al., an
application for authorizations to construct, own and operate, and to
provide firm transportation services utilizing a natural gas pipeline
system that will extend from an interconnection with the facilities
of ANR Pipe Line Company ("ANR") near Defiance, Ohio to an
interconnection with the facilities of Transcontinental Gas Pipe Line
Corporation ("Transco") near Leidy, Pennsylvania ("Independence
Project"); and
WHEREAS, Independence conducted an "open season" from April 2,
1997, through May 30, 1997, to accept requests for firm
transportation service to be made available through the Independence
Project; and
WHEREAS, Shipper has requested firm transportation service from
Independence on the Independence Project; and
WHEREAS, subject to the terms and conditions set forth in this
Agreement, Independence is willing to provide such firm
transportation service on the Independence Project and proceed with
obtaining all necessary governmental and regulatory authorizations;
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and intending to be bound, Shipper and
Independence agree as follows:
1. Regulatory Authorizations. Subject to the terms and
conditions of this Agreement, Independence will proceed with due
diligence to apply for and attempt to obtain all governmental and
regulatory authorizations, including without limitation
authorizations from the FERC, which Independence determines are
necessary to: (i) construct, own and operate (or cause to be
constructed and operated) the Independence Project and render the
firm transportation services contemplated in this Agreement and
precedent agreements with other shippers for transportation services
to be provided utilizing the Independence Project; and (ii) perform
its obligations as contemplated in this Agreement. Independence
reserves the right to file and prosecute any and all applications for
such authorizations (and any supplements and amendments thereto) and,
if necessary, any court review, in such manner as it deems to be in
its best interest. Shipper agrees to support and cooperate in the
efforts of Independence to obtain all authorizations which
Independence determines are necessary for Independence to construct,
own and operate the Independence Project and to render the
transportation services contemplated in this Agreement, including but
not limited to filing an intervention or other pleading in support of
the Independence Project. If the FERC determines that information
related to Shipper's markets, gas supply, or upstream or downstream
transportation or storage arrangements is required from Independence,
Shipper agrees to provide Independence with such information in a
timely manner to enable Independence to respond within the time
required by FERC. Independence will request a protective order from
the FERC for any commercially sensitive or confidential information
identified by Shipper.
2. Shipper's Other Transportation Arrangements. Within thirty
(30) days after Shipper executes this Agreement, Shipper will advise
Independence in writing of the upstream and downstream transportation
arrangements, including arrangements for the construction of any new
facilities, necessary for Shipper to utilize the transportation
services contemplated in this Agreement. Subject to the terms and
conditions of this Agreement, Shipper shall proceed with due
diligence to apply for and attempt to obtain from all governmental
and regulatory authorities having jurisdiction all authorizations
necessary for Shipper to: (i) construct and operate (or cause to be
constructed and operated) any facilities necessary to enable Shipper
to utilize the transportation services contemplated in this
Agreement; and (ii) perform its obligations as contemplated in this
Agreement. Shipper will not take any action that would obstruct,
interfere with or delay the receipt by Independence of the
authorizations contemplated hereunder or otherwise jeopardize
development of the Independence Project. Subject to its receipt of
all such necessary authorizations, Shipper agrees to proceed with due
diligence to construct, or cause to be constructed, all facilities
necessary for Shipper to utilize the transportation services
contemplated herein.
3. Transportation Service.
(a) Service Agreement. Shipper and Independence agree to
execute, within thirty (30) days after the date Independence receives
and accepts a FERC order authorizing Independence to construct, own
and operate the Independence Project and to render the transportation
services contemplated herein, the Firm Transportation Service
Agreement attached hereto and incorporated herein by this reference
as Exhibit A, as such Agreement may be amended from time to time to
conform to changes approved by the FERC to Independence's FERC Gas
Tariff ("Service Agreement"). Service under the Service Agreement
will commence as provided under Paragraph 3(b) below.
(b) Commencement and Term of Service. Service under the
Service Agreement will commence on the date specified by Independence
in the written notice to be provided to Shipper pursuant to Paragraph
3(c) below, which date will be the later of: (i) November 1, 1999; or
(ii) the date Independence completes the construction of all
facilities necessary to provide service to Shipper and such
facilities are available for the provision of such transportation
service and will extend for a primary term of ten (10) years and year
to year thereafter subject to termination in accordance with the
terms of the Service Agreement. As of the date for commencement of
service under the Service Agreement, Independence will stand ready to
provide firm transportation service for Shipper pursuant to the
provisions of the Service Agreement, and Shipper will pay
Independence for all applicable charges associated with the Service
Agreement.
(c) Notice of Commencement of Firm Service. Prior to
commencement of service pursuant to the Service Agreement,
Independence shall notify Shipper in writing that all of the
conditions precedent set forth in Paragraph 5 have been satisfied,
and that service under the Service Agreement will commence on a date
certain, which date will not be prior to November 1, 1999.
Notwithstanding the foregoing, Independence agrees to provide written
notice to Shipper by no later than March 1, 1999, if it does not
expect to provide Shipper with the full level of firm transportation
service contemplated herein by November 1, 1999, and inform Shipper
of its best estimate of the revised in-service date for the
Independence Project.
4. Construction of Facilities. Upon satisfaction of the
conditions precedent set forth in Paragraph 5 below, Independence
will proceed with due diligence to construct the authorized
Independence Project pipeline facilities necessary to implement the
firm transportation service contemplated in this Agreement on or
about November 1, 1999. Notwithstanding Independence's due
diligence, if Independence is unable to commence the transportation
service for Shipper as contemplated herein by November 1, 1999,
Independence will continue to proceed with due diligence to complete
construction of the necessary pipeline facilities, and commence
transportation service for Shipper at the earliest practicable date
thereafter. Independence will not be liable to Shipper if
Independence is unable to complete the construction of such
authorized and necessary Independence Project pipeline facilities and
commence the firm transportation service contemplated herein by
November 1, 1999.
5. Conditions Precedent. The commencement of service under
the Service Agreement, and Independence's and Shipper's respective
rights and obligations under the Service Agreement, are expressly
made subject to the satisfaction of each of the following conditions
precedent:
(a) Receipt and acceptance by Independence of all necessary
certificates and other authorizations required by the FERC and all
other necessary authorizations and approvals from other governmental
or regulatory agencies having jurisdiction, for the construction,
ownership and operation of the Independence Project by Independence
and the provision of transportation services consistent with the
terms and conditions of this Agreement; and
(b) Receipt of the requisite affirmative vote of the Management
Committee of Independence approving the construction of the
Independence Project; and
(c) Completion by Independence of construction of the pipeline
facilities required to provide firm transportation service for
Shipper pursuant to the Service Agreement; and
(d) Availability to Shipper of upstream capacity on ANR's
SupplyLink Expansion Project proposed in FERC Docket No. CP97-319
prior to or contemporaneously with the facilities contemplated herein
being placed into service.
6. Authorizations and Rate Methodology.
(a) Satisfactory Regulatory Authorizations. All governmental
permits, certificates, and other authorizations required in Paragraph
5(a) must be obtained in form and substance satisfactory to
Independence, in the exercise of its sole discretion. All
governmental and regulatory approvals required by this Agreement must
be duly granted by the FERC, or other governmental or regulatory
agency having jurisdiction, and must be final and non appealable;
provided that Independence may waive the condition that any such
approval be final and non appealable.
(b) Rates and Rate Design Methodology. Shipper expressly
agrees: (i) with the rate design methodology (including but not
limited to the capital structure, cost of service, rate base, rate
design determinants, and rate of return) set forth in the FERC
Application; (ii) to support such rate design methodology; and (iii)
to pay Independence the rates as approved by FERC from time to time.
7. Term. This Agreement shall become effective when executed
by both Independence and Shipper, and shall remain in effect unless
and until terminated as hereinafter provided.
(a) Termination of Precedent Agreement. This Agreement may be
terminated by either Party by giving sixty (60) days prior written
notice of its intention to terminate to the other Party if any of the
events set forth below occur; provided, however, that such
termination shall not be effective if during the sixty (60) days
notice period, the event that gave rise to the right to terminate
this Agreement is remedied:
(i) Independence has not received and accepted the
necessary FERC authorizations for the Independence Project on or
before November 1, 1999.
(ii) Independence has not completed the construction of the
authorized Independence Project pipeline facilities necessary to
provide transportation service for Shipper by November 1, 2000.
(b) Commencement of Service. If this Agreement is not
terminated pursuant to Paragraph 7(a) above, then this Agreement will
terminate by its express terms on the date of commencement of service
under the Service Agreement, and thereafter Independence's and
Shipper's respective rights and obligations related to the
transactions contemplated herein shall be determined pursuant to the
terms and conditions of the Service Agreement and the terms and
conditions of Independence's FERC Gas Tariff, as amended from time
to time.
8. Assignment. This Agreement shall be binding upon
Independence, Shipper and their successors and assigns; and neither
Party shall assign this Agreement or any rights or obligations
hereunder without first obtaining the prior written consent of the
other Party (which consent shall not be unreasonably withheld) and
subject to the receipt of any necessary governmental and regulatory
authorizations. Nothing contained herein shall prevent either Party
from pledging, mortgaging or assigning its rights as security for its
indebtedness and either Party may assign to the pledgee or mortgagee
(or to a trustee for a holder of such indebtedness) any monies due or
to become due under any Service Agreement.
9. Modification or Waiver. No modification or waiver of the
terms and conditions of this Agreement shall be made except by the
execution by the Parties of a written amendment to this Agreement.
10. Notices. All notices, requests, demands, instructions and
other communications required or permitted to be given hereunder
shall be in writing and shall be delivered personally or mailed by
certified mail, postage prepaid and return receipt requested or by
facsimile, as follows:
If to Independence:
Independence Pipeline Company
2800 Post Oak Blvd.
Houston, TX 77056
Attention: Frank J. Ferazzi
Telephone No. (713) 215-2000
Facsimile No. (713) 215-2549
If to Shipper:
DirectLink Gas Marketing Company
9 Greenway Plaza, 22nd Floor
Houston, Texas 77046
Attention: Donald H. Gullquist
Telephone: (713) 877-7800
Fax: (713) 877-7512
or to such other place within the United States of America as either
Party may designate by written notice to the other Party. All notices
given by personal delivery or certified mail shall be effective on
the date of actual receipt at the appropriate address. Notice given
by facsimile shall be effective upon actual receipt if received
during recipient's normal business hours or at the beginning of the
next business day after receipt if received after the recipient's
normal business hours.
11. Limitation of Liability. Shipper agrees that any and all
claims, demands and causes of action that it may bring against
Independence shall be limited to the assets of Independence.
Execution of this Agreement does not bind any affiliate of
Independence or require any affiliate of Independence to undertake
any obligation in connection with this Agreement. Accordingly,
Shipper hereby waives its rights to proceed against any affiliates of
Independence. Shipper and Independence further agree that neither
Party shall be liable to the other Party for incidental,
consequential or indirect damages under this Agreement, whether
arising in contract, tort or otherwise.
12. No Third Person Beneficiary. This Agreement shall not
create any rights in third parties, and no provision hereof shall be
construed as creating any obligations for the benefit of, or rights
in favor of, any person or entity other than Independence and Shipper.
13. Governing Law. THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF LAW OR RULE WHICH WOULD
REFER ANY MATTER TO THE LAWS OF A JURISDICTION OTHER THAN THE STATE
OF DELAWARE.
14. Multiple Counterparts. This Agreement may be executed by
the Parties in any number of counterparts, each of which shall be
deemed an original instrument, but all of which shall constitute but
one and the same agreement.
15. Effect of Invalid Provision. Except as otherwise expressly
stated herein, in the event any provision contained in this Agreement
shall for any reason be held invalid, illegal or unenforceable by a
court or regulatory agency of competent jurisdiction by reason of a
statutory change or enactment, such invalidity, illegality or
unenforceability shall not affect the remaining provisions of this
Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
duly executed in multiple originals by their duly authorized officers
as of the date first written above.
Independence Pipeline Company DirectLink Gas Marketing Company
By: /s/ Frank J. Ferazzi By: /s/ Donald H. Gullquist
_______________________ ________________________
Frank J. Ferazzi Donald H. Gullquist
FORM OF AGREEMENT
Rate Schedule FTS
Date: _____________ Contract No. _____________
SERVICE AGREEMENT
This AGREEMENT is entered into by Independence Pipeline Company
(Transporter) and DirectLink Gas Marketing Company (Shipper).
WHEREAS, Shipper has requested Transporter to transport Gas on its
behalf and Transporter represents that it is willing to transport Gas
under the terms and conditions of this Agreement.
NOW, THEREFORE, Transporter and Shipper agree that the terms below,
together with the terms and conditions of Transporter's applicable
Rate Schedule and General Terms and Conditions of Transporter's FERC
Gas Tariff constitute the transportation service to be provided and
the rights and obligations of Shipper and Transporter.
1. Authority for Transportation Service will be under Section 284G.
2. Rate Schedule: FTS
3. Contract Quantities:
Receipt Point(s): Defiance, Ohio
Delivery Point(s): Leidy, Pennsylvania
Primary Route(s): Defiance, Ohio to Leidy, Pennsylvania
Contract Quantities:
FTS Annual: 500,000 Dth/d
FTS Winter: 62,500 Dth/d
Such Contract Quantities shall be reduced for scheduling
purposes, but not for billing purposes, by the Contract Quantities
that Shipper has released through Transporter's capacity release
program for the period of any release.
4. Term:
This agreement shall be effective _______, _____ and shall
remain in force and effect until 9:00 a.m. Central Standard Time
___________, _____ and thereafter until terminated by Transporter or
Shipper upon at least 2 years written notice, provided however, this
agreement shall terminate immediately and, subject to the receipt of
necessary authorizations if any, Transporter may discontinue service
hereunder if (a) Shipper, in Transporter's reasonable judgement fails
to demonstrate creditworthiness, and (b) Shipper fails to provide
adequate Security in accordance with Section 17.5 of the General
Terms and Conditions.
5. Rates:
Maximum rates, charges, and fees shall be applicable for the
entitlements and quantities delivered pursuant to this Agreement
unless Transporter has advised Shipper in writing at the address
below or by Transporter's EBB that it has agreed otherwise.
It is further agreed that Transporter may seek authorization
from the Commission and/or other appropriate body at any time and
from time to time to change any rates, charges or other provisions in
the applicable Rate Schedule and General Terms and Conditions of
Transporter's FERC Gas Tariff, and Transporter shall have the right
to place such changes in effect in accordance with the Natural Gas
Act. This Agreement shall be deemed to include such changes and any
changes which become effective by operation of law and Commission
order. Nothing contained herein shall be construed to deny Shipper
any rights it may have under the Natural Gas Act, including the right
to participate fully in rate or other proceedings by intervention or
otherwise to contest increased rates in whole or in part.
6. Incorporation by Reference
The provisions of Transporter's applicable Rate Schedule and the
General Terms and Conditions of Transporter's FERC Gas Tariff are
specially incorporated herein by reference and made a part hereof.
7. Notices:
All notice can be given by telephone or other electronic means,
however, such notice shall be confirmed in writing at the address
below or through Transporter's EBB. Shipper or Transporter may
change the addresses below by written notice to the other without the
necessity of amending this agreement:
Transporter:
Independence Pipeline Company
2800 Post Oak Boulevard
Houston, TX 77056
Attention: Frank J. Ferazzi
Telephone: (713) 215-2000
FAX: (713) 215-2549
Shipper:
DirectLink Gas Marketing Company
9 Greenway Plaza, 22nd Floor
Houston, Texas 77046
Attention: Clark C. Smith
Telephone: (713) 877-7800
Fax: (713) 877-7512
8. Further Agreement
None
9. Operational Flow Orders
Shipper hereby guarantees to Transporter that each contract it
has entered into in connection with the Gas to be transported under
this Agreement contains a provision that permits Transporter to issue
an effective Operational Flow Order pursuant to Section 10 of the
General Terms and Conditions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective Officers or Representative thereunto
duly authorized to be effective as of the date stated above.
SHIPPER: DirectLink Gas Marketing Company
By: ______________________
Title: ___________________
Date: ____________________
TRANSPORTER: Independence Pipeline Company
By: ______________________
Title: ___________________
Date: ____________________
EXHIBIT H-1
Proposed Form of Public Notice
(Designated as EX-99 for EDGAR purposes)
UNITED STATES OF AMERICA
before the SECURITIES AND EXCHANGE COMMISSION
PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 Release No. _______
In the Matter of
NATIONAL FUEL GAS COMPANY
10 Lafayette Square
Buffalo, NY 14203
NATIONAL FUEL GAS DISTRIBUTION CORPORATION
10 Lafayette Square
Buffalo, NY 14203
NATIONAL FUEL GAS SUPPLY CORPORATION
10 Lafayette Square
Buffalo, NY 14203
SENECA RESOURCES CORPORATION
10 Lafayette Square
Buffalo, NY 14203
NATIONAL FUEL RESOURCES, INC.
165 Lawrence Bell Drive
Suite 120
Williamsville, NY 14221
LEIDY HUB, INC.
10 Lafayette Square
Buffalo, NY 14203
UTILITY CONSTRUCTORS, INC.
East Erie Extension
Linesville, PA 16424
HIGHLAND LAND & MINERALS, INC.
10 Lafayette Square
Buffalo, NY 14203
DATA-TRACK ACCOUNT SERVICES, INC.
10 Lafayette Square
Buffalo, NY 14203
HORIZON ENERGY DEVELOPMENT, INC.
10 Lafayette Square
Buffalo, NY 14203
SENECA INDEPENDENCE PIPELINE COMPANY
10 Lafayette Square
Buffalo, NY 14203
NIAGARA INDEPENDENCE MARKETING COMPANY
10 Lafayette Square
Buffalo, NY 14203
NOTICE OF PROPOSED ACQUISITION OF INTEREST IN BUSINESSES
National Fuel Gas Company ("National"), a registered
holding company, and its wholly-owned subsidiaries National Fuel
Gas Distribution Corporation ("Distribution"), National Fuel Gas
Supply Corporation ("Supply"), Seneca Resources Corporation
("Seneca"), Utility Constructors, Inc. ("UCI"), Highland Land
&Minerals, Inc. ("Highland"), Leidy Hub, Inc. ("Leidy"),
Data-Track Account Services, Inc. ("Data-Track"), National Fuel
Resources, Inc. ("NFR"), Horizon Energy Development, Inc.
("Horizon"), Seneca Independence Pipeline Company ("Seneca
Independence") and Niagara Independence Marketing Company
("Niagara Independence") have filed an Application-Declaration
with this Commission pursuant to Sections 9(a), 10, 11(b) and
12(b) of the Public Utility Holding Company Act of 1935, as
amended (the "Act"), the Gas Related Activities Act of 1990, and
Rules 16, 23, 24, 45, 51, 52, 80(b) and 81 promulgated under the
Act.
National and its subsidiaries seek approval of the
acquisition by Seneca Independence of an equal partnership
interest, expected to be 25%, in Independence Pipeline Company, a
Delaware general partnership (the "Pipeline Partnership"), and
the acquisition by Niagara Independence of an equal 25% interest
in DirectLink Gas Marketing Company, a Delaware general
partnership (the "Marketing Partnership"). The Pipeline
Partnership plans to build and operate interstate natural gas
pipeline facilities to extend from Defiance, Ohio to Leidy,
Pennsylvania, a distance of about 370 miles, at a cost of about
$630 million. The Pipeline Partnership plans to borrow 70% of
the construction cost from commercial sources, and have the
partners contribute the remaining 30% as capital contributions in
equal shares.
The Marketing Partnership would purchase firm natural gas
transportation services from the Pipeline Partnership and from
other interstate pipeline companies, at rates regulated by the
Federal Energy Regulatory Commission ("FERC"), and would buy and
sell natural gas and engage in related transactions.
The applicants-declarants are also seeking authority for
(i) National to make loans to Seneca Independence and Niagara
Independence and provide credit support to Seneca Independence,
Niagara Independence, the Pipeline Partnership and/or the
Marketing Partnership, (ii) Seneca Independence to make loans and
provide credit support to the Pipeline Partnership, and (iii)
Niagara Independence to make loans and provide credit support to
the Marketing Partnership, all of the above to be in proportion
to the percentage interests held by Seneca Independence and
Niagara Independence in the Pipeline Partnership and the
Marketing Partnership, respectively.
The Application-Declaration and any amendments thereto are
available for public inspection through the Commission's Office
of Public Reference. Interested persons wishing to comment or
request a hearing should submit their views in writing to the
Secretary, Securities and Exchange Commission, Washington, D.C.
20549, and serve a copy on the applicant at the address specified
above. Proof of service (by Affidavit or, in case of an
attorney-at-law, by Certificate) should be filed with the
request. Any request for a hearing shall identify specifically
the issues of fact or law that are disputed. A person who so
requests will be notified of any hearing, if ordered, and will
receive a copy of any notice or order issued in this matter.
After said date, the Application-Declaration, as filed or
as it may be amended, may be granted and/or permitted to become
effective.
For the Commission, by the Division of Investment
Management, pursuant to delegated authority.
Jonathan G. Katz Secretary
