UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 1-10042
ATMOS ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
TEXAS AND VIRGINIA 75-1743247
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1800 Three Lincoln Centre
5430 LBJ Freeway, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
(972) 934-9227
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
Number of shares outstanding of each of the issuer's classes of
common stock, as of May 1, 1998.
Class Shares Outstanding
----- ------------------
No Par Value 30,087,113<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
March 31, September 30,
1998 1997
------------ ------------
ASSETS
Property, plant and equipment $1,384,992 $1,332,672
Less accum. depreciation and amort. 508,923 483,545
---------- ----------
Net property, plant and equipment 876,069 849,127
Current assets
Cash and cash equivalents 10,025 6,016
Accounts receivable, net 110,442 71,217
Inventories of supplies and mdse. 13,289 12,333
Gas stored underground 22,910 48,122
Prepayments 4,132 6,017
---------- ----------
Total current assets 160,798 143,705
Deferred charges and other assets 111,307 95,479
---------- ----------
$1,148,174 $1,088,311
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
Common stock $ 150 $ 148
Additional paid-in capital 262,295 251,174
Retained earnings 117,630 75,938
---------- ----------
Total shareholders' equity 380,075 327,260
Long-term debt 252,152 302,981
---------- ----------
Total capitalization 632,227 630,241
Current liabilities
Current maturities of long-term debt 57,508 15,201
Notes payable to banks 146,843 167,300
Accounts payable 73,463 62,626
Taxes payable 27,332 416
Customers' deposits 13,581 15,098
Other current liabilities 51,198 52,582
---------- ----------
Total current liabilities 369,925 313,223
Deferred income taxes 87,486 87,828
Deferred credits and other liabilities 58,536 57,019
---------- ----------
$1,148,174 $1,088,311
========== ==========
See accompanying notes to condensed consolidated financial
statements.
- 2 -<PAGE>
ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Three months ended March 31,
-----------------------------
1998 1997
-------- --------
Operating revenues $288,550 $362,637
Purchased gas cost 164,579 238,389
-------- --------
Gross profit 123,971 124,248
Operating expenses
Operation 33,227 43,562
Maintenance 2,288 3,150
Depreciation and amortization 11,876 11,553
Taxes, other than income 9,377 10,133
Income taxes 22,710 18,775
-------- --------
Total operating expenses 79,478 87,173
-------- --------
Operating income 44,493 37,075
Other income 2,241 2,214
Interest charges, net 9,336 8,663
-------- --------
Net income $ 37,398 $ 30,626
======== ========
Basic net income per share $ 1.26 $ 1.04
======== ========
Diluted net income per share $ 1.25 $ 1.04
======== ========
Cash dividends per share $ .265 $ .252
======== ========
Weighted average
shares outstanding:
Basic 29,740 29,379
======== ========
Diluted 29,965 29,397
======== ========
See accompanying notes to condensed consolidated financial
statements.
- 3 -<PAGE>
ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In thousands, except per share data)
Six months ended
March 31,
--------------------
1998 1997
-------- --------
Operating revenues $583,881 $643,261
Purchased gas cost 360,309 421,744
-------- --------
Gross profit 223,572 221,517
Operating expenses
Operation 69,268 81,735
Maintenance 4,769 5,738
Depreciation and amortization 23,784 23,065
Taxes, other than income 17,596 18,312
Income taxes 34,994 29,624
-------- --------
Total operating expenses 150,411 158,474
-------- --------
Operating income 73,161 63,043
Other income 3,004 3,102
Interest charges 18,645 17,364
-------- --------
Net income $ 57,520 $ 48,781
======== ========
Basic net income per share $ 1.94 $ 1.66
======== ========
Diluted net income per share $ 1.94 $ 1.66
======== ========
Cash dividends per share $ .53 $ .50
======== ========
Weighted average shares outstanding
Basic 29,654 29,310
======= ======
Diluted 29,668 29,328
======= ======
See accompanying notes to condensed consolidated financial
statements.
- 4 -<PAGE>
ATMOS ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
Six months ended
March 31,
-------------------
1998 1997
-------- --------
Cash Flows From Operating Activities
Net income $57,520 $ 48,781
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization
Charged to depreciation and
amortization 23,784 23,065
Charged to other accounts 1,634 1,938
Deferred income taxes (benefit) (342) 3,584
Net change in operating assets and
liabilities 7,457 (20,650)
-------- --------
Net cash provided by
operating activities 90,053 56,718
Cash Flows From Investing Activities
Capital expenditures (52,575) (53,547)
Retirements of property, plant and
equipment 215 314
-------- --------
Net cash used in investing activities (52,360) (53,233)
Cash Flows From Financing Activities
Net decrease in notes payable to banks (20,457) (15,943)
Cash dividends paid (15,828) (14,789)
Issuance of long-term debt - 40,000
Repayment of long-term debt (8,522) (9,724)
Issuance of common stock 11,123 5,382
-------- --------
Net cash provided (used) by financing
activities (33,684) 4,926
-------- --------
Net increase in cash and cash equivalents 4,009 8,411
Cash and cash equivalents at beginning
of period 6,016 8,757
-------- --------
Cash and cash equivalents at end
of period $ 10,025 $ 17,168
======== ========
See accompanying notes to condensed consolidated financial
statements.
- 5 -<PAGE>
ATMOS ENERGY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1998
1. Unaudited interim financial information
In the opinion of management, all material adjustments
necessary for a fair presentation have been made to the unaudited
interim period financial statements. Such adjustments consisted
only of normal recurring accruals. Because of seasonal and other
factors, the results of operations for the six-month period ended
March 31, 1998 are not indicative of expected results of
operations for the year ending September 30, 1998. These interim
financial statements and notes are condensed as permitted by the
instructions to Form 10-Q, and should be read in conjunction with
the audited consolidated financial statements of Atmos Energy
Corporation ("Atmos" or the "Company") in its 1997 annual report
to shareholders. The condensed consolidated balance sheet of
Atmos as of March 31, 1998, the related condensed consolidated
statements of income for the three-month and six-month periods
ended March 31, 1998 and 1997, and the condensed consolidated
statements of cash flows for the six-month periods ended March
31, 1998 and 1997, included herein have been subjected to a
review by Ernst & Young LLP, the Company's independent
accountants, whose report is included herein.
Common stock - As of March 31, 1998, the Company had
75,000,000 shares of common stock, no par value (stated at $.005
per share), authorized and 30,056,436 shares outstanding. At
September 30, 1997 29,642,437 shares were outstanding.
2. Business Combination
As discussed in Note 2 of notes to consolidated financial
statements in the Company's Form 10-K for the year ended
September 30, 1997, on July 31, 1997, Atmos acquired by means of
a merger all of the assets and liabilities of United Cities Gas
Company ("UCGC"). The transaction was accounted for as a pooling
of interests. Therefore, financial statements for prior periods
have been restated to reflect the merger. Certain UCGC account
balances for prior periods have been reclassified to conform
UCGC's classifications to Atmos' presentation.
- 6 -<PAGE>
3. Rates
The Company's ratemaking activity over the three-year period
ended September 30, 1997 was discussed in Note 3 of notes to
consolidated financial statements in the Company's Form 10-K for
the year ended September 30, 1997. The status of such activity
at March 31, 1998 has not changed, except as discussed below.
In fiscal 1997, the Colorado Office of Consumer Counsel
filed a complaint with the Colorado Public Utilities Commission
("Colorado Commission") requesting a $3.5 million reduction in
the annual revenues in Colorado of Greeley Gas Company ("the
Greeley Gas Division"). On December 17, 1997, a hearing was held
at the Colorado Commission presenting a Stipulation and Agreement
reached by the Greeley Gas Division and the Colorado Office of
Consumer Counsel. It settled the Consumer Counsel's complaint
against the Greeley Gas Division for a $1.6 million reduction in
annual revenues. The Stipulation and Agreement became effective
in late January 1998. The reduction will decrease the estimated
annual gross profit of the Greeley Gas Division by approximately
4% and the gross profit of Atmos by approximately .5%.
4. Contingencies
For a review of the status of the Company's litigation and
environmental matters as of September 30, 1997, please refer to
Note 5 of notes to consolidated financial statements in the
Company's Form 10-K for the year ended September 30, 1997.
Material contingencies and new developments since September 30,
1997 are discussed below.
Litigation
On March 15, 1991, suit was filed in the 15th Judicial
District Court of Lafayette Parish, Louisiana, by the "Lafayette
Daily Advertiser" and others against Trans Louisiana Gas Company
("Trans La Division"), Trans Louisiana Industrial Gas Company,
Inc. ("TLIG"), a wholly owned subsidiary of the Company, and
Louisiana Intrastate Gas Corporation and certain of its
affiliates ("LIG"). LIG is the Company's primary supplier of
natural gas in Louisiana and is not otherwise affiliated with the
Company.
The plaintiffs purported to represent a class consisting of
all residential and commercial gas customers in the Trans La
Division's service area. Among other things, the lawsuit alleged
that the defendants violated the antitrust laws of the state of
Louisiana by manipulating the cost-of-gas component of the Trans
La Division's gas rate to the purported customer class, thereby
causing such purported class members to pay a higher rate. The
plaintiffs made no specific allegation of an amount of damages.
The case was concluded when the Court entered its final approval
of the settlement and the suit was dismissed with prejudice at a
fairness hearing on December 15, 1997.
- 7 -<PAGE>
In Colorado, the Greeley Gas Division is a defendant in
several lawsuits filed as a result of a fire in a building in
Steamboat Springs, Colorado on February 3, 1994. The plaintiffs
claim that the fire resulted from a leak in a severed gas service
line owned by the Greeley Gas Division. On January 12, 1996, the
jury awarded the plaintiffs approximately $2.5 million in
compensatory damages and approximately $2.5 million in punitive
damages. The jury assessed the Company with liability for all of
the damages awarded. The Company has appealed the judgment to
the Colorado Court of Appeals. The Company believes it has
meritorious issues for such appeal but cannot assess, at this
time, the likelihood of success in the appeal. The Company has
adequate insurance to cover the compensatory and punitive damages
awarded.
In March 1997, Western Kentucky Gas Company ("Western
Kentucky Division") was named as a defendant in a lawsuit in the
District Court in Danville, Kentucky, as a result of an explosion
and fire at a residence in Danville, Kentucky on March 4, 1997.
The plaintiffs, Lisa Benedict, et al, who were leasing the
residence, suffered serious burns in the accident and have
alleged that the Western Kentucky Division was negligent in
installing and servicing gas lines at the residence. The
plaintiffs, who are also suing the landlord/owner of the house,
have asked for punitive damages and compensatory damages in the
case. Discovery has just begun; accordingly, the Company cannot
assess, at this time, the likelihood of success in this case.
However, the Company believes it has adequate insurance and
reserves to cover damages that may be awarded.
In November 1997, a jury in Plaquemine, Louisiana awarded
Brian L. Heard General Contractor, Inc., ("Heard") a total of
$177,929 in actual damages and $15 million in punitive damages
resulting from a lawsuit by Heard against the Trans La Division,
the successor in interest to Oceana Heights Gas Company, which
the Company acquired in November 1995. The trial judge also
awarded interest on the total judgment amount. The claims are
for events that occurred prior to the time the Company acquired
Oceana Heights Gas Company. Heard claimed damages associated
with delays he allegedly incurred in constructing a sewer system
in Iberville Parish, Louisiana. Heard filed the suit against the
Trans La Division and two other defendants, alleging that gas
leaks had caused delays in Heard s completion of a sewer project,
resulting in lost business opportunities for the contractor
during 1994. The Company believes that the gas leaks claimed in
the lawsuit were minor leaks, common in normal operations of gas
systems, and were repaired in accordance with standard industry
practices and did not cause the damages claimed.
The jury awarded punitive damages under a prior Louisiana
statute that allowed punitive damages to be awarded in cases
involving hazardous substances, which, as defined in the statute,
included natural gas. Although not retroactive, the Louisiana
legislature repealed the statute in 1996. The Company does not
believe that punitive damages are applicable in the case and
- 8 -<PAGE>
should not be awarded because there were no direct damages caused
by natural gas. The Company is appealing the verdict and
aggressively pursuing the reversal of the judgment. However, the
Company cannot assess, at this time, the likelihood of the
judgment being reversed on appeal. The Company is in the process
of reviewing its insurance coverage with respect to this case.
Although Oceana Heights Gas Company was insured, it appears that
a claim of this nature will not be covered by such insurance.
However, the Company does not expect the final outcome of this
case to have a material adverse effect on the financial
condition, results of operations or net cash flows of the
Company.
From time to time, other claims are made and lawsuits are
filed against the Company arising out of the ordinary business of
the Company. In the opinion of the Company's management,
liabilities, if any, arising from these other claims and lawsuits
are either covered by insurance, adequately reserved for by the
Company or would not have a material adverse effect on the
financial condition, results of operations, or net cash flows of
the Company.
Environmental Matters
The United Cities Division owned a former manufactured gas
plant site in Americus, Georgia. On May 14, 1997, the Georgia
Environmental Protection Division requested that UCGC enter into
a proposed voluntary consent order for the remediation of the
Americus site. Subsequently, the other responsible parties at
the site advised UCGC that they would be willing to enter into a
"cashout" settlement for a one-time payment by the Company of
$250,000. A Settlement Agreement wherein the Company agreed to
pay $250,000 for a "cashout" settlement was entered into by the
parties on December 16, 1997. The agreement contains a Covenant
not to sue, an indemnification provision from the other parties
and gives the other parties all responsibility for investigation
and environmental response actions of the site. As of March 31,
1998, the Company had accrued and deferred for recovery amounts
related to this site.
The Company addresses other environmental matters from time
to time in the regular and ordinary course of its business.
Management expects that future expenditures related to response
action at any site will be recovered through rates or insurance,
or shared among other potentially responsible parties.
Therefore, the costs of responding to these sites are not
expected to materially affect the financial condition, results of
operations, or net cash flows of the Company.
5. Short-term debt
At March 31, 1998, the Company had committed, short-term,
unsecured bank credit facilities totaling $187,000,000, of which
$65,000,000 was unused. The Company also had aggregate
- 9 -<PAGE>
uncommitted lines of credit totaling $160,000,000, of which
$140,300,000 was unused.
6. Statements of cash flows
Supplemental disclosures of cash flow information for the
six-month periods ended March 31, 1998 and 1997 are presented
below.
Six months ended
March 31,
1998 1997
------ ------
(In thousands)
Cash paid for
Interest $18,460 $13,375
Income taxes 7,399 5,658
7. Earnings per share
In 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings per
Share. Statement 128 replaced the previously reported primary
and fully diluted earnings per share with basic and diluted
earnings per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of options,
warrants, and convertible securities. Diluted earnings per share
is very similar to the previously reported fully diluted earnings
per share. All earnings per share amounts for all periods have
been presented, and where necessary, restated to conform to the
Statement 128 requirements. Adoption of Statement 128 did not
change the fully diluted earnings per share amounts for the
three-month and six-month periods ended March 31, 1997.
Reconciliations of the numerators and denominators of the basic
and diluted per-share computations for net income for the three-
month and six-month periods ended March 31, 1998 and 1997 are as
follows:
- 10 -<PAGE>
For the three months ended
March 31, 1998
-----------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
(In thousands)
Basic EPS:
Income available to common
stockholders $37,398 29,740 $1.26
=====
Effect of dilutive securities:
Restricted stock - 211
Stock options - 14
------- ------
Diluted EPS:
Income available to common
stockholders and assumed
conversions $37,398 29,965 $1.25
======= ====== =====
For the three months ended
March 31, 1997
-----------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
(In thousands)
Basic EPS:
Income available to common
stockholders $30,626 29,379 $1.04
=====
Effect of dilutive securities:
Restricted stock - -
Stock options - 18
------- ------
Diluted EPS:
Income available to common
stockholders and assumed
conversions $30,626 29,397 $1.04
======= ====== =====
- 11 -<PAGE>
For the six months ended
March 31, 1998
-----------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
(In thousands)
Basic EPS:
Income available to common
stockholders $57,520 29,654 $1.94
=====
Effect of dilutive securities:
Restricted stock - -
Stock options - 14
------- ------
Diluted EPS:
Income available to common
stockholders and assumed
conversions $57,520 29,668 $1.94
======= ====== =====
For the six months ended
March 31, 1997
-----------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
(In thousands)
Basic EPS:
Income available to common
stockholders $48,781 29,310 $1.66
=====
Effect of dilutive securities:
Restricted stock - -
Stock options - 18
------- ------
Diluted EPS:
Income available to common
stockholders and assumed
conversions $48,781 29,328 $1.66
======= ====== =====
- 12 -<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
The Board of Directors
Atmos Energy Corporation
We have reviewed the accompanying condensed consolidated balance sheet of
Atmos Energy Corporation as of March 31, 1998, and the related condensed
consolidated statements of income for the three-month and six-month periods
ended March 31, 1998 and 1997 and the condensed consolidated statements of
cash flows for the six-month periods ended March 31, 1998 and 1997. These
financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly,
we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the accompanying condensed consolidated financial
statements at March 31, 1998, and for the three-month and six-month periods
ended March 31, 1998 and 1997 for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Atmos Energy Corporation as of
September 30, 1997, and the related consolidated statements of income,
shareholders' equity, and cash flows for the year then ended (not presented
herein) and in our report dated November 11, 1997, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of September 30, 1997, is fairly stated, in
all material respects, in relation to the consolidated balance sheet from
which it has been derived.
ERNST & YOUNG LLP
Dallas, Texas
April 27, 1998
- 13 -<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
The following discussion should be read in conjunction with the
condensed consolidated financial statements contained in this Quarterly
Report on Form 10-Q and Management's Discussion and Analysis contained in
the Company's 1997 Annual Report to Shareholders and the Company's Annual
Report on Form 10-K for the year ended September 30, 1997.
The Company distributes and sells natural gas and propane to
residential, commercial, industrial and agricultural customers in thirteen
states. Such business is subject to regulation by state and/or local
authorities in each of the states in which the Company operates. In
addition, the Company's business is affected by seasonal weather patterns,
competitive factors within the energy industry, and economic conditions in
the areas that the Company serves.
Cautionary Statement under the Private Securities Litigation Reform Act of
1995
The matters discussed or incorporated by reference in this Quarterly
Report on Form 10-Q contain "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 or Section 21E of the
Securities Exchange Act of 1934. All statements other than statements of
historical facts included in this Quarterly Report including, but not
limited to, those contained in the following sections, Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of Operations",
and Note 4 of notes to condensed consolidated financial statements,
regarding the Company's financial position, business strategy and plans and
objectives of management of the Company for future operations, are forward-
looking statements made in good faith by the Company. When used in this
Report or in any of the Company's other documents or oral presentations, the
words "anticipate," "report," "objective," "forecast," "goal" or similar
words are intended to identify forward-looking statements. Such forward-
looking statements are subject to risks and uncertainties that could cause
actual results to differ materially from those expressed or implied in the
statements relating to the Company's operations, markets, services, rates,
recovery of costs, availability of gas supply, and other factors. These
risks and uncertainties include, but are not limited to, national, regional
and local economic competitive conditions, regulatory and business trends
and decisions, technological developments, Year 2000 issues, inflation
rates, weather conditions, and other uncertainties, all of which are
difficult to predict and many of which are beyond the control of the
Company. Accordingly, while the Company believes these forward-looking
statements to be reasonable, there can be no assurance that they will
approximate actual experience or that the expectations derived from them
will be realized.
Ratemaking Activity
In December 1997, the Company and the Colorado Office of Consumer
Counsel presented a Stipulation and Agreement to the Colorado Commission to
settle the Consumer Counsel's $3.5 million rate reduction complaint against
- 14 -<PAGE>
the Greeley Gas Division. It was approved by the Colorado Commission,
effective in late January 1998. It provides for a reduction of
approximately $1.6 million in annual revenues in Colorado. The reduction
will decrease the estimated annual gross profit of the Greeley Gas Division
by approximately 4% and the gross profit of Atmos by approximately .5%.
Year 2000
The Year 2000 Issue is the result of computer programs being written
using two digits rather than four to define the applicable year. Any
computer programs that have date-sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business
activities.
The Company has developed a Year 2000 plan to identify, evaluate,
implement and test solutions to issues regarding four digit dates. The
Company understood the importance of this issue several years ago and began
implementing four digit solutions to in-house developed systems that were
being enhanced or changed due to non-Year 2000 issues. The major mission
critical system of the Company is a customer information system that is
being replaced and is planned to be placed in full operation in September
1998. This system uses many best practices and will add to the quality of
service to the Company's customers. The Company's Year 2000 plan includes
implementing all critical solutions by the end of calendar 1998 and testing
during calendar 1999. At this time, the Company, does not have a specific
estimated total cost for the remaining systems or mechanical device changes,
but does not believe that it will be a material amount.
Weather and Seasonality
The Company's natural gas and propane distribution businesses are
seasonal due to weather conditions in the Company's service areas. Sales
are affected by winter heating season requirements. Sales to agricultural
customers (who use natural gas as fuel in the operation of irrigation pumps)
during the period from April through September are affected by rainfall
amounts. These factors generally result in higher operating revenues and
net income during the period from October through March of each year and
lower operating revenues and either net losses or lower net income during
the period from April through September of each year. Although weather for
the six months ended March 31, 1998 was 4% warmer than normal, it was 2%
colder than weather in the corresponding period of the prior year and sales
volumes to weather sensitive customers increased .5 billion cubic feet
("Bcf"). The Company has weather normalization adjustments ("WNAs") in
Georgia and Tennessee, where it serves approximately 170,000 customers or
53% of the United Cities Division's total customers and revenues. The WNAs
increase the base rate when weather is warmer than normal and decrease it
when weather is colder than normal. The effect of the WNAs was to increase
revenues approximately $.6 million for the six months ended March 31, 1998,
as compared with an increase of approximately $2.8 million for the six month
period ended March 31, 1997. The Company does not have WNAs in its other
service areas.
- 15 -<PAGE>
FINANCIAL CONDITION
For the six months ended March 31, 1998 net cash provided by operating
activities totaled $90.1 million compared with $56.7 million for the six
months ended March 31, 1997. The increase resulted from increased net
income and decreased net operating assets and liabilities. Net income
increased $8.7 million to $57.5 million for the six months ended March 31,
1998 from $48.8 million for the six months ended March 31, 1997. Net
operating assets and liabilities decreased $7.5 million for the six months
ended March 31, 1998 compared with an increase of $20.7 million for the six
months ended March 31, 1997. This decrease in net operating assets and
liabilities resulted primarily from large swings in accounts receivable,
accounts payable and inventories of gas in underground storage that occur
when entering and leaving the winter or heating season. These fluctuations
were due primarily to weather in the month of March 1998 being 38% colder
than in the month of March 1997.
Major cash flows used in investing activities for the six months ended
March 31, 1998 included capital expenditures of $52.6 million compared with
$53.5 million for the six months ended March 31, 1997. The capital
expenditures budget for fiscal 1998 is currently $109.1 million, including
$37.0 million for completing the Customer Service Initiative ("CSI"), as
compared with actual capital expenditures of $122.3 million in fiscal 1997.
Other budgeted capital projects include major expenditures for mains,
services, meters, vehicles and computer software and equipment. The CSI
project includes a new Customer Information System, a call center, and
related business process and infrastructure changes which are planned to be
placed in full operation in September 1998. These expenditures will be
financed from internally generated funds and financing activities.
For the six months ended March 31, 1998, cash flows used by financing
activities amounted to $33.7 million as compared with cash flows provided of
$4.9 million for the six months ended March 31, 1997. During the six month
period, notes payable to banks decreased $20.5 million, as compared with a
decrease of $15.9 million in the six months ended March 31, 1997, due to
seasonal factors and the refinancing of short-term debt with proceeds from
the issuance of $40.0 million of long-term debt in the quarter ended
December 31, 1996. The debt issued in November 1996 consisted of $40.0
million of 6.09% term notes, payable in November 1998. Payments of long-
term debt totaled $8.5 million for the six months ended March 31, 1998.
Such payments consisted of a $3.0 million installment on the Company's 9.76%
Senior Notes, a $2.0 million installment on the Company's 11.2% Senior
Notes, an installment of $2.0 million on the Company's 8.69% Series N First
Mortgage Bonds, and installments of $1.5 million on various non-utility
notes. The Company paid $15.8 million in cash dividends during the six
months ended March 31, 1998, compared with dividends of $14.8 million paid
during the six months ended March 31, 1997. This reflects increases in the
quarterly dividend rate and in the number of shares outstanding. In the six
months ended March 31, 1998, the Company issued 413,999 shares of common
stock, of which 25,815 were for the Employee Stock Ownership Plan ("ESOP"),
221,786 were for the Direct Stock Purchase Plan ("DSPP"), 1,148 for the
Outside Directors Stock-for-Fee Plan, 111,250 for the Restricted Stock Grant
Plan and 54,000 for stock options under the Long Term Stock Plan for the
United Cities Division. In the six months ended March 31, 1997, the Company
issued 236,569 shares of common stock of which 146,484 were for the ESOP and
- 16 -<PAGE>
401(k) plans, 88,452 for the DSPP, and 1,633 for the Outside Directors
Stock-for-Fee Plan.
The Company believes that internally generated funds, its short-term
credit facilities and access to the debt and equity capital markets will
provide necessary working capital and liquidity for capital expenditures and
other cash needs for the remainder of fiscal 1998. At March 31, 1998 the
Company had $187.0 million in committed short-term credit facilities, $65.0
million of which was unused. The committed lines of credit are renewed or
renegotiated at least annually. At March 31, 1998, the Company also had
$160.0 million of uncommitted short-term lines of credit, of which $140.3
million was unused.
On April 20, 1998 the Company filed a registration statement on Form S-
3 with the SEC to register the issuance of up to $150 million of unsecured
debt securities. Before the debt securities may be issued, the registration
statement must become effective and approvals must be obtained from several
states' utility commissions. The proceeds from the debt issuance are to be
used to refinance short-term borrowings under the Company's credit
facilities.
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998, COMPARED WITH THREE MONTHS ENDED MARCH
31, 1997
Operating revenues decreased by 20% to $288.6 million for the three
months ended March 31, 1998 from $362.6 million for the three months ended
March 31, 1997. The most significant factor contributing to the decrease in
operating revenues was an 18% decrease in the average sales revenue per Mcf.
The decrease in the revenue per Mcf sold reflects a 27% decrease in the
average cost of gas per Mcf sold which is passed through to customers. In
addition, there was a 3% decrease in the volumes delivered. During the
quarter ended March 31, 1998, temperatures were 6% warmer than in the
corresponding quarter of the prior year, and were 13% warmer than the 30-
year normal weather for the quarter. The total volume of gas sold and
transported for the three months ended March 31, 1998 was 74.2 billion cubic
feet ("Bcf") compared with 76.3 Bcf for the three months ended March 31,
1997. Sales volumes to weather sensitive customer classes were lower for
the quarter ended March 31, 1998 than for the corresponding period of the
prior year due to the warmer winter weather. Sales volumes to industrial
(including agricultural) customers were reduced by lower demand by
agricultural customers and switching from sales service to transportation
service by certain large industrial customers in Kentucky. The average
sales price per Mcf sold decreased $.97 to $4.42 primarily due to a decrease
in the average cost of gas. The average cost of gas per Mcf sold decreased
27% to $2.77 for the three months ended March 31, 1998 from $3.78 for the
three months ended March 31, 1997 due to increased supply availability in
the current market.
Gross profit decreased by .2% to $124.0 million for the three months
ended March 31, 1998, from $124.2 million for the three months ended March
31, 1997. The decrease in gross profit was primarily due to the decrease in
volumes sold. Changes in cost of gas do not directly affect gross profit.
However, the Company estimates that the impact of the weather being 13%
- 17 -<PAGE>
warmer than normal and rainfall being above normal for the three months
ended March 31, 1998 caused gross profit to be approximately $6.0 million
less than it would have been had the Company experienced normal temperatures
and rainfall in its respective service areas. Weather was approximately 8%
warmer than normal for the three months ended March 31, 1997.
Operating expenses, excluding income taxes, decreased 17% to $56.8
million for the three months ended March 31, 1998 from $68.4 million for
the three months ended March 31, 1997. The major factors contributing to
the decrease in operation and maintenance expenses in the 1998 quarter were
savings from restructuring and the integration of United Cities, as well as
higher administrative and general expenses in the 1997 quarter, which
included expenses associated with severance pay of $4.4 million ($2.8
million after tax) due to management reorganization. The decrease in taxes
other than income taxes was related to taxes on decreased revenues and
payroll taxes related to the reduced labor force. Operating income
increased 20% for the three months ended March 31, 1998 to $44.5 million
from $37.1 million for the three months ended March 31, 1997. The increase
in operating income resulted from decreased operating expenses, as mentioned
above. Income taxes increased $3.9 million or 21% in the quarter ended
March 31, 1998 compared with the corresponding quarter of the prior year due
to increased pre-tax income.
Interest expense increased $.7 million, or 8%, for the three months
ended March 31, 1998 compared with the three months ended March 31, 1997 due
to an increased amount of total debt outstanding. Net income increased for
the three months ended March 31, 1998 by 22% to $37.4 million from $30.6
million for the three months ended March 31, 1997. This increase in net
income resulted primarily from the decrease in operating expenses discussed
above.
SIX MONTHS ENDED MARCH 31, 1998, COMPARED WITH SIX MONTHS ENDED MARCH 31,
1997
Operating revenues decreased by 9% to $583.9 million for the six months
ended March 31, 1998 from $643.3 million for the six months ended March 31,
1997. The primary factor contributing to the lower operating revenues was a
7% decrease in the average gas sales revenue per Mcf, due to a 12% decrease
in the average cost of gas per Mcf sold, which is reflected in revenues.
Total volumes delivered was unchanged for the six months ended March 31,
1998. However, the volume of gas sold decreased 4.0 Bcf and the volume
transported increased 4.0 Bcf compared with the six months ended March 31,
1997. This switching of industrial sales customers to transportation
service reduced gross revenues, purchased gas cost and, to a lesser extent,
gross profit. Sales volumes to weather sensitive customer classes increased
.5 Bcf for the six months ended March 31, 1998 compared with the
corresponding period of the prior year due to 2% colder weather. Sales
volumes to industrial (including agricultural) customers were reduced by
lower agricultural usage and switching by industrial sales customers to
transportation service. Although the weather in the Company's service areas
was 2% colder than weather in the corresponding six-month period of the
prior fiscal year, it was 4% warmer than 30-year normal weather. The
average sales price per Mcf decreased to $4.89 for the six months ended
March 31, 1998 from $5.27 for the six months ended March 31, 1997. The
decrease in the average sales price reflects a decrease in the average cost
- 18 -<PAGE>
of gas, partially offset by rate increases. The average cost of gas per Mcf
sold decreased to $3.28 for the six months ended March 31, 1998 from $3.71
for the six months ended March 31, 1997 because of generally lower gas
supply costs.
Gross profit increased 1% to $223.6 million for the six months ended
March 31, 1998, compared with $221.5 million for the six months ended March
31, 1997. This increase was primarily due to an increase of $.05 average
transportation revenue per Mcf and secondarily to rate increases in Texas,
Georgia and Illinois. The decreased cost of gas did not directly affect
gross profit. However, the Company estimates that the impact of the weather
being 4% warmer than normal and rainfall being above normal for the six
months ended March 31, 1998 caused gross profit to be approximately $3.9
million less than it would have been had the Company experienced normal
temperatures and rainfall in its respective service areas. Weather was
approximately 6% warmer than normal for the six months ended March 31, 1997.
Operating expenses, excluding income taxes, decreased to $115.4 million
in the six months ended March 31, 1998, from $128.9 million in the six
months ended March 31, 1997. The decrease was comprised of $12.5 million in
operation expense, $1.0 million in maintenance and $.7 million in taxes
other than income. The principal factors contributing to the decrease in
operation and maintenance expenses were savings realized in connection with
integration and reorganization initiatives and the administrative and
general expenses incurred in the six months ended March 31, 1997 in
connection with management reorganization. The increase in depreciation
related to utility plant additions placed in service during the past year.
Significant factors in the decrease in taxes other than income taxes were
lower taxes on decreased revenues and payroll taxes related to the reduced
labor force. The provision for income taxes for the six months ended March
31, 1998 increased $5.4 million from the provision for the corresponding
period of the prior year due to increased pre-tax income. Operating income
increased for the six months ended March 31, 1998 to $73.2 million from
$63.0 million for the six months ended March 31, 1997. The increase in
operating income was primarily related to the decreased operating expenses
and, to a lesser extent, to increased gross profit, as discussed above.
Interest charges increased $1.3 million, or 7%, due to an increased
amount of debt outstanding during the six months ended March 31, 1998
compared with the corresponding six-month period of the prior year. Net
income increased 18% for the six months ended March 31, 1998, to $57.5
million from $48.8 million for the six months ended March 31, 1997. The
increase in net income resulted primarily from the decrease in operating
expenses which was supplemented by an increase in gross profit. Dividends
per share increased approximately 6% to $.53 for the six months ended March
31, 1998. Diluted average shares outstanding increased 1% due to shares
issued under the Employee Stock Ownership Plan and the Direct Stock Purchase
Plan.
UTILITY AND NON-UTILITY DATA
The following table summarizes certain information regarding the
operation of the utility and non-utility businesses of the Company for each
of the six-month periods ended March 31, 1998 and 1997. Prior periods have
- 19 -<PAGE>
been restated to reflect the pooling of interests with UCGC on July 31,
1997.
Utility Non-utility Total
------- ----------- ---------
Six months ended March 31: (In thousands)
1998
Operating revenues $555,206 $28,675 $583,881
Net income 53,788 3,732 57,520
1997
Operating revenues $612,970 $30,291 $643,261
Net income 44,917 3,864 48,781
The utility business is comprised of the Company's five utility
divisions: Energas Division, Greeley Gas Division, Trans La Division,
United Cities Division and Western Kentucky Division. It includes regulated
as well as certain nonregulated utility businesses such as irrigation,
transportation and gas marketing activities in the utility divisions'
respective service areas.
The non-utility business includes the operations of UCG Storage and UCG
Energy, which includes a 45% interest in Woodward Marketing LLC, Atmos
Propane, and leasing of real estate, vehicles and appliances. The net
income for such operations for the six-month periods ended March 31, 1998
and 1997 are recapped below:
Six months ended March 31,
1998 1997
------ --------
(In thousands)
Non-utility net income:
Atmos Propane $1,554 $1,736
Woodward Marketing 1,462 1,414
Leasing and rental 474 596
Storage and other 242 118
------ -------
Total $3,732 $3,864
====== =======
Atmos Propane sells and transports propane to both wholesale and retail
customers. Propane statistics for the six-month periods ended March 31,
1998 and 1997 are included in the "Consolidated Operating Statistics" table
which appears at the end of Management's Discussion and Analysis. The
division sold 24.3 million gallons of propane for the six-month period ended
March 31, 1998, as compared with 23.7 million gallons for the six-month
period ended March 31, 1997. The decrease in revenues for the six months
ended March 31, 1998 compared with the same period last year was the result
of a lower average sales price due to comparatively lower cost of supply to
the division.
- 20 -<PAGE>
Total customers at March 31, 1998 increased 17,515, or 2%, compared
with March 31, 1997.
March 31,
--------------------------
1998 1997
------------ -----------
Meters-in-service at end of period
Residential 892,069 875,243
Commercial 96,430 94,585
Public authority and other 4,874 4,786
Industrial (including agricultural) 16,833 17,330
--------- ----------
Total natural gas meters 1,010,206 991,944
Propane customers 29,229 29,976
--------- ----------
Total 1,039,435 1,021,920
========= ==========
- 21 - <PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS
Quarter ended March 31,
1998 1997
Sales volumes -- MMcf(1) ------- -------
Residential 33,404 33,554
Commercial 14,903 15,518
Public authority and other 2,183 2,213
Industrial (including agricultural) 8,985 11,853
------- -------
Total 59,475 63,138
Transportation volumes -- MMcf(1) 14,748 13,189
------- -------
Total volumes delivered 74,223 76,327
======= =======
Propane - Gallons (000's) 13,022 12,081
Gas sales revenues (000's): ======= =======
Residential $155,456 $195,352
Commercial 66,865 85,449
Public authority and other 6,656 10,696
Industrial (including agricultural) 34,129 48,510
-------- --------
Total gas revenues 263,106 340,007
Transportation revenues 6,420 5,261
Other revenues 3,613 2,028
-------- --------
Total utility revenues 273,139 347,296
Non-utility revenues:
Propane revenues 11,375 12,559
Other revenues 4,036 2,782
-------- --------
Total non-utility revenues 15,411 15,341
-------- --------
Total operating revenues $288,550 $362,637
======== ========
Average Gas Sales Revenues per Mcf $ 4.42 $ 5.39
Average Transportation Revenue per Mcf $ .44 $ .40
Cost of Gas per Mcf Sold $ 2.77 $ 3.78
HEATING DEGREE DAYS
Service Weather Sensitive Quarter ended March 31,
Area Customers % 1998 1997 Normal
- -------------- ----------- ----- ----- ------
Energas 30% 1,762 1,839 1,884
Trans La 8% 855 882 1,068
Western Kentucky 18% 1,796 2,071 2,355
Greeley Gas 11% 2,779 2,945 2,963
United Cities 33% 1,862 1,916 2,200
----
System Average 100% 1,831 1,940 2,115
(1) Volumes are reported as metered in million cubic feet ("MMcf").
- 22 - <PAGE>
ATMOS ENERGY CORPORATION
CONSOLIDATED OPERATING STATISTICS
Six months ended March 31,
1998 1997
Sales volumes -- MMcf(1) ------- -------
Residential 59,871 58,875
Commercial 27,452 27,965
Public authority and other 4,066 4,049
Industrial (including agricultural) 18,319 22,799
------- -------
Total 109,708 113,688
Transportation volumes -- MMcf(1) 29,089 25,084
------- -------
Total volumes delivered 138,797 138,772
======= =======
Propane - Gallons (000's) 24,280 23,705
Gas sales revenues (000's): ======= =======
Residential $310,566 $340,741
Commercial 136,082 150,039
Public authority and other 15,606 19,861
Industrial (including agricultural) 74,241 88,456
-------- --------
Total gas revenues 536,495 599,097
Transportation revenues 13,255 10,360
Other revenues 5,456 3,513
-------- --------
Total utility revenues $555,206 $612,970
Non-utility revenues:
Propane revenues 21,818 25,375
Other revenues 6,857 4,916
-------- --------
Total non-utility revenues $ 28,675 $ 30,291
-------- --------
Total operating revenues $583,881 $643,261
======== ========
Average Gas Sales Revenues per Mcf $ 4.89 $ 5.27
Average Transportation Revenue per Mcf $ .46 $ .41
Cost of Gas per Mcf Sold $ 3.28 $ 3.71
HEATING DEGREE DAYS
Service Weather Sensitive Six months ended March 31,
Area Customers % 1998 1997 Normal
- -------------- ----------- ----- ----- ------
Energas 30% 3,394 3,128 3,286
Trans La 8% 1,651 1,421 1,729
Western Kentucky 18% 3,509 3,684 3,968
Greeley Gas 11% 5,150 5,237 5,313
United Cities 33% 3,503 3,489 3,726
----
System Average 100% 3,486 3,421 3,631
(1) Volumes are reported as metered in million cubic feet ("MMcf").
- 23 - <PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 4 of notes to consolidated financial statements herein for a
description of legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of Atmos Energy Corporation on
February 11, 1998, 27,391,818 votes were cast as follows:
VOTES VOTES BROKER
FOR WITHHELD NON-VOTE
---------- ---------- --------
Class III Directors:
Robert W. Best 27,096,540 295,278
Thomas J. Garland 27,077,093 314,725 -
Phillip E. Nichols 27,090,372 301,446 -
Charles K. Vaughan 27,090,257 301,561 -
The other directors will continue to serve until the expiration of their
terms. The term of the Class II directors, Richard W. Cardin, Thomas C.
Meredith, Carl S. Quinn and Richard Ware II will expire in 2000. The term
of the Class I directors, Travis W. Bain II, Gene C. Koonce, Vincent J.
Lewis and Dan Busbee, will expire in 1999. The term of the Class III
directors, listed above, will expire in 2001. Lee E. Schlessman retired
from the Board at the expiration of his term in February 1998 in accordance
with the Company's mandatory retirement policy.
Proposal to increase the total number of shares that may be issued under the
Restricted Stock Grant Plan by 650,000 shares.
VOTES VOTES VOTES BROKER
FOR AGAINST ABSTAINING NON-VOTE
---------- ---------- ---------- --------
25,360,895 1,430,549 483,882 116,492
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
A list of exhibits required by Item 601 of Regulation S-K and filed
as part of this report is set forth in the Exhibits Index, which
immediately precedes such exhibits.
(b) Reports on Form 8-K
None.
- 24 -<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ATMOS ENERGY CORPORATION
(Registrant)
Date: May 14, 1998 By: /s/ David L. Bickerstaff
------------------------------
David L. Bickerstaff
Vice President and Controller
(Chief Accounting Officer and
duly authorized signatory)
- 25 - <PAGE>
EXHIBITS INDEX
Item 6(a)
Exhibit Page
Number Description Number
------- ----------- -------
10.1 Agreement for Firm Intrastate
Transportation of Natural Gas in the
State of Louisiana between Trans La
and Louisiana Intrastate Gas Company
L.L.C.( LIG ) dated December 22,
1997, and effective July 1, 1997.
10.2 Agreement for Firm 311(a)(2)
Transportation of Natural Gas in the
State of Louisiana between Trans La
and Louisiana Intrastate Gas Company
L.L.C.( LIG ) dated December 22,
1997, and effective July 1, 1997.
10.3 Firm Transportation Service
Agreement No. 33180000, Rate
Schedule TF-1, between Greeley Gas
Company and Colorado Interstate Gas
Company dated October 1, 1996.
10.4 Gas Transportation Agreement Service
Package No. 4272 between United
Cities Gas Company and East
Tennessee Natural Gas Company dated
November 1, 1993.
10.5 Gas Transportation Agreement Service
Package No. 4219 between United
Cities Gas Company and Tennessee Gas
Pipeline Company dated November 1,
1993.
10.6 Transportation-Storage Contract
(Request 0180) between United Cities
Gas Company and Williams Natural Gas
Company dated October 1, 1993.
10.7 Transportation-Storage Contract
(Request 0002) between United Cities
Gas Company and Williams Natural Gas
Company dated October 1, 1993.
10.8 Service Agreement No. 867760 under
Rate Schedule FT between United
Cities Gas Company and Southern
Natural Gas Company dated November
1, 1993.
- 26 - <PAGE>
Exhibit Page
Number Description Number
------- ----------- -------
10.9 Service Agreement No. 867761 under
Rate Schedule FT-NN between United
Cities Gas Company and Southern
Natural Gas Company dated November
1, 1993.
15 Letter regarding unaudited interim
financial information
27.1 Financial Data Schedule for Atmos
Energy Corporation for the six
months ended March 31, 1998
27.2 Restated Financial Data Schedules
for Atmos Energy Corporation for the
following periods:
- Three months ended December 31,
1996
- Six months ended March 31, 1997
- Nine months ended June 30, 1997
27.3 Restated Financial Data Schedules
for Atmos Energy Corporation for the
following periods:
- Three months ended December 31,
1995
- Six months ended March 31, 1996
- Nine months ended June 30, 1996
- Year ended September 30, 1996
27.4 Restated Financial Data Schedule for
Atmos Energy Corporation for the
year ended September 30, 1995
- 27 -<PAGE>
EXHIBIT 15
----------
Board of Directors
Atmos Energy Corporation
We are aware of the incorporation by reference in the Registra-
tion Statements (Form S-3 No. 33-37869, Form S-3 No. 33-70212,
Form S-3 No. 33-58220, Form S-3 No. 33-56915, Form S-3 No. 333-
03339, Form S-3/A No. 333-32475, Form S-3 No. 333-50477, Form S-4
No. 333-13429, Form S-8 No. 33-57687, Form S-8 No. 33-68852, Form
S-8 No. 33-57695, Form S-8 No. 333-32343, and Form S-8 No. 333-
46337) of Atmos Energy Corporation of our report dated April 27,
1998, relating to the unaudited condensed consolidated interim
financial statements of Atmos Energy Corporation which are in-
cluded in its Form 10-Q for the quarter ended March 31, 1998.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report
is not a part of the registration statement prepared or certified
by accountants within the meaning of Section 7 or 11 of the
Securities Act of 1933.
ERNST & YOUNG LLP
Dallas, Texas
May 14, 1998 <PAGE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF ATMOS ENERGY CORPORATION FOR THE
SIX MONTHS ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 876,069
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 160,798
<TOTAL-DEFERRED-CHARGES> 111,307
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,148,174
<COMMON> 150
<CAPITAL-SURPLUS-PAID-IN> 262,295
<RETAINED-EARNINGS> 117,630
<TOTAL-COMMON-STOCKHOLDERS-EQ> 380,075
0
0
<LONG-TERM-DEBT-NET> 252,152
<SHORT-TERM-NOTES> 146,843
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 57,508
0
<CAPITAL-LEASE-OBLIGATIONS> 2,235
<LEASES-CURRENT> 328
<OTHER-ITEMS-CAPITAL-AND-LIAB> 309,033
<TOT-CAPITALIZATION-AND-LIAB> 1,148,174
<GROSS-OPERATING-REVENUE> 583,881
<INCOME-TAX-EXPENSE> 34,994
<OTHER-OPERATING-EXPENSES> 475,726
<TOTAL-OPERATING-EXPENSES> 510,720
<OPERATING-INCOME-LOSS> 73,161
<OTHER-INCOME-NET> 3,004
<INCOME-BEFORE-INTEREST-EXPEN> 76,165
<TOTAL-INTEREST-EXPENSE> 18,645
<NET-INCOME> 57,520
0
<EARNINGS-AVAILABLE-FOR-COMM> 57,520
<COMMON-STOCK-DIVIDENDS> 15,828
<TOTAL-INTEREST-ON-BONDS> 3,514
<CASH-FLOW-OPERATIONS> 90,053
<EPS-PRIMARY> 1.94
<EPS-DILUTED> 1.94
</TABLE>
Exhibit 10.1
AGREEMENT FOR FIRM INTRASTATE TRANSPORTATION
OF NATURAL GAS IN THE
STATE OF LOUISIANA
BETWEEN
LOUISIANA INTRASTATE GAS COMPANY L.L.C.
AND
TRANS LOUISIANA GAS COMPANY
A DIVISION OF ATMOS ENERGY CORPORATION<PAGE>
TABLE OF CONTENTS
ARTICLE DESCRIPTION PAGE
I. Definitions 2
II. Transportation Service 4
III. Pressure 6
IV. Facilities 6
V. Scheduling and Transportation Limitations 7
VI. Rates 9
VII. Term 10
VIII. Notices and Addresses 11
IX. General Conditions 12
X. Miscellaneous 12
Signatures 15
Exhibit A
Exhibit B
<PAGE>
AGREEMENT FOR FIRM INTRASTATE TRANSPORTATION
OF NATURAL GAS IN THE
STATE OF LOUISIANA
THIS AGREEMENT is made and entered into this 22nd day of
December, 1997, to be effective as of the Effective Date, by and
between LOUISIANA INTRASTATE GAS COMPANY L.L.C., a Louisiana
limited liability company, hereinafter referred to as
"Transporter" and TRANS LOUISIANA GAS COMPANY, a division of
Atmos Energy Corporation, a Texas and Virginia corporation,
hereinafter referred to as "Customer."
WITNESSETH :
WHEREAS, Customer has or will have gas available which is
produced in the state of Louisiana and is capable of being
delivered into Transporter's pipeline system; and
WHEREAS, Customer desires that Transporter transport such gas on
behalf of Customer; and
WHEREAS, Transporter has the ability in its system to move gas
from certain parts of Louisiana to certain other parts of
Louisiana to Customer or for further transportation to Customer;
and
WHEREAS, Transporter and Customer are of the opinion that the
transaction referred to above is an agreement for the
transportation of gas that is not committed or dedicated to
interstate commerce, that such gas is produced entirely within
the state of Louisiana, and that such transportation will not
cause either Transporter or Customer to become regulated as a
"Natural Gas Company" within the meaning of the Natural Gas Act
of 1938 (15 USC 717, et. seq.), or require Transporter or
Customer to invoke a Hinshaw exemption pursuant to Section 1(c)
of the Natural Gas Act to avoid such jurisdiction;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto covenant
and agree as follows:
ARTICLE I.
DEFINITIONS
Except as otherwise herein provided, the following words and/or
terms as used in this Agreement shall have the following scope
and meaning:
1.1 The term "day" shall mean a period of twenty-four (24)
consecutive hours beginning and ending at 9:00 a.m. Central Clock
Time.
1.2 The term "month" shall mean the period beginning at 9:00
A.M. Central Clock Time on the first day of the calendar month
and ending at 9:00 A.M. Central Clock Time on the first day of
the next succeeding calendar month.
1.3 The term "year" shall mean a period of three hundred
sixty-five (365) consecutive days provided, however, that any
such year which contains a date of February 29 shall consist of
three hundred sixty-six (366) consecutive days.
1.4 The term "contract year" shall mean one-year periods
beginning at 9:00 A.M. Central Clock Time on the Effective Date.
1.5 The terms "gas" and "natural gas" shall mean natural gas
as produced in its natural state whether or not stored or
processed prior to delivery, natural gas or any component thereof
that has been previously liquefied and restored to its gaseous
state prior to delivery to Customer, gas synthesized or
manufactured from oil, naphtha, coal or any other material that
meets the quality standards contained in this Agreement and which
Transporter elects to deliver in lieu of or commingled with one
or more of the types of gas described herein.
1.6 The term "MCF" shall mean one thousand (1,000) cubic feet
of gas as determined on the measurement basis set forth in
Article B-1 of Exhibit "B" hereto.
1.7 The terms "British thermal unit" or "Btu" shall mean the
amount of heat required to raise the temperature of one pound of
pure water from fifty-eight and five-tenths degrees (58.5)
Fahrenheit to fifty-nine and five-tenths degrees (59.5)
Fahrenheit.
1.8 The term "MMBtu" shall mean one million (1,000,000) Btu's.
1.9 The term "heating value" shall mean the gross number of
British thermal units, sometimes hereinafter referred to as
Btu's, produced by the combustion at constant pressure of the
amount of gas saturated with water vapor which would occupy a
volume of one (1) cubic foot at a temperature of sixty (60)
degrees Fahrenheit, under a pressure equivalent to that of thirty
(30) inches of mercury at thirty-two (32) degrees Fahrenheit and
under gravitational force (acceleration 980.665 cm. per sec. per
sec.) with air of the same temperature and pressure as the gas,
when the products of combustion are cooled to the initial
temperature of the gas and air, and when the water formed by
combustion is condensed to the liquid state, and expressed at a
pressure base of 15.025 pounds per square inch absolute and
adjusted as delivered, provided; however, gas containing a water
content not exceeding seven (7) pounds per MMcf shall be
considered dry. Where a chromatograph is used instead of a
calorimeter, the gross dry Btu shall be determined by analysis
but shall be on the equivalent basis as above.
1.10 The term "equivalent quantity" shall mean a quantity
of gas of equal heating value as determined by the product of the
volumes in cubic feet and the heating value per cubic foot, minus
Customer's pro rata share of the quantity of gas consumed by
Transporter as compressor fuel, company use and unaccounted for,
which shall not exceed 1%.
1.11 The term "Points of Delivery" shall mean those points
identified on Exhibit "A" as Points of Delivery and such other
points as the parties hereto may mutually agree.
1.12 The term "Points of Redelivery" shall mean those points
identified on Exhibit "A" as Points of Redelivery and such other
points as the parties hereto may mutually agree.
1.13 The term Effective Date shall mean July 1, 1997.
1.14 The term Sales Agreement shall mean that certain
Agreement For Natural Gas Service for Distribution and Resale
dated October 28, 1991, as amended by amendment of even date
herewith, between Customer, as buyer, and Transporter, as seller.
1.15 The term Intrastate Storage Agreement shall mean
that certain Firm Intrastate Gas Storage Agreement of even date
herewith by and between Equitable Storage Company L.L.C. and
Customer.
1.16 The term 311 Storage Agreement shall mean that
certain Firm 311(a)(2) Gas Storage Agreement of even date
herewith by and between Equitable Storage Company L.L.C. and
Customer.
1.17 The term 311 Transportation Agreement shall mean
that certain Agreement for Firm 311(a)(2) Transportation of
Natural Gas in the State of Louisiana of even date herewith by
and between Transporter and Customer.
ARTICLE II.
TRANSPORTATION SERVICE
2.1 Commencing on the Effective Date, Customer agrees to
tender and Transporter agrees to accept at the Points of Delivery
for transportation hereunder a quantity of gas each day during
the term of this Agreement, scheduled pursuant to the provisions
of Article V below, up to 80,000 MMBtu ( Maximum Daily
Quantity ). In the event Customer exceeds 80,000 MMBtu on any
given day, under the combination of this Agreement and the 311
Transportation Agreement, then the Maximum Daily Quantity under
this Agreement, in combination with the Demand Quantity under the
311 Transportation Agreement, shall be increased to such higher
amount for the remaining term of this Agreement. Transporter
shall redeliver, or cause to be redelivered, an equivalent
quantity of gas to Customer, or for Customer's account, at the
Points of Redelivery. Transporter's obligation to accept gas at
any single Point of Delivery and to redeliver gas at any single
Point of Redelivery, to the extent specified in Exhibit "A,"
shall be limited to that quantity so specified in Exhibit "A"
hereto attached as to each such point, or such greater quantity
as Transporter in its sole discretion may accept or redeliver
from time to time at such points depending on Transporter's
operating requirements.
2.2 The transportation service provided hereunder shall be for
intrastate natural gas only and on a firm basis; provided
however, such service shall be subject to the force majeure
conditions of Article B-IV of Exhibit B attached hereto and
incorporated herein. Customer hereby commits to tender to
Transporter for transportation hereunder volumes of natural gas
approximately equal to the volumes currently physically served
(both sales and transportation) by Transporter to Customer, up to
the Maximum Daily Quantity. However, if Customer desires to
utilize the transportation service under the 311 Transportation
Agreement, it may do so and Customer and Transporter hereby agree
that the volumes and payment received by Transporter thereunder
shall be credited against Customer s rights and obligations
hereunder. In the event amount received by Transporter under the
311 Transportation Agreement is less than the amount provided
under Article VI hereof, then Customer shall pay to Transporter
each month, as a transportation surcharge under this Agreement,
the difference between the rates under this Agreement and the 311
Transportation Agreement times the volume transported under the
311 Transportation Agreement during such month.
ARTICLE III.
PRESSURE
3.1 Customer shall cause delivery of the gas at the Points of
Delivery at a pressure sufficient to allow the gas to enter
Transporter's system at the varying pressures that may exist on
such system from time to time; provided, however, that if
specified for the Points of Delivery on Exhibit "A" such pressure
shall not exceed the maximum allowed delivery pressure specified
for each such Point.
3.2 Transporter shall deliver, or cause to be delivered, the
gas transported hereunder for the account of Customer at the
Points of Redelivery at pressures that may exist in Transporter's
pipeline from time to time; provided, however, that if specified
for the Points of Redelivery on Exhibit "A" hereto attached, the
pressure of the gas delivered by Transporter shall not exceed the
maximum allowed redelivery pressure specified for each such
Point.
ARTICLE IV.
FACILITIES
4.1 Transporter and Customer recognize that measurement and
other facilities exist at the Delivery or Redelivery Points
initially identified or those which may be added by amendment.
Ownership of such facilities shall remain with the original
owner, and operation of meters, instruments and other measurement
equipment at such locations shall be in accordance with Article
B-I of the General Conditions of Exhibit "B".
4.2 At Delivery and Redelivery points at which facilities do
not yet exist, Transporter shall install, own, operate and
maintain, or cause the same to be done, the meter, instruments,
equipment, and surface leases necessary to deliver the gas under
this Agreement. Installation and operation of meters,
instruments and other measurement equipment shall be in
accordance with Article B-I of the General Conditions of Exhibit
"B" as determined by Transporter in Transporter's reasonable
judgment. Transporter shall not be obligated to pay for new
facilities required under this Agreement.
ARTICLE V.
SCHEDULING AND TRANSPORTATION LIMITATIONS
5.1 Customer shall be obligated to notify Transporter by 10:00
a.m. two (2) business days prior to each month as to the daily
quantity of gas it desires to be transported during that month.
Such notification may be either written or electronic and will
indicate the quantity of gas Customer estimates it will deliver
to Transporter at each of the Points of Delivery (except Point of
Delivery Number 5, the Equitable Storage point, unless Customer
knows in advance the quantity it desires to deliver at such
point) as well as the quantity to be redelivered by Transporter
at each of the Points of Redelivery hereunder (except Points of
Redelivery Number 1, the distribution points, and Number 3, the
Equitable Storage point, unless Customer knows in advance the
quantity it desires to receive at such points).
5.2 Customer shall give Transporter at least twenty-four (24)
hours notice prior to the commencement of any day in which
Customer desires to change the quantity of gas it has scheduled
to be delivered to Transporter at the Points of Delivery (except
Point of Delivery Number 5, the Equitable Storage point).
Transporter may waive these notice requirements upon request if
in Transporter's judgment operating conditions permit such
waiver.
5.3 It is the intent of the parties that gas delivered, or
caused to be delivered, by Customer to Transporter and
redelivered by Transporter for the account of Customer shall be
as nearly as possible at uniform hourly rates and that the volume
tendered at the Points of Delivery shall be equal to that taken
by Customer at the Points of Redelivery. Departures from the
scheduled deliveries shall be kept to the minimums permitted by
the operating conditions.
5.4 Customer and Transporter agree that (i) confirmed
transportation volumes under this Agreement shall be the first
gas delivered to the Points of Redelivery, excluding the point
with Equitable Storage Company L.L.C., (ii) confirmed
transportation volumes under the 311 Transportation Agreement
shall be the second gas delivered to the Points of Redelivery
(Points of Delivery under the 311 Transportation Agreement),
excluding the point with Equitable Storage Company L.L.C., (iii)
volumes withdrawn from storage under the Intrastate Storage
Agreement shall be the third gas delivered to the Points of
Redelivery, and (iv) volumes withdrawn from storage under the 311
Storage Agreement shall be the fourth gas delivered to the
Points of Redelivery (Points of Delivery under the 311
Transportation Agreement).
5.5 Transporter agrees to determine with Customer a method to
calculate Customer s peak day and other requirements and to
provide a daily tabulation (furnished within 24 hours via fax or
other mutually agreeable method) of Customer s estimated natural
gas requirements, transportation receipts and deliveries and
storage balances. The current methodology utilized for farm taps
will be maintained. Customer s gas delivered to the storage
Point of Redelivery each month will be the difference between the
estimates mentioned above and the actual volumes received and
delivered. On any day that Customer s confirmed transportation
volumes for delivery to Transporter under this Agreement and the
311 Transportation Agreement exceed the volumes actually
physically received by Customer, those excess volumes will be
redelivered to the storage Point of Redelivery (Point of Delivery
under the 311 Transportation Agreement) on a no notice basis.
Conversely, if the volumes delivered to Transporter under this
Agreement and the 311 Transportation Agreement are less than the
requirements of Customer, then volumes of Customer s gas will be
transported from the storage Point of Delivery (Point of Receipt
under the 311 Transportation Agreement) to the Points of
Redelivery (Points of Delivery under the 311 Transportation
Agreement) on a no notice basis.
ARTICLE VI.
RATES
6.1 Customer agrees to pay Transporter a demand fee each month
equal to the product of $0.75 per MMBtu times the Maximum Daily
Quantity applicable for such month, and for all natural gas
transported hereunder as measured at the Points of Redelivery
(except Point of Redelivery No. 3, ESC), a transportation fee of
four cents (4) per MMBtu.
6.2 Transporter and Customer recognize that the fees per MMBtu
specified in this Agreement takes into account the Louisiana
Natural Gas Franchise Tax of 1% as applied to the business of
Transporter represented by this Agreement. Transporter and
Customer agree that if the Louisiana Natural Gas Franchise Tax is
increased, or if there is levied by law an additional tax other
than an income tax, after the effective date of this Agreement,
which tax is levied on or measured by sales, the movement of, the
value of, or the quantity of the gas delivered to Customer and
which tax is payable by Transporter for the right to sell or
transport gas and if Transporter lawfully pays such tax, then
Customer shall reimburse Transporter for that portion of the tax
paid by Transporter which is attributable under generally
accepted accounting principles to that part of Transporter's
business represented by this Agreement.
6.3 Customer agrees to reimburse Transporter for fifty percent
(50%) of all filing and other fees in connection with this
Agreement that Transporter is obligated to pay to any
governmental authority having jurisdiction. Filing and other
fees in connection with this Agreement shall be limited to those
fees required to implement, commence and continue transportation
under this Agreement.
ARTICLE VII.
TERM
7.1 Subject to the other provisions hereof, this Agreement
shall become effective as of the Effective Date, and shall remain
in force and effect for a primary term of five (5) years, and
shall continue from year-to-year thereafter. This Agreement may
be terminated by either party effective at the end of the fifth
contract year or at the end of any subsequent contract year by
giving written notice at least six (6) months prior to the end of
the applicable contract year.
7.2 In the event the Louisiana Public Service Commission
( LPSC ) does not allow Customer to recover in its resale rates
to its Customers the costs incurred by Customer under this
Agreement, the 311 Transportation Agreement, the Intrastate
Storage Agreement, the 311 Storage Agreement or the Sales
Agreement, then Customer may terminate this Agreement upon thirty
(30) days prior written notice to Transporter.
7.3 In the event (i) the LPSC issues an order during the term
hereof which requires Customer to unbundle its sales service, or
(ii) either the LPSC or market conditions demand or expect
Customer to unbundle its sales service, then Customer may elect
to reduce its obligation to transport hereunder pro rata to the
extent Customer s system is unbundled (up to and including
termination of this Agreement by Customer) upon sixty (60) days
prior written notice to Transporter. For purposes hereof,
unbundle shall mean the separation of sales service from
transportation service and the obligation to offer to provide
transportation service only to its end users.
ARTICLE VIII.
NOTICES AND ADDRESSES
8.1 Notices - All notices are required to be given in writing.
Any correspondence provided for in this Agreement shall be deemed
sufficiently given when deposited in the United States mail,
postage prepaid, and addressed to the respective parties at such
address or such other addresses as the parties respectively shall
designate by written notice; provided however, any notice to
cancel this Agreement shall be sent Certified Mail.
8.2 Addresses
A. Notices and Correspondence - Until Customer is
otherwise notified in writing by Transporter, notices and
payments to Transporter shall be addressed to Transporter at the
address set forth below or at such other address as Transporter
may hereafter designate by notifying Customer in writing:
Notices and Correspondence: Payments:
Louisiana Intrastate Gas Louisiana Intrastate Gas
Company L.L.C. Company L.L.C.
5555 San Felipe, Suite 2100 Texas Commerce Bank
Houston, Texas 77056 P. O. Box 200674
Attn: Transportation and ABA No. 113000609
Exchange Department Account No. 00101815455
Houston, Texas 77216-0674
B. Payments - Customer agrees to make payment hereunder
to Transporter for its account by (1) wire transfer, or (2) at
the address indicated on the monthly billing, or such other
address as Transporter may designate in writing to Customer from
time to time.
Until Transporter is otherwise notified in writing by
Customer, notices and invoices to Customer shall be addressed to
Customer at the address set forth below or at such other address
as Customer may hereafter designate by notifying Transporter in
writing:
Notices, Correspondence and Invoices:
Trans Louisiana Gas Company
P. O. Box 650205
Dallas, Texas 75265-0205
Attn: Gas Supply Department
ARTICLE IX.
GENERAL CONDITIONS
9.1 This Agreement is subject to the General Conditions
Applicable to Agreements for Transportation of Natural Gas in the
State of Louisiana, a copy of which is attached hereto and made
part hereof as Exhibit "B."
ARTICLE X.
MISCELLANEOUS
10.1 Successors and Assigns: This Agreement shall not be
assignable by either party hereto without the prior written
consent of the other, which such consent shall not be
unreasonably withheld. Nothing herein shall be construed to
prevent either party or any assignee from pledging all or any
part of this Agreement or any benefit accruing hereunder. In the
event either Transporter or Customer shall assign its interest in
this Agreement it shall in the instrument of assignment cause the
assignee to assume its rights and obligations under this
Agreement. Except as provided above, no assignment shall relieve
a party of its obligations hereunder unless the other party
hereto shall consent to the same.
10.2 Louisiana Law: It is hereby agreed by and between the
parties that all aspects of the Agreement, including
interpretation of its provisions and any disputes arising
hereunder, are to be governed solely and exclusively by Louisiana
law.
10.3 Modifications: No modifications of the terms and
provisions of this Agreement shall be or become effective except
by the execution of a supplementary written agreement.
10.4 Intrastate Commerce: Customer and Transporter agree
that as a consequence of their voluntary acts none of the gas
transported hereunder will be sold or resold, transported,
commingled, used or consumed so as to subject the gas or this
Agreement to the jurisdiction of the Federal Energy Regulatory
Commission, or successor authority, under the Natural Gas Act of
1938 (15 USC Sec. 717, et. seq.). Breach of this promise by
either party shall entitle the other party to declare this
Agreement terminated ipso facto by written notice to that effect
to the offending party. Customer and Transporter agree that any
change in applicable law which gives rise to such jurisdiction
under circumstances existing at the time of the change shall not
be such a cause for termination of this Agreement.
10.5 Odorization: It is specifically understood and agreed
that Customer is responsible for any and all odorization that is
or may be required by any statute, ordinance, rule or regulation,
and that Customer shall construct, maintain and operate any
facilities required for the performance of this obligation.
Customer agrees that Transporter shall not be obliged to odorize
the gas transported and redelivered hereunder.
10.6 Governmental Authorization: This Agreement shall be
subject to all valid and applicable laws, rules and regulations
either Federal, State or local. Transporter and Customer agree
that they will comply with and abide by the requirements of any
valid and applicable laws, rules and regulations in compliance
with their respective obligations to the other hereunder.
Without admitting to or acquiescing in the jurisdiction of the
Commissioner of Conservation of the State of Louisiana over this
Agreement pursuant to the provisions of LSA R.S. 30:555(b) or of
any body either State or Federal and reserving rights with
respect thereto, Transporter and Customer contract and agree that
each party will, in support of any application of the other, seek
pregranted approval for the abandonment of service under this
Agreement at the termination of this Agreement by the Assistant
Secretary of the Department of Natural Resources for the State of
Louisiana, or any other body or otherwise successor, either
Federal or State, that may have or assert jurisdiction over the
service provided under this Agreement. Customer and Transporter
confirm to each other that the cessation of service at the
termination of this Agreement is an important consideration to
each, and to this end, both contract and agree with the other
that neither will take any action that may be construed by any
regulatory official or body that has jurisdiction as a basis for
requiring deliveries of gas by Transporter to Customer after the
termination of this Agreement. Both agree that at all times they
will take appropriate action, and cooperate with the other, to
the end that delivery of gas hereunder may be abandoned at the
termination of this Agreement and both agree that the termination
of this Agreement, for whatever reason shall constitute authority
to abandon service hereunder.
10.7 THIS AGREEMENT shall as of the Effective Date supersede
and replace all previous agreements with respect to the
transportation of gas between Transporter and Customer.
IN WITNESS WHEREOF, this Agreement is executed effective as of
the date and year first above written.
WITNESS:
TRANS LOUISIANA GAS COMPANY
a Division of Atmos Energy
Corporation
By:
Title:
WITNESS:
LOUISIANA INTRASTATE GAS
COMPANY L.L.C.
By:
Title:
<PAGE>
EXHIBIT "A"
POINTS OF DELIVERY
Location Quantity
MMBtu/d
1.Interconnection between Amoco Production Company
and Transporter at the tailgate of the LIG
Liquids Plaquemine Plant. 25,000
2.Existing interconnection between Transporter's
facilities and Mobil E&P North America located in
Section 24, Township 12 South, Range 1 East,
Vermilion Parish, Louisiana. (1522/Kaplan Outlet) 25,000
3.Existing central point downstream of
transporter's gathering facilities in the Reddell
field located in Section 21, Township 4 South,
Range 1 East, Evangeline Parish, La.(1118/LL&E) 10,000
4.Existing interconnection between Transporter's
facilities and Amerada Hess Corporation located
in Section 26, Township 11 South, Range 1 East,
Vermilion Parish, Louisiana.(1871/Leleux) 25,000
5.Existing interconnection between Transporter's
under facilities and Equitable Storage Company
L.L.C. this Agreement in Section 43, Township 12
South, Range 5 East, and the 311 Iberia Parish,
Louisiana. Agreement Combined 80,000
6.Existing interconnection between Transporter's
facilities and Louisiana Resources Pipeline
Company L.P. located in Section 14, Township 11
South,Range 5 East, St. Martin Parish, Louisiana. 10,000
7.Existing interconnection between Transporter's
facilities and PELICO located in Section 14,
Township 11 North, Range 6 West, Natchitoches
Parish, Louisiana (1377-01-9/Black Lake) 10,000*
Points of Delivery shall include all other points as the
parties hereto may mutually agree.
*Limited to months of December, January and February
<PAGE>
POINTS OF REDELIVERY
Location Quantity
MMBtu/d
1. Those points of connection between Transporter
and Customer where gas is physically taken to
serve Customer s actual gas demand for its
distribution systems in the state of
Louisiana. As Required
2. Interconnection between Transporter and
Acadian Gas Pipeline Company located Section
3, Township 10 South, Range 2 East, Ascension
Parish, Louisiana. (1660/Geismar) 10,000
3. Existing interconnection between Transporter s
facilities and Equitable Storage Company
L.L.C. in Section 43, Township 12 South, Range
5 East, Iberia Parish, Louisiana. 30,000 under this
Agreement and the
311 Agreement Combined
4. Existing interconnection between Transporter s
facilities and Louisiana Gas Pipeline Company,
L.P., located in Section 15, Township 12
South, Range 15 East, St. James Parish,
Louisiana. 10,000
5. Existing interconnection between Transporter s
facilities and Louisiana Resources Pipeline
Company L.P. located in Section 14, Township
11 South, Range 5 East, St. Martin Parish,
Louisiana. Up to available
displacement volume
Points of Redelivery shall include all other points as the
parties hereto may mutually agree.
<PAGE>
EXHIBIT "B"
LOUISIANA INTRASTATE GAS COMPANY L.L.C.
GENERAL CONDITIONS
APPLICABLE TO
AGREEMENTS FOR TRANSPORTATION
OF NATURAL GAS
IN THE STATE OF LOUISIANA
<PAGE>
LOUISIANA INTRASTATE GAS COMPANY L.L.C.
GENERAL CONDITIONS
APPLICABLE TO
AGREEMENTS FOR TRANSPORTATION
OF NATURAL GAS
IN THE STATE OF LOUISIANA
TABLE OF CONTENTS
ARTICLE TITLE PAGE
B-I Measurements and Tests B-1
B-II Quality B-7
B-III Billings and Payments B-8
B-IV Force Majeure B-10
B-V Default B-11
B-VI Possession and Warranty of Title B-13
B-VII Governmental Regulations B-14
GENERAL CONDITIONS
ARTICLE B-I
MEASUREMENTS AND TESTS
1. The measurement of gas at each Point of Delivery and
Redelivery shall be accomplished in accordance with the following:
(a) The unit of volumes for all purposes of measurement
hereunder shall be one (1) cubic foot of gas at a temperature of
sixty (60) degrees Fahrenheit and at an absolute pressure of
fifteen and twenty-five thousandths (15.025) pounds per square
inch absolute. The average atmospheric pressure shall be assumed
to be fourteen and seven tenths (14.7) pounds per square inch at
the Points of Delivery and at the Points of Redelivery. Whenever
conditions of temperature and pressure differ from such standard,
conversion of the volume from such conditions to the standard
conditions shall be made in accordance with the Ideal Gas Laws
corrected for deviation of the gas from Boyle's Law in accordance
with the methods and formulas prescribed in the American Gas
Association's manual for the determination of super-
compressibility factors for natural gas as last amended and
superseded.
(b) The volume of gas transported hereunder shall be
measured by an orifice meter with flange type connections
installed at the Points of Delivery and at the Points of
Redelivery; provided, however, that if measurement exists at a
Point of Redelivery and is by a positive displacement meter, then
such positive meter will be used for measurement of gas at such
Point of Redelivery. Orifice meters shall be installed, operated
and volumes computed in accordance with the American National
Standard publication, Orifice Metering of Natural Gas, ANSI/API
2530, and in such amendments and revisions thereto and
superseding publications thereof. Differential and static
pressure chart cycles shall not exceed eight (8) days.
(c) The temperature of the gas transported hereunder
shall be determined by a recording thermometer continuously used
and installed so as to record properly the temperature of the gas
flowing through each meter. Temperature chart cycles shall not
exceed eight (8) days.
(d) The specific gravity of the gas shall be determined
at the point(s) of measurement by one of the following methods,
mutually acceptable to both parties: (1) by means of a properly
installed recording gravitometer of standard manufacture
utilizing the arithmetical average of the hourly specific gravity
recorded each day for computing the quantity of gas for that day,
(2) by an on line chromatograph, (3) by continuous sampling, or
(4) if (1), (2) or (3) is not considered feasible, then by use of
a portable specific gravity balance of standard manufacture
acceptable to both parties. Such determination to be made at
least once every thirty (30) days. If the recording gravitometer
fails, then the gravity from the chromatograph or the continuous
sampler shall be used if installed and working properly.
(e) The arithmetical average of the hourly temperature
when gas is flowing, the factor for specific gravity according to
the latest test therefor and the corrections for deviation from
Boyle's Law applicable during each metering period shall be used
to make proper computations of gas volumes measured hereunder.
(f) The heating value of gas, as defined in Paragraph
1.9 of Article I of this Agreement shall, at Transporter's
option, be determined at each point(s) of measurement hereunder:
(1) by the use of a spot sample taken during such month to be
analyzed on a gas chromatograph, (2) by analysis samples from a
continuous gas sampler taken by Transporter and/or its nominee by
using an analytical chromatograph, (3) by a recording calorimeter
installed by Transporter and/or its designee, (4) by an on line
chromatograph installed by Transporter and/or its designee or (5)
by application of the methods contained in the American Gas
Association publication, Fuel Gas Energy Metering, Gas
Measurement Committee Report No. 5, and in such amendments and
revisions thereto and superseding reports thereof as recommended
by such committee. The heating value however determined shall be
converted to the same condition stipulated for the unit of volume
in "Article B-I, Paragraph 1.(a)." If an analytical
chromatograph is used, such analytical chromatograph shall be of
a design and manufacture mutually agreeable to both the Customer
and the Transporter. The method of Btu computation for a perfect
gas shall be derived from the "Table of Physical Constants of
Paraffin Hydrocarbons and Other Compounds" as published in the
Gas Processors Association Bulletin 2145-84 and superseding
revisions thereof. The analysis shall be complete and individual
values in mol percent or fraction of each hydrocarbon compound
shall be listed through CH6. The CH7 value shall include the sum
of the remaining hydrocarbons in the sample and the designated
value for CH7's+ shall be 50% CH7 and 50% CH8 or as determined
from an extended chromatograph breakdown. If an on line
chromatograph is used the appropriate CH + configuration shall be
set from the program choices by an independent spot analysis, the
value of which shall be used to select the program choice closest
to the actual CH7 + value. The analysis shall further include
the mol fraction or percent individually of additional compounds
contained in chromatographically measurable quantities contained
in the sample. The method to be used for chromatographic
analysis shall be that contained in Gas Processors Association
publication number 2261-72, GPA Method of Analysis for Natural
and Similar Gaseous Mixtures by Gas Chromatography.
(g) Upon mutual agreement of the parties, other types of
Btu per cubic foot measuring devices may be installed, operated
and Btu computed in accordance with the manufacturer instructions
for same and consistent with industry-accepted practices for
transmission Btu per cubic foot measurement.
(h) Gas samples taken from the pipeline system for
purposes of determining or deriving quantitative values that will
be used in the computation of gas volume and Btu per cubic foot
shall be obtained through use of a probe to be inserted
sufficiently beyond the periphery of the internal pipe walls to
assure that the gas being drawn for the sample is free of any
liquid accumulation from the internal pipe wall.
(i) If the method for determining chromatographic
analysis, as set forth in the GPA publication 2261-72, is
revised, both parties agree that this Agreement will be amended
accordingly.
(j) Transporter's and Customer's measuring and testing
equipment shall be of standard type, installed, operated and
maintained as necessary to measure and test gas transported
hereunder. Transporter shall keep same accurate, and in good
repair, and shall test once each month. Changing of meter
charts, readings, calibrations, tests, repairs and adjustments of
Transporter's measuring and testing equipment shall be done only
by employees of Transporter, or its designated representatives.
Customer, or its designated representative shall, in the presence
of an employee of Transporter or Transporter's designated
representative, have access to Transporter's measuring and
testing equipment at any reasonable time, and shall have the
right to witness tests, calibrations and adjustments thereof.
All tests scheduled hereunder shall be preceded by reasonable
notice to Customer. Upon request of either party hereto for a
special test of any meter or auxiliary equipment, but not more
often than once every three (3) months, Transporter shall
promptly verify the accuracy of same; provided that the cost of
such special test shall be borne by the requesting party, unless
the percentage of inaccuracy found is more than two percent (2%).
If, upon any test, any measuring equipment is found to
be in error, such errors shall be taken into account in a
practical manner in computing the deliveries. If the resultant
aggregate error in the computed receipts is not more than two
percent (2%), then previous receipts shall be considered
accurate. All equipment shall, in any case, be adjusted at the
time of test to record correctly. If, however, the resultant
aggregate error in computed receipts exceeds two percent (2%) of
a recording corresponding to the average hourly rate of gas flow
for the period since the last preceding test, the previous
recordings of such equipment shall be corrected to zero error for
any period which is known definitely or agreed upon, but in case
the period is not known definitely or agreed upon, such
correction shall be for a period extending back one-half of the
time elapsed since the date of the last test, not exceeding a
correction period of sixteen (16) days.
(k) If any meter or auxiliary equipment is out of
service or out of repair for a period of time so that the amount
of gas delivered cannot be ascertained or computed from the
reading thereof, then the gas delivered during such period shall
be estimated upon the basis of the best data available, using the
first of the following methods which is feasible: (1) by using
the registration of any check meter or meters, if installed and
accurately registering; or (2) by correcting the error if the
percentage of error is ascertainable by calibration tests or
mathematical calculations; or (3) by estimating gas volumes on
the basis of deliveries during the preceding periods under
similar conditions when the equipment was registering accurately,
or by other method(s) mutually acceptable to both parties.
(l) Upon request of Customer, Transporter shall submit
its measurement charts and records to Customer for examination,
the same to be returned within thirty (30) days. Transporter's
measurement charts and records for a given accounting month will
be presumed correct if no written objection thereto is served on
either party hereto by the other within the twelve (12) month
period following any accounting month, but the same shall be
retained for a twenty-four (24) month period.
(m) Customer may install, operate and maintain, at its
sole cost, risk and expense, but in the same manner as is
required for Transporter's equipment hereunder, check measuring
and testing equipment of standard type, provided that the same
does not interfere with the operation of Transporter's equipment,
but the measurement and testing of gas for purposes of this
Agreement shall only be by Transporter's equipment. Transporter
shall have the same rights with respect to said check metering
and testing equipment of Customer as are granted to Customer with
respect to Transporter's metering and testing equipment.
(n) If it is determined prior to, or as a result of, in-
service tests, experience and observation by either Customer or
Transporter that pulsations exist that affect the measurement
accuracy, then the operator of the facilities agrees to install
and operate mechanical dampening equipment necessary to eliminate
such pulsations.
(o) If at any time during the term hereof a new method
or technique is developed with respect to gas measurement, or the
determination of the factors used in such gas measurement, such
new method or technique may be substituted for the method set
forth in this Section when, in Transporter's sole discretion,
employing such new method or technique is advisable. Transporter
shall notify Customer in writing of any such election prior to
actually implementing such substitution.
ARTICLE B-II
QUALITY
1. The gas delivered and redelivered at each Point(s) of Delivery
and Point(s) of Redelivery shall meet the following quality
specification:
(a) Oxygen - The oxygen content shall not exceed one
percent (1%) by volume of uncombined oxygen, and the parties
shall make reasonable efforts to maintain the gas free from
oxygen.
(b) Hydrogen Sulphide - The hydrogen sulphide content shall not
exc eed one (1) grain per one hundred (100) cubic feet of gas.
(c) Total Sulphur - The total sulphur content, including
mercaptans and hydrogen sulphide, shall not exceed ten (10) grains
per one hundred (100) cubic feet of gas.
(d) Carbon Dioxide - The carbon dioxide content shall not
exceed two percent (2%) by volume.
(e) Liquids - The gas shall be free of water and other
objectionable liquids at the temperature and pressure at which
the gas is delivered and the gas shall not contain any
hydrocarbons which might condense to free liquids in the
distribution system under normal distribution operating
conditions (20 psig and 40oF) and shall in no event contain water
vapor in excess of seven (7) pounds per one million (1,000,000)
cubic feet.
(f) Dust, Gums and Solid Matter - The gas shall be
commercially free of dust, gums, gum forming constituents and
other solid matter.
(g) Heating Value - The gas delivered shall contain a
heating content of not less than nine hundred fifty (950) Btu s
per cubic foot.
(h) Temperature - The gas shall not be delivered at a
temperature of less than forty degrees (40o) Fahrenheit, and not
more than one hundred twenty degrees (120o) Fahrenheit.
(i) Nitrogen - The nitrogen content shall not exceed three
percent (3%) by volume.
(j) Hydrogen - The gas shall contain no carbon monoxide,
halogens or unsaturated hydrocarbons, and no more than four
hundred parts per million (400ppm) of hydrogen.
2. In the event any gas delivered by Customer to
Transporter at any Point of Delivery fails to meet the quality
specifications set forth above, Transporter may refuse to accept
receipt of such gas until Customer or Customer s supplier shall
have corrected the quality deficiency.
3. In the event any gas delivered by Transporter to
Customer at any Point of Redelivery fails to meet the quality
specifications set forth above, Customer may refuse to accept
receipt of such gas until Transporter shall have corrected the
quality deficiency.
ARTICLE B-III
BILLINGS AND PAYMENTS
1. Billing Date - Each calendar month during the term
hereof, Transporter shall render to Customer at such office as
Customer has herein designated, statements showing the
calculations of the monthly bill for gas transported by
Transporter for Customer during the preceding month.
2. Payment Date - Not later than ten (10) days following
Customer's receipt of such statement, Customer shall make payment
to Transporter of amounts due Transporter at such office as
Transporter has herein designated as shown by statements
furnished Customer in accordance with the foregoing Paragraph.
3. Error in Bills - In the event any error is discovered in
the amount billed in any statements rendered by Transporter, such
error shall be adjusted promptly, but shall not be an excuse for
non-payment of that part of the bill which was not in error. All
statements, meter and billing, shall be considered final if not
challenged within twenty-four (24) months after the date of same.
If any statement shall have been paid in full and it shall be
determined that a disputed part of the statement was paid in
error, Transporter shall refund such amount to Customer, together
with interest at the rate set forth in Paragraph 5 of this
Article B-III over the period that Transporter had possession of
the money, within fifteen (15) days after resolution of the
dispute.
4. Access to Billing Data - Customer and Transporter shall
have the right to examine the books, records and charts of the
other party at all reasonable times to the extent necessary to
verify the accuracy of any statement, charge or computation made
pursuant to the provision of any Article of this Agreement.
5. Past Due Payments - In the event Customer fails to pay
any of the amount due Transporter when the same is due, interest
thereon shall accrue at a rate equal to the sum of the prime rate
in effect at such time at the Citibank of New York, plus one
percent (1%), not to exceed any applicable maximum lawful rate,
payable for the period from the date when such amount is due
until the same is paid. Continued default in payment after
receipt of written notice for amounts due which are not then
subject to a bona fide dispute between the parties shall entitle
Transporter to suspend all further performance under this
Agreement in addition to all other legal remedies.
ARTICLE B-IV
FORCE MAJEURE
1. If by reason of force majeure, either party hereto is
rendered unable, wholly or in part, to carry out its obligations
under this Agreement, other than the obligation to pay for
transportation services rendered, and if such party gives notice
and reasonably full particulars of such force majeure by
telephone and then followed up with a written notice to the other
party within a reasonable time after the occurrence of the cause
relied on, the obligations of the parties, such notice having
been given, so far as and to the extent that they are affected by
such force majeure, shall be suspended during the continuance of
any inability so caused, but for no longer period; and such cause
shall so far as possible be remedied with all reasonable
dispatch, except as provided for in this Section B-IV 4. hereof.
2. The term "force majeure", as used herein, shall mean any
and all circumstances beyond the direct or reasonable control of
either party which would make performance of this Agreement
impossible or unsafe, and shall include, without limiting the
foregoing, acts of God such as landslides, earthquakes,
lightning, storms (including but not limited to hurricanes and
hurricane warnings), crevasses, floods, washouts, epidemics; acts
of public enemies including wars, riots, blockades; civil and
military disturbances; insurrections, fires, explosions,
freezing; arrests and restraints of government, either federal or
state, civil or military; shutdowns for purposes of necessary or
required repairs, relocations, or construction of facilities; any
operational or mechanical failure such as breakage or accident to
machinery or lines of pipe, temporary losses of supply, or
failure of surface equipment or pipelines; the necessity for
testing pipeline or other equipment as may be required by
governmental authority or as deemed necessary by the testing
party for the safe operation thereof; any failure to perform or
to comply with any obligation or condition of this Agreement due
to the inability to obtain necessary materials, supplies,
permits, or labor; any industrial disturbance, including strikes
or lockouts; or any inability to obtain necessary rights-of-way.
3. Force majeure affecting the performance hereunder by
either party, however, shall not relieve such party of liability
in the event of negligence or in the event of failure to use due
diligence to remedy the situation and to remove the cause in an
adequate manner and with all reasonable dispatch; and such causes
or contingencies affecting such performance shall not relieve
either party from its obligations to make payment as determined
hereunder.
4. It is understood and agreed that the settlement of
strikes, lockouts, or controversies with landowners involving
rights-of-way shall be entirely within the discretion of the
party having the difficulty and that the above requirement that
any force majeure shall be remedied with all reasonable dispatch
shall not require the settlement of strikes, lockouts, or
controversies with landowners involving rights-of-way, by
acceding to the demands of the opposing party when such course is
inadvisable in the discretion of the party having the difficulty.
ARTICLE B-V
DEFAULT
It is covenanted and agreed that if either party hereto shall
fail to perform any of the covenants or obligations imposed upon it
under and by virtue of this Agreement, then, in such event, the
other party hereto may at its option terminate this Agreement by
proceeding as follows: The party claiming the default shall cause
a written notice to be served by registered mail or hand delivery
on the party allegedly in default, stating specifically the cause
for terminating this Agreement and declaring it to be the intention
of the party giving the notice to terminate the same; thereupon,
the party in default shall have thirty (30) days after the service
of the aforesaid notice in which to commence remedying such default
or remove the cause or causes stated in the notice for terminating
this Agreement, and if within said period of thirty (30) days the
party in default does so remedy or remove said cause or causes, or
if same cannot be remedied within a thirty (30) day period, shall
commence remedial action within such thirty (30) day period and
thereafter shall pursue such remedial action with due diligence to
completion, then such notice shall be withdrawn and this Agreement
shall continue in full force and effect. In case the party in
default does not so remedy the default to remove the cause or
causes within said period, then the party giving such notice shall
have the option of canceling this Agreement at will, on serving
written notice of such cancellation to the party in default by
registered mail or hand delivery while such default is still
unsatisfied. In the event Transporter and Customer cannot agree on
whether or not a default has occurred or, if so, on whether or not
it has been remedied or removed and suit is filed within such
thirty (30) day period, then the party adjudged to be in default by
final judgment shall have thirty (30) days from the date of such
final judgment within which to comply therewith and thereby prevent
such termination. This article shall not limit or control any
specific provisin for termination or cancellation of this Agreement
contained elsewhere herein. Any cancellation of this Agreement
pursuant to the provisions of this article shall be without
prejudice to the right of Transporter to collect any amounts then
due for gas delivered prior to the time of cancellation. No waiver
by either party of any one or more defaults by the other in the
performance of this Agreement shall operate or be construed as a
waiver of any future default or defaults, whether of a like or
different character.
ARTICLE B-VI
POSSESSION AND WARRANTY OF TITLE
1. As between the parties to this Agreement, each party
shall be in control and possession of all gas in that party's
facilities. The receiving party shall have no responsibility
with respect to any gas deliverable under this Agreement until
such gas is received into its facilities on or account of
anything which may be done, happen or arise with respect to such
gas before such delivery, and the delivering party shall have no
responsibility with respect to such gas after its delivery into
the facilities of the other party on or account of anything which
may be done, happen or arise with respect to such gas after such
delivery and receipt. Nothing herein shall be deemed to relieve
either the receiving party or the delivering party from
responsibility for any damages or losses which may arise or occur
as a result of the negligence of that party. Each of the parties
hereto agrees to indemnify, defend, and hold the other party
harmless from and against any and all claims, liabilities,
damages, losses, costs, and expenses (including attorney s fees)
incurred by the indemnified party arising from or relating to any
damages, losses or injuries for which the indemnifying party is
responsible pursuant to the provisions of this Section.
2. Customer hereby warrants that it has good rights to
deliver, or cause to be delivered, the gas delivered hereunder
and the right of Transporter to transport the same and Customer
warrants that all such gas is free from all liens and adverse
claims. Transporter hereby warrants that it has the right to
redeliver gas to Customer and all such gas is free from all liens
and adverse claims from all third parties.
3. Customer agrees to indemnify Transporter and save it
harmless from all suits, actions, debts, accounts, damages,
costs, losses and expenses arising from or out of adverse claims
of any and all persons to the gas delivered by Customer to
Transporter hereunder or to all taxes, license fees or charges
thereon which may be levied and assessed against Customer upon
the delivery thereof to Transporter. Transporter agrees to
indemnify Customer and save it harmless from all suits, actions,
debts, accounts, damages, costs, losses and expenses arising from
or out of adverse claims of any and all persons to the gas
redelivered by Transporter to Customer hereunder or, except as
provided in this Agreement with respect to reimbursement of the
same, to all taxes, license fees or charges imposed upon the
redelivery to Customer. If any such adverse claim is asserted
with respect to the gas delivered hereunder, with respect to the
right to deliver or redeliver such gas, or with respect to the
right to receive payment for transporting such gas, the party
against whom the adverse claim is asserted shall have the right
to retain any amount of money up to the amount of such claim out
of the money then or thereafter payable to the other party
hereunder. Such money shall be retained without interest as
security for the performance of the indemnity obligations
described above with respect to such adverse claim until such
adverse claim has been finally determined or until the party
against whom the adverse claim is asserted shall have received a
bond from the other party in an amount and with a surety
satisfactory to the party against whom the claim is asserted,
conditioned to hold such party harmless or otherwise protect such
party with respect to such claim.
ARTICLE B-VII
GOVERNMENTAL REGULATIONS
1. This Agreement shall be subject to all relevant,
present, future, local, state and federal laws, and all rules,
regulations and orders of any regulatory authority having
jurisdiction. Neither party shall be held in default for failure
to perform hereunder if such failure is due to good faith
compliance with such party's best understanding of the
requirements of any such laws, orders, rules or regulations.
Customer warrants that gas and concomitant production transported
hereunder has been and will be produced and handled in compliance
with the requirements of the Fair Labor Standards Act of 1938,
and amendments thereto, and any other applicable laws, orders,
rules and regulations.
END OF EXHIBIT "B"
Exhibit 10.2
AGREEMENT FOR FIRM 311(a)(2)
TRANSPORTATION OF NATURAL GAS IN THE
STATE OF LOUISIANA
BETWEEN
LOUISIANA INTRASTATE GAS COMPANY L.L.C.
AND
TRANS LOUISIANA GAS COMPANY
A DIVISION OF ATMOS ENERGY CORPORATION <PAGE>
TABLE OF CONTENTS
Article Subject Page
I. Definitions 2
II. Transportation Service 5
III. Facilities 7
IV. Rates 8
V. Term 10
VI. Notices and Addresses 11
VII. General Conditions 13
VIII. Miscellaneous 13
Signatures 15
Exhibit A
Exhibit B
AGREEMENT FOR FIRM 311(a)(2)
TRANSPORTATION OF NATURAL GAS IN THE
STATE OF LOUISIANA
THIS AGREEMENT is made and entered into this 22nd day of
December, 1997, to be effective as of the Effective Date, by and
between LOUISIANA INTRASTATE GAS COMPANY L.L.C., a Louisiana
limited liability company, hereinafter referred to as
"Transporter" and TRANS LOUISIANA GAS COMPANY, a Division of
Atmos Energy Corporation, a Texas and Virginia corporation,
hereinafter referred to as "Customer."
WITNESSETH:
WHEREAS, Customer has or will have gas available in Louisiana
which is capable of being delivered into Transporter's pipeline
system; and
WHEREAS, Customer desires that Transporter transport gas on its
behalf on a firm basis; and
WHEREAS, Transporter has the ability in its system to move gas
from certain parts of Louisiana to Customer or for further
transportation to Customer on a firm basis; and
WHEREAS, Transporter and Customer are of the opinion that the
transaction referred to above falls within Section 311(a)(2) of the
Natural Gas Policy Act of 1978 (NGPA) and can be accomplished
without the prior approval of the Federal Energy Regulatory
Commission (FERC), and that such transaction will not cause
Transporter to become regulated as a "Natural Gas Company" within
the meaning of the Natural Gas Act of 1938, as subsequently
amended; and
WHEREAS, Transporter has on file with the FERC a Statement
Regarding Firm Transportation Service under Section 311(a)(2) of
the NGPA, and this Agreement is subject to such Statement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained, the parties hereto covenant and
agree as follows:
ARTICLE I.
DEFINITIONS
Except as otherwise herein provided, the following words and/or
terms as used in this Agreement shall have the following scope and
meaning:
1.1 The term "day" shall mean a period of twenty-four (24)
consecutive hours beginning and ending at 9:00 a.m. Central Clock
Time.
1.2 The term "month" shall mean the period beginning at 9:00
A.M. Central Clock Time on the first day of the calendar month and
ending at 9:00 A.M. Central Clock Time on the first day of the next
succeeding calendar month.
1.3 The term "year" shall mean a period of three hundred
sixty-five (365) consecutive days provided, however, that any such
year which contains a date of February 29 shall consist of three
hundred sixty-six (366) consecutive days.
1.4 The term "contract year" shall mean one-year periods
beginning at 9:00 A.M. Central Clock Time on the Effective Date.
1.5 The terms "gas" and "natural gas" shall mean natural gas
as produced in its natural state whether or not stored or processed
prior to delivery, natural gas or any other component thereof that
has been previously liquefied and restored to its gaseous state
prior to delivery to Customer, gas synthesized or manufactured from
oil, naphtha, coal or any other material that meets the quality
standards contained in this Agreement and which Transporter elects
to deliver in lieu of or commingled with one or more of the types
of gas described herein.
1.6 The term "MCF" shall mean one thousand (1,000) cubic feet
of gas as determined on the measurement basis set forth in Article
B-1 of Exhibit "B" hereto.
1.7 The terms "British thermal unit" or"Btu" shall mean the
amount of heat required to raise the temperature of one pound of
pure water from fifty-eight and five-tenths degrees
(58.5)Fahrenheit to fifty-nine and five-tenths degrees (59.5)
Fahrenheit.
1.8 The term "MMBtu" shall mean one million (1,000,000) Btu's.
1.9 The term "heating value" shall mean the gross number of
British thermal units, sometimes hereinafter referred to as Btu's,
produced by the combustion at constant pressure of the amount of
gas saturated with water vapor which would occupy a volume of one
(1) cubic foot at a temperature of sixty (60) degrees Fahrenheit,
under a pressure equivalent to that of thirty (30) inches of
mercury at thirty-two (32) degrees Fahrenheit and under
gravitational force (acceleration 980.665 cm. per sec. per sec.)
with air of the same temperature and pressure as the gas, when the
products of combustion are cooled to the initial temperature of the
gas and air, and when the water formed by combustion is condensed
to the liquid state, and expressed at a pressure base of 15.025
pounds per square inch absolute. Where a chromatograph is used
instead of a calorimeter, the gross Btu shall be determined by
analysis but shall be on the equivalent basis as above.
1.10 The term "equivalent quantity" shall mean a quantity
of gas of equal heating value as determined by the product of the
volumes in cubic feet and the heating value per cubic foot, less
Customer's pro rata share of Transporter s compressor fuel and
equivalents and use requirements and gas lost and unaccounted for,
which shall not exceed 1%, as well as any incremental compressor
fuel incurred by Transporter to compress the gas in order to
receive the gas at the Points of Receipt or deliver the gas at the
Points of Delivery.
1.11 The term "Points of Receipt" shall mean those points
identified on Exhibit "A" as Points of Receipt and such other
points as the parties hereto may mutually agree.
1.12 The term "Points of Delivery" shall mean those points
identified on Exhibit "A" as Points of Delivery and such other
points as the parties hereto may mutually agree.
1.13 The term "Statement of Operations" shall mean the most
recent Statement of Transporter Regarding Firm Transportation under
Section 311 of the NGPA then on file with the FERC, as such may
change from time-to-time pursuant to subsequent filings by
Transporter.
1.14 The term Effective Date shall mean July 1, 1997.
1.15 The term Sales Agreement shall mean that certain
Agreement For Natural Gas Service For Distribution and Resale dated
October 28, 1991, as amended by amendment of even date herewith,
between Customer, as buyer, and Transporter, as seller.
1.16 The term Intrastate Storage Agreement shall mean that
certain Firm Intrastate Storage Agreement of even date herewith, by
and between Equitable Storage Company L.L.C. and Customer.
1.17 The term 311 Storage Agreement shall mean that certain
Firm 311(a)(2) Gas Storage Agreement of even date herewith by and
between Equitable Storage Company L.L.C. and Customer.
1.18 The term Intrastate Transportation Agreement shall mean
that certain Agreement for Firm Intrastate Transportation of
Natural Gas in the State of Louisiana of even date herewith by and
between Transporter and Customer.
ARTICLE II.
TRANSPORTATION SERVICE
2.1 Commencing on the Effective Date and subject to the
provisions of this Agreement and the Statement of Operations
a. Customer may deliver or cause to be delivered to
Transporter for Customer s account a volume of gas on a firm
basis up to 80,000 MMBtu per day when combined with the volumes
transported under the Intrastate Transportation Agreement
( Demand Quantity ). In the event Customer exceeds 80,000 MMBtu
on any given day under the combination of this Agreement and the
Intrastate Transportation Agreement, then the Demand Quantity
shall be increased to such higher amount for the remaining term
of this Agreement.
b. Transporter shall redeliver or cause to be
redelivered to Customer or for Customer s account on a firm basis
the volume actually nominated for that day by Customer to be
delivered at that Point of Delivery but not to exceed the lesser
of (i) the volume specified for such Point of Delivery on Exhibit
A or (ii) the cumulative total of the volumes then being
delivered by Customer or for its account at all Points of
Receipt.
c. Transportation service shall be in accordance with
this Agreement and the Statement of Operations which are
expressly incorporated herein and shall be followed by
Transporter and Customer. In the event of any conflict between
this Agreement and the Statement of Operations, the terms and
conditions in the Statement of Operations shall control.
d. Customer, or any assignee of Customer, shall
nominate in accordance with the Terms and Conditions of this
Agreement and the Statement of Operations the volumes of gas to
be delivered at the Points of Receipt (except Point of Receipt
Number 10, the Equitable Storage point, unless Customer knows in
advance the quantity it desires to deliver at such point) or to
be received at the Points of Delivery (except Points of Delivery
Number 1, the distribution points, and Number 2, the Equitable
Storage point, unless Customer knows in advance the quantity it
desires to receive at such points).
2.2 It is understood and agreed that upon receipt of the
gas by Transporter at the Points of Receipt hereunder Transporter
shall, subject to Transporter's obligation to redeliver gas as
specified in Section 2.1 hereof, have the absolute and
unqualified right to treat such gas as its own, including, but
not by way of limitation, the right to commingle such gas, to
redeliver molecules different from those received, and to treat
the molecules delivered in any manner, including the right to
process the same, retaining in Transporter and to those claiming
under Transporter otherwise than through this Agreement, all
right, title and interest to any components obtained by virtue of
such processing.
2.3 Customer and Transporter agree that (i) confirmed
transportation volumes under the Intrastate Transportation
Agreement shall be the first gas delivered to the Points of
Delivery described at Number 1 on Exhibit A , (ii) confirmed
transportation volumes under this Agreement shall be the second
gas delivered to the Points of Delivery described at Number 1 on
Exhibit A , (iii) volumes withdrawn from storage under the
Intrastate Storage Agreement shall be the third gas delivered at
the Points of Delivery described at Number 1 on Exhibit A , and
(iv) volumes withdrawn from storage under the 311 Storage
Agreement shall be the fourth gas delivered to the Points of
Delivery described at Number 1 on Exhibit A .
2.4 Transporter agrees to determine with Customer a method
to calculate Customer s peak day and other requirements and to
provide a daily tabulation (furnished within 24 hours via fax or
other mutually agreeable method) of Customer s estimated natural
gas requirements, transportation receipts and deliveries and
storage balances. The current methodology utilized for farm taps
will be maintained. Customer s gas delivered to the storage
Point of Delivery each month will be the differences between the
estimates mentioned above and the actual volumes received and
delivered. On any day that Customer s confirmed transportation
volume for delivery to Transporter under this Agreement and the
Intrastate Transportation Agreement exceed the volumes actually
physically redelivered to Customer, those excess volumes will be
delivered to the storage Point of Delivery (Point of Redelivery
under the Intrastate Transportation Agreement) on a no notice
basis. Conversely, if the volumes delivered to Customer under
this Agreement and the Intrastate Transportation Agreement are
less than the requirements of Customer, volumes of Customer s gas
will be transported from the storage Point of Receipt (Point of
Delivery under the Intrastate Transportation Agreement) to the
Points of Delivery (Point of Redelivery under the Intrastate
Transportation Agreement) on a no notice basis.
ARTICLE III.
FACILITIES
3.1 Transporter and Customer recognize that the facilities
and equipment are currently in place in order to provide the
service contemplated hereunder. Transporter shall install, own,
operate and maintain, or cause the same to be done, at said
Points of Receipt and Delivery the meter, instruments, equipment,
and surface leases necessary to deliver the gas under this
Agreement. Installation and operation of meters, instruments and
other measurement equipment shall be in accordance with Article
B-I of the General Conditions of Exhibit "B" as determined by
Transporter in Transporter's reasonable judgment. Following
completion of such equipment and facilities, Transporter shall
render to Customer a statement, along with appropriate supporting
documentation, showing Transporter's total cost (including
without limitation, labor, materials, overhead, and interest) of
such surface lease, equipment and facilities including the cost
of tapping Transporter's line. All indirect costs, including
general overhead, and carrying costs shall be allocated
consistent with accounting practices applied to projects for the
sole account of Transporter. Within thirty (30) days following
receipt of such statement and supporting documentation, Customer
shall make payment to Transporter of Transporter's total cost of
such surface leases, equipment and facilities as shown on such
statement. Equipment and facilities installed by Transporter,
together with any buildings erected by it for such equipment,
shall be and remain Transporter's property. Transporter and
Customer shall not be obligated to install facilities to provide
service hereunder nor repair or replace any facilities or
equipment to continue service, except with respect to metering
equipment utilized for local distribution customers.
ARTICLE IV.
RATES
4.1 Customer shall pay to Transporter a monthly fee equal
to the lesser of (i) the sum of a Charge equal to the product of
$0.75 per MMBtu times the Demand Quantity applicable for such
month under this Agreement, plus a Commodity Fee of four cents
(4) for each MMBtu delivered during that month at the Points of
Delivery (except Point of Delivery No. 2, ESC) under this
Agreement, or (ii) Transporter s then effective maximum rates for
firm 311(a)(2) transportation service. Customer and Transporter,
as applicable, shall also make all other payments as required in
the Statement of Operations. Transporter shall provide Customer
with a copy of each Statement of Operations upon the filing of
each such Statement with the FERC.
4.2 Transporter has the right hereunder to file from time
to time with the Commissioner of Conservation of the State of
Louisiana ("Commissioner") or the FERC, or both, and/or any
successor thereto, whether executive, legislative or regulatory,
for any change in the rate provisions prescribed in 4.1 (ii)
above or the Statement of Operations. Effective as of the date
such change is approved and/or allowed to become effective or
otherwise allowed to go into effect, by the appropriate authority
or authorities, Customer agrees to abide by the terms and
provisions of the Statement of Operations as they were so
changed.
4.3 Transporter and Customer recognize that the fees per
MMBtu specified in this Agreement takes into account the
Louisiana Natural Gas Franchise Tax of 1% as applied to the
business of Transporter represented by this Agreement.
Transporter and Customer agree that if the Louisiana Natural Gas
Franchise Tax is increased, or if there is levied by law an
additional tax, charge or fee other than an income tax, after the
effective date of this Agreement, which tax, charge or fee is
levied on or measured by sales, the movement of, the value of, or
the quantity of the gas delivered to Customer and which tax is
payable by Transporter for the right to sell or transport gas and
if Transporter lawfully pays such tax, then Customer shall
reimburse Transporter for that portion of the tax, charge or fee
paid by Transporter which is attributable under generally
accepted accounting principles to that part of Transporter's
business represented by this Agreement. Customer shall be
responsible for all taxes, charges and fees of whatever kind due
or payable on the production or gathering of the gas and the
transportation of the gas prior to the receipt of such gas by
Transporter at the Points of Receipt and subsequent to the
delivery of such gas by LIG at the Points of Delivery.
4.4 Customer shall have the right, at its option, to
intervene in any proceeding held to give consideration to any
change in the Statement of Operations to oppose any change to the
Statement of Operations, and in the case of any change to the
Statement of Operations becoming effective, to seek relief
therefrom.
4.5 Customer agrees to reimburse Transporter for fifty
percent (50%) of all filing and other fees in connection with
this Agreement, that Transporter is obligated to pay to the
Commissioner, the FERC or any other governmental authority having
jurisdiction. Filing and other fees in connection with this
Agreement shall be limited to those fees required to implement,
commence and continue transportation under this Agreement.
4.6 Customer agrees to reimburse Transporter for all
charges (except those occurring as a result of Transporter s
negligence) that Transporter incurs from other parties in
rendering service for Customer, including but not limited to
penalties of any kind, imbalance cash outs, whether imposed
pursuant to a transportation service agreement, operational
balancing agreement or otherwise, which charges are related to
the transportation service rendered to Customer by Transporter
under this Agreement.
ARTICLE V.
TERM
5.1 This Agreement shall become effective as of the
Effective Date and shall remain in full force for a term of five
(5) years and for successive terms of one (1) year. This
Agreement may be terminated by either party effective at the end
of the fifth contract year or at the end of any subsequent
contract year by giving written notice at least six (6) months
prior to the end of the appropriate contract year.
5.2 In the event the Louisiana Public Service Commission
( LPSC ) does not allow Customer to recover in its resale rates
to its customers the costs incurred by Customer under this
Agreement, the Intrastate Transportation Agreement, the
Intrastate Storage Agreement, the 311 Storage Agreement or the
Sales Agreement, then Customer may terminate this Agreement upon
thirty (30) days prior written notice to Transporter.
5.3 In the event (i) the LPSC issues an order during the
term hereof which requires Customer to unbundle its sales
service, or (ii) either the LPSC or market conditions demand or
expect Customer to unbundle its sales service, then Customer may
elect to reduce its obligation to transport hereunder pro rata to
the extent Customer s system is unbundled (up to and including
termination of this Agreement by Customer) upon sixty (60) days
prior written notice to Transporter. For purposes hereof,
unbundle shall mean the separation of sales service from
transportation service and the obligation to offer to provide
transportation service only to its end users.
5.4 Each party agrees to pursue any necessary regulatory
filings with any governmental or regulatory body having
jurisdiction which may be necessary to implement or continue this
Agreement.
5.5 This Agreement is subject to the provisions of Subpart
C - Certain Transportation by Intrastate Pipelines of Part 284-
Certain Sales and Transportation of Natural Gas under the FERC's
Regulations pursuant to the NGPA and the Statement of Operations.
Should the FERC or any governmental body with jurisdiction in the
premises impose lawful terms and conditions upon the
transportation services to be rendered hereunder which shall be
deemed to be materially adverse to either Transporter or Customer
in their sole judgment reasonably exercised, then that party
shall have the right to terminate this Agreement without further
obligation to the other party except to redeliver quantities
actually accepted at the Points of Delivery, to render reports of
volumes transported, to make payments due for transportation
services rendered, and to make payments as provided in the
Statement of Operations. The party so adversely affected shall
provide written notice of the attachment of any such condition
and of its election to terminate this Agreement as soon as
reasonably possible.
ARTICLE VI.
NOTICES AND ADDRESSES
6.1 Notices - All notices are required to be given in
writing. Any correspondence provided for in this Agreement shall
be deemed sufficiently given when deposited in the United States
mail, postage prepaid, and addressed to the respective parties at
such address or such other addresses as the parties respectively
shall designate by written notice; provided however, any notice
to cancel this Agreement shall be sent Certified Mail.
6.2 Addresses
A. Notices and Correspondence - Until Customer is
otherwise notified in writing by Transporter, notices and
payments to Transporter shall be addressed to Transporter at the
addresses set forth below or at such other addresses as
Transporter may hereafter designate by notifying Customer in
writing:
Notices and Correspondence: Payments:
Louisiana Intrastate Louisiana Intrastate
Gas Co. L.L.C. Gas Co. L.L.C.
5555 San Felipe Suite 2100 Texas Commerce Bank
Houston, Texas 77056 P. O. Box 200674
Attn: Transportation and ABA No. 113000609
Exchange Department Account No. 00202825455
Houston, Texas 77216-0674
B. Payments - Customer agrees to make payment
hereunder to Transporter for its account by (1) wire transfer, or
(2) at the address indicated on the monthly billing, or such
other address as Transporter may designate in writing to Customer
from time to time.
Until Transporter is otherwise notified in writing by
Customer, notices and invoices to Customer shall be addressed to
Customer at the address set forth below or at such other address
as customer may hereafter designate by notifying Transporter in
writing:
Notices, Correspondence and Invoices:
Trans Louisiana Gas Company
P. O. Box 650205
Dallas, Texas 75265-0205
Attn: Gas Supply Department
ARTICLE VII.
GENERAL CONDITIONS
7.1 This Agreement is subject to Transporter's General
Conditions Applicable to Agreements for 311(a)(2) Transportation of
Natural Gas in the State of Louisiana, a copy of which is attached
hereto and made part hereof as Exhibit "B."
ARTICLE VIII.
MISCELLANEOUS
8.1 Modifications: No modifications of the terms and
provisions of this Agreement shall be or become effective except
by the execution of a supplementary written agreement.
8.2 Customer's Status: Customer represents and warrants
that it is a local distribution company in the State of Louisiana
and is eligible for service under Section 311(a)(2) of the NGPA.
8.3 Odorization: It is specifically understood and agreed
that Customer is responsible for any and all odorization that is
or may be required by any statute, ordinance, rule or regulation,
and that Customer shall construct, maintain and operate any
facilities required for the performance of this obligation.
Customer agrees that Transporter shall not be obliged to odorize
the gas transported and redelivered hereunder.
8.4 Abandonment: Without admitting to or acquiescing in
the jurisdiction of the Commissioner of Conservation of the State
of Louisiana over this Agreement pursuant to the provisions of
LSA R.S. 30:555(b) or of any body either State or Federal and
reserving rights with respect thereto, Transporter and Customer
contract and agree that each party will, in support of any
application of the other, seek pregranted approval for the
abandonment of service under this Agreement at the termination of
this Agreement by the Assistant Secretary of the Department of
Natural Resources for the State of Louisiana, or any other body
or otherwise successor, either Federal or State, that may have or
assert jurisdiction over the service provided under this
Agreement. Customer and Transporter confirm to each other that
the cessation of service at the termination of this Agreement is
an important consideration to each, and to this end, both
contract and agree with the other that neither will take any
action that may be construed by any regulatory official or body
that has jurisdiction as a basis for requiring deliveries of gas
by Transporter to Customer after the termination of this
Agreement. Both agree that at all times they will take
appropriate action, and cooperate with the other, to the end that
delivery of gas hereunder may be abandoned at the termination of
this Agreement and both agree that the termination of this
Agreement, for whatever reason shall constitute authority to
abandon service hereunder.
8.5 The Parties acknowledge that the rates and fees
applicable hereunder have been discounted below what would
otherwise be appropriate for the type of service to be rendered
by Transporter under this Agreement due to (i) the large volume
of Customer s gas to be transported hereunder, (ii) the load
balancing benefits on Transporter s pipeline because of the
system-wide nature of this Agreement, and (iii) the economic
situation prevailing in the industry at the time this Agreement
is negotiated.
IN WITNESS WHEREOF, this Agreement is executed effective as
of the date and year first above written.
WITNESSES:
/s/ Claude K. Elkins LOUISIANA INTRASTATE GAS
COMPANY L.L.C.
By: /s/ M. K. Tate
Title: President
WITNESSES:
/s/ J. F. Carnahan TRANS LOUISIANA GAS COMPANY
a Division of Atmos Energy
Corporation
By: /s/ Gordon Roy
Title: Vice President
EXHIBIT "A"
POINTS OF RECEIPT
Location Quantity
MMBtu/d
1.Existing interconnection between Transporter's
facilities and Tennessee Gas Pipeline Company
located in Section 32, Township 19 South,
Range 19 East, Terrebonne Parish, Louisiana
(1025-40-6/Lirette) 10,000
2.Existing interconnection between
Transporter's10,000(1)facilities and Texas Gas
Transmission located in Section 22, Township 2
North, Range 1 East, Rapides Parish,
Louisiana.
(1764-40-3/Bayou Pompey) 10,000 (1)
3.Existing interconnection between Transporter's
facilities and Texas Gas Transmission located
in Section 62, Township 14 South, Range 9
East, St. Mary Parish, Louisiana.
(1055-01-1/Franklin) 50,000
4.Existing interconnection between Transporter's
facilities and ANR Pipeline Company located in
Section 51, Township 15 South, Range 11 East,
St. Mary Parish, Louisiana.
(1058-01-01/Calumet) 50,000
5.Existing interconnection between Transporter's
facilities and Trunkline Gas Company located
in Section 136, Township 4 North, Range 3
West, Rapides Parish, Louisiana.
(1376-40-3/Boyce) 10,000
6.Existing interconnection between Transporter's
facilities and Trunkline Gas Company located
in Section 11, Township 15 South, Range 11
East, St. Mary Parish, Louisiana.
(1059-40-8/Calumet/Patterson) 50,000
7.Existing interconnection between Transporter's
facilities and Texas Eastern Transmission
Corporation located in Section 42, Township 6
South, Range 2 East, St. Landry Parish,
Louisiana.
(1778-01-3/Lawtell) 10,000
8. Existing interconnection between Transporter's
facilities and Texas Eastern Transmission
Corporation located in Section 15, Township 11
South, Range 13 East, Iberville Parish,
Louisiana.
(2031-01-9/White Castle) 10,000
9.Existing interconnection between Transporter's
facilities and Columbia Gulf Transmission
Company located in Section 77, Township 16
South, Range 15 East, Terrebonne Parish,
Louisiana.
(1063-40-5/Gibson) 50,000
10.Existing interconnection between Transporter s
facilities and Equitable Storage Company
L.L.C. in Section 43, Township 12 South, Range
5 East, Iberia Parish, Louisiana.
(Jefferson Island) 80,000 under this
Agreement and the
Intrastate
Transportation
Agreement combined
11.Existing interconnection between Transporter s
facilities and Koch Gateway Pipeline Company
located in Section 4, Township 7 North, Range
11 West, Sabine Parish, Louisiana.
(Many) Volume as exists
from time-to-time
12.Existing interconnection between Transporter s
facilities and Transcontinental Gas Pipeline
Corporation located in Section 39, Township 17
South, Range 16 East, Terrebonne Parish, LA. 20,000
13.Existing interconnection between Transporter s
facilities and Nautilus Pipeline Company,
L.L.C. located in Section 45, Township 15
South, Range 10 East, St. Mary Parish,
Louisiana 20,000
Note: (1) Texas Gas-Franklin
is also Zone SL on Texas Gas and should be utilized
during the months of April - November.
Points of Receipt shall include all other points as the parties
hereto may mutually agree.<PAGE>
POINTS OF DELIVERY
Location
Quantity
MMBtu/d
1. Those points of interconnection between
Transporter and Customer where gas is
physically taken to serve Customer s actual
gas demand for its distribution systems in
the state of Louisiana. As Required
2. Existing interconnection between
Transporter s facilities and Equitable
Storage Company L.L.C. in Section 43,
Township 12 South, Range 5 East, Iberia
Parish,Louisiana.
(Jefferson Island) 30,000 under this
Agreement and the
Intrastate
Transportation
Agreement combined
3. Existing interconnection between
Transporter's facilities and ANR Pipeline
Company located in Section 51, Township 15
South, Range 11 East, St. Mary Parish,
Louisiana
(1058-01-01/Calumet) 20,000
4. Existing interconnection between
Transporter's facilities and
Transcontinental Gas Pipeline Corporation
located in Section 39, Township 17 South,
Range 16 East, Terrebonne Parish,
Louisiana.
(1062-40-9/Humphrey's) 20,000(2)
5. Existing interconnection between
Transporter's facilities and Trunkline Gas
Company located in Section 11, Township 15
South, Range 11 East, St. Mary Parish,
Louisiana.
(1059-40-8/Calumet) 20,000(2)
6. Existing interconnection between
Transporter's facilities and Texas Eastern
Transmission Corporation located in Section
15, Township 11 South, Range 13 East,
Iberville Parish, Louisiana.
(2031-01-9/White Castle) 20,000(1)
7. Existing interconnection between
Transporter's facilities and Mid Louisiana
Gas Company located in Section 37, Township
19 North, Range 4 East, Ouachita Parish,
Louisiana.
(1424-01-7/Sterlington) (3)
8. Existing interconnection between
Transporter's facilities and Southern
Natural Gas Company located in Section 6,
Township 11 North, Range 15 West, DeSoto
Parish, Louisiana.
(1370-40-5/Logansport) (3)
9. Existing interconnection between
Transporter s facilities and Texas Gas
Transmission Corporation located in
Section 31, Township 4 North, Range 1 East,
Rapides Parish, Louisiana.
(1439-40-5/Pineville) 10,000 (1)
10. Existing interconnection between
Transporter's facilities and Texas Gas
Transmission located in Section 62,
Township 14 South, Range 9 East, St. Mary
Parish, Louisiana.
(1055-01-1/Franklin) (2)
11. Existing interconnection between
Transporter's facilities and Tennessee Gas
Pipeline Company located in Section 47,
Township 15 South, Range 10 East, St. Mary
Parish, Louisiana.
(1057-40-5/Centerville) (2)
12. Existing interconnection between
Transporter's facilities and Koch Gateway
Pipeline Company located in Section 126,
Township 13 South, Range 14 East,
Assumption Parish, Louisiana.
(1493-01-9/Napoleonville) (2)
Notes: (1) By compression; TransLa to bear fuel expense.
(2) By displacement.
(3) Interconnection is currently limited, available only on
an as, if and when basis.
Points of Delivery shall include all other points as the parties
hereto may mutually agree.<PAGE>
EXHIBIT "B"
GENERAL CONDITIONS
APPLICABLE TO
AGREEMENTS FOR 311(a)(2) TRANSPORTATION
OF NATURAL GAS
IN THE STATE OF LOUISIANA
LOUISIANA INTRASTATE GAS COMPANY L.L.C.
<PAGE>
LOUISIANA INTRASTATE GAS COMPANY L.L.C.
GENERAL CONDITIONS
APPLICABLE TO
AGREEMENTS FOR 311(a)(2) TRANSPORTATION
OF NATURAL GAS
IN THE STATE OF LOUISIANA
TABLE OF CONTENTS
ARTICLE TITLE PAGE
B-I Measurements and Tests B-1
B-II Quality B-7<PAGE>
GENERAL CONDITIONS
ARTICLE B-I
MEASUREMENTS AND TESTS
1. The measurement of gas at each Point of Receipt and
Delivery shall be accomplished in accordance with the following:
(a) The unit of volumes for all purposes of measurement
hereunder shall be one (1) cubic foot of gas at a temperature of
sixty (60) degrees Fahrenheit and at an absolute pressure of
fifteen and twenty-five thousandths (15.025) pounds per square
inch absolute. The average atmospheric pressure shall be assumed
to be fourteen and seven tenths (14.7) pounds per square inch at
the Point(s) of Receipt and at the Point(s) of Delivery.
Whenever conditions of temperature and pressure differ from such
standard, conversion of the volume from such conditions to the
standard conditions shall be made in accordance with the Ideal
Gas Laws corrected for deviation of the gas from Boyle's Law in
accordance with the methods and formulas prescribed in the
American Gas Association's manual for the determination of
supercompressibility factors for natural gas as last amended and
superseded.
(b) The volume of gas transported hereunder shall be
measured by an orifice meter with flange type connections
installed at the Points of Receipt and at the Points of Delivery;
provided, however, that if measurement exists at a Point of
Delivery and is by a positive displacement meter, then such meter
will be used for measurement of gas delivered at such Point of
Delivery. Orifice meters shall be installed, operated and
volumes computed in accordance with the American National
Standard publication, Orifice Metering of Natural Gas, ANSI/API
2530, and in such amendments and revisions thereto and
superseding publications thereof. Differential and static
pressure chart cycles shall not exceed eight (8) days.
(c) The temperature of the gas transported hereunder
shall be determined by a recording thermometer continuously used
and installed so as to record properly the temperature of the gas
flowing through each meter. Temperature chart cycles shall not
exceed eight (8) days.
(d) The specific gravity of the gas shall be determined
at the point(s) of measurement by one of the following methods,
mutually acceptable to both parties: (1) by means of a properly
installed recording gravitometer of standard manufacture
utilizing the arithmetical average of the hourly specific gravity
recorded each day for computing the quantity of gas for that day,
(2) by an on line chromatograph, (3) by continuous sampling, or
(4) if (1), (2) or (3) is not considered feasible, then by use of
a portable specific gravity balance of standard manufacture
acceptable to both parties. Such determination to be made at
least once every thirty (30) days. If the recording gravitometer
fails, then the gravity from the chromatograph or the continuous
sampler shall be used if installed and working properly.
(e) The arithmetical average of the hourly temperature
when gas is flowing, the factor for specific gravity according to
the latest test therefor and the corrections for deviation from
Boyle's Law applicable during each metering period shall be used
to make proper computations of gas volumes measured hereunder.
(f) The heating value of gas, as defined in Paragraph
1.9 of Article I of this Agreement shall, at Transporter's
option, be determined at each point(s) of measurement hereunder:
(1) by the use of a spot sample taken during such month to be
analyzed on a gas chromatograph, (2) by analysis samples from a
continuous gas sampler taken by Transporter and/or its nominee by
using an analytical chromatograph, (3) by a recording calorimeter
installed by Transporter and/or its designee, (4) by an on line
chromatograph installed by Transporter and/or its designee or (5)
by application of the methods contained in the American Gas
Association publication, Fuel Gas Energy Metering, Gas
Measurement Committee Report No. 5, and in such amendments and
revisions thereto and superseding reports thereof as recommended
by such committee. The heating value however determined shall be
converted to the same condition stipulated for the unit of volume
in "Article B-I, Paragraph 1.(a)." If an analytical
chromatograph is used, such analytical chromatograph shall be of
a design and manufacture mutually agreeable to both the Customer
and the Transporter. The method of Btu computation for a perfect
gas shall be derived from the "Table of Physical Constants of
Paraffin Hydrocarbons and Other Compounds" as published in the
Gas Processors Association Bulletin 2145-84 and superseding
revisions thereof. The analysis shall be complete and individual
values in mol percent or fraction of each hydrocarbon compound
shall be listed through CH6. The CH7 value shall include the sum
of the remaining hydrocarbons in the sample and the designated
value for CH7's+ shall be 50% CH7 and 50% CH8 or as determined
from an extended chromatograph breakdown. If an on line
chromatograph is used the appropriate CH + configuration shall be
set from the program choices by an independent spot analysis, the
value of which shall be used to select the program choice closest
to the actual CH7 + value. The analysis shall further include
the mol fraction or percent individually of additional compounds
contained in chromatographically measurable quantities contained
in the sample. The method to be used for chromatographic
analysis shall be that contained in Gas Processors Association
publication number 2261-72, GPA Method of Analysis for Natural
and Similar Gaseous Mixtures by Gas Chromatography.
(g) Upon mutual agreement of the parties, other types of
Btu per cubic foot measuring devices may be installed, operated
and Btu computed in accordance with the manufacturer instructions
for same and consistent with industry-accepted practices for
transmission Btu per cubic foot measurement.
(h) Gas samples taken from the pipeline system for
purposes of determining or deriving quantitative values that will
be used in the computation of gas volume and Btu per cubic foot
shall be obtained through use of a probe to be inserted
sufficiently beyond the periphery of the internal pipe walls to
assure that the gas being drawn for the sample is free of any
liquid accumulation from the internal pipe wall.
(i) If the method for determining chromatographic
analysis, as set forth in the GPA publication 2261-72, is
revised, both parties agree that this Agreement will be amended
accordingly.
(j) Transporter shall install, own, operate and maintain
standard type measuring and testing equipment necessary to
measure and test gas transported hereunder and shall keep same
accurate and in good repair. Transporter's measuring and testing
equipment shall be tested once each month for accuracy. Changing
of meter charts, readings, calibrations, tests, repairs and
adjustments of Transporter's measuring and testing equipment
shall be done only by employees of Transporter, or its designated
representatives. Customer, or its designated representative
shall, in the presence of an employee of Transporter or
Transporter's designated representative, have access to
Transporter's measuring and testing equipment at any reasonable
time, and shall have the right to witness tests, calibrations and
adjustments thereof. All tests scheduled hereunder shall be
preceded by reasonable notice to Customer. Upon request of
either party hereto for a special test of any meter or auxiliary
equipment, but not more often than once every three (3) months,
Transporter shall promptly verify the accuracy of same; provided
that the cost of such special test shall be borne by the
requesting party, unless the percentage of inaccuracy found is
more than two percent (2%).
If, upon any test, any measuring equipment is found to
be in error, such errors shall be taken into account in a
practical manner in computing the deliveries. If the resultant
aggregate error in the computed receipts is not more than two
percent (2%), then previous receipts shall be considered
accurate. All equipment shall, in any case, be adjusted at the
time of test to record correctly. If, however, the resultant
aggregate error in computed receipts exceeds two percent (2%) of
a recording corresponding to the average hourly rate of gas flow
for the period since the last preceding test, the previous
recordings of such equipment shall be corrected to zero error for
any period which is known definitely or agreed upon, but in case
the period is not known definitely or agreed upon, such
correction shall be for a period extending back one-half of the
time elapsed since the date of the last test, not exceeding a
correction period of sixteen (16) days.
(k) If any meter or auxiliary equipment is out of
service or out of repair for a period of time so that the amount
of gas delivered cannot be ascertained or computed from the
reading thereof, then the gas delivered during such period shall
be estimated upon the basis of the best data available, using the
first of the following methods which is feasible: (1) by using
the registration of any check meter or meters, if installed and
accurately registering; or (2) by correcting the error if the
percentage of error is ascertainable by calibration tests or
mathematical calculations; or (3) by estimating gas volumes on
the basis of deliveries during the preceding periods under
similar conditions when the equipment was registering accurately,
or by other method(s) mutually acceptable to both parties.
(l) Upon request of Customer, Transporter shall submit
its measurement charts and records to Customer for examination,
the same to be returned within thirty (30) days. Transporter's
measurement charts and records for a given accounting month will
be presumed correct if no written objection thereto is served on
either party hereto by the other within the twelve (12) month
period following any accounting month, but the same shall be
retained for a twenty-four (24) month period.
(m) Customer may install, operate and maintain, at its
sole cost, risk and expense, but in the same manner as is
required for Transporter's equipment hereunder, check measuring
and testing equipment of standard type, provided that the same
does not interfere with the operation of Transporter's equipment,
but the measurement and testing of gas for purposes of this
Agreement shall only be by Transporter's equipment. Transporter
shall have the same rights with respect to said check metering
and testing equipment of Customer as are granted to Customer with
respect to Transporter's metering and testing equipment.
(n) If it is determined prior to, or as a result of, in-
service tests, experience and observation by either Customer or
Transporter that pulsations exist that affect the measurement
accuracy, then the operator of the facilities agrees to install
and operate mechanical dampening equipment necessary to eliminate
such pulsations.
(o) If at any time during the term hereof a new method
or technique is developed with respect to gas measurement, or the
determination of the factors used in such gas measurement, such
new method or technique may be substituted for the method set
forth in this Section when, in Transporter's sole discretion,
employing such new method or technique is advisable. Transporter
shall notify Customer in writing of any such election prior to
actually implementing such substitution.
ARTICLE B-II
QUALITY
1. The gas received and delivered at each Point(s) of Receipt and
Point(s) of Delivery shall meet the following quality
specification:
(a) Oxygen - The oxygen content shall not exceed one
percent (1%) by volume of uncombined oxygen, and the parties shall
make reasonable efforts to maintain the gas free from oxygen.
(b) Hydrogen Sulphide - The hydrogen sulphide content
shall not exceed one (1) grain per one hundred (100) cubic feet of
gas.
(c) Total Sulphur - The total sulphur content, including
mercaptans and hydrogen sulphide, shall not exceed ten (10) grains
per one hundred (100) cubic feet of gas.
(d) Carbon Dioxide - The carbon dioxide content shall not
exceed two percent (2%) by volume.
(e) Liquids - The gas shall be free of water and other
objectionable liquids at the temperature and pressure at which the
gas is delivered and the gas shall not contain any hydrocarbons
which might condense to free liquids in the distribution system
under normal distribution operating conditions (20 psig and 40oF)
and shall in no event contain water vapor in excess of seven (7)
pounds per one million (1,000,000) cubic feet.
(f) Dust, Gums and Solid Matter - The gas shall be
commercially free of dust, gums, gum forming constituents and other
solid matter.
(g) Heating Value - The gas delivered shall contain a
heating content of not less than nine hundred fifty (950) Btu s per
cubic foot.
(h) Temperature - The gas shall not be delivered at a
temperature of less than forty degrees (40o) Fahrenheit, and not
more than one hundred twenty degrees (120o) Fahrenheit.
(i) Nitrogen - The nitrogen content shall not exceed
three percent (3%) by volume.
(j) Hydrogen - The gas shall contain no carbon monoxide,
halogens or unsaturated hydrocarbons, and no more than four hundred
parts per million (400ppm) of hydrogen.
2. In the event any gas delivered by Customer to Transporter
at any Point of Receipt fails to meet the quality specifications
set forth above, Transporter may refuse to accept receipt of such
gas until Customer or Customer s supplier shall have corrected the
quality deficiency.
3. In the event any gas delivered by Transporter to Customer
at any Point of Delivery fails to meet the quality specifications
set forth above, Customer may refuse to accept receipt of such gas
until Transporter shall have corrected the quality deficiency.
END OF EXHIBIT "B"
Exhibit 10.3
Firm Transportation Service Agreement
Rate Schedule TF-1
between
Colorado Interstate Gas Company
and
Greeley Gas Company,
a division of Atmos Energy Corporation
Dated: October 1, 1996, or the effective date authorized
by the FERC for CIG s service changes filed in
Docket No. RP96-190, whichever is later.<PAGE>
Firm Transportation Service Agreement
Rate Schedule TF-1
The Parties identified below, in consideration of their
mutual promises, agree as follows:
1. Transporter: Colorado Interstate Gas Company
2. Shipper: Greeley Gas Company, a division of Atmos Energy
Corporation
3. Applicable Tariff: Transporter's FERC Gas Tariff, First
Revised Volume No. 1, as the same may be amended or
superseded from time to time ( the Tariff ).
4. Changes in Rates and Terms: Transporter shall have the right
to propose to the FERC changes in its rates and terms of
service, and this Agreement shall be deemed to include any
changes which are made effective pursuant to FERC Order or
regulation or provisions of law, without prejudice to
Shipper's right to protest the same.
5. Transportation Service: Transportation Service at and
between Primary Point(s) of Receipt and Primary Point(s) of
Delivery shall be on a firm basis. Receipt and Delivery of
quantities at Secondary Point(s) of Receipt and/or Secondary
Point(s) of Delivery shall be in accordance with the Tariff.
6. Points of Receipt and Delivery: Shipper agrees to Tender gas
for Transportation Service, and Transporter agrees to accept
Receipt Quantities at the Primary Point(s) of Receipt
identified in Exhibit A. Transporter agrees to provide
Transportation Service and Deliver gas to Shipper (or for
Shipper's account) at the Primary Point(s) of Delivery
identified in Exhibit A.
7. Rates and Surcharges: As set forth in Exhibit B.
8. Negotiated Rate Agreement: N/A
9. Peak Month MDQ: 6,121 Dth per Day.
10. Term of Agreement: Beginning: October 1, 1996, or the
effective date authorized by the FERC for Transporter s
service changes filed in Docket No. RP96-190, whichever is
later.
Extending through: September 30, 2000
11. Notices, Statements, and Bills:
To Shipper:
Invoices for Transportation:
- 1 -<PAGE>
Greeley Gas Company, a division of Atmos Energy Corporation
P.O. Box 650205 2
Dallas, Texas 75265-0205
Attention: Gas Supply Department
All Notices:
Greeley Gas Company, a division of Atmos Energy Corporation
P.O. Box 650205
Dallas, Texas 75265-0205
Attention: John Hack
To Transporter:
See Payments, Notices, Nominations, and Points of Contact
sheets in the Tariff.
12. Supersedes and cancels prior Agreement: When this Agreement
becomes effective, it shall supersede and cancel the
following agreement between the Parties: In part, the Firm
Transportation Service Agreement between Transporter and
Shipper dated October 1, 1996, referred to as Transporter s
Agreement No. 35024000. That portion of Agreement No.
35024000, not superseded and canceled by this Agreement,
shall be superseded and canceled by Transporter s Agreement
No. 33181000.
13. Adjustment to Rate Schedule TF-1 and/or General Terms and
Conditions: N/A.
14. Incorporation by Reference: This Agreement in all respects
shall be subject to the provisions of Rate Schedule TF-1 and
to the applicable provisions of the General Terms and
Conditions of the Tariff as filed with, and made effective
by, the FERC as same may change from time to time (and as
they may be amended pursuant to Section 13 of the
Agreement).
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement.
Transporter: Shipper:
Colorado Interstate Gas Company Greeley Gas Company, a
Division of Atmos Energy
Corporation
By /s/ Thomas L. Price By
Thomas L. Price
Vice President (Print or type name) <PAGE>
EXHIBIT A
Firm Transportation Service Agreement
between
Colorado Interstate Gas Company
and
Greeley Gas Company,
a division of Atmos Energy Corporation
Dated: October 1, 1996, or the effective date authorized by the
FERC for Transporter s service changes filed in Docket No. RP96-
190, whichever is later.
1. Shipper's Maximum Delivery Quantity ( MDQ ) for the
following months shall be as follows:
November March (Peak Month MDQ) 6,121 Dth per Day
April, May, September, October 4,285 Dth per Day
June August 2,142 Dth per Day
Primary Point(s) of Receipt Quantity
(Dth per Day) (Note 2)
Primary Point(s) of November April, June Maximum
Receipt (Note 1) through May, through Receipt
March Sept, August Pressure
October p.s.i.g.
Northern System
Echo Springs Master 300 300 300 850
Meter
Lost Cabin 1,200 1,200 1,200 1,100
Uintah 593 593 593 300
Total Northern System 2,093 2,093 2,093
Central System
Lakin Master Meter 2,277 1,240 49 220
Southern System
Big Canyon 491 267 0 955(4)
Greenwood Master 800 435 0 220
Meter
Mocane 460 250 0 65
Total Southern System 1,751 952 0
----- ----- -----
TOTAL 6,121 4,285 2,142 <PAGE>
Primary Point(s) of Delivery Quantity
(Dth per Day) (Note 3)
Primary Point(s) of November April, June Maximum
Delivery through May, through Delivery
(Note 1) March Sept, August Pressure
October p.s.i.g.
Canon City Group (Note 5)
Canon City 4,231 2,962 1,481 (Note 6)
Colorado State 298 209 104 100
Penintentiary
Engineering Station 5 4 2 Line
476+78 Pressure
Florence City Gate 989 692 346 60
Fremont County 9 6 3 Line
Industrial Park Pressure
Penrose City Gate 135 95 47 60
Penrose PBS-2 129 90 45 Line
Pressure
Portland City Gate 35 25 12 100
Pritchett City Gate 35 25 12 150
Total Canon City Group 5,866 4,108 2,052
Total Capacity Release 4,814 3,369 1,684
Eads Group
Brandon Station 28 20 10 350
Eads City Gate 207 145 72 60
Highline Taps:
Neoplan (Bent County) 3 2 1 Line
Pressure
Penrose South (Fremont 11 8 4 Line
County) Pressure <PAGE>
The Piggery (Fremont 3 2 1 Line
County) Pressure
L.J. Stafford (Baca 5 4 2 Line
County) Pressure
Total Eads Group 257 181 90
McClave Delivery 350 245 123 500
Springfield 700 490 245 Line
Pressure
----- ----- -----
TOTAL 6,121 4,285 2,142
Storage Injection 2,814 2,015 1,714 N/A
NOTES:
(1) Information regarding Point(s) of Receipt and Point(s)
of Delivery, including legal descriptions, measuring
parties, and interconnecting parties, shall be posted
on Transporter's electronic bulletin board. Transporter
shall update such information from time to time to
include additions, deletions, or any other revisions
deemed appropriate by Transporter.
(2) Each Point of Receipt Quantity may be increased by an
amount equal to Transporter's Fuel Reimbursement
percentage. Shipper shall be responsible for providing
such Fuel Reimbursement at each Point of Receipt on a
pro rata basis based on the quantities received on any
Day at a Point of Receipt divided by the total quantity
Delivered at all Point(s) of Delivery under this
Transportation Service Agreement.
(3) The sum of the Delivery Quantities at Point(s) of
Delivery shall be equal to or less than Shipper's MDQ.
(4) Minimum pressure Shipper will deliver gas to
Transporter is 350 p.s.i.g.
(5) For Capacity Release purposes, the aggregate of the
Canon City Group Point of Delivery Quantities is as
designated (e.g., 4,814 Dth per Day for the Peak Month
MDQ). To the extent that Shipper is not utilizing a
portion of its remaining Point of Delivery Quantities
at non-Canon City Group Points of Delivery, Shipper may
nominate up to the Canon City Group total (e.g., 5,866
Dth per Day November through March), provided that
total deliveries under this Agreement do not exceed the
monthly MDQ (e.g., 6,121 Dth per Day November through
March) unless an Authorized Overrun has been granted to
Shipper by Transporter.
(6) Line pressure but not less than 100 p.s.i.g. <PAGE>
EXHIBIT B
Firm Transportation Service Agreement
between
Colorado Interstate Gas Company
and
Greeley Gas Company,
a division of Atmos Energy Corporation
Dated: October 1, 1996, or the effective date authorized
by the FERC for Transporter s service changes filed
in Docket No. RP96-190, whichever is later.
Primary Primary R1
Point(s) Point(s) Reser- Com- Fuel Sur-
of of vation modity Term of Reimburse- charg
Receipt Delivery Rate Rate Rate ment es
As As (Notes (Notes Through (Note 2) (Note
listed listed 1 1 and 9/30/00 3)
on on and 4) 5)
Exhibit Exhibit
A A
Secon- Secon- R1 Com- Term of Fuel Sur-
dary dary Reser- modity Rate Reimburse- charg
Point(s) Point(s) vation Rate ment es
of of Rate
Receipt Delivery
All All (Note (Note Through (Note 2) (Note
1) 1) 9/30/00 3)
NOTES:
(1) Unless otherwise agreed by the Parties in writing,
the rates for service hereunder shall be
Transporter's maximum rates for service under Rate
Schedule TF-1 or other superseding Rate Schedules, as
such rates may be changed from time to time.
(2) Fuel Reimbursement shall be as stated on
Transporter's Schedule of Surcharges and Fees in the
Tariff, as they may be changed from time to time,
unless otherwise agreed between the Parties.
(3) Surcharges, If Applicable:
All applicable surcharges, unless otherwise
specified, shall be the maximum surcharge rate as
stated in the Schedule of Surcharges and Fees in The
Tariff, as such surcharges may be changed from time
to time.
GQC: The Gas Quality Control Surcharge shall be assessed
pursuant to Article 20 of the General Terms and
Conditions as set forth in The Tariff.
GRI: The GRI Surcharge shall be assessed pursuant to
Article 18 of the General Terms and Conditions as set
forth in The Tariff.
HFS: The Hourly Flexibility Surcharge shall be assessed
pursuant to Article 20 of the General Terms and
Conditions as set forth in The Tariff.
Order No. 636 Transition Cost Mechanism:
Surcharge(s) shall be assessed pursuant to Article 21
of the General Terms and Conditions as set forth in
The Tariff.
ACA: The ACA Surcharge shall be assessed pursuant to
Article 19 of the General Terms and Conditions as set
forth in The Tariff.
(4) If Shipper releases any of its capacity (i.e.,
becomes a Releasing Shipper under Transporter s
Capacity Release Program) and the Replacement Shipper
is paying more than the Releasing Shipper,
Transporter shall be entitled to the difference, if
any, between the reservation charge(s), including all
applicable surcharges, being paid by the Replacement
Shipper, and the reservation charges, including all
applicable surcharges, being paid by the Releasing
Shipper.
(5) The Authorized Overrun Rate charged by Transporter
shall be determined pursuant to the Stipulation and
Agreement in Docket No. RP96-190, when applicable,
while such Settlement is in effect.
- B 2 - <PAGE>
Exhibit 10.4
Contract No.: 4272
FIRM TRANSPORTATION AGREEMENT
THIS AGREEMENT is made, entered into and effective as of
this 1st day of November, 1993, by and between East Tennessee
Natural Gas Company, a Tennessee corporation hereinafter referred
to as "Transporter", and the United Cities Gas Company, an
Illinois corporation of the State of Tennessee, hereinafter
referred to as "Shipper". Transporter and Shipper shall be
referred to herein individually as "Party" and collectively as
"Parties."
ARTICLE I - DEFINITIONS
The definitions found in Section 1 of Transporter's General
Terms and Conditions are incorporated herein by reference.
ARTICLE II - SCOPE OF AGREEMENT
Transporter agrees to accept and receive daily, on a firm
basis, at the Receipt Point(s) listed on Exhibit A attached
hereto, from Shipper such quantity of gas as Shipper makes
available up to the applicable Transportation Quantity stated on
Exhibit A attached hereto and deliver for Shipper to the Delivery
Point(s) listed on Exhibit A attached hereto an Equivalent
Quantity of gas. The Rate Schedule applicable to this Agreement
shall be stated on Exhibit A.
ARTICLE III - RECEIPT AND DELIVERY PRESSURES
Shipper shall deliver, or cause to be delivered, to
Transporter the gas to be transported hereunder at pressures
sufficient to deliver such gas into Transporter's system at the
Receipt Point(s). Transporter shall deliver the gas to be
transported hereunder to or for the account of Shipper at the
pressures existing in Transporter's system at the Delivery
Point(s) unless otherwise specified on Exhibit A.
ARTICLE IV - QUALITY SPECIFICATIONS
AND STANDARDS FOR MEASUREMENTS
For all gas received, transported, and delivered hereunder,
the Parties agree to the quality specifications and standards for
measurement as provided for in Transporter's General Terms and
Conditions. Transporter shall be responsible for the operation of
measurement facilities at the Delivery Point(s) and Receipt
Point(s). In the event that measurement facilities are not
operated by Transporter, the responsibility for operations shall
be deemed to be Shipper's.
ARTICLE V - FACILITIES
The facilities necessary to receive, transport, and deliver
gas as described herein are in place and no new facilities are
anticipated to be required.
ARTICLE VI - RATES FOR SERVICE
6.1 Rates and Charges - Commencing on the date of
implementation of this Agreement under Section 10.1, the
compensation to be paid by Shipper to Transporter shall be in
accordance with Transporter's effective Rate Schedule FT-A or
FT-GS, as specified on Exhibit A. Where applicable, Shipper shall
also pay the Gas Research Institute surcharge and Annual Charge
Adjustment surcharge as such rates nay change from time to time.
6.2 Changes in Rates and Charges - Shipper agrees that
Transporter shall have the unilateral right to file with the
appropriate regulatory authority and make changes effective in
(a) the rates and charges stated in this Article, (b) the rates
and charges applicable to service pursuant to the Rate Schedule
under which this service is rendered and (c) any provisions of
Transporter's General Terms and Conditions as they may be revised
or replaced from time to time. Without prejudice to Shipper's
right to contest such changes, Shipper agrees to pay the
effective rates and charges for service rendered pursuant to this
Agreement. Transporter agrees that Shipper may protest or contest
the aforementioned filings, or may seek authorization from duly
constituted regulatory authorities for adjustment of
Transporter's existing FERC Gas Tariff as may be found necessary
to assure Transporter just and reasonable rates.
ARTICLE VII - RESPONSIBILITY DURING TRANSPORTATION
As between the Parties hereto, it is agreed that from the
time gas is delivered by Shipper to Transporter at the Receipt
Point(s) and prior to delivery of such gas to or for the account
of Shipper at the Delivery Point(s), Transporter shall be
responsible for such gas and shall have the unqualified right to
commingle such gas with other gas in its system and shall have
the unqualified right to handle and treat such gas as its own.
Prior to receipt of gas at Shipper's Receipt Point(s) and after
delivery of gas at Shipper's Delivery Point(s), Shipper shall
have sole responsibility for such gas.
ARTICLE VIII - BILLINGS AND PAYMENTS
Billings and payments under this Agreement shall be in
accordance with Section 16 of Transporter's General Terms and
Conditions as they only be revised or replaced from time to time.
ARTICLE IX - RATE SCHEDULES AND GENERAL TERNS AND CONDITIONS
This Agreement is subject to the effective provisions of
Transporter's FT-A or FT-GS Rate Schedule, as specified in
Exhibit A, and Transporter's General Terms and Conditions on file
with the FERC, or other duly constituted authorities having
jurisdiction, as the same may be changed or superseded from time
to time in accordance with the rules and regulations of the FERC,
which Rate Schedule and General Terms and Conditions are
incorporated by reference and made a part hereof for all
purposes.
ARTICLE X - TERM OF CONTRACT
10.1 This Agreement shall be effective as of November 1,
1993, and shall remain in force and effect until November 1, 2000
("Primary Term"); provided, however, that if the Primary Term is
one year or more, then the contract shall remain in force and
effect and the contract term will automatically roll-over for
additional five year increments ("Secondary Term") unless
Shipper, one year prior to the expiration of the Primary Term or
a Secondary Term, provides written notice to Transporter of
either (1) its intent to terminate the contract upon expiration
of the then current term or (2) its desire to exercise its
right-of-first-refusal in accord with Section 7.3 of
Transporter's General Terms and Conditions. Provided further, if
the FERC or other governmental body having Jurisdiction over the
service rendered pursuant to this Agreement authorizes
abandonment of such service, this Agreement shall terminate on
the abandonment date permitted by the FERC or such other
governmental body.
10.2 In addition to any other remedy Transporter may have,
Transporter shall have the right to terminate this Agreement in
the event Shipper fails to pay all of the amount of any bill for
service rendered by Transporter hereunder when that amount is
due, provided Transporter shall give Shipper and the FERC thirty
days notice prior to any termination of service. Service may
continue hereunder if within the thirty day notice period
satisfactory assurance of payment is made in accord with Section
16 of Transporter's General Terms and Conditions.
ARTICLE XI - REGULATION
11.1 This Agreement shall be subject to all applicable
governmental statutes, orders, rules, and regulations and is
contingent upon the receipt and continuation of all necessary
regulatory approvals or authorizations upon terms acceptable to
Transporter and Shipper. This Agreement shall be void and of no
force and effect if any necessary regulatory approval or
authorization is not so obtained or continued. All Parties hereto
shall cooperate to obtain or continue all necessary approvals or
authorizations, but no Party shall be liable to any other Party
for failure to obtain or continue such approvals or
authorizations. Further, if any governmental body having
jurisdiction over the service provided for herein authorizes
abandonment of each service on a date other than the Termination
Date as defined in Section 10.1 herein, then the Termination Date
shall nevertheless be the abandonment date so authorized.
11.2 Promptly following the execution of this Agreement, the
Parties will file, or cause to be filed, and diligently
prosecute, any necessary applications or notices with all
necessary regulatory bodies for approval of the service provided
for herein.
11.3 In the event the Parties are unable to obtain all
necessary and satisfactory regulatory approvals for service prior
to the expiration of two (2) years from the effective date
hereof, then, prior to receipt of such regulatory approvals,
either Party may terminate this Agreement by giving the other
Party at least thirty (30) days prior written notice, and the
respective obligations hereunder, except for the reimbursement of
filing fees herein, shall be of no force and effect from and
after the effective date of such termination.
11.4 The transportation service described herein shall be
provided subject to the provisions of the FERC Regulations shown
by Shipper on Exhibit A hereto.
ARTICLE XII - ASSIGNMENTS
12.1 Either Party may assign or pledge this Agreement and
all rights and obligations hereunder under the provisions of any
mortgage, deed of trust, indenture or other instrument that it
has executed or may execute hereafter as security for
indebtedness; otherwise, Shipper shall not assign this Agreement
or any of its rights and obligations hereunder, except as set
forth in Section 17 of Transporter's General Terms and
Conditions.
12.2 Any person or entity that shall succeed by purchase,
transfer, merger, or consolidation to the properties,
substantially or as an entirety, of either Party hereto shall be
entitled to the rights and shall be subject to the obligations of
its predecessor in interest under this Agreement.
ARTICLE XIII - WARRANTIES
In addition to the warranties set forth in Section 22 of
Transporter's General Terms and Conditions, Shipper warrants the
following:
13.1 Shipper warrants that all upstream and downstream
transportation arrangements are in place, or will be in place, as
of the requested effective date of service, and that it has
advised the upstream and downstream transporters of the receipt
and delivery points under this Agreement and any quantity
limitations for each point as specified on Exhibit A attached
hereto. Shipper agrees to indemnify and hold Transporter harmless
for refusal to transport gas hereunder in the event any upstream
or downstream transporter fails to receive or deliver gas as
contemplated by this Agreement.
13.2 Shipper agrees to indemnify and hold Transporter
harmless from all suit actions, debts, accounts, damages, costs,
losses, and expenses (including reasonable attorneys fees)
arising from or out of breach of any warranty, by the Shipper
herein.
13.3 Shipper warrants that it will have title or the right
to acquire title to the gas delivered to Transporter under this
Agreement.
13.4 Transporter shall not be obligated to provide or
continue service hereunder in the event of any breach of
warranty; provided, Transporter shall give Shipper and the FERC
thirty days notice prior to any termination of service. Service
will continue if, within the thirty day notice period, Shipper
cures the breach of warranty.
ARTICLE XIV - MISCELLANEOUS
14.1 Except for changes specifically authorized pursuant to
this Agreement, no modification of or supplement to the terms and
conditions hereof shall be or become effective until Shipper has
submitted a request for change through the TENN-SPEED 2 system
and Shipper has been notified through the TENN-SPEED 2 system of
Transporter's agreement to such change.
14.2 No waiver by any Party of any one or more defaults by
the other in the performance of any provision of this Agreement
shall operate or be construed as a waiver of any future default
or defaults, whether of a like or of a different character.
14.3 Except when notice is required through the TENN-SPEED 2
system, pursuant to Transporter's FT-A or FT-GS Rate Schedule, as
applicable, or pursuant to Transporter's General Terms and
Conditions, any notice, request, demand, statement or bill
provided for in this Agreement or any notice that either Party
may desire to give to the other shall be in writing and mailed by
registered mail to the post office address of the Party intended
to receive the same, as the case may be, to the Party's address
shown on Exhibit A hereto or to such other address as either
Party shall designate by formal written notice to the other.
Routine communications, including monthly statements and
payments, may be mailed by either registered or ordinary mail.
Notice shall be deemed given when sent.
14.4 THE INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT
SHALL BE IN ACCORDANCE WITH AND CONTROLLED BY THE LAWS OF THE
STATE OF TENNESSEE, WITHOUT REGARD TO CHOICE OF LAW DOCTRINE THAT
REFERS TO THE LAWS OF ANOTHER JURISDICTION.
14.5 The Exhibit(a) attached hereto is/are incorporated
herein by reference and made a part of this Agreement for all
purposes.
14.6 If any provision of this Agreement is declared null and
void, or voidable, by a court of competent jurisdiction, then
that provision will be considered severable at Transporter's
option; and if the severability option is exercised, the
remaining provisions of the Agreement shall remain in full force
and effect.
14.7 This Agreement supersedes and cancels the Gas Sales and
Transportation Agreement(s)between Shipper and Transporter dated
(not applicable) and (not applicable), respectively.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be duly executed as of the date first hereinabove
written.
EAST TENNESSEE NATURAL GAS COMPANY
BY
TITLE:
UNITED CITIES GAS COMPANY
BY
TITLE:
Exhibit 10.5
SERVICE PACKAGE NO. 4219
AMENDMENT NO. O
GAS TRANSPORTATION AGREEMENT
(For Use Under FT-A Rate Schedule)
THIS AGREEMENT is made and entered into as of the 1st day of
November, 1993, by and between TENNESSEE GAS PIPELINE COMPANY, a
Delaware Corporation, hereinafter referred to as Transporter and
UNITED CITIES GAS COMPANY, a corporation of the State of
ILLINOIS, hereinafter referred to as "Shipper." Transporter and
Shipper shall collectively be referred to herein as the
"Parties."
ARTICLE I
DEFINITIONS
1.1 TRANSPORTATION QUANTITY (TQ) - shall mean the maximum
daily quantity of gas which Transporter agrees to receive and
transport on a firm basis, subject to Article II herein, for the
account of Shipper hereunder on each day during each year during
the term hereof, which shall be 80,064 dekatherms. Any
limitations of the quantities to be received from each Point of
Receipt and/or delivered to each Point of Delivery shall be as
specified on Exhibit "A" attached hereto.
1.2 EQUIVALENT QUANTITY - shall be as defined in Article I
of the General Terms and Conditions of Transporter's FERC Gas
Tariff.
ARTICLE II
TRANSPORTATION
Transportation Service - Transporter agrees to accept and
receive daily on a firm basis, at the Point(s) of Receipt from
Shipper or for Shipper's account such quantity of gas as Shipper
makes available up to the Transportation Quantity, and to deliver
to or for the account of Shipper to the Point(s) of Delivery an
Equivalent Quantity of gas.
ARTICLE III
POINT(S) OF RECEIPT AND DELIVERY
The Primary Point(s) of Receipt and Delivery shall be those
points specified on Exhibit "A" attached hereto.
ARTICLE IV
All facilities are in place to render the service provided
for in this Agreement.
ARTICLE V
QUALITY SPECIFICATIONS AND STANDARDS FOR MEASUREMENT
For all gas received, transported and delivered hereunder
the Parties agree to the Quality Specifications and Standards for
Measurement as specified in the General Terms and Conditions of
Transporter's FERC Gas Tariff Volume No. 1. To the extent that no
new measurement facilities are installed to provide service
hereunder, measurement operations will continue in the manner in
which they have previously been handled. In the event that such
facilities are not operated by Transporter or a downstream
pipeline, then responsibility for operations shall be deemed to
be Shipper's.
ARTICLE VI
RATES AND CHARGES FOR GAS TRANSPORTATION
6.1 TRANSPORTATION RATES - Commencing upon the effective
date hereof, the rates, charges, and surcharges to be paid by
Shipper to Transporter for the transportation service provided
herein shall be in accordance with Transporter's Rate Schedule
FT-A and the General Terms and Conditions of Transporter's FERC
Gas Tariff.
6.2 INCIDENTAL CHARGES - Shipper agrees to reimburse
Transporter for any filing or similar fees, which have not been
previously paid for by Shipper, which Transporter incurs in
rendering service hereunder.
6.3 CHANGES IN RATES AND CHARGES - Shipper agrees that
Transporter shall have the unilateral right to file with the
appropriate regulatory authority and make effective changes in
(a) the rates and charges applicable to service pursuant to
Transporter's Rate Schedule FT-A, (b) the rate schedule(s)
pursuant to which service hereunder is rendered or (c) any
provision of the General Terms and Conditions applicable to those
rate schedules. Transporter agrees that Shipper may protest or
contest the aforementioned filings, or may seek authorization
from duly constituted regulatory authorities for such adjustment
of Transporter's existing FERC Gas Tariff as may be found
necessary to assure Transporter just and reasonable rates.
ARTICLE VII
BILLINGS AND PAYMENTS
Transporter shall bill and Shipper shall pay all rates and
charges in accordance with Articles V and VI, respectively, of
the General Terms and Conditions of Transporter's FERC Gas
Tariff.
ARTICLE VIII
GENERAL TERMS AND CONDITIONS
This Agreement shall be subject to the effective provisions
of Transporter's Rate Schedule FT-A and to the General Terms and
Conditions incorporated therein, as the same may be changed or
superseded from time to time in accordance with the rules and
regulations of the FERC.
ARTICLE IX
REGULATION
9.1 This Agreement shall be subject to all applicable and
lawful governmental statutes, orders, rules and regulations and
is contingent upon the receipt and continuation of all necessary
regulatory approvals or authorizations upon terms acceptable to
Transporter. This Agreement shall be void and of no force and
effect if any necessary regulatory approval is not so obtained or
continued. All Parties hereto shall cooperate to obtain or
continue all necessary approvals or authorizations, but no Party
shall be liable to any other Party for failure to obtain or
continue such approvals or authorizations.
9.2 The transportation service described herein shall be
provided subject to Subpart G, Part 284, of the FERC Regulations.
ARTICLE X
RESPONSIBILITY DURING TRANSPORTATION
Except as herein specified, the responsibility for gas
during transportation shall be as stated in the General Terms and
Conditions of Transporter's FERC Gas Tariff Volume No. 1.
ARTICLE XI
WARRANTIES
11.1 In addition to the warranties set forth in Article IX
of the General Terms and Conditions of Transporter's FERC Gas
Tariff, Shipper warrants the following:
(a) Shipper warrants that all upstream and downstream
transportation arrangements are in place, or will be in place as
of the requested effective date of service, and that it has
advised the upstream and downstream transporters of the receipt
and delivery points under this Agreement and any quantity
limitations for each point as specified on Exhibit "A" attached
hereto. Shipper agrees to indemnify and hold Transporter harmless
for refusal to transport gas hereunder in the event any upstream
or downstream transporter fails to receive or deliver gas as
contemplated by this Agreement.
(b) Shipper agrees to indemnify and hold Transporter
harmless from all suits, actions, debts, accounts, damages,
costs, losses and expenses (including reasonable attorneys fees)
arising from or out of breach of any warranty by Shipper herein.
11.2 Transporter shall not be obligated to provide or
continue service hereunder in the event of any breach of
warranty.
ARTICLE XII
TERM
12.1 This Agreement shall be effective as of the 1st day of
November, 1993, and shall remain in force and effect until the
1st day of November, 2000,("Primary Terms") and on a month to
month basis thereafter unless terminated by either Party upon at
least thirty (30) days prior written notice to the other Party;
provided, however, that if the Primary Term is one year or more,
then unless Shipper elects upon one year's prior written notice
to Transporter to request a lesser extension term, the Agreement
shall automatically extend upon the expiration of the Primary
Term for a term of five years and shall automatically extend for
successive five year terms thereafter unless Shipper provides
notice described above in advance of the expiration of a
succeeding term; provided further, if the FERC or other
governmental body having jurisdiction over the service rendered
pursuant to this Agreement authorizes abandonment of such
service, this Agreement shall terminate on the abandonment date
permitted by the FERC or such other governmental body.
12.2 Any portions of this Agreement necessary to resolve or
cash-out imbalances under this Agreement as required by the
General Terms and Conditions of Transporter's FERC Gas Tariff
Volume No. 1, shall survive the other parts of this Agreement
until such time as such balancing has been accomplished;
provided, however, that Transporter notifies Shipper of such
imbalance no later than twelve months after the termination of
this Agreement.
12.3 This Agreement will terminate automatically upon
written notice from Transporter in the event Shipper fails to pay
all of the amount of any bill for service rendered by Transporter
hereunder in accord with the terms and conditions of Article VI
of the General Terms and Conditions of Transporter's FERC Tariff.
ARTICLE XIII
NOTICE
Except as otherwise provided in the General Terms and
Conditions applicable to this Agreement, any notice under this
Agreement shall be in writing and mailed to the post office
address of the Party intended to receive the same, as follows:
TRANSPORTER: Tennessee Gas Pipeline Company
P. O. Box 2511
Houston, Texas 77252-2511
Attention: Transportation Services
SHIPPER:
NOTICES: UNITED CITIES GAS COMPANY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Attention: MARC TRONZO
BILLING: UNITED CITIES GAS COMPANY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Attention: MARC TRONZO
or to such other address as either Party shall designate by
formal written notice to the other.
ARTICLE XIV
ASSIGNMENTS
14.1 Either Party may assign or pledge this Agreement and
all rights and obligations hereunder under the provisions of any
mortgage, deed of trust, indenture, or other instrument which it
has executed or may execute hereafter as security for
indebtedness. Either Party may, without relieving itself of its
obligation under this Agreement, assign any of its rights
hereunder to a company with which it is affiliated. Otherwise,
Shipper shall not assign this Agreement or any of its rights
hereunder, except in accord with Article III, Section 11 of the
General Terms and Conditions of Transporter's FERC Gas Tariff.
14.2 Any person which shall succeed by purchase, merger, or
consolidation to the properties, substantially as an entirety, of
either Party hereto shall be entitled to the rights and shall be
subject to the obligations of its predecessor in interest under
this Agreement.
ARTICLE XV
MISCELLANEOUS
15.1 The interpretation and performance of this Agreement
shall be in accordance with and controlled by the laws of the
State of Texas, without regard to the doctrines governing choice
of law.
15.2 If any provisions of this Agreement is declared null
and void, or voidable, by a court of competent jurisdiction then
that provision will be considered severable at either Party's
option; and if the severability option is exercised, the
remaining provisions of the Agreement shall remain in full force
and effect.
15.3 Unless otherwise expressly provided in this Agreement
or Transporter's Gas Tariff, no modification of or supplement to
the terms and provisions stated in this agreement shall be or
become effective until Shipper has submitted a request for change
through the TENN-SPEED 2 System and Shipper has been notified
through TENN-SPEED 2 of Transporter's agreement to such change.
15.4 Exhibit "A" attached hereto is incorporated herein by
reference and made a part hereof for all purposes.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be duly executed as of the date first hereinabove
written.
TENNESSEE GAS PIPELINE COMPANY
BY:
UNITED CITIES GAS COMPANY
BY:
TITLE:
DATE:
Exhibit 10.6
Request 0180
TRANSPORTATION - STORAGE SERVICE AGREEMENT
UNDER RATE SCHEDULE TSS
THIS AGREEMENT is made and entered into this 1st day of
October, 1993, by and between WILLIAMS NATURAL GAS COMPANY, a
Delaware corporation, having its principal office in Tulsa,
Oklahoma, hereinafter referred to as "WNG," and UNITED CITIES GAS
COMPANY, incorporated in the states of Virginia and Illinois,
having its principal office in Brentwood, Tennessee hereinafter
referred to as "Shipper."
IN CONSIDERATION of the premises and of the mutual covenants
and agreements herein contained, WNG and Shipper agree as
follows:
ARTICLE I
QUANTITY
1.1 Subject to the provisions of this Agreement and of WNG's
Rate Schedule TSS, WNG agrees to receive such quantities of
natural gas as Shipper may cause to be tendered to WNG at the
Primary Receipt Point(s) designated on Exhibit A which are
selected from WNG's Master Receipt Point List, as revised from
time to time, for transportation and storage on a firm basis;
provided, however, that in no event shall WNG be obligated to
receive on any day in excess of the Maximum Daily Quantity (MDQ)
for each Primary Receipt Point or of the Maximum Daily
Transportation Quantity (MDTQ) for all Primary Receipt Points
within any area, all as set forth on Exhibit A.
1.2 WNG agrees to deliver and Shipper agrees to accept (or
cause to be accepted) at the Primary Delivery Point(s) taken from
the Master Delivery Point List and designated on Exhibit B a
quantity of natural gas thermally equivalent to the quantity
received by WNG for transportation and withdrawn from storage as
provided in Article 1.3 hereunder less appropriate reductions for
fuel and loss as provided in WNG's Rate Schedule TSS; provided,
however, that WNG shall not be obligated to deliver on any day
quantities in excess of the MDQ for each Primary Delivery Point
or in excess of the MDTQ within any area for all Primary Delivery
Points, all as set forth on Exhibit B.
1.3 Subject to the provisions of this Agreement and of WNG's
Rate Schedule TSS, WNG agrees to (a) inject and store such
quantities of natural gas up to the Maximum Storage Quantity
(MSQ) and the Maximum Daily Injection Quantity (MDIQ) as Shipper
may cause to be tendered to WNG for injection into storage, less
appropriate reductions for fuel and loss, and (b) withdraw such
quantities of natural gas up to Shipper's gas in storage and the
Maximum Daily Withdrawal Quantity (MDWQ) reflected on Exhibit C,
all on a firm basis.
ARTICLE II
DELIVERY POINT(S) AND DELIVERY PRESSURE
2.1 Natural gas to be delivered hereunder by WNG to or on
behalf of Shipper shall be delivered at the outlet side of the
measuring station(s) at or near the Delivery Point(s) designated
on Exhibit B at WNG's line pressure existing at such Delivery
Point(s).
ARTICLE III
RATE, RATE SCHEDULE AND GENERAL TERMS AND CONDITIONS
3.1 Shipper shall pay WNG each month for all service
rendered hereunder the then-effective, applicable rates and
charges under WNG's Rate Schedule TSS, as such rates and charges
and Rate Schedule TSS may hereafter be modified, supplemented,
superseded or replaced generally or as to the service hereunder.
Shipper agrees that WNG shall have the unilateral right from time
to time to file with the appropriate regulatory authority and
make effective changes in (a) the rates and charges applicable to
service hereunder, (b) the rate schedule(s) pursuant to which
service hereunder is rendered, or (c) any provision of the
General Terms and Conditions incorporated by reference in such
rate schedule(s); provided, however, Shipper shall have the right
to protest any such changes.
3.2 This Agreement in all respects is subject to the
provisions of Rate Schedule TSS, or superseding rate schedule(s),
and applicable provisions of the General Terms and Conditions
included by reference in said Rate Schedule TSS, all of which are
by reference made a part hereof.
ARTICLE IV
TERM
4.1 This Agreement shall become effective on the date of
execution and shall continue in full force and effect for an
original term until 7:00 a.m., local time on October 1, 1998;
provided, however, this Agreement shall be considered as renewed
and extended beyond such original term for successive five (5)
year terms thereafter, unless canceled, effective at the end of
the primary term or at the end of any subsequent five (5) year
term, by six (6) months advance written notice by either party.
4.2 This Agreement may be suspended or terminated by WNG in
the event Shipper fails to pay all of the amount of any bill
rendered by WNG hereunder when that amount is due; provided,
however, WNG shall give Shipper and the FERC thirty (30) days
notice prior to any suspension or termination of service. Service
may continue hereunder if within the thirty-day notice period
satisfactory assurance of payment is made by Shipper in accord
with Article 18 of the General Terms and Conditions. Suspension
or termination of this Agreement shall not excuse Shippers
obligation to pay all demand and other charges for the original
term of the Agreement.
ARTICLE V
NOTICES
5.1 Unless otherwise agreed to in writing by the parties,
any notice, request, demand, statement or bill respecting this
Agreement shall be in writing and shall be deemed given when
placed in the regular mail or certified mail, postage prepaid and
addressed to the other party, or sent by overnight delivery
service, or by facsimile, at the following addresses or facsimile
numbers, respectively:
To Shipper:
Billing:
UNITED CITIES GAS COMPANY
5300 Maryland Way
Brentwood, TN 37027
Attn: V.P., Gas Supply
Phone: 615/373-0104
Fax: 615/790-9337
Notices:
UNITED CITIES GAS COMPANY
5300 Maryland Way
Brentwood, TN 37027
Attn: V.P., Gas Supply
Phone: 615/373-0104
Fax: 615/790-9337
To WNG:
Payments:
Williams Natural Gas Company
P. O. Box 3288
Tulsa, OK 74101
Attention: Revenue Accounting
All Notices:
Williams Natural Gas Company
P. O. Box 3288
Tulsa, OK 74101
Attention: Manager - Transportation Services
Fax: 918/588-3108
ARTICLE VI
MISCELLANEOUS
6.1 The interpretation, performance and enforcement of this
Agreement shall be construed in accordance with the laws of the
State of Oklahoma.
6.2 As of the date of execution of Exhibits A, B, and C
attached to this Agreement, such executed exhibits shall be
incorporated by reference as part of this Agreement. The parties
may amend Exhibits A, B, and C by mutual agreement, which
amendment shall be reflected in a revised Exhibit A, B, and C and
shall be incorporated by reference as part of this Agreement.
6.3 Any Service Agreements under Rate Schedule TSS shall not
cover service under both TSS-P and TSS-M.
6.4 OTHER THAN AS MAY BE SET FORTH HEREIN, WNG MAKES NO
OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WITHOUT
LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR
MERCHANTABILITY.
6.5 Other Miscellaneous
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
ATTEST: WILLIAMS NATURAL GAS COMPANY
By: By:
Assistant Secretary Title:
ATTEST/WITNESS: UNITED CITIES GAS COMPANY
By: By:
Title: Title:
Exhibit 10.7
Request 0002
TRANSPORTATION- STORAGE SERVICE AGREEMENT
UNDER RATE SCHEDULE TSS
THIS AGREEMENT is made and entered into this 1st day of
October, 1993, by and between WILLIAMS NATURAL GAS COMPANY, a
Delaware corporation, having its principal office in Tulsa,
Oklahoma, hereinafter referred to as "WNG," and UNITED CITIES GAS
COMPANY, incorporated in the states of Virginia and Illinois,
having its principal office in Brentwood, Tennessee hereinafter
referred to as "Shipper."
IN CONSIDERATION of the premises and of the mutual covenants
and agreements herein contained, WNG and Shipper agree as
follows:
ARTICLE I
QUANTITY
1.1 Subject to the provisions of this Agreement and of WNG's
Rate Schedule TSS, WNG agrees to receive such quantities of
natural gas as Shipper may cause to be tendered to WNG at the
Primary Receipt Point(s) designated on Exhibit A which are
selected from WNG's Master Receipt Point List, as revised from
time to time, for transportation and storage on a firm basis;
provided, however, that in no event shall WNG be obligated to
receive on any day in excess of the Maximum Daily Quantity (MDQ)
for each Primary Receipt Point or of the Maximum Daily
Transportation Quantity (MDTQ) for all Primary Receipt Points
within any area, all as set forth on Exhibit A.
1.2 WNG agrees to deliver and Shipper agrees to accept (or
cause to be accepted) at the Primary Delivery Point(s) taken from
the Master Delivery Point List and designated on Exhibit B a
quantity of natural gas thermally equivalent to the quantity
received by WNG for transportation and withdrawn from storage as
provided in Article 1.3 hereunder less appropriate reductions for
fuel and loss as provided in WNG's Rate Schedule TSS; provided,
however, that WNG shall not be obligated to deliver on any day
quantities in excess of the MDQ for each Primary Delivery Point
or in excess of the MDTQ within any area for all Primary Delivery
Points, all as set forth on Exhibit B.
1.3 Subject to the provisions of this Agreement and of WNG's
Rate Schedule TSS, WNG agrees to (a) inject and store such
quantities of natural gas up to the Maximum Storage Quantity
(MSQ) and the Maximum Daily Injection Quantity (MDIQ) as Shipper
may cause to be tendered to WNG for injection into storage, less
appropriate reductions for fuel and loss, and (b) withdraw such
quantities of natural gas up to Shipper's gas in storage and the
Maximum Daily Withdrawal Quantity (MDWQ) reflected on Exhibit C,
all on a firm basis.
ARTICLE II
DELIVERY POINT(S) AND DELIVERY PRESSURE
2.1 Natural gas to be delivered hereunder by WNG to or on
behalf of Shipper shall be delivered at the outlet side of the
measuring station(s) at or near the Delivery Point(s) designated
on Exhibit B at WNG's line pressure existing at such Delivery
Point(s).
ARTICLE III
RATE, RATE SCHEDULE AND GENERAL TERMS AND CONDITIONS
3.1 Shipper shall pay WNG each month for all service
rendered hereunder the then-effective, applicable rates and
charges under WNG's Rate Schedule TSS, as such rates and charges
and Rate Schedule TSS may hereafter be modified, supplemented,
superseded or replaced generally or as to the service hereunder.
Shipper agrees that WNG shall have the unilateral right from time
to time to file with the appropriate regulatory authority and
make effective changes in (a) the rates and charges applicable to
service hereunder, (b) the rate schedule(s) pursuant to which
service hereunder is rendered, or (c) any provision of the
General Terms and Conditions incorporated by reference in such
rate schedule(s); provided, however, Shipper shall have the right
to protest any such changes.
3.2 This Agreement in all respects is subject to the
provisions of Rate Schedule TSS, or superseding rate schedule(s),
and applicable provisions of the General Terms and Conditions
included by reference in said Rate Schedule TSS, all of which are
by reference made a part hereof.
ARTICLE IV
TERM
4.1 This Agreement shall become effective on the date of
execution and shall continue in full force and effect for an
original term until 7:00 a.m., local time on October 1, 2013;
provided, however, this Agreement shall be considered as renewed
and extended beyond such original term for successive five (5)
year terms thereafter, unless canceled, effective at the end of
the primary term or at the end of any subsequent five (5) year
term, by six (6) months advance written notice by either party.
4.2 This Agreement may be suspended or terminated by WNG in
the event Shipper fails to pay all of the amount of any bill
rendered by WNG hereunder when that amount is due; provided,
however, WNG shall give Shipper and the FERC thirty (30) days
notice prior to any suspension or termination of service. Service
may continue hereunder if within the thirty-day notice period
satisfactory assurance of payment is made by Shipper in accord
with Article 18 of the General Terms and Conditions. Suspension
or termination of this Agreement shall not excuse Shipper's
obligation to pay all demand and other charges for the original
term of the Agreement.
ARTICLE V
NOTICES
5.1 Unless otherwise agreed to in writing by the parties,
any notice, request, demand, statement or bill respecting this
Agreement shall be in writing and shall be deemed given when
placed in the regular mail or certified mail, postage prepaid and
addressed to the other party, or sent by overnight delivery
service, or by facsimile, at the following addresses or facsimile
numbers, respectively:
To Shipper:
Billing:
UNITED CITIES GAS COMPANY
5300 Maryland Way
Brentwood, TN 37027
Attn: V.P., Gas Supply
Phone: 615/373-0104
Fax: 615/790-9337
Notices:
UNITED CITIES GAS COMPANY
5300 Maryland Way
Brentwood, TN 37027
Attn: V.P., Gas Supply
Phone: 615/373-0104
Fax: 615/790-9337
To WNG:
Payments:
Williams Natural Gas Company
P. O. Box 3288
Tulsa, OK 74101
Attention: Revenue Accounting
All Notices:
Williams Natural Gas Company
P. O. Box 3288
Tulsa, OK 74101
Attention: Manager - Transportation Services
Fax: 918/588-3108
ARTICLE VI
MISCELLANEOUS
6.1 The interpretation, performance and enforcement of this
Agreement shall be construed in accordance with the laws of the
State of Oklahoma.
6.2 As of the date of execution of Exhibits A, B, and C
attached to this Agreement, such executed exhibits shall be
incorporated by reference as part of this Agreement. The parties
may amend Exhibits A, B, and C by mutual agreement, which
amendment shall be reflected in a revised Exhibit A, B, and C and
shall be incorporated by reference as part of this Agreement.
6.3 Any Service Agreements under Rate Schedule TSS shall not
cover service under both TSS-P and TSS-M.
6.4 OTHER THAN AS MAY BE SET FORTH HEREIN, WNG MAKES NO
OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING WITHOUT
LIMITATION WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR
MERCHANTABILITY.
6.5 Other Miscellaneous
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
ATTEST: WILLIAMS NATURAL GAS COMPANY
By: By:
Assistant Secretary Title:
ATTEST/WITNESS: UNITED CITIES GAS COMPANY
By: By:
Title: Title:
Exhibit 10.8
Service Agreement No. 867760
Authorization: Blanket
(Reservation Charge)
SERVICE AGREEMENT
UNDER RATE SCHEDULE FT
THIS AGREEMENT, made and entered into as of this 1ST DAY OF
November, 1993, by and between Southern Natural Gas Company, a
Delaware corporation, hereinafter referred to as "Company", and
United Cities Gas Company, a Illinois corporation, hereinafter
referred to as "Shipper",
WITNESSETH
WHEREAS, Company is an interstate pipeline, as defined in
Section 2(15) of the Natural Gas Policy Act of 1978 (NGPA); and
WHEREAS, Shipper is a LDC/DISTRIBUTOR; and
WHEREAS, Shipper has requested fire transportation pursuant
to Rate Schedule FT of various supplies of gas for redelivery for
Shipper's account and has submitted to Company a request for such
transportation service in compliance with Section 2 of the
General Terms and Conditions applicable to Rate Schedule FT; and
WHEREAS, Company has agreed to provide Shipper with
transportation service of such gas supplies in accordance with
the terms and conditions of this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
TRANSPORTATION QUANTITY
1.1 Subject to the terms and provisions of this Agreement,
Rate Schedule FT and the General Terms and Conditions thereto,
Shipper agrees to deliver or cause to be delivered to Company at
the Receipt Point(s) described in Exhibit A and Exhibit A-1 to
this Agreement, and Company agrees to accept at such point(s) for
transportation under this Agreement, an aggregate quantity of up
to 23,444 Mcf of natural gas per day for the period of October 1
through the following March 31 and 17,998 Mcf of natural gas per
day, for the period of April 1 through the following September 30
during the term of this Agreement (each such volume respectively
referred to herein as "Transportation Demand," as applicable).
The volume for the April - September period is subject to any
Commission order addressing the mitigation issues in Docket Nos.
RS92-10, et al. Company's obligation to accept gas on a firm
basis at any Receipt Point is limited to the Receipt Points set
out on Exhibit A and to the Maximum Daily Receipt Quantity (MDRQ)
stated for each such Receipt Point. The sum of the MDDQ's for the
Receipt Points on Exhibit A shall not exceed the Transportation
Demand.
1.2 Subject to the terms and provisions of this Agreement,
Rate Schedule FT and the General Terms and Conditions thereto,
Company shall deliver a thermally equivalent quantity of gas,
less the applicable fuel charge as set forth in Rate Schedule FT,
to Shipper at the Delivery Point(s) described in Exhibit B and
Exhibit B-1 hereto. Company's obligation to redeliver gas at any
Delivery Point on a firm basis is limited to the Delivery Points
specified on Exhibit B and to the Maximum Daily Delivery Quantity
(MDDQ) stated for each such Delivery Point. The sum of the MDDQ's
for the Delivery Points on Exhibit B shall equal the
Transportation Demand.
ARTICLE II
CONDITIONS OF SERVICE
2.1 It is recognized that the transportation service
hereunder is provided on a firm basis pursuant to, in accordance
with and subject to the provisions of Company's Rate Schedule FT,
and the General Terms and Conditions thereto, which are contained
in Company's FERC Gas Tariff, as in effect from time to time, and
which are hereby incorporated by reference. In the event of any
conflict between this Agreement and Rate Schedule FT, the terms
of Rate Schedule FT shall govern as to the point of conflict. Any
limitation of transportation service hereunder shall be in
accordance with the priorities set out in Rate Schedule FT and
the General Terms and Conditions thereto.
2.2 This Agreement shall be subject to all provisions of the
General Terms and Conditions applicable to Company's Rate
Schedule FT as such conditions may be revised from time to time.
Unless Shipper requests otherwise, Company shall provide to
Shipper the filings Company makes at the Federal Energy
Regulatory Commission ("Commission") of such provisions of the
General Terms and Conditions or other matters relating to Rate
Schedule FT.
2.3 Company shall have the right to discontinue service
under this Agreement in accordance with Section 15.3 of the
General Terms and Conditions hereto.
2.4 The parties hereto agree that neither party shall be
liable to the other party for any special, indirect, or
consequential damages (including, without limitation, loss of
profits or business interruptions) arising out of or in any
manner related to this Agreement.
2.5 This Agreement is subject to the provisions of Part 284
of the Commission's Regulations under the NGPA and the Natural
Gas Act. Upon termination of this Agreement, Company and Shipper
shall be relieved of further obligation hereunder to the other
party except to complete the transportation of gas underway on
the day, of termination, to comply with provisions of Section 14
of the General Terms and Conditions with respect to any
imbalances accrued prior to termination of this Agreement, to
render reports, and to make payment for all obligations accruing
prior to the date of termination.
ARTICLE III
NOTICES
3.1 Except as provided in Section 8.6 herein, notices
hereunder shall be given pursuant to the provisions of Section 18
of the General Terms and Conditions to the respective party at
the applicable address, telephone number or facsimile machine
number stated below or such other addresses, telephone numbers or
facsimile machine numbers as the parties shall respectively
hereafter designate in writing from time to time:
Company:
Notices and General Correspondence
Southern Natural Gas Company
Post Office Box 2563
Birmingham, Alabama 35202-2563
Attention: Transportation Services Department
Telephone No.: (205) 325-7223
Facsimile Machine No.: (205) 325-7303
Dispatching Notices - Nominations/Confirmations/Scheduling
Southern Natural Gas Company
Post Office Box 2563
Birmingham, Alabama 35202-2563
Attention: Transportation Services Department
Telephone No.: (205) 325-7223
Facsimile Machine No.: (205) 325-7303
Emergencies/24-Hour Dispatching/
Limitation and Penalty Notices
Southern Natural Gas Company
Post Office Box 2563
Birmingham, Alabama 35202-2563
Attention: Gas Operations Department
Telephone No.: (205) 325-7308
Facsimile Machine No.: (205) 325-7375
Alternative Contacts:
(1) Attention: Gas Operations Department
Telephone No.: (205) 325-7305
Facsimile Machine No.: (205) 325-7375
(2) Attention: Gas Operations Department
Telephone No.: (205) 325-7309
Facsimile Machine No.: (205) 325-7375
<PAGE>
Payments
Southern Natural Gas Company
Post Office Box 102502
68 Annex
Atlanta, Georgia 30368
Shipper:
Notices ant General Correspondence
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Dispatching Notices - Nominations/Confirmations
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Dispatching Notices - Limitations
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Emergencies and 24-Bour Dispatching Contact
WILLIAM OSBOBN
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Alternative Contacts:
(1) MARC TRONZO
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
(2) RON MCDOWELL
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Invoices
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
<PAGE>
ARTICLE IV
TERM
4.1 Subject to the provisions hereof, this Agreement shall
become effective as of the date first hereinabove written and
shall be in full force and effect for a primary term through the
following dates: 10/31/1998 for 2,444 Mcf per day of
Transportation Demand and 12/31/2000 for 21,000 Mcf per day, of
Transportation Demand and shall continue in force and effect for
successive terms of 1 year each after the end of each primary
term for the specified volume, unless and until cancelled with
respect to the associated volume by either party giving 180 days
written notice to the other party prior to the end of the
specified primary term or any yearly extension thereof.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Unless otherwise agreed to by the parties, the teems of
Rate Schedule FT, and the General Terms and Conditions thereto,
shall apply to the acquisition or construction of any facilities
necessary to effectuate this Agreement. Other provisions of this
Agreement notwithstanding, Company shall be under no obligation
to commence service hereunder unless and until (1) all facilities
of whatever nature, as are required to permit the receipt,
measurement, transportation, and delivery of natural gas
hereunder have been authorized, installed, and are in operating
condition, and (2) Company, in its reasonable discretion, has
determined that such service would constitute transportation of
natural gas authorized under all applicable regulatory
authorizations and the Commission's Regulations.
ARTICLE VI
REMUNERATION
6.1 Shipper shall pay Company monthly for the transportation
services rendered hereunder the charges specified in Rate
Schedule FT, including an, penalty and other authorized charges
assessed under Rate Schedule FT and the General Terms and
Conditions. Company shall notify Shipper as soon as practicable
of the date services will commence hereunder, and if said date is
not the first day, of the month, the Reservation Charge for the
first month of service hereunder shall be adjusted to reflect
only the actual number of days during said month that
transportation service is available. Company may agree from time
to time to discount the rate charged Shipper for services
provided hereunder in accordance with the provisions of Rate
Schedule FT. Said discounted charge shall be set forth on Exhibit
E hereto.
6.2 The rates and charges provided for under Rate Schedule
FT shall be subject to increase or decrease pursuant to any order
issued by the Commission in any proceeding initiated by Company
or applicable to the services performed hereunder. Shipper agrees
that Company shall, without any further agreement by Shipper,
have the right to change from time to time, all or any part of
this Agreement, as well as all or any part of Rate Schedule FT,
or the General Terms and Conditions thereto, including without
limitation the right to change the rates and charges in effect
hereunder, pursuant to Section 4(d) of the Natural Gas Act as
may, be deemed necessary by Company in its reasonable judgment,
to assure just and reasonable service and rates under the Natural
Gas Act. Nothing contained herein shall prejudice the rights of
Shipper to contest at any time the changes made pursuant to this
Section 6.2, including the right to contest the transportation
rates or charges for the services provided under this Agreement,
from time to time, in any subsequent rate proceedings by Company
under Section 4 of the Natural Gas Act or to file a complaint
under Section 5 of the Natural Gas Act with respect to such
transportation rates or charges.
ARTICLE VII
SPECIAL PROVISIONS
7.1 If Shipper is a seller of gas under more than one
Service Agreement and requests that Company alloy it to aggregate
nominations for certain Receipt Points for such Agreements,
Company will allow such an arrangement under the terms and
conditions set forth in this Article VII. To be eligible to
aggregate gas, Shipper must comply with the provisions of Section
2.2 of the General Terms and Conditions and the terms and
conditions of the Supply Pool Balancing Agreement executed by
Shipper and Company pursuant thereto.
7.2 If Shipper is a purchaser of gas from seller(s) that are
selling from an aggregate of Receipt Points, Shipper and its
seller(s) shall execute an Agency Agreement in the format
attached hereto as Exhibit D for each such seller from whom
Shipper is purchasing gas.
ARTICLE VIII
MISCELLANEOUS
8.1 This Agreement constitutes the entire Agreement between
the parties and no waiver by Company or Shipper of any default of
either party under this Agreement shall operate as a waiver of
any subsequent default whether of a like or different character.
8.2 The laws of the State of Alabama shall govern the
validity, construction, interpretation, and effect of this
Agreement.
8.3 No modification of or supplement to the terms and
provisions hereof shall be or become effective except by
execution of a supplementary written agreement between the
parties except that in accordance with the provisions of Rate
Schedule FT, and the General Terms and Conditions thereto,
Receipt Points may be added to or deleted from Exhibit A and the
Maximum Daily Receipt Quantity for any Receipt Point on Exhibit A
may be changed upon execution by Company and Shipper of a Revised
Exhibit A to reflect said change(s), and Delivery Points may be
added to or deleted from Exhibit B and the Maximum Daily Delivery
Quantity for any Delivery Point may be changed upon execution by
Company and Shipper of a Revised Exhibit B to reflect said
change(s); provided, however, that any such change to Exhibit A
or Exhibit B must include corresponding changes to the existing
Maximum Daily Receipt Quantities or Maximum Daily Delivery
Quantities, respectively, such that the sum of the changed
Maximum Daily Receipt Quantities shall not exceed the
Transportation Demand and the sum of the Maximum Daily Delivery
Quantities equals the Transportation Demand.
8.4 This Agreement shall bind and benefit the successors and
assigns of the respective parties hereto. Subject to the
provisions of Section 22 of the General Tents and Conditions
applicable hereto, neither party may assign this Agreement
without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however,
that either party may assign or pledge this Agreement under the
provisions of any mortgage, deed of trust, indenture or similar
instrument.
8.5 Exhibits A, A-1, B, B-1, C, D and/or E, if applicable,
attached to this Agreement constitute a part of this Agreement
and are incorporated herein.
8.6 This Agreement is subject to all present and future
valid laws and orders, rules, and regulations of any regulatory
body of the federal or state government having or asserting
jurisdiction herein. After the execution of this Agreement, each
party shall make and diligently prosecute all necessary filings
with federal or other governmental bodies, or both, as may be
required for the initiation and continuation of the
transportation service which is the subject of this Agreement and
to construct and operate any facilities necessary therefor. Each
party shall have the right to seek such governmental
authorizations as it deems necessary, including the right to
prosecute its requests or applications for such authorization in
the manner it deems appropriate. Upon either party's request, the
other party shall timely provide or cause to be provided to the
requesting party such information and Material not within the
requesting party's control and/or possession that may be required
for such filings. Each party shall promptly inform the other
party of any changes in the representations made by such party
herein and/or in the information provided pursuant to this
paragraph. Each party shall promptly provide the party with a
copy of all filings, notices, approvals, and authorizations in
the course of the prosecution of its filings. In the event all
such necessary regulatory approvals have not been issued or have
not been issued on terms and conditions acceptable to Company or
Shipper within twelve (12) months from the date of the initial
application therefor, then Company or Shipper may terminate this
Agreement without further liability or obligation to the other
party by giving written notice thereof at any time subsequent to
the end of such twelve-month period, but prior to the receipt of
all such acceptable approvals. Such notice will be effective as
of the date it is delivered to the U. S. Mail, for delivery by
certified mail, return receipt requested.
8.7 This Agreement supersedes and cancels the Service Agreement
(#848970) dated 10/20/1988, between the parties hereto.
IN WITNESS THEREOF, this Agreement has been executed by the
parties as of the date first written above by their respective
duly authorized officers.
ATTEST: SOUTHERN NATURAL GAS COMPANY
By
Its
ATTEST: UNITED CITIES GAS COMPANY
By
Its
Exhibit 10.9
Service Agreement No. 867761
Authorization: Blanket
(Reservation Charge)
SERVICE AGREEMENT
UNDER RATE SCHEDULE FT-NN
THIS AGREEMENT, made and entered into as of this 1st day, of
November, 1993, by and between Southern Natural Gas Company, a
Delaware corporation, hereinafter referred to as "Company", and
United Cities Gas Company, a Illinois corporation, hereinafter
referred to as "Shipper",
WITNESSETH
WHEREAS, Company is an interstate pipeline, as defined in
Section 2(15) of the Natural Gas Policy Act of 1978 (NGPA); and
WHEREAS, Shipper is a LDC/DISTRIBUTOR; and
WHEREAS, Shipper has requested fire transportation pursuant
to Rate Schedule FT-NN of various supplies of gas for redelivery
for Shipper's account and has submitted to Company a request for
such transportation service in compliance with Section 2 of the
General Terms and Conditions applicable to Rate Schedule FT-NN;
and
WHEREAS, Company has agreed to provide Shipper with
transportation service in accordance with the terms and
conditions of this Agreement.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
TRANSPORTATION QUANTITY
1.1 Subject to the terms and provisions of this Agreement,
Rate Schedule FT-NN and the General Terms and Conditions thereto,
Shipper agrees to deliver or cause to be delivered to Company at
the Receipt Point(s) described in Exhibit A and Exhibit A-1 to
this Agreement, and Company agrees to accept at such point(s) for
transportation under this Agreement, an aggregate quantity of up
to 21,556 Mcf of natural gas per day (Transportation Demand).
Company's obligation to accept gas on a firm basis at any Receipt
Point is limited to the Receipt Points set out on Exhibit A and
to the Maximum Daily Receipt Quantity (MDRQ) stated for each such
Receipt Point. The sum of the MDRQ's for the Receipt Points on
Exhibit A shall not exceed the Transportation Demand.
1.2 Subject to the terms and provisions of this Agreement,
Rate Schedule FT-NN and the General Terms and Conditions thereto,
Company shall deliver a thermally equivalent Quantity of gas,
less the applicable fuel charge as set forth in Rate Schedule
FT-NN, to shipper at the Delivery Point(s) described in Exhibit B
and Exhibit B-1 hereto. Company's obligation to redeliver gas on
a firm basis at any Delivery Point is limited to the Delivery
Points specified on Exhibit B and to the Maximum Daily Delivery
Quantity (MDDQ) stated for each such Delivery Point. The sum of
the MDDQ's for the Delivery Points on Exhibit B shall equal the
Transportation Demand.
ARTICLE II
CONDITIONS OF SERVICE
2.1 It is recognized that the transportation service
hereunder is provided on a fins basis pursuant to, in accordance
with and subject to the provisions of Company's Rate Schedule
FT-NN, and the General Terms and Conditions thereto, which are
contained in Company's FERC Gas Tariff, as in effect from time to
time, and which are hereby incorporated by reference. In the
event of any conflict between this Agreement and Rate Schedule
FT-NN, the terms of Rate Schedule FT-NN shall govern as to the
point of conflict. Any limitation of transportation service
hereunder shall be in accordance with the priorities set out in
Rate Schedule FT-NN and the General Terms and Conditions thereto.
2.2 This Agreement shall be subject to all provisions of the
General Terms and Conditions applicable to Company's Rate
Schedule FT-NN as such conditions may be revised from time to
time. Unless Shipper requests otherwise, Company shall provide to
Shipper the filings Company makes at the Federal Energy
Regulatory Commission ("Commission") of such provisions of the
General Terms and Conditions or other matters relating to Rate
Schedule FT-NN.
2.3 Company shall have the right to discontinue service
under this Agreement in accordance with Section 15.3 of the
General Terms and Conditions hereto.
2.4 The parties hereto agree that neither part shall be
liable to the other part, for any special, indirect, or
consequential damages (including, without limitation, loss of
profits or business interruptions) arising out of or in any
gunner related to this Agreement.
2.5 This Agreement is subject to the provisions of Part 284
of the Commission's Regulations under the NGPA and the Natural
Gas Act. Upon termination of this Agreement, Company and Shipper
shall be relieved of further obligation to the other party except
to complete the transportation of gas underway on the day of
termination, to comply with the Revisions of Section 14 of the
General Terms and Conditions with respect to any imbalances
accrued prior to termination of this Agreement, to render
reports, and to make payment for all obligations accruing prior
to the date of termination.
ARTICLE III
NOTICES
3.1 Except as provided in Section 8.6 herein, notices
hereunder shall be given pursuant to the provisions of Section 18
of the General Terms and Conditions to the respective party at
the applicable address, telephone number or facsimile machine
number stated below or such other addresses, telephone numbers or
facsimile machine numbers as the parties ahal1 respectively
hereafter designate in writing from time to time:
Company:
Notices and General Correspondence
Southern Natural Gas Company
Post Office Box 2563
Birmingham, Alabama 35202-2563
Attention: Transportation Services Department
Telephone No.: (205) 325-7223
Facsimile Machine No.: (205) 325-7303
Dispatching Notices - Nominations/Confirmations/Scheduling
Southern Natural Gas Company
Post Office Box 2563
Birmingham, Alabama 35202-2563
Attention: Transportation Services Department
Telephone No.: (205) 325-7223
Facsimile Machine No.: (205) 325-7303
Emergencies/24-Hour Dispatching/
Limitation and Penalty Notices
Southern Natural Gas Company
Post Office Box 2563
Birmingham, Alabama 35202-2563
Attention: Gas Operations Department
Telephone No.: (205) 325-7308
Facsimile Machine No.: (205) 325-7375
Alternative Contacts:
(1) Attention: Gas Operations Department
Telephone No.: (205) 325-7305
Facsimile Machine No.: (205) 325-7375
(2) Attention: Gas Operations Department
Telephone No.: (205) 325-7309
Facsimile Machine No.: (205) 325-7375
Payments
Southern Natural Gas Company
Post Office Box 102502
68 Annex
Atlanta, Georgia 30368<PAGE>
Shipper:
Notices and General Correspondence
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Dispatching Notices - Nominations/Confirmations
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Dispatching Notices - Limitations
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Emergencies and 24-Hour Dispatching Contact
WILLIAM OSBORN
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Alternative Contacts:
(1) MARC TRONZO
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
(2) RON MCDOWELL
5300 MARYLAND WAY
BRENTWOOD, TN 37027
Telephone No.: (615) 373-0104
Facsimile Machine No.: (615) 790-9337
Invoices
RON MCDOWELL, VICE PRESIDENT - GAS SUPPLY
5300 MARYLAND WAY
BRENTWOOD, TN 37027
<PAGE>
ARTICLE IV
TERM
4.1 Subject to the provisions hereof, this Agreement shall
become effective as of the date first hereinabove written and
shall be in full force and effect for a primary term through
10/31/1998 and shall continue and remain in force and effect for
successive terms of 1 year each thereafter unless and until
cancelled by either party giving 180 days written notice to the
other party prior to the end of the primary term or any yearly
extension thereof.
ARTICLE V
CONDITIONS PRECEDENT
5.1 Unless otherwise agreed to by the parties, the terms of
Rate Schedule FT-NN, and the General Terms and Conditions
thereto, shall apply to the acquisition or construction of any
facilities necessary to effectuate this Agreement. Other
provisions of this Agreement notwithstanding, Company shall be
under no obligation to commence service hereunder unless and
until (1) all facilities, of whatever nature, as are required to
permit the receipt, measurement, transportation, and delivery of
natural gas hereunder have been authorized, installed, and are in
operating condition, and (2) Company, in its reasonable
discretion, has determined that such service would constitute
transportation of natural gas authorized under all applicable
regulatory authorizations and the Commission's Regulations.
ARTICLE VI
REMUNERATION
6.1 Shipper shall pay Company monthly for the transportation
services rendered hereunder the charges specified in Rate
Schedule FT-NN, including any penalty and other authorized
charges assessed under Rate Schedule FT-NN and the General Terms
and Conditions. Company shall notify Shipper as soon as
practicable of the date services will commence hereunder, and if
said date is not the first day of the month, the Reservation
Charge for the first month of service hereunder shall be adjusted
to reflect only the actual number of days during said month that
transportation service is available. Company may agree from time
to time to discount the rates charged Shipper for services
provided hereunder in accordance with the provisions of Rate
Schedule FT-NN. Said discounted charges shall be set forth on
Exhibit E hereto.
6.2 The rates and charges provided for under Rate Schedule
FT-NN shall be subject to increase or decrease pursuant to any
order issued by the Commission in any proceeding initiated by
Company or applicable to the services performed hereunder.
Shipper agrees that Company shall, without any further agreement
by Shipper, have the right to change from time to time, all or
any part of this Agreement, as well as all or any part of Rate
Schedule FT-NN, or the General Terms and Conditions thereto,
including without limitation the right to change the rates and
charges in effect hereunder, pursuant to Section 4(d) of the
Natural Gas Act as may be deemed necessary by Company, in its
reasonable judgment, to assure just and reasonable service and
rates under the Natural Gas Act. Nothing contained herein shall
prejudice the rights of Shipper to contest at any time the
changes made pursuant to this Section 6.2, including the right to
contest the transportation rates or charges for the services
provided under this Agreement, from time to time, in any
subsequent rate proceedings by Company under Section 4 of the
Natural Gas Act or to file a complaint under Section 5 of the
Natural Gas Act with respect to such transportation rates or
charges.
ARTICLE VII
SPECIAL PROVISIONS
7.1 If Shipper is a seller of gas under more than one
Service Agreement and requests that Company allow it to aggregate
nominations for certain Receipt Points for such Agreements,
Company will allow such an arrangement under the terms and
conditions set forth in this Article VII. To be eligible to
aggregate gas, Shipper must comply with the provisions of Section
2.2 of the General Terms and Conditions and the terms and
conditions of the Supply Pool Balancing Agreement executed by
Shipper and Company pursuant thereto.
7.2 If Shipper is a purchaser of gas from seller(s) that are
selling from an aggregate of Receipt Points, Shipper and its
seller(s) shall execute an Agency Agreement in the format
attached hereto as Exhibit D for each such seller from whom
Shipper is purchasing gas.
ARTICLE VIII
MISCELLANEOUS
8.1 This Agreement constitutes the entire Agreement between
the parties and no waiver by Company or Shipper of any default of
either party under this Agreement shall operate as a waiver of
an, subsequent default whether of a like or different character.
8.2 The laws of the State of Alabama shall govern the
validity, construction, interpretation, and effect of this
Agreement.
8.3 No modification of or supplement to the terms and
provisions hereof shall be or become effective except by
execution of a supplementary written agreement between the
parties except that in accordance with the provisions of Rate
Schedule FT-NN, and the General Terms and Conditions thereto,
Receipt Points may be added to or deleted from Exhibit A and the
Maximum Daily Receipt Quantity for any Receipt Point on Exhibit A
may be changed upon execution by Company and Shipper of a Revised
Exhibit A to reflect said change(s), and Delivery Points may be
added to or deleted from Exhibit B and the Maximum Daily Delivery
Quantity for any Delivery Point may be changed upon execution by
Company and Shipper of a Revised Exhibit B to reflect said
change(s); provided, however, that any such change to Exhibit A
or Exhibit B must include corresponding changes to the existing
Maximum Daily Receipt Quantities or Maximum Daily Delivery
Quantities, respectively, such that the sum of the changed
Maximum Daily Receipt Quantities shall not exceed the
Transportation Demand and the sum of the Maximum Daily Delivery
Quantities equals the Transportation Demand.
8.4 This Agreement shall bind and benefit the successors and
assigns of the respective parties hereto. Subject to the
provisions of Section 22 of the General Terms and Conditions
applicable hereto, neither party may assign this Agreement
without the prior written consent of the other party, which
consent shall not be unreasonably withheld; provided, however,
that either party may assign or pledge this Agreement under the
provisions of any mortgage, deed of trust, indenture or similar
instrument.
8.5 Exhibits A, A-1, B. B-1, C' D and/or E, if applicable,
attached to this Agreement constitute a part of this Agreement
and are incorporated herein.
8.6 This Agreement is subject to all present and future
valid laws and orders, rules, and regulations of any regulatory
body of the federal or state government having or asserting
jurisdiction herein. After the execution of this Agreement, each
party shall make and diligently prosecute all necessary filings
with federal or other governmental bodies, or both, as may be
required for the initiation and continuation of the
transportation service which is the subject of this Agreement and
to construct and operate any facilities necessary therefor. Each
party shall have the right to seek such governmental
authorizations as it deems necessary, including the right to
prosecute its requests or applications for such authorization in
the manner it deems appropriate. Upon either party's request, the
other party shall timely provide or cause to be provided to the
requesting party such information and material not within the
requesting party's control and/or possession that may be required
for such filings. Each party shall promptly inform the other
party of any changes in the representations made by such party
herein and/or in the information provided pursuant to this
paragraph. Each party shall promptly provide the party with a
copy of all filings, notices, approvals, and authorizations in
the course of the prosecution of its filings. In the event all
such necessary regulatory approvals have not been issued or have
not been issued on terms and conditions acceptable to Company or
Shipper within twelve (12) months from the date of the initial
application therefor, then Company or Shipper may terminate this
Agreement without further liability or obligation to the other
party by giving written notice thereof at any time subsequent to
the end of such twelve-month period, but prior to the receipt of
all such acceptable approvals. Such notice will be effective as
of the date it is delivered to the U.S. Mail, for delivery by
certified mail, return receipt requested.
8.7 This Agreement supersedes and cancels the Service
Agreement (#848970} dated 10/20/1988 between the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first written above by their respective
duly authorized officers.
ATTEST: SOUTHERN NATURAL GAS COMPANY
By
Its
ATTEST: UNITED CITIES GAS COMPANY
By
Its
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY RESTATED FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF ATMOS ENERGY CORPORATION
FOR THE PERIODS INDICATED BELOW AS RESTATED FOR A POOLING OF INTERESTS
IN JULY 1997.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997 SEP-30-1997
<PERIOD-END> DEC-31-1996 MAR-31-1997 JUN-30-1997
<BOOK-VALUE> PER-BOOK PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 778,835 794,565 813,886
<OTHER-PROPERTY-AND-INVEST> 0 0 0
<TOTAL-CURRENT-ASSETS> 240,372 189,291 134,843
<TOTAL-DEFERRED-CHARGES> 67,676 69,448 68,140
<OTHER-ASSETS> 0 0 0
<TOTAL-ASSETS> 1,086,883 1,053,304 1,016,869
<COMMON> 147 147 148
<CAPITAL-SURPLUS-PAID-IN> 243,944 246,075 247,772
<RETAINED-EARNINGS> 92,658 115,870 105,419
<TOTAL-COMMON-STOCKHOLDERS-EQ> 336,749 362,092 353,339
0 0 0
0 0 0
<LONG-TERM-DEBT-NET> 311,162 309,667 306,536
<SHORT-TERM-NOTES> 117,988 87,757 78,326
<LONG-TERM-NOTES-PAYABLE> 0 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 15,679 15,828 15,173
0 0 0
<CAPITAL-LEASE-OBLIGATIONS> 2,465 2,419 2,373
<LEASES-CURRENT> 273 287 299
<OTHER-ITEMS-CAPITAL-AND-LIAB> 302,567 275,254 260,823
<TOT-CAPITALIZATION-AND-LIAB> 1,086,883 1,053,304 1,016,869
<GROSS-OPERATING-REVENUE> 280,624 643,261 786,974
<INCOME-TAX-EXPENSE> 10,849 29,624 27,500
<OTHER-OPERATING-EXPENSES> 243,807 550,594 691,831
<TOTAL-OPERATING-EXPENSES> 254,656 580,218 719,331
<OPERATING-INCOME-LOSS> 25,968 63,043 67,643
<OTHER-INCOME-NET> 888 3,102 3,926
<INCOME-BEFORE-INTEREST-EXPEN> 26,856 66,145 71,569
<TOTAL-INTEREST-EXPENSE> 8,701 17,364 25,806
<NET-INCOME> 18,155 48,781 45,763
0 0 0
<EARNINGS-AVAILABLE-FOR-COMM> 18,155 48,781 45,763
<COMMON-STOCK-DIVIDENDS> 7,375 14,789 22,221
<TOTAL-INTEREST-ON-BONDS> 3,172 6,341 9,427
<CASH-FLOW-OPERATIONS> (12,463) 56,718 120,792
<EPS-PRIMARY> .62 1.66 1.55
<EPS-DILUTED> .62 1.66 1.55
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY RESTATED FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF ATMOS ENERGY CORPORATION
FOR THE PERIODS INDICATED BELOW AS RESTATED FOR A POOLING OF INTERESTS
IN JULY 1997.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS 9-MOS 12-MOS
<FISCAL-YEAR-END> SEP-30-1996 SEP-30-1996 SEP-30-1996 SEP-30-1996
<PERIOD-END> DEC-31-1995 MAR-31-1996 JUN-30-1996 SEP-30-1996
<BOOK-VALUE> PER-BOOK PER-BOOK PER-BOOK PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 729,282 728,833 745,612 770,211
<OTHER-PROPERTY-AND-INVEST> 0 0 0 0
<TOTAL-CURRENT-ASSETS> 213,172 187,269 124,493 174,603
<TOTAL-DEFERRED-CHARGES> 65,788 61,873 61,360 65,796
<OTHER-ASSETS> 0 0 0 0
<TOTAL-ASSETS> 1,008,242 977,975 931,465 1,010,610
<COMMON> 146 144 145 146
<CAPITAL-SURPLUS-PAID-IN> 238,704 234,296 238,348 241,658
<RETAINED-EARNINGS> 84,558 108,348 99,526 87,778
<TOTAL-COMMON-STOCKHOLDERS-EQ> 323,408 342,788 338,019 329,582
0 0 0 0
0 0 0 0
<LONG-TERM-DEBT-NET> 279,162 288,301 283,495 276,162
<SHORT-TERM-NOTES> 106,388 34,403 45,504 128,488
<LONG-TERM-NOTES-PAYABLE> 0 0 0 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0 0 0 0
<LONG-TERM-DEBT-CURRENT-PORT> 20,679 14,915 11,419 16,679
0 0 0 0
<CAPITAL-LEASE-OBLIGATIONS> 2,648 2,602 2,557 2,492
<LEASES-CURRENT> 207 225 242 277
<OTHER-ITEMS-CAPITAL-AND-LIAB> 275,750 294,741 250,229 256,930
<TOT-CAPITALIZATION-AND-LIAB> 1,008,242 977,975 931,465 1,010,610
<GROSS-OPERATING-REVENUE> 253,439 595,306 770,546 886,691
<INCOME-TAX-EXPENSE> 10,819 31,612 30,069 23,316
<OTHER-OPERATING-EXPENSES> 218,255 498,113 668,043 794,114
<TOTAL-OPERATING-EXPENSES> 229,074 529,725 698,112 817,430
<OPERATING-INCOME-LOSS> 24,365 65,581 72,434 69,261
<OTHER-INCOME-NET> 2,488 5,142 2,940 3,567
<INCOME-BEFORE-INTEREST-EXPEN> 26,853 70,723 75,374 72,828
<TOTAL-INTEREST-EXPENSE> 8,357 16,321 23,767 31,677
<NET-INCOME> 18,496 54,402 51,607 41,151
0 0 0 0
<EARNINGS-AVAILABLE-FOR-COMM> 18,496 54,402 51,607 41,151
<COMMON-STOCK-DIVIDENDS> 7,101 14,176 21,285 28,478
<TOTAL-INTEREST-ON-BONDS> 3,172 3,769 7,039 12,975
<CASH-FLOW-OPERATIONS> 3,986 103,924 119,548 91,733
<EPS-PRIMARY> .64 1.88 1.78 1.42
<EPS-DILUTED> .64 1.88 1.78 1.42
</TABLE>
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY RESTATED FINANCIAL INFORMATION EXTRACTED
FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF ATMOS ENERGY CORPORATION
FOR THE YEAR ENDED SEPTEMBER 30, 1995 AS RESTATED FOR A POOLING OF
INTERESTS IN JULY 1997.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 697,287
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 144,847
<TOTAL-DEFERRED-CHARGES> 58,814
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 900,948
<COMMON> 141
<CAPITAL-SURPLUS-PAID-IN> 230,630
<RETAINED-EARNINGS> 73,578
<TOTAL-COMMON-STOCKHOLDERS-EQ> 304,349
0
0
<LONG-TERM-DEBT-NET> 294,463
<SHORT-TERM-NOTES> 65,813
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 16,155
0
<CAPITAL-LEASE-OBLIGATIONS> 2,620
<LEASES-CURRENT> 262
<OTHER-ITEMS-CAPITAL-AND-LIAB> 217,286
<TOT-CAPITALIZATION-AND-LIAB> 900,948
<GROSS-OPERATING-REVENUE> 749,555
<INCOME-TAX-EXPENSE> 16,544
<OTHER-OPERATING-EXPENSES> 677,594
<TOTAL-OPERATING-EXPENSES> 694,138
<OPERATING-INCOME-LOSS> 55,417
<OTHER-INCOME-NET> 3,577
<INCOME-BEFORE-INTEREST-EXPEN> 58,994
<TOTAL-INTEREST-EXPENSE> 30,186
<NET-INCOME> 28,808
0
<EARNINGS-AVAILABLE-FOR-COMM> 28,808
<COMMON-STOCK-DIVIDENDS> 26,197
<TOTAL-INTEREST-ON-BONDS> 13,599
<CASH-FLOW-OPERATIONS> 79,143
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.06
</TABLE>
