EXHIBIT 10.65

 

EXHIBIT II

 

NOVEMBER 1, 2002, RATE FT-A AGREEMENT

 

BETWEEN LG&E AND TENNESSEE GAS PIPELINE COMPANY

 

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Service Package No: 40715

Amendment No:            

 

GAS TRANSPORTATION AGREEMENT

(For Use under FT-A Rate Schedule)

 

THIS AGREEMENT is made and entered into as of the 1st day of November, 2002, by
and between TENNESSEE GAS PIPELINE COMPANY, a Delaware Corporation, hereinafter
referred to as “Transporter” and LOUISVILLE GAS AND ELECTRIC COMPANY, a Kentucky
Corporation, hereinafter referred to as “Shipper.”  Transporter and Shipper
shall collectively be referred to herein as the “Parties.”

 

ARTICLE I – DEFINITIONS

 

1.1           TRANSPORTATION QUANTITY – 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 51,000 dekatherms.  Any
limitations on 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

 

4.1           All facilities are in place to render the service provided for in
this Agreement.

 

4.2           Pursuant to Article VIII, Section 1 of the General Terms and
Conditions of Transporter’s Tariff (“GT&C”), Transporter shall cause the
delivery of natural gas to Shipper at the Shipper’s Primary Point of Delivery as
nearly as practicable to Transporter’s line pressure, provided that such line
pressure shall not be less than 500 pounds per square inch gauge at Monroe,
meter number 020843, and 600 pounds per square inch gauge at Calvary, meter
number 020844.  Transporter shall be obligated to provide such minimum pressures
only to the extent that capacity is reserved by Shipper and scheduled by
Transporter at the Primary Delivery Point(s) described above.  Such minimum
pressure obligation is subject to the GT&C including, but not limited to,
Article X – Excuse of Performances.

 

In the event Transporter is unable to maintain the minimum pressure(s) described
herein but Shipper is still able to take receipt of the scheduled quantity at
the Primary Delivery Point(s) described above, then Shipper shall be considered
unharmed by Transporter’s inability to maintain such minimum pressure(s). 
Subject to the foregoing, any failure on Transporter’s part to deliver the
scheduled quantity at the Primary Delivery Point(s)

 

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described above shall entitle Shipper to the limited remedy specified in Rate
Schedule FT-A, Section 7 – Failure of Transporter.

 

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.  Except as provided to the contrary in any written or electronic
agreement(s) between Transporter and Shipper in effect during the term of this
Agreement Shipper shall pay Transporter the applicable maximum rate(s) and all
other applicable charges and surcharges specified in the Summary of Rates in
Transporter’s FERC Gas Tariff and in this Rate Schedule.  Transporter and
Shipper may agree that a specific discounted rate will apply only to certain
volumes under the agreement.  Transporter and Shipper may agree that a specified
discounted rate will apply only to specified volumes (MDQ, TQ, commodity
volumes, Extended Receipt and Delivery Service Volumes or Authorized Overrun
volumes) under the Agreement; that a specified discounted rate will apply only
if specified volumes are achieved (with the maximum rates applicable to volumes
above the specified volumes or to all volumes if the specified volumes are never
achieved); that a specified discounted rate will apply only during specified
periods of the year or over a specifically defined period of time; and/or that a
specified discounted rate will apply only to specified points, zones, markets or
other defined geographical area.  Transporter and Shipper may agree to a
specified discounted rate pursuant to the provisions of this Section 6.1
provided that the discounted rate is between the applicable maximum and minimum
rates of this service.

 

6.2           INCIDENTAL CHARGES – Shipper agreed 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.

 

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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 the
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.

 

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ARTICLE XII – TERM

 

12.1         This contract shall be effective as of November 1, 2002, and shall
remain in force and effect, unless modified as per Exhibit B, until October 31,
2012.  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 Tariff 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 not 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 Gas 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:  Director, Transportation Control

 

 

 

 

SHIPPER:

 

 

 

NOTICES:

Louisville Gas and Electric Company
P. O. Box 32020
Louisville, Kentucky  40232

 

 

 

 

 

Attention:  J. Clay Murphy, Dir – Gas Management,
Planning and Supply

 

 

 

 

BILLING:

Louisville Gas and Electric Company
P. O. Box 32020
Louisville, Kentucky  40232

 

 

 

 

 

Attention:  J. Clay Murphy, Dir – Gas Management,
Planning and Supply

 

 

or such other address as either Party shall designate by formal written notice
to the other.

 

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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, assignment 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 CONTRACT 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 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 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 FERC 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 PASSKEY and Shipper has been notified
through PASSKEY 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:

 

/s/

 

 

 

Agent and Attorney-in-Fact

 

 

 

 

SHIPPER: LOUISVILLE GAS AND ELECTRIC COMPANY

 

 

 

 

 

 

 

By:

 

/s/  Chris Hermann

 

 

Title:

Senior Vice President – Distribution Operations

 

Date:

July 29, 2002

 

 

 

 

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EXHIBIT “A”

TO GAS TRANSPORTATION AGREEMENT

DATED NOVEMBER 1, 2002

BETWEEN

TENNESSEE GAS PIPELINE COMPANY

AND

LOUISVILLE GAS AND ELECTRIC COMPANY

 

 

EFFECTIVE DATE OF AMENDMENT:

RATE SCHEDULE:  FT-A

SERVICE PACKAGE:

SERVICE PACKAGE TQ:  51,000 Dth

 

METER

 

METER NAME

 

INTERCONNECT PARTY NAME

 

COUNTY

 

ST

 

ZONE

 

R/D

 

LEG

 

TOTAL-TQ

 

BILLABLE-TQ

020844

 

Calgary

 

Louisville Gas and Electric Co.

 

Marion

 

Ky

 

2

 

D

 

100

 

51,000

 

51,000

011306

 

Agua Dulce

 

Channel Industries

 

Nueces

 

Tx

 

0

 

R

 

100

 

40,000

 

40,000

010723

 

Kiln Miss Exchange

 

Gulfstream

 

Hancock

 

Ms

 

1

 

R

 

500

 

7,000

 

7,000

012241

 

Ship Shoal 108

 

Chevron USA

 

OL

 

La

 

1

 

R

 

500

 

4,000

 

4,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

51,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TQ

 

 

 

 

 

 

NUMBER OF RECEIPT POINTS:

 

3

NUMBER OF DELIVERY POINTS:

 

1

 

Note:  Exhibit “A” is a reflection of the contract and all amendments as of the
amendment effective date.

 

 

GAS TRANSPORTATION AGREEMENT

(For Use under FT-A Rate Schedule)

 

EXHIBIT “B”

 

TO GAS TRANSPORTATION AGREEMENT

DATED November 1, 2002

BETWEEN

TENNESSEE GAS PIPELINE COMPANY

AND

LOUISVILLE GAS AND ELECTRIC COMPANY

 

BUYOUT/EARLY TERMINATION PROVISIONS*

 

SERVICE PACKAGE:

 

BUYOUT PERIOD(S)          November 1, 2007 through October 31, 2012

 

 

 

AMOUNT OF TQ REDUCED 51,000
Dth                                                              
FOR PERIOD(S)

 

 

AMOUNT OF                       $0.00

BUYOUT PAYMENT

FOR PERIOD(S)

 

 

ANY LIMITATIONS ON

THE EXERCISE OF THE

BUYOUT/TERMINATION

OPTION AS BID BY

THE SHIPPER: Shipper must notify Transporter on or before October 31, 2006 of
its intent to terminate the attached service agreement.  Such termination shall
become effective as of November 1, 2007.  Notwithstanding the foregoing, if at
any time Tennessee terminates the July 8, 2002, Negotiated Rate Agreement
between Tennessee and Shipper for any reason, Shipper shall have the unilateral
right to notify Tennessee of its intent to terminate this Agreement effective
sixty days after the referenced Negotiated Rate Agreement terminates.

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*NOTICE MUST BE GIVEN AS PROVIDED FOR IN THE NET PRESENT VALUE STANDARD OF THE
GENERAL TERMS AND CONDITIONS.

 

 

 

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GAS TRANSPORTATION AGREEMENT

(For Use under FT-A Rate Schedule)

 

EXHIBIT “B”

 

TO GAS TRANSPORTATION AGREEMENT

DATED November 1, 2002

BETWEEN

TENNESSEE GAS PIPELINE COMPANY

AND

LOUISVILLE GAS AND ELECTRIC COMPANY

 

BUYOUT/EARLY TERMINATION PROVISIONS*

 

SERVICE PACKAGE:

 

BUYOUT PERIOD(S)          November 1, 2007 through October 31, 2012

 

 

 

AMOUNT OF TQ REDUCED 51,000
Dth                                                              
FOR PERIOD(S)

 

 

AMOUNT OF                       $0.00

BUYOUT PAYMENT

FOR PERIOD(S)

 

 

ANY LIMITATIONS ON

THE EXERCISE OF THE

BUYOUT/TERMINATION

OPTION AS BID BY

THE SHIPPER: Shipper must notify Transporter on or before October 31, 2006 of
its intent to terminate the attached service agreement.  Such termination shall
become effective as of November 1, 2007.  Notwithstanding the foregoing, if at
any time Tennessee terminates the July 8, 2002, Negotiated Rate Agreement
between Tennessee and Shipper for any reason, Shipper shall have the unilateral
right to notify Tennessee of its intent to terminate this Agreement effective
sixty days after the referenced Negotiated Rate Agreement terminates.

 

*NOTICE MUST BE GIVEN AS PROVIDED FOR IN THE NET PRESENT VALUE STANDARD OF THE
GENERAL TERMS AND CONDITIONS.

 

 

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