Exhibit 10.1

     
(DUKE ENERGY GAS TRANSMISSION) [w05494w0549400.gif]
  D. PATRICK WHITTY
Vice President
 
   

  East Tennessee Natural Gas, LLC
5400 Westheimer Court
Houston, TX 77056-5310
 
   
January 28, 2005
   

  713 627 5432
 
   

  713 989 1613 fax
 
   

  dpwhitty@duke-energy.com

Mr. Tim Sherwood
Department Head Energy Acquisition
Washington Gas Light Company
6801 Industrial Road
Springfield, VA 22151

Re: 
Negotiated Rate for Service Agreement No. 410195 (“Service Agreement”)

Dear Mr. Sherwood:

East Tennessee Natural Gas, LLC (“Transporter”) and Washington Gas Light Company
(“Shipper”) are parties to Transporter’s Service Agreement No. 410195 under
Transporter’s Rate Schedule No. FT-A.

Shipper and Transporter hereby agree to the rate provisions set forth on the
attached tariff sheet and acknowledge that, subject to and upon approval by the
Federal Energy Regulatory Commission (“FERC”) of a filed tariff sheet reflecting
such provisions, all of the rate provisions contained therein will be applicable
to the Service Agreement. If FERC approval of a filed tariff sheet reflecting
all of the provisions on the attached tariff sheet is not obtained without
condition or modification, this Agreement shall be null and void and of no
further effect and service under the Service Agreement will be provided at the
maximum Recourse Rate unless otherwise mutually agreed.

If the foregoing accurately sets forth your understanding of the matters covered
herein, please so specify in the space provided below by having a duly
authorized representative sign in the space provided below and returning an
original signed copy to the undersigned.

     

  Sincerely,
 
   

  East Tennessee Natural Gas, LLC

  -s- D. P. Whitty [w05494w0549401.gif]

  D. Patrick Whitty, Vice President

ACCEPTED AND AGREED TO:
this 1st day of February, 2005
Washington Gas Light Company

         
By:
  -s- Adrian P. Chapman [w05494w0549402.gif]   -s- Terry McCallister
[w05494w0549403.gif]

 

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  Adrian P. Chapman   Terry McCallister

  Vice President   President and
Title:
  Regulatory Affaire & Energy Acquisition   Chief Operating Officer

 

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East Tennessee Natural Gas, LLC
FERC Gas Tariff
Third Revised Volume No. 1     Original Sheet No.      

STATEMENT OF NEGOTIATED RATES

                                                      Term of            
Customer   Contract   Rate   Demand   Commodity   Negotiated       Receipt  
Delivery Name   Number   Schedule   Rate   Rate   Rate   Quantity   Points  
Points
Washington Gas Light
Company
      FT-A   2/ 3/ 4/   2/ 3/ 4/   5/   25,000 Dth/d   Meter No.
59770 6/   Meter No. Light
59204 7/

1/  
This negotiated rate agreement does not deviate in any material respect from the
Form of Service Agreement contained in Transporter’s Tariff.
  2/  
For the months of October through April during the term of this negotiated rate
the Monthly Demand Rate is $9.42 per Dth and the Commodity Rate is $0.05 per Dth
for quantities delivered up to the MDTQ of 25,000. For the months of May through
September during the term of this negotiated rate, the Monthly Demand Rate is
$0.00 per Dth and the Commodity Rate is $0.16 per Dth delivered; provided that,
for receipts and deliveries outside the primary path, the Commodity Rate shall
be $0.21 per Dth delivered. Notwithstanding the previous two sentences, solely
for the month of February 2005, the monthly Demand Rate is $12.8626 per Dth and
the Commodity Rate is $0.05 per Dth delivered up to the maximum MDTQ of the
25,000. In addition to these rates, Shipper shall pay all applicable charges and
mandatory surcharges (such as FERC Annual Charge Adjustment) and fuel and lost
and unaccounted for gas as set forth in Transporter’s Tariff as revised from
time to time pursuant to Transporter’s Tariff. Shipper shall not be charged for
any voluntary surcharges such as GRI Rate Adjustment.
  3/  
In consideration of the rates set forth above, the applicable rates for service
under the Service Agreement during the Primary Term shall remain as stated
above. Therefore, pursuant to Section 4.5 of the FT-A Rate Schedule of
Transporter’s FERC Gas Tariff, the rates set forth above shall constitute
Negotiated Rates. The Negotiated Rates shall replace the otherwise generally
applicable maximum recourse rate, rate component, charge or credit in
Transporter’s FERC Gas Tariff (“Tariff Rates”), and the Tariff Rates shall not
apply to or be available to Shipper for service under the Service Agreement
during the Primary Term (to the extent that such Tariff Rates are inconsistent
with the rates set forth above), notwithstanding any adjustments to such
generally applicable maximum recourse rate, rate component, charge or credit
which may become effective during the Primary Term.
  4/  
If, at any time after service commences under the Service Agreement, Transporter
is collecting its effective maximum recourse rates from other Shippers subject
to refund under Section 4 of the Natural Gas Act, Transporter shall have no
refund obligation to customer even if the final maximum rate is reduced to a
level below the Negotiated Rate provided herein. Customer’s right to receive
credits relating to Transporter’s penalty revenue or other similar revenue, if
any, applicable to transportation service on Transporter’s system shall be
governed by Transporter’s FERC Gas Tariff and any applicable FERC orders and/or
regulations. In the event customer releases its firm transportation rights under
the Service Agreement, Shipper shall continue to be obligated to pay Transporter
for the difference, if any, by which the Negotiated Rate herein exceeds the
release rate.
  5/  
The term of the negotiated rate extends from the beginning of the Gas Day on
February 1, 2005, until the end of the Gas Day on March 31, 2007.
  6/  
Saltville Storage / Smyth County, Virginia.

  7/  
Transcontinental Gas Pipe Line / Rockingham County, North Carolina.

Issued by: D. A. McCallum, Director, Rates and Tariffs
Issued on:                                            Effective on: February 1,
2005

 

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Contract #410195 FT-APT

FIRM TRANSPORTATION AGREEMENT
(For Use Under Rate Schedules FT-A and FT-GS)

THIS AGREEMENT is made, entered into and effective as of this 1st day of
February, 2005, by and between East Tennessee Natural Gas, LLC, a Tennessee
limited liability company hereinafter referred to as “Transporter”, and
Washington Gas Light Company, a District of Columbia and Virginia corporation,
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 Maximum Daily 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

 

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Contract #410195 FT-APT

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 may change from time to time. 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 Notice 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 (MDRO, MDDO, MDTQ, commodity 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 areas. Transporter and
Shipper may agree to a discounted rate pursuant to the provisions of this
Section 6.1 provided that the discounted rate is between the applicable maximum
and minimum rates for this service.

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,

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Contract #410195 FT-APT

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 may be revised
or replaced from time to time.

ARTICLE IX — RATE SCHEDULES AND
GENERAL TERMS 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, or any succeeding rate schedule
and Transporter’s General Terms and Conditions on file with the Commission, 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 Commission, 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 February 1, 2005, and shall remain
in force and effect until March 31, 2007 (“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

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Contract #410195 FT-APT

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 Commission 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 Commission 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 Commission
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.

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.

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Contract #410195 FT-APT

11.4 The transportation service described herein shall be provided subject to
the provisions of the Commission’s Regulations shown 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 attorney’s 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 Commission thirty days notice

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Contract #410195 FT-APT

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 via LINK® and
Shipper has been notified via LINK® 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 via LINK®, 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(s) 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) No. 410188 between Shipper and Transporter dated N/A and
January 22, 2005, respectively.

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Contract #410195 FT-APT

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, LLC    
 
       
BY:
    CMP  

 

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  D. Patrick Whitty    

  Vice President East    

  East Tennessee Natural Gas, LLC    
 
       
DATE:
       

 

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        WASHINGTON GAS LIGHT COMPANY    
 
       
BY
  -s- Adrian P. Chapman [w05494w0549402.gif]   -s- Terry McCallister
[w05494w0549403.gif]

 

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  Adrian P. Chapman   Terry McCallister

  Vice President   President and
TITLE:
  Regulatory Affairs & Energy Acquisition   Chief Operating Officer

 

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DATE:
  February 1, 2005    

 

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Contract #410195 FT-APT

Date: February 1, 2005

EXHIBIT A TO THE
FIRM TRANSPORTATION AGREEMENT
DATED February 1, 2005

Shipper: Washington Gas Light Company
Rate Schedule: FT-A
Maximum Daily Transportation Quantity: 25,000 Dth

Proposed Commencement Date: February 1, 2005

Termination Date: March 31, 2007

Transportation Service will be provided under Part 284, Subpart G of the
Commission’s Regulations.

Primary
Receipt Point(s):

                              Interconnect   Location Name   Meter No. MDRO
Party   County, State
Saltville Storage Co.,
LLC
  59770   25,000       Smyth Co., VA

Primary
Delivery Point(s):

                              Interconnect   Location Name   Meter No. MDRO
Party   County, State
Transco
  59204   25,000   Transco   Rockingham Co., NC

Name of entity(s) to deliver gas to Transporter: Saltville Storage Co., LLC

Name of entity(s) to receive gas from Transporter: Washington Gas Light Company

* 
Transporter shall not be obligated to deliver more cubic feet of gas to any
Shipper than the quantity calculated using 1.03 dth per million cubic feet.

Notices not made via LINK® shall be made to:

         

  Shipper   Washington Gas Light Company
6801 Industrial Road
Springfield, VA 22151
 
       

  Attn:   Tim S. Sherwood
 
       

  Invoices   9801 Industrial Road
Springfield, VA 22151
 
       

  Attn.:   Accounting

New Facilities Required:            N/A

New Facilities Charge:            N/A

              EAST TENNESSEE NATURAL GAS, LLC   WASHINGTON GAS LIGHT COMPANY
 
           
BY:
  CMP   BY:   -s- Adrian P. Chapman [w05494w0549402.gif]

 

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  Vice President, D. Patrick Whitty       Adrian P. Chapman

  East Tennessee Natural Gas, LLC       Vice President
 
           

      TITLE:    

         

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          Regulatory Affairs & Energy Acquisition
 
           
DATE:
      DATE:   February 1, 2005

 

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          -s- Terry McCallister [w05494w0549403.gif]

          Terry McCallister

          President and

          Chief Operating Officer

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