Exhibit 10.9

 

SERVICE AGREEMENT

 

APPLICABLE TO FIRM TRANSPORTATION SERVICE

 

UNDER RATE SCHEDULE FS-1

 

THIS AGREEMENT made and entered into this 11th day of September, 2001, by and
between:

 

TransCanada PipeLines Limited, a body corporate, having an office and carrying
on business in the City of Calgary, in the Province of Alberta, (hereinafter
referred to as “Company”),

 

- and -

 

Cascade Natural Gas Corporation., a body corporate, having an office and
carrying on business in the City of Seattle, in the State of Washington,
(hereinafter referred to as “Shipper”)

 

WHEREAS, Company’s Facilities extend from a point of interconnection with the
pipeline facilities of NOVA Gas Transmission Ltd. (NGTL) at the Alberta-British
Columbia border, near the NGTL Coleman delivery point, through southeast British
Columbia to a point of interconnection with the pipeline facilities of PG&E Gas
Transmission, Northwest Corporation (PG&E GTNW) at the international border near
Kingsgate, British Columbia; and

 

WHEREAS, Shipper desires Company, on a firm basis, to transport certain
quantities of natural gas through Company’s Facilities from Alberta/British
Columbia border near Coleman, Alberta to British Columbia/U.S. international
border near Kingsgate, B.C.; and

 

WHEREAS, Company is willing to transport certain quantities of natural gas for
Shipper, on a firm basis;

 

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NOW, THEREFORE, the parties agree as follows:

 

1.                                       This agreement is subject to all valid
legislation with respect to the subject matters hereof, either provincial or
federal, and to all valid present and future decisions, orders, rules, and
regulations of all duly constituted governmental authorities having
jurisdiction.

 

2.                                       Shipper acknowledges receipt of a
current copy of Company’s Gas Transportation Service Documents (GTSD) and
Company agrees to provide Shipper with any amendments thereto.

 

3.                                       The terms used herein shall have the
same meanings as are ascribed to corresponding terms in the General Terms and
Conditions contained in the GTSD (General Terms and Conditions).

 

4.                                       Shipper hereby requests, and Company
agrees to provide Service pursuant to Service Schedule FS-1 in accordance with
the attached Schedule A which is incorporated into and forms part of this
Agreement, such Service to commence on the Service Availability Date and to
terminate, subject to the provisions hereof, on the Service Termination Date.

 

5.                                       Shipper agrees to make gas available
for Shipper’s share of Company Use Gas, or pay for such gas, pursuant to Section
8.5 of the General Terms and Conditions.

 

6.                                       Company undertakes to redeliver to
Shipper, and Shipper agrees to accept, at the Delivery Point, a quantity of gas
equivalent in heat content to the quantity received by Company from Shipper,
expressed in Gigajoules (GJs), at the Receipt Point, after deducting a quantity
of gas, if any, provided by Shipper for Company Use Gas.

 

7.                                       In providing service to its existing or
new Shippers, Company will use the priority of service specified in Section 8.11
of Company’s General Terms and Conditions.

 

8.                                       Prior to the Service Availability Date,
Shipper shall provide Company with all information identified in Company’s
Request for Transportation Form.

 

9.                                       Shipper agrees to pay, during the
period commencing from the Service Availability Date, and in accordance with
Schedule FS-1, the General Terms and Conditions, the Statement of

 

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Effective Rates and Charges and Schedule “A” attached hereto (all as may be
amended from time to time), the rates, tolls and charges fixed by Company from
time to time, in respect of each month, and portion thereof that this Firm
Service Agreement and any renewal thereof is in effect.

 

In the event that the Service Availability Date occurs on any day other than the
first day of a month, then the demand charge payable for such month under
Sub-section 4.3.1 of Service Schedule FS-1 shall be the product resulting from
multiplying the demand charge otherwise payable for such month by a fraction,
the numerator of which shall be the number of days in such month subsequent to
and including the Service Availability Date and the denominator of which is the
total number of days in such month.

 

10.                                 Shipper covenants that it will make timely
arrangements for upstream and downstream transportation, gas supply and markets
and all necessary governmental authorizations and that it will advise the
upstream and downstream transporters of the receipt and delivery points under
this Agreement.

 

Shipper acknowledges and agrees with Company that Company is relying upon the
covenant contained in this clause and agrees that if any such arrangements or
authorizations are not in place prior to the Service Availability Date, such
will not affect the Shipper’s obligation to pay any demand charge, surcharge, or
any other amount payable to Company.

 

11.                                 If Shipper elects to exercise its option to
terminate this Firm Service Agreement as provided for in Section 4.9 of Service
Schedule FS-1, it shall execute and serve upon Company a termination notice not
less than 12 months prior to the Service Termination Date as such date may be
extended from time to time.

 

12.                                 Shipper agrees not to make demand or bring
action against Company for Company’s refusal to transport gas hereunder in the
event that any upstream or downstream transporter fails to receive or deliver
gas as contemplated by this agreement provided that such failure was not
directly caused by the negligence of Company.

 

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13.                                 Subject to Section 8.9 of the General Terms
and Conditions of this GTSD, any notice or any request, demand, statement, bid
or bill (for the purpose of this paragraph, collectively referred to as
“Notice”) provided for by the Service Schedules, the Service Agreements and the
General Terms and Conditions, or any notice which either Shipper or Company may
wish to give to the other, shall be in writing and shall be directed as follows:

 

Shipper:

 

Cascade Natural Gas Corporation

 

 

222 Fairview Avenue North

 

 

Seattle, Washington

98109

 

 

 

Attention:

 

Mr. King Oberg

 

 

 

 

 

E-mail Address: koberg@cngc.com

 

 

 

Company:

 

TransCanada PipeLines Limited

 

 

111 Fifth Avenue S.W.

 

 

Calgary, Alberta, Canada

 

 

T2P 4K5

 

 

 

Attention:

 

Leader,

 

 

Customer Services

 

Subject to Section 8.9 of the General Terms and Conditions of this GTSD, any
notice may be given by telecopier or other telecommunication and any such Notice
shall be deemed to be given four (4) hours after transmission. Notice may also
be given by personal delivery or by courier and any such Notice shall be deemed
to be given at the time of delivery. Any Notice may also be given by prepaid
mail and any such Notice shall be deemed to be given four (4) Business Days
after mailing. In the event regular mail service, courier service, telecopier or
other telecommunication shall be interrupted by a cause beyond the control of
the parties hereto, then the party sending the Notice shall utilize any service
that has not been so interrupted to deliver such Notice.  Each party shall
provide Notice to the other of any changes of address for the purposes hereof. 
Any Notice may also be given by telephone followed immediately by personal
delivery, courier, prepaid mail, telecopier, or other telecommunication, and any
such Notice so given shall be deemed to be given as of the date and time of the
telephone Notice.

 

14.                                 The terms and conditions of Service Schedule
FS-1 and the General Terms and Conditions are, by this reference, incorporated
into and made part of this Service Agreement.

 

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15.                                 A waiver by either party of one or more
defaults by the other hereunder shall not operate as a waiver of any future
default or defaults, whether of a like or different character.

 

16.                                 This Agreement may be amended only by an
instrument in writing executed by both parties hereto.

 

17.                                 Nothing in this Agreement shall be deemed to
create any rights or obligations between the parties hereto after the expiration
of the term hereof, as same may be extended from time to time, except that
termination of this Agreement shall not relieve either party of the obligation
to correct any gas quantity imbalances or of the obligation to pay any amounts
due hereunder.

 

 

IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
as of the day and year first written above.

 

 

 

Cascade Natural Gas Corporation

TransCanada PipeLines Limited

 

 

 

 

 

 

 

 

 

 

/s/ King Oberg

 

/s/ Stephen M. V. Clark

 

 

 

(signature)

(signature)

 

 

 

 

 

 

KING OBERG - VICE PRESIDENT

 

Stephen M. V. Clark
Vice-President, Gas Development
and Director, Sales & Marketing

 

 

 

(name/title)

(name/title)

 

 

 

 

 

 

 

 

/s/ J. D. Bell

 

 

 

(signature)

(signature)

 

 

 

 

 

 

 

 

Manager, Western End Users and Interconnects

 

 

 

(name/title)

(name/title)

 

 

 

 

 

 

 

Standard Form Contact

 

 

 

Business

/s/ J.D.B.

 

 

 

Legal

/s/ DAS

 

 

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SCHEDULE A

to the Firm Service Agreement

Dated September 11, 2001 Between

 

TransCanada PipeLines Limited

AND

Cascade Natural Gas Corporation (Shipper)

 

1.

Receipt Point:

 

Alberta/British Columbia Border near Coleman, Alberta
Minimum Pressure Available 4200 kPa

 

 

 

 

2.

Delivery Point:

 

British Columbia/U.S. international border near Kingsgate, B.C.
Maximum Pressure Available 5500 kPa

 

 

 

 

3.

Shipper’s Haul Distance

 

170.7 Km

 

 

 

 

4.

Shipper’s Compression Utilization

 

170.7 Km

 

 

 

 

5.

Maximum Day Delivery Quantity (MDDQ)

 

(Winter) 22,771 GJ/d

 

 

 

(Summer) 22,771 GJ/d

 

 

 

 

6.

Service Availability Date

 

November 1, 2003

 

 

 

 

7.

Service Termination Date

 

25 years from and including the Service Availability Date

 

 

 

 

8.

Surcharge Amount:

 

 

For Special Facilities

Dollars/Month

 

 

 

 

For Other

Dollars/Month

 

 

 

 

Total Surcharge

Dollars/Month

 

 

 

 

9.

Schedule A Effective Date

 

September 11, 2001

 

 

Cascade Natural Gas Corporation

TransCanada PipeLines Limited

 

 

 

 

/s/ King Oberg

 

/s/ Stephen M. V. Clark

 

(signature)

(signature)

 

 

KING OBERG - VICE PRESIDENT

 

Stephen M. V. Clark
Vice-President, Gas Development
and Director, Sales & Marketing

 

(name/title)

(name/title)

 

 

 

 

/s/ J. D. Bell

 

(signature)

(signature)

 

 

 

 

Manager, Western End Users and Interconnects

 

(name/title)

(name/title)

 

 

 

Standard Form Contact

 

 

 

Business

/s/ J.D.B.

 

 

 

Legal

/s/ DAS

 

 

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Schedule of Service

 

SCHEDULE OF SERVICE

 

RATE SCHEDULE FT-D

 

SCHEDULE NO:

2002-94659-4 (REVISION)

 

 

 

 

 

 

CUSTOMER

Cascade Natural Gas Corporation

 

 

 

 

EXPORT DELIVERY POINT NAME:

Alberta-B.C. Bdr (Chart Accounting)

 

 

EXPORT DELIVERY POINT NO:

2000

 

 

EXPORT DELIVERY POINT LOCATION:

09-11-008-05-W5M

 

 

 

 

EXPORT DELIVERY CONTRCT DEMAND:

610.4 103 m3/d

 

 

MAXIMUM DELIVERY PRESSURE:

6205 kPa

 

 

SERVICE TERMINATION DATE:

October 31, 2028

 

 

SURCHARGE:

N/A

 

 

ADDITIONAL CONDITIONS:

N/A

 

 

THIS SCHEDULE FORMS PART OF THE SERVICE AGREEMENT DATED August 23, 2001 AND
SHALL BE DEEMED TO BE ATTACHED THERETO.

 

Cascade Natural Gas Corporation

 

NOVA Gas Transmission Ltd.

 

 

 

 

 

 

Per:

 

 

 

Per:

/s/ Darryl Ness

 

 

 

 

Per:

/s/ Patricia A. Grable

 

 

Per:

/s/ Barbara Miles

 

Senior Director Gas Supply

 

 

 

 

 

 

 

 

TARIFF

 

Effective Date: April 1, 2000, as per EUB Decision 2000-6

 

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April 24, 2003

REF:                       2002-94659-4

 

[ex109image002.jpg]

 

 

 

 

 

III - 5th Avenue S.W.

 

 

P.O. Box 1000, Station M

 

 

Calgary, Alberta, Canada T2P 4K5

 

Cascade Natural Gas Corporation

222 - Fairview Avenue North

Seattle, Washington, USA

98109

 

 

Attention:

 

Ms. Patricia Grable

 

 

 

 

 

 

SUBJECT:

 

REVISION TO SCHEDULE OF SERVICE RATE FT-D 2001-98058-4 AT ALBERTA-B.C. BDR
(CHART ACCOUNTING) #2000

 

Enclosed is your copy of the executed document of the above mentioned revision.

 

Should you require further information, please contact the undersigned at
403-920-5839 (Fax 403-920-2446).

 

Yours truly,

 

NOVA Gas Transmission Ltd.

 

 

/s/ Darryl Ness

 

Darryl Ness

Customer Sales and Service

 

 

BI/eims

Enclosure(s)

 

Acknowledgement of Executed Agreement

 

TransCanada PipeLines Limited

 

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SERVICE AGREEMENT

 

RATE SCHEDULE FT-D

 

BETWEEN:

 

NOVA Gas Transmission Ltd., a body corporate having an office in the City of
Calgary, in the Province of Alberta (“Company”)

 

— and —

 

Cascade Natural Gas Corporation, a body corporate having an office in the City
of, in the Province of (“Customer”)

 

IN CONSIDERATION of the premises and the covenants and agreements in this
Service Agreement, the parties covenant and agree as follows:

 

1.                                       Customer acknowledges receipt of a
current copy of the Tariff.

 

2.                                       The capitalized terms used in this
Service Agreement have the meanings attributed to them in the General Terms and
Conditions of the Tariff, unless otherwise defined in this Service Agreement.

 

3.                                       Customer requests and Company agrees to
provide Service pursuant to Rate Schedule FT-D in accordance with the attached
Schedules of Service. The Service will commence on the Billing Commencement Date
and will terminate, subject to the provisions of this Service Agreement, on the
Service Termination Date.

 

TARIFF

 

Effective Date: April 1, 2000, as per EUB Decision 2000-6

 

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4.                                       Customer agrees to pay to Company each
Billing Month, for all Service rendered under this Service Agreement, an amount
equal to the aggregate charges for Service described in Rate Schedule FT-D.

 

5.                                       Customer shall:

 

(a)                                  provide such assurances and information as
Company may reasonably require respecting any Service to be provided pursuant to
this Rate Schedule FT-D including, without limiting the generality of the
foregoing, an assurance that necessary arrangements have been made among
Customer, producers of gas for Customer, purchasers of gas from Customer and any
other Person relating to such Service, including all gas purchase, gas sale,
operating, processing and common stream arrangements; and

 

(b)                                 at Company’s request provide Company with an
assurance that Customer has provided the Person operating facilities downstream
of any Delivery Point in respect of which Customer has the right to receive
service with all authorizations necessary to enable such Person to provide
Company with all data and information reasonably requested by Company for the
purpose of allocating volumes of gas delivered by Company among Company’s
Customers and to bind Customer in respect of all such data and information
provided.

 

If Customer fails to provide such assurances and information forthwith following
request by Company, from time to time, Company may at its option, to be
exercised by notice to Customer, suspend the Service to which such assurances
and information relate until such time as Customer provides the assurances and
information requested, provided however that any such suspension of Service
shall not relieve Customer from any obligation to pay any rate, toll, charge or
other amount payable to Company.

 

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6.                                       Customer acknowledges that the
Facilities have been designed based on certain assumptions and forecasts
described each year in Company’s Annual Plan, and that interruption and
curtailment of Service may occur if the aggregate gas volume actually received
or the aggregate gas volume actually delivered at the Facilities is different
than forecast.

 

7.                                       Every notice, request, demand,
statement, bid or bill (for the purpose of this paragraph, collectively referred
to as “Notice”) provided for in Rate Schedule FT-D, this Service Agreement and
the General Terms and Conditions, or any other Notice which either Company or
Customer may desire to give to the other, shall be in writing and each of them
and every payment provided for shall be directed to the Person to whom given,
made or delivered at such Person’s address as follows:

 

Customer:

 

Cascade Natural Gas Corporation

222 Fairview Avenue North

Seattle, Washington  98109

 

Attention:  King Oberg

 

 

or

 

Attention:                                         (as above)

Fax:  (206) 624-7215

 

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Company:

 

NOVA Gas Transmission Ltd.

P.O. Box 1000, Station “M”

450 – 1st Street S. W.

Calgary, Alberta

T2P 4K5

 

 

Attention:                                         Customer Account
Representative

Fax:                                                                          
(403) 920-2386

 

Notice may be given by fax or other telecommunication and any such Notice shall
be deemed to be given four (4) hours after transmission. Notice may also be
given by personal delivery or by courier and any such Notice shall be deemed to
be given at the time of delivery. Any Notice may also be given by prepaid mail
and any such Notice shall be deemed to be given four (4) business days after
mailing, Saturdays, Sundays and statutory holidays excepted.  In the event of
disruption of regular mail, every payment not made electronically shall be
personally delivered, and any other Notice shall be given by one of the other
stated means.

 

Any Notice for the matters listed in the Notice Schedule for Electronic Commerce
in Appendix “F” of the Tariff shall be given via Company’s electronic bulletin
board (“EBB”).  Company shall not accept any such Notice for those matters
listed in Appendix “F” via any other alternative means, unless the EBB is
inoperative or Customer is unable to establish connection with the EBB, in which
case Notice shall be given by any other alternative means set out herein.  Any
Notice given by the EBB shall be deemed to be given one (1) hour after
transmission.

 

Any Notice may also be given by telephone followed immediately by EBB, fax,
personal delivery, courier or prepaid mail, and any Notice so given shall be
deemed to have been given as of the date and time of the telephone notice.

 

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8.                                       The terms and conditions of Rate
Schedule FT-D, the General Terms and Conditions and Schedule of Service under
Rate Schedule FT-D are by this reference incorporated into and made a part of
this Service Agreement.

 

IN WITNESS WHEREOF the parties have executed this Service Agreement by their
proper signing officers duly authorized in that behalf all as of the 11th day of
September, 2001.

 

 

Cascade Natural Gas Corporation

NOVA Gas Transmission Ltd.

 

 

 

 

 

 

 

Per:

/s/ King Oberg

 

Per:

/s/ Max Fieldman

 

 

 

 

Per:

 

 

Per:

/s/ Stephen M. V. Clark

 

 

 

Stephen M. V. Clark

 

 

 

Vice-President, Gas Development

 

 

 

 

 

 

Standard Form Contact

 

 

 

Business

/s/ S.M.V.C.

 

 

 

Legal

/s/ DAS

 

 

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Schedule of Service

 

SCHEDULE OF SERVICE

 

RATE SCHEDULE FT-D

 

SCHEDULE NO:

2001-98058-4 (NEW)

 

 

CUSTOMER

Cascade Natural Gas Corporation

 

 

EXPORT DELIVERY POINT NAME:

Alberta-B.C. Border

 

 

EXPORT DELIVERY POINT NO:

2001

 

 

EXPORT DELIVERY POINT LOCATION:

09-11-008-05-W5M

 

 

EXPORT DELIVERY CONTRCT DEMAND:

610.4 103m3/d 21200 DKths/Day

 

 

MAXIMUM DELIVERY PRESSURE:

6205 kPa

 

 

SERVICE TERMINATION DATE:

October 31, 2028

 

 

SURCHARGE:

N/A

 

 

ADDITIONAL CONDITIONS:

N/A

 

THIS SCHEDULE FORMS PART OF THE SERVICE AGREEMENT DATED Sept 11, 2001 AND SHALL
BE DEEMED TO BE ATTACHED THERETO.

 

Cascade Natural Gas Corporation

NOVA Gas Transmission Ltd.

 

 

 

 

 

 

 

Per:

/s/ King Oberg

 

Per:

/s/ Max Fieldman

 

 

 

 

Per:

 

 

Per:

/s/ Stephen M. V. Clark

 

 

 

Stephen M. V. Clark

 

 

 

Vice-President, Gas Development

 

 

 

 

 

 

Standard Form Contact

 

 

 

Business

/s/ S.M.V.C.

 

 

 

Legal

/s/ DAS

 

 

TARIFF

Effective Date: April 1, 2000, as per EUB Decision 2000-6

 

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ATTACHMENT “1”

 

1)                                      This Schedule of Service shall terminate
and be of no further force or effect on the day that is 25 years from the
Billing Commencement Date for the Service described herein.

 

2)                                      This Schedule of Service becomes a
binding obligation on Company only upon and not prior to Company delivering a
written notice to Customer setting forth the Billing Commencement Date for the
Service described herein (the “Commencement Notice”).  Until Company delivers
the Commencement Notice to Customer, Company shall have no obligations
whatsoever under this Schedule of Service.  Company may be delivering a written
notice to Customer, terminate this Schedule of Service, or cancel or revise the
Export Delivery Contract Demand, at any time prior to Company delivering the
Commencement Notice to Customer.

 

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