**EXHIBIT10.65**

 

EXHIBIT II

 

NOVEMBER 1, 2002, RATEFT-A AGREEMENT

 

BETWEEN LG&E ANDTENNESSEE GAS PIPELINE COMPANY

 

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Service Package No: 40715

AmendmentNo:            

 

GAS TRANSPORTATIONAGREEMENT

(For Use under FT-A RateSchedule)

 

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

 

ARTICLEI – DEFINITIONS

 

1.1           TRANSPORTATION QUANTITY– shall mean the maximum daily quantity of gas which Transporter agrees toreceive and transport on a firm basis, subject to Article II herein, for theaccount of Shipper hereunder on each day during each year during the termhereof, which shall be 51,000 dekatherms. Any limitations on the quantities to be received from each Point ofReceipt and/or delivered to each Point of Delivery shall be as specified onExhibit “A” attached hereto.

 

1.2           EQUIVALENT QUANTITY –shall be as defined in Article I of the General Terms and Conditions ofTransporter’s FERC Gas Tariff.

 

ARTICLE II –TRANSPORTATION

 

Transportation Service – Transporter agrees to accept and receive dailyon a firm basis, at the Point(s) of Receipt from Shipper or for Shipper’saccount such quantity of gas as Shipper makes available up to theTransportation Quantity, and to deliver to or for the account of Shipper to thePoint(s) of Delivery an Equivalent Quantity of gas.

 

ARTICLE III – POINT(S) OFRECEIPT AND DELIVERY

 

The Primary Point(s) of Receipt and Delivery shall be those pointsspecified on Exhibit “A” attached hereto.

 

ARTICLE IV

 

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

 

4.2           Pursuantto Article VIII, Section 1 of the General Terms and Conditions of Transporter’sTariff (“GT&C”), Transporter shall cause the delivery of natural gas toShipper at the Shipper’s Primary Point of Delivery as nearly as practicable toTransporter’s line pressure, provided that such line pressure shall not be lessthan 500 pounds per square inch gauge at Monroe, meter number 020843, and 600pounds per square inch gauge at Calvary, meter number 020844.  Transporter shall be obligated to providesuch minimum pressures only to the extent that capacity is reserved by Shipperand scheduled by Transporter at the Primary Delivery Point(s) describedabove.  Such minimum pressure obligationis subject to the GT&C including, but not limited to, Article X – Excuse ofPerformances.

 

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

 

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

 

ARTICLE V – QUALITYSPECIFICATIONS AND STANDARDS FOR MEASUREMENT

 

For all gas received, transported and delivered hereunder the Partiesagree to the Quality Specifications and Standards for Measurement as specifiedin the General Terms and Conditions of Transporter’s FERC Gas Tariff Volume No.1.  To the extent that no newmeasurement facilities are installed to provide service hereunder, measurementoperations will continue in the manner in which they have previously beenhandled.  In the event that such facilitiesare not operated by Transporter or a downstream pipeline, then responsibilityfor operations shall be deemed to be Shipper’s.

 

ARTICLE VI – RATES ANDCHARGES FOR GAS TRANSPORTATION

 

6.1           TRANSPORTATION RATES –Commencing upon the effective date hereof, the rates, charges, and surchargesto be paid by Shipper to Transporter for the transportation service providedherein shall be in accordance with transporter’s Rate Schedule FT-A and theGeneral Terms and Conditions of Transporter’s FERC Gas Tariff.  Except as provided to the contrary in anywritten or electronic agreement(s) between Transporter and Shipper in effectduring the term of this Agreement Shipper shall pay Transporter the applicablemaximum rate(s) and all other applicable charges and surcharges specified inthe Summary of Rates in Transporter’s FERC Gas Tariff and in this RateSchedule.  Transporter and Shipper mayagree that a specific discounted rate will apply only to certain volumes underthe agreement.  Transporter and Shippermay agree that a specified discounted rate will apply only to specified volumes(MDQ, TQ, commodity volumes, Extended Receipt and Delivery Service Volumes orAuthorized Overrun volumes) under the Agreement; that a specified discountedrate will apply only if specified volumes are achieved (with the maximum ratesapplicable to volumes above the specified volumes or to all volumes if thespecified volumes are never achieved); that a specified discounted rate willapply only during specified periods of the year or over a specifically definedperiod of time; and/or that a specified discounted rate will apply only tospecified points, zones, markets or other defined geographical area.  Transporter and Shipper may agree to aspecified discounted rate pursuant to the provisions of this Section 6.1provided that the discounted rate is between the applicable maximum and minimumrates of this service.

 

6.2           INCIDENTAL CHARGES –Shipper agreed to reimburse Transporter for any filing or similar fees, whichhave not been previously paid for by Shipper, which Transporter incurs inrendering service hereunder.

 

6.3           CHANGES IN RATES ANDCHARGES – Shipper agrees that Transporter shall have the unilateral right tofile with the appropriate regulatory authority and make effective changes in(a) the rates and charges applicable to service pursuant to Transporter’s RateSchedule FT-A, (b) the rate schedule(s) pursuant to which service hereunder isrendered, or (c) any provision of the General Terms and Conditions applicableto those rate schedules.  Transporteragrees that Shipper may protest or contest the aforementioned filings, or mayseek authorization from duly constituted regulatory authorities for suchadjustment of Transporter’s existing FERC Gas Tariff as may be found necessaryto 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 inaccordance with Articles V and VI, respectively, of the General Terms andConditions of the FERC Gas Tariff.

 

ARTICLE VIII – GENERALTERMS AND CONDITIONS

 

This Agreement shall be subject to the effective provisions ofTransporter’s Rate Schedule FT-A and to the General Terms and Conditionsincorporated therein, as the same may be changed or superseded from time totime in accordance with the rules and regulations of the FERC.

 

ARTICLE IX – REGULATION

 

9.1           This Agreement shall besubject to all applicable and lawful governmental statutes, orders, rules andregulations and is contingent upon the receipt and continuation of allnecessary regulatory approvals or authorizations upon terms acceptable toTransporter.  This Agreement shall bevoid and of no force and effect if any necessary regulatory approval is not soobtained or continued.  All Parties heretoshall cooperate to obtain or continue all necessary approvals orauthorizations, but no Party shall be liable to any other party for failure toobtain or continue such approvals or authorizations.

 

9.2           The transportationservice described herein shall be provided subject to Subpart G, Part 284 ofthe FERC Regulations.

 

ARTICLE X –RESPONSIBILITY DURING TRANSPORTATION

 

Except as herein specified, the responsibility for gas duringtransportation shall be as stated in the General Terms and Conditions ofTransporter’s FERC Gas Tariff Volume No. 1.

 

ARTICLE XI – WARRANTIES

 

11.1         In addition to thewarranties set forth in Article IX of the General Terms and Conditions ofTransporter’s FERC Gas Tariff, Shipper warrants the following:

 

(a)           Shipper warrants thatall upstream and downstream transportation arrangements are in place, or willbe in place as of the requested effective date of service, and that it hasadvised the upstream and downstream transporters of the receipt and deliverypoints under this Agreement and any quantity limitations for each point asspecified on Exhibit “A” attached hereto. Shipper agrees to indemnify and hold Transporter harmless for refusal totransport gas hereunder in the event any upstream or downstream transporterfails to receive or deliver gas as contemplated by this Agreement.

 

(b)           Shipper agrees toindemnify and hold Transporter harmless from all suits, actions, debts,accounts, damages, costs, losses and expenses (including reasonable attorneysfees) arising from or out of breach of any warranty by Shipper herein.

 

11.2         Transporter shall not beobligated to provide or continue service hereunder in the event of any breachof warranty.

 

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ARTICLE XII – TERM

 

12.1         This contract shall beeffective as of November 1, 2002, and shall remain in force and effect, unlessmodified as per Exhibit B, until October 31, 2012.  If the FERC or other governmental body having jurisdiction overthe service rendered pursuant to this Agreement authorizes abandonment of suchservice, this Agreement shall terminate on the abandonment date permitted bythe FERC or such other governmental body.

 

12.2         Any portions of thisAgreement necessary to resolve or cash out imbalances under this Agreement asrequired by the General Terms and Conditions of Transporter’s Tariff shallsurvive the other parts of this Agreement until such time as such balancing hasbeen accomplished; provided, however, that Transporter notifies Shipper of suchimbalance not later than twelve months after the termination of this Agreement.

 

12.3         This Agreement willterminate automatically upon written notice from Transporter in the eventShipper fails to pay all of the amount of any bill for service rendered byTransporter hereunder in accord with the terms and conditions of Article VI ofthe General Terms and Conditions of Transporter’s FERC Gas Tariff.

 

ARTICLE XIII – NOTICE

 

Except as otherwise provided in the General Terms and Conditionsapplicable to this Agreement, any notice under this Agreement shall be inwriting and mailed to the post office address of the Party intended to receivethe 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 writtennotice to the other.

 

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ARTICLE XIV – ASSIGNMENTS

 

14.1         Either Party may assignor pledge this Agreement and all rights and obligations hereunder under theprovisions of any mortgage, deed of trust, indenture, or other instrument whichit has executed or may execute hereafter as security for indebtedness.  Either Party may, without relieving itselfof its obligation under this Agreement, assignment any of its rights hereunderto a company with which it is affiliated. Otherwise, Shipper shall not assign this Agreement or any of its rightshereunder, except in accord with Article III, Section 11 of the General Termsand Conditions of Transporter’s FERC Gas Tariff.

 

14.2         Any person which shallsucceed by purchase, merger, or consolidation to the properties, substantiallyas an entirety, of either Party hereto shall be entitled to the rights andshall be subject to the obligations of its predecessor in interest under thisAgreement.

 

ARTICLE XV – MISCELLANEOUS

 

15.1         THE INTERPRETATION ANDPERFORMANCE OF THIS CONTRACT SHALL BE IN ACCORDANCE WITH AND CONTROLLED BY THELAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO THE DOCTRINES GOVERNING CHOICE OFLAW.

 

15.2         If any provision of thisAgreement is declared null and void, or voidable, by a court of competentjurisdiction, then that provision will be considered severable at eitherParty’s option; and if the severability option is exercised, the remainingprovisions of the Agreement shall remain in full force and effect.

 

15.3         Unless otherwiseexpressly provided in this Agreement or Transporter’s FERC Gas Tariff, nomodification of or supplement to the terms and provisions stated in thisAgreement shall be or become effective until Shipper has submitted a requestfor change through PASSKEY and Shipper has been notified through PASSKEY of Transporter’sagreement to such change.

 

15.4         Exhibit “A” attachedhereto is incorporated herein by reference and made a part hereof for allpurposes.

 

IN WITNESS WHEREOF, the Parties hereto have causedthis 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 TRANSPORTATIONAGREEMENT

DATED NOVEMBER 1, 2002

BETWEEN

TENNESSEE GAS PIPELINECOMPANY

AND

LOUISVILLE GAS ANDELECTRIC 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 contractand all amendments as of the amendment effective date.**

 

 

GAS TRANSPORTATIONAGREEMENT

(For Use under FT-A RateSchedule)

 

EXHIBIT “B”

 

TO GAS TRANSPORTATIONAGREEMENT

DATED November 1, 2002

BETWEEN

TENNESSEE GAS PIPELINECOMPANY

AND

LOUISVILLE GAS ANDELECTRIC COMPANY

 

BUYOUT/EARLY TERMINATION PROVISIONS*

 

SERVICE PACKAGE:

 

BUYOUT PERIOD(S)          November1, 2007 through October 31, 2012

 

 

 

AMOUNT OF TQ REDUCED 51,000Dth                                                              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 asof November 1, 2007.  Notwithstandingthe foregoing, if at any time Tennessee terminates the July 8, 2002, NegotiatedRate Agreement between Tennessee and Shipper for any reason, Shipper shall havethe unilateral right to notify Tennessee of its intent to terminate thisAgreement 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 STANDARDOF THE GENERAL TERMS AND CONDITIONS.

 

 

 

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GAS TRANSPORTATIONAGREEMENT

(For Use under FT-A RateSchedule)

 

EXHIBIT “B”

 

TO GAS TRANSPORTATIONAGREEMENT

DATED November 1, 2002

BETWEEN

TENNESSEE GAS PIPELINECOMPANY

AND

LOUISVILLE GAS ANDELECTRIC COMPANY

 

BUYOUT/EARLY TERMINATION PROVISIONS*

 

SERVICE PACKAGE:

 

BUYOUT PERIOD(S)          November1, 2007 through October 31, 2012

 

 

 

AMOUNT OF TQ REDUCED 51,000Dth                                                              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 asof November 1, 2007.  Notwithstandingthe foregoing, if at any time Tennessee terminates the July 8, 2002, NegotiatedRate Agreement between Tennessee and Shipper for any reason, Shipper shall havethe unilateral right to notify Tennessee of its intent to terminate thisAgreement effective sixty days after the referenced Negotiated Rate Agreementterminates.

 

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

 

 

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