exv10w1



 






Exhibit 10.1




	 	 	 
	

	 	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
	

	 	
	

	 	D. Patrick Whitty, Vice President






ACCEPTED AND AGREED TO:

this 1st day of February, 2005

Washington Gas Light Company



	 	 	 	 	 
	By:

	 	
	 	
	

	 	
	 	 
	 
	 	 	 	 
	

	 	Adrian P. Chapman
	 	Terry McCallister
	

	 	Vice President
	 	President and
	Title:

	 	Regulatory Affaire & Energy Acquisition
	 	Chief Operating Officer
	

	 	
	 	 






 









 






			
	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






 









 






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


 









 








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


3









 








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


5









 








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.




6









 








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	 
	

	 	
	 	 
	 
	 	 	 	 
	

	 	D. Patrick Whitty	 	 
	

	 	Vice President East	 	 
	

	 	East Tennessee Natural Gas, LLC	 	 
	 
	 	 	 	 
	DATE:
	 	 	 	 
	

	 	
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	WASHINGTON GAS LIGHT COMPANY	 	 
	 
	 	 	 	 
	BY

	 	
	 	
	

	 	
	 	 
	

	 	Adrian P. Chapman
	 	Terry McCallister
	

	 	Vice President
	 	President and
	TITLE:

	 	Regulatory Affairs & Energy Acquisition
	 	Chief Operating Officer
	

	 	
	 	 
	 
	 	 	 	 
	DATE:

	 	February 1, 2005	 	 
	

	 	
	 	 






7









 






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:
	 	
	

	 	

	 	 	 	

	

	 	Vice President, D. Patrick Whitty
	 	 	 	Adrian P. Chapman
	

	 	East Tennessee Natural Gas, LLC
	 	 	 	Vice President
	 
	 	 	 	 	 	 
	

	 	 	 	TITLE:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Regulatory Affairs & Energy Acquisition
	 
	 	 	 	 	 	 
	DATE:

	 	 	 	DATE:
	 	February 1, 2005
	

	 	

	 	 	 	

	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	
	

	 	 	 	 	 	Terry McCallister
	

	 	 	 	 	 	President and
	

	 	 	 	 	 	Chief Operating Officer







8