EXHIBIT

10.65




 




EXHIBIT II




 




NOVEMBER 1, 2002, RATE

FT-A AGREEMENT




 




BETWEEN LG&E AND

TENNESSEE GAS PIPELINE COMPANY




 





























 




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)




 




1





























 




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.




 




2





























 




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.




 




3





























 




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.




 




4





























 




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


  
	

   


  	

   


  	

   


  





 




5





























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.






















*NOTICE MUST BE GIVEN AS PROVIDED FOR IN THE NET PRESENT VALUE STANDARD

OF THE GENERAL TERMS AND CONDITIONS.




 




 




 




6





























 




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.




 




 




7