1st Amendment to Inter-Island Industrial Fuel Oil & Diesel Fuel Supply Contract



 HECO Exhibit 10(b) 
  
 FIRST AMENDMENT TO 
 INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL SUPPLY CONTRACT 
 BY AND BETWEEN 
 BHP PETROLEUM AMERICAS REFINING INC. 
 AND

 HAWAIIAN ELECTRIC COMPANY, INC.; 
 MAUI ELECTRIC COMPANY, LIMITED; 
 AND 
 HAWAII ELECTRIC LIGHT COMPANY, INC. 
  
 This First Amendment to Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract (“Amendment”), dated March 29, 2004 is entered into between Tesoro Hawaii Corporation fka BHP Petroleum Americas Refining Inc., a Hawaii
corporation (hereinafter referred to as “Tesoro” or “SELLER”) and Hawaiian Electric Company, Inc. (“HECO”), and its wholly-owned subsidiaries Maui Electric Company, Limited (“MECO”), and Hawaii Electric Light
Company, Inc. (“HELCO”), each a Hawaii corporation (HECO, MECO and HELCO hereinafter collectively referred to as “BUYER”). 
  
 WHEREAS, BHP Petroleum Americas Refining Inc. entered into that certain Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract dated November
14, 1997, effective as of January 1, 1998 (the “Contract”); and 
  
 WHEREAS, on or about June 1, 1998, Tesoro Petroleum Corporation purchased the stock of BHP Petroleum Americas Refining Inc., and thereafter changed the name of BHP Petroleum Americas Refining Inc. to Tesoro Hawaii
Corporation; and 
  
 WHEREAS, the Contract provided for the sale
by SELLER and purchase by BUYER of Industrial Fuel Oil (“Fuel Oil”) and Diesel Fuel (also “Diesel”) for the period from January 1, 1998 through December 31, 2004, with provision for additional terms of 12-months each 

  

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beginning each successive January 1, unless BUYER or SELLER gives written notice of termination at least 120 days prior to the expiration of the then current
term; and 
  
 WHEREAS, SELLER and BUYER desire to extend the
original term of the Contract for an additional ten-year period under the existing terms and conditions of the Contract, subject to the amendments noted herein; 
  

NOW THEREFORE, the parties agree to amend the Contract as follows, effective as of January 1, 2005: 
  
 1. All references to “BHP” or “BHP Petroleum Americas Refining Inc.” in
the title of and throughout the Contract shall be replaced by “Tesoro Hawaii Corporation”. 
  
 2. Article I (“Definitions,”), Section 1.1, is hereby amended by amending the definitions of “Month of Delivery” and “Original Term,” to read as follows: 
  
 “36. “Month of Delivery” means the calendar month during
which the physical Delivery is completed which is indicated by the cessation of pumping of Product.” 
  
 “38. “Original Term” means the first term of this Contract, which commences January 1, 1998 and concludes December 31, 2014.”

  

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 3. Article II (“Term”) is hereby amended in its entirety to read as follows: 
  
 “The Original Term of this Contract shall be from January 1, 1998
through December 31, 2014, and continue for Additional Terms, unless BUYER or SELLER gives written notice of termination at least one hundred twenty (120) Days before the beginning of an Additional Term.” 
  
 4. Article III (“Quantity”), Section 3.1 (“Minimum and Maximum Annual
Quantities”) is hereby amended in the first paragraph by replacing the phrase “1999-2004” in the table setting forth the Fuel Oil annual physical quantities with “1999-2014/Additional Term” and by
also replacing the phrase “1999-2004” in the table setting forth the Diesel annual physical quantities with “1999-2014/Additional Term”; and in the third paragraph by replacing the phrase
“2004” with “2014.” 
  
 5. Article V (“Price, BTU
Determination”), Section 5.1 (“Fuel Oil Price”) is hereby amended in the first paragraph by replacing the phrase “1999-2004” in the table setting forth the
[            ] with “1999-2014/Additional Term” and by also replacing the phrase “2004” with “2014” in the immediately following
sentence. 
  
 6. Article V (“Price, BTU
Determination”), Section 5.2 (“Diesel Price”) is hereby amended in the first paragraph by replacing the phrase “1999-2004” in the table setting forth the
[            ] with “1999-2014/Additional Term” and by also replacing the phrase “2004” with “2014” in the immediately following sentence;
and is hereby further amended in the second paragraph by replacing the phrase “1999-2004” in the table setting forth the [            ] 
  

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[            ] with “1999-2014/Additional Term” and by also
replacing the phrase “2004” with “2014” in the immediately following sentence. 
  
 7. Article VI (“Payment”), Section 6.2 (“Method of Payment”) is hereby updated by amending SELLER’S wire transfer information as follows:

  
 “Bank One, Chicago, Illinois 
  
 ABA# 071000013 
  
 Tesoro Hawaii Corporation 
  
 Account # 5563631” 
  
 8. Article XV (“Entire Agreement, Waiver and Illegality”), Section 15.2 (“Notices”) is hereby clarified and updated by amending it in its entirety to
read as follows: 
  
 “Except as otherwise expressly provided
herein, all notices shall be given in writing, by letter, electronic mail, or facsimile to the following addresses, or such other addresses as the parties may designate by notice, and shall be deemed given upon receipt, provided that notice sent by
mail shall be deemed to have been given on the date of actual delivery or at the expiration of the fifth day after the date of mailing, whichever is earlier. 
  

			
	SELLER:	  	Tesoro Hawaii Corporation
	 	  	P.O. Box 3379
	 	  	Honolulu, Hawaii 96842
	 	  	Attn: Manager Utility Fuel Sales
	 	  	Facsimile: (808) 547-3336

  

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	BUYER:	  	Hawaiian Electric Company, Inc.
	 	  	P. O. Box 2750
	 	  	Honolulu, Hawaii 96840
	 	  	Attn: Director Fuels Resources, Power Supply Process Area, Mail
	 	  	Stop WP-2/IF
	 	  	Facsimile: (808) 543-4207

  
 The Director Fuel Resources, Power
Supply Process Area, for Hawaiian Electric Company, Inc. shall be responsible for forwarding notices to the other parties to this Contract.” 
  
 9. Article XVI [            ] is hereby amended by replacing the phrase “the period
1999-2004” with “the period 1999-2014, plus any Additional Term thereafter.” 
  
 10. Addendum No. 2 (“Seller’s Facilities on Maui and Hawaii”), Section 17 (“Required Insurance”) is hereby amended by amending the first paragraph thereof in its entirety to read as follows:

  
 “Without in any way limiting BUYER’s liability
pursuant to this Contract, BUYER shall maintain and require any carrier to maintain the following insurance and all insurance that may be required under the applicable laws, ordinances, and regulations of any governmental authority: 
  

	 	i.	Workers’ Compensation and Employer’s Liability Insurance: 

  

	 	(a)	 As prescribed by applicable law, including insurance covering liability under the U.S. Longshore and Harbor Workers’ Compensation Act and the Outer Continental
Shelf Lands Act with voluntary compensation for marine 



  

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operations to include transportation, wages, maintenance and cure, and Jones Act Coverage where required. 


  

	 	(b)	Coverage B Employer’s Liability with a minimum limit of $500,000. 

  

	 	(c)	Endorsement to include a waiver of subrogation against SELLER. 

  

	 	ii.	Comprehensive General Liability Insurance: 

  

	 	(a)	Bodily Injury and Property Damage Insurance with a minimum combined single limit of $1,000,000 per occurrence for bodily injury and property damage liability. Deductible or
self-retention amount must be shown on certificate of insurance. 

  

	 	(b)	Such insurance shall include the following coverages: Products and Completed Operations and Personal Injury Liability. 

  

	 	(c)	SELLER shall be named as additional insured. 

  

	 	(d)	Endorsement to include a waiver of subrogation against SELLER. 

  

	 	iii.	Commercial Automobile Liability and Property Damage Liability Insurance: 

  

	 	(a)	Coverage for all owned, non-owned and hired vehicles used in receiving diesel from SELLER’s Neighbor Island Terminals with a minimum combined single limit of $1,000,000 per
occurrence for bodily injury and property damage liability. Coverage shall include an endorsement, form “CC 00 31 12 89, Changes in Business Auto and Truckers Policies – Mobile Equipment, Contractual Liability and Pollution (Hawaii),”
or its equivalent, to provide pollution liability coverage. Deductible or self-retention amount must be shown on certificates. 

  

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	 	(b)	If applicable, Motor Carrier Policies of Insurance for Public Liability Endorsement (Motor Carrier Act of 1980) Form MCS-90 must be provided with minimum limits of $1,000,000 Bodily
Injury and Property Damage per occurrence. 

  

	 	(c)	SELLER shall be named as additional insured. 

  

	 	(d)	Endorsement to include a waiver of subrogation against SELLER. 

  

	 	iv.	Excess (Umbrella) Liability Insurance: 

  

	 	(a)	Coverage with limits of liability not less than $5,000,000 per occurrence, and additional excess limits may be used to supplement inadequate limits in the primary policies required
in Coverage B Employer’s Liability Insurance and Comprehensive General Liability Insurance. 

  

	 	(b)	SELLER shall be named as additional insured. 

  

	 	(c)	Endorsement to include a waiver of subrogation against SELLER.” 

  
 11. Addendum No. 2 (“Seller’s Facilities on Maui and Hawaii”), Section 19 (“Notices”) is hereby updated by amending it in its entirety to read as
follows: 
  
 “Notices for the forecast of available diesel
storage capacity, arrival of BUYER’s Nominated Barge or delivery timing notification, diesel quality notifications, or transfer notifications shall be made to the following addresses: 
  

			
	MAUI:	  	 Tesoro Hawaii Corporation Terminals

	 	  	 Terminal Supervisor

	 	  	 140-A Hobron Avenue

	 	  	 Kahului, Hawaii 96732

	 	  	 Telephone: (808) 871 - 0817

	 	  	 Facsimile: (808) 871 - 0728


  

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	 	  	 Maui Electric Company, Ltd.

	 	  	 Production Department

	 	  	 P.O. Box 398

	 	  	 Kahului, Hawaii 96732

	 	  	 Telephone: (808) 442 - 4914

	 	  	 Facsimile: (808) 442 - 4975

		
	HAWAII:	  	 Tesoro Hawaii Corporation Terminals

	 	  	 Terminal Supervisor

	 	  	 607 Kalanianaole Avenue

	 	  	 Hilo, Hawaii 96720

	 	  	 Telephone: (808) 961 - 3177

	 	  	 Facsimile: (808) 969 - 1085

		
	 	  	 Hawaii Electric Light Co., Inc.

	 	  	 Production Department

	 	  	 P.O. Box 1027

	 	  	 Hilo, Hawaii 96720

	 	  	 Telephone: (808) 969 - 0423

	 	  	 Facsimile: (808) 969 - 0425”


  
 12. Exhibit A (“No. 6 Industrial
Fuel Oil Specifications”), and Exhibit B (“Diesel Specifications”), are hereby replaced by the Exhibit A and Exhibit B, respectively, attached hereto and incorporated by reference. 
  
 13. Exhibit C (“No. 6 Fuel Oil Example Price Calculation”) and Exhibit D
(“Diesel Example Price Calculation”), are hereby clarified and updated by replacing them with the Exhibit C and Exhibit D, respectively, attached hereto and incorporated herein by reference. 
  
 14. Except as expressly amended in this Amendment, the provisions of the Contract shall
remain in full force and effect, and exactly as written. 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Inter-Island Industrial
Fuel Oil and Diesel Fuel Supply Contract as of the day and year first written above. 
  

			
	TESORO HAWAII CORPORATION
		
	By	 	/s/    STEVE L. WORMINGTON        
	 	 	

	 Its
	 	 Steve L. Wormington
 (Printed or Typed Name)
  
 EVP Marketing

	
	SELLER
	
	HAWAIIAN ELECTRIC COMPANY, INC.
		
	By	 	/s/    THOMAS C. SIMMONS        
	 	 	

	 Its
	 	 Thomas C. Simmons
 (Printed or Typed Name)
  
 Vice President, Power Supply

		
	By	 	/s/    WILLIAM A. BONNET        
	 	 	

	 Its
	 	 William A. Bonnet
 (Printed or Typed Name)
  
 Vice President

	
	BUYER

  

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	MAUI ELECTRIC COMPANY, LIMITED
		
	By	 	/s/    WILLIAM A. BONNET        
	 	 	

	 Its
	 	 William A. Bonnet
 (Printed or Typed Name)
  
 Vice President

		
	By	 	/s/    RICHARD A. VON GNECHTEN        
	 	 	

	 Its
	 	 Richard A. von Gnechten
 (Printed or Typed Name)
  
 Financial Vice President

	
	BUYER
	
	HAWAII ELECTRIC LIGHT COMPANY, INC.
		
	By	 	/s/    WILLIAM A. BONNET        
	 	 	

	 Its
	 	 William A. Bonnet
 (Printed or Typed Name)
  
 Vice President

		
	By	 	/s/    RICHARD A. VON GNECHTEN        
	 	 	

	 Its
	 	 Richard A. von Gnechten
 (Printed or Typed Name)
  
 Financial Vice President

	
	BUYER

  

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 EXHIBIT A 
  

NO. 6 INDUSTRIAL FUEL OIL SPECIFICATIONS 
  

							
	 Specification - Test Item

	  	 Measurement Unit

	  	 Limits

	  	 ASTM
Method


	 GRAVITY @ 60 DEGREES F.
	  	Degrees API	  	6.5 Min.	  	 D-1298,
 D-4052-86

				
	 FLASH POINT
	  	Degrees F.	  	150 Min.	  	 D-93,
 D-6450

				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	 [___]

	 	  	[___]	  	[___]	  	[___]
	 	  	 	  	[___]	  	[___]
	 	  	[___]	  	[___]	  	[___]
	 	  	 	  	[___]	  	[___]
	 	  	[___]	  	[___]	  	[___]
	 	  	 	  	[___]	  	[___]
				
	 POUR POINT
	  	Degrees F.	  	55 Max.	  	D-97,
	 	  	 	  	 	  	D-5949
				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	[___]
	 	  	 	  	 	  	[___]
				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	[___]
	 	  	 	  	 	  	[___]
				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	[___]
				
	 SEDIMENT & WATER
	  	Percent, Volume	  	0.50 Max.	  	D-1796
				
	 HEAT VALUE, GROSS
	  	MM BTU/BBL	  	6.2 Min.	  	 D-240,
 D-4868

				
	 HEAT VALUE, NET
	  	MM BTU/BBL	  	Report	  	 D-240,
 D-4868

				
	 [___]
	  	 	  	 	  	 

  

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 EXHIBIT B 
  

DIESEL SPECIFICATIONS 
  

							
	 Specification - Test Item

	  	 Measurement Unit

	  	 Limits

	  	 ASTM
Method


	 GRAVITY @ 60 DEGREES F.
	  	Degrees API	  	30.0 Min.	  	 D-1298,
 D-4052-86

				
	 SPECIFIC GRAVITY @ 60 DEGREES F.
	  	n/a	  	.88 Max.	  	 D-1298,
 D-4052-86

	 	  	 	  	 	  	 
				
	 VISCOSITY
	  	SSU At 104 DF	  	 32.3 Min.
 39.4 Max.
	  	 D-445,
 D-2161

	 	  	SSU At 100 DF	  	 32.6 Min.
 40.1 Max.
	  	 D-445,
 D-2161

	 	  	cSt At 100 DF	  	 1.9 Min.
 4.29 Max.
	  	 D-445,
 D-2161

	 	  	cSt At 104 DF	  	 1.9 Min.
 4.07 Max.
	  	 D-445,
 D-2161

				
	 FLASH POINT, PM
	  	Degrees F.	  	150 Min.	  	 D-93
 D-6450

				
	 [___]
	  	[___]	  	[___]	  	[___]
				
	 ASH
	  	PPM, Wt.	  	100 Max.	  	D-482
				
	 [___]
	  	[___]	  	[___]	  	[___]
				
	 CARBON RESIDUE 10% RESIDUUM
	  	Percent, Wt.	  	.35 Max.	  	D-524
				
	 SEDIMENT & WATER
	  	Percent, Volume	  	0.05 Max.	  	D-1796
				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	[___]
	 	  	 	  	 	  	[___]
				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	[___]
				
	 DISTILLATION, 90% RECOVERED
	  	Degrees F.	  	540 - 650	  	D-86
				
	 [___]
	  	[___]	  	[___]	  	[___]

  

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	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	 [___]

				
	 [___]
	  	[___]	  	[___]	  	[___]
	 	  	 	  	 	  	 [___]

				
	 * HEAT VALUE, GROSS
	  	MM BTU/BBL	  	5.86	  	 D-240,
 D-4868

				
	 HEAT VALUE, NET
	  	MM BTU/BBL	  	Report	  	 D-240,
 D-4868


  

	*	Typical value is shown; value is not a specification limit. 

  

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 EXHIBIT C 
  
 No. 6 FUEL OIL EXAMPLE PRICE CALCULATION 
  
 Illustrative Price Calculation for October 2003 
  
 The price in U.S. Dollars (“USD”) per barrel of No. 6 Fuel Oil is determined Monthly pursuant to Section 5.1, as illustrated by
the following formula: 
  
 [___] 
  
 Where: 
 [___] 
 [___] 
 [___] 
 [___] 
  
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___]

 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
  
 [___] market price referencing the price of [___] 
 [___]
converted  
 from USD per metric ton to USD per barrel by dividing by 6.368. 
  

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	i.	The [____] 

  
 on all dates of publication during the period beginning the 21st Day of the second Month preceding the Month of Delivery and ending the 20th Day of the Month preceding the Month of Delivery. 
  

							
	 Date of Price

	 	 Price in USD per Metric Ton


	 Date

	 	 Low

	 	 High

	 	 Average


	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___][___]


  
 [___]:                                      
               [___] 
  

	ii.	Expressed in USD per barrel, converting to barrel from metric ton by dividing by 6.368. 

  
 = [___] / 6.368 Bbl/MT 
  
 [___] 
  
 [___] 
 [___] 
 [___] 
 [___] 
  

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 Assume the following [___] this illustration: 
  
 [___] 
 [___] 
 [___]

  
 [___] 
 [___] 
 [___] 
  
 A = [___] 
  
 T = Taxes applicable to sale of Fuel Oil 
  

	i.	HGET = Currently 4.166% of pre-HGET price, excluding the Hawaii Environmental Response Tax; 

  

	ii.	Hawaii Environmental Response Tax applied after HGET = Currently $0.05 per barrel. 

  

	I.	Sample price computation for Fuel Oil ( [___] 

 [___] gross heat
content as determined 
 pursuant to Section 5.5 is in the range: [___] MM Btu per barrel) 
  
 P = [___] 
  
 [___] 
  
 [___] per barrel 
  

	II.	Sample price computation for Fuel Oil ( [___] 

 [____] Gross Heat
Content as determined pursuant to Section 5.5 is outside the 
 range: [___] MM Btu per barrel) 
  
 Assume [___] gross heat content of [___] MM Btu per barrel 
  
 P = [___] 
  
 [___] 
  
 [___] 
  
 [___] per barrel 
  

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 EXPLANATION OF TAXES: 
  
 Taxes in the Fuel Oil price currently in effect include the Hawaii Environmental Response
Tax (currently $0.050 per barrel). Also, Hawaii State General Excise Tax (currently 4.166%) will be paid on all components of the Fuel Oil price, except at the execution of this Contract, the Hawaii Environmental Response Tax. 
  

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 EXHIBIT D 
  
 DIESEL EXAMPLE PRICE CALCULATION 
  
 Illustrative Price Calculation for October 2003 
  
 The price in U.S. Dollars (“USD”) per gallon of Diesel is determined Monthly pursuant to Section 5.2, as illustrated by the
following formula: 
  
 [_____] 
  
 Where: 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___]

 [___] 
 [___]

 [___] 
 [___] 
 [___] 
 [___]  
 [___] 
 [___] 
 [___]

 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
  

	DP =	market price referencing the price of [___] 


	    	[___] 


	    	[___] expressed in USD per gallon. 

  
 The [___] 
 [___] 
 [___]during the period beginning the 21st Day of the second Month preceding the Month of Delivery and ending the 20th Day of the Month preceding the Month of Delivery,
expressed in USD per gallon. 
  

 1 









							
	 Date of Price

	 	 Price in USD per gallon


	 	 	 Low

	 	 High

	 	 Average


	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]

	 [___]
	 	 [___]
	 	 [___]
	 	 [___]


  
 [___] in USD per
gallon:                                 [___] 
  
 [___] 
  
 [___] 
 [___]

 [___] 
 [___] 
  
 Assume the following [___] apply in this
illustration: 
  
 [___] 
 [___] 
 [___]

  
 Assume in this illustration that the [___] 
 [___] 
 thus 
  
 [___] 
  

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 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
 [___] 
  
     [___] 
  
     [___] 
     [___] 
  
     [___] 
     [___] 
  
     [___] 
     [___] 
  
 T = Taxes applicable to
sale of Diesel 
  

	i.	HGET = currently 4.166% of pre-HGET price, excluding the Hawaii Environmental Response Tax and Hawaii Liquid Fuel Fax; 

  

	ii.	Hawaii Environmental Response Tax applied after HGET = currently $0.05 per barrel; equivalent to $0.0012 per gallon; 

  

	iii.	Hawaii Liquid Fuel Tax applied after HGET = currently $0.01 per gallon. 

  

	I.	Price For Diesel Delivered into BUYER’S Nominated Barge on Oahu ( [___] [___] gross heat content is in the range: [___] Btu per gallon) 

  
 P = [___] 
  
 [___] 
  
 [___] per gallon; 
  

	II.	Price For Diesel Delivered into BUYER’S Nominated Barge on Oahu ( [___] [___] gross heat content is outside the range: [___] Btu per gallon) 

  
 Assume gross heat content, HC = [___] Btu per gallon 
  

 3 








 P = [___] 
  
 [___] 
  
 [___] 
  
 [___] per gallon

  

	III.	Price For Diesel Delivered [___] 

 [___] 
 [___] 
 [___] gross heat 
 content is in the range: [___] Btu Per gallon) 
  
 a. For Diesel Delivered [___] 
  
 [___] 
  
 P = [___] 
  
 [___] 
  
 [___] per gallon; 
  
 b. For Diesel Delivered to [___] 
  
 [___] 
  
 P = [___] 
  
 [___] 
  
 [___] per gallon; 
  
 c. For Diesel Delivered to [___]: 
  
 [___] 
  
 P = [___] 
  
 [___] 
  
 [___] per gallon; 
  

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	IV.	Price For Diesel Delivered [___] 

  
 [___] 
 [___] 
 [___] gross heat 
 content is outside the range: [___] Btu per
gallon) 
  
 For Diesel Delivered to [___] 
  
 [___] 
  
 Assume gross heat content, HC = [___] Btu per gallon 
  
 P = [___] 
  
 [___] 
  
 [___] 
  
 [___] per gallon

  
 EXPLANATION OF TAXES: 

 
 Taxes in the Diesel price currently in effect include the Hawaii Environmental Response
Tax (currently $0.050 per barrel ($0.0012 per gallon) and the Hawaii Liquid Fuel Tax (currently $0.01 per gallon). Also, the Hawaii State General Excise Tax (currently 4.166%) will be paid on all components of the Diesel price, except at the
execution of this Contract, the Hawaii Environmental Response Tax and the Hawaii Liquid Fuel Tax. 
  

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