exv10w3



 





Exhibit 10.3




Contract # ____________




SERVICE AGREEMENT




between




TRANSCONTINENTAL GAS PIPE LINE CORPORATION




and




WASHINGTON GAS LIGHT COMPANY




 









 








SERVICE AGREEMENT




     THIS
AGREEMENT entered into this 16th day of May, 2007, by and between
TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as
“Seller,” first party, and WASHINGTON GAS LIGHT COMPANY, hereinafter referred to as “Buyer,” second
party.



W  I  T  N  E  S  S  E  T  H




     WHEREAS, by order issued April 12, 2007, in Docket No. CPO6-421, the Federal Energy Regulatory
Commission (“FERC”) has authorized Seller’s Potomac Expansion Project (referred to as “Potomac”);
and



     WHEREAS, Potomac will add 165,000 Dt per day of incremental firm transportation
capacity by a proposed in-service date of November I, 2007; and



     WHEREAS, Buyer has requested firm transportation service under Potomac and has executed with
Seller a Precedent Agreement, dated September 28, 2005; and



     WHEREAS, Seller is willing to provide the requested firm transportation for Buyer
under Potomac pursuant to the terms of this Service Agreement and the
Precedent Agreement.



     NOW, THEREFORE, Seller and Buyer agree as follows:



ARTICLE I

GAS TRANSPORTATION SERVICE




     1.     Subject to the terms and provisions of this agreement and of Seller’s Rate Schedule FT,
Buyer agrees to deliver or cause to be delivered to Seller gas for transportation and Seller agrees
to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm
basis, up to a Transportation Contract Quantity (“TCQ”) of 100,000 dt per day.



     2.     Transportation service rendered hereunder shall not be subject to curtailment or
interruption except as provided in Section 11 and, if applicable, Section 42 of the General Terms
and Conditions of Seller’s FERC Gas Tariff:



ARTICLE II

POINT(S) OF RECEIPT




     Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a
pressure sufficient to allow the gas to enter Seller’s pipeline system at the varying pressures
that may exist in such system from time to time; provided, however, the pressure of the gas
delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of
Seller’s pipeline system at such point(s) of receipt in the event the maximum operating pressure(s)
of Seller’s pipeline system, at the point(s) of receipt hereunder, is from time to time increased
or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer to Seller at the point(s) of receipt shall
be correspondingly increased or decreased upon written notification of Seller to Buyer. The
point(s) of receipt for natural gas received for transportation pursuant to this agreement
shall be:




 









 





SERVICE AGREEMENT

(Continued)





     See Exhibit A, attached hereto, for points of receipt.



ARTICLE III

POINT(S) OF DELIVERY




     Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at
the following point(s) of delivery and at a pressure(s) of:



     See
Exhibit B, attached hereto, for points of delivery and pressures.



ARTICLE IV

TERM OF AGREEMENT




     This agreement shall be effective as of the later of November 1, 2007 or the date that all
Seller’s Potomac facilities necessary to provide firm transportation service to Buyer have been
constructed and are ready for service as determined in Seller’s sole opinion and shall remain in
force and effect for a primary term of twenty (20) years and thereafter until terminated by Seller
or Buyer upon at least two (2) years written notice; provided, however, this agreement shall
terminate immediately and, subject to the receipt of necessary authorizations, if any, Seller may
discontinue service hereunder if (a) Buyer, in Seller’s reasonable judgment fails to demonstrate
creditworthiness, and (b) Buyer fails to provide adequate security in accordance with Section 32 of
the General Terms and Conditions of Seller’s Volume No. 1 Tariff. As set forth in Section 8 of
Article II of Seller’s August 7, 1989 revised
Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a) pregranted abandonment under Section 284.221(d) of the Commission’s Regulations shall not
apply to any long term conversions from firm sales service to transportation service under Seller’s
Rate Schedule FT and (b) Seller shall not exercise its right to terminate this service agreement as
it applies to transportation service resulting from conversions from firm sales service so long as
Buyer is willing to pay rates no less favorable than Seller is otherwise able to collect from third
parties for such service.



ARTICLE V

RATE SCHEDULE AND PRICE




     1.     Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with
Seller’s Rate Schedule FT and the applicable provisions of the General Terms and Conditions of
Seller’s FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same
may be legally amended or superseded from lime to time. Such Rate Schedule and General Terms and
Conditions are by this reference made a part hereof. In the event Buyer and Seller mutually agree
to a negotiated rate pursuant to the provisions in Section 53 of the
General Terms and Conditions and specified term for service hereunder, provisions governing such negotiated rate
(including surcharges) and term shall be set forth on Exhibit C to the service agreement.




 









 





SERVICE AGREEMENT

(Continued)





     2.     Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be
delivered to Seller shall include the quantity of gas retained by Seller for applicable compressor
fuel, line loss make-up (and injection fuel under Seller’s Rate Schedule GSS, if applicable) in
providing the transportation service hereunder, which quantity may be changed from time to time and
which will be specified in the currently effective Sheet No. 44 of Volume No. I of this Tariff
which relates to service under this agreement and which is incorporated herein.



     3.      In addition to the applicable charges for firm transportation service pursuant to Section 3
of Seller’s Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as
a result of Buyer’s request for service under Seller’s Rate
Schedule FT, to the extent such fees
are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental
authority having jurisdiction.



ARTICLE
VI

MISCELLANEOUS




     1.     This
Agreement supersedes and cancels as of the effective date hereof the following
contract(s) between the parties hereto:



     None



     2.     No waiver by either party of any one or more defaults by the other in the performance of
any provisions of this agreement shall operate or be construed as a waiver of any future default or
defaults, whether of a like or different character.



     3.     The interpretation and performance of this agreement shall be in accordance with the laws
of the State of Texas, without recourse to the law governing conflict of laws, and to all present
and future valid laws with respect to the subject matter, including present and future orders,
rules and regulations of duly constituted authorities.



     4.     This agreement shall be binding upon, and inure to the benefit of the parties hereto and
their respective successors and assigns.



     5.     Notices to either party shall be in writing and shall be considered as duly delivered when
mailed to the other party at the following address:




	 	(a)	 	If to Seller:
	 
	 	 	 	Transcontinental Gas Pipe Line Corporation
	 
	 	 	 	P.O. Box 1396
	 
	 	 	 	Houston, Texas 77251
	 
	 	 	 	Attention: Director — Customer Services




 









 











SERVICE AGREEMENT

(Continued)





	 	(b)	 	If to Buyer:

Washington Gas Light Company

6801 Industrial Road

Springfield, VA 22151

Attention: Ken Yagelski, Director, Energy Acquisition




Such addresses may be changed from time to time by mailing appropriate notice thereof to the other
party by certified or registered mail.




     IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their
respective officers or representatives thereunto duly authorized.



	 	 	 	 	 
	 	TRANSCONTINENTAL GAS PIPE LINE

CORPORATION

(Seller)

 	 
	 	By:  	/s/ Paul F. Egner III	 
	 	 	Paul F. Egner III      	 
	 	 	Director Customer Services 	 
	 
	 	WASHINGTON GAS LIGHT COMPANY

(Buyer)

 	 
	 	By:  	/s/ Terry D. McCallister	 
	 	 	Name:  	Terry D. McCallister 	 
	 	 	Title:  	PRESIDENT& COO 	 



 









 






	 	 	 	 	 



EXHIBIT A



ATTACHED AND MADE PART OF THAT SERVICE AGREEMENT BY AND BETWEEN
TRANSCONTINENTAL GAS PIPE LINE CORPORATION, AS SELLER, AND WASHINGTON GAS
LIGHT COMPANY, AS BUYER, EFFECTIVE___




	 	 	 	 	 
	 	 	Maximum Daily Quantity
	Point (s) of Receipt	 	at
each Receipt Pt. (Dt/d)1
	Point
of interconnection between Transco’s

mainline and East Tennessee Natural Gas

(Cascade Creek) at milepost 1384.86 in

Rockingham County, NC.

	 	 	80,000	 
	 	 	 	 	 	 
	Point of interconnection between Pine Needle LNG

Facility and Transco’s mainline at milepost 1356.95

on Transco’s mainline in Guilford County, NC.

	 	 	20,000	 








 




			
	1	 	These quantities do not include the additional quantities of gas retained by seller for
applicable compressor fuel and line loss make~up provided for in Article V, 2 of the Service
Agreement, which are subject to change as provided for in
Article V, 2 thereof. Therefore, Buyer
shall also deliver or cause to be delivered at the receipt points such additional quantities of gas
in kind to be retained by Seller for compressor fuel and line loss make-up.




 









 










EXHIBIT B



ATTACHED AND MADE PART OF THAT SERVICE AGREEMENT BY AND BETWEEN
TRANSCONTINENTAL GAS PIPE LINE CORPORATION, AS SELLER, AND WASHINGTON GAS
LIGHT COMPANY, AS BUYER, EFFECTIVE___




	 	 	 
	Point (s) of Delivery	 	Pressure
	Rock
Creek Meter Station, located at milepost

1614.31 on Seller’s mainline in Montgomery

County, Maryland.

	 	Prevailing pressures in Seller’s pipeline
system.






 









 






EXHIBIT C



ATTACHED AND MADE PART OF THAT SERVICE AGREEMENT BY AND BETWEEN
TRANSCONTINENTAL GAS PIPE LINE CORPORATION, AS SELLER, AND COLUMBIA GAS OF
VIRGINIA, INC. AS BUYER, EFFECTIVE May 16, 2007




Specification of Negotiated Rate and Term




None