Exhibit 10.32


 


REDACTED


 


	
  

  	
   

  	
  EAST TENNESSEE NATURAL GAS COMPANY

  5400 Westheimer Court 

  Houston, TX 77056-5310

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mailing Address: 

  P. 0. Box 1642 

  Houston, TX 77251-1642

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  713 627 5400

  



 


September 29, 2003


 


Mr. George J.
Wackerhagen 

Duke Energy Murray, LLC 

5400 Westheimer Court 

Houston, TX 77056


 


Re:                 Patriot Project

Negotiated rate for firm transportation service 

Contract No. 410098


 


Dear
Mr. Wackerhagen::


 


This Agreement is
made and entered into this          
day of               ,
2003, by and between East Tennessee Natural Gas Company (“Transporter”) and
Duke Energy Murray, LLC (“Shipper”). Transporter and Shipper have entered into
that certain agreement dated July 19, 2001 (“Precedent Agreement”), pursuant to
which Transporter agreed, subject to the satisfaction or waiver of certain
conditions precedent, to provide an MDQ of 50,000 Dth per day of firm
transportation service in accordance with the terms of the Service Agreement,
and Shipper agreed, subject to the satisfaction or waiver of certain conditions
precedent, to pay for such transportation service in accordance with the terms
of the Service Agreement. In accordance with the mutual covenants and
agreements contained herein and in the Precedent Agreement, Transporter and
Shipper desire to enter into this Agreement with respect to the rate for
service under the Service Agreement.


 


When used in this
Agreement, and unless otherwise defined herein, capitalized terms shall have
the meanings set forth in the Precedent Agreement and/or in Transporter’s FERC
Gas Tariff, as amended from time to time.


 


1.                          Subject
to the satisfaction or waiver of all conditions precedent set forth in the
Precedent Agreement, for the primary term of the Service Agreement and the MDQ
of [* * *] Dth per day, for natural gas received and redelivered by Transporter
for Shipper under the Service Agreement, Transporter agrees to charge Shipper,
and Shipper agrees to pay Transporter as follows for primary receipts from
Transco - Rockingham Co., NC and primary deliveries to Bradley or secondary
delivery to the DENA-Murray facility, and for receipts and deliveries at other
points within the primary path and direction of flow:


 


www. duke-energy, com


_________


***
Certain information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.


 

















 


a.. a
monthly reservation charge of [***] per Dth and a commodity charge of [***] per
Dth applicable to:


 


i. [*
* *] Dth in May through September of the years 2004 through 2009,


 


ii. [*
* *] Dth in May through September of the years 2010 through 2014,


 


iii.
[* * *] Dth in the months of October through April for the entire Primary Term,
and


 


iv.
shipper, at its sole discretion, may increase the quantities to which ii. and
iii. are applicable up to a maximum total quantity of [* * *] Dth upon thirty
days written notice to Transporter.


 


b. for
all gas transported in addition to the quantities stated above, up to the MDQ
of [* * *] Dth per day, a monthly reservation charge of [* * *] per Dth and a
commodity charge of [* * *] per Dth.


 


For deliveries to markets
that are not within the primary path and direction of flow, such rate shall not
apply, and Shipper shall pay the maximum applicable Reservation Charge pursuant
to Transporter’s FERC Gas Tariff, plus the applicable commodity charge pursuant
to Transporter’s FERC Gas Tariff. The above rates are exclusive of any
applicable surcharges, such as the Federal Energy Regulatory Commission Annual
Charge Adjustment or the Gas Research Institute Rate Adjustment. For service
within the primary path, Shipper shall not be charged for fuel if such service
constitutes a backhaul.


 


The negotiated rates set
forth in this Paragraph 1 shall apply only for service under the Service
Agreement up to the MDQ of [* * *] Dth per day.


 


2.                          In
consideration of the rates set forth in Paragraph 1 above, the applicable rates
for service under the Service Agreement during the primary term shall remain as
stated in Paragraph 1 above. Therefore, pursuant to Section 4.5 of the FT-A
Rate Schedule of Transporter’s FERC Gas Tariff, the rates set forth in
Paragraph 1 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 in Paragraph 1 above),
notwithstanding any adjustments to such generally applicable maximum recourse
rate, rate component, charge or credit which may become effective during the
primary term.


 


_________


***
Certain information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.


 


2

















 


3.                          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 Shipper even if the final maximum rate is reduced to a level
below the Negotiated Rate provided herein. Shipper’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 Shipper 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.


 


4.                          Shipper
acknowledges and agrees that all terms and conditions of Transporter’s FERC Gas
Tariff, as effective from time to time, and applicable form of service
agreement, including provisions for filing of changes in Transporter’s FERC Gas
Tariff, which changes may affect this Agreement, are applicable to the Service
Agreement. In the event of a conflict between this Agreement and Transporter’s
FERC Gas Tariff and/or the Service Agreement, this Agreement shall control.


 


5.                          Subject
to Paragraph 6 below, the term of this Agreement shall commence on the date
first set forth above and shall continue in effect through and including the
primary term of the Service Agreement; provided, however, that, in the event
the Service Agreement terminates in accordance with its terms, this Agreement
shall immediately terminate and be of no further force or effect; provided
further that, in the event the Primary Point(s) of Receipt and/or the Primary
Point(s) of Delivery, as set forth in the Service Agreement, are/is revised or
amended after the date first set forth above, the Negotiated Rate stated herein
shall no longer apply, and the Parties shall negotiate a mutually agreeable
rate.


 


6.                          Transporter
shall file with the FERC to implement the above-referenced Negotiated Rate
pursuant to the FERC’s Statement of Policy Alternatives to Traditional Cost of
Service Ratemaking for Natural Gas Transporters and Regulation of Negotiated
Transportation Service of Natural Gas Transporters issued January 31, 1996, in
Docket Nos. RM95-6-000 and RM96-7-000. This Agreement shall become effective
upon the date of issuance of an order by the FERC accepting such Negotiated
Rate filing substantially in the form set forth herein.


 


7.                          Any
company that succeeds by purchase, merger, or consolidation of title to the
properties, substantially as an entirety, of Shipper, will be entitled to the
rights and will be subject to the obligations of its predecessor in title under
this Agreement. Otherwise, this Agreement may not be assigned by Shipper to any
other party without the prior


 


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express written consent
of Transporter, which consent shall not be unreasonably withheld; provided,
however, that Shipper may, without the consent of Transporter, assign this
Agreement to an affiliate so long as such affiliate meets Transporter’s
creditworthiness requirements as set forth in Transporter’s FERC Gas Tariff.
This provision is not intended to prohibit Shipper from releasing capacity
under the Service Agreement pursuant to the capacity release provisions
contained in Transporter’s FERC Gas Tariff and to FERC’s capacity release
regulations.


 


8.                          If FERC
disallows, modifies or conditions any terms of this Agreement, and such action
has a material adverse effect on the rights and obligations of the Parties, the
Parties shall use reasonable efforts to agree upon replacement terms that are
consistent with the relevant order or directive, and that maintain the relative
economic positions of, and risks to, the Parties as reflected in this Agreement
as of the date first set forth above. If the Parties are unable to negotiate
such mutually acceptable terms within 30 days of the order or directive, this
Agreement shall automatically terminate, unless the termination period is
extended by mutual written agreement.


 


9.                          This
Agreement shall be construed in accordance with and governed by the laws of the
State of Tennessee, without recourse to the law governing the conflict of laws
thereof.


 


10.                    This Agreement
contains the entire agreement of the parties with regard to the rates to be
paid by Shipper for transportation service under the Service Agreement and
shall be binding upon and inure to the benefits of the successors and permitted
assigns of each party.


 


11.                    All notices
and communications regarding this Agreement shall be made in accordance with
the notice provisions of the Precedent Agreement or the Service Agreement, as
applicable.


 


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If the foregoing
accurately sets forth your understanding of the matters covered herein, please
so indicate by having a duly authorized representative sign in the space
provided below and returning an original signed counterpart to the undersigned.


 


	
   

  	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  East
  Tennessee Natural Gas Company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ D. Patrick Whitty

  	
   

  
	
   

  	
   

  	
   

  	
  D.
  Patrick Whitty, Vice President

  
	
  ACCEPTED
  AND AGREED TO:

  this         day of           ,
  2003

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Duke
  Energy Murray, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ George J.
  Wackerhagen

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  	
   

  
									



 


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