R-97-12-11-10C - 12/11/1997Ms. Sharon Prete
City of Round Rock
221 East Main Street
Round Rock, Texas 78664
Dear Ms. Prete:
%.1
Lone Star Gas Company
301 5. Harwood 51. • Dallas, Texas 75201 -5696
November 13, 1997
Enclosed herewith please find the duplicate signatory copies of a Lone Star Gas Company Contract for
Industrial Gas Service ( "the Contract ") and Amendment of Contract for Industrial Gas Service ( "the
Amendment ") with attached Addendum to Amendment of Contract for Industrial Gas Service (Interruptible Gas
Transportation Agreement, "the Transportation Agreement "). As stated in the Contract and the Amendment,
Lone Star Gas Company continues to have contractual rights to curtail sales gas as specified in Article IV of
the Contract. If you should desire to receive service under the terms and conditions as provided therein,
please ensure that an authorized official executes both copies of the Contract, the Amendment and the
Transportation Agreement where indicated.
Please complete the following items within the agreements upon their execution:
1. (a) Rate Selection (1, 2 or 3) in the third paragraph of the Contract.
(b) Execution date above the signatory block of the Contract.
2. (a) Execution date and state of incorporation, if applicable, in the opening paragraphs of the
Amendment and attached Transportation Agreement.
(b) Appropriate notice and invoice addresses in Article VIII of the Transportation Agreement.
The primary term ending date (which will reflect a five -year period) and the contract year beginning date in
Article 1 of the Amendment will be filled in by Lone Star Gas Company upon receipt of properly executed
documents and confirmation of the installation of an operational telephone line.
Please be advised that if both copies of each of the aforementioned agreements are not executed and
returned to this office within one (1) year of the date of this letter, then this proposal shall become null and void
at such time, unless the parties agree otherwise in writing. After execution of the agreements by Lone Star
Gas Company, which is subject to its management's approval, a fully- executed original of each agreement
will be retumed to you. If you have any questions please feel free to contact Mr. Richard Bone at (512) 244-
0831.
Enclosures
cc: Mr. R. L. Bone (w /attachments)
Sincerely,
O �r c1 °LJ• 9. L iG
David W. Gilbreath
Senior Contract Administrator
1
Ms. Sharon Prete
City of Round Rock
221 E. Main St.
Round Rock, Texas 78664
Dear Ms. Prete:
GSB:
Enclosures
cc: Mr. R. L. Bone
Mr. R. H. Brown
A
Lone Star Gas Company
301 S Harwood 5t. • Deltas, Texas 7 5201 -5 696
February 6, 1998
Enclosed for your retention is a fully executed copy of your Contract for Industrial Gas Service and
the Amendment thereof with its attached Addendum (Interruptible Gas Transportation Agreement) for service
that commenced January 1, 1998.
Should you have any questions, please feel free to contact Richard Bone at (512) 244 -0831 or myself
at (214) 573 -3063. Thank you for your cooperation.
Sincerely,
Gregory S. Barber
Contract Analyst
•
TEXAS CERTIFICATE OF EXEMPTION FROM SALES TAX,
CLAIM FOR REFUND, AND POWER OF ATTORNEY
CITY ni Rou.NO Rock
FORM 23907/92
•
0 £ P •. OR _v
Account Number (t there are multiple locations and melee. attach a listing of all account number, and service locations to this form)
The undersigned hereby claims exemption from payment of Texas sales lazes for the purchase of gas from (check one):
❑ Lone Star Gas Company, a division of ENSERCH Corporation, seller, 301 S. Harwood, Dallas. Texas 75201
❑ seller, 301 S. Harwood, Dallas, Texas 75201
I claim this exemption for the following reason (check one):
❑ Natural gas is used 100% In processing, manufacturing or fabricating tangible personal property for sale In the regular course of business. (E- Tax-1)
(Brief description of Items being processed for resale)
❑ A valid and complete on -site utility study has been performed as required by 34 TAG Sec 3.295 and Is on Ole In purchaser's records which shows that
%of natural gas Is used for processing, manufacturing or fabricating tangible personal property for sale In the regular course or business.(E- Tax -1)
(Oriel description of Items processed for resale)
Affix seal here if study performed by a OR 11 the utility was certified by a nonregistered engineer, complete the following certification:
registered engineer. Name and number
must be legible. I. (name of engineer), have an
engineering degree from (name of
university) an accredited engineering college, I certify that the BTU rating, duty factor,
where needed for cycling equipment, and natural as computations on the utility study
Authorized Customer Signature
❑ Gas Is used 100% in residential dwellings. (Specify type of dwelling. I.e. nursing home, apartment complex)
(City tax will remain due on accounts located Ina dry which taxes residential use of gas.) (E - Tax =2)
❑ Exempt organization . (Name of organlzadon) (E Tax.1)
❑ Items purchased by or for the Reeclutlon Trust Corporation (RTC) or the Federal Deposit Insurance Corporation (FDIC). (E- Tex -1)
❑ Seasonal processing / Manufacturing use: _
State type of processing and processing period. This certificate should be revoked In writing when the process period ends. (A new certificate Is required each
year.) (E- Tax -1)
❑ Gas Is used 100% in exploration tor- production of, or transportation of a material extracted from the earth. (E- Tax.1)
❑ Gas Is used 100% for agriculture, Including dairy or poultry operations and pumping water Is farm and ranch Irrigation:
(Describe Use) (E- Tax.t)
❑ Gas Is used In the performance of a contract to Improve real properly for a school district or non - prollt hospital that Is licensed under Chapter 241 or 577 of the
Health and Safely Code.
(Specify exempt entity and protect for which the gas Is purchased.) (E- Tax -1)
❑ Other non.mmmerclal use (specify reason)
I understand that I will be liable for payment of salsa tax which may become due for failure to comply with the provisions of the Tax Cale: Limited Sales, Excl9e.
and Use Tax Act, Munldpal Sales and Use Tax Act, Sales and Use Taxes for Special Purpose Taxing Authorities, County Sales and Use Tax Act. County Heeldh
Services ; .les and Use Tax and Texas Health end Safety Code: Special Provisions Relating to Hospital Districts, Emergency Services Districts, and Emergency
Service Distric10 In counties with a population of 125,000 or less. Liability for the tax will be determined by the price paid for the taxable Items purchased or the
fair t et re r - value for the period of time used. 1 understand that It Is a criminal offense to give en exemption cnrtllkate to the seller for taxable Items welch I
urch- se, will be used Ina manner other than that expressed In this certificate.
Authorized Customer
/YiAyo/i
nee
Date . /i, /997
sia- a�8- 5
Phone
performed for (account name) are correct.
Engineer's Signature Date
I certify that all Items using natural gas are listed on the above referenced utility study
and that the hours and use for each item are correct.
(1)
1
FORM 23907/92
IReveree)
❑ Be credited to the customer's account
❑ Be refunded to the customer by check
STATE OF TEXAS
CLAIM FOR REFUND AND INDEMNIFICATION
The undersigned certifies that the gas used is exempt from Texas Sales Tax for the reason stated on the attached exemption certificate and
request a refund of Texas Sales Tax:
The undersigned, acting in the capacity so stated, agrees to Indemnify and hold harmless the seller against all loss, cost, expense or damage
that the seller may sustain as a result from having made payments or credits to the undersigned, Including, but not limited to disallowance of
any past, present, or future claim for refund, any overpayment by seller of claims in the proceeds hereof by any third party. Furthermore the
undersigned agrees to cause proper settlement and accounting to be made to all other (II any) parties of Interest In the proceeds hereof.
(
Authorized Customer Signature
POWER OF ATTORNEY
1 hereby execute the POWER OF ATTORNEY, appointing as my
attorney -In -fact for the purpose of qualifying me for a sales tax exemption and /or refund on natural gas used in an exempt manner. I
understand that any sales tax refund which may be approved will be made by the state through the utility company.
Executed this day of 19 .
Auhtorized Customer Signature
BEFORE ME, the undersigned authority, a Notary Public In and for the State of Texas on this day appeared
known to me to be the same person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he /she executed the same for the purposes and consideration therein expressed and the capacity
therein stale.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of A.D.
Notary Public In and For the State of Texas
Mayor
Charles Culpepper
Mayor Pro-tem
Earl Palmer
Council Members
Robert Srluka
Rod Morgan
Rick Stewart
Martha Chaves
Jimmy Joseph
City Manager
Robert L Bennett, Jr.
City Attorney
Stephan L Sheets
CITY OF ROUND ROCK
December 30, 1997
Mr. David W. Gilbreath
Senior Contract Administrator
Lone Star Gas Company
301 S. Harwood Street
Dallas, TX 75201 -5696
Re: Lone Star Gas Company Contract for Industrial Gas Service
Dear Mr. Gilbreath:
Sincerely,
Joanne Land
Assistant City Manager/
City Secretary
Enclosure(s)
Fax: 512-218-7097
4144.4U
1-800-735-2989 TDD 1- 800 - 735 -2988 Voice
221 East Main Street
Round Rock Texas 78664
512 - 218 -5400
The Round Rock City Council approved Resolution No. R- 97- 12 -11-
10C, Contract for Industrial Gas Service, at their regularly scheduled
meeting on December 11, 1997.
Enclosed is a copy of the resolution and two original contracts. Upon
approval by Lone Star Gas, please return one fully executed original
contract to us at the address above. If you have any questions, please
do not hesitate to call.
WHEREAS, the City of Round Rock is in need of gas service at
the Micki Krebsbach Pool, and
WHEREAS, Lone Star Gas has submitted a Contract for
Industrial Gas Service ( "Contract ") to provide said service, and
WHEREAS, the City Council desires to enter into said Contract
with Lone Star Gas, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City a Contract with Lone Star Gas for gas service at
the Micki Krebsbach Pool, a copy of said Contract being attached
hereto and incorporated herein for all purposes.
The City Council hereby finds and declares that written notice
of the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to
the public as required by law at all times during which this
Resolution and the subject matter hereof were discussed, considered
and formally acted upon, all as required by the Open Meetings Act,
Chapter 551, Texas Government Code, as amended, and the Act.
RESOLVED this llth day of Decemb , 1997.
ATTEST:
&:\ WP000S \RES \RS712 /
RESOLUTION NO. R- 97- 12- 11 -10C
City Secretary
CHARLES CULPEPPER, Mayor
City of Round Rock, Texas
FORM 274 6/80
CONTRACT FOR INDUSTRIAL GAS SERVICE
LONE STAR GAS COMPANY, called "Company ", agrees to sell and deliver natural gas to
City of Rnund Rnrk
called "Customer ", whose mailing address is 221 Fast Main Street
Rnund Rork, Texas 7RRR4
and Customer agrees to purchase and receive such gas from Company to meet Customer's natural gas requirement
at Customer's premises located in Williamson County,
State of Texas, and more fully described as Heaters for gwimminn pool Inrated at 101 fleepwond nrive in
Round Rnekt Texas
subject to and in accordance with all the terms and conditions contained in this contract.
This contract shall be effective as of D6cerY)8E2- I 1 19 97 and shall cover service for a
period extending to the end of the first contract year and from year to year thereafter; provided, that either party may
terminate this contract at the end of any contract year by giving written notice to the other party at least fifteen (15)
days prior to the end of any contract year. The first contract year shall commence on the first official meter reading
date after the date gas is first delivered to Customer hereunder and shall terminate at the end of the twelfth (12th)
monthly billing period thereafter.
This contract covers Customer's entire natural gas requirements in the aforesaid premises, and Customer shall
not use gas under this contract for service other than that classified by Company as industrial. Customer has elected
to receive and pay for gas under this contract during the first contract year in accordance with Rate 1 within
the attached Schedule of Industrial Rates which is incorporated herein and made a part of this contract; provided,
however, it is understood the Rate Schedule applicable to such service may be changed from time to time as
provided in Article I of the General Terms. For any succeeding contract year Customer may, at his option, and upon
written notice to Company of his intent to do so, elect to receive service under this contract at any rate within the
Company's then applicable Schedule of Industrial Rates, provided Customer makes such election and gives such
notice within twenty (20) days after the beginning of such contract year.
Bills rendered for gas delivered hereunder shall be payable at Company's office located at P. O. Box 910255
Dallas. Texas 75391 - 0255 .
This contract includes the additional terms, provisions and conditions contained in Articles I through VII, entitled
"General Terms," which are attached hereto and shall be a part of this agreement and such "General Terms" shall
be applicable to the service rendered hereunder.
This contract shall be binding upon Company, its successors and assigns, but shall not be assignable by
Customer without the written consent of Company. (��J F /�
WITNESS THE EXECUTION HEREOF as of the i / — day of .M L i ri BE . 19 9 I nr
.
CITY OF UND ROCK LONE STAR GAS COMPANY
By 6/ By
James G. Fielder
Title n11q yo n T Attornev -in -Fact
"CUSTOMER" "COMPANY"
Sales Tax Exempt - Yes IS No ❑
Inside t8 Outside ❑ City Limits
Gas is RI is not ❑ measured thru TPMS
Custo
Approved
Date Se
Contra
augurated January 1, 1998
rCommences January 1, 1998
FORM 275 4/86
GENERAL TERMS
(a) Company's Schedule of Industrial Rates may be revised from time to time in the future and any such revised
or new Schedule of Industrial Rates, when lawfully established, shall be applicable to gas purchased and sold under this
contract commencing with gas delivered after the effective date of such change. Company shall give Customer written
notice of any such change, together with a copy of the revised Schedule of Industrial Rates, and Customer may cancel
this contract by written notice to Seller within thirty (30) days following the date of Company's notice, which cancellation
shall be effective fifteen (15) days after receipt of such notice by Company; provided the new or revised rate shall be
payable for gas service during any applicable period before cancellation. If Customer fails to give the Company such
notice of cancellation, this contract shall continue. The notices herein provided for shall be deemed to have been given
when forwarded by the party giving the same addressed to the other party at the address shown in this contract by first
class mail, postage prepaid.
(b) At Company's request Customer shall from time to time deposit with Company such amount of money as
Company may determine is reasonably necessary to guarantee the payment of gas bills hereunder and all other bills
due by Customer to Company. All money deposited by Customer with Company shall bear interest at the rate prescribed
by law. Interest shall be payable annually at Company's office from which bills are rendered under this contract. Upon
the termination of this contract, said deposit, plus any accrued interest thereon, less any amount due Company by
Customer, shall be refunded to Customer.
(a) The gas shall be measured at a single meter location by standard meter or meters furnished and installed by
and at Company's expense at a place mutually agreed upon. Customer shall provide, in accordance with Company's
specifications, the necessary service line on Customer's premises to connect with Company's line and suitable space
and easement for Company's lines and other equipment, Customer shall use due care to protect Company's property
which is located on Customer's premises from damage and shall permit no person other than an agent of Company, or
a person otherwise lawfully authorized, to tamper with, inspect or remove same. All property belonging to Company and
located on Customer's premises shall be removable by Company at any time during the term of this contract and within
a reasonable time after its termination or after reasonable notice of Customer's desire to have such property removed,
title thereto remaining in Company at all times. Company shall have full and free ingress to and egress from Customer's
premises for the construction, inspection, maintenance, repair and removal of Company's property thereon or for any
purpose connected with the service of gas hereunder.
(b) Customer agrees to keep the gas burning equipment and appurtenances which may be located on the aforesaid
premises in good condition and in conformity with the requirements of any applicable city ordinance, state law, rule, order
or regulation of any govemmental authority having jurisdiction and to comply with all of Company's reasonable rules and
regulations.
(c) For the purpose of this contract the unit of measurement shall be 1,000 cubic feet of gas at a base pressure
of 14.65 pounds per square inch absolute and a base temperature of 80 degrees Fahrenheit. All volumes of gas
measured shall be adjusted by computation in accordance with the Ideal Gas Laws, corrected for deviation from the
pressure and temperature conditions set forth in the immediate preceding sentence. In such computations, a value of
60 degrees Fahrenheit shall be used for the flowing temperature of the gas; however, Company, at its sole option, may
install standard temperature recording instruments on Company's meter and correct the volume measured based on the
actual flowing temperature of the gas.
(d) Meter measurements computed by Company according to its standard operating practices shall be conclusive
except where meter is found to be inaccurate by as much as 1 percent fast or slow or failed to register, in either of which
cases Company shall repair or replace the meter, The quantity of gas delivered while the meter was inaccurate or failed
to register shall be determined by correcting the error if the percentage of error is ascertainable by calibration test or
mathematical calculation. If not so ascertainable, then it shall be determined by estimating the quantity on a basis of
deliveries under similar conditions when the meter was registering accurately. No adjustment or correction for meter
inaccuracy or failure shall be made for a period longer than 90 days.
(a) Company shall have the right at any and all times, with or without notice, to immediately discontinue, in whole
or in part, the supply of gas hereunder if in the opinion of Company a continuation of the supply under this contract would
adversely affect, jeopardize or threaten adequate service to Company's domestic or commercial customers or hazard,
jeopardize or threaten adequate service to other industrial gas customers having priority of service under Company's
Schedule of Industrial Rates; and Customer hereby authorizes Company so to do and agrees that Company shall never
be liable in damages or otherwise on account of having exercised such rights.
Gas shall be delivered to Customer at Company's operating pressure at the point of delivery. The point of delivery
of gas to Customer hereunder shall be at the point where the gas first passes from Company's equipment into
Customer's equipment, at which point the title to and ownership of the gas shall vest in Customer. Company shall not
be liable for any loss, damage, or injury resulting from the gas or its use after it leaves the aforesaid point of delivery,
all risks thereof and therefrom being hereby assumed by Customer.
(b) Gas sold and service rendered hereunder shall be subject to the priority of service provided in the Schedule
of Industrial Rates, and Customer agrees to select hereunder the rate which affords priority of service necessary and
best suited to Customer's particular type of operations. When notified by Company to do so, Customer agrees to curtail
or discontinue the use of gas hereunder in conformity with the service priority provided for in this contract and in the
Schedule of Industrial Rates. If Customer classifies his business and operations as being essential to the public health
and safety and considers continuity of his fuel service essential to the public welfare, then he shall provide stand -by fuel
and equipment adequate to meet his fuel requirements during periods of interruption of gas service under this contract.
Company cannot and does not guarantee a constant supply of gas hereunder. Inability or failure of Company to deliver
or Customer to receive gas or perform this contract shall not be the basis of claims for damages sustained by either party
or for breach of contract when due to Act of God or govemmental authority, the elements, labor troubles, fires, accidents,
breakage, repair or change of or obstructions in pipelines, equipment or machinery, depletion or failure of gas supply,
fluctuations in gas pressure, demands in excess of the capacity of Company's equipment, pipelines, or sources of gas
supply, or other causes or contingencies reasonably beyond the control of either party hereto.
FORM 275 (Reverse) 9/80
IV.
V.
If Customer shall fail to pay bills for service within twenty (20) days from date they are rendered hereunder or shall
otherwise default under this contract, Company may suspend service and deliveries of gas and such suspension shall
not prevent enforcement by Company of any other of its legal rights. Waiver by Company of a particular default
hereunder shall not be deemed a waiver of subsequent defaults whether similar or dissimilar.
VI.
This contract is expressly made subject to all present or future valid rules, orders or regulations of duly constituted
govemmental authorities having jurisdiction over the subject matter hereof.
VII.
This contract supersedes and extinguishes all prior contracts between the parties, or their respective predecessors
in interest, for gas at the location and for the purposes herein designated; and constitutes the entire contract between
the parties. No representation or statement of any representative of Company shall be a part of this contract nor an
inducement to the execution hereof unless incorporated fully herein.
Form 207 11/89
Availability:
SCHEDULE OF INDUSTRIAL RATES - N
STATE OF TEXAS
The rates hereinafter set out are available to gas customers who can be served from, and without
exceeding the capacity of, Company's existing system upon the terms, conditions, and limitations recited
herein, in the contract of which this Schedule of Industrial Rates forms a part, and in reasonable rules and
regulations adopted by Company. These rates shall not be available for standby use. The gas delivered
hereunder is for the individual use of Customer and shall not be resold.
These rates shall not be available to residential customers and shall be available to schools, churches,
rooming or boarding houses, orphanages, homes for the elderly, dormitories, hospitals, motels, hotels,
apartment buildings or other buildings used primarily as living quarters, or any other use which may be
considered human need, only if Customer has standby equipment for the use of other fuel of at least equal
capacity to that normally required by the Customer, and fuel in storage in an amount adequate to fulfill
Customer's fuel requirements during periods of curtailment, interruption and discontinuance of gas service.
Company shall not be responsible for determining the type or amount of standby fuel or equipment; such
determination shall be the sole responsibility of Customer.
This Schedule of Industrial Rates is based on Customer's use of gas service for twelve full months during
the contract year. This Schedule of Industrial Rates may be applicable to service to a Customers temporary
facilities for less than twelve full months during a contract year by the payment by Customer to Company,
upon execution of such temporary contract, of a non- refundable amount which shall be the estimated cost of
installing and removing facilities necessary to provide such service.
Measurement and Billing:
The gas shall be measured at a single meter location and shall not be combined with gas measured
through any other meter location for the purpose of billing under this schedule. Amounts billed shall be due
and payable within ten (10) days from monthly billing date.
The first step of each rate shall be applicable when the service period for which bill is rendered is for 16
days or more. Whenever the initial service period is for 15 days or less during a billing period, the Customers
consumption shall be carried forward and added to Customers consumption during the next succeeding
monthly service period for billing purposes.
Curtailment:
Subject to govemmental regulation, gas service under this Schedule of Industrial Rates shall be subject
to curtailment, interruption or discontinuance in a particular service area when necessary in the judgment of
the Company for it to maintain Residential and Commercial Rate service and Industrial service having a higher
priority. Service shall be furnished by Company and received by Customer in accordance with the following
order of priority:
Monthly Rates:
(1) Residential and Commercial Rate service
(1) Military Rate service
(2) Industrial Rate 1 service
The following priorities in descending order shall be observed as sub - priorities for Rate
1:
1. Small commercial (less than 100 Mcf on a peak day).
2. Large commercial (100 Mcf or more on a peak day) and industrial requirements
for pilot lights and plant protection gas.
3. Small industrial (less than 3,000 Mcf on an average day) requirements for
feedstock and process gas needs.
4. Large industrial (3,000 Mcf or more on an average day) requirements for
feedstock and process gas needs.
5. Industrial requirements not specified in priorities 3, 4, or 6.
6. (a) Boiler and other indirect flame applications (300 Mcf or less on an average
day with alternate fuel capabilities.
(b) Boiler fuel and other indirect flame applications (more than 300 Mcf on an
average day and less than 3,000 Mcf on an average day) with altemate fuel
capabilities.
(c) Boiler fuel and other indirect flame applications (3,000 Mcf or more on an
average day) with alternate fuel capabilities.
(3) Public Free School Rate service
(4) Industrial Rate 2 service
(5) Industrial Rate 3 service
(5) Special Electric Generation service
(6) Dump interruptible sales made subject to interruption or curtailment at Sellers sole
discretion under contracts or tariffs which provide in effect for the sale of such gas as
Seller may be agreeable to selling and Buyer may be agreeable to buying from time
to time.
Subject to Company's limitations on the availability of each rate, Customer shall receive service under its
choice of one of the following rates in accordance with the rate selected by Customer as provided in the
contract:
RATE 1
First 125 Mcf or less $202.39
All over 125 Mcf @ 1.58
RATE 2
First 600 Mcf or less $905.26
All over 600 Mcf @ 1.434
RATE 3
First 1,250 Mcf or less $1,748.12
All over 1,250 Mcf @ 1.374
Adjustment For Heat Content:
This Schedule of Industrial Rates is based upon the delivery of gas having an average total heat value
of 1,000 British thermal units (Btu) per cubic foot. Should the average total heating value of gas delivered in
any monthly period be more or less than 1,000 Btu per cubic foot, the measured volume for such period shall
be increased or decreased, respectively, in the percentage by which the average heating value of such gas
is greater or less than 1,000 Btu per cubic foot. The monthly average total heating value of the gas at a
pressure of four ounces plus 14.4 pounds per square inch and at a temperature of 60 degrees Fahrenheit
shall be determined at Company's expense by the use of standard methods and procedures.
Adjustment for Gas Cost:
The foregoing rates are based upon a weighted average cost of gas purchased by Lone Star Gas
Company of $1.00 per 1,000 cubic feet (Mcf) based on a pressure of four ounces per square inch above an
assumed atmospheric pressure of 14.4 pounds per square inch and at a temperature of 60 degrees
Fahrenheit. The 'weighted average cost of gas purchased," as used herein, shall be computed by dividing
the total amount paid or accrued by Company (as reflected by Company's Gas Purchase Accounts), including
any production, severance, dedication or gathering tax paid or accrued by Company directly or by way of
reimbursement to its gas suppliers, to producers, processors, transporters, or other sellers of gas in the latest
available fiscal month by the total volume of pipeline quality gas in Mcf purchased by Company during said
period.
Whenever the weighted average cost of gas purchased is more or less than $1.00 per Mcf, the amount
billed under this schedule shall be increased or decreased by the amount of such difference multiplied by the
consumption in Mcf, without adjustment for heating value. In applying the gas cost adjustment clause, the
adjustment shall be computed to the nearest one - hundredth of one cent.
Company, from time to time, may be required by the terms of a gas purchase contract (including an
agreed settlement of a disputed claim) or by a determination of a regulatory body or court to make additional,
payments with respect to gas previously purchased by Company. In such case, appropriate adjustments to
compensate therefor shall be made in the price payable for gas hereunder as soon as practicable after the
time of such payment so that Customer shall bear a proportionate part of any such payment which has not
been previously included in the weighted average cost of gas purchased as defined above.
Adjustment for Taxes, Licenses, Fees, Charges, And Rentals:
Customer shall pay Company an amount equivalent to a proportionate part of all taxes or rentals which
now are or which may be levied, charged or imposed by any governmental body under authority of any law,
ordinance or contract for the use of the public streets, alleys and thoroughfares in the conduct of Company's
business, or because of Company's occupation; and Customer shall pay Company an amount equivalent to
a proportionate part of any new tax or increased tax or any other governmental imposition, rental, fee or
charge levied or charged after July 1, 1976, (except state, county, city, and special district ad valorem taxes,
taxes on net income and any production or similar tax included in the weighted average cost of gas as
provided in the gas cost adjustment clause).
AMENDMENT OF CONTRACT FOR INDUSTRIAL GAS SERVICE
tA�
THIS AMENDMENT, made and entered into as of the ± day of I a7) / 199 by and
between LONE STAR GAS COMPANY, a Division of ENSERCH Corporation, a Texas corporation,
hereinafter referred to as "Company ", and CITY OF ROUND ROCK, hereinafter referred to as
"Customer ";
WITNES5ETH:
WHEREAS, Company and Customer entered into a Contract for Industrial Gas Service dated
/EC-Em/ E4 11 , 19 97 (hereinafter referred to as the "Contract ") for the sale and purchase of natural
gas to Customer's heaters for swimming pool located in Round Rock, Texas (hereinafter referred to as
"Customer's plant "); and
WHEREAS, Customer qualifies for Company's Industrial Rate 1, 2, or 3 class of gas sales
service and desires to purchase a portion of Its fuel requirements from Company and to purchase
certain volumes of gas from third parties and have Company transport such third party gas; and
WHEREAS, Company and Customer mutually desire to amend such Contract;
NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein,
Company and Customer hereby agree to amend the aforesaid Contract as provided below, effective
the first day of the month following the latest of (i) October 31, 1997, (ii) the date Company receives
this Amendment after execution by Customer or (iii) the date Customer provides, at Customer's
expense, a telephone connection to, and a compatible and operational telephone line for, Company's
automatic meter reading system(s) located at the meter(s) at or near Customer's plant:
The second paragraph of the signatory page shall be deleted, and the following
paragraph shall be substituted in lieu thereof:
"This contract shall cover service for a primary term ending January 1, 2003 and
from year to year thereafter, provided that either party may cancel this contract at the
end of the primary term, or at the end of any contract year subsequent to the primary
term, by giving written notice to the other party at least thirty (30) days prior to the
effective date of such cancellation. Each contract year hereunder shall begin
January 1 and shall consist of twelve (12) monthly billing periods (billing months)."
The fourth paragraph of the signatory page shall be deleted, and the following
paragraph shall be substituted in lieu thereof:
"Bills rendered for gas sold and delivered hereunder shall be payable at P. 0, Box
910255, Dallas, Texas 75391 -0255, or such other address as may be from time to
time designated by Company on reasonable notice. Company's mailing address for
notices hereunder is 301 S. Harwood Street, Attention: Gas Marketing, Contract
Administration, Dallas, Texas 75201."
1
The Roman Numeral "VII" in the fifth paragraph of the signatory page shall be deleted,
and the Roman Numeral "IX" shall be substituted in lieu thereof.
IV.
The first sentence of Article V of the General Terms shall be deleted, and the following
three (3) sentences shall be substituted in lieu thereof:
"In the event Customer fails to timely pay any amount(s) due hereunder, Customer
agrees to pay interest at the rate of eighteen percent (18 %) per annum, or the highest
rate allowed by law, whichever is less, on such past due amount(s). Should litigation
on any amount(s) due under this contract be required, Customer agrees to reimburse
Company for its reasonable attorneys fees. Additionally, if Customer shall fail to pay
bills for service within twenty (20) days from the date they are rendered hereunder or
shall otherwise default under this contract, Company may suspend service and
deliveries of gas and such suspension shall not prevent enforcement by Company of
any other of its legal rights."
V.
The following new Article VIII shall be added to the General Terms of the Contract:
"VIII.
(a) Customer may purchase natural gas from other suppliers to cover any portion
of Customer's plant's natural gas requirements, subject to the other terms and
conditions contained herein. To provide for transportation of such gas volumes to
Customer's plant, the Addendum attached hereto entitled Interruptible Gas
Transportation Agreement (hereinafter referred to as the "Transportation Agreement ")
is hereby incorporated into this contract and made a part hereof by this reference.
During the term of the Transportation Agreement, Customer may purchase and have
transported pursuant to the terms thereof during each biting month a total aggregate
volume of gas from such other suppliers of up to thirty (30) Mcf per day on an average
daily basis, provided, however, Customer pays Company under this contract at least
the minimum amount for the applicable rate at which Customer has elected to receive
service hereunder ($202.39 per month for Rate -1 service to Customer, S905.26 per
month for Rate -2, or $1,748.12 per month for Rate -3) during such time period.
Company and Customer hereby recognize and agree that Customer shall purchase from
Company hereunder and /or have Company transport under the Transportation
Agreement as provided herein, Customer's plant's entire natural gas requirements
during the term hereof.
(b) Customer agrees to purchase and receive from Company under this contract
any volumes of gas used at Customer's plant which are in excess of the transportation
volumes delivered to Customer by Company during each billing month, except for any
imbalances that are timely corrected as provided in Article I, subparagraph 1.21c) of the
Transportation Agreement.
2
(c) It is understood and agreed that it will be necessary for Company to install an
automatic meter reading system for each meter hereunder at or near Customer's plant
in order to comply with the various measurement and monitoring provisions herein.
Customer hereby agrees it shall, upon Company's invoicing, pay to Company the sum
of $1,350.00 to cover the initial cost of such system(s) and related set -up expenses,
unless such system(s) were installed by Company and paid for by Customer prior to the
effective date of the Transportation Agreement. Additionally, Customer agrees to
provide and maintain, at Customer's expense, a telephone connection to and a
compatible and operational telephone line for, Company's automatic meter reading
system(s); provided further, in the event Customer fails to maintain such telephone line
in an operational state and Company directly or indirectly provides repair service(s)
thereto, then Customer agrees to reimburse Company, upon Company's invoicing, the
total cost for each such repair service which is performed or caused to be performed
by Company. Such automatic meter reading system(s) shall be the sole property of
Company and shall be operated and maintained by Company at Company's expense.
(d) Customer understands that in order to provide the transportation service as
described herein, Company will incur additional costs for which Customer hereby
agrees to provide compensation by paying to Company each month hereunder a fee
(for gas cost equalization) equal to eleven and one -half cents (11.50) for each MMBtu
which Customer, as allowed under this contract, purchases from such other suppliers
and receives under the Transportation Agreement during each billing month.
(e) Both Company and Customer recognize that if Customer's volumes of gas
purchased from the aforesaid suppliers and transported under the Transportation
Agreement are interrupted for any period of time, Company shall supply standby gas
to Customer's plant under this contract at the industrial rate in effect hereunder during
such time period (pr. vided however no hin shall revent Com'.n from exer isin
its contractual rights to curtail gas as specified in Article IV hereof) and Customer
hereby agrees to pay Company each and every month an amount computed by
multiplying Customer's applicable standby fee, as set forth below, times the volume
of all gas, on a MMBtu basis (as determined by the method described in the paragraph
"Adjustment for Heat Content" in the attached Schedule of Industrial Rates), which
Customer, as allowed under this contract, purchases from such other suppliers and
receives under the Transportation Agreement during such billing month, regardless of
whether or not Company is actually called upon to supply standby gas to Customer
during such billing month. Customer's standby fee shall be an amount equal to fifteen
cents (150) per MMBtu if Customer has elected to receive Rate -1 service hereunder,
ten cents (10C) for Rate -2 service and five cents (50) for Rate -3 service.
(f) Customer also agrees to pay Company, by way of reimbursement, all taxes
imposed upon the gross receipts accruing to Company under paragraphs (c), (d) and
(e) above and any other taxes Company pays relative to such paragraphs. Company
shall invoice Customer monthly for any amounts due under said paragraphs for the
preceding billing month, and such amounts will be due and payable within ten (10)
days of the billing date.
(g) Upon termination of the aforementioned Transportation Agreement, this Article
VIII shall simultaneously therewith be null and void except for the requirement to make
payment of any amount(s) due hereunder."
3
VI.
The following new Article IX shall be added to the General Terms of the Contract:
"IX.
Pursuant to the Federal Arbitration Act, the parties hereby agree that any controversy,
claim, or alleged breach, including but not limited to torts and statutory claims, arising
out of or related to this contract shall be settled by binding arbitration administered by
the American Arbitration Association ( "AAA) in accordance with its Commercial
Arbitration Rules. Demand for arbitration may be made no later than the time that
such act would be permitted under the applicable Texas statute of limitation. Any
disputes regarding the timeliness of the demand for arbitration shall be decided by the
arbitrator(s). Judgment upon the award rendered by the arbitrator(s) may be entered
in any Court having jurisdiction thereof in order to obtain compliance therewith. Any
case in which any claim, or combination of claims, exceeds $500,000 shall be subject
to the AAA's Large Complex Case Procedures and decided by the majority of a panel
of three (3) neutral arbitrators. In rendering the award, the arbitrator(s) shall determine
the rights and obligations of the parties according to the laws of the State of Texas.
The arbitration proceedings and hearings shall be conducted at the Dallas Regional
Office of the AAA or at such other place as may be selected by mutual agreement.
No party nor the arbitrator(s) may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of all parties."
This Amendment and all operations hereunder are subject to the applicable federal and state
laws and the applicable ordinances, orders, rules and regulations of any local, state or federal
governmental authority having or asserting jurisdiction; but nothing contained herein shall be construed
as a waiver of any right to question or contest any such law, ordinance, order, rule or regulation in any
forum having jurisdiction in the premises.
Except as modified or changed hereby, all other terms and conditions of the Contract shall
remain in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed in duplicate originals by the parties
hereto as of the day and year first herein written.
CITY OF ROU ROCK LONE STAR GAS COMPANY, a Division of
ENSERCH Corporation
By
Name
Title
C Hf2c / 2
I r S CuLPePPE1 l A " �rCUSTOMER"
4
ADDENDUM TO AMENDMENT OF CONTRACT FOR INDUSTRIAL GAS SERVICE
THIS AGREEMENT is attached to and made a part of that certain "Amendment of Contract for
Industrial Gas Service" dated r i mAre, // , 1991 between LONE STAR GAS COMPANY, a Division
of ENSERCH Corporation, a Texas corporation, and CITY OF ROUND ROCK.
INTERRUPTIBLE GAS TRANSPORTATION AGREEMENT
THIS AGREEMENT, made and entered into DELgP1 E21/, 1997, by and between LONE
STAR GAS COMPANY and LONE STAR PIPELINE COMPANY, Divisions of ENSERCH Corporation, a
Texas corporation, hereinafter collectively or singularly referred to as "Transporter" and CITY OF
ROUND ROCK, hereinafter referred to as "Shipper ";
W ITNESSETH:
LS-MC-#
WHEREAS, Lone Star Gas Company and Shipper entered into a Contract for Industrial Gas
Service dated DEC.bfr16E&E. 11 , 1 99'1 (hereinafter referred to as the "Contract for Industrial Gas
Service ") for the sale and purchase of natural gas to Shipper's plant as described in the Contract for
Industrial Gas Service; and
WHEREAS, Shipper qualifies for Lone Star Gas Company's Industrial Rate 1, 2, or 3 class of
gas sales service and desires to purchase a portion of its fuel requirements from Lone Star Gas
Company and to purchase certain volumes of gas from third parties and have Transporter transport
such third party gas; and
WHEREAS, Lone Star Gas Company and Shipper have amended the Contract for Industrial Gas
Service to allow for such transportation hereunder; and
WHEREAS, Shipper owns or controls certain quantities of natural gas which are not subject to
the jurisdiction of the Federal Energy Regulatory Commission the "FERC ") under either the Natural Gas
Act of 1938, as amended, (the "NGA "), or the Natural Gas Policy Act of 1978, as amended, (the
"NGPA "), and Shipper desires that Transporter (a) receive gas from Shipper (or its designee) at the
Point(s) of Receipt hereinafter set forth and (b) deliver equivalent quantities of gas to the Point of
Delivery hereinafter set forth; and
WHEREAS, Transporter owns and operates pipeline transmission and distribution systems and
is willing to transport gas for Shipper under the terms and conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the mutual covenants and conditions herein
contained, the adequacy and sufficiency of which are hereby acknowledged, Transporter and Shipper
hereby agree as follows:
5
ARTICLE I.
QUANTITY
1.1 (a) Shipper represents that from time to time it may desire for Transporter to receive and
deliver the above described gas at the points hereinafter set forth in quantities as agreed to by the
parties. It is agreed that the volume of gas to be transported under this Agreement shall be in
accordance with the provisions set forth in Article VIII of the Contract for Industrial Gas Service. It is
further hereby agreed that the calculation of all quantities of gas received and delivered hereunder shall,
for all purposes, including, but not limited to, payment and determination of imbalance and retention
volumes, be on an MMBtu basis. Transporter's receipt and delivery of such gas volumes will be on a
wholly interruptible basis and subject to: (i) the most efficient and economic utilization of Transporter's
pipeline capacity as determined by Transporter in its reasonable sole discretion, (ii) pipeline capacity
necessary to serve existing or future sales customers under tariffs filed with applicable regulatory
authorities as determined by Transporter in its reasonable sole discretion and (iii) the other terms and
conditions contained herein.
(b) Shipper hereby acknowledges that the transportation service to be performed hereunder
by Transporter will be on a wholly interruptible basis as provided herein. Shipper agrees that such
service may be interrupted, in whole or in part, from time to time, without notice; however,
Transporter's dispatcher will endeavor to advise (by telephone) Shipper's dispatcher or authorized
representative of an interruption as soon as practicable, either before or after such interruption, but
Transporter shall have no liability for any failure to give such notice. In no event shall an interruption
of service pursuant to the terms, conditions and contingencies of this Agreement constitute a breach
of this Agreement, and Transporter shall not be liable to Shipper or third parties in damages or
otherwise because of any interruption of service. Shipper agrees to indemnify and hold harmless
Transporter for any damages, causes of actions or claims asserted by any third parties as a result of
any termination, suspension, or interruption of services hereunder by Transporter.
1 .2 (a) It is recognized that a day -to -day balance of gas received by Transporter and delivered
to Shipper may not be possible due to the inability of the parties to control precisely such receipts or
deliveries. However, Transporter, to the extent practicable, will deliver to Shipper each day a quantity
of gas equivalent to ninety -eight and one -half percent (98.5%) of the quantity of gas received by
Transporter from Shipper (or its designee) on such day and Transporter shall retain the one and one -half
percent (1.5 %) balance of the quantity of gas received as normal gas lost, gas used as fuel and gas
used in day -to -day pipeline operations the "Retention Volume ").
(b) It shall be the responsibility of Shipper to monitor, and if necessary, adjust, or cause to be
adjusted, (i) deliveries of gas to Transporter for transportation and (ii) receipts of transportation gas
from Transporter, in order to maintain a daily balance of receipts and deliveries. Transporter shall not
be obligated to receive or deliver quantities of gas on any day in excess of those quantities nominated
by Shipper, in accordance with Section 1.3 hereof, for transportation hereunder on such day, nor shall
Transporter be obligated to deliver to Shipper at the Delivery Point quantities of gas in excess of those
quantities of gas received from Shipper on such day at the Receipt Point(s), less the Retention Volume.
Shipper shall monitor, to the best of its and its designee's ability, receipts and deliveries hereunder and
shall advise Transporter of any situation wherein an imbalance has occurred or may occur unless
corrective action is taken. Shipper shall be obligated to adjust its receipts and /or deliveries of
transportation gas to the extent necessary to correct or avoid any imbalance and to notify Transporter
of such adjustments. Any adjustments to receipts and /or deliveries by Shipper, whether or not
pursuant to notification from either party, shall be coordinated with Transporter's gas control personnel.
6
(c) (1) In the event of a monthly imbalance [as described in paragraph (c)(3) below) which
Shipper fails to make up during the next month and Shipper's deliveries to Transporter at the Receipt
Point(s) during such two (2) month period are in excess of, or deficient by, more than ten percent
(10 %) of the transportation quantities delivered by Transporter to Shipper at the Delivery Point during
said two (2) month period, then (i) in the case of any cumulative imbalance, as hereinafter defined, due
Transporter ( "underdeliveries by Shipper "), Transporter shall have the right to require Shipper to
purchase such cumulative imbalance volume(s) from Transporter as industrial rate sales gas under the
Contract for Industrial Gas Service; or (ii) in the case of any cumulative imbalance, as hereinafter
defined, due Shipper ( "overdeliveries by Shipper "), Transporter shall have the right to collect from
Shipper an amount equal to the product of twenty -five cents (254) multiplied by the number of
MMBtus in such cumulative imbalance volume(s). In the event Shipper is required to purchase from
Transporter any cumulative imbalance(s), as provided in (i) above, Transporter agrees to credit Shipper
for transportation fees paid by Shipper to Transporter hereunder on such cumulative imbalance
volume(s). For the purposes of this paragraph, the term "cumulative imbalance" shall mean the sum
of (1) any imbalance carried forward from an immediately preceding month to the next succeeding
month, plus (2) any imbalance based on the delivery and receipt of gas hereunder during such
succeeding month.
(2) Notwithstanding the preceding paragraph, Transporter expressly reserves the right, at
any time in the future upon at least ninety (90) days written notice given prior to the beginning of any
contract year(s) hereunder, to institute, and from time to time revise, a cash out balancing process.
Transporter may from time to time apply the process to all Shippers, or just certain categories of
Shippers, on a non - discriminatory basis, and may apply the process on a daily or monthly basis. Any
such cash out balancing process shall be similar to what other pipelines are then using. Upon such
cash out balancing notice by Transporter, Shipper shall have the right to cancel this Agreement by
giving at least thirty (30) days written notice to Transporter prior to the beginning of such contract
year.
(3) An imbalance shall exist hereunder where, during any applicable period of the term
hereof, there is a numerical difference between the quantity of gas, exclusive of the total of those
volumes of gas delivered under the Contract for Industrial Gas Service and the Retention Volume,
delivered by Transporter to Shipper and the quantity of gas received by Transporter from Shipper (or
its designee) during such applicable period.
(d) Notwithstanding anything contained herein which might be construed to the contrary,
Transporter shall always have the total and unrestricted right, but with no obligation whatsoever, to
at any time and from time to time restrict, interrupt, or reduce its receipt and /or delivery of gas in order
to maintain a daily balance or to correct an imbalance hereunder.
1.3 At least five business days prior to the first calendar day of each month during the term
hereof, Shipper shall notify Transporter of the volumes of gas Shipper nominates for transportation at
the Receipt and Delivery Points under this Agreement for such month. Each such transportation
nomination shall contain Shipper's nominated quantities for the Receipt and Delivery Points, designation
of the appropriate contract(s) covering such gas, and the identity by name and telephone number of
individual(s) who have authority to confirm the nominated gas volumes at each Receipt Point and the
Delivery Point. Timely nominations may be given by verbal notice; provided, however, Shipper shall
furnish written confirmation thereof within five (5) business days of the date of such verbal notice.
Shipper may change nominated quantities on any business day upon verbal notice of any such
reduction of nominated quantities, but such verbal notice must be received by Transporter prior to
12:00 noon Central time of any business day to be effective the next succeeding business day. If
Shipper fails to furnish transportation nominations as required herein for any month during the term
7
hereof, Transporter may suspend transportation hereunder for such month and such interruption of
service shall not prevent enforcement by Transporter of any other of its legal rights or remedies nor be
construed as a breach of Transporter's obligations hereunder. Shipper understands that with regard
to Receipt Point nominations, Transporter at any time and from time to time and for any specified or
unspecified time period(s), may for operational reasons prorate and /or totally refuse to accept new
nominations or honor then existing nominations at certain then existing and /or newly proposed Receipt
Points; however, Transporter will endeavor to notify Shipper or Shipper's designee of such refusal as
soon as practicable, but Transporter shall not be liable for any failure to do so.
ARTICLE 11.
LOCATIONS OF POINTS OF RECEIPT AND DELIVERY
2.1 Receipt Point(s): Gas delivered by Shipper (or its designee) to Transporter hereunder shall
be delivered at points which are sometimes herein referred to as the "Transporter Receipt Point(s)" or
"Points) of Receipt" and which shall be located at mutually agreeable points on Transporter's intrastate
pipeline transmission system, and any such mutually agreeable points shall be set forth and identified
in writing signed by both Transporter and Shipper. It is agreed that (i) all points to be established
hereunder will be subject to Transporter's prior approval, (ii) certain points may require that Shipper
pay a compression fee and /or additional retention, with such requirements for any specific point(s) to
be provided to Shipper by Transporter prior to the incurment of liability for same, and (iii) for each
MMBtu received by Transporter from Shipper (or its designee) at any Receipt Point(s) located on
Transporter's Line X, an additional five cents (5C) per MMBtu shall be added to the transportation rate
hereunder and Transporter shall retain an additional one percent (1 %) of such gas over and above the
standard one and one half percent (1'' /z %) retention referenced in Article 1.2(a) above.
Notwithstanding anything contained in this Agreement which might be construed to the contrary, in
the event of unfavorable operating conditions or a change of ownership of specific Receipt Point(s) or
appurtenant facilities, or if, in Transporter's sole opinion, the receipt of gas from a specific Receipt
Point(s) hereunder ever becomes uneconomical for any reason whatsoever, then Transporter shall have
the right (i) to immediately discontinue the receipt of gas from any such Receipt Point(s) and /or (ii)
upon thirty (30) days' prior written notice to Shipper, to delete any such Receipt Point(s) from this
Agreement. Furthermore, Transporter reserves the right, at any time in the future upon at least ninety
(90) days written notice given prior to the beginning of any contract year hereunder, to require that
Shipper install, or caused to be installed, telemetering equipment reasonably satisfactory to Transporter
at all then existing as well as future Receipt Points hereunder. In the event Shipper fails to comply,
Transporter may refuse to accept gas at any such Receipt Point(s) and may delete, or refuse to add,
such point(s) from /to this Agreement.
2.2 Delivery Point: Gas transported by Transporter hereunder shall be delivered to Shipper
where gas first passes from Transporter's metering equipment into Shipper's equipment at or near
Shipper's plant as described in the Contract for Industrial Gas Service (sometimes herein referred to
as the "Point of Delivery ").
2.3 Additional Receipt Points: It is understood by both parties that Shipper and Transporter
may mutually agree in writing to establish other Receipt Points hereunder; provided, however, that
Transporter shall not be obligated to establish new Receipt Points more frequently than once every six
(6) months, unless, due to circumstances beyond Shipper's control, Shipper (or its designee) is unable
to supply gas to the original Receipt Point(s) hereunder. In such event, and upon receipt by Transporter
of documentation satisfactory to Transporter verifying such event and Shipper's inability to remedy
same, Transporter may, in its sole discretion, agree to establish an additional Receipt Point. In the
event Shipper desires that Transporter receive gas at a proposed point(s), Shipper shall notify
8
Transporter in writing of such proposed point(s), including in such notice estimated daily delivery
volume(s) at such point(s) and the location(s) thereof and Shipper shall therein warrant that the quality
of gas to be received at such proposed point(s) meets the quality specifications as defined herein and
all other applicable terms and conditions contained in this Agreement. Transporter will promptly
evaluate each point and, within thirty (30) days of Transporter's receipt of Shipper's notice, notify
Shipper whether or not Transporter is able to accept gas from Shipper's proposed new Receipt Point(s).
Failure to respond within thirty (30) days shall not be construed as Transporter's acceptance of any
proposed new point(s). If Transporter agrees to establish any additional Receipt Point(s) pursuant
hereto, such agreement shall be evidenced in writing signed by both Shipper and Transporter.
ARTICLE III.
PRESSURES AT POINTS OF RECEIPT AND DELIVERY
3.1 Shipper (or its designee) shall deliver gas to Transporter at the Receipt Point(s) at pressures
sufficient to enter Transporter's intrastate pipeline transmission system at such point; provided,
however, that Shipper's delivery pressure into Transporter's system at the Receipt Point(s) shall not
exceed Transporter's maximum allowable operating pressure, as such may vary from time to time, at
any such point(s) or cause the pressure at such point(s) to exceed Shipper's (or its designee's)
maximum allowable operating pressure.
3.2 Transporter shall deliver gas to Shipper at Transporter's operating pressure, as such may
vary from time to time, at the Delivery Point.
ARTICLE IV.
RATES
4.1 Shipper shall pay Transporter, for services rendered hereunder, at the rate set forth below,
commencing with initial deliveries of gas hereunder:
(a) Shipper shall pay Transporter each month for the transportation of gas by Transporter
hereunder during such month an amount equal to fifty -eight cents (58C) for each MMBtu
delivered hereunder at the Delivery Point.
(b) It is agreed by the parties hereto that the fifty -eight cents (58C) fee charged in paragraph
(a) above shall be escalated one cent (1 C) per MMBtu at the beginning of the second contract
year of the Contract for Industrial Gas Service and each contract year thereafter during the
term of this Agreement.
(c) Should the appropriate regulatory agency find such rates to be unreasonable for any reason
or in any way in violation of any provision of law, and determine a rate lower than that
provided for herein, Transporter may terminate this Agreement by giving Shipper thirty (30)
days' prior written notice of such termination within thirty (30) days of such rate decrease or
finding. Should the agency determine a rate higher than that provided for herein, Shipper may
terminate this Agreement by giving Transporter thirty (30) days' prior written notice of such
termination within thirty (30) days of such rate increase or finding.
9
ARTICLE V.
TERM
5.1 This Agreement shall be effective as of the effective date of the above referenced
Amendment of Contract for Industrial Gas Service, and this Agreement shall thereafter remain in full
force and effect, subject to the terms and provisions hereof, for a primary term contemporaneous
with the primary term of the Contract for Industrial Gas Service, and contract year to contract year
thereafter until cancelled by either party giving the other party thirty (30) days prior written notice;
provided, however, notwithstanding anything contained herein to the contrary, if this Agreement is still
in effect when the termination, expiration or cancellation of the Contract for Industrial Gas Service
occurs, then this Agreement shall thereupon automatically terminate simultaneously therewith.
Notwithstanding the above, if an imbalance in deliveries exists on the date of termination hereof
between the quantities theretofore delivered at the Receipt Point(s) and Delivery Point, the term of this
Agreement shall be extended for a period sufficient to allow the party whose deliveries are in arrears
to promptly eliminate any imbalance. Provided further, any termination, cancellation, or expiration of
this Agreement shall never operate to extinguish the obligation to make payment for monies due
hereunder.
ARTICLE VI.
LAWS AND REGULATIONS
6.1 This Agreement shall be subject to all applicable State and Federal laws, and orders,
directives, rules and regulations of any governmental body, official or agency having jurisdiction over
Transporter or this Agreement; therefore, Transporter's obligations and liabilities hereunder shall be
limited accordingly.
6.2 Each party warrants to the other that its or its agent's facilities utilized for the delivery and
acceptance of gas hereunder are not subject to the NGA, as heretofore amended. As a material
representation, without which both parties wou /d not have been willing to agree to this Agreement,
each party warrants to the other party that it and its agents will take no action nor commit any act of
omission which will subject this transaction or the other party's facilities, to jurisdiction of the FERC
or its successor governmental agency under the terms of the NGA or NGPA. The gas delivered and
accepted hereunder shall not have been nor shall be sold, transported, or otherwise utilized in interstate
commerce in a manner which will subject either party to the terms of the NGA or NGPA. in addition
to and without excluding any remedy the aggrieved party may have at law or in equity, the party who
breaches the above warranties and representations shall be liable to the aggrieved party for all
damages, injury and reasonable expense the aggrieved party may sustain by reason of any breach
hereof. Further, should either party or its agents perform any act, or cause any action to be performed,
at any time, that results in any gas covered hereunder becoming regulated by or subject to jurisdictional
authority of the FERC, or successor governmental authority, under the terms of the NGA or NGPA
contrary to this Agreement, this Agreement shall be deemed of its own terms to terminate on the day
before the date of such occurrence; provided, however such termination shall never be construed to
impair any right under this paragraph. Shipper hereby waives any defense for breach of this paragraph
that Transporter could avoid NGA jurisdiction under the provisions of Section 1(c) of such Act.
10
7.1 The GENERAL TERMS AND CONDITIONS attached hereto as APPENDIX "A" are
incorporated herein and made a part hereof by this reference.
(Notices)
Lone Star Pipeline Company
301 S. Harwood Street
Dallas, Texas 75201
ATTN: Transportation Contract
Administration
ARTICLE VII.
GENERAL TERMS AND CONDITIONS
ARTICLE VIII.
MISCELLANEOUS
8.1 All notices, requests, demands, statements and payments provided for in this Agreement
must be given in writing directed to the party to whom given, and mailed to or delivered at such party's
address as follows:
(Invoices)
1r OF & IlD P.Qcl - Pa,e..®
ea 9
(Payments)
Lone Star Gas Company
P.O. Box 910255
Dallas, Texas 75391 -0255
or at such address as each party may by like notice give to the other. Such mailed notices shall be
deemed to have been given when deposited in the United States mail (first class, registered or
certified), postage prepaid, or in the case of hand delivery, when delivered to a representative of either
party by a representative of the other party.
8.2 This Agreement and the Contract for Industrial Gas Service constitute the entire agreement
between the parties covering the subject matter hereof, and there are no agreements, modifications,
conditions or understandings, written or oral, express or implied, pertaining to the subject matter hereof
which are not contained herein.
8.3 Modifications of this Agreement shall be or become effective only upon the mutual
execution of appropriate supplemental agreements or amendments hereto by duly authorized
representatives of the respective parties.
8.4 This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided, however, that this Agreement shall not be
transferred or assigned by Shipper without the prior written consent of Transporter, and any purported
transfer or assignment without such consent shall be null and void and shall not operate to release
Shipper's obligations hereunder.
8.5 The captions or headings preceding the various parts of this Agreement are inserted and
included solely for convenience and shall never be considered or given any effect in construing this
11
Agreement or any part of this Agreement, or in connection with the intent, duties, obligations or
liabilities of the parties hereto.
8.6 Transporter and Shipper acknowledge, agree and intend that this Agreement is entered
into solely for the respective benefit of Transporter and Shipper and nothing contained in this
Agreement, either express or implied, shall be interpreted or construed as conferring any rights,
remedies or claims under or in respect to this Agreement or any provision hereof upon any person or
entity not a party hereto, other than the successors or assigns of the Parties hereto.
In Witness Whereof, this Agreement has been executed in duplicate originals by the parties
hereto as of the day and year first herein written.
LONE STAR GAS COMPANY
LONE STAR PIPELINE COMPANY,
Divisions of ENSERCH Corporation
CITY OF ROUND ROCK
BY rt ` Ye% . By
Sandra J. Doyle Name: CNRR.LES
Attorney -in -Fact Title mRy04-
12
1. Measuring Equipment and Testing
APPENDIX "A"
to
INTERRUPTIBLE GAS TRANSPORTATION AGREEMENT
GENERAL TERMS AND CONDITIONS
SHEET NO. 1
(a) The gas delivered to Transporter at the Receipt Point(s) shall be measured by means of
measuring devices of standard type which shall be installed, operated and maintained by Transporter
(or its designee) and gas delivered to Shipper at the Delivery Point shall be measured by meters of
standard type which shall be installed, operated and maintained by Transporter (or its designee).
Measurement devices and equipment shall be tested and adjusted for accuracy on a regular schedule
by the party metering the gas ( the "metering party ").
(b) Subject to Shipper's prior approval of costs, Shipper agrees to reimburse Transporter,
within ten (10) days from the date of receipt of Transporter's invoice, for any tap valves, metering
facilities and associated equipment and all labor and overhead expenses, attributable to the installation
of such equipment, incurred by Transporter in effectuating the receipt of gas hereunder. If the invoiced
amount is not paid when due, interest on all unpaid amounts shall accrue at the rate of one and one -
half percent (1 %z%) per month, or the highest rate allowed by law, whichever is less, from the date
such amount is due Transporter. Failure of Transporter to receive total reimbursement within thirty (30)
days of Shipper's receipt of Transporter's invoice will allow Transporter to suspend and /or terminate
this Agreement. It is understood that although Shipper shall reimburse Transporter for any tap valves,
metering facilities and all associated costs incurred by Transporter in establishing any Receipt Point(s),
Shipper shall receive ownership of only the metering facilities and Transporter will be solely responsible
for all activities in connection with said metering facilities, including, but not limited to, operation,
testing, calibration, adjusting, repair and replacement (both at Shipper's expense), and maintenance,
necessary for performance hereunder until Transporter disconnects and removes the metering facilities
within a reasonable time after termination of this Agreement. After said disconnection and removal,
Shipper will have the right within a reasonable period of time thereafter to pick up the metering
facilities from Transporter. Shipper's failure to so claim the metering facilities within ninety (90) days
of Transporter's disconnection and removal thereof, shall constitute a waiver by Shipper of any right,
title or interest in and to such metering facilities and all right, title and interest therein shall thereafter
vest in Transporter. Transporter shall retain ownership of all equipment associated with the tap and
tap valve installation. Notwithstanding the above, if adequate metering facilities are already in
existence at the Receipt Points hereunder, such existing metering facilities shall be used and the party
having title to such facilities shall retain title to such facilities.
(c) The non - metering party shall have access to the metering party's metering equipment at
all times, but the maintenance, calibration and adjustment thereof shall be done only by the employees
or agents of the metering party. Records from such metering equipment shall remain the property of
the metering party and shall be kept on file by said party for a period of not less than two (2) years.
However, upon request of the other party, the metering party shall make available to the other party
volume records from its metering equipment, together with calculations therefrom, for inspection and
verification, subject to return by the other party to the metering party within thirty (30) days after
receipt thereof.
(d) The non - metering party may, at its option and expense, install and operate meters,
instruments and equipment, in a manner which will not interfere with the metering party's equipment,
to check the metering party's meters, instruments and equipment, but the measurement of gas for the
purpose of this Agreement shall be by the metering party's meter only, except as hereinafter
specifically provided. The meters, check meters, instruments and equipment installed by each party
shall be subject at all reasonable times to inspection or examination by the other party, but the
calibration and adjustment thereof shall be done only by the installing party.
(e) Transporter shall give notice to Shipper's Receipt Point Designee who is physically
responsible for the delivery of gas at the point) of the time of all tests of the Receipt Point meter
sufficiently in advance of such tests so that Shipper's Designee may conveniently be present; provided,
however, that if Transporter has given such notice to Shipper's Designee and Shipper's Designee is not
present at the time specified, then Transporter may proceed with the test as though Shipper's Designee
were present.
(f) Meter measurements computed by the metering party shall be deemed to be correct except
where the meter is found to be inaccurate by as much as one percent (1 %), fast or slow, or to have
failed to register, in either of which cases the metering party shall repair or replace the meter. The
quantity of gas delivered while the meter was inaccurate or failed to register shall be determined by
the readings of the other party's check meter, if installed and in good operating condition, or, if not
installed and in good operating condition, then by correcting the error if the percentage of error is
ascertainable by calibration or mathematical calculation. If not so ascertainable, then it shall be
determined by estimating the quantity on a basis of deliveries under similar conditions when the meter
was registering accurately. Such adjustments or corrections shall be made only for one -half ( %,) of the
period which has elapsed since the previous test; however, no such adjustment or correction shall
exceed a time period of ninety (90) days.
2. Measurements
SHEET NO. 2
(a) In gas measurement computations, the metering party may use the findings and rules of the
Railroad Commission; with respect to flowing temperature, the metering party shall at its expense
properly install and operate a device of standard make to continuously determine or record flowing
temperature. With respect to specific gravity, such shall be determined by "on- site" sampling and
laboratory analysis or any other mutually agreeable method which is of standard industry practice
(provided, however, that either party may at its expense properly install and operate a recording
specific gravity instrument of standard make and in this event the specific gravity as recorded shall be
used).
(b) The meters for measurement of volumes at the Receipt Point(s) and Delivery Point
hereunder shall be installed and operated, and computations shall be made, in accordance with current
industry standards. The unit of measurement of gas shall be one thousand (1,000) cubic feet at a
pressure base of fourteen and sixty -five one hundredths (14.65) pounds per square inch absolute and
at a temperature base of sixty (60) degrees Fahrenheit. Meter measurements shall be computed by
the measuring party into such units in accordance with the Ideal Gas Laws for volume variations due
to metered pressure and corrected for deviation using daily averages of recorded specific gravity and
flowing temperature, or by using the calculated specific gravity determined by the method mentioned
in paragraph (c) below.
(c) The daily average heating value and specific gravity of the gas delivered hereunder by either
party may be determined by the use of BTU recording instruments of standard type, which may be
installed and operated by the metering party at the metering point, or at such other point or points as
are mutually agreeable to both parties; provided, however, if there is no BTU recording instrument at
a particular Receipt or Delivery Point specified herein or agreed upon hereunder, then the heating value
and specific gravity of the gas at such point may be determined by "on- site" sampling and laboratory
analysis or any other mutually agreeable method which is of standard industry practice.
(d) The daily average meter pressure, specific gravity, flowing temperature and heating value
shall be determined only during periods of time when the gas is actually flowing.
3. Quality
(a) Each party shall deliver to the other party hereto natural gas which is of merchantable
quality and is commercially free from water, hazardous substances, hydrocarbon liquids, bacteria, and
other objectionable liquids, solids or gas components. In addition, the gas delivered by each party shall
specifically contain (i) not more than five one hundredths of one percent (.05 %) oxygen, (ii) not more
than five (5) grains of total sulphur consisting of not more than one quarter (14) grain of hydrogen
sulphide and one (1) grain of mercaptan sulphur per one hundred (100) cubic feet of gas, (iii) not more
than three percent (3 %) by volume of carbon dioxide, (iv) not more than six percent (6 %) by volume
total non - hydrocarbon and inert gases (including carbon dioxide, nitrogen, oxygen, helium, etc.), and
(v) not more than seven pounds (74) of water vapor per one million (1,000,000) cubic feet of gas;
provided, however, if Shipper tenders gas for transportation upstream of a dehydration plant,
Transporter may waive Shipper's obligation to deliver dehydrated gas, subject to Transporter's
continuing right to withdraw such waiver at any time in the future. The gas shall be at temperatures
not in excess of one hundred twenty (120) degrees Fahrenheit or less than forty (40) degrees
Fahrenheit, provided that the gas shall have a hydrocarbon dew point not to exceed forty (40) degrees
Fahrenheit at the delivery pressure, and shall have a heat content of not less than nine hundred fifty
(950) or more than eleven hundred (1,100) British Thermal Units per cubic foot under the conditions
of measurement contained herein; provided, however, if Shipper tenders gas for transport on
Transporter's gathering system, such gas shall in addition to meeting the other quality specifications
described herein, have a minimum BTU content of one thousand (1,000) British Thermal Units under
the conditions of measurement contained herein, but there shall not be a maximum BTU content or a
minimum hydrocarbon dewpoint requirement for such gas. Transporter shall not be obligated to accept
any gas delivered by Shipper (or its designee) hereunder which is not interchangeable with other gas
in Transporter's pipeline at the Point of Receipt hereunder. Transporter's determination of such
interchangeability shall be based upon a factor which is equivalent to the quotient obtained by dividing
the total heating value of such gas, expressed in BTU's, by the square root of the specific gravity of
such gas. Such factor must be within ±7% of the interchange factor established by Transporter for
its system at the Receipt Point hereunder; provided, however, if Shipper tenders gas for transport on
Transporter's gathering system, Transporter may waive Shipper's obligation to meet these
interchangeability conditions, subject to Transporter's right to withdraw such waiver at any time in the
future.
(b) If at any time the gas fails to meet the quality specifications enumerated herein, the party
receiving such gas shall notify the party delivering such gas, and the delivering party shall immediately
correct such failure. If the delivering party is unable or unwilling to deliver gas according to such
specifications, the party receiving such gas may refuse to accept delivery of gas hereunder for so long
as such condition exists.
SHEET NO. 3
(a) Shipper agrees to pay Transporter, by way of reimbursement, all Taxes paid by Transporter
with respect to the transportation services provided hereunder and any associated facilities related to
the performance of this Agreement. If any such Taxes paid by Transporter to any governmental
authority are calculated based upon the value of or price paid for the gas transported hereunder,
Shipper shall disclose to Transporter the purchase price of such gas to enable Transporter to calculate
and pay all such fees and taxes to appropriate governmental authorities in a timely manner. If Shipper
fails or refuses to disclose the purchase price of such gas, Transporter shall have the right to terminate
this Agreement by giving Shipper ten (10) days' prior written notice. In any event, Shipper hereby
5. Billing, Accounting and Reports
SHEET NO. 4
agrees to indemnify and hold Transporter harmless from and against any and all claims, demands,
losses or expenses, including attorneys' fees, which Transporter may incur as a result of Shipper's
failure or refusal to disclose the purchase price of gas transported hereunder.
(b) The term "Taxes" as used above, shall mean all taxes and fees levied upon and /or paid by
Transporter [other than ad valorem, capital stock, income or excess profit taxes (except as provided
herein), general franchise taxes imposed on corporations on account of their corporate existence or on
their right to do business within the state as a foreign corporation and similar taxes], including, but not
limited to, gross receipts tax, street and alley rental fees agreed upon in franchise ordinances, licenses,
fees and other charges levied, assessed or made by any governmental authority on the act, right or
privilege of transporting, handling or delivering gas, which taxes or fees are based upon the volume,
heat content, value or sales /purchase price of the gas, or transportation fee payable hereunder and
applicable federal income tax imposed as a result of the installation of equipment at the Receipt Point(s)
hereunder.
(a) On approximately the 15th day of each month, Transporter shall render to Shipper a
statement for the preceding month showing the Mcf and MMBtu delivered at the Receipt Point(s) and
Delivery Point; the amount of compensation due to Transporter hereunder, including the tax
reimbursement; and other reasonable and pertinent information which is necessary to explain and
support same and any adjustments made by Transporter in determining the amount billed.
(b) Shipper shall pay Transporter ten (10) days from the date Transporter's statement is
deposited prepaid in the United States mail for gas transported hereunder during the preceding month,
or as to payment which is otherwise due hereunder, according to the measurements, computations and
rates herein provided. Transporter hereby agrees, however, that Shipper may pay any such statement
by bank wire transfer by directing the bank wire transfer to Lone Star Gas Company at Texas
Commerce Bank, Dallas, Texas, ABA No. 111001150, for deposit to Lone Star Gas Company Account
No. 08805016795. To assure proper credit, Shipper should designate the company name, invoice
number and amount being paid in the Fedwire Text Section. If the invoiced amount of any payment
due is not paid when due, interest on all unpaid amounts shall accrue at the rate of one and one half
percent (114%) per month, or the highest rate allowed by law, whichever is less, from the date such
amount is due Transporter; provided, however no interest shall accrue on unpaid amounts when failure
to make payment is the result of a bona fide dispute between the parties hereto regarding such
amounts and Shipper timely pays all amounts not in dispute.
(c) Each party hereto shall have the right at all reasonable times to examine the measurement
records and charts of the other party, or its agent /designee, if any, to the extent necessary to verify
the accuracy of any statement, charge, computation or demand made under or pursuant to any of the
provisions in this Agreement. If any such examinations reveal any inaccuracy in such billing theretofore
made, the necessary adjustments in such billing and payment shall be made; provided, that no
adjustments for any billing or payment shall be made for any inaccuracy claimed after the lapse of
twenty five (25) months from the rendition of the invoice relating thereto.
(d) If the credit worthiness or financial responsibility of Shipper should, in Transporter's
reasonable sole opinion, ever become unsatisfactory, then upon request by Transporter at anytime and
from time to time during the term hereof, Shipper shall deposit with Transporter (i) such amount of
money requested by Transporter, or (ii) a letter of credit in a form acceptable to Transporter from a
financial institution acceptable to Transporter in an amount requested by Transporter, to guarantee the
payment of statements and invoices hereunder, as well as any possible imbalances hereunder. Upon
the termination of this Agreement, any money so deposited, less any amount due Transporter by
Shipper, shall be refunded to Shipper.
6. Responsibility
Shipper shall be in control and possession of the gas and be responsible for and shall indemnify
and hold Transporter harmless from any damage or injury caused thereby until the same shall have been
delivered to Transporter at the Receipt Point(s) and after such gas shall have been delivered at the
Delivery Point, except for injuries and damages caused by the negligence of Transporter. Transporter
shall be in control and possession of the gas and be responsible for and shall indemnify and hold
Shipper harmless from any damage or injury caused thereby upon receipt of the gas at the Receipt
Point(s) and until such gas shall have been delivered to Shipper (or for its account) at the Delivery
Point, except for injuries and damages caused by the negligence of Shipper or Shipper's Designee.
Subject to the other terms and conditions of this Agreement, each party shall have the right to treat,
process and /or dehydrate the gas prior to delivering said gas to the other party.
7. Title -- Warranty & Indemnity
Shipper warrants to the Transporter that at the time of delivery of gas hereunder to Transporter,
Shipper will have good title or the right to deliver such gas, and that such gas shall be free and clear
of all liens and adverse claims; and Shipper agrees to indemnify Transporter, with respect to the gas
delivered by it, against all suits, actions, debts, accounts, damages, costs (including attorneys' fees),
losses and expenses arising from or out of any adverse claims of any and all persons to or against said
gas.
8. Force Maieure
9. Waiver of Breaches. Defaults or Rights
SHEET NO. 5
(a) In the event either party is rendered unable, wholly or in part, by force majeure to carry out
its obligations under this Agreement, except the obligation to pay monies due hereunder, it is agreed
that, on such party's giving notice and reasonably full particulars of such force majeure, in writing or
by telecopy, to the other party within a reasonable time after the occurrence of the cause relied on,
the obligations of the party giving such notice, so far as they are affected by such force majeure, shall
be suspended during the continuance of any inability so caused, but for no longer period, and such
cause shall, so far as possible, be remedied with all reasonable dispatch.
(b) The term "force majeure", as employed herein, shall mean acts of God; strikes, lockouts
or other industrial disturbances; acts of the public enemy, wars, blockades, insurrections, civil
disturbances and riots, and epidemics; landslides, lightning, earthquakes, fires, storms, floods and
washouts; arrests, orders, directives, restraints and requirements of the government and governmental
agencies, either federal or state, civil and military; any application of governmental conservation rules
and regulations; explosions, breakage or accident to machinery or lines of pipe; outages (shutdowns)
of power plant equipment or lines of pipe for inspection, maintenance or repair; freezing of wells or
lines of pipe; and any other causes, whether of the kind enumerated or otherwise, not reasonably
within the control of the party claiming suspension. It is understood and agreed that the settlement
of strikes or lockouts shall be entirely within the discretion of the party having the difficulty, and that
the above reasonable dispatch shall not require the settlement of strikes or lockouts by acceding to the
demand of the opposing party when such course is or is deemed to be inadvisable or inappropriate in
the discretion of the party having the difficulty.
No waiver by either party hereto of any one or more breaches, defaults or rights under any
provisions of this Agreement shall operate or be construed as a waiver of any other breaches, defaults
SHEET NO. 6
or rights, whether of a like or of a different character. By providing written notice to the other party,
either party may assert any right not previously asserted hereunder or may assert its right to object to
a default not previously protested. Except as specifically provided herein, in the event of any dispute
under this Agreement, the parties shall, notwithstanding the pendency of such dispute, diligently
proceed with the performance of this Agreement without prejudice to the rights of either party.
10. Remedy for Breach
Except as otherwise specifically provided herein, if either party shall fail to perform any of the
covenants or obligations imposed upon it in this Agreement (except where such failure shall be excused
under the Force Majeure provisions hereof), then, and in that event, the other party may, at its option
(without waiving any other remedy for breach hereof), by notice in writing specifying wherein the
default has occurred, indicate such party's election to terminate this Agreement by reason thereof;
provided, however, that Shipper's failure to pay Transporter within a period of ten (10) days following
Shipper's receipt of written notice from Transporter advising of such failure to make payment in full
within the time specified previously herein, shall be a default which shall give Transporter the right to
immediately terminate this Agreement, unless such failure to pay such amounts is the result of a bona
fide dispute between the parties hereto regarding such amounts hereunder and Shipper timely pays all
amounts not in dispute. With respect to any other matters, the party in default shall have thirty (30)
days from receipt of such notice to remedy such default, and upon failure to do so, this Agreement
shall terminate from and after the expiration of such thirty (30) day period. Such termination shall be
an additional remedy and shall not prejudice the right of the party not in default to collect any amounts
due it hereunder for any damage or Toss suffered by it and shall not waive any other remedy to which
the party not in default may be entitled for breach of this Agreement.
1 1 . Dispute Resolution
Pursuant to the Federal Arbitration Act, the parties hereby agree that any controversy, claim,
or alleged breach, including but not limited to torts and statutory claims, arising out of or related to
this Agreement shall be settled by binding arbitration administered by the American Arbitration
Association ('AAA) in accordance with its Commercial Arbitration Rules. Demand for arbitration may
be made no later than the time that such action would be permitted under the applicable Texas statute
of limitation. Any disputes regarding the timeliness of the demand for arbitration shall be decided by
the arbitrator(s). Judgment upon the award rendered by the arbitrator(s) may be entered in any Court
having jurisdiction thereof in order to obtain compliance therewith. Any case in which any claim, or
combination of claims, exceeds $500,000 shall be subject to the AAA'S Large, Complex Case
Procedures and decided by the majority of a panel of three (3) neutral arbitrators. In rendering the
award, the arbitrator(s) shall determine the rights and obligations of the parties according to the laws
of the State of Texas. The arbitration proceedings and hearings shall be conducted at the Dallas
Regional Office of the AAA or at such other place as may be selected by mutual agreement. No party
nor the arbitrator(s) may disclose the existence, content or results of any arbitration hereunder
without the prior written consent of all parties.
' ** END OF GENERAL TERMS AND CONDITIONS * **
DATE: December 4, 1997
SUBJECT: City Council Meeting, December 11, 1997
ITEM: 10.C. Consider a resolution authorizing the Mayor to execute a
contract for Industrial Gas Service with Lone Star Gas for gas
service at the Micki Krebsbach Pool.
STAFF RESOURCE PERSON: Sharon Prete
RECOMMENDATION: APPROVAL
ECONOMIC IMPACT:
Due to the quantity of gas used to heat the Micki Krebsbach Pool, the
City qualifies for the Industrial Gas Service rate. This contract will
allow us to switch our status from a Commercial Rate customer to an
Industrial Rate customer which will result in an estimated annual
savings of $7000.
As an Industrial Rate customer, we will be subject to curtailments
since residential and commercial customer have priority. Industrial
customers are required to provide an alternate source of fuel in the
event of a curtailment. Richard Bone, Lone Star Gas Representative
has recommended propane as our alternate service source and is
working with us on the installment.
The cost if installing the propane tank and transmission line is off -set
by the refund received from Lone Star on the initial installation of
service.