Rate Schedule TF-1 Service Agreement

Contract No. 100004

 

THIS SERVICE AGREEMENT (Agreement) by and between Northwest Pipeline LLC (Transporter) and Intermountain Gas Company (Shipper) is made and entered into on June 28, 2019 and restates the Service Agreement made and entered into on July 10, 2018.

 

WHEREAS:

  1. Effective November 1, 1992, to conform to the provisions of the approved Joint Offer of Settlement in Docket No. CP92-79, the original Replacement Firm Transportation Agreement dated July 31, 1991 (contract #100004), as assigned by Shipper to IGI Resources, Inc. (IGI) effective September 1, 1992, and amended October 1, 1992, superseded and replaced both a firm sales Service Agreement dated May 31, 1989 and a Firm Transportation Agreement dated June 22, 1988, to provide a conversion of Shipper's firm sales Contract Demand to IGI's firm Transportation Contract Demand and to establish unilateral evergreen rights.

  2. Significant events and previous amendments of this Agreement include:

     

    1. By Amendment dated November 30, 1998, Shipper accepted assignment of Contract #100004 from IGI, effective December 1, 1998.

     

    2. By Amendment dated September 27, 2001, Shipper's primary delivery point rights were revised.

      

    3. By restatement effective September 19, 2006, the "non-conforming" provisions of the Agreement relating to the contract specific OFO conditions were eliminated from Exhibit "B" by moving them to Exhibit "A", the Primary Term End Date was extended from October 31, 2009 to October 31, 2024 and Exhibit "C" was added for the Albertson's (Kuna) meter station "cost-of-service" reimbursement.

      

    4. By Amendment dated January 3, 2007, Shipper's primary receipt point rights were revised.

      

    5. By restatement effective December 7, 2007, Shipper's delivery point pressures were revised.

      

    6. By Amendment dated September 10, 2008, Shipper's Contract-Specific OFO obligation was removed from Exhibit "A". Shipper's Contract-Specific OFO obligation of 17,182 Dth/d was due to a segmented release which left a gap through the Washougal Compressor to Plymouth Compressor corridor through October 31, 2009. Shipper's segmentation was approved before Transporter began requiring realignment contracts to have OFO recall rights. In consideration for collapsing the segments early, which provides additional OFO coverage for the remaining shippers on the system, Transporter agreed to remove the Contract-Specific OFO obligation.

     

    7. By restatement effective October 13, 2010, Transporter and Shipper amended the Agreement to:

    a. add delivery pressure conditions related to the Idaho Falls and Twin Falls delivery points that were agreed to in consideration for contract term extensions; and

    b. replace the Nampa LNG delivery point with the Nampa delivery point and transfer the MDDOs and pressure commitments from Nampa LNG to the Nampa delivery point due to Transporter abandoning the Nampa LNG delivery point.

     

    8. By restatement effective March 6, 2012, Transporter and Shipper amended the Primary Term End Date from October 31, 2024, to October 31, 2032. 

     

    9. By restatement effective September 23, 2016, Transporter and Shipper amended the delivery pressure at the New Plymouth Delivery Location from 150 psig to 200 psig due to a request by the Shipper to upgrade the meter station.

     

    10. By restatement effective July 10, 2018, Transporter and Shipper amended 8,063 Dth/d of primary receipt point rights (MDQs) from Hatch Gulch to Great Divide to facilitate the permanent disconnect of the Hatch Gulch meter station from Transporter’s system. 

     

    11.  Transporter and Shipper further agree to restate the Agreement to extend the Primary Term End Date from October 31, 2032, to October 31, 2042 in exchange for the extension of existing segmentation rights through October 31, 2042.

 

 

THEREFORE, in consideration of the premises and mutual covenants set forth herein, Transporter and Shipper agree as follows:

  1. Tariff Incorporation. Rate Schedule TF-1 and the General Terms and Conditions (GT&C) that apply to Rate Schedule TF-1, as such may be revised from time to time in Transporter's FERC Gas Tariff (Tariff), are incorporated by reference as part of this Agreement, except to the extent that any provisions thereof may be modified by non-conforming provisions herein.
  2. Transportation Service. Subject to the terms and conditions that apply to service under this Agreement, Transporter agrees to receive, transport and deliver natural gas for Shipper, on a firm basis. The Transportation Contract Demand, the Maximum Daily Quantity at each Primary Receipt Point, and the Maximum Daily Delivery Obligation at each Primary Delivery Point are set forth on Exhibit A. If contract-specific OFO parameters are set forth on Exhibit A, whenever Transporter requests during the specified time period, Shipper agrees to flow gas as requested by Transporter, up to the specified volume through the specified transportation corridor.
  3. Transportation Rates. Shipper agrees to pay Transporter for all services rendered under this Agreement at the rates set forth or referenced herein. Reservation charges apply to the Transportation Contract Demand set forth on Exhibit A. The Maximum Base Tariff Rates (Recourse Rates) set forth in the Statement of Rates in the Tariff, as revised from time to time, that apply to the Rate Schedule TF-1 customer category identified on Exhibit A, will apply to service hereunder unless and to the extent that discounted Recourse Rates or awarded capacity release rates apply as set forth on Exhibit A or negotiated rates apply as set forth on Exhibit D. Additionally, if applicable under Section 21 or 29 of the GT&C, Shipper agrees to pay Transporter a facilities charge as set forth on Exhibit C.
  4. Transportation Term. This Agreement becomes effective on the effective date set forth on Exhibit A. The primary term begin date for the transportation service hereunder is set forth on Exhibit A. This Agreement will remain in full force and effect through the primary term end date set forth on Exhibit A and, if Exhibit A indicates that an evergreen provision applies, through the established evergreen rollover periods thereafter until terminated in accordance with the notice requirements under the applicable evergreen provision.
  5. Non-Conforming Provisions. All aspects in which this Agreement deviates from the Tariff, if any, are set forth as non-conforming provisions on Exhibit B. If Exhibit B includes any material non-conforming provisions, Transporter will file the Agreement with the Federal Energy Regulatory Commission (Commission) and the effectiveness of such non-conforming provisions will be subject to the Commission acceptance of Transporter's filing of the non-conforming Agreement.
  6. Capacity Release. If Shipper is a temporary capacity release Replacement Shipper, any capacity release conditions, including recall rights, are set forth on Exhibit A.
  7. Exhibit / Addendum to Service Agreement Incorporation. Exhibit A is attached hereto and incorporated as part of this Agreement. If any other Exhibits apply, as noted on Exhibit A to this Agreement, then such Exhibits also are attached hereto and incorporated as part of this Agreement. If an Addendum to Service Agreement has been generated pursuant to Sections 11.5 or 22.12 of the GT&C of the Tariff, it also is attached hereto and incorporated as part of this Agreement.
  8. Regulatory Authorization. Transportation service under this Agreement is authorized pursuant to the Commission regulations set forth on Exhibit A.
  9. Superseded Agreements. When this Agreement takes effect, it supersedes, cancels and terminates the following agreement(s): Service Agreement dated July 10, 2018, but the following Amendments and/or Addendum to Service Agreement which have been executed but are not yet effective are not superseded and are added to and become an Amendment and/or Addendum to this agreement: None
IN WITNESS WHEREOF, Transporter and Shipper have executed this Agreement as of the date first set forth above.
  
Intermountain Gas Company Northwest Pipeline LLC
By: /S/ By: /S/
Name: RANDY SCHULTZ Name: MIKE RASMUSON
Title: AGENT FOR INTERMOUNTAIN GAS CO Title: DIRECTOR, MARKETING SERVICES

 

EXHIBIT A

Dated and Effective June 28, 2019

to the

Rate Schedule TF-1 Service Agreement

(Contract No. 100004)

between Northwest Pipeline LLC

and Intermountain Gas Company

SERVICE DETAILS
  1. Transportation Contract Demand (CD): 113,024 Dth per day
  2. Primary Receipt Point(s):
      Point ID Name Maximum Daily Quantities (Dth)    
      4 IGNACIO PLANT 3,876    
      57 WEST DOUGLAS 500    
      61 NORTH DOUGLAS CREEK 2,257    
      75 CLAY BASIN RECEIPT 20,000    
      297 SUMAS RECEIPT 65,496    
      501 GREAT DIVIDE/PICEANCE CR. REC. 8,063    
      516 GLEN BENCH 50    
      543 OPAL PLANT 9,255    
      564 BLANCO HUB-TW (56498) 3,527    
      Total113,024
  3. Primary Delivery Point(s):
      Point ID Name Maximum Daily Delivery Obligation (Dth)   Delivery Pressure (psig)  
      106 MONTPELIER1,240 150    
      109 GEORGETOWN100 150    
      112 SODA SPRINGS10,001 350    
      113 GRACE200 150    
      114 SODA SPRINGS CANAL50 150    
      116 CENTRAL TURNER-GRACE200 150    
      119 BANCROFT183 150    
      121 LAVA HOT SPRINGS258 150    
      124 MCCAMMON183 150    
      128 IDAHO FALLS69,400 500    
      129 POCATELLO15,367 350    
      130 POCATELLO # 25,100 400    
      133 AMERICAN FALLS882 150    
      134 ABERDEEN3,766 385    
      135 EAST RAFT RIVER150 300    
      136 DECLO110 150    
      137 BURLEY-RUPERT-HEYBURN #29,000 475    
      138 BURLEY-RUPERT-HEYBURN8,550 250    
      142 MURTAUGH120 150    
      143 HANSEN58 150    
      144 KIMBERLY809 150    
      145 TWIN FALLS # 2858 175    
      146 TWIN FALLS19,283 500    
      147 FILER600 150    
      148 BUHL (GOODING)4,267 380    
      151 GLENNS FERRY1,017 150    
      154 MOUNTAIN HOME7,000 300    
      155 ORCHARD ROAD135 150    
      157 IDAHO STATE PENITENTIARY26,250 450    
      158 ALBERTSONS INC. (KUNA)316 400    
      159 MERIDIAN/BOISE22,649 450    
      161 CALDWELL23,054 450    
      163 EMMETT/PARMA2,633 150    
      165 NEW PLYMOUTH466 200    
      166 HENGGELER PACKING CO.30 150    
      168 FRUITLAND470 150    
      169 PAYETTE/WEISER3,693 400    
      452 INDIAN HILLS30 150    
      453 FLYING H FARMS778 150    
      455 BRUNEAU50 150    
      491 INKOM187 150    
      537 SIMPLOT-WESTVACO9,500 400    
      717 NAMPA33,644 500    
      Total282,637  
    Specified conditions for Delivery Pressure, pursuant to Section 2.4 of the General Terms and Conditions:

    While the delivery pressures stated in this Agreement represent the contractual commitment between Transporter and Shipper, The Parties agree to implement the following procedures relating to delivery pressures at the Idaho Falls Meter Station ("Idaho Falls") and the Twin Falls Meter Station ("Twin Falls"):

    Transporter will use reasonable operational efforts to provide Shipper with a minimum average daily pressure level of 600 psig at Idaho Falls and 550 psig at Twin Falls for peak days during the winter periods of November - March. Reasonable operational efforts will not require Transporter to adversely impact Transporter's contractual delivery pressure commitments to other shippers.

    Shipper will request the higher pressures at least 24 hours in advance of each day that such pressures will be required. Upon notice from Shipper, Transporter's gas control will inform Shipper if Transporter is aware of any operational conditions that would limit Transporter's ability to deliver 600 psig at Idaho Falls and 550 psig at Twin Falls. If no such operational conditions exist to limit the pressure request, Transporter will set its mainline low pressure alarm at Idaho Falls at or above 600 psig and at Twin Falls at or above 550 psig and will monitor the mainline pressure for 48 hours following the request.

  4. Customer Category:
    1. Large Customer
    2. Incremental Expansion Customer: No
  5. Recourse, Discounted Recourse, or Negotiated Rate Transportation Rates:

    (Negotiated Rates are on Exhibit D if attached.)

    1. Reservation Charge (per Dth of CD): Maximum Base Tariff Rate, plus applicable surcharges
    2. Volumetric Charge (per Dth): Maximum Base Tariff Rate, plus applicable surcharges
    3. Additional Facility Reservation Surcharge Pursuant to Section 3.4 of Rate Schedule TF-1 (per Dth of CD): None
    4. Rate Discount Conditions Consistent with Section 3.5 of Rate Schedule TF-1: Not Applicable
    5. Negotiated Rate Conditions Consistent with Section 3.7 of Rate Schedule TF-1: Not Applicable
  6. Transportation Term:
    1. Primary Term Begin Date: November 01, 1992
    2. Primary Term End Date: October 31, 2042

      Specified conditional service agreement extensions pursuant to Section 11.9 of the General Terms and Conditions of the Tariff: None

    3. Evergreen Provision: Yes, grandfathered unilateral evergreen under Section 12.3 of Rate Schedule TF-1
  7. Contract-Specific OFO Parameters: None

    Specified contract-specific OFO conditions or alternative actions: None

  8. Regulatory Authorization: 18 CFR 284.223
  9. Additional Exhibits:

    Exhibit B No

    Exhibit C Yes

    Exhibit D No

    Exhibit E No

EXHIBIT C

Dated and Effective 2019-06-28 00:00:00.000

to the

Rate Schedule TF-1 Service Agreement

(Contract No. 100004)

between Northwest Pipeline LLC

and Intermountain Gas Company

INCREMENTAL FACILITIES PAYMENT OBLIGATION

  1. DESCRIPTION OF FACILITIES:

    The facilities contemplated by Section 21 or 29 of the GT&C to provide service under this agreement include the following:

    An upgrade of the existing Albertson's (Kuna) delivery point facilities located near milepost 823.3 on Northwest's mainline; all as set forth in more detail in the Facilities Agreement between Shipper and Transporter, dated September 20, 2006 (the "Facilities Agreement").

  2. RESPONSIBILITY FOR FACILITIES COSTS:

    Pursuant to Section 21 or 29 of the GT&C, Shipper is responsible to pay for the facilities described above and has elected the payment option set forth below.

  3. TERMS AND CONDITIONS OF FACILITIES PAYMENT:

    1. Type of Charge:Monthly-Cost-of-Service Charge..
    2. Charge $6,470.00

      The initial monthly Cost-of-Service charge above will be adjusted and trued up annually to reflect actual costs incurred by Transporter, using the methodology set forth below:


      3. MONTHLY FACILITY CHARGE ANNUAL TRUE-UP METHODOLOGY

      General Principles

      The calculations are consistent with the methodologies underlying Northwest's currently effective transportation rates as established in its last rate case. These principles can only be changed in future general rate proceedings.


      The "true-up period" is a calendar year (or partial year if the Agreement is effective for only a portion of a particular calendar year). The "billing period" is the twelve months ending March 31.


      Prior to the conclusion of the billing period, the difference between the actual cost of service and the amount billed during the true-up period plus carrying costs will be invoiced or credited as a lump sum. An estimated monthly Facility Charge will be calculated for the next billing period.


      Operation and Maintenance Expense

      Direct O&M costs related to the Delivery Facilities are accumulated in a cost center or are allocated using a gross transmission plant factor. Supervisory and system control costs included in Account Nos. 850, 851, 852 and 861 are allocated to the Delivery Facilities using a gross transmission plant allocation factor.


      A&G costs are allocated in accordance with Kansas Nebraska ("KN") methodology. The KN methodology utilizes plant and direct labor factors. Labor related A&G costs are allocated based upon direct labor factors for the true-up period and plant-related A&G costs are allocated based on gross direct plant at the end of the period.


      Depreciation and Net Negative Salvage Expense

      Direct depreciation expense is calculated on a straight-line rate over the 15-year term of the Exhibit C Facility Charge.


      Indirect depreciation expense includes general and intangible plant depreciation that is allocated based on a ratio of gross direct plant for the Delivery Facilities to total system gross direct plant at the end of the true-up period.


      Net Negative Salvage is calculated using gross direct plant investment, as described in the Rate Base section of this attachment multiplied by the Net Negative Salvage rate underlying Northwest 's currently effective general system transportation rates.


      Ad Valorem and Other Taxes

      Ad Valorem taxes are based upon the most recent tax bills applicable to the county where the Delivery Facilities are located applied to the average net plant.


      Payroll taxes are allocated upon the ratio of direct labor to total system direct labor for each true-up period.


      Other taxes such as state franchise taxes and state sales and use taxes, as applicable, are allocated based upon the ratio of gross direct plant for the Delivery Facilities to total system gross direct plant at the end of the true-up period.


      Federal and State Income Taxes

      Federal and weighted average State income tax expenses are based on the income tax rates underlying Northwest 's currently effective transportation rates.


      Return

      Return on debt and equity and the applicable capital structure are based upon the last litigated or settled general rate case where the components are stated. See "Changes Resulting from General Rate Filing" section below for return treatment for newly filed rate cases.


      Rate Base

      Rate base is comprised of direct and indirect plant and is the net of gross plant investment, accumulated depreciation and accumulated deferred income taxes related to the Delivery Facilities. Rate base is calculated using the average of all months in the true-up period plus the last month of the prior true-up period, if applicable.


      Gross direct plant investment is based upon actual costs incurred for installation of the Delivery Facilities. New capital expenditures will be added to gross direct plant investment when incurred. To the extent that the gross direct plant investment has not been fully depreciated prior to the expiration of Exhibit C to the Transportation Agreement, the remaining net book value of the facilities, including any related income taxes, will be billed as part of the final true-up calculation.


      Indirect rate base includes an allocation of general items (general plant, intangible plant, materials and supplies and prepayments). Each of the general items is the average of all months in the true-up period plus the month immediately preceding the true-up period. Indirect rate base is assigned to the Delivery Facilities based upon the ratio of gross direct plant for the Delivery Facilities to total system gross direct plant at the end of the true-up period.


      Carrying Costs

      Carrying costs are calculated using the interest computed in conformance with FERC regulations from the date of each collection through the date of the refund or billing, as applicable.


      Audit Rights

      Northwest will make its accounting records and workpapers for the true-up period available for audit or review at its offices during a six-month period after the true-up is invoiced. Information will be considered correct if not challenged during that time period.


      Changes Resulting from General Rate Filings

      Changes may be made to the principles underlying Northwest 's currently effective transportation rates in Northwest 's general rate proceedings.

      The Commission's final determination on all principles decided by litigation or settlement of each general rate case will be reflected in the true-up calculation.


      All changes to rate making principles that may be made in Northwest's general rate cases pertinent to the computation of the true-up cost of service for the Delivery Facilities will be reflected in the next applicable billing period and in Northwest's true-up calculations for all applicable periods reflecting such retroactive or prospective changes, as required under the terms of the Commission's order.

      True-up calculations will reflect the basis for the adjustment for any under-collections or over-collections, including interest computed in conformance with FERC regulations from the date of each collection through the date of the payment or refund in the next applicable true-up calculation.


      During each billing period, final rates of return on debt and equity and capital structure applicable to any portion of the annual true-up period covered by final base tariff rates will be used. To the extent that any portion or all of the annual true-up period falls during a subject to refund period wherein the Commission has not finally resolved the applicable rates of return on debt and equity and capital structure, initial billings will be based on the rates of return on debt and equity and capital structure included in Northwest 's subject to refund base tariff rates.


      If the applicable rate of return on debt or equity, or the capital structure components are subsequently modified due to any final Commission order in a general rate proceeding, the difference between the cost of service previously billed under the subject to refund rates for return on debt and equity and capital structure and the cost of service developed by applying the Commission's final order for the applicable time periods will be refunded or billed during the next applicable true-up calculation. Such refund or billing will include interest computed in conformance with FERC regulations from the date of each collection through the date of the refund or billing.

    3. Term of Charge:15 years, beginning with the in-service date of the upgrade to the delivery point facilities described above.
    4. Accelerated Payment:Addressed in accordance with Section 21.7 (a) of the GT&C.