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Exhibit
10.49
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CAPACITY TRANSFER AGREEMENT
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- Between -
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NORTH JERSEY ENERGY ASSOCIATES,
A LIMITED PARTNERSHIP
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- And -
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PSEG ENERGY RESOURCES & TRADE LLC
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CAPACITY TRANSFER
AGREEMENT
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PREAMBLE
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THIS CAPACITY TRANSFER AGREEMENT (the "Agreement") is
entered into this 9th day of October, 2003, between North Jersey
Energy Associates, A Limited Partnership ("NJEA") and PSEG Energy
Resources and Trade LLC ("ER&T"), collectively referred to
herein as the "Parties".
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WHEREAS , NJEA holds certain rights and obligations under
the agreements described in Exhibit 1, including entitlement
to transport and/or store natural gas on various pipeline systems
(each a "Capacity Entitlement Agreement" and collectively the
"Capacity Entitlement Agreements"); and
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WHEREAS , NJEA proposes to cause the transfer of its rights
and obligations under these Capacity Entitlement Agreements to
ER&T, either directly or as agent for Public Service Electric
and Gas Company ("PSE&G"), 1 for the remaining
original term of the respective Capacity Entitlement Agreements;
and
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WHEREAS , NJEA and PSE&G are parties to a Gas Purchase
and Sales Agreement dated May 4, 1989 ("Gas Supply Agreement") and
are also parties to an Amendment to the Gas Purchase and Sales
Agreement dated August 20, 2003 ("Gas Supply Agreement Amendment").
Both of these agreements provide for the supply and transportation
of gas to NJEA's Sayreville electric generation facility;
and
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WHEREAS , ER&T desires to obtain a transfer of NJEA's
entitlements, rights and obligations under the Capacity Entitlement
Agreements to ER&T in order to (i) fulfill its obligations
under the BGSS Requirements Contract dated May 2, 2000 between
ER&T and PSE&G and to (ii) provide for the increased
transportation and storage capacity to allow PSE&G to provide
service pursuant to the Gas Supply Agreement, as amended by the Gas
Supply Agreement Amendment, to NJEA's Sayreville
facility.
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NOW, THEREFORE , in consideration of the foregoing and the
promises and covenants hereinafter set forth, the sufficiency of
which is hereby acknowledged, NJEA and ER&T agree as
follows:
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ARTICLE 1
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CAPACITY TRANSFER
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1.1 As of the respective effective dates described below, NJEA will
cause the transfer of its entitlement, rights and obligations under
the Capacity Entitlement Agreements described below to ER&T,
and ER&T will assume all such entitlement, rights and
obligations in accordance with Section 1.3:
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(a) As of the CTA Effective Date (as defined in Section 2.1 below),
the Firm Transportation Service Agreement dated as of February 1,
2003, by and between Transcontinental Gas Pipe Line Corporation
("Transco") and NJEA for a volume of 22,790 Dth per day;
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(b) As of the "Effective Date" of the assignment letter agreement
("DTI Assignment Agreement") by and among NJEA, ER&T and
Dominion Transmission Corporation ("DTI"), the Firm Transportation
Service Agreement dated as of February 28, 1994, by and between CNG
Transmission Corporation (now DTI) and NJEA for a volume of 22,019
Dth per day;
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(c) As of April 1, 2004, or such other date as may be agreed upon
in writing by the Parties, the Service Agreement Applicable to the
Storage of Natural Gas under Rate Schedule GSS dated as of
September 30, 1993 and amended November 1, 1998, by and between CNG
Transmission Corporation (now DTI) and NJEA for a volume of
1,050,800 Dth; and
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(d) As of April 1, 2004, or such other date as may be agreed upon
in writing by the Parties, the Service Agreement Applicable to the
Transportation of Natural Gas under Rate Schedule FT-GSS dated as
of September 30, 1993 and amended November 1, 1998, by and between
CNG Transmission Corporation (now DTI) and NJEA for a volume of
10,508 Dth per day.
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1.2 As of the "Effective Date" of that certain Assignment,
Assumption and Consent Agreement ("Tetco Assignment Agreement") by
and among NJEA, PSE&G and Texas Eastern Transmission
Corporation ("Tetco"), but in no event prior to April 1, 2004, NJEA
will cause the transfer of its entitlement, rights and obligations
under the Service Agreement for FTS-5 dated February 16, 1994 by
and between Tetco and NJEA for a volume of 10,508 Dth per day to
PSE&G in accordance with Section 1.3 and ER&T will assume
all such entitlement, rights and obligations as agent for
PSE&G.
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1.2.1 NJEA and ER&T hereby agree that NJEA shall protect
ER&T from cost increases under the Capacity Entitlement
Agreement described in Section 1.2 caused by a conversion from
service under Part 157 ("Part 157 Service") of the Federal Energy
Regulatory Commission's ("FERC") regulations at 18 C.F.R. 157 et.
seq., to service under Part 284 ("Part 284 Service") of the FERC's
regulations at 18 C.F.R. 284 ("Conversion") as, and to the extent,
described in this Section 1.2.1. Specifically if (a) either Party
receives communication or notice during the two (2) year period
beginning on the date on which the FERC receives written notice of
the transfer described in Section 1.2 pursuant to paragraph 4(b) of
the Tetco Assignment Agreement ("Exposure Period") that the FERC is
mandating or requiring a Conversion of the Capacity Entitlement
Agreement described in Section 1.2 and (b) neither Party receives,
or has received, communication or notice that the FERC is mandating
or requiring the Conversion of other similarly situated
transportation agreements and (c) as a result of the Conversion of
the Capacity Entitlement Agreement described in Section 1.2, the
total costs of Part 284 Service under such Capacity Entitlement
Agreement will be greater than the total costs of Part 157 Service
under such Capacity Entitlement Agreement, then NJEA shall
reimburse ER&T an amount equal to the Excess Total Costs;
provided, however, that if the FERC communicates at any time during
or after the Exposure Period that it is mandating or requiring
Conversion of other similarly situated transportation agreements,
then NJEA shall no longer be obligated to reimburse ER&T's
Excess Total Costs accruing after the date of such initial
communication from FERC. For purposes of this Section 1.2.1,
"Excess Total Costs" shall mean the total costs of the Capacity
Entitlement Agreement described in Section 1.2 for its remaining
original term ("Term") that are in excess of the costs that would
have been incurred under such
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