UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended October 31, 1996
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to
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Commission file number 1-6196
PIEDMONT NATURAL GAS COMPANY, INC.
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(Exact name of registrant as specified in its charter)
North Carolina 56-0556998
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1915 Rexford Road, Charlotte, North Carolina 28211
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (704) 364-3120
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of each exchange on
Title of each class which registered
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Common Stock, no par value New York Stock Exchange
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [x]
State the aggregate market value of the voting stock held by nonaffiliates of the registrant as of January 2, 1997.
Common Stock, no par value - $691,960,335
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.
Class Outstanding at January 2, 1997
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Common Stock, no par value 29,646,480
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for the Annual Meeting of Shareholders on February 28, 1997, are incorporated by reference into Part III.
PIEDMONT NATURAL GAS COMPANY, INC.
1996 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Part I. Page
Item 1. Business 1
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
Part II.
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 7
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 8. Financial Statements and Supplementary Data 15
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 34
Part III.
Item 10. Directors and Executive Officers of the Registrant 35
Item 11. Executive Compensation 37
Item 12. Security Ownership of Certain Beneficial Owners
and Management 37
Item 13. Certain Relationships and Related Transactions 38
Part IV.
Item 14. Exhibits, Financial Statement Schedule, and
Reports on Form 8-K 39
Signatures 45
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PART I
Item 1. Business
Piedmont Natural Gas Company, Inc. (the Company), incorporated in 1950, is an energy and services company primarily engaged in the transportation and sale of natural gas and the sale of propane to over 615,000 residential, commercial and industrial customers in North Carolina, South Carolina and Tennessee.
The Company is the second-largest natural gas utility in the southeast, serving over 567,000 natural gas customers. The Company and its non-utility subsidiaries and divisions are also engaged in acquiring, marketing and arranging for the transportation and storage of natural gas for large-volume purchasers, and in the sale of propane to over 48,500 customers in the Company's three-state service area.
In the Carolinas, the service area is comprised of numerous cities, towns and communities including Anderson, Greenville and Spartanburg in South Carolina and Charlotte, Salisbury, Greensboro, Winston-Salem, High Point, Burlington and the Hickory area in North Carolina. In Tennessee, the service area is the metropolitan area of Nashville, including portions of eight adjoining counties. The Company's propane market is in and adjacent to its natural gas market in all three states.
Operating revenues shown in the consolidated financial statements represent revenues from utility operations only. Such revenues totaled $685 million for the year ended October 31, 1996, of which 43% was from residential customers, 26% from commercial customers, 27% from industrial customers, 3% from secondary market sales and 1% from various sources. Revenues from non-utility operations, less related costs and income taxes, are shown in the consolidated financial statements in other income. Non-utility revenues as a percentage of total revenues, including utility operations, were 7% in 1996. No single non-utility activity accounted for greater than 6% of total revenues. Income from non-utility activities as a percentage of total net income was 9% in 1996. No single non-utility activity accounted for more than 6% of net income.
The Company is principally engaged in the gas distribution industry and has no other reportable industry segments.
The Company's utility operations are subject to regulation by the North Carolina Utilities Commission (NCUC) and the Tennessee Regulatory Authority (TRA), formerly the Tennessee Public Service Commission (TPSC), as to the issuance of securities, and by those commissions and by the Public Service Commission of South Carolina (PSCSC) as to rates, service area, adequacy of service, safety standards, extensions and abandonment
of facilities, accounting and depreciation. The Company is also subject to or affected by various federal regulations.
The Company holds non-exclusive franchises for natural gas service in all communities where required, with expiration dates from 1997 to 2044. The earliest date at which a franchise for a major service area expires is 1999. The franchises are adequate for operation of the gas distribution business and do not contain restrictions which are of a materially burdensome nature. In most cases, the loss of a franchise would not have a material effect on operations. The Company has never failed to obtain the renewal of a franchise; however, this is not necessarily indicative of future action.
The Company's utility business and its non-utility propane activities are seasonal in nature as variations in weather conditions generally result in greater earnings during the winter months. The Company normally injects natural gas into storage during periods of warm weather (principally April 1 through October 31) for withdrawal from storage during periods of cold weather (principally November 1 through March 31) when sufficient quantities of flowing pipeline gas are not available to meet customer demand. During 1996, the amount of natural gas in storage varied from 2.4 million dekatherms (one dekatherm equals 1,000,000 BTUs) to 18.3 million dekatherms, and the aggregate commodity cost of this gas in storage varied from $4.8 million to $33.9 million.
The following is a five-year comparison of gas sales and other statistics for the years ended October 31, 1992 through 1996:
1996 1995 1994 1993 1992
OPERATING REVENUES (in thousands):
Sales and Transportation:
Residential $292,010 $229,546 $240,314 $221,632 $184,442
Commercial 180,415 135,933 165,805 154,894 126,417
Industrial 184,118 133,205 165,989 173,943 146,964
For Resale 2,748 3,323 815 1 -
-------- -------- -------- -------- --------
Total 659,291 502,007 572,923 550,470 457,823
Secondary Market Sales 22,152 - - - -
Miscellaneous 3,612 3,216 2,431 2,290 2,079
-------- -------- -------- -------- --------
Total $685,055 $505,223 $575,354 $552,760 $459,902
======== ======== ======== ======== ========
GAS VOLUMES - DEKATHERMS (in thousands):
System Throughput:
Residential 43,357 33,513 36,093 34,277 30,450
Commercial 31,040 22,867 28,931 28,179 25,876
Industrial 64,054 67,735 60,966 57,505 58,740
For Resale 581 1,478 140 192 -
-------- -------- -------- -------- --------
Total 139,032 125,593 126,130 120,153 115,066
======== ======== ======== ======== ========
Secondary Market Sales 9,724 - - - -
NUMBER OF RETAIL CUSTOMERS BILLED
(12 month average):
Residential 468,803 446,118 420,861 396,394 375,681
Commercial 59,905 57,803 56,147 54,451 52,603
Industrial 2,687 2,711 2,010 1,822 1,783
-------- -------- -------- -------- --------
Total 531,395 506,632 479,018 452,667 430,067
======== ======== ======== ======== ========
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1996 1995 1994 1993 1992
AVERAGE PER RESIDENTIAL CUSTOMER:
Gas Used - Dekatherms 92.48 75.12 85.76 86.47 81.05
Revenue $622.88 $514.54 $571.00 $559.12 $490.95
Revenue Per Dekatherm $6.73 $6.85 $6.66 $6.47 $6.06
COST OF GAS (in thousands):
Natural Gas Purchased $327,968 $155,683 $242,609 $267,217 $211,492
Liquefied Petroleum Gas (LPG) 160 60 204 - 138
Transportation Gas Received (Not
Delivered) 1,024 (181) (616) (216) 627
Natural Gas Withdrawn from
(Injected into) Storage, net (8,078) 6,094 4,106 (894) (10,344)
Other Storage (40) 860 1,058 316 901
Other Adjustments 73,099 85,051 93,214 62,465 50,955
-------- -------- -------- -------- --------
Total $394,133 $247,567 $340,575 $328,888 $253,769
======== ======== ======== ======== ========
COST OF GAS PER DEKATHERM OF GAS SOLD $3.17 $2.76 $3.29 $3.11 $2.64
SUPPLY AVAILABLE FOR DISTRIBUTION -
DEKATHERMS (in thousands):
Natural Gas Purchased 127,799 86,372 106,556 106,507 101,539
LPG 121 13 52 - 49
Transportation Gas 24,550 41,589 22,299 14,281 19,181
Natural Gas Withdrawn from (Injected
into) Storage, net (1,142) (750) (1,646) (41) (4,072)
Other Storage 16 (15) 25 33 221
Company Use (152) (118) (159) (171) (148)
-------- -------- -------- -------- --------
Total 151,192 127,091 127,127 120,609 116,770
======== ======== ======== ======== ========
UTILITY CAPITAL EXPENDITURES (in thousands) $98,258 $100,825 $105,787 $84,242 $73,776
GAS MAINS - MILES OF 3" EQUIVALENT 16,900 16,700 16,300 15,900 15,620
DEGREE DAYS - SYSTEM AVERAGE:
Actual 3,993 3,144 3,567 3,659 3,369
Normal 3,606 3,617 3,630 3,637 3,648
Percentage of Actual to Normal 111% 87% 98% 101% 92%
PROPANE OPERATIONS:
Revenues (in thousands) $44,046 $33,414 $34,972 $32,120 $29,689
Volumes Sold (gallons in millions) 49.3 38.4 41.3 37.2 34.1
Customers (at year end) 48,100 48,500 46,900 42,600 40,200
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During 1996, the Company delivered 139 million dekatherms of natural gas to its customers, of which 24.4 million dekatherms were transported for large industrial customers. This compares with 125.6 million dekatherms delivered in 1995, of which 41.5 million dekatherms were transported.
Sales to temperature-sensitive customers, whose consumption varies with the weather, were 74.4 million dekatherms in 1996, compared with 56.4 million dekatherms in 1995. Weather which was 11% colder than normal was experienced in 1996, compared with 13% warmer-than-normal weather in 1995. The Company sold or transported 64.1 million dekatherms to industrial users in 1996, compared with 67.7 million dekatherms in 1995. Industrial sales are the most price-sensitive of the Company's markets and are largely a function of the Company's ability to obtain supplies of natural gas competitively priced with other industrial fuels.
Except as set forth below, all natural gas distributed is transported to the Company by one of eight interstate pipelines, Transcontinental Gas Pipe Line Corporation (Transco), Tennessee Gas Pipeline Company (Tennessee Pipeline), Texas Eastern Transmission Corporation (Texas Eastern), Columbia Gas Transmission Company (Columbia Gas), Columbia Gulf Transmission
Corporation (Columbia Gulf), National Fuel Gas Supply Corporation (National Fuel), Texas Gas Transmission Corporation (Texas Gas) and CNG Transmission Corporation (CNG).
As of November 1, 1996, the Company has contracted to purchase the following daily pipeline firm transportation capacity in dekatherms of natural gas:
Transco (including certain upstream arrangements with
CNG, Texas Gas and National Fuel) 446,200
Tennessee Pipeline 74,100
Texas Eastern 1,700
Columbia Gas (through arrangements with Transco
and Columbia Gulf) 34,000
Columbia Gulf 5,000
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Total 561,000
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The Company has the following additional daily peaking capacity in dekatherms of natural gas through local peaking facilities, storage contracts and third party city gate arrangements to meet the firm demands of its markets. This availability varies from five days to one year.
Liquefied Natural Gas 230,000
Liquefied Petroleum Gas 8,000
Transco Storage 86,000
Columbia Gas Storage 47,000
Tennessee Pipeline Storage 55,900
CNG Storage 7,000
Third Party City Gate Arrangements 52,100
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Total 486,000
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The Company utilizes a "best cost" gas purchasing philosophy that seeks to purchase gas on a short-or long-term basis by weighing cost against supply security and reliability factors. Of the 127.8 million dekatherms of natural gas purchased in 1996, approximately 13% was purchased under short-term contracts of less than one year, 13% under contracts of from one to three years and 74% under contracts of over three years.
The Company owns or has under contract 19.8 million dekatherms of storage capacity, either in the form of underground storage or liquefied natural gas. This capability is used to supplement regular pipeline supplies on colder winter days when demand increases.
For further information on gas supply and regulation, see "Gas Supply and Rate Proceedings" included in Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this report.
Currently, approximately 31% of annual gas deliveries are made to industrial or large commercial customers who have the capability to burn a fuel other than natural gas. The alternate fuels are primarily fuel oil or propane and, to a much lesser extent, coal or wood. The ability to maintain or increase deliveries of gas to these customers depends on a number of factors, including governmental regulations, the availability of gas from suppliers and the price of gas as compared with alternate fuels.
In each of the Company's general rate proceedings, the state regulatory commission authorizes the Company to recover a margin (applicable rate less cost of gas) on each unit of gas sold. Each commission has also authorized the Company to negotiate lower rates to certain of its industrial customers when necessary to remain competitive. In North Carolina and South Carolina, the Company is permitted to recover margin losses resulting from these negotiated transactions through rates. Therefore, negotiation has resulted in reduced revenues, totaling $4.8 million in 1996, but has not reduced margin. The ability to recover such negotiated margin reductions is subject to continuing regulatory approvals. A similar recovery mechanism was permitted by the TRA in the most recent general rate case proceeding; however, previous negotiated margin losses in Tennessee have been immaterial.
Although local distribution companies, such as the Company, are generally concerned about the impact of the ability of a large commercial or industrial customer to bypass their systems, the Company does not presently view bypass from existing commercial and industrial customers as a major liquidity issue.
In the residential and small commercial markets, natural gas competes primarily with electricity for such uses as cooking and water heating and with electricity and fuel oil for space heating.
During 1996, the Company's largest customer contributed $16.6 million, or 2.2%, to total revenues.
The amount of research and development costs incurred in connection with Company-sponsored research is immaterial. The Company contributes to gas industry-sponsored research projects; however, the amounts contributed to such projects are minimal.
Compliance with federal, state and local environmental protection laws had no material effect on capital expenditures, earnings or competitive position during 1996. For further information on environmental issues, see "Environmental Matters" included in Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this report.
As of October 31, 1996, the Company had 1,973 employees, compared with 1,983 employees as of October 31, 1995.
Item 2. Properties
The Company's properties consist primarily of distribution systems and related facilities to serve its utility customers. The Company has constructed and owns approximately 493 miles of lateral pipelines up to 16 inches in diameter which connect the distribution systems of the Company with the transmission systems of its pipeline suppliers. Natural gas is distributed through approximately 16,900 miles (three-inch equivalent) of distribution mains. The lateral pipelines and distribution mains
are located on or under public streets and highways, or private property with the permission of the individual owners.
The Company either owns or leases for varying periods district and regional offices for its utility and non-utility operations.
Item 3. Legal Proceedings
There are a number of lawsuits pending against the Company for damages alleged to have been caused by negligence of employees. The Company has liability insurance which it believes is adequate to cover any material judgments which may result from these lawsuits.
Item 4. Submission of Matters to a Vote of Security Holders
None.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
(a) The Company's Common Stock is traded on the New York Stock Exchange (NYSE). The following table provides information with respect to the high and low sales prices on the NYSE (symbol PNY) for each quarterly period for the years ended October 31, 1996 and 1995.
1996 High Low 1995 High Low - ---------- ---- --- ----------- ---- --- January 31 24 7/8 21 January 31 20 1/8 18 April 30 24 1/4 20 3/4 April 30 21 3/8 18 3/4 July 31 24 1/8 20 1/2 July 31 21 3/4 19 5/8 October 31 25 3/4 23 1/8 October 31 23 19 1/2 |
(b) As of January 2, 1997, the Company's Common Stock was owned by 18,389 shareholders of record.
(c) Information with respect to quarterly dividends paid on Common Stock for the years ended October 31, 1996 and 1995, is as follows:
Dividends Paid Dividends Paid
1996 Per Share 1995 Per Share
- ----------- -------------- ---------- --------------
January 31 27.5c. January 31 26 c.
April 30 29 c. April 30 27.5c.
July 31 29 c. July 31 27.5c.
October 31 29 c. October 31 27.5c.
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The Company's articles of incorporation and note agreements under which long-term debt was issued contain provisions which restrict the amount of cash dividends that may be paid on Common Stock. As of October 31, 1996, all of the Company's retained earnings was free of such restrictions.
Item 6. Selected Financial Data
Selected financial data for the years ended October 31, 1992 through 1996, is as follows:
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(in thousands except per share amounts)
Margin $ 290,922 $257,656 $234,779 $223,872 $206,133
Operating Revenues $ 685,055 $505,223 $575,354 $552,760 $459,902
Net Income $ 48,562 $ 40,310 $ 35,506 $ 37,534 $ 35,310
Earnings per Share of Common Stock $ 1.67 $ 1.45 $ 1.35 $ 1.45 $ 1.39
Cash Dividends Declared Per Share of
Common Stock $ 1.145 $ 1.085 $ 1.025 $ .965 $ .91
Average Shares of Common Stock Outstanding 29,161 27,890 26,346 25,960 25,345
Total Assets $1,064,916 $964,895 $889,233 $797,748 $724,865
Long-Term Debt (less current maturities) $ 391,000 $361,000 $313,000 $278,000 $231,300
Rate of Return on Average Common Equity 13.11% 12.27% 12.10% 13.65% 14.02%
Long-Term Debt to Total Capitalization Ratio 50.32% 50.42% 50.89% 49.38% 46.62%
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Liquidity and Capital Resources
The Company has committed bank lines of credit totaling $57 million to finance current cash requirements. Additional uncommitted lines are also available on an as needed, if available, basis. Borrowings under the lines include bankers' acceptances, transactional borrowings and overnight cost-plus loans based on the lending bank's cost of money, with a maximum rate of the lending bank's commercial prime interest rate. The gas distribution business is highly seasonal and requires the use of short-term debt at times to meet working capital requirements and to temporarily finance construction pending the issuance of long-term debt or equity. Borrowings against the lines of credit during 1996 ranged from zero to a high of $74.5 million and interest rates ranged from a monthly average of 5.45% to 5.91% during the year. At October 31, 1996, $39 million of short-term debt was outstanding at a weighted average interest rate of 5.60%.
The Company had $401 million of long-term debt outstanding at October 31, 1996. Annual sinking fund requirements and maturities of this debt are $10 million in each of the next five years. Long-term debt retired in 1996 totaled $7 million.
On October 7, 1996, the Company sold $40 million of 7.50% Medium-Term Notes due 2026. Proceeds from the sale were used to reduce short-term debt. The notes are to be redeemed in a single payment at maturity.
At October 31, 1996, the Company's capitalization ratio consisted of 50% long-term debt and 50% common equity. The embedded cost of long-term debt at that date was 8.39%. The return on average common equity in 1996 was 13.11%.
Cash provided from operations and from financing was sufficient to fund investing activities, largely capital expenditures of $101.2 million, payments of debt principal and interest of $38.4 million and dividend payments to shareholders of $33.4 million.
The Company's capital expansion program is very important in meeting the growth in the demand for natural gas associated with the annual growth in customer base. Capital expenditures for 1996 were $98.3 million for utility operations and $2.9 million for non-utility activities. Capital expenditures totaling $104.7 million for utility operations, primarily to serve customer growth, and $3 million for non-utility activities are budgeted for 1997. Cash requirements for all activities are expected to be provided by internally generated cash, issuance of Common Stock through dividend reinvestment and stock purchase plans, short-term bank borrowings, and issuance of long-term debt and common stock if market and other conditions are favorable.
Although local gas distribution companies (LDCs), such as the Company, are generally concerned about the impact of the ability of a large commercial or industrial customer to bypass their systems, the Company does not presently view bypass from existing commercial and industrial customers as a major liquidity issue.
Gas Supply and Rate Proceedings
The majority of the natural gas distributed by the Company is transported to the Company by one of eight interstate pipelines under tariffs regulated by the Federal Energy Regulatory Commission (FERC). The Company has been operating in an unbundled environment with all of its interstate pipelines for several years under FERC Order 636 which required the interstate pipelines to price separately the gas sales, transportation and storage services provided by them and to transport gas to their customers. The Company has not experienced any major operating problems due to Order 636.
The regulations under which gas is purchased and transported are in various stages of litigation or appeal to the courts. The final resolution of these matters could affect the rates paid by the Company to these interstate pipelines for past and future purchases and transportation of gas, the amount of refunds to which the Company may be entitled with respect to past amounts paid and the terms under which the Company may purchase and transport gas in the future.
In the Company's opinion, present rules and regulations of the North Carolina Utilities Commission (NCUC), the Public Service Commission of South Carolina (PSCSC) and the Tennessee Regulatory Authority (TRA), formerly the Tennessee Public Service Commission (TPSC), permit the pass through to customers of any interstate pipeline capacity and storage service costs and any other costs that may be incurred under Order 636. Through 1996, the Company has recovered substantially all such costs through purchased gas adjustment procedures.
The majority of the Company's natural gas supply is purchased from sources in non-regulated transactions. The Company is permitted to recover 100% of its prudently incurred gas costs, subject to annual prudence reviews covering historical twelve-month periods. For the latest applicable periods, the NCUC, the PSCSC and the TRA found the Company to be prudent in its gas purchasing practices and allowed 100% recovery of its gas costs.
In May 1996, the TRA approved a performance incentive plan effective July 1, 1996. The plan provides for an overall annual cap of $1.6 million on gains or losses by the Company based on cost of gas purchased as related to benchmarks, together with income from marketing transportation and storage capacity in the secondary market. Secondary market transactions include sales for resale, off-system sales, capacity release and other interstate transactions designed to reduce fixed gas costs during off-peak periods for the benefit of customers. The benefits of the incentive plan are to eliminate the cost of annual gas prudence reviews, to reduce gas costs for Tennessee ratepayers and to provide potential earnings to shareholders by sharing in gas cost reductions.
In December 1995, the NCUC issued an order effective November 1, 1995, which required all natural gas utilities to flow through to customers 75% of the net compensation or margin received from secondary market transactions while retaining 25% of such margin. The Company had previously accounted for such transactions in accordance with a sharing mechanism, 90% to customers and 10% to the Company, pursuant to an order issued in 1994.
In April 1996, the NCUC ordered the establishment of an expansion fund for the Company as legislated by the General Assembly of North Carolina and approved initial funding to enable the extension of natural gas service into unserved areas of the state. Prior to this order, the Company had been holding certain supplier refunds attributable to North Carolina operations pending the establishment of such a fund. As ordered by the NCUC, these refunds had been invested in short-term U.S. Treasury securities. In May 1996, the Company transferred $16.4 million to the North Carolina State Treasurer for credit to the Company's expansion fund account. Such amounts along with other supplier
refunds, including interest earned to date, are included in restricted cash in the consolidated financial statements. The use of such funds will be at the discretion of the NCUC as individual project applications for unserved areas are filed by the Company and approved by the NCUC. As of October 31, 1996, no funds had been used for expansion.
In 1994, the Company filed a petition with the NCUC for a certificate of public convenience and necessity to serve four counties in North Carolina which are not presently receiving natural gas service. The Company requested permission to use the expansion fund to offset a portion of the cost of the construction in the four counties. Another company, not currently providing natural gas service in North Carolina or elsewhere, also filed an application to serve the four counties; however, this company did not request permission to use expansion funds.
In 1995, the NCUC granted a conditional certificate to the Company to serve the four-county area but prohibited the Company from utilizing available expansion funds. The Company did not accept the condition that prohibited the use of expansion funds, and the NCUC granted a conditional certificate to the competing applicant. Following further motions and responses by all parties involved, the NCUC, in January 1996, granted a final certificate to the competing applicant. The Company's appeal of that order was heard by the Supreme Court of North Carolina in November. The outcome of these proceedings cannot be determined at this time.
In November 1995, the PSCSC issued an order permitting the Company to increase its rates in South Carolina, effective November 7, 1995, by $7.8 million annually. The Consumer Advocate for the State of South Carolina has appealed that order to the Circuit Court of Richland County, South Carolina. The outcome of this appeal cannot be determined at this time.
In October 1996, the NCUC issued an order approving an uncontested stipulation in a general rate proceeding permitting the Company to increase its margin in North Carolina, effective November 1, 1996, by $8.7 million annually, including an increase in customers' rates of $3.1 million annually.
In a general rate case proceeding, the TRA permitted the Company to increase its margin in Tennessee, effective January 1, 1997, by $4.4 million annually.
Impact of Inflation
Inflation impacts the Company primarily in the prices it pays for labor, materials and services. Since the Company can adjust its rates to recover these costs only through the regulatory process, increased costs can have a significant impact
on the results of operations. Under present regulatory commission orders, the Company passes on to its customers substantially all changes in the cost of gas through purchased gas adjustment procedures.
Results of Operations
Net income for 1996 was $48.6 million, compared with $40.3 million in 1995 and $35.5 million in 1994. The increase in net income in 1996, compared with 1995, was primarily due to regulatory rate changes which increased rates and updated gas cost components, increased delivered volumes to customers due to customer growth and 11% colder-than-normal weather, secondary market transactions and increased earnings from propane operations, partially offset by increases in operations and maintenance expenses, depreciation, general taxes and utility interest charges. The increase in net income in 1995, compared with 1994, was primarily due to regulatory rate changes which increased rates and updated gas cost components, partially offset by increases in operations and maintenance expenses, general taxes and utility interest charges. Compared with the prior year, weather in the Company's service area was 27% colder in 1996, and 12% and 3% warmer in 1995 and 1994, respectively. Volumes of gas delivered to customers increased to 139 million dekatherms in 1996, compared with 125.6 million dekatherms in 1995, an increase of 10.7%, and 126.1 million dekatherms in 1994.
Operating revenues were $685.1 million in 1996, $505.2 million in 1995 and $575.4 million in 1994. The increase in operating revenues in 1996 over 1995 was primarily due to higher rates billed from increased commodity costs of natural gas, increased delivered volumes, particularly increased sales to weather-sensitive residential and commercial customers, the shift from transportation to sales of gas, secondary market sales and an increase in the average number of customers billed. The decrease in 1995 from 1994 was primarily due to the shift from sales of gas to transportation on which there is no commodity cost included in revenues and to a net decrease in rates charged to customers. Even though general rate increases were in effect in two states for 1995, such increases were offset by decreases in the gas cost components. The weather normalization adjustment mechanism (WNA) in effect in all three states is designed to offset the impact that unusually cold or warm weather has on customer billings and margin. Weather 11% colder than normal was experienced in 1996, compared with 13% and 2% warmer-than-normal weather in 1995 and 1994, respectively.
In each of the Company's general rate proceedings, the state regulatory commission authorizes the Company to recover a margin (applicable rate less cost of gas) on each unit of gas sold. Each commission has also authorized the Company to negotiate lower rates to certain of its industrial customers when necessary to remain competitive. In North Carolina and South Carolina, the
Company is permitted to recover margin losses resulting from these negotiated transactions through rates. Therefore, negotiation has resulted in reduced revenues, totaling $4.8 million in 1996, but has not reduced margin. The ability to recover such negotiated margin reductions is subject to continuing regulatory approvals. The Company is seeking such a recovery mechanism in Tennessee; however, negotiated margin losses in Tennessee have been immaterial.
Cost of gas was $394.1 million in 1996, $247.6 million in 1995 and $340.6 million in 1994. The increase in 1996, compared with 1995, was primarily due to an increase in delivered volumes, the shift from transportation to sales as noted above, higher commodity prices from suppliers and higher pipeline demand charges, partially offset by a decrease in reservation fees. The decrease in 1995 from 1994 was primarily due to lower prices from suppliers and the shift from sales to transportation. Increases or decreases in purchased gas costs from suppliers had no significant impact on margin as substantially all changes were passed on to customers through purchased gas adjustment procedures.
Margin was $290.9 million in 1996, $257.7 million in 1995 and $234.8 million in 1994. The increases were primarily due to regulatory approved changes and rate increases, and for 1996 and 1994, greater volumes of gas sold. Such increases were partially offset by WNA credits of $11.6 million in 1996, compared with WNA surcharges of $10.4 million and $100,000 in 1995 and 1994, respectively. The margin earned per dekatherm of gas delivered increased by $.04 in 1996 over 1995 and by $.19 in 1995 over 1994.
Other operations and maintenance expenses increased from $108.2 million to $121.6 million over the three-year period 1994 to 1996. The increases were primarily due to increases in the cost of maintenance and repairs of mains, rents, advertising, payroll and employee benefits.
Depreciation expense increased from $24.6 million to $36 million over the three-year period 1994 to 1996 due to the growth in plant in service and to increases in depreciation rates for North Carolina operations effective November 1, 1994, and for South Carolina operations effective November 1, 1995.
General taxes increased from $26.6 million to $31 million over the three-year period 1994 to 1996 primarily due to increases in property taxes resulting from rate increases and additions to taxable property, gross receipts taxes on higher revenues and payroll taxes.
Other income, net of income taxes, increased from $4.2 million in 1994 to $5 million in 1996 primarily due to increases from propane operations, jobbing activities, earnings from energy
marketing services and interest earned on temporary cash investments. Such increases were partially offset by decreases in the allowance for equity funds used during construction and in earnings from merchandise operations.
Utility interest charges were $31.1 million in 1996, $29.5 million in 1995 and $24.5 million in 1994. The increases were primarily due to increases in the balances outstanding on long-term debt, higher interest rates charged on short-term debt and higher interest on refunds due customers. For 1995, the increase was also due to increases in the balances outstanding on short-term debt.
Environmental Matters
The Company has owned, leased or operated manufactured gas plant (MGP) facilities at 11 sites in its three-state service area. These sites, eight of which involve other parties who either owned the property or operated the facilities, are in various stages of analysis. The Company and other parties have been working with state environmental agencies to assess the situation and develop plans for further investigation and remediation if necessary. In addition, the Company has substantially completed evaluating and remediating underground tank storage sites.
The Company is authorized by its three state regulatory commissions to utilize deferral accounting, or the creation of a regulatory asset, for expenditures made in connection with environmental matters. Accordingly, the Company has established a liability and an associated regulatory asset of $4 million as of October 31, 1996, for estimated future environmental costs.
The estimate of the regulatory asset and liability was based on a generic MGP site study and on underground storage tank comprehensive site evaluations. Site-specific evaluations have not been performed for the MGP sites and cost-sharing arrangements with other responsible parties and possible insurance recoveries have not been finalized. Resolution of these matters and further evaluations of the sites could significantly affect recorded amounts; however, the Company believes that the ultimate resolution of these environmental matters will not have a material adverse effect on financial position or results of operations.
Accounting Pronouncements
On November 1, 1996, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (FAS 121). FAS 121 requires that regulatory assets be probable of future recovery at each balance sheet date. Adoption of FAS 121 will not have a material impact on financial
position or results of operations based on the current regulatory structure in which the Company operates.
Effective January 1, 1998, the Company will adopt SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities" (FAS 125). Adoption of FAS 125 is not expected to have a material impact on financial position or results of operations.
Other Matters
In 1995, Piedmont Interstate Pipeline Company (Piedmont Interstate), a wholly-owned subsidiary, in conjunction with an interstate pipeline, formed Pine Needle LNG Company, L.L.C. (Pine Needle), a North Carolina limited liability company, in which Piedmont Interstate is a 35% member. Pine Needle was formed to construct, own and operate a $107 million, four billion cubic feet liquified natural gas (LNG) peak-demand facility in North Carolina. The facility will provide peak demand and storage service to the Company and other customers on the interstate pipeline's system. The Company has subscribed to one-half of Pine Needle's storage capacity and vaporization capability. In November 1996, the FERC issued its final certificate to Pine Needle for the construction of these facilities. Area residents are opposing the construction and have stated the intention of requesting the federal courts to block the construction of these facilities. Pine Needle is currently concluding financing arrangements by which it will finance the construction and obtain long-term capital at the end of construction. Construction is planned to begin in early 1997 with the peaking service scheduled to be available during the winter of 1999-2000. An affiliate of the pipeline will be the operator of the facilities.
Item 8. Financial Statements and Supplementary Data
The Company's consolidated financial statements and schedules required by this Item are listed in Item 14(a)1 and 2 in Part IV of this report.
CONSOLIDATED BALANCE SHEETS
October 31, 1996 and 1995
ASSETS
1996 1995
---- ----
(in thousands)
Utility Plant:
Utility plant in service $1,141,535 $1,045,051
Less accumulated depreciation 306,419 273,350
---------- ----------
Utility plant in service, net 835,116 771,701
Construction work in progress 26,913 29,655
---------- ----------
Total utility plant, net 862,029 801,356
---------- ----------
Other Physical Property, at cost (net of
accumulated depreciation of $14,569,000 in 1996
and $12,869,000 in 1995) 27,072 26,299
---------- ----------
Current Assets:
Cash and cash equivalents 4,994 5,811
Restricted cash 20,481 17,948
Receivables (less allowance for doubtful
accounts of $1,960,000 in 1996 and
$972,000 in 1995) 32,378 21,118
Inventories:
Gas in storage 50,065 39,992
Materials, supplies and merchandise 7,451 7,463
Deferred cost of gas 6,796 3,352
Refundable income taxes 31,949 15,265
Other 3,873 6,336
---------- ----------
Total current assets 157,987 117,285
---------- ----------
Deferred Charges and Other Assets:
Unamortized debt expense (amortized
over life of related debt on a
straight-line basis) 3,033 3,071
Other 14,795 16,884
---------- ----------
Total deferred charges and other assets 17,828 19,955
---------- ----------
Total $1,064,916 $ 964,895
========== ==========
|
See notes to consolidated financial statements.
CAPITALIZATION AND LIABILITIES 1996 1995
---- ----
(in thousands)
Capitalization:
Stockholders' equity:
Cumulative preferred stock - no par
value - 175,000 shares authorized $ - $ -
Common stock - no par value - 50,000,000
shares authorized; outstanding, 29,548,868
shares in 1996 and 28,835,004 shares in 1995 246,907 230,964
Retained earnings 139,184 124,015
---------- --------
Total stockholders' equity 386,091 354,979
Long-term debt 391,000 361,000
---------- --------
Total capitalization 777,091 715,979
---------- --------
Current Liabilities:
Current maturities of long-term debt and sinking
fund requirements 10,000 7,000
Notes payable 39,000 13,500
Accounts payable 60,150 38,303
Customers' deposits 6,114 9,589
Deferred income taxes 17,727 14,166
Taxes accrued 9,940 9,008
Refunds due customers 68 22,289
Other 10,656 9,803
---------- --------
Total current liabilities 153,655 123,658
---------- --------
Deferred Credits and Other Liabilities:
Unamortized federal investment tax credits 8,939 9,497
Accumulated deferred income taxes 93,812 84,320
Other 31,419 31,441
---------- --------
Total deferred credits and other liabilities 134,170 125,258
---------- --------
Total $1,064,916 $964,895
========== ========
|
See notes to consolidated financial statements.
STATEMENTS OF CONSOLIDATED INCOME
For the Years Ended October 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
(in thousands except per share amounts)
Operating Revenues $685,055 $505,223 $575,354
Cost of Gas 394,133 247,567 340,575
-------- -------- --------
Margin 290,922 257,656 234,779
-------- -------- --------
Other Operating Expenses:
Operations 105,822 94,088 92,686
Maintenance 15,776 16,409 15,526
Depreciation 36,039 31,944 24,571
Income taxes 27,609 22,511 19,561
General taxes 31,047 27,392 26,565
-------- -------- --------
Total other operating expenses 216,293 192,344 178,909
-------- -------- --------
Operating Income 74,629 65,312 55,870
-------- -------- --------
Other Income:
Non-utility activities, net of
income taxes 4,376 3,785 3,997
Other income, net of income taxes 624 691 180
-------- -------- --------
Total other income 5,000 4,476 4,177
-------- -------- --------
Income Before Utility Interest Charges 79,629 69,788 60,047
-------- -------- --------
Utility Interest Charges:
Interest on long-term debt 30,120 26,354 23,816
Allowance for borrowed funds used
during construction (credit) (783) (1,095) (1,272)
Other interest 1,730 4,219 1,997
-------- -------- --------
Total utility interest charges 31,067 29,478 24,541
-------- -------- --------
Net Income $ 48,562 $ 40,310 $ 35,506
======== ======== ========
Average Shares of Common
Stock Outstanding 29,161 27,890 26,346
Earnings Per Share of Common Stock $ 1.67 $ 1.45 $ 1.35
|
See notes to consolidated financial statements.
STATEMENTS OF CONSOLIDATED CASH FLOWS
For the Years Ended October 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
(in thousands)
Cash Flows from Operating Activities:
Net income $48,562 $40,310 $35,506
------- ------- -------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 40,107 35,712 28,366
Deferred income taxes 13,053 15,014 (4,529)
Amortization of investment
tax credits (558) (558) (559)
Allowance for funds used during
construction (1,419) (1,690) (2,272)
Changes in assets and liabilities:
Restricted cash (2,533) (2,987) (7,973)
Receivables (11,260) 1,479 1,176
Inventories (10,061) 4,671 (4,898)
Other assets, net (15,882) (11,841) 5,015
Accounts payable 21,847 2,399 (17,387)
Refunds due customers (22,221) 165 20,247
Other liabilities, net (711) 8,211 19,711
------- ------- -------
Total adjustments 10,362 50,575 36,897
------- ------- -------
Net cash provided by operating activities 58,924 90,885 72,403
------- ------- -------
Cash Flows from Investing Activities:
Utility construction expenditures (96,759) (99,180) (103,534)
Other (2,876) (3,311) (3,867)
------- ------- -------
Net cash used in investing activities (99,635) (102,491) (107,401)
------- ------- -------
Cash Flows from Financing Activities:
Increase (Decrease) in bank loans, net 25,500 (50,000) 21,500
Proceeds from issuance of
long-term debt 40,000 55,000 40,000
Retirement of long-term debt (7,000) (5,000) (5,000)
Sale of common stock, net of expenses - 33,023 -
Issuance of common stock through
dividend reinvestment and
employee stock plans 14,787 8,435 8,462
Dividends paid (33,393) (30,564) (26,996)
------- ------- -------
Net cash provided by financing activities 39,894 10,894 37,966
------- ------- -------
Net Increase (Decrease) in Cash and
Cash Equivalents (817) (712) 2,968
Cash and Cash Equivalents at
Beginning of Year 5,811 6,523 3,555
------- ------- -------
Cash and Cash Equivalents at End of Year $ 4,994 $ 5,811 $ 6,523
======= ======= =======
Cash Paid During the Year for:
Interest $31,435 $27,310 $24,327
Income taxes $52,087 $30,087 $27,114
|
See notes to consolidated financial statements.
STATEMENTS OF CONSOLIDATED RETAINED EARNINGS
For the Years Ended October 31, 1996, 1995 and 1994
1996 1995 1994
-------- -------- --------
(in thousands)
Balance at Beginning of Year $124,015 $114,400 $105,890
Net Income 48,562 40,310 35,506
-------- -------- --------
Total 172,577 154,710 141,396
-------- -------- --------
Deduct:
Dividends declared on common
stock ($1.145 a share in 1996,
$1.085 in 1995 and $1.025 in 1994) 33,393 30,564 26,996
Capital stock expense - 131 -
-------- -------- --------
Total 33,393 30,695 26,996
-------- -------- --------
Balance at End of Year $139,184 $124,015 $114,400
======== ======== ========
|
See notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
A. Operations and Principles of Consolidation.
Piedmont Natural Gas Company, Inc. (the Company), an investor-owned
public utility, is primarily engaged in the distribution and sale of natural gas
to residential, commercial and industrial customers in the Piedmont region of
North Carolina and South Carolina and the metropolitan Nashville, Tennessee,
area. The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. Significant intercompany transactions have
been eliminated in consolidation where appropriate.
B. Utility Plant and Depreciation.
Utility plant is stated at original cost, including direct labor and
materials, allocable overheads and an allowance for borrowed and equity funds
used during construction (AFUDC). The weighted average accrual rate for AFUDC
was 9.39% for 1996, 9.47% for 1995 and 9.30% for 1994. The portion of AFUDC
attributable to equity funds is included in other income, and the portion
attributable to borrowed funds is shown as a reduction of utility interest
charges. The costs of property retired are removed from utility plant and such
costs, including removal costs net of salvage, are charged to accumulated
depreciation.
Depreciation expense is computed using the straight-line method applied to average depreciable costs. The ratio of depreciation provisions to average depreciable property balances was 3.40% for 1996, 3.29% for 1995 and 2.79% for 1994.
C. Inventories.
Inventories are maintained on the basis of the average cost charged
thereto.
D. Deferred Purchased Gas Adjustment.
Rate schedules include purchased gas adjustment provisions that permit
the recovery of purchased gas costs. Purchased gas adjustment factors are
revised periodically without formal rate proceedings to reflect changes in the
cost of purchased gas. Charges to cost of gas are based on the amount
recoverable under approved rate schedules. The net of any over- or
under-recovered amounts is included in refunds due customers.
E. Income Taxes.
Deferred income taxes are provided for differences between book and
tax income, principally attributable to accelerated tax depreciation and the
timing of the recording of revenues and cost of gas. Deferred investment tax
credits are being amortized to income over the estimated useful life of the
related property.
F. Operating Revenues.
Revenues are recognized from meters read on a monthly cycle basis
which results in unrecognized revenue from the cycle date through month end.
The cost of gas delivered to customers but not yet billed under the cycle
billing method is deferred.
G. Earnings Per Share.
Earnings per share are computed based on the weighted average number
of shares of Common Stock outstanding during each year.
H. Regulation.
Certain income, expense and capital items may be treated differently
for ratemaking purposes by the state regulatory commissions which establish
rates charged to customers.
I. Statement of Cash Flows.
For purposes of reporting cash flows, all highly liquid debt
instruments purchased with an original maturity of three months or less are
considered to be cash equivalents.
J. Segment Reporting.
The Company is principally engaged in the gas distribution industry
and has no other reportable industry segments.
K. Use of Estimates.
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
L. Reclassifications.
Certain financial statement items for 1995 and 1994 have been
reclassified to conform with the 1996 presentation.
2. Regulatory Matters
The Company's utility operations are subject to regulation by the North Carolina Utilities Commission (NCUC) and the Tennessee Regulatory Authority (TRA), formerly the Tennessee Public Service Commission (TPSC), as to the issuance of securities, and by those commissions and by the Public Service Commission of South Carolina (PSCSC) as to rates, service area, adequacy of service, safety standards, extensions and abandonment of facilities, accounting and depreciation.
The Company has been operating in an unbundled environment with all of its interstate pipelines for several years under Federal Energy Regulatory Commission (FERC) Order 636. This order required the interstate pipelines to price separately the gas sales, transportation and storage services provided by them and to transport gas to their customers. The Company has not experienced any major operating problems due to Order 636. In the Company's opinion, present rules and regulations of the NCUC, the PSCSC and the TRA permit the pass through to customers of any interstate pipeline capacity and storage service costs and any other costs that may be incurred under Order 636. Through 1996, the Company has recovered substantially all such costs through purchased gas adjustment procedures.
In April 1996, the NCUC ordered the establishment of an expansion fund for the Company as legislated by the General Assembly of North Carolina and approved initial funding to enable the extension of
natural gas service into unserved areas of the state. Prior to this order, the Company had been holding certain supplier refunds attributable to North Carolina operations pending the establishment of such a fund. As ordered by the NCUC, these refunds had been invested in short-term U.S. Treasury securities. In May 1996, the Company transferred $16,400,000 to the North Carolina State Treasurer for credit to the Company's expansion fund account. Such amounts along with other supplier refunds, including interest earned to date, are included in restricted cash. The use of such funds will be at the discretion of the NCUC as individual project applications for unserved areas are filed by the Company and approved by the NCUC. As of October 31, 1996, no funds had been used for expansion.
In 1994, the Company filed a petition with the NCUC for a certificate of public convenience and necessity to serve four counties in North Carolina which are not presently receiving natural gas service. The Company requested permission to use the expansion fund to offset a portion of the cost of the construction in the four counties. Another company, not currently providing natural gas service in North Carolina or elsewhere, also filed an application to serve the four counties; however, this company did not request permission to use expansion funds.
In 1995, the NCUC granted a conditional certificate to the Company to serve the four-county area but prohibited the Company from utilizing available expansion funds. The Company did not accept the condition that prohibited the use of expansion funds, and the NCUC granted a conditional certificate to the competing applicant. Following further motions and responses by all parties involved, the NCUC, in January 1996, granted a final certificate to the competing applicant. The Company's appeal of that order was heard by the Supreme Court of North Carolina in November. The outcome of these proceedings cannot be determined at this time.
In December 1995, the NCUC issued an order effective November 1, 1995, which required all natural gas utilities to flow through to customers 75% of the net compensation or margin received from secondary market transactions while retaining 25% of such margin. Secondary market transactions include sales for resale, off-system sales, capacity release and other interstate transactions designed to reduce fixed gas costs during off-peak periods for the benefit of customers. The Company had previously accounted for such transactions in accordance with a sharing mechanism, 90% to customers and 10% to the Company, pursuant to an order issued in 1994.
In November 1995, the PSCSC issued an order permitting the Company to increase its rates in South Carolina, effective November 7, 1995, by $7,800,000 annually. The Consumer Advocate for the State of South Carolina has appealed that order to the Circuit Court of Richland County, South Carolina. The outcome of this appeal cannot be determined at this time.
In October 1996, the NCUC issued an order approving an uncontested stipulation in a general rate proceeding permitting the Company to increase its margin in North Carolina, effective November 1, 1996, by $8,700,000 annually, including an increase in customers' rates of $3,100,000 annually.
In December 1996, the TRA issued an order in a general rate case proceeding permitting the Company to increase its margin in Tennessee, effective January 1, 1997, by $4,400,000 annually.
3. Long-Term Debt
Long-term debt at October 31, 1996 and 1995, is summarized as follows:
1996 1995
---- ----
(in thousands)
Senior Notes:
9.19%, due 2001 $ 30,000 $ 30,000
10.02%, due 2003 28,000 32,000
10.06%, due 2004 16,000 17,000
10.11%, due 2004 32,000 34,000
9.44%, due 2006 35,000 35,000
8.51%, due 2017 35,000 35,000
Medium-Term Notes:
6.23%, due 2003 45,000 45,000
6.87%, due 2023 45,000 45,000
8.45%, due 2024 40,000 40,000
7.40%, due 2025 55,000 55,000
7.50%, due 2026 40,000 -
-------- --------
Total 401,000 368,000
Less current maturities 10,000 7,000
-------- --------
Total $391,000 $361,000
======== ========
|
Annual sinking fund requirements and maturities through 2001 are $10,000,000 in each year.
On October 7, 1996, the Company sold $40,000,000 of 7.50% Medium-Term Notes due 2026. Proceeds from the sale were used to reduce short-term debt. The notes are to be redeemed in a single payment at maturity.
The Company's articles of incorporation and note agreements under which long-term debt was issued contain provisions which restrict the amount of cash dividends that may be paid on Common Stock. At October 31, 1996, all of the Company's retained earnings was free of such restrictions.
4. Capital Stock
The changes in Common Stock for the years ended October 31, 1994, 1995 and 1996, are summarized as follows:
Shares Amount
-------- ----------
(in thousands)
Balance, October 31, 1993 26,152,354 $179,130
Issue to Participants in the Employee
Stock Purchase Plan (SPP) 28,630 524
Issue to Dividend Reinvestment and
Stock Purchase Plan (DRIP) 395,559 7,938
---------- --------
Balance, October 31, 1994 26,576,543 187,592
Issue to SPP 29,133 523
Issue to DRIP 409,860 7,912
Public Offering 1,725,000 33,154
Issue to Participants in the
Long-Term Incentive Plan (LTIP) 94,468 1,783
---------- --------
Balance, October 31, 1995 28,835,004 230,964
Issue to SPP 27,713 577
Issue to DRIP 635,046 14,210
Issue to LTIP 51,105 1,156
---------- --------
Balance, October 31, 1996 29,548,868 $246,907
========== ========
|
At October 31, 1996, 3,015,948 shares of Common Stock were reserved for issuance as follows:
SPP 270,576
DRIP 1,640,395
LTIP 1,104,977
---------
Total 3,015,948
=========
|
5. Financial Instruments and Related Fair Value
The Company has committed bank lines of credit totaling $57,000,000 to finance current cash requirements. Additional uncommitted lines are also available on an as needed, if available, basis. Borrowings under the lines, with maturity dates of less than 90 days, include bankers' acceptances, transactional borrowings and overnight cost-plus loans based on the lending bank's cost of money, with a maximum rate of the lending bank's commercial prime interest rate. At October 31, 1996, the lines of credit were on either a fee basis or compensating balance basis, with average annual balance requirements of $600,000.
At October 31, 1996, outstanding notes payable consisted of $35,000,000 in bankers' acceptances and $4,000,000 in overnight cost-plus loans. The weighted average interest rate on such borrowings was 5.60%.
The Company's principal business activity is the sale and transportation of natural gas to customers located in North Carolina, South Carolina and Tennessee. At October 31, 1996, gas receivables totaled $23,907,000 and other receivables totaled $10,431,000. The uncollected balance of installment receivables transferred with
recourse was $26,584,000 and $27,147,000 at October 31, 1996 and 1995, respectively. The Company has provided an adequate allowance for any receivables which may not be ultimately collected, including the receivables transferred with recourse.
Effective January 1, 1998, the Company will adopt SFAS No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities." The Company does not expect the adoption of FAS 125 to have a material effect on financial position or results of operations.
The following estimated fair values of financial instruments have been determined using available market information and commonly accepted valuation methodologies. Judgment is necessary in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair values. The estimated fair values of the Company's financial instruments at October 31, 1996 and 1995, are as follows:
1996 1995
----------------- -------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- ----- -------- -------
(in thousands)
Cash and cash
equivalents (1) $ 4,994 $ 4,994 $ 5,811 $ 5,811
Restricted cash (1) 20,481 20,481 17,948 17,948
Receivables (1) 32,378 32,378 21,118 21,118
Long-term debt (2) 401,000 442,116 368,000 426,529
Notes payable (1) 39,000 39,000 13,500 13,500
Accounts payable (1) 60,150 60,150 38,303 38,303
|
(1) The carrying amount in the consolidated balance sheets approximates fair value because of the short maturity of these instruments.
(2) The fair value is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.
6. Employee Benefit Plans
The Company has a defined-benefit pension plan for the benefit of substantially all full-time regular employees. Plan benefits are generally based on credited years of service and the level of compensation during the five consecutive years of the last ten years prior to retirement during which the participant received his or her highest compensation. It is the Company's policy to fund the plan in an amount not in excess of the amount that is deductible for income tax purposes under applicable
federal regulations. Plan assets consist primarily of marketable securities with a minor investment in commercial real estate and cash equivalents.
The plan is amended from time to time in accordance with changes in tax law. The unrecognized prior service costs, if any, resulting from amendments are amortized over the average remaining service life of active employees.
A reconciliation of the funded status of the plan to the amounts recognized in the consolidated financial statements at October 31, 1996 and 1995, is presented below:
1996 1995
---- ----
(in thousands)
Actuarial present value of benefit obligations:
Vested benefit obligation $ 66,537 $ 64,217
========= =========
Accumulated benefit obligation $ 73,818 $ 70,840
========= =========
Projected benefit obligation for service
rendered to date $(106,962) $(103,867)
Plan assets at fair value 117,646 104,520
--------- ---------
Plan assets in excess of projected
benefit obligation 10,684 653
Unrecognized net gain from past experience
different from that assumed and effects
of changes in assumptions (23,238) (10,157)
Unrecognized prior service cost 4,222 4,639
Unrecognized net obligation at transition 105 120
--------- ---------
Accrued pension cost $ (8,227) $ (4,745)
========= =========
|
Net periodic pension cost, excluding trustee fees and other expenses, for the years ended October 31, 1996, 1995 and 1994, includes the following components:
1996 1995 1994
---- ---- ----
(in thousands)
Service cost $ 5,215 $ 4,212 $ 4,475
Interest cost 6,891 6,704 6,359
Return on plan assets (17,127) (19,009) (161)
Net asset gain (loss) deferred 7,766 10,544 (7,105)
Other 432 358 432
-------- -------- -------
Net periodic pension cost $ 3,177 $ 2,809 $ 4,000
======== ======== =======
Actuarial assumptions used were:
Weighted average discount rate 7.0% 6.75% 7.75%
Rate of increase in future compensation
levels 5.0% 5.0% 5.5%
Expected long-term rate of return 9.5% 9.5% 8.5%
|
The Company provides certain postretirement health care and life insurance benefits to substantially all full-time regular employees. As of October 31, 1996, the liability associated with such benefits was funded in irrevocable trust funds which can only be used to pay the benefits.
A reconciliation of the funded status of the plan to the amounts recognized in the consolidated financial statements at October 31, 1996 and 1995, is presented below:
1996 1995
---- ----
(in thousands)
Accumulated postretirement benefit obligation:
Retirees $(11,129) $ (9,043)
Fully eligible active plan participants (5,442) (6,094)
Other active plan participants (2,847) (4,271)
-------- --------
Total (19,418) (19,408)
Plan assets at fair value 3,137 2,763
-------- --------
Accumulated postretirement benefit obligation
in excess of plan assets (16,281) (16,645)
Unrecognized net gain from past experience
different from that assumed and from changes
in assumptions 852 809
Unrecognized transition obligation 15,808 16,738
-------- --------
Prepaid postretirement benefit cost $ 379 $ 902
======== ========
|
Net periodic postretirement benefit cost for the years ended October 31, 1996, 1995 and 1994, includes the following components:
1996 1995 1994
---- ---- ----
(in thousands)
Service cost $ 657 $ 578 $ 600
Interest Cost 1,342 1,405 1,335
Return on plan assets (289) (226) -
Amortization of transition obligation 930 930 975
Other - (24) -
------ ------ ------
Net periodic postretirement benefit cost $2,640 $2,663 $2,910
====== ====== ======
Actuarial assumptions used were:
Weighted average discount rate 7.25% 7.25% 8.0%
Weighted average rate of return
on plan assets 9.5% 8.0% 8.5%
Average assumed annual rate of salary increase
for the applicable life insurance plans 5.0% 5.0% 5.5%
|
The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation for the medical plans is 8.75% for 1997, declining gradually to 4.5% in 2005 and remaining at that level thereafter. The health care cost trend rate assumption has a significant effect on the amounts reported. A one-percentage point increase in this rate would increase the accumulated postretirement
benefit obligation at October 31, 1996, by $1,125,000 and the aggregate of the service and interest cost components of net periodic postretirement benefit cost by $85,000.
The Company maintains salary investment plans which are profit sharing plans under Section 401(a) of the Internal Revenue Code of 1986, as amended (the Tax Code), which include qualified cash or deferred arrangements under Tax Code Section 401(k). Employees who have completed six months of service are eligible to participate. Participants are permitted to defer a portion of their base salary to the plans, with the Company matching a portion of the participants' contributions. All contributions vest immediately. For the years ended October 31, 1996, 1995 and 1994, the Company contributed $2,173,000, $1,932,000 and $1,824,000, respectively, to the plans.
7. Income Taxes
The components of income tax expense for the years ended October 31, 1996, 1995 and 1994, are as follows:
1996 1995 1994
---- ---- ----
Federal State Federal State Federal State
------- ----- ------- ----- ------- -----
(in thousands)
Income taxes charged
to operations:
Current $11,966 $3,215 $ 6,809 $1,886 $14,224 $ 3,213
Deferred 11,224 1,762 12,176 2,198 2,334 349
Amortization of
investment tax
credits (558) - (558) - (559) -
------- ------ ------- ------ ------- -------
Total 22,632 4,977 18,427 4,084 15,999 3,562
------- ------ ------- ------ ------- -------
Income taxes charged
to other income:
Current 2,683 568 1,937 353 1,765 446
Deferred 52 16 485 155 (524) 159
------- ------ ------- ------ ------- -------
Total 2,735 584 2,422 508 1,241 605
------- ------ ------- ------ ------- -------
Total income tax
expense $25,367 $5,561 $20,849 $4,592 $17,240 $ 4,167
======= ====== ======= ====== ======= =======
|
A reconciliation of income tax expense at the federal statutory rate to recorded income tax expense for the years ended October 31, 1996, 1995 and 1994, is as follows:
1996 1995 1994
---- ---- ----
(in thousands)
Federal taxes at 35% $27,822 $23,013 $19,920
State income taxes, net of
federal benefit 3,614 2,987 2,709
Amortization of investment tax credits (558) (558) (559)
Implementation of SFAS No. 109 for
non-regulated subsidiaries - - (723)
Other, net 50 (1) 60
------- ------- -------
Total income tax expense $30,928 $25,441 $21,407
======= ======= =======
|
At October 31, 1996 and 1995, deferred income taxes consisted of the following temporary differences:
1996 1995
---- ----
(in thousands)
Excess of tax over book depreciation and tax and
book asset basis differences $101,797 $93,820
Revenues and cost of gas 21,609 14,498
Long-term incentive plan (3,176) (2,962)
Regulatory asset related to SFAS No. 109 tax gross-up (4,608) (4,861)
Pension expense (3,388) (1,875)
Alternative minimum tax (558) (2,469)
Other, net (137) 2,335
-------- -------
Net deferred income taxes $111,539 $98,486
======== =======
|
Total deferred income tax liabilities were $130,536,000 and $116,022,000 and total deferred income tax assets were $18,997,000 and $17,536,000 at October 31, 1996 and 1995, respectively.
8. Subsidiary and Non-Utility Activities
Piedmont Energy Company is a 51% member of Resource Energy Services Company, L.L.C. (Resource Energy), a North Carolina limited liability company. Resource Energy offers natural gas acquisition, transportation and storage services to industrial users and other utilities in the southeast, mid-Atlantic and midwest regions of the United States. If such customers are on the Company's distribution system, revenues for transporting this gas are included in utility operating revenues. In March 1996, Resource Energy acquired 100% of the stock of Boyd Rosene and Associates, Inc., a Tulsa-based natural gas aggregator, marketing and consulting company whose principal activities are focused in the mid-continent region of the United States.
Piedmont Intrastate Pipeline Company is a 36% member of Cardinal Pipeline Company, L.L.C. (Cardinal), a North Carolina limited liability company. Cardinal, which was formed in cooperation with another North Carolina utility and which began operations in 1995, owns and operates a natural gas pipeline from a connection with an interstate pipeline to facilities owned by the Company and facilities owned by the other utility company. In December 1995, the two members of Cardinal, the interstate pipeline and another North Carolina utility formed a new limited liability company, Cardinal Extension Company, LLC, to purchase and extend the existing pipeline. The project is subject to regulatory approvals and will be project financed on a non-recourse basis with estimated costs of $97,000,000. It is anticipated that Piedmont Intrastate's ownership in the new limited liability company will be 17% and will not require any capital contributions beyond the current investment in Cardinal. Because the investment in Cardinal is treated as utility assets for ratemaking purposes, the Company includes its share of the assets and operations of Cardinal in utility operations.
Piedmont Interstate Pipeline Company is a 35% member of Pine Needle LNG Company, L.L.C. (Pine Needle), a North Carolina limited liability company. Pine Needle was formed in 1995 to construct, own and operate a liquified natural gas (LNG) peak-
demand facility in North Carolina. The facility, estimated to cost $107,000,000, will be located near an interstate pipeline and will have storage capacity of four billion cubic feet with vaporization capability of 400 million cubic feet per day. The Company has subscribed to one-half of this capacity. In November 1996, the FERC issued its final certificate to Pine Needle for the construction of these facilities. Area residents are opposing the construction and have stated the intention of requesting the federal courts to block the construction of these facilities. Pine Needle is currently concluding financing arrangements by which it will finance the construction and obtain long-term capital at the end of construction. Construction is planned to begin in early 1997 with the peaking service scheduled to be available during the winter of 1999-2000. An affiliate of the pipeline will be the operator of the facilities.
Piedmont Propane Company, through various operating divisions, markets propane and propane appliances to residential, commercial and industrial customers within and adjacent to the Company's three-state natural gas service area.
Operating revenues shown in the consolidated financial statements represent revenues from utility operations only. Non-utility revenues as a percentage of total revenues, including utility operations, were 7% in 1996 and 8% in 1995 and 1994. No single non-utility activity accounted for greater than 6% of total revenues in any year. Income from non-utility activities as a percentage of total net income was 9% in 1996 and 1995 and 12% in 1994. No single non-utility activity accounted for more than 8% of net income in any year.
9. Environmental Matters
The Company has owned, leased or operated manufactured gas plant (MGP) facilities at 11 sites in its three-state service area. These sites, eight of which involve other parties who either owned the property or operated the facilities, are in various stages of analysis. The Company and other parties have been working with state environmental agencies to assess the situation and develop plans for further investigation and remediation if necessary. In addition, the Company has substantially completed evaluating and remediating underground tank storage sites.
The Company is authorized by its three state regulatory commissions to utilize deferral accounting, or the creation of a regulatory asset, for expenditures made in connection with environmental matters. Accordingly, the Company has established a liability and an associated regulatory asset of $4,000,000 as of October 31, 1996, for estimated future environmental costs. In addition, as of October 31, 1996, the Company had deferred environmental costs for actual expenditures, primarily legal costs and preliminary engineering assessments, in the amount of $184,000, net of recoveries from customers.
The estimate of the regulatory asset and liability was based on a generic MGP site study and on underground storage tank comprehensive site evaluations. Site-specific evaluations have not been performed for the MGP sites and cost-sharing arrangements with other responsible parties and possible insurance recoveries have not been finalized. Resolution of these matters and further evaluations of the sites could significantly affect recorded amounts; however, the Company believes that the ultimate resolution of these environmental matters will not have a material adverse effect on financial position or results of operations.
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The management of the Company is responsible for the preparation and integrity of the accompanying consolidated financial statements and related notes. The statements were prepared in conformity with generally accepted accounting principles appropriate in the circumstances and include amounts which are necessarily based on management's best estimates and judgments made with due consideration to materiality. Financial information presented elsewhere in this report is consistent with that in the financial statements.
Management has established and is responsible for maintaining a comprehensive system of internal accounting controls which it believes provides reasonable assurance that Company policies and procedures are complied with, assets are safeguarded and transactions are executed according to management's authorization. This system is continually reviewed for effectiveness and modified in response to changing business conditions and operations and as a result of recommendations by the external and internal auditors.
The Audit Committee of the Board of Directors, consisting solely of outside Directors, meets periodically with Deloitte & Touche LLP, the internal auditors and representatives of management to discuss auditing and financial reporting matters. The Audit Committee reviews audit plans and results and the Company's accounting, financial reporting and internal control practices, procedures and results. Both Deloitte & Touche LLP and the internal auditors have full and free access to all levels of management.
INDEPENDENT AUDITORS' REPORT
Piedmont Natural Gas Company, Inc.
We have audited the accompanying consolidated balance sheets of Piedmont Natural Gas Company, Inc. and subsidiaries (the Company) as of October 31, 1996 and 1995, and the related statements of consolidated income, retained earnings and cash flows for each of the three years in the period ended October 31, 1996. Our audits also included the supplemental consolidated financial statement schedule listed in Item 14. These financial statements and consolidated financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and consolidated financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 31, 1996 and 1995, and the results of its operations and its cash flows for each of the three years in the period ended October 31, 1996 in conformity with generally accepted accounting principles. Also, in our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/s/ DELOITTE & TOUCHE LLP Charlotte, North Carolina December 20, 1996 |
QUARTERLY FINANCIAL DATA
Quarterly financial data for the years ended October 31, 1996 and 1995, is summarized as follows:
Earnings
Operating Operating Net Per Share of
Revenues Margin Income Income Common Stock
- ----------------------------------------------------------------------------
(in thousands except per share amounts)
1996
- ----
January 31 $239,160 $106,453 $38,904 $34,098 $1.18
April 30 $259,472 $105,395 $37,887 $32,451 $1.12
July 31 $ 95,744 $ 40,186 $ 79 $(8,326) $(.28)
October 31 $ 90,679 $ 38,888 $(2,241) $(9,661) $(.33)
1995
- ----
January 31 $202,476 $ 97,769 $35,370 $30,233 $1.13
April 30 $179,391 $ 87,840 $30,280 $24,026 $ .87
July 31 $ 61,649 $ 35,202 $ (703) $(8,825) $(.31)
October 31 $ 61,707 $ 36,845 $ 365 $(5,124) $(.18)
|
The pattern of quarterly earnings is the result of the highly seasonal nature of the business as variations in weather conditions generally result in greater earnings during the winter months. Earnings per share are calculated based on the weighted average number of shares outstanding during the quarter. The annual amount may differ from the total of the quarterly amounts due to changes in the number of shares outstanding during the year.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information required under this item with respect to directors is contained in the Company's proxy statement filed with the Securities and Exchange Commission (SEC) on or about January 23, 1997, and is incorporated herein by reference.
The names, ages and positions of all of the executive officers of the Company as of October 31, 1996, are listed below along with their business experience during the past five years.
So far as practicable, all elected officers are elected at the first meeting of the Board of Directors held following the annual meeting of shareholders in each year and hold office until the meeting of the Board following the annual meeting of shareholders in the next subsequent year and until their respective successors are elected and qualify. All other officers hold office during the pleasure of the Board. There are no family relationships among these officers. There are no arrangements or understandings between any officer and any other person pursuant to which the officer was selected except for employment agreements with Messrs. Denny, Dzuricky, Killough, Maxheim, Schiefer and Skains.
Business Experience
Name, Age and Position During Past Five Years
- ---------------------- ----------------------
John H. Maxheim, 62 Elected in 1984.
Chairman of the Board, President
and Chief Executive Officer
Ware F. Schiefer, 58 Elected February 1995.
Executive Vice President Prior to his election, he
was Senior Vice
President-Marketing and
Gas Supply.
David J. Dzuricky, 45 Elected in June 1995.
Senior Vice President-Finance From 1993 until his
election, he was Vice
President and Treasurer
of Consolidated Natural
Gas Company, Pittsburgh,
Pennsylvania. From 1992
to 1993, he was Vice
President and Treasurer
of Virginia Natural Gas
Company, Norfolk,
Virginia.
|
Ray B. Killough, 48 Elected in 1993. Prior
Senior Vice President-Operations to his election, he was
Vice President-
Engineering.
Thomas E. Skains, 40 Elected in February 1995,
Senior Vice President-Gas Supply effective April 1995.
and Services Prior to his election, he
was Senior Vice
President, Transportation
and Customer Services,
for Transcontinental Gas
Pipe Line Corporation,
Houston, Texas.
Ted C. Coble, 53 Elected in 1982.
Vice President and Treasurer, and
Assistant Secretary
Stephen D. Conner, 48 Elected in 1990.
Vice President-Corporate
Communications
J. William Denny, 61 Elected in 1985.
Vice President-Nashville Division
Charles W. Fleenor, 46 Elected in 1987.
Vice President-Gas Services
Paul C. Gibson, 57 Elected in 1986.
Vice President-Rates
Barry L. Guy, 52 Elected in 1986.
Vice President and Controller
Donald F. Harrow, 41 Elected in 1992. Prior
Vice President-Governmental Relations to his election, he was
Director-Governmental
Relations.
Dale C. Hewitt, 51 Elected in 1993. Prior
Vice President-North Carolina to his election, he was
Operations District Manager of the
Company's Greensboro, North
Carolina, operations.
William L. Lindner, 65* Elected in 1973.
Vice President-Technology
|
Kevin M. O'Hara, 38 Elected in 1993. Prior to
Vice President-Corporate Planning his election, he was
Director-Information
Services Plans and
Controls.
William R. Pritchard, Jr., 53 Elected in 1986.
Vice President-Information
Services
Ralph P. Stewart, 56** Elected in 1986.
Vice President-Employee Relations
Bartlett C. Winkler, 60 Elected in 1980.
Vice President-Marketing
William D. Workman, III, 56 Elected in December 1993,
Vice President-South Carolina effective January 1994.
Operations Prior to his election, he was
Senior Director for Facilities and
Civic Affairs for Fluor Daniel, Inc.,
Greenville, South Carolina.
|
* Retired November 4, 1996. ** Retired December 1, 1996.
Item 11. Executive Compensation
Information required under this item is contained in the Company's proxy statement filed with the SEC on or about January 23, 1997, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
Information with respect to security ownership of certain beneficial owners is contained in the Company's proxy statement filed with the SEC on or about January 23, 1997, and is incorporated herein by reference.
(b) Security Ownership of Management
Information with respect to security ownership of directors and officers is contained in the Company's proxy statement filed with the SEC on or about January 23, 1997, and is incorporated herein by reference.
(c) Changes in Control
The Company knows of no arrangements or pledges which may result in a change in control.
Item 13. Certain Relationships and Related Transactions
Information with respect to certain transactions with directors is contained in the Company's proxy statement filed with the SEC on or about January 23, 1997, and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. FINANCIAL STATEMENTS
The following consolidated financial statements of the Company and its subsidiaries and the related independent auditors' report for the year ended October 31, 1996, are included in Item 8 of this report as follows:
Page
----
Consolidated Balance Sheets - October 31, 1996 and 1995 16
Statements of Consolidated Income - Years Ended
October 31, 1996, 1995 and 1994 18
Statements of Consolidated Cash Flows - Years Ended
October 31, 1996, 1995 and 1994 19
Statements of Consolidated Retained Earnings - Years
Ended October 31, 1996, 1995 and 1994 20
Notes to Consolidated Financial Statements 21
Management's Responsibility for Financial Reporting 32
Independent Auditors' Report 33
(a) 2. SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENT SCHEDULE
Page
----
II Valuation and Qualifying Accounts 47
|
Schedules other than those listed above and certain other information are omitted for the reason that they are not required or are not applicable, or the required information is shown in the financial statements or notes thereto.
(a) 3. EXHIBITS
Where an exhibit is filed by incorporation by reference to a previously filed registration statement or report, such registration statement or report is identified in parentheses. Upon written request of a shareholder, the Company will provide a copy of the exhibit at a nominal charge.
3.1 Copy of Articles of Incorporation of the Company, filed in the Department of State of the State of North Carolina on December 13, 1993 (Exhibit No. 2, Registration Statement on Form 8-B, dated March 2, 1994).
3.2 Copy of By-Laws of the Company as amended (Exhibit No.
2, Registration Statement on Form 8-B, dated March 2,
1994).
4.1 Copy of Note Agreement, dated as of August 30, 1988, between the Company and Jefferson-Pilot Life Insurance Company, et al (Exhibit 4.26, Form 10-K for the fiscal year ended October 31, 1988).
4.2 Copy of Note Agreement, dated as of June 15, 1989, between the Company and The Mutual Life Insurance Company of New York (Exhibit 4.27, Form 10-K for the fiscal year ended October 31, 1989).
4.3 Copy of Note Agreement, dated as of August 31, 1989, between the Company and Teachers Insurance and Annuity Association of America (Exhibit 4.28, Form 10-K for the fiscal year ended October 31, 1989).
4.4 Copy of Note Agreement, dated as of July 30, 1991, between the Company and The Prudential Insurance Company of America (Exhibit 4.29, Form 10-K for the fiscal year ended October 31, 1991).
4.5 Copy of Note Agreement, dated as of September 21, 1992, between the Company and Provident Life and Accident Insurance Company (Exhibit 4.30, Form 10-K for the fiscal year ended October 31, 1992).
4.6 Copy of Indenture, dated as of April 1, 1993, between the Company and Citibank, N.A., Trustee (Exhibit 4.1, Registration Statement No. 33-60108).
4.7 Copy of Medium-Term Note, Series A, dated as of July 23, 1993 (Exhibit 4.7, Form 10-K for the fiscal year ended October 31, 1993).
4.8 Copy of Medium-Term Note, Series A, dated as of October 6, 1993 (Exhibit 4.8, Form 10-K for the fiscal year ended October 31, 1993).
4.9 Copy of Medium-Term Note, Series A, dated as of September 19, 1994 (Exhibit 4.9, Form 10-K for the fiscal year ended October 31, 1994).
4.10 Copy of Pricing Supplement of Medium-Term Notes, Series B, dated October 3, 1995 (Exhibit 4.10, Form 10-K for the fiscal year ended October 31, 1995).
4.11 Copy of Pricing Supplement of Medium-Term Notes, Series B, dated October 4, 1996.
10.1 Copy of Employment Agreement between Tennessee Natural
Resources, Inc., and J. William Denny, dated April 27,
1984 (Exhibit 10.17, Registration Statement No. 33-
4767).
10.2 Copy of the Company's Executive Long-Term Incentive Plan,
as amended through December 2, 1994 (Exhibit 10.3, Form
10-K for the fiscal year ended October 31, 1994).
10.3 Copy of Employment Agreement between the Company and John
H. Maxheim, dated February 26, 1993 (Exhibit 10.4, Form
10-K for the fiscal year ended October 31, 1993).
10.4 Copy of Articles of Organization of Cardinal Pipeline
Company, L.L.C., dated April 5, 1994 (Exhibit 10.1, Form
10-Q for the quarterly period ended April 30, 1994).
10.5 Copy of Operating Agreement of Cardinal Pipeline Company,
L.L.C., dated March 23, 1994 (Exhibit 10.2, Form 10-Q for
the quarterly period ended April 30, 1994).
10.6 Copy of Construction, Operating and Management Agreement
by and between Public Service Company of North Carolina,
Inc. and Cardinal Pipeline Company, L.L.C., dated March
23, 1994 (Exhibit 10.3, Form 10-Q for the quarterly
period ended April 30, 1994).
10.7 Copy of Service Agreement under Rate Schedule LG-A,
dated January 15, 1971, between the Company and
Transcontinental Gas Pipe Line Corporation (Exhibit 67,
Registration Statement No. 2-59631).
10.8 Copy of Service Agreement (5,900 Mcf per day) (Contract
No. 4995), dated August 1, 1991, between the Company and
Transcontinental Gas Pipe Line Corporation (Exhibit
10.20, Form 10-K for the fiscal year ended October 31,
1991).
10.9 Copy of Service Agreement under Rate Schedule WSS (69,701
dekatherms per day) (Contract No. 26419-001), dated
August 1, 1991, between the Company and Transcontinental
Gas Pipe Line Corporation (Exhibit 10.10, Form 10-K for
the fiscal year ended October 31, 1995).
10.10 Copy of Service Agreement FT-Incremental Mainline (6,222
Mcf per day) (Contract No. 2268), dated August 1, 1991,
between the Company and Transcontinental Gas Pipe Line
Corporation (Exhibit 10.16, Form 10-K for the fiscal year
ended October 31, 1992).
|
10.11 Copy of Service Agreement (FT, 205,200 Mcf per day)
(Contract No. 3702), dated February 1, 1992, between the
Company and Transcontinental Gas Pipe Line Corporation
(Exhibit 10.20, Form 10-K for the fiscal year ended
October 31, 1992).
10.12 Copy of Service Agreement (Contract #800059) (SCT, 1,677
Dt/day), dated June 1, 1993, between the Company and
Texas Eastern Transmission Corporation (Exhibit 10.28,
Form 10-K for the fiscal year ended October 31, 1993).
10.13 Copy of Gas Transportation Agreement for Use Under FT-A
Rate Schedule (Contract No. 237) (FTA, 130,000 Dt/day),
dated September 1, 1993, between the Company and
Tennessee Gas Pipeline Company (Exhibit 10.30, Form 10-K
for the fiscal year ended October 31, 1993).
10.14 Copy of Gas Storage Contract for Use Under Rate Schedule
FS (Contract No. 2400) (672,091 Dt total capacity), dated
September 1, 1993, between the Company and Tennessee Gas
Pipeline Company (Exhibit 10.31, Form 10-K for the fiscal
year ended October 31, 1993).
10.15 Copy of Service Agreement under Rate Schedule GSS, dated
October 1, 1993, between the Company and Transcontinental
Gas Pipe Line Corporation (Exhibit 10.22, Form 10-K for
the fiscal year ended October 31, 1995).
10.16 Copy of FTS Service Agreement (23,000 Dt/day), dated
November 1, 1993, between the Company and Columbia Gas
Transmission Corporation (Exhibit 10.24, Form 10-K for
the fiscal year ended October 31, 1994).
10.17 Copy of Service Agreement under Rate Schedule FSS
(2,263,920 Dt total capacity) (Contract No. 38015), dated
November 1, 1993, between the Company and Columbia Gas
Transmission Corporation (Exhibit 10.25, Form 10-K for
the fiscal year ended October 31, 1994).
10.18 Copy of Service Agreement under Rate Schedule SST
(Winter: 10,000 Dt/day; Summer: 5,000 Dt/day) (Contract
No. 38052), dated November 1, 1993, between the Company
and Columbia Gas Transmission Corporation (Exhibit
10.26, Form 10-K for the fiscal year ended October 31,
1994).
10.19 Copy of FSS Service Agreement (10,000 dekatherms per day
daily storage quantity) (Contract No. 38017), dated
November 1, 1993, between the Company and Columbia Gas
Transmission Corporation (Exhibit 10.26, Form 10-K for
the fiscal year ended October 31, 1995).
|
10.20 Copy of SST Service Agreement (37,000 dekatherms per day)
(Contract No. 38054), dated November 1, 1993, between the
Company and Columbia Gas Transmission Corporation
(Exhibit 10.27, Form 10-K for the fiscal year ended
October 31, 1995).
10.21 Copy of Service Agreement (20,504 Mcf per day), dated
June 6, 1994, between the Company and Transcontinental
Gas Pipe Line Corporation (Exhibit 10.29, Form 10-K for
the fiscal year ended October 31, 1995).
10.22 Copy of FTS-1 Service Agreement (5,000 dekatherms per
day) (Contract No. 43462), dated September 14, 1994,
between the Company and Columbia Gulf Transmission
Company (Exhibit 10.30, Form 10-K for the fiscal year
ended October 31, 1995).
10.23 Copy of FTS 1 Service Agreement (23,455 Dt per
day)(Contract No. 43461), dated September 14, 1994,
between the Company and Columbia Gulf Transmission
Company.
10.24 Copy of Letter of Agreement of Amendment No. 1 to Gas
Storage Service Agreement (50,798 Mcf maximum storage
withdrawal per day) (Contract No. 6815), dated July 1,
1995, between the Company and Tennessee Gas
Pipeline Company.
10.25 Copy of Letter of Agreement of Amendment No. 1 to Gas
Storage Service Agreement (6,190 Mcf maximum storage
withdrawal per day) (Contract No. 2400), dated July 1,
1995, between the Company and Tennessee Gas
Pipeline Company.
10.26 Copy of Firm Transportation Agreement (FT/NT), dated
September 22, 1995, between the Company and Texas Gas
Transmission Corporation.
10.27 Copy of Service Agreement Applicable to Transportation of
Natural Gas Under Rate Schedule FT (X-74 Assignment)
(12,875 Dt per day), dated October 18, 1995, between the
Company and CNG Transmission Corporation.
10.28 Copy of FT Service Agreement #01632 (24,995 Dt per day,
NIPPS), dated October 18, 1995, between the Company and
National Fuel Gas Supply Corporation.
10.29 Copy of Service Agreement (Southern Expansion, FT 53,000
Mcf per day peak winter months, 47,700 Mcf per day
shoulder winter months) (Contract No. 0.4189), dated
November 1, 1995, between the Company and
Transcontinental Gas Pipe Line Corporation.
|
10.30 Copy of Service Agreement (24,140 Mcf per day) (Contract
No. 1.1996 NIPPS), dated November 1, 1995, between the
Company and Transcontinental Gas Pipe Line Corporation.
10.31 Copy of Service Agreement (12,785 Mcf per day) (Contract
No. 1.1994, FT/NT), dated November 1, 1995, between the
Company and Transcontinental Gas Pipe Line Corporation.
10.32 Copy of Rate Schedule GSS Service Agreement, dated May
15, 1996, between the Company and CNG Transmission
Corporation.
10.33 Copy of Employment Agreement between the Company and
David J. Dzuricky, dated May 31, 1996.
10.34 Copy of Employment Agreement between the Company and
Ray B. Killough, dated May 31, 1996.
10.35 Copy of Employment Agreement between the Company and
Ware F. Schiefer, dated May 31, 1996.
10.36 Copy of Employment Agreement between the Company and
Thomas E. Skains, dated May 31, 1996.
10.37 Copy of Service Agreement (SE95/96), dated June 25,
1996, between the Company and Transcontinental Gas Pipe
Line Corporation.
12 Computation of Ratio of Earnings to Fixed Charges.
23 Independent Auditors' Consent.
27 Financial Data Schedule (for Securities and Exchange
Commission use only).
99 Annual Report on Form 11-K.
|
(b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PIEDMONT NATURAL GAS COMPANY, INC.
(Registrant)
Date January 24, 1997 By: /s/ John H. Maxheim
---------------- --------------------------------
John H. Maxheim
Chairman of the Board, President
and Chief Executive Officer
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ John H. Maxheim Chairman of the Board, January 24, 1997
- ----------------------------- President and Chief
John H. Maxheim Executive Officer, and
Director
/s/ David J. Dzuricky Senior Vice President- January 24, 1997
- ----------------------------- Finance
David J. Dzuricky (Principal Financial
Officer)
/s/ Barry L. Guy Vice President and January 24, 1997
- ----------------------------- Controller (Principal
Barry L. Guy Accounting Officer)
|
Signature Title Date
--------- ----- ----
/s/ Jerry W. Amos Director January 24, 1997
- -----------------------------
Jerry W. Amos
Director January 24, 1997
- -----------------------------
C. M. Butler III
/s/ Sam J. DiGiovanni Director January 24, 1997
- -----------------------------
Sam J. DiGiovanni
/s/ Muriel W. Helms Director January 24, 1997
- -----------------------------
Muriel W. Helms
/s/ John F. McNair III Director January 24, 1997
- -----------------------------
John F. McNair III
/s/ Ned R. McWherter Director January 24, 1997
- -----------------------------
Ned R. McWherter
/s/ Walter S. Montgomery, Jr. Director January 24, 1997
- -----------------------------
Walter S. Montgomery, Jr.
/s/ Donald S. Russell, Jr. Director January 24, 1997
- -----------------------------
Donald S. Russell, Jr.
Director January 24, 1997
- -----------------------------
John E. Simkins, Jr.
|
Schedule II
PIEDMONT NATURAL GAS COMPANY, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
For the Years Ended October 31, 1996, 1995 and 1994
- ------------------------------------------------------------------------------
Balance at Additions Balance
Beginning Charged to Deductions at End
Description of Period Costs and Expenses (A) of Period
- ------------------------------------------------------------------------------
(in thousands)
Allowance for doubtful accounts:
1996 $ 972 $2,846 $1,858 $1,960
1995 947 1,805 1,780 972
1994 776 2,195 2,024 947
|
(A) Uncollectible accounts written off, net of recoveries and adjustments.
Piedmont Natural Gas Company, Inc.
Form 10-K
For the Fiscal Year Ended October 31, 1996
Exhibits
4.11 Copy of Pricing Supplement of Medium-Term Notes, Series
B, dated October 4, 1996.
10.23 Copy of FTS 1 Service Agreement (23,455 Dt per day)
(Contract No. 43461), dated September 14, 1994, between
the Company and Columbia Gulf Transmission Company.
10.24 Copy of Letter of Agreement of Amendment No. 1 to Gas
Storage Service Agreement (50,798 Mcf maximum storage withdrawal
per day) (Contract No. 6815), dated July 1, 1995, between the
Company and Tennessee Gas Pipeline Company.
10.25 Copy of Letter of Agreement of Amendment No. 1 to Gas
Storage Service Agreement (6,190 Mcf maximum storage withdrawal
per day) (Contract No. 2400), dated July 1, 1995, between the
Company and Tennessee Gas Pipeline Company.
10.26 Copy of Firm Transportation Agreement (FT/NT), dated
September 22, 1995, between the Company and Texas Gas
Transmission Corporation.
10.27 Copy of Service Agreement Applicable to Transportion of Natural
Gas Under Rate Schedule FT(X-74 Assignment) (12,875 Dt per day),
dated October 18, 1995, between the Company and CNG Transmission
Corporation.
10.28 Copy of FT Service Agreement #01632 (24,995 Dt per day,
NIPPS), dated October 18, 1995, between the Company and
National Fuel Gas Supply Corporation.
10.29 Copy of Service Agreement(Southern Expansion, FT 53,000 Mcf per
day peak winter months, 47,700 Mcf per day shoulder winter
months) (Contract No. 0.4189), dated November 1, 1995, between
the Company and Transcontinental Gas Pipe Line Corporation.
10.30 Copy of Service Agreement (24,140 Mcf per day) (Contract No.
1.1996 NIPPS), dated November 1, 1995, between the Company and
Transcontinental Gas Pipe Line Corporation.
10.31 Copy of Service Agreement (12,785 Mcf per day) (Contract No.
1.1994, FT/NT), dated November 1, 1995, between the Company and
Transcontinental Gas Pipe Line Corporation.
|
Piedmont Natural Gas Company, Inc.
Form 10-K
For the Fiscal Year Ended October 31, 1996
Exhibits
10.32 Copy of Rate Schedule GSS Service Agreement, dated May 15, 1996,
between the Company and CNG Transmission Corporation.
10.33 Copy of Employment Agreement between the Company and David J.
Dzuricky, dated May 31, 1996.
10.34 Copy of Employment Agreement between the Company and Ray B.
Killough, dated May 31, 1996.
10.35 Copy of Employment Agreement between the Company and Ware F.
Schiefer, dated May 31, 1996.
10.36 Copy of Employment Agreement between the Company and Thomas E.
Skains, dated May 31, 1996.
10.37 Copy of Service Agreement (SE95/96), dated June 25, 1996, between
the Company and Transcontinental Gas Pipe Line Corporation.
12 Computation of Ratio of Earnings to Fixed Charges.
23 Independent Auditors' Consent.
27 Financial Data Schedule (for Securities and Exchange use only).
99 Annual Report on Form 11-K.
|
EXHIBIT 4.11
Rule 424(b)(3)
File Nos.33-60108 and 33-59369
PRICING SUPPLEMENT NO. 2 TO REGISTRATION STATEMENT NO. 33-59369
AND PRICING SUPPLEMENT NO. 5 TO REGISTRATION STATEMENT NO. 33-60108
Dated October 4, 1996
(Prospectus dated August 9, 1995, as supplemented
by the Prospectus Supplement dated September 20, 1995)
$150,000,000 Piedmont Natural Gas Company, Inc.
Medium-Term Notes, Series B Due Nine Months or More from Date of Issue
Principal Amount: $40,000,000 |_| Floating Rate Notes |X| Book Entry Notes
Issue Price: 100% |X| Fixed Rate Notes |_| Certificated Notes
Original Issue Date: October 9, 1996 Maturity Date: October 9, 2026
Original Issue Discount Notes: |_| Yes Total Amount of OID:
|X| No
Yield to Maturity:
Initial Accrual Period:
Interest Payments Dates: January 1 and Record Dates: December 16 and June 15
July 1 of each year and at maturity next preceding the Interest Payment Dates
|X| The Notes cannot be redeemed prior to maturity. |X| The Notes cannot be repaid
prior to maturity.
|_| The Notes may be redeemed prior to maturity. |_| The Notes may be repaid prior
to maturity at the option of
the holders thereof.
|
Optional Optional
Redemption Redemption Repayment Repayment
Date(s) Percentage(s) Date(s) Percentage(s)
------- ------------- ------- -------------
|
Applicable Only to Fixed Rate Notes:
Interest Rate: 7.50%
Applicable Only to Floating Notes:
Interest Rate Basis: Maximum Interest Rate:
|_| Commercial Paper Rate Minimum Interest Rate:
|_| CD Rate Spread (plus or minus):
|_| Prime Rate Spread Multiplier:
|_| Federal Funds Effective Rate Interest Reset Date(s):
|_| Treasury Rate Interest Reset Month(s):
|_| LIBOR Interest Reset Period:
Initial Interest Rate: Interest Payment Month(s):
Index Maturity: Interest Payment Period:
|
Calculation Date(s): Calculation Agent:
EXHIBIT 10.23
SERVICE AGREEMENT NO. 43461
CONTROL NO.1994-07-02-0006
FTS 1 SERVICE AGREEMENT
THIS AGREEMENT, made and entered into this 14th day of September, 1994 by and between:
COLUMBIA GULF TRANSMISSION COMPANY
("TRANSPORTER")
AND
PIEDMONT NATURAL GAS CO
("SHIPPER")
WITNESSETH: That in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
Section 1. Service to be Rendered. Transporter shall perform and Shipper shall receive the service in accordance with the provisions of the effective FTS 1 Rate Schedule and applicable General Terms and Conditions of Transporter's FERC Gas Traiff, First Revised Volume No.1 (Tariff), on file with the Federal Energy Regulatory Commission (Commission), as the same may be amended or superseded in accordance with the rules and regulations of the Commission herein contained. The maximum obligations of Transporter to deliver gas hereunder to or for Shipper, the designation of the points of delivery at which Transporter shall deliver or cause gas to be delivered to or for Shipper, and the points of receipt at which the Shipper shall deliver or cause gas to be delivered, are specified in Appendix A, as the same may be amended from time to time by agreement between Shipper and Transporter, or in accordance with the rules and regulations of the Commission. Service hereunder shall be provided subject to the provisions of Part 284.222 of Subpart G of the Commission's regulations. Shipper warrants that service hereunder is being provided on behalf of AN lNTERSTATE PIPELINE COMPANY, COLUMBIA GAS TRANSMISSION CORPORATION.
Section 2. Term. Service under this Agreement shall commence as of NOVEMBER 01, 1994, and shall continue in full force and effect until OCTOBER 31, 2011, and from YEAR-to-YEAR thereafter unless terminated by either party upon 6 MONTHS' written notice to the other prior to the end of the initial term granted or any anniversary date thereafter. Shipper and Transporter agree to avail themselves of the Commission's pre-granted abandonment authority upon termination of this Agreement, subject to any right of first refusal Shipper may have under the Commission's regulations and the Transporter's Tariff.
Section 3. Rates. Shipper shall pay the charges and furnish Retainage as described in the above-referenced Rate Schedule, unless otherwise agreed to by the parties in writing and specified as an amendment to this Service Agreement.
Section 4. Notices. Notices to Transporter under this Agreement shall be addressed to it at Post Office Box 683, Houston, Texas 77001. Attention: Director, Planning, Transportation and Exchange and notices to Shipper shall be addressed to it at
PIEDMONT NATURAL GAS CO
P 0 BOX 33068
CHARLOTTE, NC 28233
ATTN: CHUCK FLEENOR
SERVICE AGREEMENT NO. 43461
CONTROL NO. 1994-07-02-0006
FTS 1 SERVICE AGREEMENT
until changed by either party by written notice.
Section 5. Superseded Agreements. This Service Agreement supersedes and cancels, as of the effective date hereof, the following Service Agreements: FTS1 37929
PIEDMONT NATURAL GAS CO
By: /s/ C. W. Fleenor
----------------------
Name: C.W. Fleenor
Title: Vice President
Date: September 19, 1994
|
COLUMBIA GULF TRANSMISSION COMPANY
By: /s/ S. M. Warnick
---------------------
Name: S. M. Warnick
Title: Vice President
Date: 9-19-94
|
Revision No.
Control No. 1994--07--02-0006
Appendix A to Service Agreement No. 43461
Under Rate Schedule FTS1
Between (Transporter) COLUMBIA GULF TRANSMISSION COMPANY
and (Shipper) PIEDMONT NATURAL GAS CO
Transportation Demand 23,455 Dth/day
F
o
o Primary Receipt Points
t
n
o
Measuring t Measuring Maximum Daily
Point No. e Point Name Quantity (Dth/Day)
--------- - ---------- ------------------
2700010 01 CGT-RAYNE 23,455
|
Revision No
|
Control No. 1994-07-02-0006
Appendix A to Service Agreement No. 43461
Under Rate Schedule FTS1
Between (Transporter) COLUMBIA GULF TRANSMISSION COMPANY
and (Shipper) PIEDMONT NATURAL GAS CO
Primary Delivery Points
Measuring Footnote Measuring Maximum Daily Point No. Point Name Quantity (Dth/Day) - ------------------------------------------------------------------------------- 801 01 TCO-LEACH 23,455 |
Revision No.
Control No. 1994-07-0008
Appendix A to Service Agreement No. 43461
Under Rate Schedule FTS1
Between(Seller)COLUMBIA GULF TRANSMISSION COMPANY
and(Buyer) PIEDMONT NATURAL GAS CO
FN01/ THE TRANSPORTATION DEMAND AND THE FIRM CAPACITY RIGHTS WILL
FLUCTUATE SEASONALLY FOR THIS MEASURING POINT. DURING THE WINTER
SEASON (11-01 THROUGH 03-31) THE TRANSPORTATION DEMAND RIGHTS WILL
BE 23,455 DTH/D AND DURING THE SUMMER SEASON (04-01 THROUGH
10-31) THE TRANSPORTATION DEMAND WILL BE 21,583 DTH/D.
|
Revision No.
Control No. 1994-07-02-0006
|
Appendix A to Service Agreement No. 43461
Under Rate Schedule FTS1
Between (Transporter) COLUMBIA GULF TRANSMISSION COMPANY
and (Shipper) PIEDMONT NATURAL GAS CO
The Master List of Interconnects (MLI) as defined in Section 1 of the General Terms and Conditions is incorporated herein by reference for purposes of listing valid secondary interruptible receipt points and delivery points.
CANCELLATION OF PREVIOUS APPENDIX A
Service changes pursuant to this Appendix A shall become effective as of NOVEMBER 01, 1994. This Appendix A shall cancel and supersede the previous Appendix A effective as of N/A, to the Service Agreement referenced above. With the exception of this Appendix A, all other terms and conditions of said Service Agreement shall remain in full force and effect.
PIEDMONT NATURAL GAS CO
By: /s/ C. W. Fleenor
----------------------------
Name: C.W. Fleenor
Title: Vice President
Date: September 19, 1994
|
COLUMBIA GULF TRANSMISSION COMPANY
By: /s/ S. M. Warnick
----------------------------
Name: S. M. Warnick
Title: Vice President
Date: 9-19-94
|
Tennessee Gas Pipeline EXHIBIT 10.24
Tenneco Energy
1010 Milam Street
PO Box 2511
Houston, Texas 77252 2511
Tel 713 757 2131
June 25, 1996
C.W. FLEENOR
PIEDMONT NATURAL GAS COMPANY INC
1915 REXFORD ROAD
CHARLOTTE, NC 28211
RE: Amendment No. 1 to
Gas Storage Service Agreement
Dated May 1, 1994
Service Package No. 6815
Dear CHUCK:
TENNESSEE GAS PIPELINE COMPANY and PIEDMONT NATURAL GAS COMPANY INC (PIEDMONT) agree to amend the Agreement effective July 1, 1995, to change the Maximum Storage Quantity and Injection/Deliverability Rights as reflected in the Attached Revised Exhibit A.
Except as amended herein, all terms and provisions of the Agreement shall remain in full force and effect as written.
If the foregoing is in accordance with your understanding of the Agreement, please so indicate by signing and returning to my attention both originals of this letter. Upon Tennessee's execution, an original will be forwarded to you for your files.
Should you have any questions, please do not hesitate to contact me at
(713) 757-2576.
Best regards,
TENNESSEE GAS PIPELINE COMPANY
/s/ Richard Denney ------------------------------------- RICHARD DENNEY CENTRAL ACCOUNTS |
PIEDMONT NATURAL GAS COMPANY INC
June 25, 1996
Contract number: 6815
Amendment number: 1
Amendment effective date: July 1, 1995
ACCEPTED AND AGREED TO This 19 Day of July, 1996
TENNESSEE GAS PIPELINE COMPANY
By: /s/ J. P. Dickerson
--------------------------------------
Title: Agent and Attorney in Fact
|
ACCEPTED AND AGREED TO
This 30 Day of July, 1996
PIEDMONT NATURAL GAS COMPANY INC
By: /s/ Thomas E. Skains
---------------------------------------
Title: Senior Vice President Gas and Services
|
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A"
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED May 1, 1994
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
PIEDMONT NATURAL GAS COMPANY INC
PIEDMONT NATURAL GAS COMPANY INC
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 6815
SERVICE PACKAGE MSQ: 2,901,943
WITHDRAWAL QUANTITY: 50,798
INJECTION QUANTITY: 19,347
SERVICE POINT: Compressor Station 087 - PORTLAND Storage
METER METER NAME COUNTY ST ZONE 1/W LEG TOTAL-TQ BILLABLE-TQ
- -----------------------------------------------------------------------------------------------------------------------------------
060020 TGP - PORTLAND STORAGE INJECTION SUMNER TN 01 1 100 19,347 19,347
Total Injection TQ: 19,347 19,347
070020 TGP - PORTLAND STORAGE WITHDRAWAL SUMNER TN O1 W 100 50,798 50,798
Total Withdrawal TQ: 50,798 50,798
|
NUMBER OF INJECTION POINTS: 2
NUMBER OF WITHDRAWAL POINTS: 2
NOTE: EXHIBIT "A" REFLECTION OF THE CONTRACT AND ALL AMENDMENTS AS OF THE AMENDMENT EFFECTIVE DATE.
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A-1"
SHOWING REQUESTED CHANGES
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED May 1, 1994
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
PIEDMONT NATURAL GAS COMPANY INC
PIEDMONT NATURAL GAS COMPANY INC
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 6815
SERVICE PACKAGE MSQ: 0
WITHDRAWAL QTY: 970
INJECTION QTY: 0
SERVICE POINT: Compressor Station 087 - PORTLAND Storage
METER METER NAME COUNTY ST ZONE 1/W LEG TOTAL-TQ BILLABLE-TQ
- -----------------------------------------------------------------------------------------------------------------------------------
Total Injection TQ: 0 0
070020 TGP - PORTLAND STORAGE WITHDRAWAL SUMNER TN 01 W 100 970 970
Total Withdrawal TQ: 970 970
NUMBER OF INJECTION POINTS AFFECTED: 1
NUMBER OF WITHDRAWAL POINTS AFFECTED: 2
|
Tennessee Gas Pipeline EXHIBIT 10.25
Tenneco Energy
1010 Milam Street
PO Box 2511
Houston, Texas 77252 2511
Tel 713 757 2131
June 25, 1996
C.W. FLEENOR
PIEDMONT NATURAL GAS COMPANY INC
1915 REXFORD ROAD
CHARLOTTE, NC 28211
RE: Amendment No. 1 to
Gas Storage Service Agreement
Dated September 1, 1993
Service Package No. 2400
Dear CHUCK:
TENNESSEE GAS PIPELINE COMPANY and PIEDMONT NATURAL GAS COMPANY INC (PIEDMONT) agree to amend the Agreement effective July 1, 1995, to change the Maximum Storage Quantity and Injection/Deliverability Rights as reflected in the Attached Revised Exhibit A.
Except as amended herein, all terms and provisions of the Agreement shall remain in full force and effect as written.
If the foregoing is in accordance with your understanding of the Agreement, please so indicate by signing and returning to my attention both originals of this letter. Upon Tennessee's execution, an original will be forwarded to you for your files.
Should you have any questions, please do not hesitate to contact me at (713)757-2576.
Best regards,
TENNESSEE GAS PIPELINE COMPANY
/s/ Richard Denney ----------------------------------- RICHARD DENNEY CENTRAL ACCOUNTS |
PIEDMONT NATURAL GAS COMPANY INC
June 25, 1996
Contract number: 2400
Amendment number: 1
Amendment effective date: July 1, 1995
ACCEPTED AND AGREED TO
This 19 Day of July, 1996
TENNESSEE GAS PIPELINE COMPANY
By: /s/ J. P. Dickerson
-----------------------------------
Title: Agent and Attorney in Fact
|
ACCEPTED AND AGREED TO This 30 Day of July, 1996
PIEDMONT NATURAL GAS COMPANY INC
By: /s/ Thomas E. Skains
-----------------------------------
Title: Senior Vice President Gas Supply and Services
|
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A"
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED September 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
PIEDMONT NATURAL GAS COMPANY INC
PIEDMONT NATURAL GAS COMPANY INC
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 2400
SERVICE PACKAGE MSQ: 672,091
WITHDRAWAL QUANTITY: 6,190
INJECTION QUANTITY: 4,480
SERVICE POINT: Compressor Station 087 PORTLAND Storage
METER METER NAME COUNTY ST ZONE 1/W LEG TOTAL-TQ BILLABLE-TQ
- ---------------------------------------------------------------------------------------------------------------------------------
060020 TGP-PORTLAND STORAGE INJECTION SUMNER TN 01 I 100 4,480 4,480
Total Injection TQ: 4,480 4,480
070020 TGP PORTLAND STORAGE WITHDRAWAL SUMNER TN 01 W 100 6,190 6,190
Total Injection TQ: 6,190 6,190
NUMBER OF INJECTION POINTS: 2
NUMBER OF WITHDRAWAL POINTS: 2
|
NOTE: EXHIBIT "A" IS A REFLECTION OF THE CONTRACT AND ALL AMENDMENTS AS OF THE AMENDMENT EFFECTIVE DATE.
GAS STORAGE SERVICE AGREEMENT
EXHIBIT "A-1"
SHOWING REQUESTED CHANGES
AMENDMENT #1 TO GAS STORAGE SERVICE AGREEMENT
DATED September 1, 1993
BETWEEN
TENNESSEE GAS PIPELINE COMPANY
AND
PIEDMONT NATURAL GAS COMPANY INC
PIEDMONT NATURAL GAS COMPANY INC
EFFECTIVE DATE OF AMENDMENT: July 1, 1995
RATE SCHEDULE: FS
SERVICE PACKAGE: 2400
SERVICE PACKAGE MSQ: 0
WITHDRAWAL QTY: 118
INJECTION QTY: 0
SERVICE POINT: Compressor Station 087 - PORTLAND Storage
METER METER NAME COUNTY ST ZONE 1/W LEG TOTAL-TQ BILLABLE-TQ
- ----------------------------------------------------------------------------------------------------------------------------------
Total Injection TQ: 0 0
070020 TGP-PORTLAND STORAGE WITHDRAWAL SUMNER TN 01 W 100 118 118
Total Withdrawal TQ: 118 118
NUMBER OF INJECTION POINTS AFFECTED: 1
NUMBER OF WITHDRAWAL POINTS AFFECTED: 2
|
EXHIBIT 10.26
FIRM TRANSPORTATION AGREEMENT
THIS AGREEMENT, made and entered into this 22nd day of September, 1995, by and between Texas Gas Transmission Corporation, a Delaware corporation, hereinafter referred to as "Texas Gas," and Piedmont Natural Gas Company, a North Carolina corporation, hereinafter referred to as "Customer,"
WITNESSETH:
WHEREAS, Customer has natural gas which it desires Texas Gas to move through its existing facilities; and
WHEREAS, Texas Gas has the ability in its pipeline system to move natural gas for the account of Customer and
WHEREAS, Customer desires that Texas Gas transport such natural gas for the account of Customer and
WHEREAS, Customer and Texas Gas are of the opinion that the transaction referred to above falls within the provisions of Section 284.223 of Subpart G of Part 284 of the Federal Energy Regulatory Commission's (Commission) regulations and the blanket certificate issued to Texas Gas in Docket No. CP88- 686-000, and can be accomplished without the prior approval of the Commission;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto covenant and agree as follows;
ARTICLE I
Definitions
1.1 Definition of Terms of the General Terms and Conditions of Texas Gas's FERC Gas Tariff on file with the Commission is hereby incorporated by reference and made a part of this Agreement.
ARTICLE II
Transportation Service
2.1 Subject to the terms and provisions of this Agreement, Customer agrees to deliver or cause to be delivered to Texas Gas, at the Point(s) of Receipt in Exhibit "A" hereunder, Gas for Transportation, and Texas Gas agrees to receive, transport, and redeliver, at the Point(s) of Delivery in Exhibit "B" hereunder, Equivalent Quantities of Gas to Customer or for the account of Customer, in accordance with Section 3 of Texas Gas's effective FT Rate Schedule and the terms and conditions contained herein, up to 13,482 MMBtu per day, which shall be Customer's Firm Transportation Contract Demand, and up to 2,035,782 MMBtu during the winter season, and up to 2,885,148 MMBtu during the summer season, which shall be Customer's Seasonal Quantity Levels.
2.2 Customer shall reimburse Texas Gas for the Quantity of Gas required for fuel, company use, and unaccounted for associated with the transportation service hereunder in accordance with Section 16 of the General Terms and Conditions of Texas Gas's FERC Gas Tariff. The applicable fuel retention percentage(s) is shown on Exhibit "A". Texas Gas may adjust the fuel retention percentage as operating circumstances warrant; however, such change shall not be retroactive. Texas Gas agrees to give Customer thirty (30) days written notice before changing such percentage.
2.3 Texas Gas, at its sole option, may, if tendered by Customer, transport daily quantities in excess of the Transportation Contract Demand.
2.4 In order to protect its system, the delivery of gas to its customers and/or the safety of its operations, Texas Gas shall have the right to vent excess natural gas delivered to Texas Gas by Customer or Customer's supplier(s) in that part of its system utilized to transport gas received hereunder. Prior to venting excess gas, Texas Gas will use its best efforts to contact Customer or Customer's supplier(s) in an attempt to correct such excess deliveries to Texas Gas. Texas Gas may vent such excess gas solely within its reasonable judgment and discretion without liability to Customer, and a pro rata share of any gas so vented shall be allocated to Customer. Customer's pro rata share shall be determined by a fraction, the numerator of which shall be the quantity of gas delivered to Texas Gas at the Point of Receipt by Customer or Customer's supplier(s) in excess of Customer's confirmed nomination and the denominator of which shall be the total quantity of gas in excess of total confirmed nominations flowing in that part of Texas Gas's system utilized to transport gas, multiplied by the total quantity of gas vented or lost hereunder.
2.5 Any gas imbalance between receipts and deliveries of gas, less fuel and PVR
adjustments, if applicable, shall be cleared each month in accordance with
Section 17 of the General Terms and Conditions in Texas Gas's FERC Gas Tariff.
Any imbalance remaining at the termination of this Agreement shall also be
cashed-out as provided herein.
ARTICLE III
Scheduling
3.1 Customer shall be obligated five (5) working days prior to the end of each month to furnish Texas Gas with a schedule of the estimated daily quantity(ies) of gas it desires to be received, transported, and redelivered for the following month. Such schedules will show the quantity(ies) of gas Texas Gas will receive from Customer at the Point(s) of Receipt, along with the identity of the supplier(s) that is delivering or causing to be delivered to Texas Gas quantities for Customer's account at each Point of Receipt for which a nomination has been made.
3.2 Customer shall give Texas Gas, after the first of the month, at least twenty-four (24) hours notice prior to the commencement of any day in which Customer desires to change the quantity(ies) of gas it has scheduled to be delivered to Texas Gas at the Point(s) of Receipt. Texas Gas agrees to waive this 24-hour prior notice and implement nomination changes requested by Customer to commence in such lesser time frame subject to Texas Gas's being able to confirm and verify such nomination change at both Receipt and Delivery Points, and receive PDAs reflecting this nomination change at both Receipt and Delivery Points. Texas Gas will use its best efforts to make the nomination change effective at the time requested by Customer; however, if Texas Gas is unable to do so, the nomination change will be implemented as soon as confirmation is received.
ARTICLE IV
Points of Receipt, Delivery, and Supply Lateral Allocation
4.1 Customer shall deliver or cause to be delivered natural gas to Texas Gas at the Point(s) of Receipt specified in Exhibit "A" attached hereto and Texas Gas shall redeliver gas to Customer or for the account of Customer at the Point(s) of Delivery specified in Exhibit "B" attached hereto in accordance with Sections 7 and 15 of the General Terms and Conditions of Texas Gas's FERC Gas Tariff.
4.2 Customer's preferential capacity rights on each of Texas Gas's supply laterals shall be as set forth in Exhibit "C" attached hereto, in accordance with Section 34 of the General Terms and Conditions of Texas Gas's FERC Gas Tariff.
ARTICLE V
Term of Agreement
5.1 This Agreement shall become effective the later of November 1, 1995 or the date on which any and all authorizations are received by Texas Gas, CNG, and Transco to effectuate the transportation contemplated hereby (including downstream transportation). This Agreement shall have a primary term beginning on such date (with the rates and charges described in ARTICLE VIII becoming effective on that date) and extending for a period of eleven years from that date, or through October 31, 2006; with extensions of one year at the end of the primary term and each additional term thereafter unless written notice is given at least one year prior to the end of such term by either party.
ARTICLE VI
Point(s) of Measurement
6.1 The gas shall be delivered by Customer to Texas Gas and redelivered by Texas Gas to Customer at the Point(s) of Receipt and Delivery hereunder.
6.2 The gas shall be measured or caused to be measured by Customer and/or Texas Gas at the Point(s) of Measurement which shall be as specified in Exhibits "A", "A-I", and "B" herein. In the event of a line loss or leak between the Point of Measurement and the Point of Receipt, the loss shall be determined in accordance with the methods described contained in Section 3, "Measuring and Measuring Equipment," contained in the General Terms and Conditions of First Revised Volume No. 1 of Texas Gas's FERC Gas Tariff.
ARTICLE VII
Facilities
7.1 Texas Gas and Customer agree that any facilities required at the Point(s) of Receipt, Point(s) of Delivery, and Point(s) of Measurement shall be installed, owned, and operated as specified in Exhibits "A", "A-I", and "B" herein. Customer may be required to pay or cause Texas Gas to be paid for the installed cost of any new facilities required as contained in Sections 1.3, 1.4, and 1.5 of Texas Gas's FT Rate Schedule. Customer shall only be responsible for the installed cost of any new facilities described in this Section if agreed to in writing between Texas Gas and Customer.
ARTICLE VIII
Rates and Charges
8.1 Each month, Customer shall pay Texas Gas for the service hereunder an amount determined in accordance with Section 5 of Texas Gas's FT Rate Schedule contained in Texas Gas's FERC Gas Tariff, which Rate Schedule is by reference made a part of this Agreement. The maximum rates for such service consist of a monthly reservation charge multiplied by Customer's firm transportation demand as specified in Section 2.1 herein. The reservation charge shall be billed as of the effective date of this Agreement. In addition to the monthly reservation charge, Customer agrees to pay Texas Gas each month the maximum commodity charge up to Customer's Transportation Contract Demand. For any quantities delivered by Texas Gas in excess of Customer's Transportation Contract Demand,
Customer agrees to pay the maximum FT overrun commodity charge.
In addition, Customer agrees to pay:
(a) Texas Gas's Fuel Retention percentage(s).
(b) The currently effective GRI funding unit, if applicable, the currently effective FERC Annual Charge Adjustment unit charge (ACA), the currently effective Take-or-Pay surcharge, or any other then currently effective surcharges, including but not limited to Order 636 Transition Costs.
If Texas Gas declares force majeure which renders it unable to perform service herein, then Customer shall be relieved of its obligation to pay demand charges for that part of its FT Contract Demand affected by such force majeure event until the force majeure event is remedied.
Unless otherwise agreed to in writing by Texas Gas and Customer, Texas Gas may, from time to time, and at any time selectively after negotiation, adjust the rate(s) applicable to any individual Customer; provided, however, that such adjusted rate(s) shall not exceed the applicable Maximum Rate(s) nor shall they be less than the Minimum Rate(s) set forth in the currently effective Sheet No.10 of this Tariff. If Texas Gas so adjusts any rates to any Customer, Texas Gas shall file with the Commission any and all required reports respecting such adjusted rate.
8.2 In the event Customer utilizes a Secondary Point(s) of Receipt or Delivery for transportation service herein, Customer will continue to pay the monthly reservation charges as described in Section 8.1 above. In addition, Customer will pay the maximum commodity charge applicable to the zone in which gas is received and redelivered up to Customer's Transportation Contract Demand and the maximum overrun commodity charge for any quantities delivered by Texas Gas in excess of Customer's winter season or summer season Transportation Contract Demand. Customer also agrees to pay the ACA, Take-or-Pay Surcharge, GRI charges, fuel retention charge, and any other effective surcharges, if applicable, as described in Section 8.1 above.
8.3 It is further agreed that Texas Gas may seek authorization from the Commission and/or other appropriate body for such changes to any rate(s) and terms set forth herein or in Rate Schedule FT, as may be found necessary to assure Texas Gas just and reasonable rates. Nothing herein contained shall be construed to deny Customer any rights it may have under the Natural Gas Act, as amended, including the right to participate fully in rate proceedings by intervention or otherwise to contest increased rates in whole or in part.
8.4 Customer agrees to fully reimburse Texas Gas for all filing fees, if any, associated with the service contemplated herein which Texas Gas is required to pay to the Commission or any agency having or assuming jurisdiction of the transactions contemplated herein.
8.5 Customer agrees to execute or cause its supplier or processor to execute a separate agreement with Texas Gas providing for the transportation of any liquids and/or liquefiables, and agrees to pay or reimburse Texas Gas, or cause Texas Gas to be paid or reimbursed, for any applicable rates or charges associated with the transportation of such liquids and/or liquefiables, as specified in Section 24 of the General Terms and Conditions of Texas Gas's FERC Gas Tariff.
ARTICLE IX
Miscellaneous
9.1 Texas Gas's Transportation Service hereunder shall be subject to receipt of all requisite regulatory authorizations from the Commission, or any successor regulatory authority, and any other necessary governmental authorizations, in a manner and form acceptable to Texas Gas. The parties agree to furnish each other with any and all information necessary to comply with any laws, orders, rules, or regulations.
9.2 Except as may be otherwise provided, any notice, request, demand, statement, or bill provided for in this Agreement or any notice which a party may desire to give the other shall be in writing and mailed by regular mail, or by postpaid registered mail, effective as of the postmark date, to the post office address of the party intended to receive the same, as the case may be, or by facsimile transmission, as follows;
Texas Gas
Texas Gas Transmission Corporation
3800 Frederica Street
Post Office Box 1160
Owensboro, Kentucky 42302
Attention: Gas Revenue Accounting (Billings and Statements)
Customer Services (Other Matters)
Gas Transportation and Capacity Allocation
(Nominations)
Fax (502) 926-8686
|
Customer
Piedmont Natural Gas Company
P. O.Box 33058
1915 Rexford Road
Charlotte, North Carolina 28211
Attention: Mr. Keith Maust
The address of either party may, from time to time, be changed by a party mailing, by certified or registered mail, appropriate notice thereof to the other party. Furthermore, if applicable, certain notices shall be considered duly delivered when posted to Texas Gas's Electronic Bulletin Board, as specified in Texas Gas's tariff.
9.3 This Agreement shall be governed by the laws of the State of Kentucky.
9.4 Each party agrees to file timely all statements, notices, and petitions required under the Commission's Regulations or any other applicable rules or regulations of any governmental authority having jurisdiction hereunder and to exercise due diligence to obtain all necessary governmental approvals required for the implementation of this Transportation Agreement.
9.5 All terms and conditions of Rate Schedule FT and the attached Exhibits "A", "A-I", "B", and "C" are hereby incorporated to and made a part of this Agreement.
9.6 This contract shall be binding upon and inure to the benefit of the successors, assigns, and legal representatives of the parties hereto.
9.7 Neither party hereto shall assign this Agreement or any of its rights or obligations hereunder without the consent in writing of the other party. Notwithstanding the foregoing, either party may assign its right, title and interest in, to and by virtue of this Agreement including any and all extensions, renewals, amendments, and supplements thereto, to a trustee or trustees, individual or corporate, as security for bonds or other obligations or securities, without such trustee or trustees assuming or becoming in any respect obligated to perform any of the obligations of the assignor and, if any such trustee be a corporation, without its being required by the parties hereto to qualify to do business in the state in which the performance of this Agreement may occur, nothing contained herein shall require consent to transfer this Agreement by virtue of merger or consolidation of a party hereto or a sale of all or substantially all of the assets of a party hereto, or any other corporate reorganization of a party hereto.
9.8 This Agreement insofar as it is affected thereby, is subject to all valid rules, regulations, and orders of all governmental authorities having jurisdiction.
9.9 No waiver by either party of any one or more defaults by the other in the performance of any provisions hereunder shall operate or be construed as a waiver of any future default or defaults whether of a like or a different character.
9.10 All rights and responsibilities, excluding any imbalances and outstanding monies owed for transportation service rendered prior to the effective date of this contract, under the transportation agreement between Transporter and Transcontinental Gas Pipe Line Corporation, dated September 27, 1991, will be assigned to Customer upon execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective representatives there unto duly authorized, on the day and year first above written.
ATTEST: TEXAS GAS TRANSMISSION CORPORATION
/s/ Vivian C. Poole By: /s/ Kim R. Cocklin ---------------------- -------------------------------------- Asst. Secretary Vice President |
WITNESSES: PIEDMONT NATURAL GAS COMPANY
/s/ W.F. Schiefer By /s/ Thomas E. Skains
- ----------------------- --------------------------------------
Senior Vice President
/s/ Keith P. Maust Attest: /s/ Martin C. Ruegsegger
- ----------------------- ------------------------------
Secretary
Date of Execution by Customer:
October 11, 1995
- ------------------------------
|
Contract No. T7471
Exhibit "A"
Firm Point(s) of Receipt
Piedmont Natural Gas Company
Firm Transportation Agreement
Daily Firm
Meter Capacity
Lateral Segment Zone No. Name MMBtu
- ----------------------------------------------------------------------------------------
North Lousisiana Leg
Cathage - Haughton
1 2102 Champlin 2,134
Haughton - Sharon
1 9866 Cornerstone-Ada 3,203
Southeast Leg
Henry - Lafayette
SL 2790 Henry Hub 5,338
Mainline
Eunice - Zone SL/1 Line
SL 8147 Mamou (ref. #8046) 3,395
|
The Daily Firm Capacity at the points listed above will be increased on a pro rata basis to effectuate delivery of Customer's full Firm Transportation Contract Demand in the event Texas Gas raises its fuel retention percentage.
Effective Date 11/01/95
EXHIBIT "A-I"
CONTRACT NO. T7471
Contract Demand 13,482 MMBtu/D
EXHIBIT "B"
POINT(S) OF DELIVERY
Meter MAOP MDP*
No Name/Description Facilities (psig) (psig)
- -------------------------------------------------------------------------------------------------------------
CNG Transmission Corporation
1247 LEBANON-CONGAS -S9, T3, R4, Warren (1) 531
County, OH
|
*Minimurn Operating Pressure - 531 psig
NOTE:SEE ATTACHED STANDARD FACILITIES KEY FOR EXPLANATION OF FACILITIES. *MINIMUM DELIVERY PRESSURE
CONTRACT NO. T7471
FIRM TRANSPORTATION AGREEMENT
EXHIBIT "C"
SUPPLY LATERAL CAPACITY
PIEDMONT NATURAL GAS COMPANY
PREFERENTIAL RIGHTS
SUPPLY LATERAL MMBTU/D
Zone 1 Supply Lateral(s)
- ---------------------------------------
North Louisiana Leg: 5,337
------
Total Zone 1: 5,337
Zone SL Supply Lateral(s)
- ---------------------------------------
East Leg: 0
Southeast Leg: 5,338
South Leg: 0
Southwest Leg: 0
West Leg: 0
WC-294: 0
HIOS: 0
------
Total Zone SL: 5,338
------
Grand Total: 10,675
======
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Effective Date: 11/01/95
EXHIBIT 10.27
SERVICE AGREEMENT
APPLICABLE TO TRANSPORTATION OF NATURAL GAS
UNDER RATE SCHEDULE FT
(X-74 ASSIGNMENT)
AGREEMENT made as of this 18th of October, 1995, by and between CNG TRANSMISSION CORPORATION, a Delaware corporation, hereinafter called "Pipeline," and PIEDMONT NATURAL GAS COMPANY, INC., a North Carolina corporation, hereinafter called "Customer."
WHEREAS, Customer has elected to take assignment of a portion of the firm transportation service entitlements provided by Pipeline to Transcontinental Gas Pipeline Corporation ("Transco"), under Pipeline's Rate Schedule X-74 (Lebanon-to-Leidy Service); and
WHEREAS, Pipeline has agreed to assign such entitlements to Customer for service under part 284 of the Commission's regulations, subject to Pipeline's ability to obtain relief from its contractual obligation to serve Transco for a like quantity of firm transportation service, under Pipeline's Rate Schedule X-74.
WITNESSETH: That, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Quantities
A. During the term of this Agreement, Pipeline will transport for Customer, on a firm basis, and Customer may furnish, or cause to be furnished, to Pipeline natural gas for such transportation, and Customer will accept, or cause to be accepted, delivery from Pipeline of the quantities Customer has tendered for transportation.
B. The maximum quantities of gas which Pipeline shall deliver and which Customer may tender shall be as set forth on Exhibit A, attached hereto.
ARTICLE II
Rate
A. Unless otherwise mutually agreed in a written amendment to this Agreement, beginning on November 1,1995, Customer shall pay Pipeline for transportation services rendered pursuant to this Agreement:
1. The maximum rates and charges provided under Rate Schedule FT set forth in Pipeline's effective FERC Gas Tariff, including applicable surcharges and the Fuel Retention Percentage; and
2. All additional charges applicable to Rate Schedule X-74 Capacity and set forth on Sheet No.37 of Pipeline's effective FERC Gas Tariff.
B. Pipeline shall have the right to propose, file and make effective with the Federal Energy Regulatory Commission or any other body having jurisdiction, revisions to any applicable rate schedule, or to propose, file, and make effective superseding rate schedules for the purpose of changing the rate, charges, and other provisions thereof effective as to Customer; provided, however, that (i) Section 2 of Rate Schedule FT "Applicability and Character of Service," (ii) term, (iii) quantities, and (iv) points of receipt and points of delivery shall not be subject to unilateral change under this Article. Said rate schedule or superseding rate schedule and any revisions thereof which shall be filed and made effective shall apply to and become a part of this Service Agreement. The filing of such changes and revisions to any applicable rate schedule shall be without prejudice to the right of Customer to contest or oppose such filing and its effectiveness.
ARTICLE III
Term of Agreement
Subject to all the terms and conditions herein, this Agreement shall be effective as of the later of November 1,1995 or the date on which any and all authorizations are received by Pipeline, Transco, and Texas Gas Transmission Corporation, as may be required to effectuate the transportation contemplated hereby including the transportation services immediately upstream and downstream of Pipeline. This Agreement shall continue in effect for a primary term through and including October 31, 2006, and from year to year thereafter, until either party terminates this Agreement by giving written notice to the other at least twelve months prior to the start of the next contract year.
ARTICLE IV
Points of Receipt and Deliverv
The Points of Receipt and Delivery and the maximum quantities for each point for all gas that may be received for Customer's account for Transportation by Pipeline shall be as set forth on Exhibit A.
ARTICLE V
INCORPORATION BY REFERENCE OF TARIFF PROVISIONS
To the extent not inconsistent with the terms and conditions of this Agreement, the following provisions of Pipeline's effective FERC Gas Tariff, and any revisions thereof that may be made effective hereafter are hereby made applicable to and a part hereof by reference:
1. All of the provisions of Rate Schedule FT, or any effective superseding rate schedule or otherwise applicable rate schedule; and
2. All of the provisions of the General Terms and Conditions, as they may be revised or superseded from time to time.
ARTICLE VI
MISCELLANEOUS
A. No change, modification or alteration of this Agreement shall be or become effective until executed in writing by the parties hereto; provided, however, that the parties do not intend that this Article VI.A. requires a further written agreement either prior to the making of any request or filing permitted under Article II hereof or prior to the effectiveness of such request or filing after Commission approval, provided further, however, that nothing in this Agreement shall be deemed to prejudice any position the parties may take as to whether the request, filing or revision permitted under Article II must be made under Section 7 or Section 4 of the Natural Gas Act.
B. Any notice, request or demand provided for in this Agreement, or any notice which either party may desire to give the other, shall be in writing and sent to the following addresses:
Pipeline: CNG Transmission Corporation
445 West Main Street
Clarksburg, West Virginia 26301
Attention: Vice President, Marketing
and Customer Services
Customer: Piedmont Natural Gas Company, Inc.
P. O. Box 33068
Charlotte, North Carolina 28233
for Notices, Attention: Keith Maust, Director, Gas Supply
for Invoices, Attention: Ann Boggs, Director, Rates
|
or at such other address as either party shall designate by formal written notice.
C. No presumption shall operate in favor of or against either party hereto as a result of any responsibility either party may have had for drafting this Agreement.
D. The subject headings of the provisions of this Agreement are inserted for the purpose of convenient reference and are not intended to become a part of or to be considered in any interpretation of such provisions.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound, have caused this Agreement to be signed by their duly authorized officials as of the day and year first written above.
CNG TRANSMISSION CORPORATION (Pipeline)
By: /s/ Joseph A. Curia
---------------------------------------
Its: Vice President
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PIEDMONT NATURAL GAS COMPANY, INC.
(Customer)
By: /s/ Thomas E. Skains
---------------------------------------
Its: Senior Vice President, Gas Supply
---------------------------------------
(Title)
|
EXHIBIT A
OCTOBER _, 1995 FT SERVICE AGREEMENT (X-74 ASSIGNMENT)
BETWEEN CNG TRANSMISSION CORPORATION
AND PIEDMONT NATURAL GAS COMPANY, INC.
EXHIBIT A
TO THE FT SERVICE AGREEMENT
DATED OCTOBER ___, 1995
BETWEEN CNG TRANSMISSION CORPORATION AND
PIEDMONT NATURAL GAS COMPANY, INC.
(X-74 ASSIGNMENT)
A. QUANTITIES
The maximum quantities of gas which Pipeline shall deliver and which Customer may tender shall be as follows:
1. A Maximum Daily Transportation Quantity (MDTQ) of 12,875 Dt.
2. A Maximum Annual Transportation Quantity (MATQ) of 4,699,375 Dt.
B. POINT OF RECEIPT
The Point of Receipt and the maximum quantities for such point shall be as set forth below. Each of the parties will use due care and diligence to assure that uniform pressures will be maintained at the Receipt Point as reasonably may be required to render service hereunder, but Pipeline shall not be required to accept gas at less than the minimum pressure specified herein. In addition to the quantities specified below, Customer may increase the quantities furnished to Pipeline at the Receipt Point, so long as such quantities, when reduced by the fuel retention percentage specified in Pipeline's currently-effective FERC Gas Tariff, do not exceed the quantity limitation specified below for the Receipt Point.
1. Up to 12,875 Dt per Day at the interconnection of the facilities of Pipeline and Texas Gas Transmission Corporation in Warren County, Ohio, known as the Lebanon Interconnection, at a pressure of not less than five hundred thirty-one (531) pounds per square inch gauge ("psig").
EXHIBIT A
OCTOBER _, 1995 FT SERVICE AGREEMENT (X-74 ASSIGNMENT)
BETWEEN CNG TRANSMISSION CORPORATION
AND PIEDMONT NATURAL GAS COMPANY, INC.
C POINT OF DELIVERY
The Maximum Daily Delivery Obligation ("MDDO") stated below reflects Pipeline's total obligation to deliver quantities to the Point of Delivery under all firm service agreements between Pipeline and Customer, Customer's assignee, any applicable Replacement Customer, or any other Customer. Each of the parties will use due care and diligence to assure that uniform pressures will be maintained at the Delivery Point as reasonably may be required to render service hereunder, but Pipeline shall not be required to deliver gas (or to cause gas to be delivered) at greater than the maximum pressure specified herein. The Point of Delivery and the MDDO shall be as follows:
1. Up to 12,875 Dt per Day at the interconnection of the facilities of Pipeline and Transcontinental Gas Pipe Line Corporation, or other pipeline(s) in Clinton County, Pennsylvania, known as the Leidy Interconnection, at a pressure of not greater than one thousand, two hundred (1,200) psig.
EXHIBIT 10.28
SERVICE AGREEMENT #01632
(FT Service)
AGREEMENT made this 18th day of October, 1995, by and between NATIONAL FUEL GAS SUPPLY CORPORATION, a Pennsylvania corporation, hereinafter called "Transporter" and PIEDMONT NATURAL GAS COMPANY, hereinafter called "Shipper."
WHEREAS, Shipper has requested that Transporter transport natural gas; and
WHEREAS, Transporter has agreed to provide such transportation for Shipper subject to the terms and conditions hereof.
WITNESSETH: That, in consideration of the mutual covenants herein contained, the parties hereto agree that Transporter will transport for Shipper, on a firm basis, and Shipper will furnish, or cause to be furnished, to Transporter natural gas for such transportation during the term hereof, at the prices and on the terms and conditions hereinafter provided.
ARTICLE I
Quantities
Beginning on the date on which deliveries of gas are commenced hereunder and thereafter for the remaining term of this Agreement, and subject to the provisions of Transporter's FT Rate Schedule, Transporter agrees to receive and transport for Shipper's account up to the following quantities of natural gas:
Shipper's contract Maximum Daily Transportation Quantity shall be the equivalent, in dekatherms, of 24,505 Mcf, using as the conversion factor the heat content of gas being received at the primary receipt point, as such heat content changes from time to time; provided, however, that for billing purposes, Shipper's MDTQ ("billing MDTQ") shall be 24,995 Dth.
ARTICLE II
Rate
Unless otherwise mutually agreed in a written amendment to this Agreement, for each dekatherm of gas transported for Shipper by Transporter hereunder, Shipper shall pay Transporter the maximum rate provided under Rate Schedule FT set forth in Transporter's effective FERC Gas Tariff. In the event that the Transporter places on file with the Federal Energy Regulatory Commission ("Commission") another rate schedule which may be applicable to transportation service rendered hereunder, then Transporter, at its option, may from and after the effective date of such rate schedule, utilize such rate schedule in performance of this Agreement. Such a rate schedule(s) or superseding rate schedule(s) and any revisions thereof which shall be filed and become effective shall apply to and be a part of this Agreement. Transporter shall have the right to propose, file and make effective with the Commission, or other body having jurisdiction, changes and revisions of any effective rate schedule(s), or to propose, file, and make effective superseding rate schedules, for the purpose of changing the rate, charges, and other provisions thereof effective as to Shipper, and Shipper shall have the right to oppose any such aforementioned rate schedule or rate filing.
Shipper agrees to reimburse Transporter for its pro rata share of the filing fees associated with this service and paid to the Commission.
ARTICLE III
Term of Agreement
This Agreement shall be effective upon the later of (1) November 1, 1995, or (2) the date on which Transporter and Transcontinental Gas Pipe Line Corporation have confirmed that they possess the authority to make a corresponding reduction to the level of service under their Rate Schedules X-58 and X-324, respectively, and shall continue in effect for a primary term ending November 1, 2007, and shall continue in effect from year to year thereafter, subject to termination as provided hereafter. This agreement may be terminated by either Shipper or Transporter upon six (6) months' advance written notice specifying as the termination date the expiration of the primary term or any anniversary thereof.
ARTICLE IV
Points of Receipt and Delivery
The Point(s) of Receipt for all gas that may be received for Shipper's account for transportation by Transporter and the MDTQ and gas pressures applicable to each Point of Receipt, shall be: See Exhibit A.
The Point(s) of Delivery for all gas to be delivered by Transporter for Shipper's account and the MDTQ and gas pressures applicable to each Point of Delivery, shall be: See Exhibit A.
ARTICLE V
Incorporation By Reference of Tariff Provisions
To the extent not inconsistent with the terms and conditions of this agreement, the provisions of Rate Schedule FT, or any effective superseding rate schedule or otherwise applicable rate schedule, including any provisions of the General Terms and Conditions incorporated therein, and any revisions thereof that may be made effective hereafter are hereby made applicable to and a part hereof by reference.
ARTICLE VI
Miscellaneous
1. No change, modification or alteration of this Agreement shall be or become effective until executed in writing by the parties hereto, and no course of dealing between the parties shall be construed to alter the terms hereof, except as expressly stated herein.
2. No waiver by any party of any one or more defaults by the other in the performance of any provisions of this Agreement shall operate or be construed as a waiver of any other default or defaults, whether of a like or of a different character.
3. Any company which shall succeed by purchase, merger or consolidation of the gas related properties, substantially as an entirety, of Transporter or of Shipper, as the case may be, shall be entitled to the rights and shall be subject to the obligations of its predecessor in title under this Agreement. Either party may, without relieving itself of its obligations under this Agreement, assign any of its rights hereunder to a company with which it is affiliated, but otherwise, no assignment of this Agreement or of any of the rights or obligations
hereunder shall be made unless there first shall have been obtained the consent
thereto in writing of the other party. Consent shall not be unreasonably
withheld. This paragraph is not intended to affect Shipper's rights pursuant to
Section 10 of the General Terms and Conditions of Transporter's tariff.
4. Except as herein otherwise provided, any notice, request, demand, statement or bill provided for in this Agreement, or any notice which either party may desire to give the other, shall be in writing and shall be considered as duly delivered when mailed by registered or certified mail to the Post Office address of the parties hereto, as the case may be, as follows:
Transporter: National Fuel Gas Supply Corporation
Gas Supply - Transportation
Room 1200
10 Lafayette Square
Buffalo, New York 14203
Shipper: Piedmont Natural Gas Company
1915 Rexford Road
Charlotte, NC 28211
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Attn: Keith Maust (General Correspondence) Ann Boggs (Billing Statements)
or at such other address as either party shall designate by formal written notice. Routine communications, including monthly statements, shall be considered as duly delivered when mailed by either registered, certified, or ordinary mail, electronic communication, or telecommunication.
5. This Agreement and the respective obligations of the parties hereunder are subject to all present and future valid laws, orders, rules and regulations of constituted authorities having jurisdiction over the parties, their functions or gas supply, this Agreement or any provision hereof. Neither party shall be held in default for failure to perform hereunder if such failure is due to compliance with laws, orders, rules or regulations of any such duly constituted authorities.
6. The subject headings of the articles of this Agreement are inserted for the purpose of convenient reference and are not intended to be a part of the Agreement nor considered in any interpretation of the same.
7. No presumption shall operate in favor of or against either party hereto as a result of any responsibility either party may have had for drafting this Agreement.
8. The interpretation and performance of this Agreement shall be in accordance with the laws of the State of Pennsylvania, without recourse to the law regarding the conflict of laws.
The parties hereto have caused this Agreement to be signed by their duly authorized personnel, the day and year first above written.
NATIONAL FUEL GAS SUPPLY CORPORATION
(Transporter)
/s/ John R. Pustulka ------------------------- By: John R. Pustulka Title: Vice President |
PIEDMONT NATURAL GAS COMPANY
(Shipper)
/s/ Thomas E. Skains -------------------------- By: Thomas E. Skains Title: Senior Vice President, Gas Supply |
EXHIBIT A TO SERVICE AGREEMENT #01632
BETWEEN
NATIONAL FUEL GAS SUPPLY CORPORATION ("TRANSPORTER") AND
PIEDMONT NATURAL GAS COMPANY
Point(s) of Receipt Point
Point Pressure
- ----- --------
The interconnection between Sufficient to enter the Niagara Spur Loop Line;
Transporter and TransCanada however, Transporter shall not be obligated to
Pipelines Ltd. at Niagara. receive gas at pressures less than 700 psig.
Point(s) of Delivery Point
Point Pressure
- ----- --------
The interconnection between Sufficient to enter Transco's system; however,
Transporter and Transcontinental transporter shall not be obligated to deliver gas
Gas Pipeline Corporation (Transco) to Transco at a pressure of 1200 psig.
at Leidy, Pennsylvania.
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EXHIBIT 10.29
SERVICE AGREEMENT
THIS AGREEMENT entered into this first day of November, 1995, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as "Seller," first party, and PIEDMONT NATURAL GAS COMPANY, INC., hereinafter referred to as "Buyer," second party,
WITNESSETH
WHEREAS, pursuant to Order Nos. 636, issued by the Federal Energy Regulatory Commission (Commission), Buyer has notified Seller of its desire to convert its firm transportation service under Seller's Rate Schedule X-303 from Service under Part 157 of the Commission's regulations to service under Part 284(G) of the Commission's regulations; and
WHEREAS, Buyer has designated that such Part 284(G) service will be rendered under Seller's Rate Schedule FT; and
WHEREAS, Seller has prepared this agreement for service for Buyer under Rate Schedule FT, and this agreement will supersede and terminate the existing service agreement between Seller and Buyer under Rate Schedule X-303.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to Seller gas for transportation and Seller agrees to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm basis, up to the dekatherm equivalent of a Transportation Contract Quantity ("TCQ") of
a. 53,000 Mcf per day for the peak winter months of December, January, and February, and
b. 47,700 Mcf per day for the shoulder winter months of November and March
2. Transportation service rendered hereunder shall not be subject to curtailment or interruption except as provided in Section 11 of the General Terms and Conditions of Seller's FERC Gas Tariff.
ARTICLE II
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a pressure sufficient to allow the gas to enter Seller's pipeline system at the varying pressures that may exist in such system from time to time; provided, however, the pressure of the gas delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of Seller's pipeline system at such point(s) of receipt. In the event the maximum operating pressure(s) of Seller's pipeline system, at the point(s) of receipt hereunder, is from time to time increased or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer to Seller at the point(s) of receipt shall be correspondingly
SERVICE AGREEMENT (CONTINUED)
increased or decreased upon written notification of Seller to Buyer. The point(s) of receipt for natural gas received for transportation pursuant to this agreement shall be:
See Exhibit A, attached hereto, for points of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at the following point(s) of delivery and at a pressure(s) of
See Exhibit B, attached hereto, for points of delivery and pressures.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of November 1, 1995 and shall remain in force and effect until 8:00 a.m. Eastern Standard Time November 1, 2005 and thereafter until terminated by Seller or Buyer upon at least nine (9) months prior written notice; provided, however, this agreement shall terminate immediately and, subject to the receipt of necessary authorizations, if any, Seller may discontinue service hereunder if (a) Buyer, in Seller's reasonable judgement fails to demonstrate credit worthiness, and (b) Buyer fails to provide adequate security in accordance with Section 32 of the General Terms and Conditions of Seller's Volume No.1 Tariff. As set forth in Section 8 of Article II of Seller's August 7, 1989 revised Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a) pregranted abandonment under Section 284.221(d) of the Commission's Regulations shall not apply to any long term conversions from firm sales service to transportation service under Seller's Rate Schedule FT and (b) Seller shall not exercise its right to terminate this service agreement as it applies to transportation service resulting from conversions from firm sales service so long as Buyer is willing to pay rates no less favorable than Seller is otherwise able to collect from third parties for such service.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with Seller's Rate Schedule FT and the applicable provisions of the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same may be legally amended or superseded from time to time. Such Rate Schedule and General Terms and Conditions are by this reference made a part hereof.
2. Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be delivered to Seller shall include the quantity of gas retained by Seller for applicable compressor fuel, line loss make-up (and injection fuel under Seller's Rate Schedule GSS, if applicable) in providing the transportation service hereunder, which quantity may be changed from time to time and which will be specified in the currently effective Sheet No. 44 of Volume No. 1 of this Tariff which relates to service under this agreement and which is incorporated herein.
3. In addition to the applicable charges for firm transportation service pursuant to Section
SERVICE AGREEMENT (CONTINUED)
3 of Seller's Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as a result of Buyer's request for service under Seller's Rate Schedule FT, to the extent such fees are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental authority having jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This Agreement supersedes and cancels as of the effective date hereof the following contract(s) between the parties hereto:
Rate Schedule X-303 Service Agreement between Seller and Buyer, dated June 29, 1990, as amended on February 1, 1992 and as amended on February 1,1993.
2. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character.
3. The interpretation and performance of this agreement shall be in accordance with the laws of the State of Texas, without recourse to the law governing conflict of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns.
5. Notices to either party shall be in writing and shall be considered as duly delivered when mailed to the other party at the following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
P.O. Box 1396
Houston, Texas, 77251
Attn: Customer Services
(b) If to Buyer:
Piedmont Natural Gas Company, Inc.
P.O. Box 33068
Charlotte, North Carolina 28233
Attn: Vice President, Gas Supply and Transportation
Such addresses may be changed from time to time by mailing appropriate notice thereof to the other party by certified or registered mail.
SERVICE AGREEMENT (CONTINUED)
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers or representatives thereunto duly authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
(Seller)
By: /s/ Frank J. Ferazzi
---------------------------------------
Frank J. Ferazzi
Vice President - Customer Service
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PIEDMONT NATURAL GAS COMPANY, INC.
(Buyer)
By: /s/ Thomas E. Skains
----------------------------------------
Title: Sr. Vice President, Gas Supply
------------------------------
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EXHIBIT A
Buyer's Buyer's
Mainline Capacity Mainline Capacity
Entitlement Entitlement
Receipt Peak Months Shoulder Months
Point 1/ (Mcf per Dav) 2/ (Mcf per Day) 2/
TIER I Holmesville 19,695 17,726
TIER II 37,830 34,047
Jefferson Davis County-
Miss Fuels
Hattiesburg - Endevco
TIER III 53,000 47,700
Clarke County - Miss Fuels
Magnolia Pipeline Interconnect
Jonesboro - SNG
Heidelberg
Station 85 Main Line Pool
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- ------------------
TIER I - Transco's mainline between Holmesville and Station 70
TIER II - Transco's mainline between Station 70 and Station 80
TIER III - Transco's mainline downstream of Station 80
1/ Seller's ability to receive gas under this Rate Schedule at specific
point(s) of receipt is subject to the operating limitations of Transco
and the upstream party at such point(s) and the availability of
capacity at such point(s) of receipt, but in no event will Seller
require a pressure at the Points of Receipt greater than 800 psig.
2/ These quantities do not include the additional quantities of gas
retained by Seller for applicable compressor fuel and line loss
make-up provided for in Article V, 2 of this Service Agreement, which
are subject to change as provided for in Article V, 2 hereof. The
volume provided for each tier represents the maximum allowable firm
capacity entitlement to be transported through the associated tier
from all receipt points within that tier. However, the total
cumulative capacity entitlement for all receipt points provided herein
shall not exceed the specified capacity entitlement provided for Tier
III, which amount shall equal Shipper's transportation contract demand
quantity. To the extent that on any day other participants in
Transco's Southern Expansion Project are not utilizing their total
daily TCQ within a Tier, Transco is willing to receive additional
quantities of gas from Shipper at such points within such Tier, on an
interruptible basis, not to exceed Shipper's total daily TCQ.
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EXHIBIT B
Facility Group Facility Group
Delivery Point Increment Increment
Delivery Increment Peak Months Shoulder Months
Point(s) of Delivery and Pressures* (Mcf per Day) (Mcf per Day) (Mcf per Day)
- ----------------------------------- -------------- --------------- ---------------
Group 8
Anderson 2,809
Greenville 4,187
Woodruff 4,187
Startex 2,809
-----
Total 10,600 9,144
Group 9 3,180
-----
Total 3,180 2,862
Group 10
Charlotte 4,028
Salisbury 4,028
Spencer Buck 4,028
Winston-Salem 12,190
Kernersville 12,190
Greensboro 13,250
------
Total 39,220 35,289
Total Transportation
Contract Quantity: 53,000 47,700
------ ------
|
* Subject to the conditions contained in this Agreement, Seller shall
make deliveries of gas for the account of Buyer at the Point(s) of
Delivery specified above at such pressures as may be available from
time to time in Seller's line serving such Point(s) of Delivery not to
exceed maximum allowable operating pressure, but not less than fifty
(50) psig or at such other pressures as may be agreed upon in the
day-to-day operations of Buyer and Seller.
Deliveries of gas to the Point(s) of Delivery shall be subject to the limitations of Shipper's Delivery Point Entitlements
(DPE) at such points as set forth in Transco's FERC Gas Tariff.
EXHIBIT 10.30
SERVICE AGREEMENT
THIS AGREEMENT entered into this first day of November, 1995, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as "Seller," first party, and PIEDMONT NATURAL GAS COMPANY, INC., hereinafter referred to as "Buyer," second party,
WITNESSETH
WHEREAS, pursuant to Order Nos. 636, issued by the Federal Energy Regulatory Commission (Commission) and Seller's procedures set forth on page 7 of Seller's August 4, 1993 Order No.636 Compliance Filing in Docket No. RS92-86, Buyer has notified Seller of its desire to unbundle its bundled firm transportation service under Seller's Rate Schedule X-324 and convert such service from Part 157 of the Commission's regulations to service with Seller and the upstream pipeline(s) under Part 284(G) of the Commission's regulations; and
WHEREAS, Buyer has designated that Seller's Part 284(G) service will be rendered under Seller's Rate Schedule FT; and
WHEREAS, Seller has prepared this agreement for service for Buyer under Rate Schedule FT, and this agreement will supersede and terminate the existing service agreement between Seller and Buyer under Rate Schedule X-324 (Transco system contract number .6241); and
WHEREAS, this shall not be effective until Seller's service agreement(s) with the upstream transporter(s) has (have) been amended to reflect Seller's reduced transportation service entitlement.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to Seller gas for transportation and Seller agrees to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm basis, up to the dekatherm equivalent of a Transportation Contract Quantity ("TCQ") of 24,140 Mcf per day.
2. Transportation service rendered hereunder shall not be subject to curtailment or interruption except as provided in Section 11 of the General Terms and Conditions of Seller's FERC Gas Tariff.
ARTICLE II
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a pressure sufficient to allow the gas to enter Seller's pipeline system at the varying pressures that may exist in such system from time to time; provided, however, the pressure of the gas delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of Seller's pipeline system at such point(s) of receipt. In the event the maximum operating pressure(s) of Seller's pipeline system, at the point(s) of receipt hereunder, is from time to time increased or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer to Seller at the point(s) of receipt shall be correspondingly increased or decreased upon written notification of Seller to Buyer.
SERVICE AGREEMENT (CONTINUED)
The point(s) of receipt for natural gas received for transportation pursuant to this agreement shall be:
See Exhibit A, attached hereto, for points of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at the following point(s) of delivery and at a pressure(s) of
See Exhibit B, attached hereto, for points of delivery and pressures.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of November 1, 1995 and shall remain in force and effect until 8:00 a.m. Eastern Standard Time November 1, 2007, and thereafter until terminated by Seller or Buyer upon at least six (6) months prior written notice; provided, however, this agreement shall terminate immediately and, subject to the receipt of necessary authorizations, if any, Seller may discontinue service hereunder if (a) Buyer, in Seller's reasonable judgement fails to demonstrate credit worthiness, and (b) Buyer fails to provide adequate security in accordance with Section 32 of the General Terms and Conditions of Seller's Volume No.1 Tariff. As set forth in Section 8 of Article II of Seller's August 7, 1989 revised Stipulation and Agreement in Docket Nos. RP88-68 et. al., (a) pregranted abandonment under Section 284.221(d) of the Commission's Regulations shall not apply to any long term conversions from firm sales service to transportation service under Seller's Rate Schedule FT and (b) Seller shall not exercise its right to terminate this service agreement as it applies to transportation service resulting from conversions from firm sales service so long as Buyer is willing to pay rates no less favorable than Seller is otherwise able to collect from third parties for such service.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with Seller's Rate Schedule FT and the applicable provisions of the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same may be legally amended or superseded from time to time. Such Rate Schedule and General Terms and Conditions are by this reference made a part hereof.
2. Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be delivered to Seller shall include the quantity of gas retained by Seller for applicable compressor fuel, line loss make-up (and injection fuel under Seller's Rate Schedule GSS, if applicable) in providing the transportation service hereunder, which quantity may be changed from time to time and which will be specified in the currently effective Sheet No.44 of Volume No.1 of this Tariff which relates to service under this agreement and which is incorporated herein.
3. In addition to the applicable charges for firm transportation service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as a
SERVICE AGREEMENT (CONTINUED)
result of Buyer's request for service under Seller's Rate Schedule FT, to the extent such fees are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental authority having jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This Agreement supersedes and cancels as of the effective date hereof the following contract(s) between the parties hereto:
Rate Schedule X-324 Service Agreement between Seller and Buyer, dated January 30, 1992 (Transco system contract number .6241).
2. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character.
3. The interpretation and performance of this agreement shall be in accordance with the laws of the State of Texas, without recourse to the law governing conflict of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns.
5. Notices to either party shall be in writing and shall be considered as duly delivered when mailed to the other party at the following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
P.O. Box 1396
Houston, Texas, 77251
Attn: Customer Services
(b) If to Buyer:
Piedmont Natural Gas Company, Inc.
1915 Rexford Road
Charlotte, North Carolina 28211
Attn: Senior Vice President, Gas Supply
Such addresses may be changed from time to time by mailing appropriate notice thereof to the other party by certified or registered mail.
SERVICE AGREEMENT (CONTINUED)
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers or representatives thereunto duly authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
(Seller)
By: /s/ Frank J. Ferrazzi
----------------------------------------
Frank J. Ferazzi
Vice President - Customer Service
|
PIEDMONT NATURAL GAS COMPANY, INC.
(Buyer)
By: /s/ Thomas E. Skains
----------------------------------------
Title: Sr. Vice President, Gas Supply
-------------------------------------
|
EXHIBIT A
Buyer's Capacity
Point(s) of Receipt Entitlement (Mcf/d) 1/
- ------------------- ----------------------
The points of interconnection between 1)Seller 24,140
and pipeline facilities jointly owned by National Fuel
and CNG Transmission Corporation and TETCO at
Leidy, Clinton County, Pennsylvania, and 2) Seller
and the pipeline facilities owned by CNG at Leidy, Clinton
County, Pennsylvania.
|
1/ These quantities do not include the additional quantities of gas
retained by Seller for applicable compressor fuel and line loss
make-up provided for in Article V,2 of this Service Agreement, which
are subject to change as provided for in Article V,2 hereof.
Deliveries of gas for transportation hereunder at the Points of
Receipt shall be made at any pressure that Seller may require, but in
no event greater than 1,200 psig.
|
EXHIBIT B
Point(s) of Delivery Pressure(s) - -------------------- ----------- The point of interconnection between Seller's Leidy Line Prevailing pressures in Seller's pipeline system. and its main line in Mercer County, New Jersey. |
EXHIBIT 10.31
SERVICE AGREEMENT
THIS AGREEMENT entered into this first day of November, 1995, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as "Seller," first party, and PIEDMONT NATURAL GAS COMPANY, INC., hereinafter referred to as "Buyer," second party,
WITNESSETH
WHEREAS, pursuant to Order Nos. 636, issued by the Federal Energy Regulatory Commission (Commission) and Seller's procedures set forth on page 7 of Seller's August 4, 1993 Order No.636 Compliance Filing in Docket No. RS92-86, Buyer has notified Seller of its desire to unbundle its bundled firm transportation service under Seller's Rate Schedule FT-NT and convert such service from Part 157 of the Commission's regulations to service with Seller and the upstream pipeline(s) under Part 284(G) of the Commission's regulations; and
WHEREAS, Buyer has designated that Seller's Part 284(G) service will be rendered under Seller's Rate Schedule FT; and
WHEREAS, Seller has prepared this agreement for service for Buyer under Rate Schedule FT, and this agreement will supersede and terminate the existing service agreement between Seller and Buyer under Rate Schedule FT-NT (Transco system contract number .6212); and
WHEREAS, this agreement shall not be effective until Seller's service agreement(s) with the upstream transporter(s) has (have) been amended to reflect Seller's reduced transportation service entitlement.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to Seller gas for transportation and Seller agrees to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm basis, up to the dekatherm equivalent of a Transportation Contract Quantity ("TCQ") of 12,785 Mcf per day.
2. Transportation service rendered hereunder shall not be subject to curtailment or interruption except as provided in Section 11 of the General Terms and Conditions of Seller's FERC Gas Tariff.
ARTICLE II
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a pressure sufficient to allow the gas to enter Seller's pipeline system at the varying pressures that may exist in such system from time to time; provided, however, the pressure of the gas delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of Seller's pipeline system at such point(s) of receipt. In the event the maximum operating pressure(s) of Seller's pipeline system, at the point(s) of receipt hereunder, is from time to time increased or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer to Seller at the point(s)
SERVICE AGREEMENT (CONTINUED)
of receipt shall be correspondingly increased or decreased upon written notification of Seller to Buyer. The point(s) of receipt for natural gas received for transportation pursuant to this agreement shall be:
See Exhibit A, attached hereto, for points of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at the following point(s) of delivery and at a pressure(s) of
See Exhibit B, attached hereto, for points of delivery and pressures.
ARTICLE IV
TERM OF AGREEMENT
This agreement shall be effective as of November 1, 1995 and shall
remain in force and effect until 8:00 a.m. Eastern Standard Time November 1,
2006, and thereafter until terminated by Seller or Buyer upon at least twelve
(12) months prior written notice; provided, however, this agreement shall
terminate immediately and, subject to the receipt of necessary authorizations,
if any, Seller may discontinue service hereunder if (a) Buyer, in Seller's
reasonable judgement fails to demonstrate credit worthiness, and (b) Buyer fails
to provide adequate security in accordance with Section 32 of the General Terms
and Conditions of Seller's Volume No.1 Tariff. As set forth in Section 8 of
Article II of Seller's August 7, 1989 revised Stipulation and Agreement in
Docket Nos. RP88-68 et. al., (a) pregranted abandonment under Section 284.221(d)
of the Commission's Regulations shall not apply to any long term conversions
from firm sales service to transportation service under Seller's Rate Schedule
FT and (b) Seller shall not exercise its right to terminate this service
agreement as it applies to transportation service resulting from conversions
from firm sales service so long as Buyer is willing to pay rates no less
favorable than Seller is otherwise able to collect from third parties for such
service.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with Seller's Rate Schedule FT and the applicable provisions of the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same may be legally amended or superseded from time to time. Such Rate Schedule and General Terms and Conditions are by this reference made a part hereof.
2. Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be delivered to Seller shall include the quantity of gas retained by Seller for applicable compressor fuel, line loss make-up (and injection fuel under Seller's Rate Schedule GSS, if applicable) in providing the transportation service hereunder, which quantity may be changed from time to time and which will be specified in the currently effective Sheet No.44 of Volume No.1 of this Tariff which relates to service under this agreement and which is incorporated herein.
SERVICE AGREEMENT (CONTINUED)
3. In addition to the applicable charges for firm transportation service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as a result of Buyer's request for service under Seller's Rate Schedule FT, to the extent such fees are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental authority having jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This Agreement supersedes and cancels as of the effective date hereof the following contract(s) between the parties hereto:
Rate Schedule FT-NT Service Agreement between Seller and Buyer, dated July 20, 1992 (Transco system contract number .6212).
2. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character.
3. The interpretation and performance of this agreement shall be in accordance with the laws of the State of Texas, without recourse to the law governing conflict of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit of the parties hereto and their respective successors and assigns.
5. Notices to either party shall be in writing and shall be considered as duly delivered when mailed to the other party at the following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
P.O. Box 1396
Houston, Texas, 77251
Attn: Customer Services
(b) If to Buyer:
Piedmont Natural Gas Company, Inc.
P.O. Box 33068
Charlotte, North Carolina 28233
Senior Vice President, Gas Supply
Such addresses may be changed from time to time by mailing appropriate notice thereof to the other party by certified or registered mail.
SERVICE AGREEMENT (CONTINUED)
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers or representatives thereunto duly authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATlON
(Seller)
By: /s/ Frank J. Ferazzi
----------------------------------------
Frank J. Ferazzi
Vice President - Customer Service J. Ferazzi
|
PIEDMONT NATURAL GAS COMPANY, INC.
(Buyer)
By: /s/ Thomas E. Skains
----------------------------------------
Title: Sr. Vice President, Gas Supply
-------------------------------------
|
EXHIBIT A
Buyer's Capacity
Point(s) of Receipt Entitlement (Mcf/d) 1/
- ------------------- ----------------------
The point of interconnection between the 12,785
facilities of Seller and CNG Transmission Corporation
at Leidy in Clinton County, Pennsylvania.
|
1/ These quantities do not include the additional quantities of gas retained by Seller for applicable compressor fuel and line loss make-up provided for in Article V,2 of this Service Agreement, which are subject to change as provided for in Article V,2 hereof. Deliveries of gas for transportation hereunder at the Point(s) of Receipt shall be made at any pressures that Seller may require, but in no event greater than 1,200 psig.
EXHIBIT B
Point(s) of Delivery Pressure(s) - -------------------- ----------- The point of interconnection between Seller's Prevailing pressures in Seller's pipeline Liedy Line and its main line in Mercer County, New Jersey. system. |
EXHIBIT 10.32
SERVICE AGREEMENT
APPLICABLE TO THE STORAGE OF NATURAL GAS
UNDER RATE SCHEDULE GSS
(PART 284)
AGREEMENT made as of this May 15, 1996, by and between CNG TRANSMISSION CORPORATION, a Delaware corporation, hereinafter called "Pipeline," and NASHVILLE GAS COMPANY, a division of Piedmont Natural Gas Company, Inc., a North Carolina company, hereinafter called "Customer."
WHEREAS, on October 4, 1993, Pipeline and Rochester Gas and Electric Corporation ("RG&E") entered into a Marketing Agreement that was designed to permit Pipeline to assist RG&E in marketing RG&E's on-system storage demand and capacity, and related transportation capacity on Pipeline;
WHEREAS, Pipeline and Customer have agreed that Customer will acquire on a permanent basis a part of the RG&E capacity;
NOW, THEREFORE, WITNESSETH: That in consideration of the mutual covenants herein contained, the parties hereto agree that Pipeline will store natural gas for Customer during the term, at the rates and on the terms and conditions hereinafter provided and, with respect to gas delivered by each of the parties to the other, under and subject to Pipeline's Rate Schedule GSS and all of the General Terms and Conditions contained in Pipeline's FERC Gas Tariff and any revisions thereof that may be made effective hereafter:
ARTICLE I
QUANTITIES
Beginning as of April 1,1996 and thereafter for the remaining term of this agreement, Customer agrees to deliver to Pipeline and Pipeline agrees to receive for storage in Pipeline's underground storage properties, and Pipeline agrees to inject or cause to be injected into storage for Customer's account, store, withdraw from storage, and deliver to Customer and Customer agrees to receive, quantities of natural gas as set forth on Exhibit A, attached hereto.
ARTICLE II
RATE
A. For storage service rendered by Pipeline to Customer hereunder, Customer shall pay Pipeline the maximum rates and charges provided under Rate Schedule GSS contained in Pipeline's effective FERC Gas Tariff or any effective superseding rate
schedule.
B. The Storage Demand Charge and the Storage Capacity Charge
provided in the aforesaid rate schedule shall commence on April 1,1996.
C. Pipeline shall have the right to propose, file and make effective with the Federal Energy Regulatory Commission or any other body having jurisdiction, revisions to any applicable rate schedule, or to propose, file, and make effective superseding rate schedules for the purpose of changing the rate, charges, and other provisions thereof effective as to Customer; provided, however, that (i) Section 2 of Rate Schedule GSS "Applicability and Character of Service," (ii) term, (iii) quantities, and (iv) points of receipt and points of delivery shall not be subject to unilateral change under this Article. Said rate schedule or superseding rate schedule and any revisions thereof which shall be filed and made effective shall apply to and become a part of this Service Agreement. The filing of such changes and revisions to any applicable rate schedule shall be without prejudice to the right of Customer to contest or oppose such filing and its effectiveness.
D. Notwithstanding Paragraph ll.A., above, Customer's agreement in Paragraph ll.A. to pay the maximum rates and charges provided under Rate Schedule GSS is subject to a cap which limits the overall monthly rate, exclusive of any penalty, to be paid by Customer for service under this Agreement, to an amount not to exceed an increase in applicable rates and charges at the rate of three percent (3%) per annum from April 1,1996.
ARTICLE III
TERM OF AGREEMENT
Subject to all the terms and conditions herein, this Agreement shall be effective as of April 1,1996, and shall continue in effect for a primary term through and including March 31, 2003, and for subsequent annual terms of April 1 through March 31 thereafter, until either party terminates this Agreement by giving written notice to the other at least twelve months prior to the start of an annual term.
ARTICLE IV
POINTS OF RECEIPT AND DELIVERY
The Points of Receipt for Customer's tender of storage injection quantities, and the Point(s) of Delivery for withdrawals from storage shall be specified on Exhibit A, attached hereto.
ARTICLE V
INCORPORATION BY REFERENCE OF TARIFF PROVISIONS
To the extent not inconsistent with the terms and conditions
of this Agreement, the following provisions of Pipeline's effective FERC Gas
Tariff, and any
revisions thereof that may be made effective hereafter are hereby made applicable to and a part hereof by reference:
1. All of the provisions of Rate Schedule GSS, or any effective superseding rate schedule or otherwise applicable rate schedule; and
2. All of the provisions of the General Terms and Conditions, as they may be revised or superseded from time to time.
ARTICLE VI
MISCELLANEOUS
A. No change, modification or alteration of this Agreement shall be or become effective until executed in writing by the parties hereto; provided, however, that the parties do not intend that this Article VI.A. requires a further written agreement either prior to the making of any request or filing permitted under Article II hereof or prior to the effectiveness of such request or filing after Commission approval, provided further, however, that nothing in this Agreement shall be deemed to prejudice any position the parties may take as to whether the request, filing or revision permitted under Article II must be made under Section 7 or Section 4 of the Natural Gas Act.
B. Any notice, request or demand provided for in this Agreement, or any notice which either party may desire to give the other, shall be in writing and sent to the following addresses:
Pipeline: CNG Transmission Corporation
445 West Main Street
Clarksburg, West Virginia 26301
Attention: Vice President, Marketing and Customer Services
Customer: Nashville Gas Company,
a division of Piedmont Natural Gas Company, Inc.
1915 Rexford Road
Charlotte, North Carolina 28211
Attention: Director - Federal Regulatory and Supply Planning
|
or at such other address as either party shall designate by formal written notice.
C. No presumption shall operate in favor of or against either party hereto as a result of any responsibility either party may have had for drafting this Agreement.
D. The subject headings of the provisions of this Agreement are inserted for the purpose of convenient reference and are not intended to become a part of or to be considered in any interpretation of such provisions.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their duly authorized officials as of the day and year first above written.
CNG TRANSMISSION CORPORATION
(PIPELINE)
By: /s/ Joseph A. Curia
-------------------------------------------
Its: Vice President
-----------------------------------------
|
NASHVILLE GAS COMPANY
A DIVISION OF PIEDMONT NATURAL GAS COMPANY, INC.
(CUSTOMER)
By: /s/ C. W. Fleenor
-------------------------------------------
Its: Vice President
-----------------------------------------
(Title)
|
EXHIBIT A
TO THE STORAGE SERVICE AGREEMENT
DATED MAY 15, 1996
BETWEEN CNG TRANSMISSION CORPORATION AND
NASHVILLE GAS COMPANY
A DIVISION OF PIEDMONT NATURAL GAS COMPANY, INC.
A. QUANTITIES
The quantities of natural gas storage service which Customer may utilize under this Service Agreement, as well as Customer's applicable Billing Determinants, are as follows:
1. Storage Capacity of 350,000 Dekatherms (Dt), and
2. Storage Demand of 7,000 Dt per day.
B. POINTS OF RECEIPT
The Points of Receipt and the maximum quantity for that point shall be as set forth below. Each of the parties will use due care and diligence to assure that uniform pressures will be maintained at the Receipt Points as reasonably may be required to render service hereunder, but Pipeline shall not be required to accept gas at less than the minimum pressures specified herein. In addition to the quantities specified below, Customer may increase the quantities furnished to Pipeline at each Receipt Point, so long as such quantities, when reduced by the fuel retention percentage specified in Pipeline's currently effective FERC Gas Tariff, do not exceed the quantity limitation specified below for each Receipt Point.
1. Up to 5,000 Dt per Day at the interconnection of the facilities of Pipeline and Texas Eastern Transmission Corporation ("Texas Eastern") or other pipeline(s) in Westmoreland County, Pennsylvania, known as the Oakford Interconnection, at a pressure of not less than five hundred seventy-five (575) pounds per square inch gauge ("psig");
2. Up to 5,000 Dt per Day at the interconnection of the facilities of Pipeline and Texas Eastern or Transcontinental Gas Pipe Line Corporation known as the Leidy Interconnection, at a pressure of not less than one thousand two hundred (1,200) psig.
EXHIBIT A
MAY 15, 1996 GSS AGREEMENT (PART 284)
BETWEEN CNG TRANSMISSION CORPORATION AND
NASHVILLE GAS COMPANY
3. Up to 5,000 Dt per Day at the interconnection of the facilities of Pipeline and Tennessee Gas Pipeline Company ("Tennessee") at the Ellisburg Interconnection; and other mutually agreed upon interconnects in Tennessee's Zone 4, at a pressure of not less than four hundred seventy-five (475) psig;
4. Subject to the availability of capacity, up to 5,000 Dt per Day at the interconnection of the facilities of Pipeline and Texas Eastern in Warren County, Ohio, known as the Lebanon Interconnection;
5. To the extent of available capacity, and as mutually agreeable, up to 1,500 Dt per day at the interconnection of the facilities of Pipeline and Columbia Gas Transmission Corporation, at Wirt County, West Virginia, known as the Rockport Interconnection, at a pressure of not less than three hundred nine (309) psig; and up to 5,000 Dt per day at Oscar Nelson Interconnect at a pressure of not less than six hundred eighty (680) psig.
C. POINTS OF DELIVERY
1. The Primary Point(s) of Delivery for subsequent transportation to Customer of all firm storage withdrawal quantities shall be the points of withdrawal from Pipeline's storage pool(s).
2. These Point(s) of Delivery shall only be Primary, as defined in Pipeline's FERC Gas Tariff, to the extent that corresponding transportation from the points of withdrawal from Pipeline's storage pool(s) is provided under the "Service Agreement Applicable to Transportation Of Natural Gas Under Rate Schedule FT" between Pipeline and Customer, dated May 15, 1996.
EXHIBIT 10.33
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of May 31, 1996, by and between PIEDMONT NATURAL GAS COMPANY, INC., a North Carolina corporation (the "Corporation"), and DAVID J. DZURICKY, a resident of Mecklenburg County, North Carolina (the "Officer").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has determined that the continued retention of the services of the Officer on a long-term basis as described herein is in the best interest of the corporation in that (a) it promotes the stability of senior management of the Corporation, (b) it enables the Corporation to retain the services of a well-qualified Senior Vice President with extensive contacts in the natural gas industry, and (c) it secures the continued services of the Officer notwithstanding any change in control of the Corporation; and
WHEREAS, the services of the Officer, his experience and knowledge of the affairs of the Corporation, and his reputation and contacts in the Corporation's industry are extremely valuable to the Corporation; and
WHEREAS, the Corporation considers the establishment and maintenance of a sound and vital management to be part of its overall corporate strategy and to be essential to protecting and enhancing the best interests of the Corporation and its stockholders; and
WHEREAS, the parties desire to enter into this Agreement in order to clearly set forth the terms and conditions of the Officer's employment relationship with the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereby agree as follows:
1. Employment. The Corporation hereby employs the Officer and the Officer hereby accepts such employment, upon the terms and conditions stated herein, as Senior Vice President of the Corporation. The Officer shall render such administrative and management services to the Corporation as are customarily performed by persons situated in a similar executive capacity. The Officer shall promote the business of the Corporation and perform such other duties as shall from time to time be reasonably prescribed by the Directors. It is understood that the Officer's continued election as an officer of the Corporation is dependent upon action by the Board of Directors of the Corporation from time to time and that, subject to the provisions of Section 7 of this Agreement, the Officer's title and/or duties may change from time to time.
2. Base Salary. The corporation shall pay the Officer during the term of this Agreement as compensation for all services rendered by him to the Corporation a base salary in such amounts and at such intervals as shall be commensurate with his duties and responsibilities hereunder.
Initially such base salary shall be at the rate of $170,000 per year. The Officer's base salary may be increased from time to time to reflect the duties required of the Officer. In reviewing the Officer's base salary, the Board of Directors of the Corporation shall consider the overall performance of the Officer and the service of the Officer rendered to the Corporation and its subsidiaries and changes in the cost of living. The Board of Directors may also provide for performance or merit increases. Participation by Officer in any incentive, deferred compensation, stock option, stock purchase, bonus, pension, life insurance or other employee benefit plans which may be offered by the Corporation from time to time and participation in any fringe benefits provided by the Corporation shall not cause a reduction of the base salary payable to the Officer. The Officer will be entitled to such customary fringe benefits, vacation and sick leave as are consistent with the normal practices and established policies of the Corporation.
3. Participation in Incentive, Retirement and Employee Benefit Plans; Fringe Benefits. The Officer shall be entitled to participate in any plan relating to incentive compensation, stock options, stock purchase, pension, thrift, profit sharing, group life insurance, medical coverage, disability coverage, education, or other retirement or employee benefits that the Corporation has adopted, or may from time to time adopt, for the benefit of its executive employees and for employees generally, subject to the eligibility rules of such plans.
The Officer shall also be entitled to participate in any other fringe benefits which are now or may be or become applicable to the Corporation's executive employees, including the payment of reasonable expenses for attending annual and periodic meetings of trade associations, and any other benefits which are commensurate with the duties and responsibilities to be performed by the Officer under this Agreement. Additionally, the Officer shall be entitled to such vacation and sick leave as shall be established under uniform employee policies promulgated by the Board of Directors. The Corporation shall reimburse the Officer for all out-of-pocket reasonable and necessary business expenses which the Officer may incur in connection with his service on behalf of the Corporation.
4. Term. The initial term of employment under this Agreement shall be for a one-year period commencing June 1, 1996; provided, however, this Agreement shall automatically be extended to a full one-year period on each successive day during the term of this Agreement. The effect hereof shall be that the Agreement shall at all times remain subject to a term of one year, unless (i) written notice has been given that the Agreement shall not be extended as provided in this Section 4, or (ii) the Agreement is terminated pursuant to Section 7. If written notice from the Corporation or the Officer is delivered to the other party advising the other party that this Agreement is not to be further extended, then upon such notice, the Agreement shall terminate on the first anniversary of the date of notice. Provided, further, no extension shall cause this Agreement to extend beyond the date on which the Officer reaches 65 years of age. Upon any extension, the base salary of the extended agreement shall be the base salary in effect on the effective date of such extension.
5. Loyalty; Noncompetition
(a) The Officer shall devote his best efforts to the performance of his duties and responsibilities under this Agreement.
(b) During the term of this Agreement, or any renewals hereof, the Officer agrees he will not, own, manage, operate, join, control or participate in the management, operation or control of, or be employed by or connected in any manner with any business which competes with the Corporation or any of its subsidiary corporations without the prior written consent of the Corporation. Notwithstanding the foregoing, the Officer shall be free, without such consent, to purchase or hold as an investment or otherwise, up to five percent of the outstanding stock or other securities of any corporation which has its securities publicly traded on any recognized securities exchange or in any established over-the-counter market.
The Officer shall hold in confidence all knowledge or information of a confidential nature with respect to the business of the Corporation or any subsidiary of the Corporation received by him during the term of this Agreement and will not disclose or make use of such information without the prior written consent of the Corporation.
The Officer acknowledges that it would not be possible to ascertain the amount of monetary damages in the event of a breach by the Officer under the provisions of this Section 5 and agrees that, in the event of a breach of this Section, injunctive relief enforcing the terms of this Section is an appropriate remedy.
6. Standards. The Officer shall perform his duties and responsibilities under this Agreement in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors. The Corporation will provide the Officer with the working facilities and staff customary for similar executives and necessary for him to perform his duties.
7. Termination and Termination Pay.
(a) By Death. The Officer's employment under this Agreement shall be terminated upon the death of the Officer during the term of this Agreement, in which event the Officer's estate shall be entitled to receive all compensation due the Officer through the last day of the calendar month in which his death shall have occurred.
(b) By Total Disability. The Officer's employment under this Agreement shall be terminated upon the total permanent disability of the Officer during the term of this Agreement, in which event the Officer shall receive all compensation, including bonuses, through the date of determination of such disability and for a period of 90 days thereafter. For purposes of this Section, the Officer shall be deemed to have suffered permanent disability upon the determination of such
status by the United States Social Security Administration or a certification to such effect by the Officer's regular physician.
(c) By Officer. The Officer's employment under this Agreement may be terminated at any time by the Officer upon 60 days' written notice to the Board of Directors. Upon such termination, the Officer shall be entitled to receive all compensation, including bonuses, through the effective date of such termination.
(d) By Corporation. The Board of Directors may terminate the Officer's employment at any time, but any termination by the Board of Directors, other than termination for cause, shall not prejudice the Officer's right to continue to receive payment of all compensation and the continuance of benefits for a period of 12 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less) as provided below. The Officer shall have no right to receive compensation or other benefits (other than vested benefits) for any period after termination for "cause." Termination for cause shall mean termination because of the Officer's personal dishonesty, incompetence, willful material misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful material violation of an law, rule or regulation (other than traffic or traffic-related violations or similar offenses) or final cease-and-desist order, or material breach of any provisions of this Agreement.
(e) Change of Control. In the event of involuntary termination of the Officer's employment under this Agreement in connection with, or at any time following, any Change of Control of the Corporation, or in the event of voluntary termination by the Officer in connection with, or within 12 months after, any Change in Control of the Corporation, the Officer shall be paid the following amount for a period of 12 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less):
(i) base salary plus
(ii) all amounts to which he may be or may become entitled to under any incentive or bonus plan plus
(iii) participation in all welfare benefit plans, practices, policies and programs at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period preceding his termination and with the costs of such benefits paid in the same manner as prior to this termination.
The Officer's base salary shall be paid in the same periodic payments over the remaining term of this Agreement. If the Officer is involuntarily terminated after a Change in Control, he shall be paid all base salary, incentive compensation and bonuses in a lump sum.
In connection with this Agreement the term "Change in Control" shall mean (i) the adoption of a plan or merger or consolidation of the Corporation with any other corporation or association as a result of which the holders of the voting capital stock of the Corporation as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; and (ii) the acquisition of more than 20% of the voting capital stock of the Corporation by any person within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. The term "person" means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.
(f) Reduction of Duties. Notwithstanding any other provision
of this Agreement to the contrary, the Officer may voluntarily terminate his
employment under this Agreement following a Change in Control of the
Corporation, whether approved in advance by the Board of Directors or otherwise,
and shall thereupon be entitled to receive the payments described in Section
7(e) of this Agreement, upon the occurrence, or within 30 days thereafter, of
any of the following events, which have not been consented to in advance by the
Officer in writing; (i) if the Officer would be required to move his personal
residence or perform his principal executive functions more than 20 miles from
the city limits of Charlotte, North Carolina; (ii) if in the organization
structure of the Corporation, the Officer would be required to report to a
person or persons other than the Board of Directors, Chairman of the Board,
President, or Executive Vice President; (iii) if the Corporation should fail to
maintain employee benefits and welfare benefit plans, including incentive
compensation, vacation, fringe benefit, stock option and retirement plans
providing at least the same level of benefits afforded Officer as of the date
hereof; (iv) if the Officer would be assigned duties and responsibilities other
than those normally associated with his position as Senior Vice President; or
(v) if the Officer's responsibilities or authority have in any way been
diminished.
(g) Costs and Expenses. In the event any dispute shall arise between the Officer and the Corporation as to the terms or interpretation of this Agreement, including this Section 7, whether instituted by formal legal proceedings or otherwise, including any action taken by Officer to enforce the terms of this Section 7 or in defending against any action taken by the Corporation, the Corporation shall reimburse the Officer for all costs and expenses, proceedings or actions in the event the Officer prevails in any such action.
8. Successors and Assigns.
(a) This Employment Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation which
shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the
Corporation.
(b) Since the Corporation is contracting for the unique and
personal skills of the Officer, the Officer shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Corporation.
9. Modification; Waiver; Amendments. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Officer and on behalf of the Corporation by such Officer as may be specifically designated by the Board of Directors. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.
10. Applicable Law. This Agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of North Carolina.
11. Severability. The provision of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove written.
CORPORATION:
ATTEST: Piedmont Natural Gas Company, Inc.
/s/ Martin C. Ruegsegger
- ---------------------------
Secretary
By: /s/ John.H. Maxheim
--------------------------
OFFICER:
/s/ David J. Dzuricky (SEAL)
--------------------------------
|
Employment Agreement reviewed and approved by the Board of Directors this 31st day of May, 1996.
BY: /s/ John F. McNair III
--------------------------------
|
EXHIBIT 10.34
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of May 31, 1996, by and between PIEDMONT NATURAL GAS COMPANY, INC., a North Carolina corporation (the "Corporation"), and RAY B. KILLOUGH, a resident of Mecklenburg County, North Carolina (the "Officer").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has determined that the continued retention of the services of the Officer on a long-term basis as described herein is in the best interest of the corporation in that (a) it promotes the stability of senior management of the Corporation, (b) it enables the Corporation to retain the services of a well-qualified Senior Vice President with extensive contacts in the natural gas industry, and (c) it secures the continued services of the Officer notwithstanding any change in control of the Corporation; and
WHEREAS, the services of the Officer, his experience and knowledge of the affairs of the Corporation, and his reputation and contacts in the Corporation's industry are extremely valuable to the Corporation; and
WHEREAS, the Corporation considers the establishment and maintenance of a sound and vital management to be part of its overall corporate strategy and to be essential to protecting and enhancing the best interests of the Corporation and its stockholders; and
WHEREAS, the parties desire to enter into this Agreement in order to clearly set forth the terms and conditions of the Officer's employment relationship with the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereby agree as follows:
1. Employment. The Corporation hereby employs the Officer and the Officer hereby accepts such employment, upon the terms and conditions stated herein, as Senior Vice President of the Corporation. The Officer shall render such administrative and management services to the Corporation as are customarily performed by persons situated in a similar executive capacity. The Officer shall promote the business of the Corporation and perform such other duties as shall from time to time be reasonably prescribed by the Directors. It is understood that the Officer's continued election as an officer of the Corporation is dependent upon action by the Board of Directors of the Corporation from time to time and that, subject to the provisions of Section 7 of this Agreement, the Officer's title and/or duties may change from time to time.
2. Base Salary. The corporation shall pay the Officer during the term of this Agreement as compensation for all services rendered by him to the Corporation a base salary in such amounts and at such intervals as shall be commensurate with his duties and responsibilities hereunder. Initially
such base salary shall be at the rate of $185,000 per year. The Officer's base salary may be increased from time to time to reflect the duties required of the Officer. In reviewing the Officer's base salary, the Board of Directors of the Corporation shall consider the overall performance of the Officer and the service of the Officer rendered to the Corporation and its subsidiaries and changes in the cost of living. The Board of Directors may also provide for performance or merit increases. Participation by Officer in any incentive, deferred compensation, stock option, stock purchase, bonus, pension, life insurance or other employee benefit plans which may be offered by the Corporation from time to time and participation in any fringe benefits provided by the Corporation shall not cause a reduction of the base salary payable to the Officer. The Officer will be entitled to such customary fringe benefits, vacation and sick leave as are consistent with the normal practices and established policies of the Corporation.
3. Participation in Incentive, Retirement and Employee Benefit Plans; Fringe Benefits. The Officer shall be entitled to participate in any plan relating to incentive compensation, stock options, stock purchase, pension, thrift, profit sharing, group life insurance, medical coverage, disability coverage, education, or other retirement or employee benefits that the Corporation has adopted, or may from time to time adopt, for the benefit of its executive employees and for employees generally, subject to the eligibility rules of such plans.
The Officer shall also be entitled to participate in any other fringe benefits which are now or may be or become applicable to the Corporation's executive employees, including the payment of reasonable expenses for attending annual and periodic meetings of trade associations, and any other benefits which are commensurate with the duties and responsibilities to be performed by the Officer under this Agreement. Additionally, the Officer shall be entitled to such vacation and sick leave as shall be established under uniform employee policies promulgated by the Board of Directors. The Corporation shall reimburse the Officer for all out-of-pocket reasonable and necessary business expenses which the Officer may incur in connection with his service on behalf of the Corporation.
4. Term. The initial term of employment under this Agreement shall be for a one-year period commencing June 1, 1996; provided, however, this Agreement shall automatically be extended to a full one-year period on each successive day during the term of this Agreement. The effect hereof shall be that the Agreement shall at all times remain subject to a term of one year, unless (i) written notice has been given that the Agreement shall not be extended as provided in this Section 4, or (ii) the Agreement is terminated pursuant to Section 7. If written notice from the Corporation or the Officer is delivered to the other party advising the other party that this Agreement is not to be further extended, then upon such notice, the Agreement shall terminate on the first anniversary of the date of notice. Provided, further, no extension shall cause this Agreement to extend beyond the date on which the Officer reaches 65 years of age. Upon any extension, the base salary of the extended agreement shall be the base salary in effect on the effective date of such extension.
5. Loyalty; Noncompetition
(a) The Officer shall devote his best efforts to the performance of his duties and responsibilities under this Agreement.
(b) During the term of this Agreement, or any renewals hereof, the Officer agrees he will not, own, manage, operate, join, control or participate in the management, operation or control of, or be employed by or connected in any manner with any business which competes with the Corporation or any of its subsidiary corporations without the prior written consent of the Corporation. Notwithstanding the foregoing, the Officer shall be free, without such consent, to purchase or hold as an investment or otherwise, up to five percent of the outstanding stock or other securities of any corporation which has its securities publicly traded on any recognized securities exchange or in any established over-the-counter market.
The Officer shall hold in confidence all knowledge or information of a confidential nature with respect to the business of the Corporation or any subsidiary of the Corporation received by him during the term of this Agreement and will not disclose or make use of such information without the prior written consent of the Corporation.
The Officer acknowledges that it would not be possible to ascertain the amount of monetary damages in the event of a breach by the Officer under the provisions of this Section 5 and agrees that, in the event of a breach of this Section, injunctive relief enforcing the terms of this Section is an appropriate remedy.
6. Standards. The Officer shall perform his duties and responsibilities under this Agreement in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors. The Corporation will provide the Officer with the working facilities and staff customary for similar executives and necessary for him to perform his duties.
7. Termination and Termination Pay.
(a) By Death. The Officer's employment under this Agreement shall be terminated upon the death of the Officer during the term of this Agreement, in which event the Officer's estate shall be entitled to receive all compensation due the Officer through the last day of the calendar month in which his death shall have occurred.
(b) By Total Disability. The Officer's employment under this Agreement shall be terminated upon the total permanent disability of the Officer during the term of this Agreement, in which event the Officer shall receive all compensation, including bonuses, through the date of determination of such disability and for a period of 90 days thereafter. For purposes of this Section, the Officer shall be deemed to have suffered permanent disability upon the determination of such status by the United States Social Security Administration or a certification to such effect by the Officer's regular physician.
(c) By Officer. The Officer's employment under this Agreement may be terminated at any time by the Officer upon 60 days' written notice to the Board of Directors. Upon such termination, the Officer shall be entitled to receive all compensation, including bonuses, through the effective date of such termination.
(d) By Corporation. The Board of Directors may terminate the Officer's employment at any time, but any termination by the Board of Directors, other than termination for cause, shall not prejudice the Officer's right to continue to receive payment of all compensation and the continuance of benefits for a period of 12 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less) as provided below. The Officer shall have no right to receive compensation or other benefits (other than vested benefits) for any period after termination for "cause." Termination for cause shall mean termination because of the Officer's personal dishonesty, incompetence, willful material misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful material violation of an law, rule or regulation (other than traffic or traffic-related violations or similar offenses) or final cease-and-desist order, or material breach of any provisions of this Agreement.
(e) Change of Control. In the event of involuntary termination of the Officer's employment under this Agreement in connection with, or at any time following, any Change of Control of the Corporation, or in the event of voluntary termination by the Officer in connection with, or within 12 months after, any Change in Control of the Corporation, the Officer shall be paid the following amount for a period of 12 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less):
(i) base salary plus
(ii) all amounts to which he may be or may become entitled to under any incentive or bonus plan plus
(iii) participation in all welfare benefit plans, practices, policies and programs at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period preceding his termination and with the costs of such benefits paid in the same manner as prior to this termination.
The Officer's base salary shall be paid in the same periodic payments over the remaining term of this Agreement. If the Officer is involuntarily terminated after a Change in Control, he shall be paid all base salary, incentive compensation and bonuses in a lump sum.
In connection with this Agreement the term "Change in Control" shall mean (i) the adoption of a plan or merger or consolidation of the Corporation with any other corporation or association as a result of which the holders of the voting capital stock of the Corporation as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; and (ii) the acquisition of more than 20% of the voting capital stock of the Corporation by any person
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. The term "person" means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.
(f) Reduction of Duties. Notwithstanding any other provision
of this Agreement to the contrary, the Officer may voluntarily terminate his
employment under this Agreement following a Change in Control of the
Corporation, whether approved in advance by the Board of Directors or otherwise,
and shall thereupon be entitled to receive the payments described in Section
7(e) of this Agreement, upon the occurrence, or within 30 days thereafter, of
any of the following events, which have not been consented to in advance by the
Officer in writing; (i) if the Officer would be required to move his personal
residence or perform his principal executive functions more than 20 miles from
the city limits of Charlotte, North Carolina; (ii) if in the organization
structure of the Corporation, the Officer would be required to report to a
person or persons other than the Board of Directors, Chairman of the Board,
President, or Executive Vice President; (iii) if the Corporation should fail to
maintain employee benefits and welfare benefit plans, including incentive
compensation, vacation, fringe benefit, stock option and retirement plans
providing at least the same level of benefits afforded Officer as of the date
hereof; (iv) if the Officer would be assigned duties and responsibilities other
than those normally associated with his position as Senior Vice President; or
(v) if the Officer's responsibilities or authority have in any way been
diminished.
(g) Costs and Expenses. In the event any dispute shall arise between the Officer and the Corporation as to the terms or interpretation of this Agreement, including this Section 7, whether instituted by formal legal proceedings or otherwise, including any action taken by Officer to enforce the terms of this Section 7 or in defending against any action taken by the Corporation, the Corporation shall reimburse the Officer for all costs and expenses, proceedings or actions in the event the Officer prevails in any such action.
8. Successors and Assigns.
(a) This Employment Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation which
shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the
Corporation.
(b) Since the Corporation is contracting for the unique and
personal skills of the Officer, the Officer shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Corporation.
9. Modification; Waiver; Amendments. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Officer and on behalf of the Corporation by such Officer as may be specifically designated by the Board of Directors. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.
10. Applicable Law. This Agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of North Carolina.
11. Severability. The provision of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove written.
CORPORATION:
ATTEST: Piedmont Natural Gas Company, Inc.
/s/ Martin C. Ruegsegger
- ----------------------------
Secretary
By: /s/ John H. Maxheim
------------------------------
OFFICER:
/s/ Ray B. Killough (SEAL)
----------------------------------
|
Employment Agreement reviewed and approved by the Board of Directors this 31st day of May, 1996.
BY: /s/ John F. McNair III
-------------------------------
|
EXHIBIT 10.35
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of May 31, 1996, by and between PIEDMONT NATURAL GAS COMPANY, INC., a North Carolina corporation (the "Corporation"), and WARE F. SCHIEFER, a resident of Mecklenburg County, North Carolina (the "Officer").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has determined that the continued retention of the services of the Officer on a long-term basis as described herein is in the best interest of the corporation in that (a) it promotes the stability of senior management of the Corporation, (b) it enables the Corporation to retain the services of a well-qualified Executive Vice President with extensive contacts in the natural gas industry, and (c) it secures the continued services of the Officer notwithstanding any change in control of the Corporation; and
WHEREAS, the services of the Officer, his experience and knowledge of the affairs of the Corporation, and his reputation and contacts in the Corporation's industry are extremely valuable to the Corporation; and
WHEREAS, the Corporation considers the establishment and maintenance of a sound and vital management to be part of its overall corporate strategy and to be essential to protecting and enhancing the best interests of the Corporation and its stockholders; and
WHEREAS, the parties desire to enter into this Agreement in order to clearly set forth the terms and conditions of the Officer's employment relationship with the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereby agree as follows:
1. Employment. The Corporation hereby employs the Officer and the Officer hereby accepts such employment, upon the terms and conditions stated herein, as Executive Vice President of the Corporation. The Officer shall render such administrative and management services to the Corporation as are customarily performed by persons situated in a similar executive capacity. The Officer shall promote the business of the Corporation and perform such other duties as shall from time to time be reasonably prescribed by the Directors. It is understood that the Officer's continued election as an officer of the Corporation is dependent upon action by the Board of Directors of the Corporation from time to time and that, subject to the provisions of Section 7 of this Agreement, the Officer's title and/or duties may change from time to time.
2. Base Salary. The corporation shall pay the Officer during the term of this Agreement as compensation for all services rendered by him to the Corporation a base salary in such amounts and at such intervals as shall be commensurate with his duties and responsibilities hereunder. Initially
such base salary shall be at the rate of $212,000 per year. The Officer's base salary may be increased from time to time to reflect the duties required of the Officer. In reviewing the Officer's base salary, the Board of Directors of the Corporation shall consider the overall performance of the Officer and the service of the Officer rendered to the Corporation and its subsidiaries and changes in the cost of living. The Board of Directors may also provide for performance or merit increases. Participation by Officer in any incentive, deferred compensation, stock option, stock purchase, bonus, pension, life insurance or other employee benefit plans which may be offered by the Corporation from time to time and participation in any fringe benefits provided by the Corporation shall not cause a reduction of the base salary payable to the Officer. The Officer will be entitled to such customary fringe benefits, vacation and sick leave as are consistent with the normal practices and established policies of the Corporation.
3. Participation in Incentive, Retirement and Employee Benefit Plans; Fringe Benefits. The Officer shall be entitled to participate in any plan relating to incentive compensation, stock options, stock purchase, pension, thrift, profit sharing, group life insurance, medical coverage, disability coverage, education, or other retirement or employee benefits that the Corporation has adopted, or may from time to time adopt, for the benefit of its executive employees and for employees generally, subject to the eligibility rules of such plans.
The Officer shall also be entitled to participate in any other fringe benefits which are now or may be or become applicable to the Corporation's executive employees, including the payment of reasonable expenses for attending annual and periodic meetings of trade associations, and any other benefits which are commensurate with the duties and responsibilities to be performed by the Officer under this Agreement. Additionally, the Officer shall be entitled to such vacation and sick leave as shall be established under uniform employee policies promulgated by the Board of Directors. The Corporation shall reimburse the Officer for all out-of-pocket reasonable and necessary business expenses which the Officer may incur in connection with his service on behalf of the Corporation.
4. Term. The initial term of employment under this Agreement shall be for a two-year period commencing June 1, 1996; provided, however, this Agreement shall automatically be extended to a full two-year period on each successive day during the term of this Agreement. The effect hereof shall be that the Agreement shall at all times remain subject to a term of two years, unless (i) written notice has been given that the Agreement shall not be extended as provided in this Section 4, or (ii) the Agreement is terminated pursuant to Section 7. If written notice from the Corporation or the Officer is delivered to the other party advising the other party that this Agreement is not to be further extended, then upon such notice, the Agreement shall terminate on the second anniversary of the date of notice. Provided, further, no extension shall cause this Agreement to extend beyond the date on which the Officer reaches 65 years of age. Upon any extension, the base salary of the extended agreement shall be the base salary in effect on the effective date of such extension.
5. Loyalty; Noncompetition
(a) The Officer shall devote his best efforts to the performance of his duties and responsibilities under this Agreement.
(b) During the term of this Agreement, or any renewals hereof, the Officer agrees he will not, own, manage, operate, join, control or participate in the management, operation or control of, or be employed by or connected in any manner with any business which competes with the Corporation or any of its subsidiary corporations without the prior written consent of the Corporation. Notwithstanding the foregoing, the Officer shall be free, without such consent, to purchase or hold as an investment or otherwise, up to five percent of the outstanding stock or other securities of any corporation which has its securities publicly traded on any recognized securities exchange or in any established over-the-counter market.
The Officer shall hold in confidence all knowledge or information of a confidential nature with respect to the business of the Corporation or any subsidiary of the Corporation received by him during the term of this Agreement and will not disclose or make use of such information without the prior written consent of the Corporation.
The Officer acknowledges that it would not be possible to ascertain the amount of monetary damages in the event of a breach by the Officer under the provisions of this Section 5 and agrees that, in the event of a breach of this Section, injunctive relief enforcing the terms of this Section is an appropriate remedy.
6. Standards. The Officer shall perform his duties and responsibilities under this Agreement in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors. The Corporation will provide the Officer with the working facilities and staff customary for similar executives and necessary for him to perform his duties.
7. Termination and Termination Pay.
(a) By Death. The Officer's employment under this Agreement shall be terminated upon the death of the Officer during the term of this Agreement, in which event the Officer's estate shall be entitled to receive all compensation due the Officer through the last day of the calendar month in which his death shall have occurred.
(b) By Total Disability. The Officer's employment under this Agreement shall be terminated upon the total permanent disability of the Officer during the term of this Agreement, in which event the Officer shall receive all compensation, including bonuses, through the date of determination of such disability and for a period of 90 days thereafter. For purposes of this Section, the Officer shall be deemed to have suffered permanent disability upon the determination of such status by the United States Social Security Administration or a certification to such effect by the Officer's regular physician.
(c) By Officer. The Officer's employment under this Agreement may be terminated at any time by the Officer upon 60 days' written notice to the Board of Directors. Upon such termination, the Officer shall be entitled to receive all compensation, including bonuses, through the effective date of such termination.
(d) By Corporation. The Board of Directors may terminate the Officer's employment at any time, but any termination by the Board of Directors, other than termination for cause, shall not prejudice the Officer's right to continue to receive payment of all compensation and the continuance of benefits for a period of 24 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less) as provided below. The Officer shall have no right to receive compensation or other benefits (other than vested benefits) for any period after termination for "cause." Termination for cause shall mean termination because of the Officer's personal dishonesty, incompetence, willful material misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful material violation of an law, rule or regulation (other than traffic or traffic-related violations or similar offenses) or final cease-and-desist order, or material breach of any provisions of this Agreement.
(e) Change of Control. In the event of involuntary termination of the Officer's employment under this Agreement in connection with, or at any time following, any Change of Control of the Corporation, or in the event of voluntary termination by the Officer in connection with, or within 12 months after, any Change in Control of the Corporation, the Officer shall be paid the following amount for a period of 24 months from the effective date of termination or until such time as the Officer reaches 65 years of age (which ever is less):
(i) base salary plus
(ii) all amounts to which he may be or may become entitled to under any incentive or bonus plan plus
(iii) participation in all welfare benefit plans, practices, policies and programs at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period preceding his termination and with the costs of such benefits paid in the same manner as prior to this termination.
The Officer's base salary shall be paid in the same periodic payments over the remaining term of this Agreement. If the Officer is involuntarily terminated after a Change in Control, he shall be paid all base salary, incentive compensation and bonuses in a lump sum.
In connection with this Agreement the term "Change in Control" shall mean (i) the adoption of a plan or merger or consolidation of the Corporation with any other corporation or association as a result of which the holders of the voting capital stock of the Corporation as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; and (ii) the acquisition of more than 20% of the voting capital stock of the Corporation by any person
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. The term "person" means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.
(f) Reduction of Duties. Notwithstanding any other provision of this Agreement to the contrary, the Officer may voluntarily terminate his employment under this Agreement following a Change in Control of the Corporation, whether approved in advance by the Board of Directors or otherwise, and shall thereupon be entitled to receive the payments described in Section 7(e) of this Agreement, upon the occurrence, or within 30 days thereafter, of any of the following events, which have not been consented to in advance by the Officer in writing; (i) if the Officer would be required to move his personal residence or perform his principal executive functions more than 20 miles from the city limits of Charlotte, North Carolina; (ii) if in the organization structure of the Corporation, the Officer would be required to report to a person or persons other than the Board of Directors, Chairman of the Board or President; (iii) if the Corporation should fail to maintain employee benefits and welfare benefit plans, including incentive compensation, vacation, fringe benefit, stock option and retirement plans providing at least the same level of benefits afforded Officer as of the date hereof; (iv) if the Officer would be assigned duties and responsibilities other than those normally associated with his position as Executive Vice President; or (v) if the Officer's responsibilities or authority have in any way been diminished.
(g) Costs and Expenses. In the event any dispute shall arise between the Officer and the Corporation as to the terms or interpretation of this Agreement, including this Section 7, whether instituted by formal legal proceedings or otherwise, including any action taken by Officer to enforce the terms of this Section 7 or in defending against any action taken by the Corporation, the Corporation shall reimburse the Officer for all costs and expenses, proceedings or actions in the event the Officer prevails in any such action.
8. Successors and Assigns.
(a) This Employment Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation which
shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the
Corporation.
(b) Since the Corporation is contracting for the unique and
personal skills of the Officer, the Officer shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Corporation.
9. Modification; Waiver; Amendments. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Officer and on behalf of the Corporation by such Officer as may be specifically designated by the Board of Directors. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.
10. Applicable Law. This Agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of North Carolina.
11. Severability. The provision of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove written.
CORPORATION:
ATTEST: Piedmont Natural Gas Company, Inc.
/s/ Martin C. Ruegsegger
- -----------------------------
Secretary
By: /s/ John H. Maxheim
---------------------------
OFFICER:
/s/ Ware F. Schiefer (SEAL)
------------------------------------
|
Employment Agreement reviewed and approved by the Board of Directors this 31st day of May, 1996.
BY: /s/ John F. McNair III
--------------------------------
|
EXHIBIT 10.36
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of May 31, 1996, by and between PIEDMONT NATURAL GAS COMPANY, INC., a North Carolina corporation (the "Corporation"), and THOMAS E. SKAINS, a resident of Mecklenburg County, North Carolina (the "Officer").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has determined that the continued retention of the services of the Officer on a long-term basis as described herein is in the best interest of the corporation in that (a) it promotes the stability of senior management of the Corporation, (b) it enables the Corporation to retain the services of a well-qualified Senior Vice President with extensive contacts in the natural gas industry, and (c) it secures the continued services of the Officer notwithstanding any change in control of the Corporation; and
WHEREAS, the services of the Officer, his experience and knowledge of the affairs of the Corporation, and his reputation and contacts in the Corporation's industry are extremely valuable to the Corporation; and
WHEREAS, the Corporation considers the establishment and maintenance of a sound and vital management to be part of its overall corporate strategy and to be essential to protecting and enhancing the best interests of the Corporation and its stockholders; and
WHEREAS, the parties desire to enter into this Agreement in order to clearly set forth the terms and conditions of the Officer's employment relationship with the Corporation.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereby agree as follows:
1. Employment. The Corporation hereby employs the Officer and the Officer hereby accepts such employment, upon the terms and conditions stated herein, as Senior Vice President of the Corporation. The Officer shall render such administrative and management services to the Corporation as are customarily performed by persons situated in a similar executive capacity. The Officer shall promote the business of the Corporation and perform such other duties as shall from time to time be reasonably prescribed by the Directors. It is understood that the Officer's continued election as an officer of the Corporation is dependent upon action by the Board of Directors of the Corporation from time to time and that, subject to the provisions of Section 7 of this Agreement, the Officer's title and/or duties may change from time to time.
2. Base Salary. The corporation shall pay the Officer during the term of this Agreement as compensation for all services rendered by him to the Corporation a base salary in such amounts and at such intervals as shall be commensurate with his duties and responsibilities hereunder. Initially
such base salary shall be at the rate of $177,000 per year. The Officer's base salary may be increased from time to time to reflect the duties required of the Officer. In reviewing the Officer's base salary, the Board of Directors of the Corporation shall consider the overall performance of the Officer and the service of the Officer rendered to the Corporation and its subsidiaries and changes in the cost of living. The Board of Directors may also provide for performance or merit increases. Participation by Officer in any incentive, deferred compensation, stock option, stock purchase, bonus, pension, life insurance or other employee benefit plans which may be offered by the Corporation from time to time and participation in any fringe benefits provided by the Corporation shall not cause a reduction of the base salary payable to the Officer. The Officer will be entitled to such customary fringe benefits, vacation and sick leave as are consistent with the normal practices and established policies of the Corporation.
3. Participation in Incentive, Retirement and Employee Benefit Plans; Fringe Benefits. The Officer shall be entitled to participate in any plan relating to incentive compensation, stock options, stock purchase, pension, thrift, profit sharing, group life insurance, medical coverage, disability coverage, education, or other retirement or employee benefits that the Corporation has adopted, or may from time to time adopt, for the benefit of its executive employees and for employees generally, subject to the eligibility rules of such plans.
The Officer shall also be entitled to participate in any other fringe benefits which are now or may be or become applicable to the Corporation's executive employees, including the payment of reasonable expenses for attending annual and periodic meetings of trade associations, and any other benefits which are commensurate with the duties and responsibilities to be performed by the Officer under this Agreement. Additionally, the Officer shall be entitled to such vacation and sick leave as shall be established under uniform employee policies promulgated by the Board of Directors. The Corporation shall reimburse the Officer for all out-of-pocket reasonable and necessary business expenses which the Officer may incur in connection with his service on behalf of the Corporation.
4. Term. The initial term of employment under this Agreement shall be for a one-year period commencing June 1, 1996; provided, however, this Agreement shall automatically be extended to a full one-year period on each successive day during the term of this Agreement. The effect hereof shall be that the Agreement shall at all times remain subject to a term of one year, unless (i) written notice has been given that the Agreement shall not be extended as provided in this Section 4, or (ii) the Agreement is terminated pursuant to Section 7. If written notice from the Corporation or the Officer is delivered to the other party advising the other party that this Agreement is not to be further extended, then upon such notice, the Agreement shall terminate on the first anniversary of the date of notice. Provided, further, no extension shall cause this Agreement to extend beyond the date on which the Officer reaches 65 years of age. Upon any extension, the base salary of the extended agreement shall be the base salary in effect on the effective date of such extension.
5. Loyalty; Noncompetition
(a) The Officer shall devote his best efforts to the performance of his duties and responsibilities under this Agreement.
(b) During the term of this Agreement, or any renewals hereof, the Officer agrees he will not, own, manage, operate, join, control or participate in the management, operation or control of, or be employed by or connected in any manner with any business which competes with the Corporation or any of its subsidiary corporations without the prior written consent of the Corporation. Notwithstanding the foregoing, the Officer shall be free, without such consent, to purchase or hold as an investment or otherwise, up to five percent of the outstanding stock or other securities of any corporation which has its securities publicly traded on any recognized securities exchange or in any established over-the-counter market.
The Officer shall hold in confidence all knowledge or information of a confidential nature with respect to the business of the Corporation or any subsidiary of the Corporation received by him during the term of this Agreement and will not disclose or make use of such information without the prior written consent of the Corporation.
The Officer acknowledges that it would not be possible to ascertain the amount of monetary damages in the event of a breach by the Officer under the provisions of this Section 5 and agrees that, in the event of a breach of this Section, injunctive relief enforcing the terms of this Section is an appropriate remedy.
6. Standards. The Officer shall perform his duties and responsibilities under this Agreement in accordance with such reasonable standards expected of employees with comparable positions in comparable organizations and as may be established from time to time by the Board of Directors. The Corporation will provide the Officer with the working facilities and staff customary for similar executives and necessary for him to perform his duties.
7. Termination and Termination Pay.
(a) By Death. The Officer's employment under this Agreement shall be terminated upon the death of the Officer during the term of this Agreement, in which event the Officer's estate shall be entitled to receive all compensation due the Officer through the last day of the calendar month in which his death shall have occurred.
(b) By Total Disability. The Officer's employment under this Agreement shall be terminated upon the total permanent disability of the Officer during the term of this Agreement, in which event the Officer shall receive all compensation, including bonuses, through the date of determination of such disability and for a period of 90 days thereafter. For purposes of this Section, the Officer shall be deemed to have suffered permanent disability upon the determination of such status by the United States Social Security Administration or a certification to such effect by the Officer's regular physician.
(c) By Officer. The Officer's employment under this Agreement may be terminated at any time by the Officer upon 60 days' written notice to the Board of Directors. Upon such termination, the Officer shall be entitled to receive all compensation, including bonuses, through the effective date of such termination.
(d) By Corporation. The Board of Directors may terminate the Officer's employment at any time, but any termination by the Board of Directors, other than termination for cause, shall not prejudice the Officer's right to continue to receive payment of all compensation and the continuance of benefits for a period of 12 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less) as provided below. The Officer shall have no right to receive compensation or other benefits (other than vested benefits) for any period after termination for "cause." Termination for cause shall mean termination because of the Officer's personal dishonesty, incompetence, willful material misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties, willful material violation of an law, rule or regulation (other than traffic or traffic-related violations or similar offenses) or final cease-and-desist order, or material breach of any provisions of this Agreement.
(e) Change of Control. In the event of involuntary termination of the Officer's employment under this Agreement in connection with, or at any time following, any Change of Control of the Corporation, or in the event of voluntary termination by the Officer in connection with, or within 12 months after, any Change in Control of the Corporation, the Officer shall be paid the following amount for a period of 12 months from the effective date of termination or until such time as the Officer reaches 65 years of age (whichever is less):
(i) base salary plus
(ii) all amounts to which he may be or may become entitled to under any incentive or bonus plan plus
(iii) participation in all welfare benefit plans, practices, policies and programs at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period preceding his termination and with the costs of such benefits paid in the same manner as prior to this termination.
The Officer's base salary shall be paid in the same periodic payments over the remaining term of this Agreement. If the Officer is involuntarily terminated after a Change in Control, he shall be paid all base salary, incentive compensation and bonuses in a lump sum.
In connection with this Agreement the term "Change in Control" shall mean (i) the adoption of a plan or merger or consolidation of the Corporation with any other corporation or association as a result of which the holders of the voting capital stock of the Corporation as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; and (ii) the acquisition of more than 20% of the voting capital stock of the Corporation by any person
within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. The term "person" means an individual or a corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or any other form of entity not specifically listed herein.
(f) Reduction of Duties. Notwithstanding any other provision
of this Agreement to the contrary, the Officer may voluntarily terminate his
employment under this Agreement following a Change in Control of the
Corporation, whether approved in advance by the Board of Directors or otherwise,
and shall thereupon be entitled to receive the payments described in Section
7(e) of this Agreement, upon the occurrence, or within 30 days thereafter, of
any of the following events, which have not been consented to in advance by the
Officer in writing; (i) if the Officer would be required to move his personal
residence or perform his principal executive functions more than 20 miles from
the city limits of Charlotte, North Carolina; (ii) if in the organization
structure of the Corporation, the Officer would be required to report to a
person or persons other than the Board of Directors, Chairman of the Board,
President, or Executive Vice President; (iii) if the Corporation should fail to
maintain employee benefits and welfare benefit plans, including incentive
compensation, vacation, fringe benefit, stock option and retirement plans
providing at least the same level of benefits afforded Officer as of the date
hereof; (iv) if the Officer would be assigned duties and responsibilities other
than those normally associated with his position as Senior Vice President; or
(v) if the Officer's responsibilities or authority have in any way been
diminished.
(g) Costs and Expenses. In the event any dispute shall arise between the Officer and the Corporation as to the terms or interpretation of this Agreement, including this Section 7, whether instituted by formal legal proceedings or otherwise, including any action taken by Officer to enforce the terms of this Section 7 or in defending against any action taken by the Corporation, the Corporation shall reimburse the Officer for all costs and expenses, proceedings or actions in the event the Officer prevails in any such action.
8. Successors and Assigns.
(a) This Employment Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Corporation which
shall acquire, directly or indirectly, by conversion, merger, consolidation,
purchase or otherwise, all or substantially all of the assets of the
Corporation.
(b) Since the Corporation is contracting for the unique and
personal skills of the Officer, the Officer shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the written
consent of the Corporation.
9. Modification; Waiver; Amendments. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Officer and on behalf of the Corporation by such Officer as may be specifically designated by the Board of Directors. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.
10. Applicable Law. This Agreement shall be governed in all respects whether as to validity, construction, capacity, performance or otherwise, by the laws of North Carolina.
11. Severability. The provision of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first hereinabove written.
CORPORATION:
ATTEST: Piedmont Natural Gas Company, Inc.
/s/ Martin C. Ruegsegger
- -----------------------------
Secretary
By: /s/ John H. Maxheim
----------------------------
OFFICER:
/s/ Thomas E. Skains (SEAL)
-------------------------------------
|
Employment Agreement reviewed and approved by the Board of Directors this 31st day of May, 1996.
BY: /s/ John F. McNair III
---------------------------------
|
EXHIBIT 10.37
SERVICE AGREEMENT
THIS AGREEMENT entered into this 25 day of June 1996, by and between TRANSCONTINENTAL GAS PIPE LINE CORPORATION, a Delaware corporation, hereinafter referred to as "Seller," first party, and PIEDMONT NATURAL GAS COMPANY, INC. hereinafter referred to as "Buyer," second party,
WITNESSETH
WHEREAS, by order issued December 21, 1994, in Docket No. CP94-109, the Federal Energy Regulatory Commission ("Commission") authorized Seller's 1995/1996 Southeast Expansion Project (referred to as "SE95/96") and by order issued February 5, 1996, in the same proceeding, the Commission authorized certain modifications to Phase II of SE95/96; and
WHEREAS, SE95/96 is being constructed in two phases -- Phase I added the dekatherm equivalent of 115,000 Mcf of gas per day of incremental firm transportation capacity in December 1995, and Phase II, as amended, will add the dekatherm equivalent of 55,000 Mcf of gas per day of incremental firm transportation capacity by a proposed in-service date of November 1, 1996; and
WHEREAS, Seller and Buyer have executed (i) a Precedent Agreement, dated October 26, 1993, for firm transportation service under SE95/96, (ii) a Service Agreement, dated April 30, 1995 (hereinafter referred to as the "April 30, 1995 Service Agreement"), under Seller's Rate Schedule FT for such firm transportation service, and (iii) a letter agreement, dated May 22, 1995, for additional firm transportation service under Phase II to be made available as a result of the modifications to the SE95/96 facilities; and
WHEREAS, the parties now desire to enter into this agreement to incorporate the additional firm transportation service for Buyer under Phase II and to supersede and terminate the April 30, 1995 Service Agreement.
NOW, THEREFORE, Seller and Buyer agree as follows:
ARTICLE I
GAS TRANSPORTATION SERVICE
1. Subject to the terms and provisions of this agreement and of Seller's Rate Schedule FT, Buyer agrees to deliver or cause to be delivered to Seller gas for transportation and Seller agrees to receive, transport and redeliver natural gas to Buyer or for the account of Buyer, on a firm basis, up to the dekatherm equivalent of a Transportation Contract Quantity ("TCQ") of 75,213 Mcf per day from November 1, 1995 to October 31, 1996, and up to the dekatherm equivalent of 103,509 Mcf per day from November 1, 1996 through the remaining term of this agreement. 1
1 Buyer and Seller agree that the commencement of service hereunder up to the stated TCQ amounts shall be subject to the completion of construction and placement into service of Seller's facilities necessary to provide firm transportation service to Buyer pursuant to the authorizations issued by the FERC in Docket No. CP94-109. Seller shall notify Buyer as soon as reasonably practicable as the additional authorized facilities are constructed and ready for placement into service.
SERVICE AGREEMENT
(Continued)
2. Transportation service rendered hereunder shall not be subject to curtailment or interruption except as provided in Section 11 of the General Terms and Conditions of Seller's Volume No.1 FERC Gas Tariff.
ARTICLE II
POINT(S) OF RECEIPT
Buyer shall deliver or cause to be delivered gas at the point(s) of receipt hereunder at a pressure sufficient to allow the gas to enter Seller's pipeline system at the varying pressures that may exist in such system from time to time; provided, however, the pressure of the gas delivered or caused to be delivered by Buyer shall not exceed the maximum operating pressure(s) of Seller's pipeline system at such point(s) of receipt. In the event the maximum operating pressure(s) of Seller's pipeline system, at the point(s) of receipt hereunder, is from time to time increased or decreased, then the maximum allowable pressure(s) of the gas delivered or caused to be delivered by Buyer to Seller at the point(s) of receipt shall be correspondingly increased or decreased upon written notification of Seller to Buyer. The point(s) of receipt for natural gas received for transportation pursuant to this agreement shall be:
See Exhibit A, attached hereto, for points of receipt.
ARTICLE III
POINT(S) OF DELIVERY
Seller shall redeliver to Buyer or for the account of Buyer the gas transported hereunder at the following point(s) of delivery and at a pressure(s) of:
See Exhibit B, attached hereto, for points of delivery and pressures.
ARTICLE IV
TERM OF AGREEMENT
1. This agreement shall be effective as of the later of November 1, 1995 or the date Seller's facilities necessary to provide service to Buyer under Phase I of SE95/96 have been constructed and are ready for service, and shall remain in force and effect for a primary term of twenty (20) years from and after such effective date and year to year thereafter until terminated
SERVICE AGREEMENT
(Continued)
after such primary term by Seller or Buyer upon at least two (2) years written prior notice to the other party; provided, however, this agreement shall terminate immediately and, subject to the receipt of necessary authorizations, if any, Seller may discontinue service hereunder if (a) Buyer, in Seller's reasonable judgment fails to demonstrate credit worthiness, and (b) Buyer fails to provide adequate security in accordance with Seller's Rate Schedule FT.
ARTICLE V
RATE SCHEDULE AND PRICE
1. Buyer shall pay Seller for natural gas delivered to Buyer hereunder in accordance with Seller's Rate Schedule FT and the applicable provisions of the General Terms and Conditions of Seller's FERC Gas Tariff as filed with the Federal Energy Regulatory Commission, and as the same may be legally amended or superseded from time to time. Such Rate Schedule and General Terms and Conditions are by this reference made a part hereof.
2. Seller and Buyer agree that the quantity of gas that Buyer delivers or causes to be delivered to Seller shall include the quantity of gas retained by Seller for applicable compressor fuel, line loss make-up (and injection fuel under Seller's Rate Schedule GSS, if applicable) in providing the transportation service hereunder, which quantity may be changed from time to time and which will be specified in the currently effective Sheet No.44 of Volume No.1 of this Tariff which relates to service under this agreement and which is incorporated herein.
3. In addition to the applicable charges for firm transportation service pursuant to Section 3 of Seller's Rate Schedule FT, Buyer shall reimburse Seller for any and all filing fees incurred as a result of Buyer's request for service under Seller's Rate Schedule FT, to the extent such fees are imposed upon Seller by the Federal Energy Regulatory Commission or any successor governmental authority having jurisdiction.
ARTICLE VI
MISCELLANEOUS
1. This Agreement supersedes and cancels as of the effective date hereof the following contract(s) between the parties hereto: April 30, 1995 Service Agreement
2. No waiver by either party of any one or more defaults by the other in the performance of any provisions of this agreement shall operate or be construed as a waiver of any future default or defaults, whether of a like or different character.
3. The interpretation and performance of this agreement shall be in accordance with the laws of the State of Texas, without recourse to the law governing conflict of laws, and to all present and future valid laws with respect to the subject matter, including present and future orders, rules and regulations of duly constituted authorities.
4. This agreement shall be binding upon, and inure to the benefit of the parties hereto and
SERVICE AGREEMENT
(Continued)
their respective successors and assigns.
5. Notices to either party shall be in writing and shall be considered as duly delivered when mailed to the other party at the following address:
(a) If to Seller:
Transcontinental Gas Pipe Line Corporation
P.O. Box 1396
Houston, Texas 77251
Attention: Vice President - Customer Service
(b) If to Buyer:
Piedmont Natural Gas Company, Inc.
1915 Rexford Road
Charlotte, North Carolina 28211
Such addresses may be changed from time to time by mailing appropriate notice thereof to the other party by certified or registered mail.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers or representatives thereunto duly authorized.
TRANSCONTINENTAL GAS PIPE LINE CORPORATION
(Seller)
By /s/ Frank J. Ferazzi -------------------------------------------- Frank J. Ferazzi Vice President - Customer Service |
PIEDMONT NATURAL GAS COMPANY, INC.
(Buyer)
By /s/ Thomas E. Skains -------------------------------------------- Senior Vice President - Gas Supply and Services |
SERVICE AGREEMENT
(Continued)
EXHIBIT A
POINT(S) OF RECEIPT MAXIMUM DAILY QUANTITY AT EACH
RECEIPT POINT (MCF/D) 2:
PHASE I PHASE II 3
The interconnection between the
facilities of Seller and Seller's 75,213 103,509
Mobile Bay Lateral near Butler in
Choctaw County, Alabama
|
2 These quantities do not include the additional quantities of gas to be
retained by Seller for compressor fuel and line loss make-up. Therefore, Buyer
shall also deliver or cause to be delivered at the receipt points such
additional quantities of gas to be retained by Seller for compressor fuel and
line loss make-up.
3 The stated quantity represents the combined quantities for Phase I and
Phase II.
SERVICE AGREEMENT
(Continued)
EXHIBIT B
POINT(S) OF DELIVERY 4 MAXIMUM DAILY QUANTITY AT EACH
DELIVERY POINT (MCF/D):
PHASE I PHASE II 5
Woodruff Meter Station, located at milepost 1198.97 on Seller's 6,024 9,024
main transmission line, Spartanburg County, South Carolina.
Charlotte Meter Station, located at milepost 1287.10 on Seller's 21,315 35,634
main transmission line in Iredell County, North Carolina.
Cardinal Meter Station, located at milepost 1369.50 on Seller's 12,211 23,188
main transmission line, Rockingham County, North Carolina.
Hickory Meter Station, located at milepost 1269.23 on Seller's main 35,663 35,663
transmission line, Stanley, North Carolina.
|
4 Seller shall redeliver gas at Seller's available pipeline pressure.
5 The stated volume represents the combined quantities for Phase I and
Phase II.
|
EXHIBIT 12
PIEDMONT NATURAL GAS COMPANY, INC. AND SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges
For the Years Ended October 31, 1992 through 1996
(in thousands except ratio amounts)
---------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Earnings:
Net income from
continuing operations $ 48,562 $ 40,310 $35,506 $37,534 $35,310
Income taxes 30,928 25,442 21,407 23,427 21,259
Fixed charges 37,009 35,651 29,736 26,715 26,246
-------- -------- ------- ------- -------
Total Adjusted Earnings $116,499 $101,403 $86,649 $87,676 $82,815
======== ======== ======= ======= =======
Fixed Charges:
Interest $ 34,511 $ 33,224 $27,671 $24,870 $24,570
Amortization of debt
expense 345 336 334 192 180
One-third of rental expense 2,153 2,091 1,731 1,653 1,496
-------- -------- ------- ------- -------
Total Fixed Charges $ 37,009 $ 35,651 $29,736 $26,715 $26,246
======== ======== ======= ======= =======
Ratio of Earnings to Fixed
Charges 3.15 2.84 2.91 3.28 3.16
======== ======== ======= ======= =======
|
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Piedmont Natural Gas Company, Inc.:
We consent to the incorporation by reference in Post-Effective Amendment No. 3 to Registration Statement No. 2-67478 of Piedmont Natural Gas Company, Inc., on Form S-8; in Post-Effective Amendment No. 2 to Registration Statement No. 33-3815 of Piedmont Natural Gas Company, Inc., on Form S-8; in Registration Statement No. 333-01855 of Piedmont Natural Gas Company, Inc., on Form S-3; in Amendment No. 1 to Registration Statement No. 33-59369 of Piedmont Natural Gas Company, Inc., on Form S-3; and in Registration Statement No. 33- 61093 of Piedmont Natural Gas Company, Inc., on Form S-8 of our report dated December 20, 1996, appearing in this Annual Report on Form 10-K of Piedmont Natural Gas Company, Inc., for the year ended October 31, 1996.
/s/ DELOITTE & TOUCHE LLP Charlotte, North Carolina January 24, 1997 |
| ARTICLE UT |
| THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS OF PIEDMONT NATURAL GAS COMPANY FOR THE YEAR ENDED OCTOBER 31, 1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | YEAR |
| FISCAL YEAR END | OCT 31 1996 |
| PERIOD START | NOV 01 1995 |
| PERIOD END | OCT 31 1996 |
| BOOK VALUE | PER BOOK |
| TOTAL NET UTILITY PLANT | 862,029 |
| OTHER PROPERTY AND INVEST | 27,072 |
| TOTAL CURRENT ASSETS | 157,987 |
| TOTAL DEFERRED CHARGES | 17,828 |
| OTHER ASSETS | 0 |
| TOTAL ASSETS | 1,064,916 |
| COMMON | 246,907 |
| CAPITAL SURPLUS PAID IN | 0 |
| RETAINED EARNINGS | 139,184 |
| TOTAL COMMON STOCKHOLDERS EQ | 386,091 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| LONG TERM DEBT NET | 391,000 |
| SHORT TERM NOTES | 39,000 |
| LONG TERM NOTES PAYABLE | 0 |
| COMMERCIAL PAPER OBLIGATIONS | 0 |
| LONG TERM DEBT CURRENT PORT | 10,000 |
| PREFERRED STOCK CURRENT | 0 |
| CAPITAL LEASE OBLIGATIONS | 0 |
| LEASES CURRENT | 0 |
| OTHER ITEMS CAPITAL AND LIAB | 238,825 |
| TOT CAPITALIZATION AND LIAB | 1,064,916 |
| GROSS OPERATING REVENUE | 685,055 |
| INCOME TAX EXPENSE | 27,609 |
| OTHER OPERATING EXPENSES | 582,817 |
| TOTAL OPERATING EXPENSES | 610,426 |
| OPERATING INCOME LOSS | 74,629 |
| OTHER INCOME NET | 5,000 |
| INCOME BEFORE INTEREST EXPEN | 79,629 |
| TOTAL INTEREST EXPENSE | 31,067 |
| NET INCOME | 48,562 |
| PREFERRED STOCK DIVIDENDS | 0 |
| EARNINGS AVAILABLE FOR COMM | 48,562 |
| COMMON STOCK DIVIDENDS | 33,393 |
| TOTAL INTEREST ON BONDS | 0 |
| CASH FLOW OPERATIONS | 58,924 |
| EPS PRIMARY | 1.67 |
| EPS DILUTED | 0 |
Exhibit 99
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
For Annual Reports of Employee Stock Purchase, Savings and Similar Plans Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended October 31, 1996
Commission file number 1-6196
A. Full title of the plans and address of the plans, if different from that of the issuer named below:
Piedmont Natural Gas Company Employee Stock Purchase Plan Piedmont Natural Gas Company Employee Stock Ownership Plan
B. Name of issuer of the securities held pursuant to the plans and the address of its principal executive office:
PIEDMONT NATURAL GAS COMPANY, INC.
1915 Rexford Road
Charlotte, North Carolina 28211
PIEDMONT NATURAL GAS COMPANY EMPLOYEE STOCK PURCHASE PLAN
There were no material changes in the provisions of the Piedmont Natural Gas Company Employee Stock Purchase Plan (ESPP) during the year ended October 31, 1996. Financial statements are not required under Article 6A of Regulation S-X since the shares purchased by employees under the ESPP are not held by a trustee. Participating employees are furnished a statement after each stock purchase date (June 30 and December 31) showing the number of shares and the purchase price of any stock purchased for them and the balance remaining to their credit. At October 31, 1996, 621 employees participated in the ESPP.
PIEDMONT NATURAL GAS COMPANY EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
October 31, 1996 and 1995
Assets:
1996 1995
---- ----
Investment in Common Stock of Piedmont Natural Gas
Company, Inc., at market value - 240,457
and 233,053 shares (cost $2,621,591 and
$2,428,677) at 1996 and 1995,
respectively $5,891,197 $5,127,166
Receivable on sale of stock 135 65,603
Short-term demand notes, at cost which
approximates market 223 182
Other 1 1
---------- ----------
Total Assets and Net Assets Available
for Plan Benefits $5,891,556 $5,192,952
========== ==========
|
See notes to financial statements.
PIEDMONT NATURAL GAS COMPANY EMPLOYEE STOCK OWNERSHIP PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended October 31, 1996, 1995 and 1994
1996 1995 1994
---- ---- ----
Dividend and interest income $ 269,400 $ 256,811 $ 252,624
Gain (loss) on sale of assets (Note 3) (30,109) 65,663 9,611
Net appreciation (depreciation) in
fair value of investment in
Common Stock 624,623 361,882 (1,322,886)
Withdrawals by participants (165,310) (415,884) (409,145)
---------- ---------- ----------
Net increase (decrease) 698,604 268,472 (1,469,796)
Net assets available for benefits:
Beginning of year 5,192,952 4,924,480 6,394,276
---------- ---------- ----------
End of year $5,891,556 $5,192,952 $4,924,480
========== ========== ==========
|
See notes to financial statements.
PIEDMONT NATURAL GAS COMPANY EMPLOYEE STOCK OWNERSHIP PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The Piedmont Natural Gas Company Employee Stock Ownership Plan (ESOP) was established to enable employees of the Company and its subsidiaries to acquire Common Stock of the Company. Through 1986, the basis for the Company's contributions to the ESOP was a tax credit on the amount of aggregate compensation paid or accrued to all employees under the ESOP. The Tax Reform Act of 1986 eliminated the tax credit allowance, and no Company contributions have been made since 1987.
The ESOP is administered by an ESOP Administration Committee approved by the Company's Board of Directors. The Trust Client Services department of Wachovia Bank of North Carolina, N.A. serves as the trustee and custodian of the ESOP. The ESOP is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Separate accounts are maintained for each participant to reflect the allocation of contributions and subsequent dividend and investment income. Any income credited to participants is reinvested in Common Stock.
A participant is defined as an active eligible employee with a balance in his or her ESOP account. An employee is eligible to participate in the ESOP following the later of the date on which he or she completes at least 1,000 hours of service during a period of 12 consecutive months or attains age 21. Employees who reached eligibility subsequent to the termination of Company contributions are not considered participants.
The ESOP provides for immediate vesting. Distributions are made either at early retirement (age 55 and 10 years of service), at normal retirement (age 65), at actual retirement for a participant who remains employed after attaining normal retirement age, at permanent disability or at death of the participant. The Administration Committee of the ESOP may, in its sole discretion, direct an earlier distribution following a participant's termination of employment.
A qualified participant, defined as any employee who has reached age 55 and completed ten years of participation, has the right to diversify a portion of his or her account balance each year during the qualified election period.
The Company may terminate the ESOP at any time and may either cause the ESOP to continue operations until the ESOP trustee
has distributed all benefits or cause the assets of the ESOP to be liquidated and distributed.
2. BASIS OF ACCOUNTING
The financial statements are presented on the accrual basis of accounting.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.
The investment in the Company's Common Stock is valued at fair market value on October 31, 1996 and 1995 determined by quoted market values on the New York Stock Exchange. Dividend income is accrued on the ex-dividend date. Purchases and sales of securities are recorded on a trade-date basis. Realized gains and losses from security transactions are reported on the average cost method.
Certain prior year amounts have been reclassified to conform to the 1996 presentation.
3. GAIN (LOSS) ON SALE OF ASSETS
The gain (loss) on sale of assets for the years ended October 31, 1996, 1995 and 1994, is computed as follows:
1996 1995 1994
---- ---- ----
Gross proceeds $ 1,397 $195,724 $271,116
Historical cost 31,506 130,061 261,505
-------- -------- --------
Gain (loss) $(30,109) $ 65,663 $ 9,611
======== ======== ========
|
4. NET ASSETS AVAILABLE FOR BENEFITS
Net assets available for benefits adjusted for the payable to participants for withdrawal for the years ended October 31, 1996, 1995 and 1994, are as follows:
1996 1995 1994
---- ---- ----
Net assets available for
benefits at end of year $5,891,556 $5,192,952 $4,924,480
Payable to participants
for withdrawals 156,025 70,795 20,363
---------- ---------- ----------
Net assets available for
benefits adjusted for
payable to participants
for withdrawals $5,735,531 $5,122,157 $4,904,117
========== ========== ==========
|
5. TAX STATUS
The ESOP is qualified under Sections 401 and 409 of the Internal Revenue
Code of 1986, as amended (the Tax Code). The Internal Revenue Service
has informed the Company by letter that the ESOP is qualified, and the
trust established under the ESOP is exempt from income taxes under
Section 501(a) of the Tax Code. The ESOP has been amended since
receiving the determination letter. However, the ESOP administrator and
tax counsel believe that the ESOP is currently designed and being
operated in compliance with the applicable requirements of the Code.
The amount of the distribution under the ESOP is taxed to the recipient as ordinary income, with the taxable amount attributed to Common Stock distributed to a participant being the lesser of the cost to the trust or its fair market value on the date of distribution. Any increase in the value of the Common Stock is not taxed during the period that the stock is held by the trust nor upon its distribution to the participant. If stock is sold by a participant after distribution, the sale is subject to capital gain or loss treatment, depending on the sales price of the stock.
INDEPENDENT AUDITORS' REPORT
Piedmont Natural Gas Company
Employee Stock Ownership Plan:
We have audited the accompanying statements of net assets available for benefits of the Piedmont Natural Gas Company Employee Stock Ownership Plan (the Plan) as of October 31, 1996 and 1995, and the related statements of changes in net assets available for benefits for each of the three years in the period ended October 31, 1996. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at October 31, 1996 and 1995, and the Plan's changes in net assets available for benefits for each of the three years in the period ended October 31, 1996 in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP - ------------------------- DELOITTE & TOUCHE LLP Charlotte, North Carolina January 3, 1997 |