20231023Notice of Affiliate Transaction REDACTED.pdf

VIA ELECTRONIC FILING
October 23, 2023
Idaho Public Utilities Commission 11331 West Chinden Boulevard Building 8 Suite 201A Boise, Idaho 83714-1021
Attention: Jan Noriyuki Commission Secretary
Re: PacifiCorp Notice of Affiliate Transaction — PacifiCorp and Kern River Gas
Transmission Company Case No. PAC-E-05-8
Dear Ms. Noriyuki:
Pursuant to Commitment I 17(2), incorporated in the Idaho Public Utilities Commission Order No. 29973, issued February 13, 2006, as supplemented by Order No. 29998 March 14, 2006, in the above-referenced proceeding, approving the acquisition of PacifiCorp by MidAmerican Energy Holdings Company (now Berkshire Hathaway Energy Company or BHE), PacifiCorp hereby provides notice of an affiliated interest transaction with Kern River Gas
Transmission Company (KRGT).
PacifiCorp contracted with KRGT a Precedent and Facilities Agreement (the Agreement). By the Agreement’s terms KRGT is to construct a new natural gas pipeline lateral,
a new delivery meter station, a pressure regulation station, and all associated facilities necessary
to provide firm natural gas transportation service to PacifiCorp’s Naughton Plant (Naughton). KRGT will also tender to PacifiCorp a firm transportation service agreement for service commensurate with mutually agreed upon, prearranged commercial terms described therein. A true copy of the Agreement is included with this notice as Confidential Attachment A.
PacifiCorp is a wholly-owned indirect subsidiary of BHE. Likewise, KRGT is a wholly-owned indirect subsidiary of BHE, whose ownership interest in both PacifiCorp and KRGT creates an affiliated interest relationship between them.
Timothy K. Clark Senior Attorney 1407 W. North Temple, Suite 320 Salt Lake City, UT 84116 801-220-4565 [e-mail]
RECEIVED
2023 October 23, PM 3:07
IDAHO PUBLIC
UTILITIES COMMISSION
2
Please do not hesitate to contact me if you have any questions.
Sincerely,
Timothy K. Clark Senior Attorney PacifiCorp
Enclosure: Confidential Attachment A.pdf
REDACTED
KRGT owns and operates an interstate natural gas transmission system extending from receipt points near Opal, Wyoming, to delivery points in Utah, Nevada, and California.
PacifiCorp owns and operates a power plant (i.e., Naughton) near Kemmerer, Wyoming. In the
event PacifiCorp converts Naughton’s units from coal to natural gas, construction of natural gas facilities and firm natural gas transportation services for their operation will be necessary. Thus, entering the Agreement is in the public interest because it enables PacifiCorp to best meet its customers’ needs and ultimately benefits KRGT’s customers.
PacifiCorp completed a request for proposal requesting natural gas firm transportation rates for the development/construction of suitable natural gas facilities to connect the Naughton units to an interstate pipeline and for firm transportation service. KRGT was the lowest cost alternative in a review a competitive comparison of rates. The dollar value of this transaction is
projected to be $ million total-company allocated.
CONFIDENTIAL ATTACHMENT A
to
PacifiCorp Notice of Affiliate Transaction
PRECEDENT AND FACILITIES AGREEMENT
(NAUGHTON LATERAL AND DELIVERY METER STATION)
THIS PRECEDENT AND FACILITIES AGREEMENT ("Agreement") is made and entered into as of October 16, 2023 ("Effective Date"), by and between KERN RIVER GAS TRANSMISSION COMPANY
("Kern River"), a Delaware corporation, and P ACIFICORP ("Customer"), an Oregon corporation.
Hereinafter, Kern River and Customer may be referred to individually as a "Party" or collectively
as the "Parties."
BACKGROUND:
A.Kern Rive1 owns and operates an interstate natural gas transmission system extending from
receipt points near Opal, Wyoming to delivery points in Utah, Nevada, and California.
B.Customer requested that Kern River construct a new natural gas pipeline lateral, a newdelivery meter station, a pressure regulation station, and all associated facilities necessaryto provide firm natural gas transportation service to Customer's facility located nearKemmerer, Wyoming ("Naughton Plant").
C.Kern River is willing to design, permit, construct, own, operate, and maintain the DeliveryFacilities ( defined below).
D.Customer has or will execute a FIRM TRANSPORTATION SERVICE AGREEMENT ("TSA")substantially in the fmm of Exhibit A with Kern River for transpo1iation service uponmutually agreed upon, prearranged commercial terms set forth in such TSA, subject to the
rates, terms and conditions of the Tariff (as defined in Section 1.20 below).
E.In consideration of the mutual covenants and agreements herein contained, and subject toall the terms, conditions, and provisions of this Agreement, Kern River and Customer dohereby agree as follows:
ARTICLE l DEFINITIONS
When used in this Agreement, the capitalized te1ms set fmih below shall have the following meanmgs:
1.1 "49 CFR § 192.195" shall mean Title 49 of the Code of Federal Regulations,
Section 192.195
1.2 "Actual Cost" shall mean the cost incmTed or committed for the construction of the
Delivery Facilities, determined in Kern River's sole discretion, including, but not limited
to, (i) planning, design, materials, labor, contract and engineering costs; (ii) overheads; (iii)
all applicable taxes; (iv) income tax gross-up, when applicable; (v) allowance for funds
used during construction (AFUDC), when applicable; (vi) associated operation and maintenance costs; and (vii) any reservation charge credits, as defined in Kern River's
Page 1 of 12
Tariff, paid to other shippers by Kern River as a result of any outage caused by the construct10n of the Dehve1y Facilities.
1.3 "Contract Value" shall mean, as of the determination date, the unpaid reservation charges of the remaining 01iginal term of the TSA
1.4 "Custody Transfer Point" shall mean the point of interconnection between the Delive1y
Facilities and Customer's Downstream Facilities.
1.5 "Customer's Remaining Obligation" shall mean that portion of the Actual Cost which has not been paid to Kern River, as of any given calendar date, and is equal to (x) multiplied by (y); where (x) equals the unpaid reservation charges of the remaining original term of the TSA ( excluding any costs associated with the extension option) divided by the total
reservation charges for the entire original term of the TSA (excluding any costs associated
with the extension option), and (y) equals the Actual Cost.
1.6 "Delivery Facilities" shall mean those facilities owned by Kern River as set forth on Exhibit B including, but not limited to, a new pipeline lateral, a new delivery meter station, a pressure regulation station, and all associated facilities and appurtenances required for
the transportation and delivery of natural gas, as contemplated by this Agreement and the
TSA, to Customer's facilities located in Section 34, Township 21 No1ih, Range 116 West,
Lincoln County, Wyoming.
1.7 "Downstream Facilities" shall mean any and all facilities not owned or operated by Kern River that may be necessary, in the reasonable opinion of Customer, to protect and connect Customer's facilities to the Delivery Facilities, to meet applicable regulatory
requirements, to meet Customer's gas quality requirements, and to protect Customer's
facilities. Downstream Facilities may include, but are not limited to, odorization facilities, pressure regulation, over-pressure protection equipment, liquid separation and gas filtration equipment, and applicable cathodic protection equipment. The Downstream Facilities will accommodate Kem River's operating pressures as they exist from time to
time, up to the Maximum Delivery Pressure.
1.8 "Dth" shall mean dekatherm. For the purposes of this Agreement, one dekathenn shall equal one thousand standard cubic feet of natural gas.
1 9 "FERC" shall mean the FEDERAL ENERGY REGULATORY COMMISSION.
I. 10 "Imaged Documents" shall have the meaning set forth in Section 13 .3.
1.11 "MAOP" shall mean maximum allowable operating pressure, in pounds per square inch gauge ("1!§.!g").
1.12 "Maximum Delivery Pressure" shall mean the maximum pressure at which Kern River will deliver to the Customer at the Custody Transfer Point. The Maximum Delive1y Pressure is psig
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REDACTED
1.13 "Minimum Delivery Pressure" shall mean the minimum pressure at which Kern River
will deliver gas to the Customer at the Custody Transfer Point. The Minimum Delivery Pressure is ps1g.
1.14 "Naughton Plant" shall have the meaning set forth above in Section B of the Background p01i10n of this Agreement
1.15 "Necessary Approvals" shall mean an approval that has become final and is no longer subject to rehearing or appeal, regardmg the construction and operation of the Delivery Facilities, this Agreement or the TSA, issued by FERC, any federal, state, local, or municipal agency, or any other governmental authority, in a form and substance satisfacto1y to Kern River in its sole determination; provided, however, at Kern River's
sole disc1etion, Kern River may waive a Necessary Approval. Necessary Approvals shall
specifically include, but shall not be limited to, all ughts of way, permits and authorizations for the Delivery Facilities.
1.16 "Open Season" shall mean the period ( as described in Section 2.1 below) when Kern River will conduct a binding open season to offer third paiiies an opportunity to bid on the pre­arranged transaction as set fo1ih in this Agreement and governed by the Tariff
1.17 "Requested Delivery Facilities Capacity" shall mean Customer's requested delivery measurement range of Dth per day mmimum through Dth per day maximum.
1.18 "Security" shall mean the amount of credit assurance required by Kern River pursuant to
Exhibit C, provided by Customer and held by Kern River to secure Customer's obligations
to Kern River under this Agreement and/or the TSA.
1.19 "Set-Point Pressure." The Naughton Plant will have ability to request set-point at 300 psig through 450 psig. The Naughton Plant's common Set-Point Pressure requirement is 300 psig.
1.20 "Tariff' shall mean Kern River's FERC GAS TARIFF, as revised from time to time.
1.21 "TSA" shall mean a FIRM TRANSPORTATION SERVICE AGREEMENT executed pursuant to Kern River's Open Season, or any subsequent open seasons for the Delivery Facilities in the form attached hereto as Exhibit A and incorporated into this Agreement by this reference, subject to the Tariff.
ARTICLE II
TRANSPORTATION SERVICE
2.1 Subject to the terms of this Agreement, Kern River will tender to Customer a TSA substantially in the form as set fmih in Exhibit A to this Agreement. The TSA will be consistent with Kern River's Rate Schedule KRF-1 and shall be subject to all the applicable terms and conditions of Kern River's Tariff, as may be revised from time to time, and all rules and regulations of governmental authorities having Jurisdiction. The TSA will
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provide for the transpo1iation of natural gas up to Dth per day from the primary
point of receipt to the primary point of delivery at a demand/reservation rate of per Dth per day for a term of five years set fmih in Exhibit A. Pursuant to Tariff General Terms and Conditions Section 27.2(c), Kern River shall post the pre-arranged transaction for competitive bid. In accordance with Tariff General Terms and Conditions
Section 27.2(c), if another party submits a bid with a higher incremental economic value
than the pre-aITanged transaction set fmih in this Agreement, Customer will have an opportunity to retain the capacity by matching such higher bid. If the capacity is awarded to another party pursuant to Tariff General Terms and Conditions Section 27.2(c), Customer shall have no further obligations under this Agreement, which shall then be void and of no effect. If Customer is awarded the capacity, Kern River shall tender the TSA. If Customer fails to return a fully executed copy of the TSA within (30) thi1iy calendar days
of the date tendered to Customer by Kern River, Customer will immediately be in breach
of this Agreement on the date of such failure and will be liable for any and all damages at law or in equity hereunder, as accelerated to the date of such breach.
The term of the TSA shall commence on the later of March 1, 2026, or the date on which Kern River deems the facilities ready for service, provided, however, the TSA shall be subject to any Necessary Approvals, and acceptance of such Necessary Approvals, and the
completion of any facilities necessary for Kern River to provide the service as set fo1ih in A1iicle IV.
2.2 Kern River and Customer shall execute a TSA, OPERATIONAL BALANCING AGREEMENT and a SIGNAL LEASE AGREEMENT prior to the in-service date of the Delivery Facilities in
order to facilitate operation of the Delivery Facilities.
ARTICLE III FACILITIES TO BE CONSTRUCTED AND OPERA TED
3 1 The Delivery Facilities shall consist of those facilities required or necessary to facilitate the measurement and delivery of the Requested Delive1y Facilities Capacity Customer agrees that the design, construct10n and components used to build the Delive1y Facilities will be determined by Kern River in its sole and reasonable discretion. Customer acknowledges that Exhibit Bis not a comprehensive list of the items that may be necessmy to construct the Delive1y Facilities.
3 .2 Kern River or its designee shall design, construct, install, mspect and test the Delivery Facilities to ensure that the Delivery Facilities can meet the Requested Delivery Facilities Capacity in accordance with this Agreement, Kern River's specifications, the Tariff, and otherwise in accordance with sound and prudent natural gas industry practice, and in
compliance with any and all applicable laws, rules, regulations and orders of any duly
constituted governmental authority having jurisdiction over Kern River or the Delivery Facilities.
3 .3 Each Pmiy represents and warrants that its facilities shall be designed, procured, constructed, and mstalled m accordance with all valid and applicable laws, regulations,
codes, rules, ordinances, and directives of all applicable federal, state, local and tribal
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REDACTED
authorities, if any, having jurisdiction over such facilities including, without limitation, the
provisions of 49 CFR § 192.
3 .4 Kern River shall own, operate and maintain the Delivery Facilities as part of its interstate transmission system pmsuant to its Tariff and any and all applicable laws, rules, regulations and orders of any duly constituted authority having junsdiction.
3.5 Customer has the responsibility to adhere to 49 CFR § 192.195 and any other applicable federal and state requirements. Customer expressly agrees that Kern River is not responsible for the over-pressure protection or odorization of the Downstream Facilities, and that Customer is solely liable for any and all damages due to inadequate over-pressure protection on the Downstream Facilities.
3.6 Customer and Kern River hereby specifically acknowledge that delivery of natural gas
transp01ied by Kern River to Customer shall be at the Set-Point Pressure requested by the
Naughton Plant, provided, however, Kern River reserves the right to modify the requested Set-Point Pressure in order to account for control system dead band limitations to ensure the delivery pressure will not exceed the Maximum Dehveiy Pressure or be less than the Mimmum Delive1y Pressure.
3.7 Kern River shall obtain all the Necessary Approvals. Such Necessaiy Approvals shall be obtained by and in the name of Kern River. Kern River shall be under no obligation to commence construction of the Delivery Facilities until such time as all Necessary Approvals have been obtained. Kern River shall not be liable to Customer under this Agreement for failure to obtain, or for delays in obtaining, the Necessaiy Approvals. The
Paiiies will work together in good faith to obtain any required permits.
3.8 Subject to receipt ofNecessaiy Approvals, Kern River will make commercially reasonable effo1is to complete the Delive1y Facilities no later than March 1, 2026. Customer shall not be obligated to make payment of any transpmiation demand/reservation charges until the
Delivery Facilities are complete, provided, however, Kern River may declare the Delive1y
Facilities ready for service regardless of whether or not the Downstream Facilities to be
constructed by Customer are complete.
3.9 Customer or its designee, at no cost or expense to Kern River, shall be solely responsible for the maintenance and operation of the Downstream Facilities. Kem River or its designee, shall be solely responsible for the maintenance and operation of the Deliveiy Facilities.
Customer and Kern River, each agree to make reasonable efforts to coordinate testing and
maintenance on the Downstream Facilities and Delivery Facilities, respectively.
3 .10 Customer shall grant Kern River permanent and tempora1y easements on Customer-owned property necessary for the construction of a delive1y meter station contemplated by this
Agreement, as determined and mutually agreed by both Parties. The easement terms and
conditions shall be to Kern River's satisfaction. The permanent easement for the delive1y meter station shall have unrestricted vehicle access from a public road by March 1, 2025.
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ARTICLE IV
CONDITIONS PRECEDENT
4.1 This Agreement and the TSA are expressly subject to receipt by Kern River of all Necessary Approvals
4.2 To the extent Kern River, after making commercially reasonable eff01is, is unable to obtain the Necessary Approvals, Kern River may terminate this Agreement and the TSA pursuant
to this A1iicle IV, and neither Paiiy shall have any further obligations pursuant to this
Agreement or the TSA, except that Customer shall be obligated to pay Kern River for the Actual Cost within thiliy (30) calendar days of written notice which shall be accompanied with reasonable supp01i of its Actual Cost.
4.3 In exchange for the consideration received hereunder, including without limitation the expected revenue from the TSA, Kem River is willing to make the capital expenditures foi
the construction of the Delivery Facilities; provided, however, if Customer has not
provided a CIAC for an amount equal to the Actual Cost, and if the Total Deliveiy Point Entitlement (as defined in Exhibit A of the TSA) is, for any reason during the term of the TSA, in whole or in paii, (i) reduced ( except in the instance of a temporary capacity release), or (ii) realigned away from the Primmy Receipt or Primaiy Delivery Points under
the TSA, such act is a breach of this Agreement and Customer will promptly pay to
Kem River an amount, which is immediately due and owing, equal to the Customer's Remaining Obligation on the date triggering the provisions of this section. This section and the reimbursement obligations herein will survive the permanent release of the capacity m the TSA or any assignment thereof and Customer will continue to be obligated for the reimbursement of Customer's Remaining Obligation unless Kem River consents to the
express release of such obligation.
4.4 Kem River shall make reasonable commercial efforts to adhere to the total cost set forth in Exhibit D. If Kem River anticipates an overrun of the total cost at any time, it will make reasonable commercial effo1is to provide Customer with prompt notice prior to incurring such total cost overrun.
ARTICLEV
TERM AND TERMINATION
5.1 This Agreement shall become effective as of the Effective Date and shall remain in effect until all obligations and responsibilities of this Agreement and the TSA have been fully
satisfied, provided, however, upon both Paiiies' execution of the TSA, Operational
Balancing Agreement and Signal Lease Agreement, Section 2.1 and Exhibit A of this Agreement shall expire and be superseded by the TSA. In the event this Agreement is terminated prior to the Delivery Facilities being ready for service for any reason not solely
caused by Kem River, Customer shall be obligated to pay Kern River for the Actual Cost within thirty (30) calendar days of written notice which shall be accompanied with
reasonable support of its Actual Cost.
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5.2 Kern River may terminate this Ag1eement and the TSA immediately upon written notice to Customer if (i) Customer, in Kern River's reasonable Judgment, fails to meet and
maintam the creditworthiness requirements set forth in A1iicle VI below, and (i1) Customer
fails to provide Secmity in accordance with Article VI below.
ARTICLE VI
CREDITWORTHINESS
6.1 Customer must meet the requirements of General Terms & Conditions Section 29 of the Tanff and the Security requirements of Exhibit C hereof.
ARTICLE VII
SUCCESSION AND ASSIGNMENT
7.1 Customer shall not assign or transfer this Agreement, including by operation of law such as by purchase, merger or consolidation, without the express prior written consent of Kern River, which consent shall not be umeasonably withheld or delayed. Any such purpmied assignment, transfer or delegation without Kern River's express written consent
shall be null and void. As a condition precedent, any such assignment so consented to by
Kern River must meet and satisfy the creditworthiness requirements set fmih in Article VI.
AR TI CLE VIII No THIRD PARTY BENEFICIARIES
8.1 This Agreement shall not create any rights in any third parties, and no provision shall be construed as creating any obligation for the benefit of, or right in favor of, any person or entity other than Kern River or Customer.
ARTICLE IX
NOTIFICATIONS, COMMUNICATIONS AND PAYMENTS
9 .1 Except as otherwise provided herein, any notice contemplated or required by this Agreement shall be in writing, and shall be considered duly delivered when delivered by registered mail or overnight courier, to the appropriate Party at the appropriate address set forth below, or at such other address as Kem River or Customer may from time to time
designate by written notice:
As to Kem River:
KERN RIVER GAS TRANSMISSION COMPANY
2755 E. Cottonwood Parkway, Suite #300
Salt Lake City, Utah 84121 Attn: VP -Customer Service & Business Development
As to Customer:
PACIFICORP
825 NE Multnomah St, Suite 600
Portland, Oregon 97232 Attn Irene Heng
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ARTICLEX
SEPARATE CLAUSES
10.1 Each clause is separate from the other clauses. If any clause or provis10n of this Agreement
is deemed invalid, the remaining clauses and provisions shall remain in full force and effect.
ARTICLE XI
BREACH AND CONSEQUENTIAL DAMAGES
11.1 Except as otherwise set forth herein, a Party's failure to comply with the terms contained in this Agree�ent will constitute a breach of this Agreement and the TSA Upon a Pmiy's default, that Pmiy will be liable for any and all damages at law or in equity he1eunder; with respect to Customer, damages would include, but not limited to, payment of the Contract Value, as accelerated to the date of breach The Parties specifically retain, but are not
limited to, any rights the Party may exercise pursuant to Section 11 of the General Terms
and Conditions of the Tariff.
11.2 NEITHER PARTY, NOR ITS REPRESENTATIVE OFFICERS, DIRECTORS, EMPLOYEES,
REPRESENTATIVES, AFFILIATES, SUCCESSORS OR ASSIGNS WILL BE LIABLE TO THE OTHER
PARTY FOR ANY INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES HOWEVER
CAUSED, WHETHER ARISING OUT OF CONTRACT, TORT, STRICT LIABILITY, INDEMNITY,
WARRANTY, PROFESSIONAL LIABILITY, CONTRIBUTION, OR OTHERWISE.
ARTICLE XII
REPRESENTATION AND WARRANTIES OF CUSTOMER
Customer hereby wanants and represents to Kern River the following·
12.1 Customer is duly organized, validly existmg and in good standing under the laws of the jurisdiction of its organization and has full power to execute, deliver and perform this
Agreement.
12.2 The execution, delivery and performance of this Agreement have been and remain duly authorized by all necessary corporate or organizational action and do not contravene any provision of law or of Customer's constitutional documents or any contractual restriction binding on Customer or its assets.
12.3 All consents, authonzations and approvals of, and registrations and declarat10ns with, any governmental authority necessary for the due execution, delivery and performance of this Agreement have been obtained and remain in full force and effect and all conditions thereof have been duly complied with, and no other action by and no notice to or filing with, any governmental authority is required in connection with Customer's execution, delivery or
performance of this Agreement.
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12 4 Customer's assets, at their respective fair value, exceed Customer's liabilities and Customer has, or will have, sufficient cash and capital to pay its liabilities and obligations as they become due.
12.5 In consideration for its execution of this Agreement, Customer will receive reasonably
equivalent value for the obligations that 1t is assuming as a result of this Agreement.
ARTICLE XIII
ENTIRE AGREEMENT, SINGLE UNITARY TRANSACTION,
AMENDMENTS AND IMAGED DOCUMENTS
13.1 This Agreement hereto constitutes the entire agreement between Kern River and Customer pertaining to the subject matter hereof.
13.2 No amendments to, or modifications of, this Agreement shall be effective unless agreed to
in a written instrument executed by Kern River and Customer that expressly refers to this
Agreement.
13.3 Any document generated by the Parties with respect to this Agreement, mcluding this Agreement, may be imaged and stored electronically ("Imaged Documents"). Imaged Documents may be introduced as evidence in any proceeding as if such were original
business records and neither Paiiy shall contest the admissibility of Imaged Documents as
evidence in any proceeding.
13.4 Kern River's Tariff requires that the terms, conditions and obligations set fo1ih herein be separately documented in this Agreement. Notwithstanding this separate documentation,
the terms, conditions and obligations set forth herein are an integral, unseverable paii of a
single, unitary transaction between Kern River and Customer consisting of (i) the
obligations evidenced by this Agreement and (ii) the terms, conditions and obligations set forth in the TSA. As evidenced by the mtegrated, intertwined elements of the transaction evidenced by this Agreement and the TSA, Kern River and Customer each intend that this Agreement and the TSA operate as one, unitary unseverable agreement. Kern River and Customer each acknowledge that neither this Agreement nor the TSA would exist as
separate agreements. Any reference to (i) this Agreement individually, or (ii) this
Agreement and the TSA together is merely a function of the Tariffs separate documentation requirement and does not evidence or constitute separate agreements or transactions. Kem River and Customer agree that any reference (i) this Agreement or the TSA individually, or (iii) this Agreement and the TSA together constitutes a reference to
the single, unitary transaction consisting of this Agreement and the TSA together. Because
this Agreement and the TSA together constitute one unitary, unseverable agreement and memorialize the terms and conditions of a single transaction, recoupment may be used to determine the liability owed under the transaction.
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ARTICLE XIV
GOVERNING LAW AND JURY W AIYER
14.1 The construction, interpretation, and enforcement of this Agreement shall be governed by and construed in accordance with the laws of the State of Utah, excludmg any conflict of law rule, which would refer any matter to the laws of a jurisdiction other than the State of
Utah. Exclusive jurisdiction and venue shall lie in Salt Lake City, Utah.
14.2 TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH
PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL
HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY CANNOT BE OR HAS NOT BEEN
WAIVED.
ARTICLE XV
CONFIDENTIALITY
15 .1 Kern River and Customer agree to maintain this Agreement, all of its contents and
subsequent and related documents (if clearly marked "Confidential Information" by the transmitting Pmiy) in strict confidence and shall not cause or permit disclosure thereof to any third pmiy without the express written consent of the other Party except to the extent necessary to comply with valid laws, regulations or orders of any comi or agency having jurisdiction. The Parties specifically agree that disclosure to FERC shall be authorized under this Section If either Pmiy becomes aware of a judicial or administrative proceeding or request that has resulted in or may result in such disclosure, it shall so notify the other Pmiy sufficiently in advance of any disclosure for such Pmiy to take any and all actions necessary to prevent the disclosure and maintain the confidentiality of this Agreement and all related documents. Notwithstanding any other provision of this Agreement, if the
disclosing Patiy fails to notify the other Party prior to such disclosure, the disclosing Pmiy
shall be liable for damages for such disclosure without notice.
ARTICLE XVI
INDEMNIFICATION
16.1 To the fullest extent permitted by law, the Pmiies agree to protect, defend, indemnify and
hold each other, their directors, officers, employees, attorneys-in-fact, agents and affiliated
companies, free and harmless from and against any and all losses, claims, liens, demands, and causes of action of every kind and character, arising out of, or m connection with, that Pmiy's (including its officers, employees', agents', contractors', subcontractors' acts,
omissions, willful misconduct or negligence in the performance of their obligations under
this Agreement, including, but not limited to, the amounts of judgments, penalties, interest, court costs, investigation expenses and costs and legal fees incurred by that Pmiy's, its directors, officers, employees, attorneys-in-fact, agents and affiliated companies, in defense of same arising in favor of any governmental agencies, third persons, contractors Page 10 of 12
or subcontractors, on account of taxes, claims, liens, debts, personal injuries, death or
damages to property, and all other claims or demands of every character.
ARTICLE XVII ATTORNEYS' FEES
17.1 The prevailing Party shall have the right to collect from the other Party its reasonable costs
and attorneys' fees incurred in enforcing this Agreement.
[SIGNATURE PAGE FOLLOWS]
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I I WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
KER RJVER GAS TH.A T lJS JON COMP A 'Y
By: 7;.ttk .d���Date: q/z,/zvz�
c£ � Mac McGuire
CA,,�f\i Vice President-Customer Service & Business Development
PACJFJCORP
Date: I D/�/2023�/
Rick Link Senior Vice President -Resource Planning/Procurement/Optimization
Page 12 of 12
1'
r.
EXHIBIT A TOTHE PRECEDENT AND FACILITIES AGREEMENT
DATED ------
BETWEEN KERN RlVER GAS TRANSMISSION COMP ANY AND PACIFICORP
FIRM TRANSPORTATION SERVICE AGREEMENT Rate Schedule KRF-1
THIS FIRM TRANSPORTATION SERVICE AGREEMENT ("Agreement") is made and entered
into as of this __ th day of 2023, by and between KERN RIVER GASTRANSMISSION COMPANY ("Transporter") and PacifiCorp ("Shipper"), and supersedes all previous versions of this Agreement, if any.
WHEREAS, Shipper has acquired or intends to acquire a supply of Natural Gas
that can be delivered to Transporter's pipeline system and redelivered by Transporter to Shipper or for Shipper's account at Delivery Points on Transporter's system;
WHEREAS, Shipper was awarded available capacity pursuant to Transporter's Notice Identifier ________ , Open Season Notice;
WHEREAS, Shipper desires Transportation service from Transporter in accordance with Transporter's Rate Schedule KRF-1, on file with the Federal Energy Regulatory Commission ("FERC"), as amended from time to time; and
WHEREAS, Transporter is willing to render such Transportation service.
NOW, THEREFORE, in consideration of the mutual covenants and agreements as herein set forth, the parties agree as follows:
----'
REDACTED
_
REDACTED
d FERC order, without prejudice to Shipper's right to
4.5 TO THE FULLEST EXTENT PERMITTED BY LAW, SHIPPER AND TRANSPORTER WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of this day of ___ , 2023.
"SHIPPER:"
PACI FI CORP
By:
Title:
"TRANSPORTER:"
KERN RIVER GAS TRANSMISSION COMPANY
By:
Title:
REDACTED
EXHIBIT "A" TO FIRM TRANSPORTATION SERVICE AGREEMENT CONTRACT NO. BETWEEN PACI FI CORP AND KERN RIVER GAS TRANSMISSION COMPANY
REDACTED
EXHIBIT "B" TO FIRM TRANSPORTATION SERVICE AGREEMENT CONTRACT NO. BETWEEN PACI FI CORP AND KERN RIVER GAS TRANSMISSION COMPANY
REDACTED
EXHIBIT B TO THE PRECEDENT AND FACILITIES AGREEMENT
DATED ----
BETWEEN KERN RIVER GAS TRANSMISSION COMPANY AND PACIFICORP
Major equipment comprising the Delivery Facilities:
DELIVERY METER STATION Delive1y meter(s) Worker-monitor valve assembly(ies) for pressure regulation to a single Custody Transfer Point
consisting of one flanged connection.
One (1) gas heater assembly
One ( 1) filter separator unit
One (I) condensate tank Flow computer, transmitters and communication equipment Cathodic protection equipment Such other equipment as necessary to ensure the Interconnect Facilities satisfy the requirements
of this Agreement Kern River shall arrange for utility power to be installed at the Delive1y Facility location.
PIPELINE LATERAL One (1) 16-inch hot tap on 36-inch piping One (1) 20-inch launcher assembly and associated piping
One (1) 20-inch receiver assembly and associated piping
16-inch diameter lateral line pipe
EXHIBIT C
TOTHE PRECEDENT AND FACILITIES AGREEMENT DATED ----
BETWEEN
KERN RlVER GAS TRANSMISSION COMPANY AND PACIFICORP
CREDITWORTHINESS
A.Definitions
B.
"Mainline Facilities" shall mean facilities on Kern River's main pipeline system andappurtenant facilities to such Mainline Facilities.
"Non-mainline Facilities" shall mean facilities other than Mainline Facilities, which
includes, but is not limited to, lateral lines and measurement facilities.
"True-Up" shall mean the process(es) initiated and completed by Kem River at any timeduring or after completion of the Delivery Facilities, to adJust any amount previouslyestimated to the Actual Cost, and the Security provided pursuant to Exhibit C attached
hereto and incorporated herein.
When Security is not Required
Security will not be required during any period after the execution of this Agreement and/or
throughout the term of the TSA, provided that Customer meets and maintains the creditwmihiness requirements outlined in Section 29 of the General Terms and Conditions of the Tariff.
C.When Security is Required
Security will be required at any time after the execution of this Agreement and/orthroughout the duration of the TSA if Customer fails to meet the creditworthinessrequirements outlined in Section 29 of the General Terms and Conditions of the Tariff.
1.Amount of Security To Be Provided:
If Security is reqmred pursuant to Exhibit C, Subpmi B, then, upon request byKern River, Customer shall provide Security in an amount equal to the following:
a.If Customer provides a guaranty, the amount of the guaranty will be, at a minimum,
in an amount equal to Customer's Contract Value.
b If Customer provides a letter of credit or cash escrow, then Customer shall provide Security in an amount equal to the total of Customer's Remaining Obligation (computed as of the date of the demand and including income tax gross-up).
c.Customer and Kern River hereby agree that 100% of the Actual Cost will constituteNon-mamline Facilities and 0% of the Actual Cost will constitute MainlineFacilities under this Agreement.
2.Form of Security To Be Provided:
a.Customer may provide a guaranty, letter of credit or cash in a three-party escrow
account.
b.If Customer provides a letter of credit, the letter of credit will be substantially inthe form attached as Schedule Cl of Exhibit C or will be in a form acceptable toKem River and from a financial institution acceptable to Kern River.
c.If Customer provides a guaranty, the guaranty will be substantially 111 the formattached as Schedule C2 of Exhibit C or will be in a form acceptable to Kern Riverand executed by a guarantor that meets the creditworthiness requirements ofSection 29 of the General Terms and Conditions of the Tariff; provided, however,Kern River will not accept a guaranty from multiple guarantors unless such
guarantors are jointly and severally liable under the terms of the single guaranty.
d.If Customer provides cash escrow, Customer agrees to execute a Joinder in MasterEscrow Agreement substantially in the form attached as Schedule C3 of Exhibit Cor will be in a form reasonably acceptable to Kern River.
3.Timing of Provision of Security: The amount of Secunty required under this ExhibitC will be provided within ten (10) calendar days of the date of Kern River's writtenrequest. If Actual Cost is not known at the time of Kern River's request, the amountrequested will be based on a good faith estimate of the costs expected to be incurred.
Once the Actual Cost is known Security provided will be subject to True-Up.
4.Return of Security Associated with the Actual Cost of the Project:
a.Any return of Security is conditioned upon Customer (i) performing in accordancewith this Agreement including making all payments required when due, and (ii)providing all requited Security on a timely basis as set forth herein.
b.If Kern River has constructed Mainline Facilities to provide Customer's service,and if Customer: (i) has performed in accordance with the TSA including makingall payments required when due, (ii) has not taken any of the actions set forth insubpmis (i) and (ii) of Section 4.3 of this Agreement, and (iii) has timely provided
all the requiied credit assurance associated with any activity with Kern Rivei, then Kern River will return that portion of the Security associated with the Actual Cost
of the Delivery Facilities in excess of the product of (A) the original security
amount associated with the Actual Cost of the Delivery Facilities and (B) the ratio of the remaining unpaid reservation charges under the original term of the TSA to the total reservation charges under the original teim of the TSA.
c.If Kern River has constructed Non-mainline Facilities, to provide Customer's
service, and if Customer: (i) has performed in accordance with the TSA including
making all payments when due, (ii) has not taken any of the act10ns set forth in
subpmis (i) and (ii) of Section 4 3 of this Agreement and (iii) has provided all therequired credit assurance associated with any activity with Kern River, then KernRiver will return that portion of the Security associated with the Actual Cost of theNon-mainline Facilities in the amount by which the Security associated with the
Actual Cost of the Non-mainline facilities exceeds the Customer's Contract Value.
d.Any return of Security will occur no more frequently than annually on or abouteach anniversary of the beginning date of the contract. The obligation of Kern Riverto reduce the Security will be subject to the right of Kern River to recoup and/or
setoff all or any pmi of the Security against any obligations or claims whatsoever
owing to Kern River from Customer, whether in connection with this Agreement
or in connection with any umelated transaction.
5.Miscellaneous:
a.If due to default under this Agreement, Customer becomes obligated to pay
Customer's Remaining Obligation and Kern River is holding Security, then
Customer waives any and all claims to the balance of the Security held by KemRiver and agrees that such balance will be retained by Kern River and appliedtoward any amounts due from Customer.b.Failure to remit in full all Security by the due dates will be a breach of thisAgreement and may, at the discretion of Kern River, result in the termination of
Kern River's obligations under this Agreement. Upon any default under thisAgreement, Kern River may pursue any remedy available at law or equity.c.The Security will be owned and held by Kern River for its sole and exclusive benefituntil the earlier of (i) Customer meeting the creditworthiness requirements ofSection 29 of the General Terms and Conditions of the Tariff, or (ii) Customersatisfying in full all of its obligations under this Agreement.
d.The Security will be owned and held by Kern River, and Customer's sole interestin the Secunty will be a residual interest, if any, remaining after all of Customer'sobligations under this Agreement are satisfied in full. If Security is provided in theform of a letter of credit, Customer will have no interest m the letter of credit or its
proceeds.
BENEFICIARY.
Applicant
SCHEDULE Cl TO EXHIBIT C TOTHE PRECEDENT AND FACILITIES AGREEMENT DATED ----
BETWEEN KERN RJVER GAS TRANSMISSION COMPANY AND PACIFICORP
Form of Letter of Credit
IRREVOCABLE ST AND BY LETTER OF CREDIT
DA TE OF ISSUANCE. --- ----
Kern River Gas Transmission Company
1111 South 103rd Street Omaha, NE 68124-1000 Attn· Ci ed1t Department Phone· [phone]
Fax· ( 402) 548-5266
[Company] [Address] [City, State, Zip] Attn __ ____ ___ _____ _ Phone _____ _________ _ Fax. __________ _____ _
Re. Irrevocable Standby Letter of Credit No . ______ ______ __ __ _
Amount (U S Dollars). $ ________ __ _ Expiration Date· _______ _
At the request of [Insert Party's legal name, add1ess and zip code] ("Shipper"), [Insert Bank's legal name,
address and zip code] ("Issumg Bank") hereby establishes our Irrevocable Standby Lettet of Ct edit ("Letter of C1edit") in your favor for the imtial amount of [ ] Umted States Dollars [($ ____ �], available to you at sight upon demand at our offices as specified above on or before the expnation hereof
Funds under this Letter of Credit are available at sight against your draft drawn on us beat mg upon its face the amount of the draw and the clause, "Diawn under [Issuing Bank Name] Letter of C1edit Number [Number] dated [date]," and accompanied by the following documents·
The origmal or a photocopy (as evidenced by a notarized statement from an officei of Benefic1my) of this Letter of Credit and any subsequent amendments, 1f any; and
A statement purportedly signed by an authorized officer of Kern River Gas Transmiss10n Company stating that "Shipper 1s m default of its obligations under one 01 more agreement(s) between Shipper and Kern River Gas Transmission Company" and/or that "Shipper has failed to pay its mvoice when due under one or m01e agreement(s) between Shippe1 and Kern River Gas Transmission Company" and/01 that "Kern Rivet Gas Transmission Company has contractual obligations with
)
Shipper that extend beyond the apphcable exp11 ation date of the Lette1 of Ct edit and Shipper has
not p1ovided an acceptable substitute Letter of Credit, 01 alte111at1ve acceptable ehg1ble secu11ty within nmety (90) calendar days prim to such date "
Partial diawings and multiple drawmgs unde1 this Letter of Cted1t are permitted All chaiges of this Lette1 of Ctedit a1e fo1 the account of the Applicant. Beneficiary's 11ghts and 111te1ests in tins Lette1 of
Credit may be tiansfeired, pledged or assigned.
We hereby engage with you that drafts under and in compliance with the terms and conditions of this Letter of C1ed1t will be duly hono1ed by us if p1esented 111 person at this office 01 by overnight coune1 or by registered mat! on 01 before the current expnatton date
It 1s a condition of this Lette1 of C1edit that it shall be considered automatically extended without amendment for an additional penod of one (1) year fiom the present or any futme expnation date unless we notify you 111 writmg not less than nmety (90) calendar days befo1 e such date that we elect not to extend this Lette1 of Credit fo1 such additional term, such notice to be sent by registered mat! to you at the address herein Upon receipt by you of such notice, you may draw on us at sight for the balance 1 emaining under this Letter of Credit w1th111 the then applicable expiration date.
Draft presentation befo1e 9.00 AM [Apphcable Time Zone] on any Busmess Day (as defined below) shall be honored before 5·00 PM [Applicable Time Zone] on the same Business Day by wire tiansfe1 m
immediately available funds to any account designated by an autho11zed representative of the Beneficia1y (or any other 1easonable means specified by an authorized representative of the Benefic1aiy) Draft p1esentatton after 9 00 AM [Apphcable Tune Zone] and before 5.00 PM [Applicable Tune Zone] on any Busmess Day shall be honored on the followmg Busmess Day in nnmediately avatlable funds to any account designated by an autho11zed 1 epresentat1ve of the Beneficiary ( or any other reasonable means specified by an autho11zed representative of the Beneficiary). As used in this Letter of Cted1t, the term
"Busmess Day" shall mean a day other than Saturday or Sunday 01 any other day in which Bankmg Institutions in the State of [Applicable State where Issuing Bank 1s Located] are authorized or reqmred by law to close.
The amount which may be drawn by you unde1 this Letter of Credit shall be automatically reduced by the amount of any diawings paid through the Issumg Bank referencing this Letter of Credit No ___ _
To the extent not mcons1stent 01 m confhct with the specific terms of this Letter of Credit, this Letter of Ct edit is subject to all p10v1sions of The Uniform Customs and Practzce for Documentmy Credits (2007
Revision), International Chamber of Commetce, Publication No 600 ("UCP 600"). To the extent not addressed by the specific terms of this Letter of Ct edit, and 1f the UCP 600 is silent or does not govern, this Letter of Credit shall be governed by the laws of the State of New York, without regard to principles of
conflicts of law.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES
ANY RIGHT IT MAY HA VE TO A TRIAL BY JURY IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LETTER OF CREDIT EACH PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY ACTION IN WHICH AJURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED
[BANK SIGNATURE]
SCHEDULE C2 TO EXHIBIT C TO THE PRECEDENT AND FACILITIES AGREEMENT
DATED ----
BETWEEN KERN RIVER GAS TRANSMISSION COMPANY AND PACIFICORP
Form of Guaranty
GUARANTY
THIS GUARANTY is given as of [Month] _, 20_ by _______ __.. a [State
of Formation corporation/LLC/partnership/form of entity], with its principal place of business
located at [address], ("Guarantor") to KERN RIVER GAS TRANSMISSION COMPANY ("Kern River")
RECITAL
A.WHEREAS, Kern River owns and operates ce1iain facilities to provide natural gas servicespursuant to Kern River's FERC Gas Tariff;
B.WHEREAS, Kern River:
(i)supplies or may supply transportation and storage services to [Shipper Name(s)]
("Shipper") pursuant to (x) transportation and storage agreements now existing orhereafter executed; (y) agreements ancillaty or incident to such transpo1iation andstorage agreements, including, but not limited to, facilities or precedentagreements, and (z) the terms and conditions of Kern River's FERC Gas Tariff, and
(ii)conducts, or may conduct, purchases or sales of natural gas or related financialtransactions with Shipper pursuant to one or more agreements or contracts nowexisting or hereafter executed.
Collectively, the afore-mentioned now existing or hereafter arising contracts, agreements
and ancillaty documents and instruments, and all extensions, renewals, refunding,
replacements, restatements and modifications of any of the foregoing shall be refened to
herein as the "Agreements".
C.WHEREAS, [State relationship of Guarantor] to Shipper.
D.WHEREAS, Guarantor derives or will derive substantial benefit from Kern River's
extension of services and other performance to Shipper pursuant to the Agreements andGuarantor desires to induce Kern River to commence or continue providing services andother performance to Shipper pursuant to the Agreements.
E WHEREAS, Kern River is willing to commence or continue providmg services or
performance only if Guarantor absolutely and unconditionally guaranties prompt and
complete payment when due of Shipper's Guaranteed Obligations, as defined below.
NOW THEREFORE, in consideration of the premises Guarantor agrees as follows:
AGREEMENT
1.Guaranty. Guarantor hereby absolutely, unconditionally and i1Tevocably guarantiesto Kern River:
(a)the prompt and complete payment when due and payable (whether at the
stated due date or by reqmred prepayment, acceleration or otherwise) of all
Guaranteed Obligations, as defined herein, of Shipper to Kern River(notwithstanding the fact that from time to time there may be noindebtedness outstanding), and
(b)the prompt and complete performance of Shipper's covenants,representations and warranties under all Agreements, documents and
instruments evidencing the Guaranteed Obligations.
2."Guaranteed Obligations" means:
(a)any and all indebtedness, obligations and liabilities of Shipper to Kern River
arising out of or related to the Agreements as and when such indebtedness,obligations and liabilities of Shipper are due and payable pursuant to theAgreements, whether by acceleration or otherwise, without regard to anycure rights or notice obligations;
(b)any and all other indebtedness, obligations and liabilities of Shipper to KemRiver now existing or hereafter arising, direct or indirect, absolute or
contingent, joint or several, secured or unsecured, matured or not matured,monetary or nonmonetary as and when such indebtedness, obligations andliabilities are due and payable.
3.Payment Guaranty. This Guaranty is a guaranty of payment and not of collection.
This Guaranty is a primary and original obligation of Guarantor and is not merely
the creation of a surety relationship. There are no conditions precedent to the
effectiveness of this Guaranty and this Guaranty is in full force and effect and is
binding on Guarantor upon execution and delivery to Kem River. Kern River shall,
upon accrual of any Guaranteed Obligation, have the right to proceed first and
directly against Guarantor under this Guaranty. Guarantor's liability hereunder for
the Guaranteed Obligations shall be immediate and shall not be contingent upon
the exercise or enforcement by Kern River of whatever remedies Kern River may
have against any other obligor or person or the enforcement of any lien or
realization upon any security Kern River may possess. Kern River is not required
to either commence or exhaust efforts to collect from Shipper or to look to or pursue
any other paiiy or source of payment before Guarantor is obligated to Kern River
for the entirety of the Guaranteed Obligations or before Kern River may collect the
Guaranteed Obligations from Guarantor.
4.Payment Terms Before commencing judicial action against Guarantor on account
of the Guaranteed Obligations, Kern River shall piovide fifteen (15) business days
written notice (the "Guarantor Courtesy Notice") to Guarantor that Guaranteed
Obligations are due and owing to Kern River and demanding that such Guaranteed
Obligations be immediately paid. In the event that the Guaranteed Obligations are
not paid to Kern River by wire transfer or certified funds within fifteen (15)
business days following delivery of the Guarantor Courtesy Notice to Guarantor,Kern River may take any and all actions necessary to collect the Guaranteed
Obligations from Guarantor. Without altering or affecting the Guarantor's
obligations to pay and perforn1 the Guaranteed Obligations, the Guarantor Courtesy
Notice shall contain a brief explanation and an accounting of the GuaranteedObligations then due and owing in a form and content similar to what Kern River
provides to its shipper customers. The Guarantor shall pay all costs of collecting
the Guaranteed Obligations or enforcing this Guaranty incurred by Kern River
(including reasonable attorneys' fees, costs and expenses, and disbursements of
counsel).
5.
From and after the 15th business day following delivery of the Guaranty Comiesy
Notice, all Guaranteed Obligations shall accrue interest at a rate of one and one­
half percent per month.
Guaranty Unconditional and Absolute. The Guaranteed Obligations of Guaiantor
hereunder shall be unconditional and absolute and, without limiting the generality
of the foregoing, shall not be released, discharged or otherwise affected by:
(a)any extension, renewal, settlement, compromise, waiver, discharge or
release in respect of any Guaranteed Obligations of Shipper;
(b)the existence, or extent of, any release, exchange, surrender, non-perfection
or invalidity of any direct or indirect security for any of the Guaranteed
Obligations;
( c)any modification, amendment (including, but not limited to, a restatement
in whole or in part), waiver, extension of or supplement to any of the
Agreements or the Guaranteed Obligations agreed to from time to time by
Shipper and Kern River;
( d)any change in the corporate existence (including its constitution, laws, rules,
regulations or powers), structure or ownership of Shipper, Kern River or
Guarantor, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting Shipper, Kern Rive1 or Guarantor, or their assets;
( e)the existence of any claim, set-off or other rights which Guarantor may haveat any time against Kern River, Shipper, or any other corporation or person,
whether in connection herewith or in connection with any umelated
transaction;
(f)the invalidity or unenforceability in whole or in paii of the Agreements orany Guaranteed Obligations or any instrument evidencing any GuaranteedObligations, or any provis10n of applicable law or regulation purp01iing toprohibit payment by Shipper of amounts to be paid by it under theAgreements or any of the Guaranteed Obligations;
(g)any other act or omission to act or delay of any kind by Kem River which
might, but for the provisions of this paragraph, constitute a legal or equitable
discharge of any of Guarantor's obligations hereunder. The Guarantor
agrees that any release that may be given by Kern River to Shipper or any
other obligor shall not release Guarantor.
6.Term and Termination. This Guaranty is necessary, among other reasons, to induceKern River to enter into Agreements that may result in the accrual of liabilities andpayment obligations for years mto the future. This Guaranty shall remain in fullforce and effect until the Guaranteed Obligations arising out of any Agreements
have been fully paid and performed. Guarantor may terminate this Guaranty at anytime by providing sixty (60) calendar days' prior written notice (a "TerminationNotice") of termination to Kern River. A termination of the Guaranty as toGuarantor shall not become effective until the 61 st calendar day (the "TerminationDate") following delivery of the Termination Notice to Kem River and shall notaffect, te1mmate, alter or amend Guarantor's obligations to pay all Guaranteed
Obligations arising from or relating to Ag1 eements entered into prior to the 61 st dayfollowing Kern River's receipt of a Termination Notice.
For purposes of clarity, in the event a Guarantor (a "Terminating Guarantor")properly delivers a Termination Notice, the Terminating Guarantor shallneve1iheless remain absolutely, unconditionally and in-evocably liable for all
Guaranteed Obligations, or extensions or renewals of the same, arising from or
related to any Agreements entered into prior to the Termination Date but shall bedischarged as to only those Guaranteed Obligations arising from or relating toAgreements entered into following the Termination Date.
7 Waiver by Guarantor. Guarantor irrevocably waives acceptance hereof, diligence,
presentment, demand, protest, notice of dishonor, notice of any sale of collateral
and any notice not provided for herein, any right of subrogation to Shipper's rights
against Kern River under any Agreement or otherwise, and any requirement that at
any time any person exhaust any right to take any action against Shipper or their
assets or any othe1 person. Guarantor further hereby waives any right of
exoneration, subrogation or reimbursement until all Guaranteed Obligations are
fully and indefeasibly paid or performed and until the expiration of any applicable
preference periods.
8.Subrogation. Upon making any payment hereunder, Guaiantor shall be subrogated
to the rights of Kern River against Shipper with respect to such payment; provided
that such Guarantor shall not enforce any right or receive any payment by way of
subrogation until all of the Guaranteed Obligations shall have been paid in full and
Kern River agrees to take, at Guarantor's expense, such steps as Guarantor may
reasonably request to implement such subrogation.
9 Bankruptcy. In the event that the obligation of Shipper or Guarantor to pay any
amount under any of the Agreements or this Guaranty is stayed, excused or
discharged as the result of any insolvency, bankruptcy, dissolution or reorganization proceeding of Shipper or Guarantor (a "Bankruptcy Event"), all
such amounts shall nonetheless be and remain Guaranteed Obligations and shall be
due and payable by Guarantor as if no Bankruptcy Event occurred.
10.
11.
12.
13.
If any payment ( an "A voided Payment") received by Kern River from any Shipper
or Guarantor in respect of the Guaranteed Obligations is subsequently recovered from or repaid by Kern River as the result of any Bankruptcy Event, Guarantor's
payment obligation hereunder shall continue to be effective as though such A voided
Payment had not been made and without regard to any Termination Date that may
have occurred after the date the claim relating to the A voided Payment accrued.
Assignment. Successors and Assigns. This Guaranty shall be binding upon and inure to the benefit of Guarantor and its successors and assigns and Kern River and
its successors and assigns. Notwithstanding the foregomg, Guarantor may not
assign or delegate its rights or obligations hereunder without the prior express
written consent of the Kern River, which shall not be umeasonably withheld, and
any such purported assignment or delegation without Kern River's express written consent shall be void.
Amendments and Waivers. No provis10n of this Guaranty may be amended, supplemented or modified, nor any of the terms and conditions hereof waived, with respect to Guarantor except by a written instrument executed by Guarantor and Kern River.
Remedies Cumulative. The rights, powers, remedies and privileges provided in this
Guaranty are cumulative and not exclusive of any rights, powers, remedies and
privileges provided by law and any other agreement.
Representat10ns and Warranties. Guarantor hereby warrants and represents to Kern River:
(a)Guarantor is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, and has full power
to execute, deliver and perform this Guaianty.
(b)The execution, delivery and performance of the Guaranty has been andiemains duly authorized by all necessary orgamzational action and does not
contravene any provision of law or of Guarantor's constitutional documents
or any contractual restriction binding on Guarantor or its assets.
( c)All consents, authorizations and approvals of, and registrations and
declarations with, any governmental authority necessary for the due
execution, delivery and performance of this Guaranty have been obtained
and remam in full force and effect and all conditions thereof have been duly
complied with, and no other action by and no notice to or filing with, any
governmental authority is required m connection with the execution,
delivery or performance of this Guaranty.
( d)This Guaranty constitutes the legal, valid and binding obligation ofGuarantor enforceable against Guarantor in accordance with its terms,subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(e)Guarantor's assets, at their respective fair value, exceed Guarantor's
liabilities, including the Guaranteed Obligations and Guarantor has, or will
have, sufficient cash and capital to pay its liabilities and obligations,
including the Guaranteed Obligations, as they become due.
( f)In consideration for its execution of this Guaranty, Guarantor will receivereasonably equivalent value for the Guaranteed Obligations that it isassuming as a result of the Agreements and the relationship, common
enterprise and synergies existing between Guarantor and Shipper.
14.Notices. All notices required herem shall be in writing and shall be deemed
delivered (i) when received by registered or certified mail; or (ii) when delivered
by FedEx, UPS or other comparable overnight delivery service to the address
specified below:
Kem River: 1111 South 103rd Street
Omaha, NE 68124-1000 Attn: Credit Department Telephone: ( 402) 398-7741 Fax: ( 402) 548-5266
Guarantor:
Attn: ----- -----Telephone: ___ ____ _
Fax: ---- -------
For informational purposes:
Shipper:
Telephone: ________ _ Fax: ----- -------
or such other address as any party may from time to time specify in writing.
15.Governing law and jurisdiction. This Guaranty shall be governed by, and
interpreted in accordance with, the laws of the State of New York, without regardto principles of conflicts oflaws thereunder ( other than Sections 5-1401 and 5-1402of the New York General Obligations Law). Kern River (by its acceptance of thisGuaranty) and Guarantor hereby irrevocably: (i) consent and submit to theexclusive jurisdiction of the United States District Court for the Southern District
of New York, or if that court does not have subject matter jurisdiction, to theexclusive jurisdiction of the Supreme Comi of the State of New York, New YorkCounty (without prejudice to the right of any pmiy to remove to the United StatesDistrict Comi for the Southern District of New York) for the purposes of any suit,action or other proceeding arising out of this Guaranty or the subject matter hereof
brought by Kern River, Guarantor or their respective successors or assigns; and (ii)waives (to the fullest extent permitted by applicable law) and agrees not to assertany claim that it is not personally subject to the jurisdiction of the above-namedcourts, that the suit, action or proceeding is brought in an inconvenient forum, thatthe venue of the suit, action or proceeding is improper or that this Guaranty or thesubject matter hereof may not be enforced in or by such comi.
16.TO THE FULLEST EXTENT PERMITTED BY LAW, GUARANTORHERETO WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY. EACH
PARTY FURTHER WAIVES ANY RIGHT TO CONSOLIDATE ANY
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED.
17.Third Party Beneficiaries. This Guaranty shall not be construed to create any third
pmiy beneficiary relationship as to or with any person or entity other than Kern
River.
18 Electronic Signature; Multiple Originals. A signature delivered by facsimile or e� mail in portable document format (.pdf) shall be deemed to be an original manual
signature for purposes of the Guaranty and shall be binding upon Guarantor and
have the same legal effect as an original manual signature. This Guaranty may be signed in counterparts, each of which when signed shall be an original, but all of which shall together constitute one and the same instrument.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed as of
the date fast above written.
GUARANTOR
[ name of Guarantor]
By:---------- ----
Pnnted Name: ---- - --- - ----
Title: - -- -- - ----- -- --
SCHEDULE C3 TO EXHIBIT C
TO THE PRECEDENT AND FACILITIES AGREEMENT DATED ----
BETWEEN
KERN RIVER GAS TRANSMISSION COMP ANY
AND PACIFICORP
Form of Joinder in Master Escrow Agreement
JOINDER IN MASTER ESCROW AGREEMENT
This Joinder in Master Escrow Agreement (the "Joinder") dated as of [ ], 20_, is
by and among [ inse1i Shipper name], a [inse1i Shipper state of formation] [limited liability company/paiinership/corporation] ("Shipper"); Kern River Gas Transmission Company, a Delaware corporation ("Company"), and U.S. Bank National Association, a national banking association, as Escrow Agent hereunder ("Esc1ow Agent"). Terms not defined herein have the meanmgs given to them in the Master Escrow Agreement ( defined below).
BACKGROUND
[A]Shipper and Company have entered into the Contract, pursuant to which Shipper has agreed
to provide funds as credit suppmi for Shipper's obligations under the Contract. Consistent withand in fu1iherance of the foregoing, the Shipper has agreed to deposit the Escrow Funds ( definedbelow) in an escrow account established by Escrow Agent pursuant to the Master EscrowAgreement dated as of June 15, 2016, among the Escrow Agent and the Company (the "Master
Escrow Agreement"), together with each shipper executing a Joinder in Master EscrowAgreement thereby becoming a paiiy to the Maste1 Escrow Agreement;
[B.] As of the date hereof the Shipper and Company are paiiies to [that ce1iain Cash Escrow Agreement dated as of [ ]/a cash escrow an-angement under Company's FERC Gas Tariff] (the
"Prior Escrow Arrangement") whereby Shipper previously transferred funds to the escrow agent thereunder as credit suppo1i for the Contract and, since the date of such transfer, such funds have been and continue to be subject to the Prior Escrow An-angement.
[C.] The Shipper and Company are entering into this Joinder for the purpose of replacing the
Prior Escrow Arrangement with the Master Escrow Agreement and, consistent with and in fu1therance of the foregoing, the Shipper and Company have jointly directed that all funds currently subject to the Prior Escrow Arrangement and relating to the Shipper be transfe1Ted
directly to the Escrow Agent for credit to the Account as Escrow Funds.
[D.] Escrow Agent has agreed to accept, hold, and disburse the Escrow Funds deposited with it (together with the earnings thereon) in accordance with the terms of the Master Escrow Agreement; and
[E.] In order to establish the esc10w of the Escrow Funds pursuant to the Master Escrow Agreement, the parties hereto have entered into this Joinder.
NOW, THEREFORE, in consideration of the premises and agreements contamed herein and for other good and valuable considerat10n, the Shipper, Company and the Escrow Agent hereby agree as follows:
AGREEMENTS
1.Joinder in Master Escrow. By execution hereof, the Shipper hereby joins in and becomesa Shipper under the Master Escrow Agreement. The Shipper has received a copy of the Master
Escrow Agreement, understands its provisions and Shipper hereby adopts and agrees to be boundby all of the provisions of the Maste1 Esc10w Agreement and all of the provisions of the MasterEscrow Agreement hereby being incorporated herein.
2.Deposit of Escrow Funds. Simultaneously with the execution and delive1y of thisJoinder, [Shipper will transfer the funds in the amount set forth on Schedule I hereof (the"Esc1ow Funds") to Escrow Agent, by wire transfer of immediately available funds, to theaccount of the Escrow Agent referenced on Schedule I hereof! OR [Shipper and Companyjointly direct that all funds currently subject to the Prior Escrow Arrangement and relating to
the Shipper be transferred directly to the Escrow Agent for credit to the Account as Escrow
Funds]. Immediately upon the delive1y to the Escrow Agent, the Shipper, Company and the
Escrow Agent each acknowledge and agree that the Escrow Funds shall be subject to,administered and disbursed solely in accordance with the provisions of the Master EscrowAgreement
3.Security Interest. The parties hereto intend that the deposit of the Escrow Funds with theEscrow Agent constitute an irrevocable transfer by the Shipper, that neither the Shipper nor theCompany claims an equitable or other mterest in the Escrow Funds, and that the rights of eachof the Shipper and the Company in the Escrow Funds are limited to their respective rights to
receive disbursements made by the Escrow Agent pursuant to Section 4 of the Master EscrowAgreement. Without limiting the foregoing, in the event Shipper is determined to have any rightor interest in and to the Escrow Funds, Shipper hereby grants to Company a security interestin all of Shipper's right, title and interest in the Escrow Funds to secure payment andperformance of all of the obligations owing to Company under the Contract. Shipper authorizes
Company to file a financing statement to perfect this security interest and, in fmiherance ofthe foregoing, Escrow Agent acknowledges that Escrow Agent has control of the Accounton behalf of the Company as its agent. Upon any default under the Contract, Company maypursue any remedy available at law, including those available to a secured paiiy under theprovisions of the Uniform Commercial Code.
4 General Provisions.
(a)Effect of Agreement. This Joinder together with the Master Escrow Agreement shall bebmding upon the Shipper, Company and the Escrow Agent and their respective, successorsand permitted assigns.
(b)Representations and Warranties.
(i)Each of the pmiies hereto represents and waiTants that it has full power and
authonty to execute and deliver this Jomder and to perform its obligat10ns hereunder and the Joinder has been duly approved by all necessary action and constitutes its valid and binding agreement enforceable m accmdance with its terms; and (ii)By execution hereof, Shipper represents and warrants that it has the full powerand authority to perform its obligations under the Master Escrow Agreement, as supplemented
by this Joinder, and that the Master Escrow Agreement, as supplemented, constitutes its valid and binding agreement enforceable in accordance with its terms.
( c)Severability. Every provision hereof is intended to be severable, and if any term orprovision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shallnot affect the validity of the remainder of this Agreement, provided, however, that all provisions
hereof shall be enforced to the fullest extent permitted by law.
[ signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Joinder in Master Escrow
Agreement to be executed as of the date fost above written.
[insert SHIPPER name], as Shipper
By: ___________ _ Name: _____ _ _ _ _ ____ _ Title: ___ _ _ ________ _
KERN RIVER GAS TRANSMISSION COMPANY, as Company
By: ___ _ _______ _ Name: _____________ _ Title: ------------ --
U.S.BANK NATIONAL ASSOCIATION, as Escrow Agent
By: ___________ _ Name: --------------Title: --------------
SCHEDULE 1 OF MAS1ERESCROW AGREEMENT
1.
2.
3.
Effective Date: Escrow Funds Amount: $ ___ _ _ _ _ __ _ Escrow Funds Transfer Instructions:
RBK U.S. Bank N.A ABA 091000022 BNF US BANK TFM ESCR OW Beneficiary Account Number: 104793255431
Beneficimy Account Address: 777 E. Wisconsin A venue
Milwaukee, WI 53202-5300 SWIFT Code (for mt'l wll'es): USBKUS44 IMT Reference: Kern River Gas Transmission Company I [Escrow account name & number]
4 Shipper Taxpayer Identification Number:
(Attach IRS Form W-9 and an original Form W-8, as applicable)
5.For purposes of Section 16 of the Master Escrow Agreement, all noticesand written commumcations to Shipper shall be sent to.
_____________ [Shipper Name]_
__ _ ___ _______ [Shipper Address]_
Telephone: _________________ _
Facsimile· -------E-mail:----- - --
(Attach copy of formation documents, e.g., Articles of Incorporation/Organization, etc.)
KR Pt ecedent Ag, cement (v. 2 0 Mar 2023)
EXHIBIT D TOTHE PRECEDENT AND FACILITIES AGREEMENT DATED ---
BETWEEN KERN RlVER GAS TRANSMISSION COMPANY AND PACIFICORP
Preliminary Schedule of Cost s to be Incurred by Kern River
The costs below are to aid the Paiiies' understanding of the expected Actual Costs
2022 $
2023 $
2024 $
2025 $
2026 $
2027 $
Total $
Pre liminaty
Cost Estimate
KR Precedent Ag1 eement (v 2.0 Mar 2023)
REDACTED