To All Bay State Gas Marketers:
On February 1, 1999, the Massachusetts Department of Telecommunications and Energy ("MDTE") issued an order (the "Order") adddressing, among other things, issues relating to the contract renewal and supply planning process of the local distribution companies. In the spirit of that Order, Bay State Gas Company ("Bay State") has listed below its decisions with regard to two contracts that are up for renewal. The first is a contract with Tennessee Gas Pipeline that expires on March 31, 2004 and requires at least 1 years advance notice. The second is a National Fuel Gas Supply contract that expires on September 1, 2003 and requires at least six months advance notice.
| Contracts Up For Renewal | |||||
Expiration | |||||
| Tennessee | 5196 | FT-A | 3/31/04 | One Year | |
| National Fuel | F01451 | FT | 9/31/03 | Six Months | |
Bay State is in negotiations with Tennessee to renew this contract for five years but has not yet reached a decision. Bay State is also negotiating with National Fuel in hopes of terminating this contract. Bay State’s intention is to terminate the National Fuel contract if it can obtain primary receipt points at Niagara, NY, on Tennessee contract No. 5291. This would allow Bay State to by-pass the National Fuel transmission system and provide transportation at a lower cost. Bay State expects to determine whether this primary receipt point can be obtained within the next month. If it can not, Bay State will renew the National Fuel contract.
As communicated in a previous resource planning memo dated April 12, 2002 and consistent with its most recent Forecast and Supply Plan filing, Bay State has entered into a Precedent Agreement with Algonquin for 20,000 dth per day of capacity for a term of ten years on the Hubline project scheduled to be in service by November 1, 2003.
In addition, Bay State has also determined that it will require additional capacity to serve its Lawrence division and is negotiating with Tennessee for up to 20,000 dth per day of zone 6-6 capacity from Dracut. This capacity would replace a portion of Bay State’s current peaking contract for 45,000 dth per day eliminating a portion of company managed supply in the process.
Please feel free to contact me at 508.836.7269 with any questions or comments you may have.
Sincerely,
Christopher A. Kahl
