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HomeMy WebLinkAbout2004-225 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON BY-LAW 2004- 225 Being a By-law to authorize a contract between the Corporation of the Municipality of Clarington and A.E. Sharp Limited, Burlington, Ontario, to enter into agreement for the direct purchase of Natural Gas. THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY ENACTS AS FOLLOWS: 1. THAT the Mayor and Clerk are hereby authorized to execute, on behalf of the Corporation of the Municipality of Clarington and seal with the Corporation Seal, a contract between, A.E. Sharp Limited, Burlington, Ontario, and said Corporation; and 2. THAT the contract attached hereto as Schedule "A" form part of this By-law. By-law read a first and second time this 25th day of October ,2004. By-law read a third time and finally passed this 25th day of October ,2004. . .f 14/10/2004 Version 2 AGENCY AGREEMENT (LarS!:e Volume) AS!:encv BillinS!: and Collection Service THIS Agreement made as of the 14th of October 2004 BETWEEN: THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON, ("Customer") and A.E. SHARP, a subsidiary of SEMINOLE CANADA GAS COMPANY ("Sharp") Description of Services: Sharp hereby agrees to provide services for the Customer, including, but not limited to the following: administer and monitor (load balance) all Direct Purchase Agreements with Gc.s Utility, manage and nominate all transportation agreements on behalf of the Customer, provide gas comparison reports as preferred by the Customer, provide weekly market price reports, develop a buying strategy to procure supply, provide advice regarding gas supply, pricing options, portfolio composition and market timing to the Customer, keep the Customer fully informed on all actions taken pursuant to this agreement, carry out, in all respects, the Customer's instructions with respect to negotiations, and keep the customer informed of current market conditions. Notice and Appointment of Agent: The Customer (as identified above) hereby confirms and provides notice to all interested parties (each a "Notified Party") that by executing this Agency Agreement it has entered into a contract appointing Shatp as its exclusive agent to enter into, manage and administer, on the Customer's behalf, all contracts necessary to arrange for the purchase and distribution (which term includes transportation, storage and delivery) of gas to the Service Address (as described in Schedule "A" attached heretq), as well as billing and collecting for these services. The Customer agrees that the terms and conditions of such contracts shall be binding on the Customer. Enrollment: The Customer authorizes and directs Sharp to enter into arrangements on behalf of the Customer with the natural gas distribution company for each Service Address (the "Distribution Company"). The Customer approves the transfer from its current agent to Shatp. Direction: The Customer hereby requests, authorizes and directs the Distribution Company and any other Notified Party to release any and all information in such Notified Party's possession and control, relating to the Customer, and the supply and delivery of natural gas to each Service Address including, but not limited to, customer usage information, site usage history report for the past twelve (12) months, credit and payment history, consumption history, utility account number and account information to Sharp and acknowledges that such release may be subject to a fee in accordance with any terms and conditions of the Notified Party. Distribution Company Terms: The Customer confirms that Sharp has notified the Customer that the Customer may be bound by the terms, conditions and policies established by the Distribution Company for each Service Address and further confirms that the Customer will comply with such terms, conditions and policies. Reliance: Each Notified Party may deal exclusively with and rely on Sharp to make all arrangements on the Customer's behalf in connection with the supply and delivery of natural gas to each Service Address as if the Customer had made such arrangements. Billing and Fees: The Distribution Company will bill the Customer for the natural gas delivered to each Service Address and for certain distribution access charges and any other fees, charges or taxes relating to the delivery of natural gas delivered to such Service Address. A fee will be paid to Sharp in consideration of its services of $O.04/GJ ($O.OO15121m3) for the initial term, which will be added to the cost of gas commodity and delivery. Should the Customer and Sharp agree to a further 2 year term, the fee for that period will be subject to mutual agreement. The Customer acknowledges that, at some point during the Term of this Contract, Sharp may bill the Customer directly for some or all of the costs associated with the supply and delivery of gas to the Service Address, provided that the Customer will not pay any additional costs as a result of Sharp billing the Customer directly. The Customer agrees to indemnify and save harmless Shatp from any costs or damages incurred by Sharp that are caused by the Customer. Sharp and the customer will mutually agree upon a pricing strategy that will be confirmed in writing by Sharp with a separate pricing confirmation. The Ontario Energy Board does not regulate the price of natural gas under this service. N:\Client Service\Clienl Corresp & Contracts\CIClarington\Revised CLARlNGTQN AAG Noy 1, 2004.doc 151lJ.~1 , 14/10/2004 Version 2 Pricing Strategy: Sharp and the Customer will mutually agree upon a pricing strategy that will be confirmed in writing by Sharp with a separate pricing confirmation. The price of natural gas under this service is not regulated by the Ontario Energy Board. All negotiations by Sharp on behalf of the customer shall be conducted in accordance with such pricing strategy, terms and conditions as are specified by the Customer from time to time. Effective Date: The appointments and directions are effective as of the date of this Agency Agreement. Responsibility: The Customer confirms that it has the authority to enter into an agreement for the supply of natural gas to each Service Address and to appoint an agent for the delivery thereof to each Service Address. The Customer agrees to keep the payment of its natural gas account with the Distribution Company and Sharp up~to-date, to pay such accounts when due and to be bound by and responsible for the arrangements made by Sharp as agent on its behalf. The Customer has read the Contract and understands and agrees to be bound by the terms thereof. Term: This Contract is for a 3 year term commencing on November I, 2004 and expiring on October 31,2007 (the "Initial Term"). Customer and Sharp may renew this Contract for an additional 2 year period on new terms (the Initial Term and any renewal thereof defined, collectively, as the "Term"), provided that Sharp delivers written notice 120 days before the expiration of the Initial Term and if the Customer does not provide written notice to Sharp that it does not accept the renewal terms no less than 90 days prior to the expiration of the Term. Conditions of Service: Sharp is under no obligation to provide any services or to continue to arrange for the supply of natural gas under this Agency Agreement in any of the following circumstances: (a) if the Customer defaults on payment of its account; (b) upon written notice by Sharp, if Sharp is unable or is prevented from complying with any of the obligations it owes to the Distribution Company or if the Distribution Company is unable or is prevented from complying with any of the obligations it owes to Sharp; (c) if, as determined by Sharp, any: (i) amendment to applicable law, by-law, statute, regulation, rule, ordinance, policy, order, code, information letter, guideline, bulletin or directive; or (ii) judicial or regulatory order, requires, directs or makes desirable, directly or indirectly, that a material term be amended, inserted or deleted in this Agency Agreement and Sharp notifies the Customer that it wishes to renegotiate the terms and conditions of this Agency Agreement in connection with such amendment, insertion or deletion and the parties are unable to agree upon the revised terms and conditions of this Agency Agreement within 30 days of such notice; (d) if the Distribution Company no longer services the Service Address for any reason or takes any step to disconnect supply, other than as a result of an emergency or to facilitate repairs to the natural gas facilities; (e) if the Customer authorizes another natural gas supplier or Agent for the Service Address during the Term; (f) if any other natural gas supplier is appointed by the Distribution Company to supply natural gas to the Service Address during the Term due to an Event of Default affecting the Customer; (g) if this Agency Agreement or any part thereof is assigned without the consent of Sharp; or (h) if the Service Address is, at any time during the Term, no longer owned or occupied by the Customer or owned or occupied by any person other than the Customer without the consent of Sharp. Either party may give the other party additional warnings before it terminates this Agency Agreement. Scope of Agency: The Customer acknowledges that (a) Sharp is not a fiduciary of the Customer with respect to the purchase and sale of natural gas; and (b) the Customer has other alternatives to acquire natural gas. Further Assurances: The Customer agrees that it shall execute other documentation (including another agency agreement) if required by the Distribution Company in addition to or in substitution of this Agency Agreement Event of Default: As used in this Agreement, an Event of Default is anyone or more of following occurrences: (a) Failure by any Party to comply with any material term of this Agreement, which failure has not been cured within sixty (60) days of the non- performing Party's receipt of written notice thereof; (b) Institution of proceedings in a court of competent jurisdiction for the reorganization, liquidation or involuntary dissolution of a Party, or for its adjudication as a bankrupt or insolvent, or the appointment of a receiver of the property of the Party, and said proceedings are not dismissed, and any receiver, trustee or liquidator appointed therein discharged, within sixty (60) days after the institution of said proceedings; (c) The voluntary filing of any proceeding for liquidation, dissolution or adjudication of a Party as a bankrupt Natural Gas Imbalances. At any time during the Term, the Customer's actual or forecasted natural gas consumption may exceed or fall short of the forecasted Annual Volume as set out in Schedule A. The Distribution Company maintains an account which records the difference between the forecasted amount and the quantities of gas actually consumed (the "Balancing Gas Account"). The Distribution Company may require Sharp or the Customer to bring its Balancing Gas Account into balance. The Customer will reimburse Sharp for any and all costs incurred by Sharp (including N:\Client Service\ClientCorresp & Contracts\C\Clarington\Revised CLARINGTON MG Nov 1, 2004.doc 15113.vl . j 14/10/2004 Version 2 charges imposed by the Distribution Company and any other costs incurred by Sharp) that are reasonably attributable to the Customer to bring the Balancing Gas Account into balance. Flow-Through Charges: The Customer hereby acknowledges that, in addition to all other amounts referenced herein, the Customer shall be responsible for and agrees to pay all charges, fees, assessments or allocations assessed by or through the Distribution Company against the Customer or Sharp as the result of the delivery of natural gas to the Service Address, matters incidental thereto and any act or omission of the Customer or of Sharp taken or omitted at the request of or on behalf of the Customer. Party Indemnity: Both parties agree that they will indemnify and save harmless each other, its affiliates, the respective directors, officers, and employees, and the permitted assigns of each party and its affiliates in full for any loss, damage, injury, liability or cost which any of the parties and its Representatives, as applicable, suffers arising from, or incurs as a consequence of, any act or omission of the other party relating to the supply or delivery of natural gas to the Service Address including, without limitation to the foregoing, any claim resulting from any default or breach by either party, or any failure of either party to perform any obligation relating to the Contract or any obligation to any third party, including, but not limited to, any agreement with the Distribution Company. Indemnification under this section shall not be available with respect to any Claim to the extent any Claim results from the action or failure to act of a third party that is not under the control of the indemnifying party. Assignment: Neither party shall assign or otherwise transfer any of its rights or obligations under the Contract without the prior written consent of the other. Such consent shall not be unreasonably withheld; provided however, Sharp may assign or otherwise transfer any or all of its rights or obligations under the Contract to its affiliates without the consent of the Customer. Other than with the consent of the other party or in the case of an assignment by Sharp to an affiliate, no assignment or transfer shall relieve the assignor or transferor of any of its obligations under the Contract. Confidentiality: The Customer shall not disclose the terms of any purchase and sale of natural gas under the Contract to a third party (other than the Customer's employees, counsel, accountants or consultants who have agreed to keep such terms confidential) except in order to comply with any applicable law, order, regulation, exchange rule or to effectuate transportation of the natural gas hereunder; provided, the Customer shall notify Sharp of any proceeding of which the Customer is aware which may result in disclosure and use reasonable efforts to prevent or limit the disclosure. Sharp shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. No Business Restrictions: The Customer understands and acknowledges that Sharp and its affiliates participate, or may participate, in numerous aspects of the natural gas market under a variety of roles and with varying interests. The Contract does not, in any way, preclude Sharp and its affiliates from pursuing any other business opportunities they may wish to pursue. No Waiver: No delay or omission by either party in exercising any right, power or remedy under the Contract shall be construed as a waiver of such right, power or remedy and any single or partial exercise shall not prevent any other or further exercise of the same or the exercise of any other right, power or remedy. Severance of Invalid Provisions: If and for so long as any provision of the Contract shall be deemed to be judged invalid for any reason whatsoever, such invalidity shall not affect the validity or operation of any other provision of the Contract except only so far as shall be necessary to give effect to the construction of such invalidity, and any such invalid provision shall be deemed to be severed from the Contract without affecting the validity of the balance of the Contract. Entire Agreement: The Contract contains the entire agreement between the Customer and Sharp and it replaces any prior written or oral agreement between the parties concerning the supply or delivery of natural gas. There are no verbal representations, rights or obligations that are not contained in the Contract. The laws of Ontario and the laws of Canada applicable in Ontario shall govern the Contract. Execution: The Agency Agreement may be executed in multiple counterparts and by facsimile transmission, each of which shall be deemed an original and all of which shall constitute one instrument. Address for Notices: Any notice or other communication under the Contract shall be in writing and shall be delivered by courier, mail or facsimile to the Address for Notices set out below or to such other address as may be specified in writing by either party from time to time. A.E. SHARP a subsidiary of Seminole Canada Gas Company ("Sharp") Suite 500 1100 Burloak Road Burlington, Ontario L 7L 6B2 Tel: 905-315-2060 Fax: 905-315-2061 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 Temperance Street Bowmanville, ON Lie 3A6 Tel: 90 79 Fax: 5-623-3 30 Mktg er ~\~ itle: n;v6f..)f.AY SENIOR VICE PRESIDENT :\Client ServiceIClient Corresp & Contra::ts\CIClaringtonIRevised ClARlNGTON AAG Nov 1, 2004.doc Per: - rlr Title: ~n. Mayor IS1l3.vl