August 30, 2004 - Third OSP (Ocean States Power) Arbitration Award Received
In October of 2003, ProGas asked the Producers to approve a ballot for arbitration costs associated with the Gas Purchase Contract between OSP I and ProGas dated December 14, 1988 and the Gas Purchase Contract between OSP II and ProGas, dated September 29, 1989 (the "Contracts"). The Contracts provide for sales of 50,000 Mcf/day and 25,000 Mcf/day respectively at the Niagara delivery point. After a year of hard work which culminated in a hearing in August, on August 30th ProGas received the Arbitration award for the 2003 Arbitration with an effective date of September 1, 2004. We are very pleased to report that the Arbitration Panel adopted ProGas' proposal in it's entirety! As a result, the Pool will benefit from a significant increase under the Contracts and will enjoy the associated positive impact the new pricing has on the monthly netback price.
ProGas will be sending out a letter to Producers this week with some additional information on the Award. Unfortunately, TransCanada has already filed a Notice of Arbitration on behalf of OSP for the fourth arbitration under the Contracts. Accordingly, ProGas will be sending out a ballot this week for the approval of arbitration costs should a fourth arbitration be required.
The netback forecast posted includes the price increase that resulted from this Arbitration decision.
If you have any questions on the recent Arbitration Award, please contact:
Shonda Day, Director of Marketing, at 233-1310
Wendy Thomas, Director of Supply, at 233-1392
Bryn O'Shaughnessy, Director of Projects and Strategy at 233-1997
or your Supply Representative.