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Here are my comments on the draft received earlier today: (1) Sect. 1.9.
The second to last sentence in the definition of Cumulative Net Revenues
duplicates part (but not all) of the first sentence of Section 7.2 with
regard to what is included in Cumulative Net Revenue. (I don't believe the
language of Sect. 7.2 regarding the make-up of Cumulative Net Revenue is
intended to be only "for purposes of Section 7.1" as the wording of 7.2
suggests, so this could be confusing.) Perhaps the make-up of Cumulative
Net Revenue should be covered in just one place or, as an alternative, the
definition 1.9 could cross-reference 7.2. Also, the last sentence of 1.9 is
confusing. I believe this means the same thing as is stated expressly in
the last sentence of Sect. 7.2, i.e., "Cumulative Net Revenues includes
uncollectable accounts receivable for which Peoples has assumed credit risk
pursuant to Section 2.10." As I understand it, the second part of the
sentence means: "Cumumlative Net Revenues shall not be adjusted to reflect
revenues refunded in accordance with Section 3.3, unless the refund is
attributable to (see my comment below re use of the word "knowing")
application by MEH, without the knowledge or consent of Peoples, of a rate
which exceeds the maximum rate allowed under Peoples' applicable FERC
Tariffs." Perhaps we could state this more clearly in 1.9 or
cross-reference 7.2. (2) Sect. 3.3. I would delete part (i) if the last
sentence. It would be illegal and contrary to this Agreement for MEH (or
Peoples) to charge a rate above the maximum, so it seems inappropriate to
suggest that MEH can collect a fee for doing this. Also in this Section,
Part (ii) of the third sentence was modified to add the word "knowingly" to
describe the situation where MEH would be responsible to pay a refund.
Because this is not something MEH can legally do, it seems inappropriate to
have a provision addressing it. The Agreement can properly address the
responsibility for refund of an inadvertent overcharge, which is how I
interpreted this provision of 3.3 in the last draft. Perhaps we should just
make Peoples responsible for all refunds. Let me know what you think. (3)
Sect. 7.2. As indicated above, I am not sure that these provisions re
Cumulative Net Revenue are only "for purposes of Section 7.1". I would
suggest a clarification of how this works as indictaed in point 1 above.
Also, 6 lines from the end of 7.2, I think the reference to 7.2 (ii) is a
typo. I believe it's just 7.2.(4) Sect. 18.3. Do we want to include any
work related to the Governmental Approval as "ordinary course"? If so,
there is some suggested language in an e-mail I sent dated Aug. 28. It
suggests a revision to item (vi).