Form 8-K

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H/gQSdNKy8YR3PsvPeR6kbhPhF8kbR1rMtC19qsdlesw934+SPBfTWcxfjQmvLTF YuTSKyBoKX+d4R7fGdnRfQ== 0001193125-04-100115.txt : 20040608 0001193125-04-100115.hdr.sgml : 20040608 20040608150154 ACCESSION NUMBER: 0001193125-04-100115 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20040528 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040608 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN ELECTRIC CO INC CENTRAL INDEX KEY: 0000046207 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 990040500 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04955 FILM NUMBER: 04853757 BUSINESS ADDRESS: STREET 1: 900 RICHARDS ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085437771 MAIL ADDRESS: STREET 1: 900 RICHARDS STREET CITY: HONOLULU STATE: HI ZIP: 96813 FORMER COMPANY: FORMER CONFORMED NAME: HAWAIIAN ELECTRIC CO LTD DATE OF NAME CHANGE: 19670212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HAWAIIAN ELECTRIC INDUSTRIES INC CENTRAL INDEX KEY: 0000354707 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 990208097 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08503 FILM NUMBER: 04853756 BUSINESS ADDRESS: STREET 1: 900 RICHARDS ST CITY: HONOLULU STATE: HI ZIP: 96813 BUSINESS PHONE: 8085435662 MAIL ADDRESS: STREET 1: 900 RICHARDS STREET CITY: HONOLULU STATE: HI ZIP: 96813 8-K 1 d8k.htm FORM 8-K Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 28, 2004


Exact Name of Registrant as Specified in Its Charter	Commission File Number	I.R.S. Employer Identification No.
Hawaiian Electric Industries, Inc.	1-8503	99-0208097
Hawaiian Electric Company, Inc.	1-4955	99-0040500

State of Hawaii

(State or other jurisdiction of incorporation)

900 Richards Street, Honolulu, Hawaii 96813

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code:

(808) 543-5662—Hawaiian Electric Industries, Inc. (HEI)

(808) 543-7771—Hawaiian Electric Company, Inc. (HECO)

None

(Former name or former address, if changed since last report.)

Item 5.

Other Events and Regulation FD Disclosure

A. Agreement of Resignation, Appointment and Acceptance among HEI, Bank of Hawaii and BNY Western Trust Company (BNY Western)

On April 5, 2004, HEI signed an Agreement of Resignation, Appointment and Acceptance under which Bank of Hawaii resigned as Trustee of the HEI Dividend Reinvestment and Stock Purchase Plan (DRIP) and HEI appointed BNY Western as successor to Bank of Hawaii as trustee of the HEI DRIP. BNY Western has thus been substituted in place of Bank of Hawaii as trustee under the HEI DRIP. The governing documents listed on Exhibit A to the agreement were previously filed as follows: (1) Letter Agreement with Hawaiian Trust Company, Limited, of which Bank of Hawaii is successor by merger, establishing trustee relationship (10/6/1989)—previously filed as Exhibit 4(d) to Form S-3, Registration No. 33-31449, filed October 10, 1989, and (2) Dividend Reinvestment Plan, as amended—previously filed as Exhibit 4(d) to Form S-3, Registration No. 333-108110, filed August 20, 2003.

B. HELCO power situation update

The following is an update of the Hawaii Electric Light Company, Inc. (HELCO, an electric utility subsidiary of HECO) power situation (see “HELCO power situation,” which is incorporated herein by reference to pages 21 to 25 of HEI’s and HECO’s Form 10-Q for the quarter ended March 31, 2004).

After several years of opposition to, and resulting delays in, the efforts of HELCO to expand its Keahole power plant site to add new generation, HELCO entered into a conditional settlement agreement in November 2003 (Settlement Agreement) with all but one of the parties (Waimana Enterprises, Inc. (Waimana)) that had actively opposed the project, and with several regulatory agencies. The Settlement Agreement is intended to permit HELCO to complete the plant expansion, subject to satisfaction of the terms and conditions of the Settlement Agreement, and HELCO is actively engaged in construction activities to install the planned generation. One of the nominal 20 megawatt combustion turbines (CT-4) has been installed and was put into limited commercial operation in May 2004. Under the Settlement Agreement, CT-4 must have noise mitigation measures installed before it can be operated full-time. The noise mitigation measures are expected to be installed by the end of 2004. The other combustion turbine (CT-5) has been installed and is subject to ongoing testing. HELCO reclassified $40 million of capital costs for CT-4 and related pre-air permit facilities from construction in progress to plant and equipment. HELCO’s electric rates, however, will not change specifically as a result of including CT-4 and CT-5 in HELCO’s plant and equipment until HELCO files a rate increase application and the Public Utilities Commission of the State of Hawaii (PUC) grants HELCO rate relief.

The recovery of costs relating to CT-4 is subject to the rate-making process governed by the PUC. Management believes no adjustment to costs incurred to put CT-4 into service is required. However, if it becomes probable that the PUC will disallow some or all of the incurred costs for rate-making purposes, HELCO may be required to write off a material portion of the costs incurred in its efforts to put CT-4 into service.

IPP complaints; related PPAs. Three IPPs—Kawaihae Cogeneration Partners (KCP), which is an affiliate of Waimana, Enserch Development Corporation (Enserch) and Hilo Coast Power Company (HCPC)—filed separate complaints with the PUC in 1993, 1994 and 1999, respectively, alleging that they were each entitled to a power purchase agreement (PPA) to provide HELCO with additional capacity. KCP and Enserch each claimed that the generation capacity they would provide under their proposed PPAs would be a substitute for HELCO’s planned expansion of the Keahole plant.

The Enserch and HCPC complaints were resolved by HELCO’s entry into PPAs with each of these parties. The term of the PPA with HCPC extends from January 2000 through December 2004, but would have continued on a year to year basis unless HELCO or HCPC gave written notice of termination by May 30 of the year of termination. On May 28, 2004 HELCO gave written notice to HCPC that it would terminate the PPA

effective December 31, 2004. With respect to KCP, due to subsequent developments, including a ruling by the Hawaii Circuit Court for the Third Circuit that the lease for KCP’s proposed plant site was invalid, HELCO believes that KCP’s proposal for a PPA is not viable.

C. Fuel contracts

The initial terms of the existing major fuel supply contracts between HECO, Maui Electric Company, Limited (MECO), HELCO, and their fuel suppliers (Tesoro Hawaii Corporation, formerly known as BHP Petroleum Americas Refining Inc., and Chevron Products Company, a division of Chevron U.S.A. Inc.) expire at the end of 2004, but continue on a year to year basis unless terminated by either party. The utilities have reached agreement with these suppliers on amendments to the existing fuel supply contracts that will extend the contracts for a fixed term of 10 years on substantially the same terms and conditions, including market-related pricing. The amendments to the fuel supply contracts are subject to approval by the PUC and, if approved by the PUC, will by their terms become effective on January 1, 2005. On May 28, 2004, the utilities filed applications with the PUC for approval of the amendments to the four existing fuel supply contracts (which are identified below under Item 7).

Item 7.

Financial Statements and Exhibits

(c) Exhibits


Exhibit No.		Description

HEI
HEI Exhibit 99		Agreement of Resignation, Appointment and Acceptance by and among HEI, Bank of Hawaii, BNY Western Trust Company dated April 5, 2004

HECO
HECO Exhibit 10(a)		First Amendment to Low Sulfur Fuel Oil Supply Contract by and between Tesoro Hawaii Corporation, formerly known as BHP Petroleum Americas Refining Inc., and HECO dated March 29, 2004 (confidential treatment has been requested for portions of this exhibit, which has been redacted accordingly)

HECO Exhibit 10(b)		First Amendment to Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract by and between Tesoro Hawaii Corporation, formerly known as BHP Petroleum Americas Refining Inc., and HECO, MECO and HELCO dated March 29, 2004 (confidential treatment has been requested for portions of this exhibit, which has been redacted accordingly)

HECO Exhibit 10(c)		First Amendment to Low Sulfur Fuel Oil Supply Contract by and between Chevron Products Company, a division of Chevron U.S.A. Inc., and HECO entered into as of April 12, 2004 (confidential treatment has been requested for portions of this exhibit, which has been redacted accordingly)

HECO Exhibit 10(d)		Amendment to Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract by and between Chevron Products Company, a division of Chevron U.S.A. Inc., and HECO, MECO and HELCO entered into as of April 12, 2004 (confidential treatment has been requested for portions of this exhibit, which has been redacted accordingly)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. The signature of the undersigned companies shall be deemed to relate only to matters having reference to such companies and any subsidiaries thereof.



HAWAIIAN ELECTRIC INDUSTRIES, INC. (Registrant)				HAWAIIAN ELECTRIC COMPANY, INC. (Registrant)

/s/ Curtis Y. Harada				/s/ Richard A. von Gnechten
Curtis Y. Harada Controller (Chief Accounting Officer of HEI)				Richard A. von Gnechten Financial Vice President (Principal Financial Officer of HECO)
Date: June 8, 2004				Date: June 8, 2004

EX-99 2 dex99.htm AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE Agreement of Resignation, Appointment and Acceptance

HEI Exhibit 99

AGREEMENT OF RESIGNATION, APPOINTMENT AND ACCEPTANCE

This Agreement of Resignation, Appointment and Acceptance is made by and among that issuer or other person who is identified in Exhibit A attached hereto (the “Exhibit”) as the “Issuer” (the “Issuer”), Bank of Hawaii, a Hawaii banking corporation duly organized and existing under the laws of the State of Hawaii and having its principal corporate trust office at 130 Merchant Street, Honolulu, HI 96813 (the “Bank) and BNY Western Trust Company, a California state banking corporation duly organized and existing under the laws of the State of California and having its principal corporate trust office at 700 S. Flower, 5^th Floor, Los Angeles, CA 90017 (“BNY”).

RECITALS:

WHEREAS, the Issuer and the Bank entered into one or more trust indentures, paying agency agreements, registrar agreements, or other relevant agreements as such are more particularly described in the Exhibit under the section entitled “Client Agreements” (individually and collectively referred to herein as the “Client Agreements”) under which the Bank was appointed in the capacity or capacities identified in the Exhibit (individually and collectively the “Positions”);

WHEREAS, the Issuer desires to appoint BNY as the successor to the Bank in the Positions under the Client Agreements; and

WHEREAS, BNY is willing to accept such appointment as the successor to the Bank in the Positions under the Client Agreements.

NOW, THEREFORE, the Issuer, the Bank and BNY, for and in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby consent and agree as follows:

ARTICLE I

THE BANK

SECTION 1.01. The Bank hereby resigns from the Positions under the Client Agreements.

SECTION 1.02. The Bank hereby assigns, transfers, delivers and confirms to BNY all right, title and interest of the Bank in and to the Rights (as such term is defined in that Transfer and Assumption Agreement dated December 2, 2003 between BNY and the Bank) relating to the Client Agreements.

ARTICLE II

THE ISSUER

SECTION 2.01. The Issuer hereby accepts the resignation of the Bank from the Positions under the Client Agreements.

SECTION 2.02. All conditions relating to the appointment of BNY as the successor to the Bank in the Positions under the Client Agreements have been met by the Issuer, and the Issuer hereby appoints BNY to the Positions under the Client Agreements with like effect as if originally named to such Positions under the Client Agreements.

ARTICLE III

BNY

SECTION 3.01. BNY hereby represents and warrants to the Bank and to the Issuer that BNY is not disqualified to act in the Positions under the Client Agreements.

SECTION 3.02. BNY hereby accepts its appointment to the Positions under the Client Agreements and accepts and assumes the rights, powers, duties and obligations of the Bank under the Client Agreements, upon the terms and conditions set forth therein, with like effect as if originally named to such Positions under the Client Agreements.

ARTICLE IV

MISCELLANEOUS

SECTION 4.01. This Agreement and the resignation, appointment and acceptance effected hereby shall be effective as of 12:01 A.M. local Los Angeles time on the Effective Date set forth in the Exhibit.

SECTION 4.02. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

SECTION 4.03. This Agreement may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

SECTION 4.04. The persons signing this Agreement on behalf of the Issuer, BNY and the Bank are duly authorized to execute it on behalf of the each party, and each party warrants that it is authorized to execute this Agreement and to perform its duties hereunder.

SECTION 4.05. The Issuer represents that it is the type of entity as identified in the Exhibit and has been duly organized and is validly existing under the laws of the jurisdiction and with the principal office as identified in the Exhibit.

-2-

IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Resignation, Appointment and Acceptance to be duly executed and acknowledged all as of the day and year first above written.


Hawaiian Electric Industries, Inc. as Issuer

By:		/s/ Eric K. Yeaman
Name:		Eric K. Yeaman
Title:		Financial Vice President and Treasurer

Date:		April 5, 2004



Bank of Hawaii, as Prior Trustee

By:		/s/ Johanna K. Tokunaga
Name:
Title:



By:		/s/ Marilynn M. Matsumoto
Name:		Marilynn M. Matsumoto
Title:		Vice President



BNY Western Trust Company, as Successor Trustee

By:		/s/ Daren M. DiNicola
Name:		Daren M. DiNicola
Title:		V.P. & Bus. Group Mgr.

-3-

EXHIBIT A

Issuer: Hawaiian Electric Industries, Inc.

Effective Date: February 9, 2004

Client Agreement(s):

Name/Description

Account
Numbers

Governing Document (Date)

Bank of Hawaii’s Capacity

Hawaiian Electric Dividend Reinv &

Stock Purchase Plan (HEI DIV REIN-AD)

185017456

Letter Agreement with Hawaiian Trust Company, Limited, of which Bank of Hawaii is successor by merger, establishing trustee relationship (10/6/1989) and Dividend Reinvestment Plan, as amended (both attached)

Trustee (Proxy voting of HEI stock in HEI Dividend Reinvestment Plan and other responsibilities as set forth in Letter Agreement and Plan)

EX-10.(A) 3 dex10a.htm 1ST AMENDMENT TO LOW SULFUR FUEL OIL SUPPLY CONTRACT 1st Amendment to Low Sulfur Fuel Oil Supply Contract

HECO Exhibit 10(a)

FIRST AMENDMENT TO

LOW SULFUR FUEL OIL SUPPLY CONTRACT

BY AND BETWEEN

BHP PETROLEUM AMERICAS REFINING INC.

AND

HAWAIIAN ELECTRIC COMPANY, INC.

This First Amendment to Low Sulfur Fuel Oil Supply Contract (“Amendment”), dated March 29, 2004 is entered into between Tesoro Hawaii Corporation fka BHP Petroleum Americas Refining Inc., a Hawaii corporation (referred to as “Tesoro” or “SELLER”), and Hawaiian Electric Company, Inc., a Hawaii corporation, (referred to as “HECO” or “BUYER”).

WHEREAS, BHP Petroleum Americas Refining Inc. entered into that certain Low Sulfur Fuel Oil Supply Contract dated November 14, 1997, effective as of January 1, 1998 (the “Contract”); and

WHEREAS, on or about June 1, 1998, Tesoro Petroleum Corporation purchased all the stock of BHP Petroleum Americas Refining Inc., and thereafter changed the name of BHP Petroleum Americas Refining Inc. to Tesoro Hawaii Corporation; and

WHEREAS, the Contract provided for the sale by SELLER and purchase by HECO of Low Sulfur Fuel Oil (referred to as “LSFO” or “Product”) for the period from January 1, 1998 through December 31, 2004, with provision for additional terms of 12-months each, beginning each successive January 1, unless BUYER or SELLER gives written notice of termination at least 120 days prior to the expiration of the then current term; and

WHEREAS, SELLER and BUYER desire to extend the original term of the Contract for an additional ten-year period under the existing terms and conditions of the Contract, subject to the amendments noted herein;

NOW THEREFORE, the parties agree to amend the Contract as follows, effective as of January 1, 2005:

1. All references to “BHP” or “BHP Petroleum Americas Refining Inc.” in the title of and throughout the Contract shall be replaced by “Tesoro Hawaii Corporation”.

2. Article I (“Definitions”) is hereby amended by amending the definition of “Original Term” in its entirety to read as follows:

“22. “Original Term” means the first term of this Contract, which commenced January 1, 1998 and concludes December 31, 2014.”

3. Article III (“Term”) is hereby amended in its entirety to read as follows:

“The Original Term of this Contract shall be from January 1, 1998 through December 31, 2014, and shall continue for Additional Terms, unless BUYER or SELLER gives written notice of termination at least one hundred twenty (120) Days prior to the beginning of an Additional Term.”

4. Article V (“Quantity”), Section 5.1 (“Quantity”) is hereby amended in the first paragraph by replacing the phrase “2000-2004” in the table with “2000-2014/Additional Term”, by replacing the phrase “Years 2001, 2002 and 2003” with “Years 2001, 2002, 2003, 2005, 2006, 2007, 2009, 2010, 2011, 2013, and 2014”, and by replacing the phrase “Years 2000 and 2004” with “Years 2000, 2004, 2008, and 2012”; in the second paragraph, by replacing the phrase “Year 2004” with “Year 2014”; and in the fourth paragraph, by replacing the phrase “Years 2000, 2001, 2002, 2003 and 2004” with “Years 2000 through 2014.”

5. Article VI (“Price”), Section 6.1 (“Determination of Product Price”) is hereby amended by replacing all references to [___] and [___] therein with [___] and by replacing their respective definitions with the definition of [___] below.

[___]

6. Article VI (“Price”), Section 6.1 (“Determination of Product Price”) is hereby further amended by replacing the phrase “2000-2004” in the table following the definition of price component [___] with “2000-2014/Additional Term”; and by amending the sentence immediately following the definition of price formula component [___] by replacing the phrase “2004” with “2014”.

7. Article VIII (“Payment”), Section 8.1 (“Invoices”) is hereby updated by amending the identity of and address information for the “SELLER” in the second paragraph as follows:

“SELLER:

TESORO HAWAII CORPORATION

P.O. Box 3379

Honolulu, Hawaii 96842

Attn: Manager Utility Fuel Sales

Facsimile: (808) 547-3336”

8. Article VIII (“Payment”), Section 8.2 (“Method of Payment”) is hereby updated by amending the SELLER’s wire transfer information as follows:

“Bank One, Chicago, Illinois

ABA# 071000013

Tesoro Hawaii Corporation

Account # 5563631”

9. Article IX (“Notices”) is hereby clarified and updated by replacing it in its entirety with the following:

“Except as otherwise expressly provided herein, all notices shall be given in writing, by letter, electronic mail or facsimile to the following addresses, or such other address as the parties may designate by notice, and shall be deemed to have been duly given upon receipt, provided that notice sent by mail shall be deemed to have been given on the date of actual delivery or at the expiration of the fifth day after the date of mailing, whichever is earlier.


BUYER:		Hawaiian Electric Company, Inc. P. O. Box 2750 Honolulu, Hawaii 96840 Attn: Director Fuels Resources, Power Supply Process Area, Mail Stop WP-2/IF Facsimile: (808) 543-4207

SELLER:		Tesoro Hawaii Corporation P.O. Box 3379 Honolulu, Hawaii 96842 Attn: Manager Utility Fuel Sales Facsimile: (808) 547-3336”

10. Exhibit A (“Product Specifications”) is hereby replaced by the Exhibit A attached hereto and incorporated herein by reference.

11. Exhibit B (“Illustrative Schedule Of Prices”) is hereby clarified and updated by replacing it with the Exhibit B attached hereto and incorporated herein by reference.

12. Exhibit C (“Illustrative Computation of Price Formula Component”) is hereby clarified and updated by replacing it with the Exhibit C attached hereto and incorporated herein by reference.

13. Except as expressly amended in this First Amendment, the provisions of the Contract shall remain in full force and effect, and exactly as written.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Low Sulfur Fuel Oil Supply Contract as of the day and year first written above.


HAWAIIAN ELECTRIC COMPANY, INC.

By		/s/ THOMAS C. SIMMONS

		Thomas C. Simmons
		(Printed or Typed Name)

Its		Vice President, Power Supply

By		/s/ RICHARD A. VON GNECHTEN

		Richard A. von Gnechten
		(Printed or Typed Name)

Its		Financial Vice President
		BUYER


TESORO HAWAII CORPORATION

By		/s/ STEVE L. WORMINGTON

		Steve L. Wormington
		(Printed or Typed Name)

Its		EVP Marketing
		SELLER

EXHIBIT A

PRODUCT SPECIFICATIONS


LSFO Specification – Test Item	Measurement Unit	Limits	ASTM Method
GRAVITY @ 60 DEGREES F.	Degrees API	12 Min. 24 Max.	D-4052

[_____________________________________________________________________________________________________

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________]



HEAT VALUE, GROSS	MM BTU/BBL	6.0 million Min.	D-240, D-4868

FLASH POINT	Degrees F.	150 Min.	D-93, D-6450

POUR POINT	Degrees F.	125 Max.	D-97, D-5949

ASH	Percent, Weight	0.05 Max.	D-482

SEDIMENT & WATER	Percent, Weight	0.50 Max.	D-1796

[____________________________________________________________________________________________]

EXHIBIT B

ILLUSTRATIVE SCHEDULE OF PRICES

Illustrative Price Calculation for Product Delivered to Meet the Nominated Commitment of

October 2003

Determination of Product Price Under Article VI. The Product Price in U.S. Dollars (USD) per barrel shall be determined according to the following price formula:

[_________________________________________________________________]

Where:

[_____________________________________________________________________________________________________

__________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________

__________________________________________________________________________________________________ __________________________________________________________________________________________________

__________________________________________________________________________________________________ _______________________]

[_]

= market price referencing a component (base price) of the price of [_____________________________________________ ____________________________________________________________________________________________________ ____________________________________________________________________________________________________ _____________________________________________________________________________________________], expressed in USD per barrel.

[______________________________________________________________________________________________ _______________________________________________________________________________________] during the period beginning the 21^st Day of the second Month preceding the Nominated Month of Delivery and ending the 20^th of the Month immediately preceding the Nominated Month of Delivery.


Date of Price	Price in USD per Barrel
Date	Low	High	Average
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]

[________]			[________]

ii.

[______________________________________________________________________________________________ _______________________________________________________________________________________]] during the period beginning the 21^st Day of the second Month preceding the Nominated Month of Delivery and ending the 20^st of the Month immediately preceding the Nominated Month of Delivery.


Date of Price	Price in USD per Barrel
Date	Low	High	Average
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]

[________]			[________]

iii.

Compute the [___________________________________________________________________________________________ ______________________________________________________________________________________________________ _______________________________________________________________________________________________________ _________________________________________________]

[___________________________________________________________________________]

[_]

= market price referencing a component [___________________________________________________________________ ______________________________________________________________________________________________________ _______________________], expressed in USD per barrel.

Determination of [____________________________________________________________________________________________ _________________________________________________________________________________________]


Date of Price	Price in USD per Barrel
Date	Low	High	Average
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]
[________]	[________]	[________]	[________]

[________]		[________]

[_______________________________]

F1	= a factor to reflect [_____________________________________________________________________________________ __________________________________], expressed in USD per barrel.

A factor for [________________________________________________________________________________] which is computed in accordance with the following formula:

[_______________________________________________]

Where:

[___________________________________________________________________________________________________

________________________________________________________________________________________________

______________________________]

[___________________________________________________________________________________________________

________________________________________________________________________________________________

___________________________________________________________________]

i.	Determination of the [___________________________________________________________________________________ _______________________________________________]


Date of Price	Price in USD per Metric Ton
Date	Low	High	Average
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]
[________]	[________]	[________]	[________] [__]

[______] in USD per metric ton: [________]

ii.	Conversion of [________________________________________________________________] from USD per Metric Ton to USD per barrel

Expressed in USD per Bbl: = [__________] / 6.368 Bbl/MT

[_____________________________________]

iii.	Computation using price formula

[_____________________________________]

[____________________________________________________]

[______________________________________________]

[__________________________________________]

[________________________________________________________________________________________________________

____________________________________________________________________________________________________

__________________________________________________________________________________], expressed in USD per barrel.

A factor for [______________] which is computed in accordance with the following formula:

[_______________]

Where:

[__]

[_____________] derived by multiplying [_______________________________________________________________

__________________________________________________________________________________________________

_______________________________________________________________________________________________] for the three Months in the calendar quarter immediately preceding the calendar quarter of the Nominated Month of Delivery, by the [_________________________________________________________________________________________

_________________________________________________________________________________________], applicable to the Year of the quarter of the referenced [___] data, expressed in USD per barrel.

[_______________________________________________________________________________________________] as defined in [________] to reflect the cost of the additional premium for full USD 1 billion coverage of Oil Pollution Liability Insurance on vessels carrying persistent oils to and from the U.S.A., consistent with a typical vessel derived in Exhibit C attached to this Contract.

[_________________________________________________________________________________________________________

______________________________________________________________________________________________________

__] for the three Months in the calendar quarter immediately preceding the calendar quarter of the Nominated Month of Delivery, by [________________________________________________________________________________________

____________________________________________________________________________________________________] applicable to the Year of the quarter of the referenced [___] data, expressed in USD per barrel.

i.	the [________________________________________________________________________________________________

___________________________________________________________________________________________________

_____________], for the three Monthly publications in the calendar quarter immediately preceding the calendar quarter of the Nominated Month of Delivery

Date of Publication: [_____________________________________________________________________________________

______________________________________________________________________________________________________

__________________________________________________________________________]


July 2003		[____]
August 2003		[____]
September 2003		[____]

[_________]		[______]

ii.	the [__________________________________________________________________________________________________

________________________________________________________________________], applicable to the Year of the quarter of the referenced [____] data, expressed in [__________________________________________________________________

_________________________________________________________________________]

[_________________________________________________________________________________________] effective January 1, 2003:

[______________________________________________________________________________________________________

_______________________________________________________________________________________________________

_________________]

* prorated due [__________________________________________________________________________________________

_________________________________________________________________________________________________]

iii.	Computation using price formula

[________________________]

[____________________]

iv.	Conversion of [_____________________________________] from USD per metric ton to USD per barrel

[______________________]

[________________]

[_______________________________________________________________________________________________] as defined

in [_____] to reflect the cost of the additional premium for full USD 1 billion coverage of Oil Pollution Liability Insurance on vessels carrying persistent oils to and from the U.S.A., consistent with a typical vessel derived in Exhibit C attached to this Contract.

[_______________________], derived as illustrated in Exhibit C attached hereto.

[________________]

[______________]

[_____________________________]

[_]

= a per barrel [__________________________________________________________________________________________

__________________________________________], applicable to volumes sold and Delivered by SELLER and purchased and received by BUYER in each Year of the Contract.

[_______________]

T = Taxes applicable to sale of Product

i.	HGET = 4.166% of pre-HGET price, excluding the Hawaii Environmental Response Tax;

ii.	Hawaii Environmental Response Tax applied after HGET = $0.05 per barrel

A.	Sample Product Price Computation for Delivery with Standard BTU Content of [-] MM Btu Per Barrel

[_______________________________]

[__________________________________________________]

[__________________________________]

[_______________________]

[________________]

B.	Sample Product Price Computation for Delivery with BTU Content Other than Standard [__] MM Btu per Barrel

[___________________________]

Assume [__] gross heat content [_________________] Product Delivered against the October 2003 Nomination, [________________

___________________________________________________________________________________________]

[________________________________________]

[________________________________________]

[_____________________]

[____________]

EXPLANATION OF TAXES:

Taxes in the LSFO price currently in effect include the Hawaii Environmental Response Tax of $0.050 per barrel. Also, Hawaii State General Excise Tax of 4.166% will be paid on all components of the Product Price, except at the execution of this Contract, the Hawaii Environmental Response Tax.

EXHIBIT C

ILLUSTRATIVE COMPUTATION OF PRICE FORMULA COMPONENT

Article VI of this Contract provides for the determination of the price per physical barrel of LSFO, which price determination [________________________________________________________________________________________________________

_________________________________________________________________________________________________________

_______________________________________________________________________________________________]. The current edition of [___________________________________________________________________] to reflect the cost of additional insurance premium for oil pollution liability insurance on vessels carrying “Persistent Oils” (a cargo category which would include any grade of fuel oil, most fuel oil blending components as well as most types of crude oil) applicable to voyages having a destination in the U.S.A. SELLER acknowledges that any vessel used to transport LSFO that is sold and purchased under this Contract, including its components and the crude oil from which the LSFO is derived, shall be required to possess oil spill liability insurance coverage in the maximum amount commercially available, $1 billion as of January 1, 2004.

The price formula component [____] refers to [________________________________________________________________

___________________________________________________________________________________________________________

__________________________________________] In order to derive an approximation of the relationship between Deadweight and Gross Registered Tons, the design characteristic of tankers against which marine insurance, including oil pollution liability insurance, is levied, for a nominal vessel consistent with [_______________________], the average size characteristics of two vessels that have transported LSFO or crude oil to Barbers Point, Hawaii are used as reference data. These vessels are described as follows:


Name		Deadweight Tons		Gross Registered Tons(GT)

[____________________________________________________________________________________________________

__________________________________________________________________________________________________________]

[__________________________________________________________________________________________________________]

The [____________________________________________________]that is to be included in the computation of [_______]

[___________________________________________]is consistent with the computation of [__] and is to be derived in the same manner as the following illustrative example calculations:

1. [__________________] rate in effect from February 20, 2003 (see note #1 at end) onwards shall include a [______________] computed as follows:

[_____________________________________] with respect to the additional insurance premium for oil spill liability insurance coverage in the maximum amount commercially available, $ 1 billion as of January 1, 2004, on vessels carrying Persistent Oils to and from the U.S.A., [____] is derived:

[_________________________________________________________________________________________________

___________________________________________________________________________________]

[_____________________]

For illustrative purposes, this rate may be expressed in USD per barrel as follows:

[__________________________________________

________________________________________________________________________________________________]

[_________________________________________]

2. The [________________________] and their related [______________________] applicable for each calendar quarter are based upon an average of [___________________________________] in the calendar quarter immediately preceding the calendar quarter of the Nominated Month of delivery. Therefore the [________________________] computed above may properly be prorated for certain quarterly periods. Such proration may be computed as follows:

With respect to volumes of LSFO [______________________________________________________________________

_______________________________________________________________________________________] (typically February 20th of each Year), the relevant [______________________________________] to be included in the computation of the [_______________________________________] shall be prorated for illustrative purposes as follows (for the first calendar quarter of a Year which is not a leap Year):

50/90 multiplied by the [______________________]computed prior to the rate change and 40/90 multiplied by the [___________________] using the revised rate.

With respect to volumes of [________________________], and continuing for so long as the [______________________] as set forth in [_________________________] shall be applicable, the relevant [_____________________________] to be included in the computation of the price component [_____________] shall be as derived as in part 1 above.

Note

(1): [___________________________] are revised and applicable for each calendar year, however the value of the [_________________________________] that pertains to the cost of oil pollution liability insurance is revised in accordance with the Protection & Indemnity Club (mutual marine insurance organizations) premium year, generally February 20 through February 19 of the following year. Reference [________________________] for the [____________________________] in effect from February 20, 2003 onwards and applicable to the October 2003 Product price.

EX-10.(B) 4 dex10b.htm 1ST AMENDMENT TO INTER-ISLAND INDUSTRIAL FUEL OIL & DIESEL FUEL SUPPLY CONTRACT 1st Amendment to Inter-Island Industrial Fuel Oil & Diesel Fuel Supply Contract

HECO Exhibit 10(b)

FIRST AMENDMENT TO

INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL SUPPLY CONTRACT

BY AND BETWEEN

BHP PETROLEUM AMERICAS REFINING INC.

AND

HAWAIIAN ELECTRIC COMPANY, INC.;

MAUI ELECTRIC COMPANY, LIMITED;

AND

HAWAII ELECTRIC LIGHT COMPANY, INC.

This First Amendment to Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract (“Amendment”), dated March 29, 2004 is entered into between Tesoro Hawaii Corporation fka BHP Petroleum Americas Refining Inc., a Hawaii corporation (hereinafter referred to as “Tesoro” or “SELLER”) and Hawaiian Electric Company, Inc. (“HECO”), and its wholly-owned subsidiaries Maui Electric Company, Limited (“MECO”), and Hawaii Electric Light Company, Inc. (“HELCO”), each a Hawaii corporation (HECO, MECO and HELCO hereinafter collectively referred to as “BUYER”).

WHEREAS, BHP Petroleum Americas Refining Inc. entered into that certain Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract dated November 14, 1997, effective as of January 1, 1998 (the “Contract”); and

WHEREAS, on or about June 1, 1998, Tesoro Petroleum Corporation purchased the stock of BHP Petroleum Americas Refining Inc., and thereafter changed the name of BHP Petroleum Americas Refining Inc. to Tesoro Hawaii Corporation; and

WHEREAS, the Contract provided for the sale by SELLER and purchase by BUYER of Industrial Fuel Oil (“Fuel Oil”) and Diesel Fuel (also “Diesel”) for the period from January 1, 1998 through December 31, 2004, with provision for additional terms of 12-months each

beginning each successive January 1, unless BUYER or SELLER gives written notice of termination at least 120 days prior to the expiration of the then current term; and

NOW THEREFORE, the parties agree to amend the Contract as follows, effective as of January 1, 2005:

1. All references to “BHP” or “BHP Petroleum Americas Refining Inc.” in the title of and throughout the Contract shall be replaced by “Tesoro Hawaii Corporation”.

2. Article I (“Definitions,”), Section 1.1, is hereby amended by amending the definitions of “Month of Delivery” and “Original Term,” to read as follows:

“36. “Month of Delivery” means the calendar month during which the physical Delivery is completed which is indicated by the cessation of pumping of Product.”

“38. “Original Term” means the first term of this Contract, which commences January 1, 1998 and concludes December 31, 2014.”

3. Article II (“Term”) is hereby amended in its entirety to read as follows:

“The Original Term of this Contract shall be from January 1, 1998 through December 31, 2014, and continue for Additional Terms, unless BUYER or SELLER gives written notice of termination at least one hundred twenty (120) Days before the beginning of an Additional Term.”

4. Article III (“Quantity”), Section 3.1 (“Minimum and Maximum Annual Quantities”) is hereby amended in the first paragraph by replacing the phrase “1999-2004” in the table setting forth the Fuel Oil annual physical quantities with “1999-2014/Additional Term” and by also replacing the phrase “1999-2004” in the table setting forth the Diesel annual physical quantities with “1999-2014/Additional Term”; and in the third paragraph by replacing the phrase “2004” with “2014.”

5. Article V (“Price, BTU Determination”), Section 5.1 (“Fuel Oil Price”) is hereby amended in the first paragraph by replacing the phrase “1999-2004” in the table setting forth the [ ] with “1999-2014/Additional Term” and by also replacing the phrase “2004” with “2014” in the immediately following sentence.

6. Article V (“Price, BTU Determination”), Section 5.2 (“Diesel Price”) is hereby amended in the first paragraph by replacing the phrase “1999-2004” in the table setting forth the [ ] with “1999-2014/Additional Term” and by also replacing the phrase “2004” with “2014” in the immediately following sentence; and is hereby further amended in the second paragraph by replacing the phrase “1999-2004” in the table setting forth the [ ]

[ ] with “1999-2014/Additional Term” and by also replacing the phrase “2004” with “2014” in the immediately following sentence.

7. Article VI (“Payment”), Section 6.2 (“Method of Payment”) is hereby updated by amending SELLER’S wire transfer information as follows:

“Bank One, Chicago, Illinois

ABA# 071000013

Tesoro Hawaii Corporation

Account # 5563631”

8. Article XV (“Entire Agreement, Waiver and Illegality”), Section 15.2 (“Notices”) is hereby clarified and updated by amending it in its entirety to read as follows:

“Except as otherwise expressly provided herein, all notices shall be given in writing, by letter, electronic mail, or facsimile to the following addresses, or such other addresses as the parties may designate by notice, and shall be deemed given upon receipt, provided that notice sent by mail shall be deemed to have been given on the date of actual delivery or at the expiration of the fifth day after the date of mailing, whichever is earlier.


SELLER:		Tesoro Hawaii Corporation
		P.O. Box 3379
		Honolulu, Hawaii 96842
		Attn: Manager Utility Fuel Sales
		Facsimile: (808) 547-3336


BUYER:		Hawaiian Electric Company, Inc.
		P. O. Box 2750
		Honolulu, Hawaii 96840
		Attn: Director Fuels Resources, Power Supply Process Area, Mail
		Stop WP-2/IF
		Facsimile: (808) 543-4207

The Director Fuel Resources, Power Supply Process Area, for Hawaiian Electric Company, Inc. shall be responsible for forwarding notices to the other parties to this Contract.”

9. Article XVI [ ] is hereby amended by replacing the phrase “the period 1999-2004” with “the period 1999-2014, plus any Additional Term thereafter.”

10. Addendum No. 2 (“Seller’s Facilities on Maui and Hawaii”), Section 17 (“Required Insurance”) is hereby amended by amending the first paragraph thereof in its entirety to read as follows:

“Without in any way limiting BUYER’s liability pursuant to this Contract, BUYER shall maintain and require any carrier to maintain the following insurance and all insurance that may be required under the applicable laws, ordinances, and regulations of any governmental authority:

Workers’ Compensation and Employer’s Liability Insurance:

(a)

As prescribed by applicable law, including insurance covering liability under the U.S. Longshore and Harbor Workers’ Compensation Act and the Outer Continental Shelf Lands Act with voluntary compensation for marine

operations to include transportation, wages, maintenance and cure, and Jones Act Coverage where required.

(b)

Coverage B Employer’s Liability with a minimum limit of $500,000.

(c)

Endorsement to include a waiver of subrogation against SELLER.

ii.

Comprehensive General Liability Insurance:

(a)

Bodily Injury and Property Damage Insurance with a minimum combined single limit of $1,000,000 per occurrence for bodily injury and property damage liability. Deductible or self-retention amount must be shown on certificate of insurance.

(b)

Such insurance shall include the following coverages: Products and Completed Operations and Personal Injury Liability.

(c)

SELLER shall be named as additional insured.

(d)

Endorsement to include a waiver of subrogation against SELLER.

iii.

Commercial Automobile Liability and Property Damage Liability Insurance:

(a)

Coverage for all owned, non-owned and hired vehicles used in receiving diesel from SELLER’s Neighbor Island Terminals with a minimum combined single limit of $1,000,000 per occurrence for bodily injury and property damage liability. Coverage shall include an endorsement, form “CC 00 31 12 89, Changes in Business Auto and Truckers Policies – Mobile Equipment, Contractual Liability and Pollution (Hawaii),” or its equivalent, to provide pollution liability coverage. Deductible or self-retention amount must be shown on certificates.

(b)

If applicable, Motor Carrier Policies of Insurance for Public Liability Endorsement (Motor Carrier Act of 1980) Form MCS-90 must be provided with minimum limits of $1,000,000 Bodily Injury and Property Damage per occurrence.

(c)

SELLER shall be named as additional insured.

(d)

Endorsement to include a waiver of subrogation against SELLER.

iv.

Excess (Umbrella) Liability Insurance:

(a)

Coverage with limits of liability not less than $5,000,000 per occurrence, and additional excess limits may be used to supplement inadequate limits in the primary policies required in Coverage B Employer’s Liability Insurance and Comprehensive General Liability Insurance.

(b)

SELLER shall be named as additional insured.

(c)

Endorsement to include a waiver of subrogation against SELLER.”

11. Addendum No. 2 (“Seller’s Facilities on Maui and Hawaii”), Section 19 (“Notices”) is hereby updated by amending it in its entirety to read as follows:

“Notices for the forecast of available diesel storage capacity, arrival of BUYER’s Nominated Barge or delivery timing notification, diesel quality notifications, or transfer notifications shall be made to the following addresses:


MAUI:		Tesoro Hawaii Corporation Terminals
		Terminal Supervisor
		140-A Hobron Avenue
		Kahului, Hawaii 96732
		Telephone: (808) 871 - 0817
		Facsimile: (808) 871 - 0728


		Maui Electric Company, Ltd.
		Production Department
		P.O. Box 398
		Kahului, Hawaii 96732
		Telephone: (808) 442 - 4914
		Facsimile: (808) 442 - 4975

HAWAII:		Tesoro Hawaii Corporation Terminals
		Terminal Supervisor
		607 Kalanianaole Avenue
		Hilo, Hawaii 96720
		Telephone: (808) 961 - 3177
		Facsimile: (808) 969 - 1085

		Hawaii Electric Light Co., Inc.
		Production Department
		P.O. Box 1027
		Hilo, Hawaii 96720
		Telephone: (808) 969 - 0423
		Facsimile: (808) 969 - 0425”

12. Exhibit A (“No. 6 Industrial Fuel Oil Specifications”), and Exhibit B (“Diesel Specifications”), are hereby replaced by the Exhibit A and Exhibit B, respectively, attached hereto and incorporated by reference.

13. Exhibit C (“No. 6 Fuel Oil Example Price Calculation”) and Exhibit D (“Diesel Example Price Calculation”), are hereby clarified and updated by replacing them with the Exhibit C and Exhibit D, respectively, attached hereto and incorporated herein by reference.

14. Except as expressly amended in this Amendment, the provisions of the Contract shall remain in full force and effect, and exactly as written.

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract as of the day and year first written above.


TESORO HAWAII CORPORATION

By		/s/ STEVE L. WORMINGTON

Its		Steve L. Wormington (Printed or Typed Name) EVP Marketing

SELLER

HAWAIIAN ELECTRIC COMPANY, INC.

By		/s/ THOMAS C. SIMMONS

Its		Thomas C. Simmons (Printed or Typed Name) Vice President, Power Supply

By		/s/ WILLIAM A. BONNET

Its		William A. Bonnet (Printed or Typed Name) Vice President

BUYER


MAUI ELECTRIC COMPANY, LIMITED

By		/s/ WILLIAM A. BONNET

Its		William A. Bonnet (Printed or Typed Name) Vice President

By		/s/ RICHARD A. VON GNECHTEN

Its		Richard A. von Gnechten (Printed or Typed Name) Financial Vice President

BUYER

HAWAII ELECTRIC LIGHT COMPANY, INC.

By		/s/ WILLIAM A. BONNET

Its		William A. Bonnet (Printed or Typed Name) Vice President

By		/s/ RICHARD A. VON GNECHTEN

Its		Richard A. von Gnechten (Printed or Typed Name) Financial Vice President

BUYER

EXHIBIT A

NO. 6 INDUSTRIAL FUEL OIL SPECIFICATIONS


Specification - Test Item	Measurement Unit	Limits	ASTM Method
GRAVITY @ 60 DEGREES F.	Degrees API	6.5 Min.	D-1298, D-4052-86

FLASH POINT	Degrees F.	150 Min.	D-93, D-6450

[___]	[___]	[___]	[___]
			[___]
	[___]	[___]	[___]
		[___]	[___]
	[___]	[___]	[___]
		[___]	[___]
	[___]	[___]	[___]
		[___]	[___]

POUR POINT	Degrees F.	55 Max.	D-97,
			D-5949

[___]	[___]	[___]	[___]
			[___]
			[___]

[___]	[___]	[___]	[___]
			[___]
			[___]

[___]	[___]	[___]	[___]
			[___]

SEDIMENT & WATER	Percent, Volume	0.50 Max.	D-1796

HEAT VALUE, GROSS	MM BTU/BBL	6.2 Min.	D-240, D-4868

HEAT VALUE, NET	MM BTU/BBL	Report	D-240, D-4868

[___]

EXHIBIT B

DIESEL SPECIFICATIONS


Specification - Test Item	Measurement Unit	Limits	ASTM Method
GRAVITY @ 60 DEGREES F.	Degrees API	30.0 Min.	D-1298, D-4052-86

SPECIFIC GRAVITY @ 60 DEGREES F.	n/a	.88 Max.	D-1298, D-4052-86


VISCOSITY	SSU At 104 DF	32.3 Min. 39.4 Max.	D-445, D-2161
	SSU At 100 DF	32.6 Min. 40.1 Max.	D-445, D-2161
	cSt At 100 DF	1.9 Min. 4.29 Max.	D-445, D-2161
	cSt At 104 DF	1.9 Min. 4.07 Max.	D-445, D-2161

FLASH POINT, PM	Degrees F.	150 Min.	D-93 D-6450

[___]	[___]	[___]	[___]

ASH	PPM, Wt.	100 Max.	D-482

[___]	[___]	[___]	[___]

CARBON RESIDUE 10% RESIDUUM	Percent, Wt.	.35 Max.	D-524

SEDIMENT & WATER	Percent, Volume	0.05 Max.	D-1796

[___]	[___]	[___]	[___]
			[___]
			[___]

[___]	[___]	[___]	[___]
			[___]

DISTILLATION, 90% RECOVERED	Degrees F.	540 - 650	D-86

[___]	[___]	[___]	[___]


[___]	[___]	[___]	[___]
			[___]

[___]	[___]	[___]	[___]
			[___]

* HEAT VALUE, GROSS	MM BTU/BBL	5.86	D-240, D-4868

HEAT VALUE, NET	MM BTU/BBL	Report	D-240, D-4868

*	Typical value is shown; value is not a specification limit.

EXHIBIT C

No. 6 FUEL OIL EXAMPLE PRICE CALCULATION

Illustrative Price Calculation for October 2003

The price in U.S. Dollars (“USD”) per barrel of No. 6 Fuel Oil is determined Monthly pursuant to Section 5.1, as illustrated by the following formula:

[___]

Where:

[___]

[___] market price referencing the price of [___]

[___] converted

from USD per metric ton to USD per barrel by dividing by 6.368.

i.	The [____]

on all dates of publication during the period beginning the 21st Day of the second Month preceding the Month of Delivery and ending the 20th Day of the Month preceding the Month of Delivery.


Date of Price	Price in USD per Metric Ton
Date	Low	High	Average
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]
[___]	[___]	[___]	[___][___]

[___]: [___]

ii.	Expressed in USD per barrel, converting to barrel from metric ton by dividing by 6.368.

= [___] / 6.368 Bbl/MT

[___]

Assume the following [___] this illustration:

[___]

A = [___]

T = Taxes applicable to sale of Fuel Oil

i.	HGET = Currently 4.166% of pre-HGET price, excluding the Hawaii Environmental Response Tax;

ii.	Hawaii Environmental Response Tax applied after HGET = Currently $0.05 per barrel.

I.	Sample price computation for Fuel Oil ( [___]

[___] gross heat content as determined

pursuant to Section 5.5 is in the range: [___] MM Btu per barrel)

P = [___]

[___]

[___] per barrel

II.

Sample price computation for Fuel Oil ( [___]

[____] Gross Heat Content as determined pursuant to Section 5.5 is outside the

range: [___] MM Btu per barrel)

Assume [___] gross heat content of [___] MM Btu per barrel

P = [___]

[___]

[___] per barrel

EXPLANATION OF TAXES:

Taxes in the Fuel Oil price currently in effect include the Hawaii Environmental Response Tax (currently $0.050 per barrel). Also, Hawaii State General Excise Tax (currently 4.166%) will be paid on all components of the Fuel Oil price, except at the execution of this Contract, the Hawaii Environmental Response Tax.

EXHIBIT D

DIESEL EXAMPLE PRICE CALCULATION

Illustrative Price Calculation for October 2003

The price in U.S. Dollars (“USD”) per gallon of Diesel is determined Monthly pursuant to Section 5.2, as illustrated by the following formula:

[_____]

Where:

[___]

DP =

market price referencing the price of [___]

[___]

[___] expressed in USD per gallon.

The [___]

[___]

[___]during the period beginning the 21st Day of the second Month preceding the Month of Delivery and ending the 20th Day of the Month preceding the Month of Delivery, expressed in USD per gallon.


Date of Price	Price in USD per gallon
	Low	High	Average
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]

[___] in USD per gallon: [___]

[___]

Assume the following [___] apply in this illustration:

[___]

Assume in this illustration that the [___]

[___]

thus

[___]

[___]

T = Taxes applicable to sale of Diesel

i.	HGET = currently 4.166% of pre-HGET price, excluding the Hawaii Environmental Response Tax and Hawaii Liquid Fuel Fax;

ii.	Hawaii Environmental Response Tax applied after HGET = currently $0.05 per barrel; equivalent to $0.0012 per gallon;

iii.	Hawaii Liquid Fuel Tax applied after HGET = currently $0.01 per gallon.

I.	Price For Diesel Delivered into BUYER’S Nominated Barge on Oahu ( [___] [___] gross heat content is in the range: [___] Btu per gallon)

P = [___]

[___]

[___] per gallon;

II.

Price For Diesel Delivered into BUYER’S Nominated Barge on Oahu ( [___] [___] gross heat content is outside the range: [___] Btu per gallon)

Assume gross heat content, HC = [___] Btu per gallon

P = [___]

[___]

[___] per gallon

III.

Price For Diesel Delivered [___]

[___]

[___] gross heat

content is in the range: [___] Btu Per gallon)

a. For Diesel Delivered [___]

[___]

P = [___]

[___]

[___] per gallon;

b. For Diesel Delivered to [___]

[___]

P = [___]

[___]

[___] per gallon;

c. For Diesel Delivered to [___]:

[___]

P = [___]

[___]

[___] per gallon;

IV.

Price For Diesel Delivered [___]

[___]

[___] gross heat

content is outside the range: [___] Btu per gallon)

For Diesel Delivered to [___]

[___]

Assume gross heat content, HC = [___] Btu per gallon

P = [___]

[___]

[___] per gallon

EXPLANATION OF TAXES:

Taxes in the Diesel price currently in effect include the Hawaii Environmental Response Tax (currently $0.050 per barrel ($0.0012 per gallon) and the Hawaii Liquid Fuel Tax (currently $0.01 per gallon). Also, the Hawaii State General Excise Tax (currently 4.166%) will be paid on all components of the Diesel price, except at the execution of this Contract, the Hawaii Environmental Response Tax and the Hawaii Liquid Fuel Tax.

EX-10.(C) 5 dex10c.htm 1ST AMENDMENT TO LOW SULFUR FUEL OIL SUPPLY CONTRACT 1st Amendment to Low Sulfur Fuel Oil Supply Contract

HECO Exhibit 10(c)

FIRST AMENDMENT TO

LOW SULFUR FUEL OIL SUPPLY CONTRACT

BY AND BETWEEN

CHEVRON PRODUCTS COMPANY,

A DIVISION OF CHEVRON U.S.A. INC.

AND

HAWAIIAN ELECTRIC COMPANY, INC.

This First Amendment to Low Sulfur Fuel Oil Supply Contract (“Amendment”) is entered into as of April 12, 2004 between Chevron Products Company, a Division of Chevron U.S.A. Inc., a Pennsylvania corporation (“Chevron”) and Hawaiian Electric Company, Inc., a Hawaii corporation (“HECO”).

WHEREAS, Chevron and HECO entered into a Low Sulfur Fuel Oil Supply Contract as of November 14, 1997, effective as of January 1, 1998 (the “Contract”); and

WHEREAS, the Contract provided for the sale by Chevron and purchase by HECO of Low Sulfur Fuel Oil (“LSFO”) and other petroleum products for the period from January 1, 1998 through December 31, 2004, with provision for continuation of the term beginning each successive January 1, unless HECO or Chevron gives written notice of termination at least 120 days before the beginning of an Extension; and

WHEREAS, Chevron and HECO desire to continue the arrangement for the sale and purchase of LSFO and other petroleum products for an additional ten-year period under the terms and conditions of the Contract, subject to the amendments noted herein;

NOW THEREFORE, the parties agree as follows, effective as of January 1, 2005:

1.	Article 1 (“Definitions”) is hereby amended by amending existing definitions “7”, “10”, “12”, “15”, “16”, “22”, “29” and by adding new definitions, “32,” “33,” “34”, “35” and “36” as follows:

“Black Oil Pipeline” means either Chevron’s 8 inch pipeline running from Barbers Point to Honolulu which can be used for transporting LSFO to the HECO fuel receiving and storage facilities at Waiau and Iwilei in addition to the transportation of Chevron’s petroleum products or, one placed in service, shall also mean HECO’s 8 inch Waiau Fuel Pipeline running from Barbers Point to the HECO fuel receiving and storage facilities at HECO’s Waiau Power Plant which will be the successor facility for routinely transporting fuel from Barbers Point to HECO’s storage facilities at Waiau. LSFO shall then be routinely transported to HECO’s storage facilities at Iwilei by truck.

10.

“Contract” means this Low Sulfur Fuel Oil Supply Contract, between Chevron and HECO, the original term of which commenced January 1, 1998 and the amended term of which commences January 1, 2005.

12.

“Deliver,” “Delivery,” “Deliveries” or “Delivered” refers to the transfer of title or physical movement of LSFO or Line Displacement Stock sold by Chevron and purchased by HECO.

15.

“Extension” means successive 12-Month periods in the term of this Contract in addition to and after the initial term of this Contract as amended, which is through December 31, 2014, each Extension beginning January 1.

16.

“Facilities And Operating Contract” means that certain separate agreement by and between Chevron and HECO dated November 14, 1997 or, if applicable, any successor agreements between the same parties that provide for the operations and maintenance of HECO’s BPTF, HECO’s Kahe Pipeline and HECO’s Black Oil Pipeline by Chevron and/or use of Chevron’s Black Oil Pipeline by HECO.

22.

“Line Displacement Stock “ means, collectively for this purpose, Diesel Fuel No. 2, Chevron Industrial Fuel Oil No. 6 or Chevron Industrial Fuel Oil No. 5 Delivered to either (i) displace LSFO from BPTF piping, HECO’s Kahe Pipeline, Chevron’s Black Oil Pipeline or HECO’s Black Oil Pipeline during any shutdown of operations of such facilities for reasons including but not limited to emergency, inspection, repair, or maintenance; (ii) heat up BPTF piping, HECO’s Kahe Pipeline, Chevron’s Black Oil Pipeline or HECO’s Black Oil Pipeline subsequent to any shutdown; or (iii) be used as reasonably required for the use or operation of such facilities in order to facilitate the movement of LSFO into HECO’s tankage at BPTF, Kahe, Waiau and Iwilei.

29.

“Pipeline Delivery” or “Pipeline Deliveries” means a Delivery of LSFO or Line Displacement Stock from Chevron’s Hawaii Refinery either (i) to HECO’s petroleum receiving and storage tanks at BPTF via Chevron’s Refinery pipelines; (ii) where or if there exists a direct connection between Chevron’s Refinery pipelines and HECO’s Kahe Pipeline, to HECO’s petroleum receiving and storage tanks at Kahe; (iii) by use of Chevron’s Black Oil Pipeline, to HECO’s petroleum receiving and storage tanks at Waiau, or Iwilei; or (iv) where or if there exists a direct connection between Chevron’s Refinery pipelines and HECO’s Black Oil Pipeline, Delivery of LSFO or Line Displacement Stock from Chevron’s Hawaii Refinery to HECO’s petroleum receiving and storage tanks at Waiau.

32.

33.

[___________________________________________________________________________________________________ _________________]

34.

35.

36.

2.	Article 2 (“Term of Contract”) is hereby amended by replacing it in its entirety to read as follows:

The term of this Contract shall be extended beyond December 31, 2004, for the period commencing with January 1, 2005 and continuing through December 31, 2014, and shall continue thereafter for Extensions beginning each successive January 1, unless HECO or Chevron gives written notice of termination at least 120 Days before the beginning of an Extension.

Section 3.1 (“Purchase Volumes”) is hereby amended by replacing the phrase “2000-2004” in the table setting forth the “Annual Average Daily Rate in Physical Barrels Per Day” in the first paragraph with the phrase “2000-2014/Extensions”; by replacing the phrase “2004” with the phrase “2014” in the penultimate sentence in Section 3.1; and by adding the following to the second table in this section, “Annual Volume in Thousands Of Barrels,” as follows:

Annual Volume In Thousands Of Barrels


Year	Minimum	Maximum
2005	[___________________________]
2006	[___________________________]
2007	[___________________________]
2008	[___________________________]
2009	[___________________________]
2010	[___________________________]
2011	[___________________________]
2012	[___________________________]
2013	[___________________________]
2014	[___________________________]
Extension non-leap year	[___________________________]
Extension leap year	[___________________________]

4.	Article 4 (“Quality”) is hereby amended by adding to ASTM Test Method “D93” an alternative laboratory test method for LSFO Specification “Flash Point,” “D6450”.

5.	Section 5.1 (“Price Per Physical Barrel”) is hereby updated by amending the definition of market price index factor [____] in price formula component [_________] to read as follows:

[_______________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ___________________________________________]

6.	Section 5.1 (“Price Per Physical Barrel”) is hereby updated by amending the definition of [____________________________] in price formula component [——————-] to read as follows:

(c) There shall be added to the multiplication product of (a) and (b) above, a [_________________________________________ _______________________________________________________________________________________________________ _______________________] with respect to the additional premiums for full $ 1 billion coverage provided by P&I Clubs for Oil Pollution Liability Insurance on vessels carrying persistent oils to and from the U.S.A., consistent with a typical vessel as derived in Addendum No. 3 attached to this Contract.

Section 5.1 (“Price Per Physical Barrel”) if hereby updated by amending by replacing the phrase “2000-2004/Extension” with the phrase “2000-2014/Extensions” for the years of the indicated period applicable for price formula components [___] and [___]; and by replacing the phrase “2004” with the phrase “2014” in the sentence following the table following the definition for [___]

8.	Article 6 (“Indemnity”) is hereby amended by replacing it in its entirety to read as follows:

Section 6.1 HECO Indemnifies Chevron

HECO agrees to release, defend, indemnify and hold harmless Chevron, and its officers, directors, agents, employees and invitees from and against all Site Remediation Costs (including, without limitation, all fines, penalties and Reasonable Costs of investigation) and all claims, losses, damages, expenses, costs and liability (including attorney’s fees and

costs of litigation), including without limitation for injuries to or deaths of persons or damage to property, but excluding consequential damages or punitive damages (other than punitive damages actually paid by Chevron to a third party), arising or resulting from or related in any manner whatsoever to (i) the loss, release, discharge, spill or threat thereof, of any petroleum product for which HECO has risk of loss occurring from any leak, rupture or other incident involving the Pipelines or BPTF, or (ii) any contaminated third party LSFO purchased by HECO or third party LSFO purchased by HECO which does not meet the specifications for LSFO described in this Contract; except to the extent such claims, losses, damages, expenses, costs and liability, including without limitation for injuries to or deaths of persons or damage to property are caused by the gross negligence or willful misconduct of respectively, Chevron, or its officers, directors, agents, employees and invitees. Chevron agrees to promptly notify HECO of any claim, loss, cost, damage, exposure or liability and to provide HECO reasonable information and assistance related to any claim or action or the defense thereof.

Section 6.2 Chevron Indemnifies HECO

Except to the extent provided in Section 6.1, Chevron agrees to release, defend indemnify and hold harmless, HECO and its officers, directors, agents, employees and invitees from and against all claims, losses, damages, expenses, costs and liability (including attorneys fees and costs of litigation), including without limitation for injuries to or deaths of persons or damage to property (including LSFO, its components, Line Displacement Stock, risk of loss which is in HECO), but excluding consequential damages or punitive damages (other than punitive damages actually paid by HECO to a third party), arising or resulting from or related in any manner whatsoever to:

(i)

any loss, release, discharge, spill, or threat thereof, of any petroleum product for which Chevron has risk of loss, occurring from any leak, or other incident except to the extent such claims, losses, damages, expenses, costs and liability, including without limitation for injuries to or deaths of persons or damage to property (including LSFO, its components, Line Displacement Stock, risk of loss which is in HECO), are caused by the gross negligence or willful misconduct of, respectively, HECO, or its officers, directors, agents, employees and invitees,

(ii)

any LSFO, its components, Line Displacement Stock, for which Chevron has the risk of loss, which does not meet specifications or is contaminated, except to the extent such off spec or contaminated products, claims, losses, damages, expenses, costs and liability, including without limitation for injuries to or deaths of persons or damage to property (including LSFO, its components, Line Displacement Stock, risk of loss which is in HECO), are caused by the gross negligence or willful misconduct of, respectively, HECO, or its officers, directors, agents, employees and invitees, or

(iii)

any LSFO, its components, Line Displacement Stock, for which HECO has the risk of loss, which does not meet specifications or is contaminated, to the extent such off spec or contaminated products, claims, losses, damages, expenses, costs and liability, including without limitation for injuries to or deaths of persons or damage to property (including LSFO, its components, Line Displacement Stock, risk of loss

which is in HECO), are caused by the negligence or willful misconduct of, respectively, Chevron, or its officers, directors, agents, employees and invitees.

HECO agrees to promptly notify Chevron of any claim, loss, cost, damages, expense or liability and to provide Chevron reasonable information and assistance related to any claim or action of the defense thereof.

Section 6.3 Provision Survival

The provisions of this Article 6 shall survive the termination of this Contract to the extent that they apply to events, which occurred during the term of this Contract.

9.	Section 7.1 (“LSFO Delivery”) is hereby amended by replacing it in its entirety to read as follows:

Pipeline Delivery of LSFO or Line Displacement Stock from Chevron’s Hawaii Refinery shall be made by one of the following methods:

(a)

Chevron may Deliver LSFO or Line Displacement Stock by pipeline from the Refinery into HECO’s BPTF. Title and risk of loss of such LSFO and Line Displacement Stock shall pass to HECO where Refinery pipelines interconnect with HECO’s BPTF pipelines at the point where the pipelines intersect the boundary line between the Refinery property and HECO’s BPTF property at either point A, depending on whether Chevron Delivers LSFO or Line Displacement Stock through the “Front Door Line” or “Back Door Line” as shown in Addendum No. 4.

(b)

Pursuant to the Facilities and Operating Agreement between Chevron and HECO or to the terms and conditions of any agreement by and between Chevron and HECO which may become effective subsequently thereto which provides for the contingent use of Chevron’s Black Oil Pipeline, Chevron may Deliver LSFO by pipeline from the Refinery into HECO’s receiving and storage tanks at Waiau and Iwilei. With respect to such Deliveries to HECO’s receiving and storage tanks at Waiau and Iwilei, title and risk of loss of LSFO or Line Displacement Stock Delivered from the Refinery shall pass to HECO where the Refinery pipelines interconnect with Chevron’s Black Oil Pipeline at either of two locations shown as point C in Addendum No. 4. Where or if there exists a direct connection between Chevron’s Refinery pipelines and HECO’s Kahe Pipeline, Delivery of LSFO or Line Displacement Stock from Chevron’s Hawaii Refinery to HECO’s petroleum receiving and storage tanks at Kahe, title and risk of loss of LSFO or Line Displacement Stock Delivered from the Refinery shall pass to HECO where the Refinery pipelines interconnect with HECO’s Kahe Pipeline at either of two locations shown as point B in Addendum No. 4.

The use of facilities for Delivery of LSFO or Line Displacement Stock pursuant to Section 7.1.(b) of this Contract, including but not limited to HECO’s obligation to pay a per barrel pipeline pumping fee for the LSFO or Line Displacement Stock Delivered under Section 7.1 (b), if such shall be levied for the movement of LSFO or Line Displacement Stock, the measurement of the pumped quantities and the terms of sale and Delivery by Chevron and purchase and receipt by HECO of Line Displacement Stock other than the specific provisions set forth in Article 9 herein, shall be governed by the Facilities And Operating Contract or the terms and conditions of any agreement by and between Chevron and HECO which may become effective subsequently thereto which provides for the operation or use of the HECO Kahe Pipeline, HECO Waiau Fuel Pipeline or Chevron’s Black Oil Pipeline.

10.	Section 7.2 (“Determination of Quantity”) is hereby amended by the addition of the following paragraph at the end, which shall read as follows:

The quality of Line Displacement Stock shall be determined on the basis of samples drawn in such a manner as to be representative of each individual Delivery. Samples of Line Displacement Stock shall be drawn by Chevron or, if mutually agreed, by or under the supervision of an Independent Inspector the cost of which shall be shared equally by Chevron and HECO. Such samples shall be divided into two parts: one part shall be used by Chevron to determine quality and BTU content, if so requested by HECO; and the other part shall be sealed and retained separately by HECO.

11.	Section 7.3 (“Measurement of Quantity”) is hereby amended by amending the first paragraph to read as follows:

Quantities of LSFO and Line Displacement Stock shipped between the facilities by pipeline including quantities of same Delivered by Pipeline Delivery hereunder shall be determined at the time of the Pipeline Delivery by gauging Chevron’s tanks before and after pumping under the supervision of the Independent Inspector. Quantities of LSFO and Line Displacement Stock pumped, sold or Delivered by Chevron and purchased or received by HECO hereunder shall be calculated in accordance with the current measurement standards adopted by industry, ASTM, API and other recognized standard-setting bodies as are applicable in the opinion of the Independent Inspector and shall be expressed in G.S.V., U.S. barrels @ 60 degrees F.

12.	Section 9.1 (“Line Displacement Stock”) is hereby amended in its entirety to read as follows:

HECO shall purchase and Chevron shall supply whatever volume of Line Displacement Stock is received into HECO’s LSFO tankage at BPTF, Kahe, Waiau or Iwilei as may be reasonably required by HECO for the operation and maintenance of the HECO Kahe Pipeline and HECO Waiau Fuel Pipeline or as may be reasonably required for Chevron to

complete the Deliveries of LSFO received into HECO’s tankage at Waiau and Iwilei via Chevron’s Black Oil Pipeline. The price of No. 2 diesel fuel or No. 6 fuel oil used as Line Displacement Stock shall be the then-current pricing for the fuel comprising the Line Displacement Stock in that certain separate agreement between Chevron and HECO and its affiliated companies of even date herewith, known as the Inter-Island Industrial Fuel Oil and Diesel Fuel Contract (“Inter-Island Supply Contract”), if such a supply contract is in effect; otherwise its price shall be the then-current Honolulu posted price for such fuel, less normally available discounts, if any, at the time of purchase. The price of No. 5 fuel oil used as Line Displacement Stock shall be the [__________________________________________________________________________________________] in the Inter-Island Supply Contract, if such a supply contract is in effect; otherwise its price shall be the then-current Honolulu posted price for No. 5 fuel oil, less normally available discounts, if any, at the time of purchase. HECO’s minimum purchase obligation and Chevron’s maximum purchase obligation set forth in Article 3 shall be reduced by each physical barrel of Line Displacement Stock sold.

13.	Section 10.1 (“Invoices”) is hereby amended in its entirety by replacing it with the following:

Invoices, which will show the price per physical barrel of LSFO, blend stock and Line Displacement Stock sold will be prepared and dated following Delivery. Invoices shall include full documentation, as approved by both parties including Certificate of Quality, report of the Independent Inspector, and price calculation; such documentation may, however, be provided by Chevron to HECO separately. The invoices shall also show as a separate item the estimated amounts of any reimbursements to which Chevron is entitled pursuant to Section 5.3.

If an invoice incorporating an item other than a BTU content adjustment is found to be in error or is otherwise disputed by HECO, then HECO shall pay the undisputed portion of such invoice when due and thereupon have the option to withhold payment of the disputed portion of said invoice without penalty until such error or dispute is resolved and HECO shall have received a corrected invoice, debit or credit. HECO shall notify Chevron’s designated representatives as soon as any such error or item of dispute is discovered to expedite resolution and correction. HECO shall make payment for such corrected invoice or debit in accordance with Section 10.3.

If Chevron’s or HECO’s final laboratory result for BTU content is unavailable or if Chevron’s laboratory result is disputed by HECO, Chevron may issue a provisional invoice pursuant to Section 7.2. HECO shall in such case make payment for such provisional invoice in accordance with the provisions of Section 10.3.

Chevron will transmit an original of the invoice to HECO by first class mail to the address in Section 18.4 or as otherwise instructed. The invoice shall also be sent to HECO by facsimile or electronic mail on the same day.

14.	Section 10.2 [________________________________] is hereby amended in its entirety by replacing it to read as follows:

______________________________________________________________________________________________________ ______________________________________________________________________________________________________ ______________________________________________________________________________________________________ __________________________________________________________________________________________________]

15.	Section 10.3 (“Payments”) is hereby amended by replacing it in its entirety to read as follows:

Payments of Chevron’s invoices shall be made by HECO in U.S. dollars. Subject to Section 10.1, Section 10.2, Section 7.4 and Section 8.6 herein, such payments shall be due within [________________] days from HECO’s first receipt of Chevron’s invoice and full documentation. Due dates are dates payments are to be received by Chevron.

16.	Section 10.4 (“Method of Payment”) is hereby amended by replacing it in its entirety to read as follows:

Payments of Chevron’s invoices shall be tendered by HECO to Chevron by means of an [_____________________________________________________________________________________________________ ______________________________________________________________________________________________________ ______________________________________________________________________________________________________ ______________________________________________________________________________________________________ ______________________________________________________________________________________________________

___________] HECO shall make immediate payment in full to Chevron by Fedwire funds transfer of immediately available funds to:

Chevron U.S.A. Inc.

Account Number 59-51755

First National Bank of Chicago, Chicago, IL

ABA Ref. No. 071000013

for credit to the account of the payee. Such Fedwire funds transfer shall reference the relevant customer account number from [____________________________________________________________________________________________] HECO shall by email or fax provide Chevron’s designated representatives written documentation evidencing the specific invoices being paid.

17.	Article 10 (“Invoicing and Payment”) is hereby amended by adding a new Section 10.5 [——————-] which shall read as follows:

[________________________]

[_______________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________

________________________________________________________________________________________________________

________________________]

[_______________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ________________________________________________________________________________________________________ ______________________________________________________________________________]

________________________________________________________________________________________________________

________________________________________]

18.	Article 11 (“Contingencies”) is hereby amended by adding a new Section 11.8 “Renegotiation,” which shall read as follows:

Section 11.8 Renegotiation

It is understood and agreed that both parties entered into this Contract in reliance on [__________________________________] in existence or in effect on the Effective Date of this Contract and on the execution date of any subsequent amendments hereto, to the extent that they directly or indirectly affect the terms under which LSFO is sold by Chevron or purchased by HECO hereunder. If at any time any [______________________________________________________________________________] come into existence and become effective after the Effective Date of this Contract and after the execution date of any subsequent amendment hereto, and such [__________] significantly affects a party’s ability to continue to perform under this Contract or, [_________________________________________________] has a material and adverse financial effect upon either party or upon a party’s ability to perform its obligations under this Contract, then the affected party, shall have the option to call for renegotiation of the price for LSFO sold to HECO, or renegotiation of any other provision of this Contract the performance of which by the affected party would be affected. Such option shall be exercised by the affected party no later than one hundred eighty (180) days after such [__________________________________] comes into existence and becomes effective, by giving written notice to the other party of the call to renegotiate. Within ten (10) days after the date of such notice, the parties shall enter into negotiations and in the event that the parties do not agree upon a new price of LSFO or other provision satisfactory to both parties within forty (40) days after the date of such notice, the affected party shall have the right to terminate this Contract effective thirty (30) Days after giving written notice of termination to the other party. Such notice of termination shall be given within thirty (30) days immediately following the forty (40) day negotiation period. Until a mutually satisfactory new price of LSFO or other provision has been agreed upon, or until this Contract is terminated as provided herein, the price of LSFO or other provision that was in effect when the request for renegotiation was made shall continue in full force and effect.

19.	Section 18.4 (“Notices”) is hereby updated by amending the address and other contact information of “Seller” or “Chevron” and “Buyer” or “HECO” to read as follows:

Seller:

Chevron Products Company,

A Division of Chevron U.S.A. Inc

Attention: Manager, Hawaii Refinery

91-480 Malakole Street

Kapolei, Hawaii 96707

Facsimile: (808) 682-2214

Buyer:

Hawaiian Electric Company, Inc.

Attention: Vice President Power Supply

P.O. Box 2750

Honolulu, HI 96840-0001

Facsimile: (808) 543-4366

20.	Addendum No. 1 (“Illustrative Schedule of Prices”) is hereby amended to clarify and update information and is replaced in its entirety by the Addendum No. 1 attached hereto and incorporated herein by reference.

21.	Addendum No. 3 (“Recovery of Worldscale Fixed Differential For Oil Pollution Liability Insurance”) is hereby amended to update information and is replaced in its entirety by the Addendum No. 3 attached hereto and incorporated herein by reference.

22.	Other than the amendments noted herein, the provisions of the Contract shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Contract as of the day and year first written above.

ACCEPTED AND AGREED

“Chevron”

CHEVRON PRODUCTS COMPANY,

A DIVISION OF CHEVRON U.S.A. INC



BY:		/s/ MARTHA A. GILLES

		Martha A. Gilles
		(Printed or Typed Name)

TITLE:		Hawaii Refinery Manager


“Buyer”

HAWAIIAN ELECTRIC COMPANY, INC.

BY:		/s/ THOMAS C. SIMMONS

		Thomas C. Simmons
		(Printed or Typed Name)

TITLE:		Vice President, Power Supply



BY:		/s/ RICHARD A. VON GNECHTEN

		Richard A. von Gnechten
		(Printed or Typed Name)

TITLE:		Financial Vice President

ADDENDUM No. 1

ILLUSTRATIVE SCHEDULE OF PRICES

(Illustrative Product Price Calculation for September 2003)

For the Monthly cumulative volume which is at or below the [____] maximum limit of Section 3.1 multiplied by the number of Days in the Month, the price of LSFO Delivered to meet the Nominated commitment of a Month shall be determined as follows:

[_________________________________________________________________________________________________________

____________________]

Where [___] is equal to the billing price per physical barrel of LSFO Delivered to meet that portion of the Nominated commitment of a Month that is equal to or below the [__] maximum regardless of the actual Month Delivered, in U. S. dollars.

i.	[___________________] = A market index for low sulfur fuel oil, defined as the [_______________________________________

________________],

defined as follows:

[_________________________________________________________________________________________________________

__________________________________________________________________________________________________________

__________________________________________________________________________________________________________]

[__________________________________________________________________________________________________________

____________________________________________________]

[_____________________________________________

______________________________________________

_________________________________________________]


(Price in USD per barrel)

Date	Low	High	Average
[_______________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[_______________________________]
[_______________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]

[____________________________________]

[_____________________________________________

______________________________________________

_________________________________________________]


(Price in USD per barrel)

Date	Low	High	Average
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]
[___________________________________________________]

[_______________________________________]

[____________________]

[___________________________________________________________________

____________________________________________________________________]

[_______________________________________________________________________________]

[___________________________________________________________________________________________________________

____________________________________________________________________________________________________________

_____________________________________________________________]

[______________________________]

[__________________________________________________________________________________________________

_____________________________________________]

(a)	[____] ____ [___________________________________________________] for all [__________________________________

___________________________________________________________________________________________________________

_____], during the period beginning the 21st of the second Month immediately preceding the Nominated Month of Delivery and ending the 20th Day of the Month immediately preceding the Nominated Month of Delivery.


(Price in USD per barrel)

Date	Low	High	Average
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]

[________________] Price [________________]

(b)	[___] ___ Similarly, the [__________________________________________________________________________________

____________________________________________________]


(Price in USD per barrel)

Date	Low	High	Average
[________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[________________________]
[________________________]
[________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]

[________________] Price [________________]

(c)	[____] ___ Similarly, the [_________________________________________________________________________________

___________________________________________________________].


(Price in USD per barrel)

Date	Low	High	Average
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]

[________________] Price [________________]

(d)	[____] ____ Similarly, the [________________________________________________________________________________

___________________]

for [_________________________________________________________________]


(Price in USD per barrel)

Date		Average
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]
[_______________________________]

[________________] Price [________________]

[___________________],

[_______________________________________________________________________

________________________________________________________________________

________________________________________________________________________]

[_____________________] = [_________________________]

[__________________________________________________________]

[__________________________________________________________]

[_____________________] = [_________________________]

ii.

[__________] = [_________________________________________________________________________________________

________________________________________________________________________________________________________

______________________]

(a)	The simple [_____________________________________________________________________________________________

_____________________________________________] as published [_____________________________________________

__________________________________] for the three Monthly publications in the calendar quarter immediately preceding the calendar quarter of the Nominated Month of Delivery. [__________________________________________________________

_______________________________________________________________________________________________________

________________________________________________________]

[_____________________________________________] [____________________________________]


Publication Date		[___]

April 2003		[___]
May 2003		[___]
June 2003		[___]
		______
[______]		[___]

(b)	[____________________________________________________________________________________________________] applicable to the Year of the quarter defined in (a) above; expressed in [____________________________________________

______________________________________________________________________________________________________

_______________________________________________]

[______________________________________________________________________________________________________

________________]

= [____________________]

(c)	There shall be added to the multiplication product of (a) and (b) above, [___________________________________________

_____________________________________], if and as provided by [___________] with respect to the Additional Insurance Premium for full $ 1 Billion coverage of Oil Pollution Liability Insurance on vessels carrying persistent oils to and from the U.S.A., consistent with a typical vessel as derived in Addendum No. 3 attached to this Contract.

[_________________________________________] for Additional Insurance Premiums for Oil Pollution Liability Insurance for SBT Tankers effective February 20, 2003

[____________]

The [___________________] will be expressed in U.S. dollars per barrel, using a conversion factor of 6.75 barrels (“bbls”) per metric ton (“MT”).

[____________________________________________________________________________________]

[__________________________]

iii.

[________] = A market index for [___________________________________________________________________________

_______________________________________________________________________________________________________

_________________________________________] for all dates of publication during the period beginning the 21st of the second Month immediately preceding the Nominated Month of Delivery and ending the 20th Day of the Month immediately preceding the Nominated Month of Delivery.


Price in USD per Metric Tonne

Date	Low	High	Average
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]
[____________________________________________________]

[______] [_______________________]

The [_______________________________] will be expressed in U.S. dollars per barrel, using a conversion factor of 6.368 barrels per metric ton.

[______________________________________]


iv.	[__]	=	[_______________________________________________________________________________________________
	____________________________________________________________________________________________________
	______________________________________]

			[______________________________]

[______________________________]

v.	[__] = The actual BTU content of each LSFO Delivery, pursuant to Section 7.2, expressed in MM BTU’s per barrel and rounded to three decimal places.

T	=	[_____________________] the Hawaii General Excise Tax, the Hawaii Environmental Response Tax, [_______________] and any other tax properly imposed on the sale of LSFO pursuant to Section 5.3 herein.

		[______________________________________]

		[______________________________________]

		HGET = 4.166% of pre-HGET price

		Hawaii Environmental Response Tax applied after HGET [_____________________________] = $0.05 per barrel

A.	Product Price Computation for [____] Delivery with Standard BTU Content of [___] MM BTU Per Barrel


[__]	=	[_______________________________________________________________________________________________
___________________]

=	[_______________________________________________________________________________________________]

	=	[__________________________________________________]

	=	[___________________]

non-Hawaii Tax component of T:

	[__________________________________________________]

	Pre-Hawaii Tax Price = [_______________________________]

	= [__________] per barrel, invoice billing rate per barrel

Hawaii Taxes, the balance of T = sum of:

	HGET = 4.166% of the pre-tax LSFO price [____________] = 0.04166 * [__________] = [__________]

	[________________________________________________________________________________________________ ___________________________________]

	Hawaii Environmental Response Tax = $0.05/bbl

	= [______________________]

[__]	=	[________________________]

	=	[________________________] per barrel

B.	Product Price Computation for [_____] Delivery with BTU Content Other than Standard [__] MM BTU per barrel


[__]	=	[_______________________________________________________________________________________________
	_____________________]

If for purposes of illustration, BTU content of LSFO Delivery is [___] MM BTU per barrel [_____________________________ _________________________________ ________________________________________, the computation is as follows:

	=	[_______________________________________________________________________________________________]

	=	[_______________________________________________]

	=	[___________________]

non-Hawaii Tax component of T:

	[__________________________________________________]

	Pre-Hawaii Tax Price = [_______________________________]

	= [__________] per barrel, invoice billing rate per barrel

Hawaii Taxes, the balance of T = sum of:

	HGET = 4.166% of the pre-tax LSFO price [____________] = 0.04166 * [__________] = [__________]

	[________________________________________________________________________________________________ ___________________________________]

	Hawaii Environmental Response Tax = $0.05/bbl

	= [______________________]

[__]	=	[________________________]

	=	[________________________]

C.	Product Price Computation for [ ] Delivery with Standard BTU Content of [ ] MM BTU per barrel


[_________________________________________________________________________________________________________ __________________________________________________________________________________________________________ __________________________________________________________________________________________________________ ___________________]

[__]	=	[______________________________________________________________________________________________
		____________]

[_________________________________________________________________________________________________________ _________________________________________________________________________________________________________ ___________________]

	[__]	= [______________________________________________________________________________________________
	_____________________________________________________________________________________________________

	____________________________]

		[______________________________________]

	[_______________________________]

[__]	=	[_______________________________________________________]

	=	[________________________________________]

	=	[____________________]

non-Hawaii Tax component of T:

	[_____________________________]

	Pre-Hawaii Tax Price = [___________________]

	= [_______] per barrel, invoice billing rate per barrel

Hawaii Taxes, the balance of T = sum of:


		HGET = 4.166% of the pre-tax LSFO price [_______] = 0.04166 * [__________________] = [______________]

		[________________________________________________
		____________________________]

		Hawaii Environmental Response Tax = $0.05/bbl

		= [_______]

[___]		= [____________] = [____________]

D.	Product Price Computation for [____] Delivery with BTU Content Other than Standard [__] MM BTU per barrel


[___________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
________________________]

[__]		= [___________________________________________________________________________________________________ ________________]

[________________________________________________________________________________________________________ _________________________________________________________________________________________________________ ___________________________________]

		[___] = [______________________________________________________________________________________________ ____________________________________________________________________________________________________ ____________________________]

		[_________________________]

		[_________________]

If for purposes of illustration, BTU content of LSFO Delivery is [__] MM BTU per barrel [______________________________ ___________________________________________________________] the computation is as follows:


[__]	=	[_______________________________________________________________________________________________
		______]

	=	[__________________________________________________]

	=	[___________________]

non-Hawaii Tax component of T:

	[__________________________________________________]

	Pre-Hawaii Tax Price = [_______________________________]

	= [__________] per barrel, invoice billing rate per barrel

Hawaii Taxes, the balance of T = sum of:

	HGET = 4.166% of the pre-tax LSFO price [____________] = 0.04166 * [__________] = [__________]

	[_____________________________________________ ___________________________________]

	Hawaii Environmental Response Tax = $0.05/bbl

	= [______________________]

[__]	=	[________________________]

	=	[________________________]

Note on items as they appear on invoices

Actual invoices for sales and Deliveries of LSFO may include additional charges for pipeline throughput and pipeline displacement stock incurred under the Facilities and Operating Contract by and between the same parties and for which certain taxes, such as the HGET [________________________________] are consolidated with the corresponding tax charged on the sale of LSFO.

Actual invoices for sales and Deliveries of LSFO may also contain comments, which reference the measured BTU content of the invoiced Delivery, calculated LSFO price per unit before [___________________________] and per unit amount of pipeline throughput charge, if any.

ADDENDUM NO. 3

Recovery of [_____________________________] For Oil Pollution Liability Insurance

The price formula for LSFO in Section 5.1 of the Contract includes the component [________] that refers to a [_______________

________________________________________________________________________________________________________

_________________________________________] which incorporates a [__________________] to reflect the cost of additional premium for full $ 1 Billion coverage for Oil Pollution Liability Insurance on vessels carrying “Persistent Oils” (a cargo category which would include any grade of fuel oil, most fuel oil blending components as well as most types of crude oil) applicable to voyages having a destination in the U.S.A. Chevron acknowledges that any vessel used to transport LSFO that is sold and purchased under the Contract, including its components and the crude oil from which the LSFO is derived, shall be required to possess oil pollution liability insurance coverage in the maximum amount commercially available, $ 1 Billion as of the execution of this Contract.

The price formula component [_________] refers to an [____] rate applicable to [_________________________________________ _________________________________________________________________________________________________________

________________________________________________________________________________________________________

________________________________________] In order to derive an approximation of the relationship between Deadweight and Gross Registered Tons (“GT”), the design characteristic of tankers against which marine insurance, including oil pollution liability insurance, is levied, for a nominal vessel consistent with the mathematical average of this vessel size classification, [________________________________________________________________________________________________________ _________________________________________________________________________] These vessels are described as follows:


Name	Deadweight Tons (DWT)		Gross Registered Tons (GT)
[__________________________________]	[______	]	[______	]
[__________________________________]	[______	]	[______	]
[___________________]	[______	]	[______	]

The [—————————] that is to be included in the computation of [___________] is to be derived in the same manner as the following illustrative example calculations:

1. The [_________________________] in effect from February 20, 2003 (see note #1 at end), shall include a [__________________] for SBT (Segregated Ballast Tank equipped) Tankers, which shall be computed as follows:

[_________________________] with respect to the additional insurance premiums for oil pollution liability insurance coverage in the maximum amount commercially available, $ 1 billion as of the execution of this Contract, on vessels carrying persistent oils to and from the U.S.A is defined as follows:


[________________________________________________________________]
[___________]

= [_____________________]

For illustrative purposes, this rate may be expressed in U.S. dollars per barrel as follows:


= [___________]
[______________]

= [_____________________]

2. The [__________________________________________________] applicable for each [__________________] are based upon an [—————————————————————————————] in the calendar quarter immediately preceding the calendar quarter of the Nominated Month of Delivery. Therefore the relevant [____________________________] computed above should be applied (to a Year of 365 Days) as follows:

With respect to volumes of LSFO [_____________________________________________] following a change in the published rate (typically February 20 of each Year); the relevant [_____________________________] to be included in the computation of the price component [__________] shall be the sum of:

50/90 multiplied by the [______________] computed prior to the rate change:

and 40/90 multiplied by the [_________________] computed using the revised rate:

With respect to volumes of LSFO [_____________________] and continuing for so long as the [___________________] as set forth in [____________________________________] shall be applicable, the relevant [_________________________] to be included in the computation of the price component [__________________] shall be as derived in part 1 above.

Note (1):

[________________________] are revised and applicable for each calendar year, however the value of the [____________________] that pertains to the cost of oil pollution liability insurance is revised in accordance with the Protection & Indemnity Club (mutual marine insurance organizations) premium year, generally February 20 through February 19 of the following year. Reference [________________________] for the [___________________________] in effect from February 20, 2003 onwards and applicable to the determination of the September 2003 LSFO price.

EX-10.(D) 6 dex10d.htm AMENDMENT TO INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL SUPPLY CONTRACT Amendment to Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract

HECO Exhibit 10(d)

AMENDMENT TO

INTER-ISLAND INDUSTRIAL FUEL OIL AND DIESEL FUEL SUPPLY

CONTRACT

BY AND BETWEEN

CHEVRON PRODUCTS COMPANY,

A DIVISION OF CHEVRON U.S.A. INC.

AND

HAWAIIAN ELECTRIC COMPANY, INC.;

MAUI ELECTRIC COMPANY, LTD.;

and

HAWAII ELECTRIC LIGHT CO., INC.

This Amendment (“Amendment”) is entered into as of April 12, 2004 by and among Chevron Products Company, A Division of Chevron U.S.A., Inc., a Pennsylvania corporation (“Chevron”) and Hawaiian Electric Company, Inc., (“HECO”), and its wholly-owned subsidiaries, Maui Electric Company, Ltd.(“MECO”), and Hawaii Electric Light Co., Inc.(“HELCO”), each a Hawaii corporation, (HECO, MECO and HELCO collectively referred to as “Buyers”).

WHEREAS, Chevron and Buyers, along with additional Buyers Hawaiian Tug & Barge Corp. and Young Brothers, Limited, each also a Hawaii corporation, entered into an Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract as of November 14, 1997, effective as of January 1, 1998 (the “Contract”); and

WHEREAS, the Contract provided for the sale by Chevron and purchase by Buyers of Fuel Oil, Diesel, Jet and other petroleum products (collectively “Oil and Jet”) for the period from January 1, 1998 through December 31, 2004, with provision for continuation of the term beginning each successive January 1, unless Buyers or Chevron gives written notice of termination at least 120 days before the beginning of an Extension; and

WHEREAS, by agreement dated October 29, 1999, Hawaiian Tug & Barge and Young Brothers, Limited were deleted as Buyers under the Contract; and

WHEREAS, Chevron and Buyers desire to continue the arrangement for the sale and purchase of Oil and Jet for an additional ten-year period under the terms and conditions of the Contract, subject to the amendments noted herein;

NOW THEREFORE, the parties agree as follows, effective as of January 1, 2005:

1.	New Definitions, “55,” “56,” “57” and “58” are added and the following Definitions in Article I are amended to read as follows:

19.

“Contract” means this Inter-Island Industrial Fuel Oil and Diesel Fuel Supply Contract, between Chevron and Buyers, the original term of which commenced January 1, 1998 and the amended term of which commences January 1, 2005.

25.

“Extension” means successive 12-Month periods in the term of this Contract in addition to and after the term of this Contract as amended, which is through December 31, 2014, each Extension beginning January 1.

31.

The definition of “HT&B” is deleted.

53.

The definition of “YB” is deleted.

55.

[___]

56.

[___]

57.

[___]

58.

[___].

2.	All references to Hawaiian Tug & Barge Corp., HT&B, Young Brothers, Limited, and YB in the title and throughout the Contract shall be deleted.

3.	Article II “Term” is amended to read as follows:

The term of this Contract shall be extended beyond December 31, 2004, for the period commencing with January 1, 2005 and continuing through December 31, 2014, and shall continue thereafter for Extensions beginning each successive January 1, unless Buyer or Chevron gives written notice of termination at least 120 Days before the beginning of an Extension.

Section 3.1, “Minimum and Maximum Annual Quantities” is hereby amended by amending the “1999-2004” portions of the tables setting forth the minimum and maximum annual quantities for Diesel and CIFO, and the “1998-2004” portion of the table setting forth the minimum and maximum annual quantities for Jet, to read as follows below, and to replace the word “2004” in the last paragraph of the section with “2014”:

Diesel


1999 – 2014/Extensions	Minimum		Maximum
HECO	[___	]	[___	]
HELCO	[___	]	[___	]
MECO	[___	]	[___	]
MECO-Molokai	[___	]	[___	]

TOTAL	[___	]	[___	]

ii.

CIFO


1999 – 2014/Extensions	Minimum		Maximum
HELCO	[___	]	[___	]
MECO	[___	]	[___	]

TOTAL	[___	]	[___	]

iii.

Jet


1998 – 2014/Extensions	Minimum	Maximum
HELCO	0	[___	]
MECO	0	[___	]

TOTAL	0	[___	]

5.	Section 4.1 (“CIFO Specifications”) is hereby amended by adding to ASTM Test Method “D93” an alternative laboratory test method for specification Item, “Flash, °F”, “D6450.”

6.	Section 4.2 (“Diesel Specifications”) is hereby amended by adding to ASTM Test Method “D93” an alternative laboratory test method for specification Item, “Flash Point, PM”, “D6450.”

Section 5.1 (“Diesel, CIFO and Jet Prices’), part (i) (“No. 2 Diesel Fuel”), is hereby amended by replacing the phrase “1999 – 2004” in the table setting forth the per gallon values of [___] and [___] of price formula component [___] with the phrase “1999 – 2014/Extensions”; and also by replacing the phrase “2002-2004” in

the table defining per gallon values price formula components [___] [___] and [___] with the phrase “2002-2014/Extensions”.

8.	Section 5.1 (“Diesel, CIFO and Jet Prices”), part (ii) (“CIFO”), is hereby amended by replacing the phrase “1999 – 2004” in the table setting forth the per barrel values of [___] and [___] of price formula component [___] with the phrase “1999 – 2014/Extensions”.

9.	Addendum No. 1 (“Illustrative Schedule of Prices”) is hereby amended to clarify and update information and is replaced in its entirety by the Addendum No. 1 attached hereto and incorporated herein by reference.

10.	Section 6.1 (“Delivery of Diesel and CIFO to MECO and HELCO”), part “iii” is hereby updated by deleting part of the fifth sentence after “disposal” and by deleting the sixth and seventh sentences.

11.	Section 6.2, “Delivery of Diesel to HT&B and YB” and all references to it otherwise in the Contract are hereby deleted.

12.	Section 9.1, “Invoices,” is hereby amended by replacing it in its entirety to read as follows:

Invoices, which will show the price per physical barrel of Oil and Jet sold will be prepared and dated following Delivery; and for the services provided by Chevron as outlined in Article XI, shall be rendered promptly to Buyer. Invoices shall include full documentation, as approved by both parties including Certificate of Quality, report of the Independent Inspector, and price calculation; such documentation may, however, be provided by Chevron to Buyer separately.

Chevron will transmit an original of the invoice to Buyer by first class mail to the address in Section 23.3 or as otherwise instructed. A copy of the invoice shall also be sent to Buyer by facsimile or electronic mail on the same day.

13.	Section 9.2., “Payment Terms,” part “i” is hereby amended by replacing it in its entirely to read as follows:.

Payments of Chevron’s invoices shall be made by Buyer in U.S. dollars. Subject to Section 8.3 herein, payments shall be due [___] days from Buyer’s first receipt of Chevron’s invoice and full documentation. Due dates are dates payments are to be received by Chevron.

14.	Section 9.2., “Payment Terms,” part “ii” is hereby deleted.

15.	Section 9.2., “Payment Terms,” part “iii” is hereby amended by replacing it in its entirety to read as follows:

If an invoice is found to be in error or is otherwise disputed by Buyer, then Buyer shall pay the undisputed portion of such invoice when due and thereupon have the option to withhold payment of the disputed portion of said invoice without penalty until such error or dispute is resolved and Buyer shall have received a corrected invoice, debit or credit. Buyer shall notify Chevron’s designated representatives as soon as any such error or item of dispute is discovered to expedite resolution and correction. Buyer shall make payment for such corrected invoice or debit in accordance with Section 9.2.i.

16.	A new Section 9.2.iv, [___] shall be added to Article XI, “Invoicing and Payment,” which shall read as follows:

[___]

17.	Part “ii.” of Section 9.3, “Method of Payment,” is hereby deleted and Part “i.” of this same Section 9.3 is amended to read as follows:.

Payments of Chevron’s invoices shall be tendered by Buyer to Chevron by means of [___]

[___]

[___], Buyer shall make immediate payment in full to Chevron by Fedwire funds transfer of immediately available funds to:

Chevron U.S.A. Inc.

Account Number 59-51755

First National Bank of Chicago, Chicago, IL

ABA Ref. No. 071000013

for credit to the account of the payee. Such Fedwire funds transfer shall reference the relevant customer account number [___]

[___] Buyer shall by email or fax provide Chevron’s designated representatives written documentation evidencing the specific invoices being paid.

18.	A new Section 12.7, “Renegotiation,” shall be added to Article XII, “Contingencies,” which shall read as follows:

Section 12.7 Renegotiation

It is understood and agreed that both parties entered into this Contract in reliance on [___] in existence or in effect on the Effective Date of this Contract and on the execution date of any subsequent amendments hereto, to the extent that they directly or indirectly affect the terms under which Oil, Jet or the services provided by Chevron as outlined in Article XI

are sold by Chevron or purchased by Buyers hereunder. If at any time any [___] come into existence and become effective after the Effective Date of this Contract and after the execution date of any subsequent amendment hereto, and such [___] significantly affects a party’s ability to continue to perform under this Contract or such [___] have a material and adverse financial effect upon either party or upon a party’s ability to perform its obligations under this Contract, then the affected party shall have the option to call for renegotiation of the price for Oil, Jet or the services provided by Chevron as outlined in Article XI sold to Buyers, or renegotiation of any other provision of this Contract the performance of which by the affected party would be affected. Such option shall be exercised by the affected party no later than one hundred eighty (180) days after such [___] comes into existence and becomes effective, by giving written notice to the other party of the call to renegotiate. Within ten (10) days after the date of such notice, the parties shall enter into negotiations and in the event that the parties do not agree upon a new price of Oil, Jet or the services provided by Chevron as outlined in Article XI or other provision satisfactory to both parties within forty (40) days after the date of such notice, the affected party shall have the right to terminate this Contract effective thirty (30) Days after giving written notice of termination to the other party. Such notice of termination shall be given within thirty (30) days immediately following the forty (40) day negotiation period. Until a mutually satisfactory new price of Oil, Jet or the services provided by Chevron as outlined in Article XI or other provision has been agreed upon, or until this Contract is terminated as provided herein, the price of Oil, Jet or the services provided by Chevron as outlined in Article XI or other provision that was in effect when the request for renegotiation was made shall continue in full force and effect.

19.	Section 23.2 (“Notification”) is hereby updated by amending the address and other contact information of “Chevron” and “Buyer” to read as follows:


Chevron:		Chevron Products Company, A Division of Chevron U.S.A. Inc Attention: Manager, Hawaii Refinery 91-480 Malakole Street Kapolei, Hawaii 96707 Facsimile: (808) 682-2214

Buyer:		Hawaiian Electric Company, Inc. Attention: Vice President Power Supply P.O. Box 2750 Honolulu, HI 96840-0001 Facsimile: (808) 543-4366

20.	Other than the amendments noted herein, the provisions of the Contract shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Contract as of the day and year first written above.

“Chevron”

CHEVRON PRODUCTS COMPANY, A DIVISION OF CHEVRON U.S.A. INC



BY:		/s/ MARTHA A. GILLES

		Martha A. Gilles
		(Printed or Typed Name)

TITLE:		Hawaii Refinery Manager

“Buyers”

HAWAIIAN ELECTRIC COMPANY, INC.



BY:		/s/ THOMAS C. SIMMONS

		Thomas C. Simmons
		(Printed or Typed Name)

TITLE:		Vice President, Power Supply




BY:		/s/ RICHARD A. VON GNECHTEN

		Richard A. von Gnechten
		(Printed or Typed Name)

TITLE:		Financial Vice President

MAUI ELECTRIC COMPANY, LTD.



BY:		/s/ EDWARD L. REINHARDT

		Edward L. Reinhardt
		(Printed or Typed Name)

TITLE:		President



BY:		/s/ RICHARD A. VON GNECHTEN

		Richard A. von Gnechten
		(Printed or Typed Name)

TITLE:		Financial Vice President

HAWAII ELECTRIC LIGHT COMPANY, INC.



BY:		/s/ WARREN H. W. LEE

		Warren H. W. Lee
		(Printed or Typed Name)

TITLE:		President



BY:		/s/ RICHARD A. VON GNECHTEN

		Richard A. von Gnechten
		(Printed or Typed Name)

TITLE:		Financial Vice President

ADDENDUM NO. 1

ILLUSTRATIVE SCHEDULE OF PRICES

Illustrative Product Price Calculation for October 2003

I.	NO. 2 DIESEL FUEL

For HECO, MECO or HELCO FOB point of Delivery as per Section 6.3 and Section 6.1, respectively:

[___]

where PD1 is equal to the price per physical gallon for the Month of Delivery for No. 2 Diesel Fuel purchased by HECO, MECO or HELCO in U.S. Dollars (“$”) per (“/”) gallon.

[___]


Date of Price	Price in $/gallon
	Low	High	Average
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]
[___]	[___]	[___]	[___]

[___] = USD [___] per gallon

ii.

[___]

[___]

Assume [___] per gallon premium values apply:

[___]

[___] = [___]

iii.

TD1/TD2/TD3/TD4/TD5 = Taxes applicable to the sale of Diesel pursuant to Section 5.3 herein.

Hawaii General Excise Tax = 4.166% of pre-HGET price

[___]

Taxes after application of HGET [___]

Hawaii Environmental Response Tax = $0.05 per barrel, $0.0012 per gallon

Hawaii Liquid Fuel Tax = $0.01 per gallon, $0.42 per barrel

iv.

LP1, LP2, LP3, and LP4 are [___] for Deliveries in bulk to the respective Buyer at [___]

[___], respectively, during the period indicated and expressed in $ per gallon, as follows:


		2005-2014/Extensions
LP1		[___]
LP2		[___]
LP3		[___]
LP4		[___]

A.	Product Price Computation for [____] Delivery of No. 2 Diesel Fuel purchased by HECO, MECO or HELCO Having A Standard BTU Content Of [____] [____] BTU Per Gallon

Per gallon

[___] = [___]

= [___]

where TD1 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/gallon

[___]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD1 = [___]/gallon

[___] = [___]

= [___] per gallon

Per barrel

[___] = [___]

= [___]

where TD1 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/bbl

[___]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

TD1 = [___]/bbl

[___] = [___]

= [___] per barrel

B.	Product Price Computation for [_____] Delivery of No. 2 Diesel Fuel purchased by HECO, MECO or HELCO Having Other Than A Standard BTU Content

Assume the weighted average BTU content per gallon of the representative samples of Diesel purchased by a respective Buyer during a calendar quarter was [___]. The price charged for the Diesel sold and Delivered to that respective Buyer during each Month of the calendar quarter in question shall be adjusted by multiplying the Diesel price by the ratio of the actual heat content to a standard of [___] BTU.

Per gallon

[___] = [___]

= [___]

where TD1 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/gallon

[___]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD1 = [___]/gallon

[___] = [___]

= [___] per gallon

Per barrel

[___] = [___]

= [___]

where TD1 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/bbl

[___]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

TD1 = [___]/bbl

[___] = [___]

= [___] per barrel

C.	Product Price Computation for [___] Delivery of No. 2 Diesel Fuel purchased by MECO and HELCO to BUYER’s Nominated Marine Terminal at [___] Having

A Standard BTU Content Of [___] BTU Per Gallon

1.	For [___]:

[___]

Where PD2 is equal to the price per physical gallon for the Month of Delivery for No. 2 Diesel purchased by [___], in $/gallon.

Assume [___] per gallon location premium value applies, thus

[___]

Per gallon

[___] = [___]

= [___]

where TD2 = sum of

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/gallon

[___]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD2 = [___]/gallon

[___] = [___]

= [___] per gallon

Per barrel

[___] = [___]

= [___]

where TD2 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/bbl

[___]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

TD2 = [___]/bbl

[___] = [___]

= [___] per barrel

2.	For [___]:

[___]

Where PD3 is equal to the price per physical gallon for the Month of Delivery for No. 2 Diesel purchased by [___], in $/gallon,

Assume [___] per gallon location premium value applies, thus

[___]

Per gallon

[___] = [___]

= [___]

where TD3 = sum of

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/gallon

[___]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD3 = [___]/gallon

[___] = [___]

= [___] per gallon

Per barrel

[___] = [___]

= [___]

= [____]

where TD3 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/bbl

[___]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

TD3 = [___]/bbl

[___] = [___]

= [___] per barrel

3.	For [___]

[___]

Where PD4 is equal to the price per physical gallon for the Month of Delivery for No. 2 Diesel purchased by [___], in $/gallon.

Assume [___] per gallon location premium value applies, thus

[___]

Per gallon

[___] = [___]

= [___]

where TD4 = sum of

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/gallon

[___]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD4 = [______]/gallon

[___] = [___]

= [___] per gallon

Per barrel

[___] = [___]

= [___]

where TD4 = sum of:

HGET = 4.166% of Diesel Index [___] = 0.04166*[___] = [___]/bbl

[___]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

TD4 = [___]/bbl

[___] = [___]

= [___] per barrel

4.	For [___]

[___]

Where PD5 is equal to the price per physical gallon for the Month of Delivery for No. 2 Diesel purchased by [___], in $/gallon.

Assume [___] per gallon location premium value applies, thus

[___]

Per gallon

[___] = [___]

= [___]

where TD5 = sum of

HGET = 4.166% of Diesel Index [____] = 0.04166*[____] = [____]/gallon

[____]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD5 = [____]/gallon

[____] = [____]

= [____] per gallon

Per barrel


[____]	=	[____]

	=	[____]

	=	[____]

where TD5 = sum of:

HGET = 4.166% of Diesel Index [____] = 0.04166*[____] = [____]/bbl

[____]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

TD5 = [____]/bbl

[____] = [____]

= [____]

D.	Product Price Computation for [____] Delivery of No. 2 Diesel Fuel purchased by MECO and HELCO [____] Having A BTU Content Of Other Than Standard

Assume the weighted average BTU content per gallon of the representative samples of Diesel purchased by a respective Buyer during a calendar quarter was [____]. The price charged for the Diesel sold and Delivered to that respective Buyer during each Month of the calendar quarter in question shall be adjusted by multiplying the Diesel price by the ratio of the actual BTU content to a standard of [____] BTU.

For [____]:

[____]

Where PD2 is equal to the price per physical gallon for the Month of Delivery for No. 2 Diesel purchased by [____], in $/gallon.

Assume [____] per barrel location premium value applies, thus

[____]

Per gallon


[____]	=	[____]

	=	[____]

	=	[____]

where TD2 = sum of

HGET = 4.166% of Diesel Index [____] = 0.04166*[____] = [____]/gallon

[____]

Hawaii Environmental Response Tax = $0.0012/gallon

Hawaii Liquid Fuel Tax = $0.0100/gallon

TD2 = [____]/gallon

[____] = [____]

= [____] per gallon

Per barrel

[____] = [____]

= [____]

where TD2 = sum of:

HGET = 4.166% of Diesel Index [____] = 0.04166*[____] = [____]/bbl

[____]

Hawaii Environmental Response Tax = $0.05/bbl

Hawaii Liquid Fuel Tax = $0.42/bbl

[____] = [____]/bbl


[____]	=	[____]

	=	[____] per barrel

Note on computation of other Diesel Delivered to [____]:

Price per physical gallon for the Month of Delivery for No. 2 Diesel purchased by [____] in $/gallon having a BTU content other than standard would be determined in a manner logically consistent with than computed above for [____].

CIFO

For MECO or HELCO FOB their respective Nominated Barge:

[____]

Where PF is equal to the price per physical barrel for the Month of Delivery for CIFO, in $/barrel .

i.	FI = [____]


Date of Price	Price in USD per Metric Tonne
	Low	High	Average
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]
[____]	[____]	[____]	[____] [____]

[____] = [____] per metric tonne

[____]

[____] = [____] per barrel

ii.

[____]

Assume [____] per barrel premium values apply:

[____]

Assume further that the barrel volume in the Delivery to be priced is [____] thus

[____] = [____]

iii.

TF = Taxes applicable to the sale of CIFO pursuant to Section 5.3 herein.

Hawaii General Excise Tax = 4.166% of pre-HGET price

[____]

Taxes after application of HGET [____]:

Hawaii Environmental Response Tax = $0.05 per barrel

E.	Product Price Computation for [____] Delivery of CIFO Purchased by MECO or HELCO Having A Standard BTU Content Of [____] BTU Per Barrel

[____] = [____]

= [____]

where TF = sum of:

HGET = 4.166% of CIFO Index [____] = 0.04166*[____] = [____]/bbl

[____]

Hawaii Environmental Response Tax = $0.05/bbl

[____] = [____]/bbl

[____] = [____]

= [____] per barrel

F.	Product Price Computation for [____] Delivery of CIFO Purchased by MECO or HELCO Having Other Than A Standard BTU Content

Assume the weighted average BTU content per barrel of the representative samples of CIFO purchased by a respective Buyer during a calendar quarter [____]. The price charged for the CIFO sold and Delivered to that respective Buyer during each Month of the calendar quarter in question shall be adjusted by multiplying the CIFO price by the ratio of the actual BTU content to a standard of [____] BTU.

[____] = [____]

= [____]

where TF = sum of:

HGET = 4.166% of CIFO Index [____] = 0.04166[____] = [____]/bbl

[____]

Hawaii Environmental Response Tax = $0.05/bbl

[____] = [____]/bbl

[____] = [____]

= [____] per barrel

Note on items as they appear on invoices

Actual invoices for sales and Deliveries of Diesel and CIFO may include additional charges for Hawaii DOT/Harbors Div. wharfage fees applied when Buyer’s Nominated Barge is moored, all or in part, against or to State piers.

For billing purposes, certain taxes, such as the HGET [____], on the sale and Delivery of Diesel may be consolidated with the corresponding tax charged on the sale and Delivery of CIFO.

Actual invoices for sales and Deliveries of Diesel and CIFO may also contain comments which reference the wharfage charge per unit, and volume of Diesel and CIFO on which the wharfage fee is levied and the identifying number of the State pier for which wharfage is being levied.

JET

For MECO or HELCO FOB [____]

PJ = JI + [____] + TJ

Where PJ is equal to the price per physical barrel for the Month of Delivery for Jet, in $/gallon.

[____]

[____]


	[____]	[____]	[____]

[____]	[____]	[____]	[____]
[____]	[____]	[____]	[____]
[____]	[____]	[____]	[____]
[____]	[____]	[____]	[____]
[____]	[____]	[____]	[____]

[____]

ii.

TJ = Taxes applicable to the sale of Jet pursuant to Section 5.3 herein.

Hawaii General Excise Tax = 4.166% of pre-HGET price

[____]

Taxes after application of HGET [____]:

Hawaii Environmental Response Tax = $0.05 per barrel, $0.0012 per gallon

G.	Product Price Computation for Delivery of Jet Purchased by MECO or HELCO

Per gallon

[____] = [____] + [____] + TJ

= [____] + TJ

where TJ = sum of:

HGET = 4.166% of Jet Index [____] = 0.04166[____] = [____]/gallon

[____]

Hawaii Environmental Response Tax = $0.0012/gallon

TJ = [____]/gallon

[____] = [____]

= [____] per gallon

Per barrel


[____]	=	[____]

	=	[____]

		= [____]

where TJ = sum of:

HGET = 4.166% of Jet Index [____] = 0.04166*[____] = [____]/bbl

[____]

Hawaii Environmental Response Tax = $0.05/bbl

TJ = [____]/bbl

[____] = [____]

= [____] per barrel

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