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surplus bulk treated water in addition to the minimum amounts set forth in this paragraph. <br /> <br /> 4. SHOULDERS I-III J, PUMPING STATION. The parties acknowledge that in <br /> <br />order to properly serve all its customers, Portsmouth may at some future time construct, at <br /> <br />its sole expense, an additional pumping station in the Shoulders Hill area of the City of <br /> <br />Suffolk, the cost of which may affect Portsmouth's futare retail water rates to its residential <br /> <br />customers residing in Portsmouth. Portsmouth agrees that the construction of this pumping <br /> <br />station shall begin not later than the time when Chesapeake's annual average daily rate of <br /> <br />flow reaches 3.7 mgd, and that Portsmouth shall use its best efforts to have construction <br /> <br />completed within thirty-six (36) months. <br /> <br /> 5. EFFECT OF INTERRUPTION OF SUPPLY ON ANNUAL AVERAGE <br /> <br />DAILY RATE OF FLOW. In the event that Portsmouth is unable to supply Chesapeake's <br /> <br />water demand, up to 5.0 mgd, for any reason, including force majeure, acts of war or <br /> <br />terrorism, labor stoppages, state or federal regulatory action, drought, or insufficient water <br /> <br />supply, for any day(s) within the calendar year, such day(s) shall not be considered when <br /> <br />calculating the "annual average daily'' rate of flow. For example, if water restrictions are <br /> <br />placed on the use of water for any day(s) in a year, the annual average daily rate of flow <br /> <br />would be the total volume of water purchased under this Amendment during that year on <br /> <br />nonrestricted days divided by the number of nourestricted days in that year. <br /> <br /> 6. CALCULATION OF RATES. For the first 3.0 mgd of water supplied during <br /> <br />a billing period, Chesapeake agrees to pay Rate A, which equals the higher of 150% of <br /> <br />Portsmouth's then-current retail rate to its residential customers residing in Portsmouth or <br /> <br />100% of Chesapeake's then-current retail rate to its residential customers residing in <br /> <br /> 3 <br /> <br /> <br />