Common use of Fuel Costs Clause in Contracts

Fuel Costs. 23.1 The quantity of coal delivered to the San Xxxx Project shall be determined by the belt scales, in accordance with the Underground Coal Sales Agreement. 23.2 The Operating Agent shall maintain the Project Coal Inventory wherein ownership shall be apportioned among the Participants based on Common Participation Share. Coal inventory shall be accounted for in FERC Account 151. 23.3 All Participants acknowledge and recognize the terms and conditions of the Underground Coal Sales Agreement which was entered into by PNM and TEP on behalf of the Participants. Exhibit VII, attached hereto and incorporated herein, contains example “Interim Invoices”, “UG-CSA Invoices”, and “UPS Invoices” prepared and defined pursuant to Section 8 of the Underground Coal Sales Agreement. 23.4 Monthly costs of the Project Coal Inventory and fuel expense shall be apportioned among and paid for by the Participants on the following basis: 23.4.1 UG-CSA Invoicing Allocations In the event that UG-CSA Invoices are rendered and payable pursuant to Section 8.7 (A) of the Underground Coal Sales Agreement, amounts due thereunder shall be allocated and paid for by the Participants as Fixed Fuel Expense and Variable Fuel Expense as described in: Exhibit IX, Fixed Fuel Expense; and Exhibit X, Variable Fuel Expense and as provided below: 23.4.1.1 Costs that are classified as Fixed Fuel Expense shall be charged to FERC Account 501, or to such FERC Account number as may be applicable in the future if fuel deliveries terminate, and shall be apportioned among and paid for by the Participants in accordance with Common Participation Share. 23.4.1.2 Costs that are classified as Variable Fuel Expense shall be charged to FERC Account 151 and such costs shall be apportioned among and paid for by the Participants on the basis of Common Participation Share. Monthly cost for coal withdrawn from Project Coal Inventory (equivalent to total monthly Participant Coal Consumption) shall be credited to FERC Account 151 and charged to FERC Account 501 on an average price basis as determined by dividing the total number of tons of coal in Project Coal Inventory at the beginning of the month, plus the coal delivered during the month, into the total recorded cost in FERC Account 151 and multiplying the cost per ton so derived by the number of tons withdrawn. The cost for coal withdrawn charged to FERC Account 501 shall be apportioned among and paid for by the Participants on the basis of the percentage that each Participant’s monthly Participant Coal Consumption bears to the total monthly Participant Coal Consumption of all Units. The cost for coal withdrawn thusly credited to FERC Account 151 shall be apportioned among the Participants on the basis of Common Participation Share. 23.4.1.3 Any other Total Monthly Coal Cost not currently classified in Exhibits IX or X as Fixed Fuel Expense or Variable Fuel Expense shall be deemed to be Fixed Expense until reclassified by the Coordination Committee. 23.4.2 Interim Invoicing Allocations In the event that Interim Invoices are rendered and payable pursuant to Section 8.7 (B) of the Underground Coal Sales Agreement, such costs shall be allocated and invoiced to the Participants as described below. 23.4.2.1 The Base Price (“Base Price”) band shall be based on the Minimum Annual Tons. The annual allocation of the coal tonnage in the Base Price band shall be made among the Participants on the basis of Common Participation Share. The monthly allocation of the coal tonnage in the Base Price band shall be made among the Participants on the basis of each Participant’s share of Monthly Minimum Tons. The cost of the monthly Base Price band will be allocated among and paid for by the Participants by multiplying each Participant’s share of Monthly Minimum Tons by the Base Price. 23.4.2.2 The Incremental Price (“Incremental Price”) band(s) shall be based on (an) annualized band(s) of tons of coal delivered in excess of Minimum Annual Tons. The cost of the monthly Incremental Price band(s) will be allocated among and paid for by the Participants by multiplying each Participant’s consumption of Incremental Price band coal(s) by the Incremental Price for such band(s). Participants shall only be eligible for allocation of Incremental Price band coal pricing if their monthly Participant Coal Consumption exceeds their share of Monthly Minimum Tons. 23.4.2.3 At the end of each year, the Operating Agent shall reconcile the sum of each Participant’s monthly Interim Invoice-related payments to a properly allocable share of Base Price band tons, Incremental Price band or bands tons, and cost associated with any change in Project Coal Inventory and invoice or refund any such reconciliation amounts to each Participant. This reconciliation will be exclusive of any year-end true up required pursuant to Section 23.4.2.6. 23.4.2.4 In the year-end reconciliation process of Section 23.4.2.3, any amount credited by SJCC for tons invoiced but not delivered shall be credited to FERC Account 501 and apportioned to the Participants on the basis of the percentage that each Participant’s annual Incremental Price Band(s) consumption bears to the total annual Incremental Price Band(s) consumption for all Units. Any net consumption of Project Coal Inventory tons shall be charged to FERC Account 501 and apportioned among and paid for by the Participants on the basis of the percentage that each Participant’s annual Incremental Price Band(s) consumption bears to the total annual Incremental Price Band(s) consumption for all Units. The price for such tons shall be determined by dividing the total recorded cost in FERC Account 151 by the total number of tons of coal in Project Coal Inventory, both as recorded on January 1 of said year. The total amount of any such payment for consumed Project Coal Inventory tons shall subsequently be credited to FERC Account 151 and apportioned to the Participants based on Common Participation Share. In the year-end reconciliation process of Section 23.4.2.3, the costs of any net addition to Project Coal Inventory tons, as invoiced by SJCC, shall be charged to FERC Account 151 and apportioned to and paid for by the Participants based on Common Participation Share.

Fuel Costs. 23.1 The quantity of coal delivered to the San Xxxx Project shall be determined by the belt scales, in accordance with the Underground Coal Sales AgreementCSA. 23.2 The Operating Agent shall maintain the Project Coal Inventory wherein ownership shall be apportioned among the Participants based on Common Participation Sharein the percentages shown in Section 6.3. Coal inventory shall be accounted for in FERC Account 151. 23.3 All Participants acknowledge and recognize the terms and conditions of the Underground Coal Sales Agreement which was entered into by PNM and TEP on behalf of the Participants. Exhibit VII, attached hereto and incorporated herein, contains example “Interim Invoices”, “UG-CSA Invoices”, and “UPS Invoices” prepared and defined pursuant to Section 8 of the Underground Coal Sales Agreement.[Omitted] 23.4 Monthly [Omitted] 23.5 Limestone costs of the Project Coal Inventory and fuel expense shall be apportioned among and paid for by the Participants on the following basis: 23.4.1 UG-CSA Invoicing Allocations In the event that UG-CSA Invoices are rendered and payable pursuant to Section 8.7 (Achemicals) of the Underground Coal Sales Agreement, amounts due thereunder shall be allocated and paid for by the Participants as Fixed Fuel Expense and Variable Fuel Expense as described in: Exhibit IX, Fixed Fuel Expense; and Exhibit X, Variable Fuel Expense and as provided below: 23.4.1.1 Costs that are classified as Fixed Fuel Expense shall be charged chargeable to FERC Account 501, or to such FERC Account number as may be applicable in the future if fuel deliveries terminate, and shall be apportioned among and paid for by the Participants in accordance with Common Participation Share. 23.4.1.2 Costs that are classified as Variable Fuel Expense shall be charged to FERC Account 151 and such costs shall be apportioned among and paid for by the Participants on the basis of Common Participation Share. Monthly cost for coal withdrawn from Project Coal Inventory (equivalent to total monthly Participant Coal Consumption) shall be credited to FERC Account 151 and charged to FERC Account 501 on an average price basis as determined by dividing the total number of tons of coal in Project Coal Inventory at the beginning of the month, plus the coal delivered during the month, into the total recorded cost in FERC Account 151 and multiplying the cost per ton so derived by the number of tons withdrawn. The cost for coal withdrawn charged to FERC Account 501 502 shall be apportioned among and paid for by the Participants on the basis of the percentage that each Participant’s monthly Participant Coal Consumption bears to the total monthly Participant Coal Consumption of all Units. 23.6 All other fuel-related expenses which are chargeable to FERC Account 501 shall be apportioned among and paid for by the Participants on the following basis: 23.6.1 Variable fuel-related expenses (including, but not limited to ash and gypsum disposal) on the basis of the percentage that each Participant’s monthly Participant Coal Consumption bears to the total monthly Participant Coal Consumption of all Units. 23.6.2 Fixed fuel-related expenses (including, but not limited to fuel handling) on the basis of Common Participation Share. 23.6.3 Fuel oil purchased for use at the San Xxxx Project is first delivered into one of two storage tanks. Tank 1 and 2 storage tank feeds Unit 1 and Tank 3 and 4 storage tank feeds Unit 4. When oil is withdrawn from a storage tank for consumption, it is metered by Unit. Costs for fuel oil usage shall be separately accounted for by these two storage tanks as follows: 23.6.3.1 Costs for fuel oil purchases to Tank 1 and 2 shall be charged to FERC Account 151 and such costs shall be apportioned among and paid for by the Unit 1 Participants on the basis of Section 6.2.4. Monthly cost for fuel oil withdrawn from Tank 1 and 2 shall be credited to FERC Account 151 and charged to FERC Account 501 on an average price basis as determined by dividing the total number of gallons of fuel oil in Tank 1 and 2 at the beginning of the month, plus the fuel oil delivered during the month, into the total recorded cost in FERC Account 151 and multiplying the cost per gallon so derived by the number of gallons withdrawn from Tank 1 and 2. The cost for coal fuel oil withdrawn from Tank 1 and 2 charged to FERC Account 501 shall be apportioned among and paid for by the Unit 1 Participants first on the basis of the individual Unit metered consumption and then on the basis of Section 6.2.1. The cost for fuel oil withdrawn from Tank 1 and 2 thusly credited to FERC Account 151 shall be apportioned among the Unit 1 Participants on the basis of Common Participation ShareSection 6.2.4. 23.4.1.3 Any other Total Monthly Coal Cost not currently classified in Exhibits IX or X as Fixed Fuel Expense or Variable Fuel Expense shall be deemed 23.6.3.2 Costs for fuel oil purchases to be Fixed Expense until reclassified by the Coordination Committee. 23.4.2 Interim Invoicing Allocations In the event that Interim Invoices are rendered Tank 3 and payable pursuant to Section 8.7 (B) of the Underground Coal Sales Agreement, such costs shall be allocated and invoiced to the Participants as described below. 23.4.2.1 The Base Price (“Base Price”) band shall be based on the Minimum Annual Tons. The annual allocation of the coal tonnage in the Base Price band shall be made among the Participants on the basis of Common Participation Share. The monthly allocation of the coal tonnage in the Base Price band shall be made among the Participants on the basis of each Participant’s share of Monthly Minimum Tons. The cost of the monthly Base Price band will be allocated among and paid for by the Participants by multiplying each Participant’s share of Monthly Minimum Tons by the Base Price. 23.4.2.2 The Incremental Price (“Incremental Price”) band(s) shall be based on (an) annualized band(s) of tons of coal delivered in excess of Minimum Annual Tons. The cost of the monthly Incremental Price band(s) will be allocated among and paid for by the Participants by multiplying each Participant’s consumption of Incremental Price band coal(s) by the Incremental Price for such band(s). Participants shall only be eligible for allocation of Incremental Price band coal pricing if their monthly Participant Coal Consumption exceeds their share of Monthly Minimum Tons. 23.4.2.3 At the end of each year, the Operating Agent shall reconcile the sum of each Participant’s monthly Interim Invoice-related payments to a properly allocable share of Base Price band tons, Incremental Price band or bands tons, and cost associated with any change in Project Coal Inventory and invoice or refund any such reconciliation amounts to each Participant. This reconciliation will be exclusive of any year-end true up required pursuant to Section 23.4.2.6. 23.4.2.4 In the year-end reconciliation process of Section 23.4.2.3, any amount credited by SJCC for tons invoiced but not delivered shall be credited to FERC Account 501 and apportioned to the Participants on the basis of the percentage that each Participant’s annual Incremental Price Band(s) consumption bears to the total annual Incremental Price Band(s) consumption for all Units. Any net consumption of Project Coal Inventory tons 4 shall be charged to FERC Account 501 151 and such costs shall be apportioned among and paid for by the Unit 4 Participants on the basis of the percentage that each Participant’s annual Incremental Price Band(s) consumption bears to the total annual Incremental Price Band(s) consumption Section 6.2.5. Monthly cost for all Units. The price for such tons fuel oil withdrawn from Tank 3 and 4 shall be credited to FERC Account 151 and charged to FERC Account 501 on an average price basis as determined by dividing the total number of gallons of fuel oil in Tank 3 and 4 at the beginning of the month, plus the fuel oil delivered during the month, into the total recorded cost in FERC Account 151 and multiplying the cost per gallon so derived by the total number of tons of coal in Project Coal Inventory, both as recorded on January 1 of said yeargallons withdrawn from Tank 3 and 4. The total amount cost for fuel oil withdrawn from Tank 3 and 4 charged to FERC Account 501 shall be apportioned among and paid for by the Unit 4 Participants first on the basis of any such payment the individual Unit metered consumption and then on the basis of Section 6.2.3. The cost for consumed Project Coal Inventory tons shall subsequently be fuel oil withdrawn from Tank 3 and 4 thusly credited to FERC Account 151 and shall be apportioned to among the Unit 4 Participants on the basis of Section 6.2.5. 23.7 The Operating Agent shall provide the Participants based a monthly written report on Common Participation Share. In the year-end reconciliation process of Section 23.4.2.3, following items related to coal deliveries at the costs of any net addition to Project Coal Inventory tons, as invoiced by SJCC, shall be charged to FERC Account 151 and apportioned to and paid for by the Participants based on Common Participation Share.San Xxxx Project: 23.7.1 [Omitted] 23.7.2 [Omitted]