Common use of Heat Rate Degradation Adjustment Clause in Contracts

Heat Rate Degradation Adjustment. (Unfired Capacity) (i) Prior to the Initial Delivery Date and directly before or after the Initial Capacity Test, a test to establish the Capacity of the Unit at Base Load will be conducted (“Initial Base Capacity Test”). The Initial Base Capacity Test shall be conducted using the same test procedures and adjustment methodology as for the Initial Capacity Test, except that each Unit will be at Base Load without duct firing. The output (measured in MWs) determined from this test shall be the “Initial Base Capacity” (Ci). The Initial Base Capacity will be measured for Dual Unit Operation as well as separately for each of the two combustion turbines in Single Unit Operation. (ii) On a seasonal basis (Summer/Non-Summer), and directly before or after the Seasonal Capacity Test, a test to reestablish the Capacity of the Unit at Base Load, for Dual Unit Operation as well as separately for each of the two combustion turbines in Single Unit Operation, will be conducted (“Seasonal Base Capacity Test”). The test shall be conducted using the same test procedures and adjustment methodology as for the Seasonal Capacity Test, except that each Unit will be at Base Load. The output (measured in MWs) determined from this test shall be the “Tested Base Capacity” (Cb). The actual heat rate as measured under such test conditions will be deemed the “Actual Tested Heat Rate.” Retests of the Actual Tested Heat Rate shall be conducted directly before or after a Buyer’s Capacity Test or a Seller’s Capacity Test. (iii) The Guaranteed Heat Rate Curves defined in 4.2(a) will be used to calculate “Initial Guaranteed Unfired Heat Rates” (HRi) for each Unit at varying output levels from minimum load to Base Load by adjusting the Guaranteed Heat Rate Curves by the ratio of Unit output to the Base Load Capacity. Before the first Seasonal Capacity Test, the ratio to be used will be the ratio of Unit output to Ci. After the first Seasonal Capacity Test, the ratio to be used will be the ratio of Unit output to Cb. (iv) As of the Execution Date, an appropriate heat rate degradation for Dual Unit Operation as well as separate heat rate degradation for each of the two combustion turbines in Single Unit Operation defining the functional relationship between heat rate degradation and measured Capacity degradation (“Heat Rate Degradation Factor” or “HDF”), along with the detailed basis for the development of this factor (including turbine manufacturer’s information and heat-balance tables) is set forth in Appendix II. (v) For each Seasonal Base Capacity Test, a “Capacity Degradation Factor” (or “CDF”) will be computed as: CDF = 1 – (Cb/Ci); The “Unfired Heat Rate Adjustment” (or “HRA”) will be computed as: HRA = CDF * HDF