PRICE REDETERMINATION PROCEDURE Clause Samples
The Price Redetermination Procedure clause establishes a formal process for adjusting the contract price under certain conditions, such as changes in costs or market rates. Typically, this clause outlines the circumstances that trigger a price review, the documentation required from the parties, and the steps for negotiating and agreeing on a revised price. Its core practical function is to ensure that both parties have a clear, fair mechanism for addressing significant cost fluctuations, thereby reducing disputes and maintaining contract balance over time.
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PRICE REDETERMINATION PROCEDURE. In the event Producer or Dynegy seeks a price redetermination pursuant to this Section 11.3, such Party (the "initiating Party") may notify "Confidential Treatment Requested" the other Party (the "non-initiating Party") in writing, specifying the * [REDACTED] or [REDACTED] at issue and describing (i) the proposed replacement measure of the fair market value of spot gas at the location; and (ii) the proposed effective date of the replacement measure of fair market value. If the non-initiating Party agrees with the replacement measure of the fair market value of spot gas and its effective date, Exhibit "A" shall be amended to reflect the replacement and its effective date. If the non-initiating Party does not agree with the proposed replacement measure of the fair market value of spot gas or its effective date, then within thirty days after delivery of the initiating Party's initial notice each Party shall designate a representative with authority to negotiate and agree upon a replacement measure of the fair market value of spot gas. The representatives shall then meet and attempt in good faith to reach agreement. If the representatives have not reached agreement within sixty days after delivery of the initiating Party's initial notice, then the initiating Party may elect to have the issue resolved by binding arbitration in accordance with Section 11.3.3 below. If a replacement measure of the fair market value of spot gas is established, either by agreement of the Parties or through arbitration, such replacement measure of the fair market value of spot gas shall be reflected in an appropriate amendment to Exhibit "A". A Party receiving a price redetermination request under this Section 11.3 may respond by requesting a replacement measure of the fair market value of spot gas at any other applicable location(s) in accordance with the procedure set forth in this Section 11.3.2. To the extent feasible, both the initial request and any responsive request shall be addressed in the same negotiating sessions and/or arbitration so as to minimize the administrative cost of resolving all pricing issues. Notwithstanding anything in this Section to the contrary, in the event a replacement measure of the fair market value of spot gas is determined by arbitration, the Party invoking the arbitration (or Parties if both Parties invoked the arbitration) shall not be entitled to invoke arbitration pursuant to this Section 11.3.2 during a period of twelve full months following ...