Statutory and Regulatory Changes. 18.1 The Parties recognize and hereby agree that if any federal, state or municipal government or regulatory authority, including without limitation the SCC, should for any reason enter an order, modify its rules, or take any action whatsoever, having the effect of disallowing Virginia Power the recovery from its customers of all or any portion of the payments for Dependable Capacity hereunder in excess of the sum of: (x) $6.00 per kW per Month in 1989 dollars as escalated by the Gross National Product Implicit Price Deflator beginning April 1, 1990, and continuing each April until termination of this Agreement; plus (y) an amount in each Month equal to the product of the Net Electrical Output for that Month multiplied by the non-firm energy payment specified in Virginia Power's Schedule 19, supplements thereto and reissues and replacements thereof, on file with the SCC and in effect from time to time, including additions to or escalations of such payments whether included in Schedule 19 or referenced therein; such amount in excess being hereinafter referred to as the Disallowance (except where such disallowance is due to Virginia Power's failure to seek recovery or comply with procedural requirements governing recovery of such costs), then: 128 Page 128 of 138 (a) If the Disallowance occurs before the twentieth anniversary of the Commercial Operations Date, Virginia Power shall continue to pay for Dependable Capacity at the Capacity Purchase Price set forth in Article 10 through the twentieth anniversary of the Commercial Operations Date. Payments for Dependable Capacity beginning on the twentieth anniversary of the Commercial Operations Date shall not exceed the amount unaffected by the Disallowance. Further, Virginia Power may, at its option, beginning on the twentieth anniversary of the Commercial Operations Date withhold up to seventy-five (75) percent of the payments for Dependable Capacity until the sooner of (i) the twenty-first anniversary of the Commercial Operations Date or (ii) the Day the entire amount of the Disallowance is repaid with interest at the Interest Rate minus two percentage points from the date each part of the Disallowance was paid to Operator. In the event that such withholding does not fully repay the Disallowance and accrued interest by the twenty-first anniversary of the Commercial Operations Date, then Operator shall pay the remainder to Virginia Power within twenty eight (28) Days after the twenty-first anniversary of the Commercial Operations Date in a lump sum; provided, however, that if Operator demonstrates to Virginia Power that it is unable 129 Page 129 of 138 to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect. (b) If the Disallowance occurs after the twentieth anniversary of the Commercial Operations Date, all future payments for Dependable Capacity shall not exceed the amount unaffected by the Disallowance. Further, the Operator shall repay the full amount of the Disallowance with interest by the earlier of (i) one year from the date of such Disallowance or (ii) the expiration of this Agreement; provided, however, that if Operator demonstrates to Virginia Power that it is unable to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, 130 Page 130 of 138 as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect. (c) On the twentieth (20th) anniversary of the Commercial Operations Date or thereafter, Operator shall have the option to propose any or all of the following actions: (i) repay any total disallowance, including without limitation interest, and renegotiate a lower purchase price for the Facility's capacity; or (ii) transfer ownership of the Facility to Virginia Power in full settlement of all of Operator's duties and obligations under this Agreement, including without limitation any duties or obligations under this Section 18.1. The Parties obligate themselves to use all good faith efforts to establish, if practicable, an appeal and overruling of the Disallowance or a superseding order, approval of modified rules or tariffs, or other action so as to allow timely resumption of full, or failing that, adjusted payments hereunder. 18.2 Operator agrees that if there is a Disallowance which Operator chooses to repay under Section 18.1(b)(ii) over an extended Term (which was extended pursuant to the proviso to Section 18.2(b)), then Operator will provide, prior to the date on which the Term would have expired absent such sum, in addition to any other security posted under this Agreement, a letter of credit, or a surety bond containing features reasonably similar to a letter of credit, either of which must: (i) be issued by an institution reasonably acceptable to Virginia Power, (ii) be in form and substance reasonably acceptable to Virginia Power, (iii) provide for draws by Virginia Power on a monthly basis, and (iv) permit presentation at a bank located in Richmond, Virginia for immediately available funds in the amount of such disallowance for the remaining term of this Agreement, which letter of credit shall be maintained until the earlier of the termination of this Agreement or the date by which the disallowance has belen recovered by Virginia Power pursuant to Section 18.1 at which time the letter of credit or surety bond provided pursuant to this Section will terminate, or in the case of a surety bond may be cancelled by Operator.
Appears in 1 contract
Samples: Power Purchase and Operating Agreement (Cogentrix Energy Inc)
Statutory and Regulatory Changes. 18.1 The Parties recognize and hereby agree that if any federal, state or municipal government or regulatory authority, including including, without limitation limitation, the SCC, should for any reason enter an order, modify its rules, or take any action whatsoever, having the effect of disallowing Virginia North Carolina Power the recovery from its customers of all or any portion of the payments for Dependable Delivered Capacity and Net Electrical Output hereunder in excess of the sum of: energy and capacity prices established (xnotwithstanding any limitations on the size of the Facility) $6.00 per kW per Month in 1989 dollars as escalated by the Gross National Product Implicit Price Deflator beginning April 1, 1990, and continuing each April until termination of this Agreement; plus SCC pursuant to 18 C.F.R. 292.304(c) (ycurrently represented by Schedule 19 POWER PURCHASES FROM COGENERATION AND SMALL POWER PRODUCTION QUALIFYING FACILITIES) an amount in each Month equal to the product of the Net Electrical Output for that Month multiplied by the non-firm energy payment specified in Virginia Power's Schedule 19, supplements thereto and reissues and replacements thereof, on file with the SCC and in effect from time to timefor the period of disallowance, including additions to or escalations of such payments whether included in Schedule 19 or referenced therein; such amount in excess being hereinafter referred to as the Disallowance (except where such disallowance is due to Virginia North Carolina Power's ’s failure to seek recovery or comply with procedural requirements governing recovery of such costs), then: 128 Page 128 of 138
(a) If the Disallowance occurs before the twentieth eighteenth anniversary of the Commercial Operations Date, Virginia North Carolina Power shall continue to pay for Dependable Capacity at make the Capacity Purchase Price set forth payments specified in Article 10 through the twentieth eighteenth anniversary of the Commercial Operations Date. Payments for Dependable Delivered Capacity beginning on the twentieth eighteenth anniversary of the Commercial Operations Date shall not exceed the amount unaffected by the Disallowance. Further, Virginia North Carolina Power may, at its option, beginning on the twentieth eighteenth anniversary of the Commercial Operations Date withhold up to seventy-five (75) percent of the payments for Dependable Delivered Capacity after said eighteenth anniversary until the sooner of (i) the twenty-first twentieth anniversary of the Commercial Operations Date or (ii) the Day the entire amount of the Disallowance is repaid with interest at the Interest Rate minus two percentage points from the date each part of the Disallowance was paid to Operator. In the event that such withholding does not fully repay the Disallowance and accrued interest Interest by the twenty-first twentieth anniversary of the Commercial Operations Date, then the Operator shall pay the remainder to Virginia North Carolina Power within one hundred and twenty eight (28120) Days after the twenty-first twentieth anniversary of the Commercial Operations Date in a lump sum, or; provided, however, that if Operator demonstrates to Virginia Power that it is unable 129 Page 129 of 138 to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect.
(b) If the Disallowance occurs after the twentieth eighteenth anniversary of the Commercial Operations Date, Date all future payments for Dependable Delivered Capacity shall not exceed the amount unaffected by the Disallowance. Further, the Operator shall repay the full amount of the Disallowance with interest Interest by the earlier later of (i) one year from the date of such Disallowance or (ii) the expiration of this Agreement; provided, however, that if Operator demonstrates to Virginia Power that it is unable to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, 130 Page 130 of 138 as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect.
(c) On the twentieth (20th) twenty-first anniversary of the Commercial Operations Date or thereafter, Operator shall have the option to propose any or all of the following actions: (i) repay any total disallowance, including without limitation interest, and renegotiate a lower purchase price for the Facility's capacity; or (ii) transfer ownership of the Facility to Virginia Power in full settlement of all of Operator's duties and obligations under this Agreement, including without limitation any duties or obligations under this Section 18.1Date. The Parties obligate themselves to use all good faith efforts to establish, if practicable, an appeal and overruling of the Disallowance or a superseding order, approval of modified rules or tariffs, or other action so as to allow timely resumption of full, or failing that, adjusted payments hereunder.
18.2 Operator agrees that if there is a Disallowance which Operator chooses to repay under Section 18.1(b)(ii) over an extended Term (which was extended pursuant to the proviso to Section 18.2(b)), then Operator will provide, prior to the date on which the Term would have expired absent such sum, in addition to any other security posted under this Agreement, a letter of credit, or a surety bond containing features reasonably similar to a letter of credit, either of which must: (i) be issued by an institution reasonably acceptable to Virginia Power, (ii) be in form and substance reasonably acceptable to Virginia Power, (iii) provide for draws by Virginia Power on a monthly basis, and (iv) permit presentation at a bank located in Richmond, Virginia for immediately available funds in the amount of such disallowance for the remaining term of this Agreement, which letter of credit shall be maintained until the earlier of the termination of this Agreement or the date by which the disallowance has belen recovered by Virginia Power pursuant to Section 18.1 at which time the letter of credit or surety bond provided pursuant to this Section will terminate, or in the case of a surety bond may be cancelled by Operator.
Appears in 1 contract
Samples: Power Purchase and Operating Agreement (Westmoreland Coal Co)
Statutory and Regulatory Changes. 18.1 The Parties recognize and hereby agree that if any federal, state or municipal government or regulatory authority, including without limitation the SCC, authority should for any reason enter an order, modify its rules, or take any action whatsoever, having the effect of disallowing Virginia North Carolina Power the recovery from its customers of all or any portion of the payments for Dependable Capacity hereunder in excess of the sum of: (x) $6.00 5.62 per kW per Month month in 1989 1987 dollars as escalated by the Gross National Product Implicit Price Deflator beginning April 1l, 19901988, and continuing each April 1 until the termination of this Agreement; plus (y) an amount in each Month equal to the product of the Net Electrical Output for that Month multiplied by the non-firm energy payment specified in Virginia Power's Schedule 19, supplements thereto and reissues and replacements thereof, on file with the SCC and in effect from time to time, including additions to or escalations of such payments whether included in Schedule 19 or referenced therein; such amount in excess being hereinafter referred to as the Disallowance (except where such disallowance is due to Virginia North Carolina Power's failure to seek recovery or comply with procedural requirements governing recovery of such costs), then: 128 Page 128 of 138:
(a) If the Disallowance occurs before the twentieth twelfth anniversary of the Commercial Operations Date, Virginia North Carolina Power shall continue to pay for Dependable Capacity at the Capacity Purchase Price set forth in Article 10 through the twentieth twelfth anniversary of the Commercial Operations Date. Payments for Dependable Capacity beginning on the twentieth twelfth anniversary of the Commercial Operations Date shall not exceed the amount unaffected by the Disallowance. Further, Virginia North Carolina Power may, at its option, beginning on the twentieth twelfth anniversary of the Commercial Operations Date withhold up to seventy-five (75) percent of the payments for Dependable Capacity until the sooner of (i) the twenty-first fifteenth anniversary of the Commercial Operations Date or (ii) the Day the entire amount of the Disallowance is repaid with interest at the Interest Rate minus two percentage points from the date each part of the Disallowance was paid to Operator. In the event that such withholding does not fully repay the Disallowance and accrued interest Interest by the twenty-first fifteenth anniversary of the Commercial Operations Date, then the Operator shall pay the remainder to Virginia North Carolina Power within twenty eight (28) Days after the twenty-first fifteenth anniversary of the Commercial Operations Date in a lump sum; provided, however, that if Operator demonstrates to Virginia Power that it is unable 129 Page 129 of 138 to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect.;
(b) If the Disallowance occurs after the twentieth twelfth anniversary of the Commercial Operations Date, all future payments for Dependable Capacity shall not exceed the amount unaffected by the Disallowance. Further, the Operator shall repay the full amount of the Disallowance with interest Interest by the earlier later of (i) one year from the date of such Disallowance or (ii) the expiration of this Agreement; provided, however, that if Operator demonstrates to Virginia Power that it is unable to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, 130 Page 130 of 138 as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation fifteenth anniversary of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effectCommercial Operations Date.
(c) On The Parties agree that neither Party shall file a petition to initiate a Disallowance and the twentieth (20th) anniversary of the Commercial Operations Date or thereafter, Operator shall have the option to propose any or all of the following actions: (i) repay any total disallowance, including without limitation interest, and renegotiate a lower purchase price for the Facility's capacity; or (ii) transfer ownership of the Facility to Virginia Power in full settlement of all of Operator's duties and obligations under this Agreement, including without limitation any duties or obligations under this Section 18.1. The Parties obligate themselves to use all good faith efforts to establish, if practicable, an appeal and overruling of the any Disallowance or a superseding order, approval of modified rules or tariffs, or other action so as to allow timely resumption of full, or failing that, adjusted payments hereunder.
18.2 Operator agrees that if there is a Disallowance which Operator chooses to repay under Section 18.1(b)(ii) over an extended Term (which was extended pursuant to the proviso to Section 18.2(b)), then Operator will provide, prior to the date on which the Term would have expired absent such sum, in addition to any other security posted under this Agreement, a letter of credit, or a surety bond containing features reasonably similar to a letter of credit, either of which must: (i) be issued by an institution reasonably acceptable to Virginia Power, (ii) be in form and substance reasonably acceptable to Virginia Power, (iii) provide for draws by Virginia Power on a monthly basis, and (iv) permit presentation at a bank located in Richmond, Virginia for immediately available funds in the amount of such disallowance for the remaining term of this Agreement, which letter of credit shall be maintained until the earlier of the termination of this Agreement or the date by which the disallowance has belen recovered by Virginia Power pursuant to Section 18.1 at which time the letter of credit or surety bond provided pursuant to this Section will terminate, or in the case of a surety bond may be cancelled by Operator.
Appears in 1 contract
Samples: Power Purchase and Operating Agreement (Panda Interfunding Corp)
Statutory and Regulatory Changes. 18.1 The Parties recognize and hereby agree that if any federal, state or municipal government or regulatory authority, including without limitation the SCCNCUC, should for any reason enter an order, modify its rules, or take any action whatsoever, having the effect whatsoever ordering North Carolina Power to pay bank to its customers amounts collected as a result of payments made hereunder or specifically disallowing Virginia North Carolina Power the recovery from its customers of all or any portion of the payments (i) made hereunder, or (ii) to be made hereunder for Dependable Capacity hereunder and Net Electrical Output (“Disallowance”) in excess of the sum of: (x) $6.00 per kW per Month in 1989 dollars as escalated by the Gross National Product Implicit Price Deflator beginning April 1of payments made, 1990or to be made, for Dependable Capacity and continuing each April until termination of this Agreement; plus (y) an amount in each Month equal to the product of the Net Electrical Output for that Month multiplied based on the energy and capacity prices established (notwithstanding any limitations on the size of the Facility) by the non-firm energy payment specified in Virginia Power's NCUC pursuant to 18 C.F.R. 292.304(c) (currently represented by Schedule 19, supplements thereto and reissues and replacements thereof, on file with the SCC 19 POWER PURCHASES FROM COGENERATION AND SMALL POWER PRODUCTION QUALIFYING FACILITIES) and in effect from at the time to time, including additions to or escalations of such payments whether included in Schedule 19 or referenced therein; such amount in excess being hereinafter referred to as the Disallowance (except where for the period of time in which such disallowance Disallowance is in effect, then the following terms and conditions shall be applicable to such Disallowance, unless such Disallowance is due to Virginia North Carolina Power's ’s failure to seek recovery or comply with procedural requirements governing recovery of such costs), then: 128 Page 128 . The number of 138years remaining in the Term of this Agreement will constitute the Schedule 19 length of contract used to determine the payment for Dependable Capacity hereunder.
(a) If the Disallowance occurs before the twentieth fifteenth anniversary of the Commercial Operations Date, Virginia North Carolina Power shall continue to pay for Dependable Capacity at the Capacity Purchase Price set forth in Article 10 through the twentieth fifteenth anniversary of the Commercial Operations Date. Payments for Dependable Capacity beginning on the twentieth fifteenth anniversary of the Commercial Operations Date shall not exceed the amount unaffected by the Disallowance. Further, Virginia North Carolina Power may, at its option, beginning on the twentieth fifteenth anniversary of the Commercial Operations Date withhold up to seventy-five (75) percent of the payments for Dependable Capacity until the sooner of (i) the twenty-first eighteenth anniversary of the Commercial Operations Date or (ii) the Day the entire amount of the Disallowance is repaid with interest at the Interest Rate minus two percentage points from the date each part of the Disallowance was paid to Operator. In the event that such withholding does not fully repay the Disallowance and accrued interest at the Interest Rate by the twenty-first eighteenth anniversary of the Commercial Operations Date, then Operator shall pay the remainder to Virginia North Carolina Power within twenty eight (28) Days after the twenty-first eighteenth anniversary of the Commercial Operations Date in a lump sum; provided, however, that if Operator demonstrates to Virginia Power that it is unable 129 Page 129 of 138 to borrow funds (without recourse to partners in, or shareholders of, Operator or affiliates of either, as described more fully in Section 17.5 of this Agreement), sufficient to make such lump sum payment at all or on terms that would permit continued operation of the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect.60
(b) If the Disallowance occurs after the twentieth fifteenth anniversary of the Commercial Operations Date, all future payments for Dependable Capacity shall not exceed the amount unaffected by the Disallowance. Further, the Operator shall repay the full amount of the Disallowance with interest at the Interest Rate by the earlier later of (i) one year from the date of such Disallowance or (ii) the expiration eighteenth anniversary of the Commercial Operations Date;
(c) In no event shall the Disallowance begin earlier than the date of the final order in which such Disallowance occurred. 61
(d) Not later than ten (10) days after North Carolina Power receives notice that any federal, state, or municipal government regulatory authority, including the NCUC; has been requested to make or is considering a Disallowance, North Carolina Power shall use its best efforts to notify Operator in writing. Within thirty (30) days of the date of a final order creating a Disallowance, Operator shall, at its option, either grant to North Carolina. Power a valid second lien (the “Second Lien”) on the Facility securing North Carolina Power’s right to repayment of the Disallowance or provide to North Carolina Power a letter of credit in a face amount set forth below in form and substance satisfactory to Virginia Power. Any letter of credit issued or Second Lien granted pursuant to this Section shall secure the maximum amount of the Disallowance that Operator is obligated to repay North Carolina Power pursuant to this Agreement, based on the parties’ estimate of the amount of such Disallowance that could accrue assuming the Disallowance continues through the 15th anniversary of the Commercial Operations Date. Any Second Lien and the payment obligations secured thereby and all rights and privileges (including any rights to rents, income, profits, insurance proceeds and condemnation awards) granted to secure North Carolina Power shall be junior and in all respects subordinate to (i) the lien of any mortgage, deed of trust and/or other security interest securing construction or term financing, (ii) the obligations secured thereby (subject to the last sentence of this AgreementSection 18.1(d)), any “Permitted Loan Modification” (as defined below) and (iv) any other modifications to such obligations and instruments to which North Carolina Power consents (such consent not to be unreasonably withheld), (each of the foregoing being referred to herein as a “First Lien”). A “Permitted Loan Modification” shall mean and include (i) any increase in the principal amount of any construction or term financing if such increase is attributable to (A) improvements, alterations or repairs to the Facility including, without limitation, improvements required to comply with applicable law or necessary for the proper operation or maintenance of the Facility, or (B) interest accrual arising from or after a default by the borrower or as a result of a restructure of the loan after or in anticipation of any such default, (ii) any refinancing of construction or term financing to the extent such refinancing does not exceed 115% of the original principal amount of the construction or term financing which is being refinanced, (iii) any amendments, modifications or supplements to a First Lion which do not extend the term thereof or increase the amount scoured thereby, and (iv) any modifications, amendments, agreements, deeds of trust, lions or security interests executed in connection with or securing any of the foregoing. The form and substance of the instruments or documents creating the Second Lien shall be in all respects satisfactory to the holders of or beneficiaries under the First Lien and North Carolina Power consistent with (i) its position as a second lienor and standard commercial practice with respect to project financing and (ii) this Section 18.1(d). Such instruments or documents creating the Second Lien and documents providing for the use of Common Facilities by the Facility to ensure that the Facility can be owned and operated independent of the Roanoke Valley I Project shall be negotiated prior to or as part of any third party financing requiring the consent of North Carolina Power. North Carolina Power shall not be obligated to consent to such financing until such instruments or documents are negotiated and agreed to by the Parties. Operator shall provide the subordination provisions required by the lenders for the Roanoke Valley I Project, which shall serve as the basis for the subordination provisions for the Second Lien; provided, however, to the extent that if these provisions conflict with the conditions of such subordination set forth in this Section 18.1(d), Section 18.1(d) shall control. Notwithstanding the foregoing, nothing contained in this Section 18.1(d) or the Second Lien (including the subordination provisions thereof) shall limit North Carolina Power’s right (i) to enforce any of its rights under this Agreement in the event of any breach by Operator demonstrates of its obligations under this Agreement (including, without limitation, the right to Virginia Power that it is unable bring an action for damages resulting from Operator’s failure to borrow funds (without recourse to partners inperform in accordance with this Article 18), or shareholders of, Operator or affiliates of either, 130 Page 130 of 138 as described more fully in Section 17.5 of this Agreement), sufficient (ii) to make such lump sum payment enforce the Second Lien at all or on terms that would permit continued operation of any time after the Facility by Operator at a profit, then the Term of this Agreement shall be automatically extended for an additional five (5) Years. The Capacity Purchase Price and equivalent hourly Capacity Purchase Price applicable to such extension period shall be those set out in Section 10.15(b) of this Agreement for Agreement Years 26, 27, 28, 29 and 30 and all other terms and conditions of this Agreement shall continue and be in full force and effect.
(c) On the twentieth (20th) 18th anniversary of the Commercial Operations Date or thereafterand, Operator shall have the option in connection therewith, to propose any or all of the following actions: (i) repay any total disallowance, including without limitation interest, and renegotiate a lower purchase price for the Facility's capacity; or (ii) transfer ownership of sell the Facility subject to Virginia Power in full settlement of all of Operator's duties and obligations under this Agreement, including without limitation any duties or obligations under this Section 18.1the First Lien. The Parties obligate themselves to use all good faith efforts to establish, if practicable, an appeal and overruling of the Disallowance or a superseding order, approval of modified rules or tariffs, or other action so as to allow timely resumption of fullfull or, or failing that, adjusted payments hereunder.
18.2 Operator agrees that if there is a Disallowance which Operator chooses to repay under Section 18.1(b)(ii) over an extended Term (which was extended pursuant to the proviso to Section 18.2(b)), then Operator will provide, prior to the date on which the Term would have expired absent such sum, in addition to any other security posted under this Agreement, a letter of credit, or a surety bond containing features reasonably similar to a letter of credit, either of which must: (i) be issued by an institution reasonably acceptable to Virginia Power, (ii) be in form and substance reasonably acceptable to Virginia Power, (iii) provide for draws by Virginia Power on a monthly basis, and (iv) permit presentation at a bank located in Richmond, Virginia for immediately available funds in the amount of such disallowance for the remaining term of this Agreement, which letter of credit shall be maintained until the earlier of the termination of this Agreement or the date by which the disallowance has belen recovered by Virginia Power pursuant to Section 18.1 at which time the letter of credit or surety bond provided pursuant to this Section will terminate, or in the case of a surety bond may be cancelled by Operator.. 62
Appears in 1 contract
Samples: Power Purchase and Operating Agreement (Westmoreland Coal Co)
