POWER PURCHASE
AND
OPERATIONS COORDINATION AGREEMENT
BETWEEN
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
AND
COGEN TECHNOLOGIES NJ VENTURE
DATED June 5, 1989
____________
TABLE OF CONTENTS
PAGE
----
RECITALS....................................... 1
ARTICLE I DEFINITIONS.................................... 4
ARTICLE II GENERAL CONDITIONS OF DELIVERY AND
ACCEPTANCE OF NET ELECTRICAL POWER OUTPUT...... 9
Section A - Warranty of Qualifying Facility
Status............................. 9
Section B - Repeal of PURPA.................... 10
Section C - Verification and Nomination of
Capacity........................... 11
Section D - Exceptions to Obligation to
Accept Electrical Power Output..... 13
Section E - Obligation to Provide Reactive
Power.............................. 16
Section F - Condition Precedent................ 17
Section G - Relationship to TRANSMISSION
AGREEMENT.......................... 18
ARTICLE III TERM........................................... 18
ARTICLE IV PURCHASE PRICE AND PAYMENT CONDITIONS.......... 19
Section A - Monthly Energy Charge.............. 19
Section B - Monthly Capacity Charge............ 21
Section C - Monthly Service Charge............. 25
Section D - Recovery of Payments............... 25
Section E - Replacement Energy and
Capacity Costs..................... 27
Section F - Security Provision................. 32
ARTICLE V BILLING AND PAYMENT............................ 42
-i-
TABLE OF CONTENTS
PAGE
----
ARTICLE VI OPERATIONS COORDINATION.......................... 43
ARTICLE VII NET ELECTRICAL POWER OUTPUT SPECIFICATIONS....... 47
ARTICLE VIII METERING/RECORDS................................. 47
ARTICLE IX USE OF THE PUBLIC SERVICE SYSTEM................. 48
ARTICLE X DEDICATION OF FACILITIES......................... 49
ARTICLE XI LIABILITY........................................ 49
ARTICLE XII FORCE MAJAURE.................................... 50
ARTICLE XIII INDEMNIFICATION.................................. 52
ARTICLE XIV INSURANCE........................................ 54
ARTICLE XV WARRANTIES....................................... 58
ARTICLE XVI EVENTS OF DEFAULT AND BREACH OF CONTRACT......... 59
Section A - Default by VENTURE................... 59
Section B - Default by PSE&G..................... 61
Section C - Remedies............................. 63
ARTICLE XVII ARBITRATION...................................... 65
ARTICLE XVIII SPECIFIC PERFORMANCE............................. 69
ARTICLE XIX ENTIRE AGREEMENT................................. 70
ARTICLE XX ASSIGNMENT/TRANSFER.............................. 70
ARTICLE XXI CURE BY FINANCIER................................ 72
ARTICLE XXII FINANCIER SECURITY AGREEMENTS.................... 75
ARTICLE XXIII DETERMINATION OF PSE&G COSTS..................... 77
ARTICLE XXIV STANDARD FOR PERFORMANCE......................... 77
-ii-
TABLE OF CONTENTS
PAGE
----
ARTICLE XXV STANDBY ELECTRIC SERVICE......................... 78
ARTICLE XXVI SUCCESSORS AND ASSIGNS........................... 78
ARTICLE XXVII CHOICE OF LAW.................................... 79
ARTICLE XXVIII CAPTIONS......................................... 79
ARTICLE XXIX COUNTERPARTS..................................... 79
ARTICLE XXX MISCELLANEOUS.................................... 80
ARTICLE XXXI RESERVATIONS..................................... 81
ARTICLE XXXII SURVIVAL OF OBLIGATIONS.......................... 81
ARTICLE XXXIII NOTICES.......................................... 81
EXHIBIT 1 INTERCONNECTION PLAN
EXHIBIT 2 PAYMENT TRACKING ACCOUNT
EXHIBIT 3 CONSENT TO ASSIGNMENT
-iii-
COGEN TECHNOLOGIES NJ VENTURE
POWER PURCHASE
AND
OPERATIONS COORDINATION AGREEMENT
This AGREEMENT made and entered as of the 5th day of June, 1989 by and
between PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a New Jersey corporation
(PSE&G) and COGEN TECHNOLOGIES NJ VENTURE (VENTURE), a New Jersey partnership.
RECITALS
WHEREAS, VENTURE owns and operates a grid connected COGENERATION
FACILITY which is located within the electric service territory of PSE&G at the
property of Bayonne Industries, Inc. and IMTT-Bayonne (BAYONNE) in the City of
Bayonne, County of Xxxxxx, State of New Jersey;
WHEREAS, VENTURE has a contract to sell seventy-five and eight tenths
percent (75.8%) of the NET ELECTRICAL POWER OUTPUT to Jersey Central Power &
Light Company (JCP&L) and intends to sell to PSE&G the remaining twenty-four and
two tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT produced by the
COGENERATION FACILITY, and PSE&G, in recognition of its obligation under the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Sections 796 et seq.)
(PURPA) as implemented by the Federal Energy Regulatory Commission (FERC or
Commission) and the State of New Jersey Board of Public Utilities (NJBPU), will
purchase
-2-
pursuant to the terms and conditions set forth herein twenty-four and two tenths
(24.2%) of such NET ELECTRICAL POWER OUTPUT from the COGENERATION FACILITY;
WHEREAS, VENTURE has obtained, pursuant to the rules and regulations
of the FERC set forth at 18 C.F.R. 292.207(b), a certification that the
COGENERATION FACILITY is a qualifying facility in accordance with 18 C.F.R.
Section 292.203, as declared in FERC Docket No. QF86-972-000;
WHEREAS, VENTURE has constructed and shall maintain the COGENERATION
FACILITY in compliance with the regulations of the FERC applicable to qualifying
facility status during the term of this AGREEMENT;
WHEREAS, VENTURE has entered into agreements with BAYONNE and Exxon
Company USA (Exxon) pursuant to which BAYONNE and Exxon will purchase and
VENTURE will sell thermal energy;
WHEREAS, PSE&G is a public utility as defined in N.J.S.A 48:2-13 and,
as such, is required by applicable statutes and regulations to furnish safe,
adequate and proper service to its retail and sale-for-resale customers and
further, to have and maintain its property, plant and equipment in such
condition as to enable it to do so;
-3-
WHEREAS, VENTURE has entered into a Revised Transmission Service and
Interconnection Agreement, dated April 27, 1987 (TRANSMISSION AGREEMENT) with
PSE&G, which is incorporated by reference herein and made a part hereof, to
design, construct, install, operate and maintain the INTERCONNECTION so as to
interconnect the PROJECT with the electric transmission facilities of PSE&G
emanating from PSE&G's Bayonne Switching Station;
WHEREAS, PSE&G's obligation under this AGREEMENT and under the
TRANSMISSION AGREEMENT to receive instantaneous active electrical power output
from the COGENERATION FACILITY at the RECEIPT POINT shall not exceed 190,000 kw;
WHEREAS, PSE&G is a member of the Pennsylvania-New Jersey-Maryland
Interconnection (PJM); and
WHEREAS, PJM is a fully coordinated power pool which, pursuant to an
agreement executed by and among its members, affords to the member utilities for
the benefit of their customers reliable electric service at the lowest possible
cost;
-4-
NOW, THEREFORE, in consideration of the recitals and mutual covenants
contained herein, the PARTIES hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms when used herein with capitalization shall have
the following meanings, unless a different meaning shall be expressly stated:
AGREEMENT means this Power Purchase and Operations Coordination
Agreement between VENTURE and PSE&G.
COGENERATION FACILITY means the three gas turbines and waste heat
boilers, one steam turbine, synchronous generators, and all appurtenant
structures and equipment constructed, installed, owned/leased, operated and
maintained by VENTURE at the property of BAYONNE, for the purpose of generating
steam and electricity and other forms of useful thermal energy output and having
an installed name-plate rating of 164.9 megawatts.
DATE OF COMMERCIAL OPERATION means the date on which the NJBPU
approves this AGREEMENT, unless the PARTIES do not give written acceptance
within thirty (30) days as provided in ARTICLE II, Section F.
-5-
FINANCIER means any individual(s) or entity(ies) and any
representative(s) or trustee(s) for any such individual(s) or entity(ies):(i)
lending money to VENTURE for: (a) the construction or term financing of the
PROJECT; (b) the establishment and/or maintenance of working capital
requirements; and/or (c) the refinance or take-out of any such loan(s); and/or
(ii) participating as an equity investor in the PROJECT; and/or (iii) any lessor
under a lease finance arrangement. Such term includes the Prudential Insurance
Company of America (Prudential).
INTERCONNECTION means the 138,000-volt circuit reinforcements,
extensions and associated terminal facility reinforcements to the PUBLIC SERVICE
SYSTEM which have been designed, constructed, and installed by PSE&G to
interconnect the PROJECT with and to the PUBLIC SERVICE SYSTEM, as more fully
described in the TRANSMISSION AGREEMENT as set forth in Exhibit 1.
LOAN AGREEMENT means any agreement between VENTURE and one or more
FINANCIERS pursuant to which VENTURE arranges for and obtains debt financing to
construct and/or operate the PROJECT. Such term includes the Term Loan Agreement
between VENTURE and Prudential dated as of November 1, 1987, as amended pursuant
to the First Amendment to the Term Loan Agreement dated as of December 15, 1988.
-6-
MONTH means the calendar month commencing at 12:00.01 a.m. Eastern
Time on the first day of the calendar month and concluding at midnight Eastern
Time on the final day of the same calendar month.
NET ELECTRICAL CAPACITY means the average monthly amount of electrical
capacity in kilowatts produced at the COGENERATION FACILITY during ON-PEAK
PERIODS less the amount of electric capacity consumed by the COGENERATION
FACILITY'S in-plant load during ON-PEAK PERIODS, and delivered to PSE&G at the
RECEIPT POINT, determined by dividing the NET ELECTRICAL ENERGY during such ON-
PEAK PERIOD by the total hours in such ON-PEAK PERIOD.
NET ELECTRICAL ENERGY means the amount of electrical energy in
kilowatthours produced at the COGENERATION FACILITY, less the amount of electric
energy consumed by the COGENERATION FACILITY'S in-plant load, and delivered to
PSE&G at the RECEIPT POINT.
NET ELECTRICAL POWER OUTPUT means the NET ELECTRICAL ENERGY and NET
ELECTRICAL CAPACITY.
OFF-PEAK PERIOD means all other hours of a week exclusive of the ON-
PEAK PERIOD.
-7-
ON-PEAK PERIOD means, as specified in PSE&G's Purchased Electric Power
Tariff, the period from 7:00 a.m. to 9:00 p.m. (Eastern Time) Monday through
Friday, excluding holidays, as from time to time defined by PJM, or as otherwise
designated in PSE&G's Purchased Electric Power Tariff then in effect.
PARTY or PARTIES means PSE&G or VENTURE, or both, and their respective
successors or assigns.
PROJECT means the COGENERATION FACILITY, SUBSTATION FACILITY and
associated facilities and equipment constructed, owned/leased, operated and
maintained by VENTURE at the property of BAYONNE for the purpose of producing,
among other things, electric power.
PUBLIC SERVICE SYSTEM means the electric power generation,
transmission, subtransmission and distribution facilities owned, operated and
maintained by PSE&G, which includes, the INTERCONNECTION.
RECEIPT POINT, also referred to as POINT OF INTERCONNECTION, means the
point of physical connection of the PROJECT to the PSE&G 138kV transmission
system located at the point at which the PSE&G 138kV transmission system meets
with and connects to the SUBSTATION FACILITY. The
-8-
RECEIPT POINT is identified in Exhibit 1 of the TRANSMISSION AGREEMENT, which
exhibit is made a part hereof and incorporated by reference herein.
SUBSTATION FACILITY means the 138kV substation designed, constructed,
installed, owned, operated and maintained by VENTURE at the PROJECT which is
required to connect the COGENERATION FACILITY with the PUBLIC SERVICE SYSTEM, as
more fully described in the TRANSMISSION AGREEMENT.
SUMMER SEASON means the consecutive period of time from June 1 to
September 30 of any year.
SYSTEM EMERGENCY means the existence of a physical or operational
condition and/or the occurrence of an event on the PUBLIC SERVICE SYSTEM or PJM
System which in PSE&G's sole judgment is: (i) imminently likely to endanger life
or property; or (ii) impairs and/or imminently will impair: (a) PSE&G's ability
to discharge its statutory obligation(s) to provide safe, adequate and proper
service to its retail and sale-for-resale customers; and/or (b) the safety
and/or reliability of the PUBLIC SERVICE SYSTEM or PJM System.
WINTER SEASON means the consecutive period of time from December 1 to
the last day in February.
-9-
ARTICLE II
GENERAL CONDITIONS OF DELIVERY AND
ACCEPTANCE OF NET ELECTRICAL POWER OUTPUT
Except as otherwise provided herein, VENTURE agrees to deliver and
sell and PSE&G agrees to accept and purchase during the term of this AGREEMENT
twenty-four and two tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT
from the COGENERATION FACILITY.
SECTION A
WARRANTY OF QUALIFYING FACILITY STATUS
VENTURE warrants that, at the date of first power deliveries from
VENTURE's COGENERATION FACILITY and subject to Section B of this ARTICLE II,
during the term of this AGREEMENT, the COGENERATION FACILITY shall meet the
requirements for a qualifying facility as established by the FERC's Rules and
Regulations set forth in Title 18 C.F.R. Section 292 et seq. Subject to
Section B of this ARTICLE II, VENTURE's obligation to deliver and sell and
PSE&G's obligation to accept and purchase twenty-four and two tenths percent
(24.2%) of the NET ELECTRICAL POWER OUTPUT shall be conditioned on VENTURE's
maintaining the requisite qualifying facility status as set forth in PURPA and
the Rules and Regulations of the FERC implementing same during the term of this
AGREEMENT as applicable to the COGENERATION FACILITY with respect to qualifying
facility status.
-10-
SECTION B
REPEAL OF PURPA
In the event that (i) Sections 201 and 210 of PURPA are for any reason
no longer in effect, or (ii) the COGENERATION FACILITY ceases to qualify as a
qualifying facility under PURPA for any reason not within the control of
VENTURE, including but not limited to a reduction or cessation in thermal energy
use by BAYONNE or Exxon, the rights and obligations of VENTURE and PSE&G under
this AGREEMENT will continue so long as the NJBPU does not take any action which
would prevent PSE&G from full and timely recovery from its customers of all
costs and charges paid to VENTURE for capacity and energy delivered and sold to
PSE&G, and so long as the continued operation of the COGENERATION FACILITY and
the continued acceptance and purchase of twenty-four and two tenths percent
(24.2%) of the NET ELECTRICAL POWER OUTPUT by PSE&G at the rates set forth
herein does not violate any federal, state or local law, ordinance or regulation
or subject VENTURE or its owners to regulation under the Public Utility Holding
Company Act of 1935 (PUHCA) where such regulation is unreasonably burdensome. If
the continued operation of the COGENERATION FACILITY as a result of the
occurrence of the events specified in (i) or (ii) above would violate any such
law, ordinance or regulation or would subject VENTURE or its owners to
regulation under PUHCA where such regulation is unreasonably burdensome, the
PARTIES shall negotiate in good
-11-
faith to attempt to reach an agreement on a power sale contract, lease or other
arrangement which will provide for the continued purchase of twenty-four and two
tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT by PSE&G under terms
which provide the same economic benefit to the PARTIES as is provided under this
AGREEMENT. If the NJBPU no longer permits such full and timely recovery or the
existing recovery mechanism for such costs is changed, modified, and/or
eliminated so as to impair such full and timely recovery; and if an event
specified in (i) or (ii) above has occurred, the PARTIES shall negotiate in good
faith to attempt to reach an agreement on a power sale contract, lease or other
arrangement which will provide for the continued acceptance and purchase of
twenty-four and two tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT by
PSE&G at a rate which provides substantially similar economic benefits to the
PARTIES as is provided under this AGREEMENT and which the NJBPU will permit
PSE&G to recover from its ratepayers. If, after such negotiations, the PARTIES
are unable to reach such an agreement, either PARTY may exercise any other
remedy provided under the AGREEMENT.
SECTION C
VERIFICATION AND NOMINATION OF CAPACITY
In order to establish VENTURE's obligation to deliver twenty-four and
two tenths percent (24.2%) of the NET ELECTRICAL CAPACITY to PSE&G and PSE&G's
obligation to pay for such NET ELECTRICAL CAPACITY in accordance with
-12-
ARTICLE IV of this AGREEMENT, VENTURE has nominated the following nominal net
seasonal capacity levels (Net Seasonal Capacity) specific to the reference
ambient temperature indicated:
SUMMER SEASON 150 MW @ 94 degrees F
WINTER SEASON 179 MW @ 25 degrees F
The PARTIES agree that NET ELECTRICAL CAPACITY delivered is a function
of ambient temperature and that nominated or renominated values of Net Seasonal
Capacity are to be adjusted to actual prevailing average ambient temperature
conditions for purposes of determining whether any excess capacity has been
delivered pursuant to ARTICLE IV, Section B, or for determining any replacement
energy or capacity costs pursuant to ARTICLE IV, Section E.
VENTURE shall be entitled to an initial renomination of the SUMMER
SEASON and WINTER SEASON nominal Net Seasonal Capacity based upon performance,
test or demonstrated results from actual operations prior to one (1) year after
the DATE OF COMMERCIAL OPERATION. These renominated values shall be in effect
for all purposes of this AGREEMENT until a future renomination is made in
accordance with this Section C.
VENTURE shall be entitled to renominate the value(s) of the SUMMER
SEASON and/or WINTER SEASON Net Seasonal Capacity levels every year, starting
from the date of the initial renomination or the DATE OF COMMERCIAL OPERATION if
no initial renomination is made, for the
-13-
balance of the term of this AGREEMENT. In no event, however, shall any
renominated capacity value lie outside a range of plus or minus ten percent
(10%) of the SUMMER SEASON and/or WINTER SEASON Net Seasonal Capacity values
determined for the initial renomination or the values set forth in this section
if no initial renomination is made.
Each subsequent renomination after the initial renomination shall be
based on the COGENERATION FACILITY's projected performance based on actual or
test results during expected ambient conditions in the SUMMER SEASON and/or
WINTER SEASON. VENTURE agrees to provide PSE&G with all data reasonably
necessary for PSE&G to confirm the renominated value(s).
SECTION D
EXCEPTIONS TO OBLIGATION TO ACCEPT
ELECTRICAL POWER OUTPUT
Notwithstanding the above, and in addition to the provisions of
ARTICLE XII of this AGREEMENT, PSE&G shall be excused from accepting all or a
portion of twenty-four and two tenths percent (24.2%) of the NET ELECTRICAL
POWER OUTPUT:
(1) if VENTURE fails to comply with the Interconnection, Protection and
Safety Requirements and Standards for Customer-Owned Generating
Facilities as set forth in Exhibit 2.
(2) If PSE&G is unable to back down its own generation sufficiently to
accept tventy-four and two tenths
-14-
percent (24.2 %) of the NET ELECTRICAL POWER OUTPUT from the
COGENERATION FACILITY without jeopardizing the integrity of the PUBLIC
SERVICE SYSTEM or the PJM System.
(3) If Transmission facilities are loaded to their published ratings and
continued or increased power output from the COGENERATION FACILITY
would adversely affect the reliability of the PUBLIC SERVICE SYSTEM or
the PJM System.
(4) Under Light Load Conditions, during which PSE&G shall use its best
efforts to treat VENTURE equally with all other non-utility generation
on the PUBLIC SERVICE SYSTEM in accordance with established procedures.
PSE&G shall give notice to VENTURE in time for VENTURE to cease the
delivery of twenty-four and two tenths percent (24.2%) of the NET
ELECTRICAL POWER OUTPUT which notice shall be served no less than two
(2) hours prior to the scheduled delivery. For purposes of this ARTICLE
II, Section D, the term "Light Load Conditions" means a minimum
generation emergency condition declared by PJM or the PSE&G Electric
System Operations Center or similar circumstances which may imminently
lead to such conditions without actions being taken by PSE&G to avoid
this circumstance. Such circumstances may include but shall not be
limited to conditions which may
-15-
require a reduction in output of a PSE&G nuclear unit and/or removal
of a generation unit from service which could not be returned to
service in the next peak period.
(5) During any SYSTEM EMERGENCY if such purchases would contribute to such
SYSTEM EMERGENCY.
(6) If PSE&G intentionally interrupts acceptance of twenty-four and two
tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT to conduct
planned maintenance of the interconnection or adjacent transmission,
and/or subtransmission facilities.
All cases of PSE&G's refusal to purchase from VENTURE shall be subject
subsequently to verification by the NJBPU, if requested by VENTURE. Where
practicable, PSE&G shall give VENTURE advance notice of any interruption,
curtailment or reduction effected pursuant to this Section D, the circumstances
requiring or necessitating the interruption, curtailment or reduction of PSE&G's
acceptance of twenty-four and two tenths (24.2%) of the NET ELECTRICAL POWER
OUTPUT and, if able, the reasons therefor, and the extent and duration thereof.
In the event PSE&G is unable, for any reason, to give VENTURE advance notice of
such interruption, curtailment or reduction of such acceptance, PSE&G shall, as
soon thereafter as practicable, contact VENTURE to confirm such interruption,
curtailment or reduction, explaining the circumstances requiring or
necessitating the interruption, curtailment or reduction,
-16-
and, if able, furnish the reasons therefor and the extent and duration thereof.
At VENTURE's request, PSE&G shall provide written notice to VENTURE explaining
the circumstances requiring or necessitating any interruption, curtailment or
reduction of service effective pursuant to this ARTICLE II. PSE&G will resume
the acceptance of twenty-four and two tenths percent (24.2%) of the NET
ELECTRICAL POWER OUTPUT as soon as practicable after the reason for the
interruption, curtailment or reduction no longer exists.
In the event acceptance of twenty-four and two tenths percent (24.2%)
of the NET ELECTRICAL POWER OUTPUT is interrupted, curtailed or reduced by PSE&G
for any reason specified in this Section D, PSE&G agrees to use its best
efforts (consistent with PSE&G's existing obligations to restore service to its
retail and wholesale customers) to correct any condition and to restore
acceptance of such power. VENTURE expressly agrees that PSE&G is not liable for
damages of any kind to VENTURE or any third party, all as more fully set forth
in ARTICLE XI and ARTICLE XIII of this AGREEMENT, due to PSE&G's failure to
accept twenty-four and two tenths percent (24.2%) of the NET ELECTRICAL POWER
OUTPUT for any of the reasons expressed above.
SECTION 3
OBLIGATION TO PROVIDE REACTIVE POWER
PSE&G may request, and, when requested, VENTURE shall use best efforts
to provide reactive power, leading or lagging, from the COGENERATION FACILITY up
to the operating
-17-
limits of the COGENERATION FACILITY to the extent that it does not require a
reduction in NET ELECTRICAL POWER OUTPUT and further, in the event of a SYSTEM
EMERGENCY, PSE&G may request VENTURE to provide reactive power, leading or
lagging, from the COGENERATION FACILITY and, if PSE&G makes such a request,
VENTURE shall use its best efforts to provide same up to the operating limits of
the COGENERATION FACILITY, whether or not same requires a reduction in NET
ELECTRICAL POWER OUTPUT.
SECTION F
CONDITION PRECEDENT
The following shall be a condition precedent to the effectiveness of
this AGREEMENT: A finding by the NJBPU in an Order that this AGREEMENT, as
presently constituted, is reasonable and prudent throughout the term of this
AGREEMENT and that PSE&G will be able to flow through to and/or fully and timely
recover from its ratepayers through the Levelized Energy Adjustment Clause or
its successor all purchased power costs incurred by PSE&G pursuant to this
AGREEMENT, which approval by the NJBPU shall be under terms and conditions
reasonably acceptable to both PSE&G and VENTURE.
After the foregoing condition has been satisfied, the PARTIES shall,
within thirty (30) days, affirm in writing, executed by both PARTIES, that this
condition precedent has been satisfied. In the event said condition precedent is
not satisfied, this AGREEMENT shall be void.
-18-
SECTION G
RELATIONSHIP TO TRANSMISSION AGREEMENT
This AGREEMENT contains similar obligations with respect to certain
operations and coordination requirements as well as the obligations relating to
such requirements of the PARTIES under this AGREEMENT as are found in the
TRANSMISSION AGREEMENT. To the extent provisions of this AGREEMENT and the
TRANSMISSION AGREEMENT are similar and activities anticipated to be undertaken
to comply with this AGREEMENT are in substance the same as activities to be
undertaken to comply with the TRANSMISSION AGREEMENT, compliance by either PARTY
with the provisions of this AGREEMENT shall fulfill the obligations of such
PARTY under the TRANSMISSION AGREEMENT.
ARTICLE III
TERM
Subject to the condition precedent set forth in ARTICLE II above, this
AGREEMENT shall enter into effect as of the DATE OF COMMERCIAL OPERATION and
shall continue in effect for an initial term ending November 1, 2008. Upon the
expiration of the initial term, this AGREEMENT shall be renewed for two (2)
successive five (5) year renewal terms unless either PARTY provides written
notice of intent not to renew to the other no less than three (3) years prior to
the expiration of the then pending term.
At the expiration of this AGREEMENT, this
-19-
AGREEMENT and each PARTY's obligation(s) hereunder shall automatically terminate
as of the effective date thereof; provided, however, expiration of this
AGREEMENT shall not relieve either PARTY from any obligation arising under this
AGREEMENT to pay any monies due to the other PARTY which monetary obligation was
incurred prior to the date of expiration of this AGREEMENT.
ARTICLE IV
PURCHASE PRICE AND PAYMENT CONDITIONS
Beginning on the DATE OF COMMERCIAL OPERATION and until the expiration
of the AGREEMENT, PSE&G agrees to pay VENTURE in accordance with Sections A and
B of this ARTICLE IV, a Monthly Energy Charge and a Monthly Capacity Charge as
defined below.
SECTION A
MONTHLY ENERGY CHARGE
The Monthly Energy Charge for any month shall be twenty-four and two
tenths percent (24.2%) of the NET ELECTRICAL ENERGY delivered by VENTURE to
PSE&G during any MONTH times VENTURE's Adjusted Base Rate. The Adjusted Base
Rate is composed of the sum of a Fixed Component, a Fuel Component and a GNP
Deflator Component, as follows:
(1) The Fixed Component is equal to two (2) cents/kWh, and is unchanged for
the duration of this AGREEMENT.
(2) The Fuel Component starts at one and eighty-eight
-20-
hundredths (1.88) cents/kWh as of the DATE OF COMMERCIAL OPERATION and
shall remain in effect until the first day of the first MONTH which
begins after such date. On the first day of such MONTH and each
subsequent MONTH, the Fuel Component in effect for the previous MONTH
is multiplied by an Escalation Factor which shall be determined as
follows:
The Escalation Factor shall be a fraction, the numerator of which is
PSE&G's CIG rate or its successor rate for the MONTH during which any
NET ELECTRICAL ENERGY is being delivered and the denominator of which
is the CIG rate for the prior MONTH.
(3) The GNP Deflator Component on December 1, 1988 shall be seventy-two
hundredths (.72) cent/kWh, which shall remain in effect through
December 31, 1989. On January 1, 1990 and on January 1 of each year
thereafter, the GNP Deflator Component in effect for the previous year
is multiplied by an escalation factor as determined below for the
purposes of determining the GNP Deflator Component to be in effect
during such year. The escalation factor shall be determined using the
annual Implicit Price Deflator for Gross National Product (GNP) in the
Survey of Current Business published by the United States Department of
Commerce/Bureau
-21-
of Economic Analysis as follows:
(a) Multiply the current GNP Deflator Component by the fraction of
which the numerator is the GNP Deflator (Preliminary) for the calendar
year prior to the current year and the denominator which is the GNP
Deflator (Final) for the second calendar year prior to the current
year.
(b) When the GNP Deflator (Final) is published, re-calculate the
current GNP Deflator Component by using the fraction of which the
numerator is the GNP Deflator (Final) for the calendar year prior to
the current year and the denominator which is the GNP Deflator (Final)
for the second calendar year prior to the current year.
(c) The total energy payment for months in which the GNP Deflator
(Preliminary) was used shall be be recalculated and the appropriate
adjustment shall be made during the next billing period.
SECTION B
MONTHLY CAPACITY CHARGE
The Monthly Capacity Charge shall be twenty-four and two tenths
percent (24.2%) of the NET ELECTRICAL CAPACITY during such month times a
capacity rate equal to eight dollars and seventy-six cents ($8.76) per kW-month
effective on December 1, 1988 and escalated at four and nine tenths percent
(4.9%) on January 1, 1990 and January 1 of each year thereafter for the duration
of this AGREEMENT.
-22-
1. Payment of the Monthly Capacity Charge shall be made in accordance with the
following:
(a) For the SUMMER SEASON PSE&G shall pay VENTURE in accordance with the
above Monthly Capacity Charge, but VENTURE shall not be entitled to
retain any amounts paid by PSE&G at a level of capacity in excess of
twenty-four and two tenths percent (24.2%) of the Net Seasonal Capacity
in Section C of ARTICLE II.
(b) For the WINTER SEASON PSE&G shall pay VENTURE in accordance with the
above Monthly Capacity Charge, but VENTURE shall not be entitled to
retain any amounts paid by PSE&G at a level of capacity in excess of
twenty-four and two tenths percent (24.2%) of the Net Seasonal Capacity
in Section C of ARTICLE II.
2. At the end of each SUMMER SEASON, PSE&G shall determine whether capacity in
excess of twenty-four and two tenths percent (24.2%) of the then Net Seasonal
Capacity nominated or renominated by VENTURE in Section C of ARTICLE II has
been delivered and sold to PSE&G. The total capacity delivered in such season
shall be determined by dividing the total number of kwh's actually delivered
by VENTURE during the ON-PEAK PERIOD of the SUMMER SEASON by the total of all
ON-PEAK hours during such SUMMER SEASON and multiplying the result by twenty-
four and two tenths
-23-
percent (24.2%). The excess capacity shall be the amount by which the total
capacity as determined above exceeds twenty-four and two tenths percent
(24.2%) of the SUMMER SEASON capacity nominated or renominated by VENTURE in
Section C of ARTICLE II, as adjusted for the actual average prevailing
ambient temperature.
If PSE&G has paid for and has not requested such excess capacity, PSE&G
shall be entitled to and VENTURE shall refund any excess capacity charges
paid pursuant to this paragraph, such refund to be equal to four times the
product of: (a) the excess capacity determined in this Section B 2 of ARTICLE
IV, and (b) the Monthly Capacity Charge determined pursuant to this ARTICLE
IV Section B. Any such refund shall be credited against and an adjustment
made on the Statement of Payment to VENTURE with regard to the month of
September.
3. At the end of each WINTER SEASON, PSE&G shall determine whether capacity in
excess of twenty-four and two tenths percent (24.2%) of the then Net Seasonal
Capacity nominated or renominated by VENTURE in Section C of ARTICLE II has
been delivered and sold to PSE&G. The total capacity delivered in such season
shall be determined by dividing the total number of kWh's actually delivered
by VENTURE during the ON-PEAK PERIOD of the WINTER SEASON by the total of all
ON-PEAK PERIOD hours during such WINTER SEASON and
-24-
multiplying the result by twenty-four and two tenths percent (24.2%). The
excess capacity shall be the amount by which the total capacity as determined
above exceeds twenty-four and two tenths percent (24.2%) of the capacity
nominated or renominated by VENTURE pursuant to Section C of ARTICLE II, as
adjusted for the actual average prevailing ambient temperature.
If PSE&G has paid for and has not requested such excess capacity, PSE&G
shall be entitled to and VENTURE shall refund any excess Capacity Charges for
said three (3) MONTH period, such refund to be equal to the sum of the
product of: (a) each MONTH of the three (3) MONTH excess capacity and (b) the
Monthly Capacity Charge pursuant to this ARTICLE IV Section B. Any such
refund shall be credited against and an adjustment made on the Statement of
Payment to VENTURE with regard to the month of February.
4. For purposes of this ARTICLE IV, Section B and Section E, it is agreed and
understood that the capacity nominated or renominated shall be value adjusted
to the average ambient temperature which actually prevailed during the ON-
PEAK PERIOD's of the applicable season. The procedure for adjustments which
shall be made by VENTURE using established correlations and/or vendor-based
performance curves or data depicting
-25-
capacity output of the COGENERATION FACILITY as a function of ambient
temperature shall be submitted to PSE&G for approval. VENTURE shall provide
PSE&G with all the information and calculations used to make such
adjustments if so requested by PSE&G.
Prevailing average ambient temperature for purposes of adjusting the
applicable nominated or renominated capacity shall be determined from
available meteorological data as measured at Newark International Airport,
Newark, New Jersey.
SECTION C
MONTHLY SERVICE CHARGE
PSE&G shall charge VENTURE a monthly service charge for metering and
administrative expenses, as set forth under the service charge portion of the
applicable Purchased Electric Power tariff then on file with the NJBPU.
SECTION D
RECOVERY OF PAYMENTS
Each PARTY, having entered into this AGREEMENT in good faith, hereby
waives all rights on its part now or hereafter to undertake any proceeding for
the sole purpose of having the purchase rate, as calculated in this ARTICLE IV
of this AGREEMENT, set aside as being unjust and unreasonable or of impairing or
disallowing the full and timely recovery of any payment made by PSE&G under this
AGREEMENT. Each PARTY recognizes, however, that subsequent
-26-
to execution and approval of this AGREEMENT, if any legislative or judicial
body or governmental agency having jurisdiction impairs or disallows the full
and timely recovery of any payments made by PSE&G under this AGREEMENT for
ratemaking purposes, then the PARTIES shall, within thirty (30) days thereafter,
execute an amendment to this AGREEMENT implementing the appropriate purchase
rate, which is that rate which the NJBPU or any successor will permit PSE&G to
recover on a full and timely basis from its ratepayers. Such a revised purchase
rate shall be effective as of the effective date of the legislative, judicial or
governmental agency pronouncement requiring such a revised purchase rate. Such
amendment and such revised rate shall be null and void ab initio in the event
that any such legislative, judicial or governmental agency pronouncement is not
upheld on appeal, and PSE&G shall, within thirty (30) days thereafter, pay to
VENTURE the amount by which the payments which would have been made under the
AGREEMENT in the absence of such amendment exceed the amount paid under such
amendment.
It is expressly agreed and understood that a prospective change in the
amount or the calculation of PSE&G's avoided cost within the meaning of PURPA
shall not give rise to a revision of the purchase price under this AGREEMENT
unless any legislative or judicial body or governmental agency having
jurisdiction disallows payments
-27-
made by PSE&G hereunder for ratemaking purposes in accordance with the provision
of this Section D.
It is also expressly agreed and understood that this Section D does
not in any way authorize or permit any legislative or judicial body or
government agency having jurisdiction to impair or disallow the full, and timely
recovery of any payments made by PSE&G under this AGREEMENT.
PSE&G agrees to give notice to VENTURE of any challenge to the
validity of the AGREEMENT or to the full and timely recovery of any payments
under this AGREEMENT from its ratepayers in any regulatory or judicial
proceeding, so as to permit VENTURE to intervene in such proceeding provided
that the failure of PSE&G to give notice shall not be deemed a breach of this
AGREEMENT so long as such failure was due to good faith error or omission; PSE&G
further agrees to refrain from objecting or in any way opposing any application
by VENTURE to intervene before any regulatory body or judicial forum, or
otherwise fully participate before such body or forum, in which the validity or
consequences of the AGREEMENT is subject to challenge. VENTURE and PSE&G further
agree to use their best efforts to defend the AGREEMENT before such regulatory
body or judicial forum.
SECTION E
REPLACEMENT ENERGY AND CAPACITY COSTS
Effective on January 1 of each year following the
-28-
first full year after the DATE OF COMMERCIAL OPERATION, if VENTURE fails to
generate and sell twenty-four and two tenths percent (24.2%) of the NET
ELECTRICAL POWER OUTPUT to PSE&G, and if this AGREEMENT has not been terminated
pursuant to ARTICLE XVI, VENTURE shall pay PSE&G Replacement Energy Costs and/or
Replacement Capacity Costs as provided below:
1. Replacement Energy Costs
For the purposes of this Section E, VENTURE shall be deemed to have
generated and sold a total amount of NET ELECTRICAL ENERGY to PSE&G at a
level for all ON-PEAK PERIOD hours during the SUMMER SEASON and WINTER
SEASON which shall be eighty-five percent (85%) of twenty-four and two
tenths percent (24.2%) of the Net Seasonal Capacity nominated or renominated
pursuant to Section C of ARTICLE II for such season, adjusted for the
average ambient temperature, multiplied by all ON PEAK hours during such
season (Average Generation). If twenty-four and two tenths percent (24.2%)
of the actual amount of NET ELECTRICAL ENERGY delivered by VENTURE to PSE&G
during all ON-PEAK PERIOD hours, for either the SUMMER SEASON or WINTER
SEASON including any credits calculated pursuant to Subparagraph 3 of this
Section E (Actual Generation) is less than the Average Generation, then
VENTURE shall pay PSE&G Replacement Energy Costs equal to the number of
kilowatthours by
-29-
which the Average Generation exceeds the Actual Generation, multiplied by
PSE&G's Cost of Replacement Energy. The Cost of Replacement Energy during
the SUMMER SEASON or WINTER SEASON shall be the amount by which the
projected average PJM Billing Rate, as shown on Exhibit 2, for all hours of
such season during such year exceeds the Adjusted Base Rate in effect during
such season.
2. Replacement Capacity Costs
For the purposes of this Section E, VENTURE shall be deemed to have provided
Net Seasonal Capacity to PSE&G at an average level for all ON-PEAK PERIOD
hours during the SUMMER SEASON and WINTER SEASON which shall be eighty-five
(85%) of twenty-four and two tenths percent (24.2%) of the Net Seasonal
Capacity then nominated or renominated pursuant to Section C of ARTICLE II
for each season adjusted to the average ambient temperature (Average
Capacity). The Average Capacity for the second and third full years which
begin after the DATE OF COMMERCIAL OPERATION shall be based upon the actual
capacity achieved for all the ON-PEAX PERIOD hours during the SUMMER SEASON
and WINTER SEASON in the immediately preceding year. For all remaining years
of this AGREEMENT Average Capacity will be based upon an average of the
actual capacity during the SUMMER SEASONS and WINTER SEASONS
-30-
respectively of the three immediately preceding years. If the actual amount
of Net Seasonal Capacity provided by VENTURE to PSE&G during all ON-PEAK
PERIOD hours during such season, including any credits calculated pursuant
to Subparagraph 3 of this Section E (Actual Capacity) is less than the
Average Capacity, then the capacity charge paid to VENTURE for such season
shall be multiplied times the ratio of the Actual Capacity divided by the
Average Capacity. The difference between the reduced capacity charge
determined above and the actual capacity charge paid to VENTURE shall be
refunded to PSE&G.
3. Performance Waiver Provision
In the event VENTURE shall incur (i) an event of Force Majeure in accordance
with ARTICLE XII, or (ii) a curtailment in accordance with ARTICLE II,
Section D(2), (3), (4), (5) or (6), then a credit towards VENTURE's Actual
Generation (Generation Credit) during either the SUMMER SEASON or WINTER
SEASON shall be calculated as follows:
GC = AG x (Nu divided by Nt) x (He divided by Ht)
Where GC = Generation Credit Per Affected Generator
AG = Average Generation
Nu = Nameplate Rating of Affected Generator
Nt = Total Nameplate Rating of all Generators
He = Lost ON-PEAK PERIOD Hours
Ht = Total ON-PEAK PERIOD Hours
-31-
In addition, should VENTURE incur an event described in (i) or (ii),
as set forth above, then a credit towards VENTURE's Actual Capacity (Capacity
Credit) shall be calculated as follows:
CC = AC x (Nu divided by Nt) x (He divided by Ht)
Where CC = Capacity Credit per Affected Generator
AC = Average Capacity
4. Payment of Replacement Energy and Capacity Costs
Within sixty (60) days subsequent to the close of each season, PSE&G
shall submit to VENTURE a Replacement Energy Cost and Replacement
Capacity Cost Statement (Statement), setting forth the amount of any
payment to be made by VENTURE to PSE&G pursuant to this ARTICLE IV,
Section E. VENTURE shall make payment to PSE&G within thirty (30) days
of the date of the Statement.
This ARTICLE IV, Section E sets forth the methodology for calculating
Replacement Energy Costs and Replacement Capacity Costs to be paid to PSE&G in
the event VENTURE fails to fulfill certain performance obligations and if this
AGREEMENT has not been terminated pursuant to ARTICLE XVI. The inclusion of such
provision is not intended to create any express or implied right in VENTURE to
terminate this AGREEMENT. Termination of this AGREEMENT by VENTURE, except as
provided for in ARTICLE XVI or in the exercise of its rights under ARTICLE XVII
following a determination that PSE&G has breached this AGREEMENT, shall
-32-
constitute a breach of this AGREEMENT.
SECTION F
SECURITY PROVISION
1. A Payment Tracking Account, an illustration of which is made a part
of this AGREEMENT as Exhibit 2, shall be established on the DATE OF COMMERCIAL
OPERATION to define the cumulative difference between the projected payments to
be made by PSE&G to VENTURE under this AGREEMENT (Projected Contract Payment)
and the projected payments which would have been made if such payments were
based on the PJM Billing Rate for energy and the PJM Capacity Deficiency Rate
for capacity (hereinafter referred to as the PJM Price), as shown in Exhibit 2.
The Payment Tracking Account shall not be funded, and any balance in the Payment
Tracking Account shall accrue interest at a rate equal to the Prime Rate of The
Chase Manhattan Bank, N.A., New York, New York, on January lst of each year but
in no event shall the interest rate applied to this account exceed thirteen
percent (13%).
2. For each twelve (12) MONTH period (Period) after the DATE OF
COMMERCIAL OPERATION, the Payment Tracking Account shall be calculated by PSE&G
pursuant to Exhibit 2 as follows:
(a) The difference (Difference Value) between the Projected Contract
Payment (Rate A) and the PJM Price (Rate B) shown in column headed
Rate A - Rate B, is fixed, for the term of the AGREEMENT, as shown for
each year.
-33-
(b) The Energy column is shown for illustrative purposes only, and twenty-
four and two tenths percent (24.2%) of the actual NET ELECTRICAL
ENERGY delivered and sold to PSE&G for each Period will be used to
calculate the annual amount to be included in the Payment Tracking
Account.
(c) The interest rate shown in the Cumulative column is shown for
illustrative purposes only. The interest rate to be applied annually
to the balance in the Cumulative column is specified in Paragraph 1 of
this Section F.
(d) The Cumulative amount in the Payment Tracking Account at the end of
the first Period will be determined by multiplying the Difference
Value (cents/kWh) for year one (1) by twenty-four and two tenths
percent (24.2%) of the NET ELECTRICAL ENERGY actually delivered and
sold to PSE&G during the Period.
(e) The Cumulative amount for each subsequent Period will be the algebraic
sum of the (i) Cumulative amount in the Payment Tracking Account at
the start of each Period; (ii) interest rate multiplied by the
cumulative amount in the Payment Tracking Account from (i) above;
(iii) Difference Value for that Period from (a), multiplied by twenty-
four and two tenths percent (24.2%) of the NET ELECTRICAL ENERGY
actually delivered and sold
-34-
to PSE&G during such Period minus (iv) all Replacement Energy Payments
during such Period under this ARTICLE IV, Section E.
3. The Payment Tracking Account shall be closed at the end of the
Period in which the account equals zero or has a credit balance. If the Payment
Tracking Account has not been closed by the end of the initial term of this
AGREEMENT, VENTURE shall at VENTURE's option either: (1) pay any credit balance
due to PSE&G and the Payment Tracking Account shall thereupon be closed; or (2)
continue sales to PSE&G from the PROJECT under terms that will reduce the
balance due to PSE&G to zero over a maximum period of five (5) years which terms
may include, at VENTURE's request provided notice is given at least three (3)
years prior to the end of the initial term of this AGREEMENT and with PSE&G's
and NJBPU's approval, the sale of the entire output of the COGENERATION FACILITY
to PSE&G as long as such sales to PSE&G shall be for not less than one (1) year
in duration; provided, however, that if this AGREEMENT is terminated prior to
the end of the initial term specified in ARTICLE III following a breach of this
AGREEMENT by VENTURE, VENTURE shall pay any balance in the Payment Tracking
Account to PSE&G over the remaining years of the initial term of this AGREEMENT
or over a five (5) year period, whichever is shorter, including interest that
will accumulate as long as a balance exists in the Payment Tracking Account. The
Payment Tracking Account shall be
-35-
deemed closed at such time as VENTURE has repaid all such monies to PSE&G.
Notwithstanding the foregoing, if this AGREEMENT is terminated prior
to the end of the initial term specified in ARTICLE III following a breach by
PSE&G resulting in termination of the AGREEMENT, VENTURE shall pay PSE&G the
amount, if any, by which any balance in the Payment Tracking Account exceeds the
damages found to be due to VENTURE as a result of such default. VENTURE shall
not be required to make any such payments following a default by PSE&G until
there has been a final determination of the amount of damages due to VENTURE
(Determination Date). Following the Determination Date, any amount due to PSE&G
shall be paid ratably during the period of time between the Determination Date
and the date on which, based on circumstances in existence as of such date, the
Payment Tracking Account would have terminated if PSE&G had not defaulted. The
unpaid portion of such an amount due PSE&G shall bear interest at the rate
specified in Paragraph 1 of this Section F.
4. To secure the obligation of VENTURE described in this Section F,
VENTURE shall provide security in accordance with the terms of this paragraph 4.
(a) Definitions. When used in this paragraph 4, the following terms shall
have the respective meanings set forth below:
(1) Contract Security Schedule - The Schedule
-36-
prepared by VENTURE pursuant to Subparagraph (d) of this
Paragraph 4.
(2) Fair Market Value - The Fair Market Value of the COGENERATION
FACILITY determined pursuant to Subparagraph (c) of this
Paragraph 4.
(3) Lien - A lien or other security interest in the COGENERATION
FACILITY created in connection with the financing or refinancing
of the COGENERATION FACILITY and secured by the COGENERATION
FACILITY.
(4) PSE&G Security Value - At any time, the PSE&G Security Value
shall be the Fair Market Value of the COGENERATION FACILITY less
the outstanding principal amount of any obligation secured by a
Lien.
(b) In order to secure the repayment obligation of VENTURE under this
Section F, VENTURE will provide security in the form of a letter of credit
satisfactory to PSE&G for ten percent (10%) of any balance in the Payment
Tracking Account in any Period. VENTURE may propose other forms of security in
lieu of the letter of credit required under this Subparagraph (b) of Paragraph
4, which other forms may include insurance, performance bonds, or corporate
guarantees or any combination thereof. The acceptance or rejection of such
proposal shall be at PSE&G's sole discretion.
-37-
(c) Valuation.
(1) For the purposes of this Paragraph 4, the Fair Market Value of the
COGENERATION FACILITY at any time shall be the summation of (a)
the present value of projected future earnings, before interest
and income taxes, (hereinafter referred to as EBIT), for each
year, or fraction thereof, of the remaining initial term of the
AGREEMENT and (b) the Residual Value of the COGENERATION
FACILITY. The present value of the EBIT for each remaining year
or fraction thereof shall be determined using a discount factor
based on PSE&G's then current incremental cost of capital for
that year. The cost of capital will be the blended cost,
reflecting the cost of debt and equity to PSE&G on an after tax
basis and shall be determined in accordance with generally
accepted accounting principles by outside financial auditors
normally used by PSE&G.
EBIT shall be calculated by subtracting projected operating
expenses from projected revenues. Projected revenues shall be the
projected payments to VENTURE under this AGREEMENT, plus any other
projected payments made by third parties to VENTURE from the
-38-
operation of the COGENERATION FACILITY pursuant to the contracts which
would inure to the benefit of a purchaser of the COGENERATION FACILITY.
Projected operating expenses shall mean projected costs to VENTURE for
the following items:
(i) Fuel
(ii) COGENERATION FACILITY administrative, management, operating and
maintenance personnel whose place of work is the COGENERATION
FACILITY, including all required benefits and employee-related
overheads.
(iii) Maintenance materials and supplies and spare parts.
(iv) Expenses for subcontract maintenance and third party services
related to operating and maintaining the COGENERATION FACILITY.
(v) Cost of insurance maintained by the COGENERATION FACILITY.
(vi) Taxes paid to the City of Bayonne and/or County of Xxxxxx.
The Residual Value of the COGENERATION FACILITY at any time shall
be based on the value of its equipment and other components when
dismantled and sold into the used
-39-
equipment market. For the purposes of this Subparagraph (c) of
Paragraph 4, the Residual Value shall not reflect any potential future
earnings of the COGENERATION FACILITY even if it had useful life
remaining and were to remain in place at the property of BAYONNE.
Notwithstanding the foregoing, upon consent of PSE&G, such
consent not to be unreasonably withheld, the Residual Value may reflect
potential future earnings of the COGENERATION FACILITY beyond the
initial term of this AGREEMENT provided that VENTURE provides evidence
satisfactory to PSE&G that: (i) the COGENERATION FACILITY has
sufficient remaining useful life beyond the primary term, and that (ii)
a willing or legally obligated purchaser of power exists who would pay
for such power at rates which would produce a positive EBIT. Such
evidence shall be deemed satisfactory if submitted to PSE&G by an
appraiser mutually acceptable to the PARTIES.
VENTURE shall develop without the use of outside appraisers the
projected revenues and expenses as well as the Residual Value. VENTURE
will present its projections to PSE&G, such findings to be based on
actual
-40-
information from past operating performance including revenues, energy
generation revenues received and expenses incurred for the COGENERATION
FACILITY.
PSE&G will accept VENTURE'S projections if its own projections of
the present value of future EBITS and Residual Value do not differ from
those of VENTURE by more than ten percent (10%). PSE&G will review its
projections and supporting data with VENTURE. If PSE&G projections
differ by more than ten percent (10%), the determination of the Fair
Market Value shall be made by an independent appraiser mutually
acceptable to the PARTIES which shall be binding on both PARTIES.
(2) Determination of the Fair Market Value of the COGENERATION FACILITY
shall be made within thirty (30) days of the DATE OF COMMERCIAL
OPERATION, and thereafter when required by PSE&G but no more
frequently than once each Period. Except as provided in subparagraph
(3) of this Paragraph (c), the cost of any such appraisal shall be paid
by VENTURE.
(3) Either PARTY may request an appraisal of the COGENERATION FACILITY in
addition to that specified in Subparagraph (2) of this Paragraph (c)
above provided, however, that
-41-
the cost of any such appraisal if requested by
PSE&G shall be borne by PSE&G.
(d) Contract Security Schedule: Within thirty (30) days of the DATE OF
COMMERCIAL OPERATION, and on each occasion when PSE&G requires a valuation in
accordance with Subparagraph (2) of Paragraph (c) of this Section F, 4 until the
end of the period in which the Payment Tracking Account has a credit balance,
VENTURE shall prepare and submit to PSE&G a Contract Security Schedule showing,
for the following year, the following information:
(1) The Fair Market Value of the COGENERATION FACILITY.
(2) The PSE&G Security Value.
If at any time the PSE&G Security Value is less than one hundred fifty
percent (150%) of the balance in the Payment Tracking Account, PSE&G may at its
option require VENTURE to provide and maintain a letter of credit satisfactory
to PSE&G with regard to the amount by which the PSE&G Security Value is less
than one hundred fifty percent (150%) of the balance in the Payment Tracking
Account. To the extent that such amounts are not covered by any letter of credit
or other security provided pursuant to Subparagraph (b) of this Section F, 4,
VENTURE may propose other forms of security in lieu of the letter of credit
otherwise required pursuant to this Subparagraph (d) of Paragraph 4 which other
forms may include insurance, performance bonds, or corporate guarantees or any
-42-
combination thereof. The acceptance or rejection of such proposal shall be at
PSE&G's sole discretion.
ARTICLE V
BILLING AND PAYMENT
After the DATE OF COMMERCIAL OPERATION, PSE&G shall read its recording
meter(s) at the COGENERATION FACILITY MONTHly to determine the amount of payment
to be made to VENTURE for any MONTH in accordance with the provisions of ARTICLE
IV and shall thereafter prepare and present to VENTURE, on or before the last
day of the subsequent MONTH, a statement and payment by wire transfer for
twenty-four and two tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT
delivered to PSE&G during the MONTH. Such statement shall indicate the total
kilowatthours delivered and sold to PSE&G during the MONTH for both the ON-PEAK
PERIOD and the OFF-PEAK PERIOD, the Monthly Energy Charge, the Monthly Capacity
Charge and the Monthly service Charge as set forth in ARTICLE IV.
If the payment is not received by the due date specified above, PSE&G
shall pay to VENTURE an interest charge on unpaid amounts which shall accrue
daily from the due date until the date upon which payment is made at the then
current late payment charge for commercial customers prescribed in PSE&G's
Tariff for Electric Service, Standard Terms and Conditions as may be amended
from time to time.
In the event VENTURE disputes any statement,
-43-
VENTURE shall present the dispute in writing and submit supporting documentation
to PSE&G within a thirty (30) day period from receipt of such statement. Upon
receipt of notice of the dispute and supporting documentation, PSE&G shall have
thirty (30) days from receipt of such notice to resolve any dispute with
VENTURE. In the event the dispute is not resolved within the thirty (30) day
period, either PARTY may submit the matter to arbitration for resolution in
accordance with ARTICLE XVII. The disputed amount of any statement disputed by
VENTURE, in accordance with the provisions of this ARTICLE V, which is
ultimately determined to be due and owing by PSE&G to VENTURE, from the date
originally due shall, until payment, accrue interest at the then current late
payment charge for commercial customers prescribed in PSE&G's Tariff for
Electric Service, Standard Terms and Conditions as may be amended from time to
time.
ARTICLE VI
OPERATIONS COORDINATION
During any term of this AGREEMENT, VENTURE shall use best efforts to
coordinate the operation of the PROJECT with the operation of the PUBLIC SERVICE
SYSTEM. To discharge its best efforts obligation to coordinate operation of the
PROJECT with the PUBLIC SERVICE SYSTEM, VENTURE shall: (i) maintain a power
factor at or as near unity as practicable at the RECEIPT POINT, unless requested
otherwise by PSE&G; (ii) control its voltage and speed to
-44-
values acceptable to PSE&G consistent with sound utility practice; (iii)
coordinate its relaying and fusing so as to conform with PSE&G's system
protection practices, in effect from time to time; (iv) maintain the PROJECT in
a safe and reliable operating condition; (v) submit to PSE&G the MONTHLY
schedules and estimates required by this ARTICLE VI; and (vi) perform such other
actions, as may be reasonably requested by PSE&G, to enable PSE&G to (a) operate
the PUBLIC SERVICE SYSTEM in a safe and reliable manner; and (b) operate the
PUBLIC SERVICE SYSTEM so as to discharge PSE&G's statutory obligations to
provide safe, adequate and proper service to its retail and sale-for-resale
customers. Each PARTY shall use its best efforts to operate the COGENERATION
FACILITY and the PUBLIC SERVICE SYSTEM with due regard for the PUBLIC SERVICE
SYSTEM and the COGENERATION FACILITY.
As of the DATE OF COMMERCIAL OPERATION, VENTURE shall provide to PSE&G
by the first (1st) day of each MONTH the following: (i) an hourly schedule of
the estimated NET ELECTRICAL CAPACITY VENTURE plans to supply to the RECEIPT
POINT for acceptance and purchase by PSE&G in the succeeding MONTH; (ii) an
estimate of the generation of NET ELECTRICAL ENERGY which VENTURE plans to
supply to the RECEIPT POINT for acceptance and purchase by PSE&G in the
succeeding MONTH; (iii) an estimate of the generation of NET ELECTRICAL ENERGY
which VENTURE plans to supply to the RECEIPT POINT for acceptance and purchase
by PSE&G for the succeeding twelve (12) MONTHS; and (iv) the names and
-45-
telephone numbers of responsible management level employees for contact by PSE&G
personnel at any time during the succeeding MONTH relative to any matter arising
out of, relating to, or resulting from PSE&G's obligation to provide service to
VENTURE under this AGREEMENT. In addition, VENTURE shall furnish to PSE&G
annually a schedule of planned maintenance and/or repair activities for the
succeeding thirty-six (36) MONTHS. VENTURE agrees to use its best efforts to
schedule planned maintenance only during the MONTHS of October, November, March,
April and May.
VENTURE agrees to notify PSE&G of its planned maintenance at least one
(1) MONTH prior to a scheduled outage. PSE&G will review the effect of the
proposed schedule on the overall maintenance schedules of PJM and PSE&G and
advise VENTURE of problems that may be created by VENTURE's scheduled outage
within ten (10) days of receipt of VENTURE's notice and suggest reasonable
alternative schedules.
Except in an emergency, VENTURE shall give prior notice of not less
than eight (8) hours for any anticipated outage other than planned maintenance.
VENTURE agrees to attempt to give notice to PSE&G as soon as practical in the
event of emergencies or other unanticipated outages.
VENTURE shall complete regular and required maintenance, testing and
inspections of the COGENERATION FACILITY substantially in accordance with
manufacturer's standard recommendations.
-46-
VENTURE shall not violate any code, regulation and/or statute
applicable to the construction, installation, or operation of the
interconnection equipment and protective devices on VENTURE's side of the
RECEIPT POINT which violation is adverse to PSE&G.
VENTURE shall maintain and classify (in a timely manner) outage
statistics in accordance with the then current PJM interconnection outage
classification procedures and shall supply such statistics to PSE&G as
requested.
Pursuant to and consistent with VENTURE's obligation to coordinate
operation of the PROJECT with the operation of the PUBLIC SERVICE SYSTEM,
VENTURE shall install and maintain, at its expense, during any term of this
AGREEMENT, a telephone line reserved for communication by and between PSE&G
operating personnel and VENTURE operating personnel.
PSE&G shall use best efforts to coordinate PUBLIC SERVICE SYSTEM
maintenance, repair, rearrangement, relocation, removal or reinforcement
activities with VENTURE's planned maintenance of the COGENERATION FACILITY so as
to minimize any interruption, curtailment or reduction of acceptance of the
COGENERATION FACILITY's NET ELECTRICAL POWER OUTPUT; provided, however, the
scheduling, implementation and conduct of such activities by PSE&G shall remain
within the sole discretion of PSE&G. PSE&G will provide a schedule of planned
maintenance to VENTURE as soon
-47-
as is practicable after such a schedule is available for distribution.
ARTICLE VII
NET ELECTRICAL POWER OUTPUT SPECIFICATIONS
The NET ELECTRICAL POWER OUTPUT supplied by VENTURE to the RECEIPT
POINT for receipt by PSE&G during the term of this AGREEMENT shall be at a
nominal voltage of 138,000 volts, 60 hertz, balanced three-phase alternating
current produced by synchronous generator(s) equipped with automatic voltage
regulation and automatic speed control. The NET ELECTRICAL POWER OUTPUT shall be
free from harmonics which would interfere with PSE&G's metering accuracy, the
PUBLIC SERVICE SYSTEM, or the quality of PSE&G's service to its retail and
sale-for-resale customer loads. In no event shall the operation of the
COGENERATION FACILITY result in total harmonic distortion as defined by NEMA MG
1-22, as revised, greater than five percent (5%) of the fundamental component as
measured at the POINT OF INTERCONNECTION.
ARTICLE VIII
METERING/RECORDS
PSE&G shall install, own, operate and maintain an electricity
recording meter at the SUBSTATION FACILITY which, in the judgment of PSE&G, is
required or necessary to enable PSE&G to make an accurate measurement of the
quantity
-48-
of NET ELECTRICAL POWER OUTPUT received at the RECEIPT POINT from the
COGENERATION. The electricity recording meter shall be the same meter as
provided in and in accordance with ARTICLE XII of the TRANSMISSION AGREEMENT.
Unless otherwise agreed to by PSE&G and VENTURE and/or except as
otherwise provided in the TRANSMISSION AGREEMENT and this AGREEMENT, PSE&G's
electricity recording meter shall be utilized for the determination of the
payments reflected in any billing statement submitted to VENTURE under this
AGREEMENT.
ARTICLE IX
USE OF THE PUBLIC SERVICE SYSTEM
The nature and extent of and the terms and conditions relating to
VENTURE's use of the PUBLIC SERVICE SYSTEM are set forth in their entirety in
this AGREEMENT and the TRANSMISSION AGREEMENT. Except as otherwise provided in
and pursuant to the terms and conditions of any applicable PSE&G tariff on file
with the NJBPU or the FERC, VENTURE shall not be permitted to use the PUBLIC
SERVICE SYSTEM nor shall PSE&G be obligated to provide any service to VENTURE,
other than as provided in this AGREEMENT and the TRANSMISSION AGREEMENT. Any
rights to or interest in the PUBLIC SERVICE SYSTEM which VENTURE has or may
claim as a result of this AGREEMENT shall cease or expire upon termination of
this AGREEMENT.
-49-
ARTICLE X
DEDICATION OF FACILITIES
No undertaking by PSE&G under any provision of this AGREEMENT shall
constitute the dedication to VENTURE or to the public of the PUBLIC SERVICE
SYSTEM.
ARTICLE XI
LIABILITY
Neither PARTY nor its officers, directors, partners, agents, servants,
employees, affiliates, parent, subsidiaries or respective successors or assigns
shall be liable to the other PARTY (except for Replacement Energy and Capacity
Costs as provided for in ARTICLE IV of this AGREEMENT or as otherwise
specifically provided in this AGREEMENT) for claims for incidental, special,
direct, indirect or consequential damages (Damages) whether such Damages claim
is based on a cause of action based in warranty, negligence, strict liability,
contract, operation of law or otherwise except where such claim for Damages
arises out of, relates to or results from the gross negligence of such PARTY or
the willful disregard by a PARTY of its obligations under this AGREEMENT;
provided, however, each PARTY shall have the right to seek to recover from the
other PARTY direct damages upon the occurrence of a breach of this AGREEMENT as
defined in and which has been established pursuant to and in accordance with
ARTICLE XVI of this AGREEMENT.
-50-
ARTICLE XII
FORCE MAJEURE
An event of Force Majeure as used herein means an event beyond the
reasonable control of and which occurs without the fault or negligence of the
PARTY claiming Force Majeure which events may include but are not limited to:
acts of God; strikes, lockouts or other similar such industrial disturbances;
acts of the public enemy, wars, civil disturbances, blockades, military actions,
insurrections or riots; landslides, floods, washouts, lightning, earthquakes,
tornadoes, hurricanes, blizzards or other storms or storm warnings; explosions,
fires, sabotage or vandalism; mandates, directives, orders or restraints of any
governmental, regulatory or judicial body or agency (other than mandates,
directives, orders or restraints either sought, approved or not contested by the
PARTY asserting Force Majeure or issued in any bankruptcy or insolvency
proceeding for the relief of the PARTY asserting Force Majeure); breakage,
defects, malfunctioning, or accident to machinery, equipment, materials or lines
of pipe or wires; freezing of machinery, equipment, materials or lines of pipe
or wires; inability or delay in the obtaining of materials or equipment;
inability to obtain or utilize any permit, approval, easement, license or right-
of-way. The settlement of strikes, lockouts or other similar such industrial
disturbances shall be entirely within the discretion of the PARTY directly
affected. The requirement
-51-
herein that any event of Force Majeure shall be remedied with all reasonable
dispatch shall not require the settlement of strikes, lockouts or other similar
such industrial disturbances when such course is, in the opinion of the PARTY
directly affected, inadvisable.
Notwithstanding this ARTICLE XII, for purposes of determining
VENTURE's payment of Replacement Energy and Replacement Capacity Costs as
provided in ARTICLE IV, Section E, an event of Force Majeure shall not include
equipment failures due to (a) ordinary wear and tear and (b) defects in
manufacture, design or construction.
In the event PSE&G or VENTURE is rendered unable, wholly or in part,
by an event of Force Majeure, to perform any obligation it has under this
AGREEMENT, it is agreed that, on PSE&G or VENTURE giving notice and full
particulars of such event of Force Majeure to the other PARTY, as soon
thereafter as practicable, the obligations of PSE&G or VENTURE, so far as they
are affected by such event of Force Majeure, shall be suspended during the
continuance of any inability or incapacity so caused, but for no longer period;
provided however, neither PARTY shall be relieved from any obligation to make
payment to the other for expenses already incurred. PSE&G or VENTURE shall use
best efforts to remedy the cause of such inability or incapacity with all
reasonable dispatch.
Neither PARTY shall be liable to the other for any claims, losses,
damages, liabilities or expenses sustained
-52-
or incurred by PSE&G or VENTURE, arising out of, relating to, or resulting from
PSE&G's or VENTURE's inability or incapacity to perform its obligations under
this AGREEMENT due to any event of Force Majeure, as herein defined.
ARTICLE XIII
INDEMIFICATION
Each PARTY shall indemnify and hold harmless the other PARTY and each
and every of its officers, directors, partners, agents, servants, employees,
affiliates, parent, subsidiaries or respective successors and assigns of, from
and against any and all claims, demands and suits, actions, and liabilities,
losses, damages, and/or judgments, which may arise therefrom, as well as against
any fees, costs, charges or expenses which PSE&G or VENTURE, its officers,
directors, partners, agents, servants, employees, affiliates, parent,
subsidiaries or respective successors and assigns, incur in the defense of any
such claims, suits, actions or similar such demands made or filed by any third-
party, which in any manner arise out of, relate to, or result from negligence,
strict liability or breach of this AGREEMENT by the indemnifying PARTY including
but not limited to the design, construction, engineering, installation,
operation, maintenance, repair, replacement, supervision, inspection, testing,
protection, reinforcement, reconstruction, decommissioning, removal, use,
control or ownership of its facilities.
-53-
In case a claim is asserted or action brought against either PARTY as
to which it believes it is entitled to indemnification under this ARTICLE XIII,
the PARTY seeking indemnification shall promptly notify the other in writing of
such claim or action. Prompt notice as contemplated in the preceding sentence
shall mean such notice as would be required to enable the indemnitor to assert
and prosecute appropriate defenses relative to such claim or such action in a
timely fashion. If the PARTY seeking indemnification fails to give the other
PARTY prompt notice of any claim or action as provided in this ARTICLE XIII,
that PARTY shall have no obligation to indemnify pursuant to this ARTICLE XIII.
Upon receipt of such notice request for indemnification, that PARTY shall
promptly make a determination of whether it believes it is required to indemnify
and shall promptly notify the PARTY seeking indemnification in writing of that
determination. If the PARTY to whom such notice and request is directed
determines that it is required to indemnify the other PARTY pursuant to this
ARTICLE XIII, it shall Assume the defense of such claim or action, including the
employment of counsel and shall assume thereafter the payment of all costs and
expenses relative to the defenses of such claim or action. The non-indemnifying
PARTY shall cooperate in all reasonable respects with the indemnifying PARTY in
the defense of such claim or action. The non-indemnifying PARTY shall have the
right, at its own expense, to employ separate counsel in any
-54-
such action and to participate in the defense thereof. The indemnifying PARTY
shall not be liable for any settlement of any such claim or action effected
without its consent. Before settling any claim or action, the indemnifying PARTY
shall demonstrate to the other that it has sufficient financial means or has
made adequate arrangements to make all payments under any such settlement as and
when due.
ARTICLE XIV
INSURANCE
1. As of the DATE OF COMMERCIAL OPERATION, VENTURE shall obtain and
maintain in force as hereinafter provided to the extent commercially
available on reasonable terms:
(a) comprehensive general liability insurance, including contractual
liability coverage with a combined single limit of not less than five
million dollars ($5,000,000) for each occurrence;
(b) workmen's compensation or employee's liability insurance policy in
accordance with applicable New Jersey statutory requirements; and
(c) property insurance covering physical loss or damage to the COGENERATION
FACILITY which shall include the following:
(i) "boiler and machinery" property damage insurance with respect to
damage to the machinery, plant, equipment, storage
-55-
facilities or similar apparatus included in the COGENERATION
FACILITY from risks normally insured against under machinery
policies in an amount equal to the replacement value of such
machinery, plant, equipment, storage facilities or similar
apparatus; and
(ii) business interruption insurance to provide coverage against loss
resulting from interruption of business and consequent reduction
in gross revenues caused by damage to the COGENERATION FACILITY
and extra expense incurred to continue the normal operation of
business following such damage in an amount at least equal to one
(1) year's gross operating revenues, minus non-continuing
expenses, including (to the extent commercially available)
coverage against loss resulting from interruption of business
arising because of damage to boilers and machinery.
Such property insurance may include deductible amounts for the account of
VENTURE not to exceed the following:
(1) all-risk property coverage - $250,000;
(2) boiler and machinery - $250,000 except $250,000 per occurrence
with respect to the gas turbines; $250,000 with respect to the
-56-
steam turbine and $1.00 per KVA for the transformers; and
(3) business interruption coverage - 60 days.
2. The insurance carrier or carriers and form of policy shall be subject
to prior review and approval of PSE&G to assure compliance with provisions
of Paragraph 1 above, and shall be furnished by VENTURE to PSE&G within
thirty (30) days of the DATE OF COMMERCIAL OPERATION and thereafter on or
before January 1 of each year until this AGREEMENT is terminated. VENTURE
hereby agrees to provide PSE&G with at least thirty (30) days notice of:
(a) the cancellation of any policy of insurance required by this ARTICLE
XIV; or
(b) the reduction of any coverage below the levels required by this ARTICLE
XIV.
VENTURE shall also provide to PSE&G evidence of satisfactory workmen's
compensation coverage.
3. Within thirty (30) days of the DATE OF COMMERCIAL OPERATION, VENTURE
shall furnish a certificate of insurance to PSE&G which certificate shall
provide that such insurance shall not be terminated nor expire except upon
thirty (30) days prior written notice to PSE&G, and shall bear in substance
the following clauses:
(a) In consideration of the premium charged, PSE&G is named as an
additional insured in accordance with
-57-
the terms of said policy and for acts and or omissions that are solely
and directly caused by VENTURE on VENTURE's comprehensive general
liability insurance with respect to all covered liabilities arising
out of VENTURE's use and ownership of the COGENERATION FACILITY.
(b) The inclusion of more than one insured under this policy shall not
operate to impair the rights of one insured against another insured;
and the coverages afforded by this policy will apply as though
separate policies had been issued to each insured. The inclusion of
more than one insured will not, however, operate to increase the limit
of the carriers' liability. PSE&G will not, by reason of its
inclusion under this policy, incur liability to the insurance carrier
for payment of premium for this policy.
(c) Any other insurance carried by PSE&G which may be applicable shall be
deemed excess insurance and VENTURE's insurance primary for all
purposes despite any conflicting provision in VENTURE's policy to the
contrary.
(d) It is expressly agreed and understood that the insurer(s) of the
COGENERATION FACILITY, naming PSE&G as an additional insured, shall
waive any right it has to subrogation with respect to PSE&G.
-58-
4. VENTURE shall maintain such insurance in effect for so long as the
COGENERATION FACILITY is operated in parallel with PSE&G's electric system.
If VENTURE fails to comply with the provisions of this ARTICLE XIV,
Paragraph 4, VENTURE shall, at its own cost, defend, indemnify, and hold
harmless PSE&G, its directors, officers, employees, agents, assigns, and
successors in interest from and against any and all loss, damage, claim,
cost, charge, or expense of any kind of nature (including direct,
indirect, or consequential loss, damage, claim, cost, charge, or expense,
including attorney's fees and other costs of litigation) resulting from the
death or injury to any person or damage to any property, including the
personnel and property of PSE&G, to the extent that PSE&G would have been
protected had VENTURE complied with all of the provisions of this ARTICLE
XIV.
ARTICLE XV
WARRANTIES
Except with respect to any lien possessed by a FINANCIER, VENTURE
warrants and shall be obligated to supply to this RECEIPT POINT twenty-four and
two tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT free and clear of
any liens and/or adverse claims which might attach to such NET ELECTRICAL POWER
OUTPUT prior to its delivery and sale to PSE&G. VENTURE agrees to indemnify and
hold harmless
-59-
PSE&G against any and all claims, demands, suits, actions, costs, and
liabilities, damages, losses and/or judgments arising out of, relating to or
resulting from any such adverse claim or lien, as well as against any fees,
costs, charges or expenses which PSE&G might incur in the defense of any such
claim, suit, action or similar such demand made or filed by such person, its
successors or assigns, asserting such adverse claim. In effecting the right of
or obligation to indemnify pursuant to and in accordance with the provisions of
this ARTICLE XV the procedural provisions set forth in ARTICLE XIII of this
AGREEMENT shall govern.
ARTICLE XVI
EVENTS OF DEFAULT AND BREACH OF CONTRACT
SECTION A
DEFAULT BY VENTURE
VENTURE shall be in default under this AGREEMENT upon the happening or
occurrence of any of the following events or conditions, each of which shall be
deemed to be an "Event of Default," and each of which shall be considered a
breach of contract for purposes of this AGREEMENT unless (i) it is cured in
accordance with the provisions specified below, and (ii) VENTURE compensates
PSE&G for any direct damages which PSE&G suffers as a result of such default.
1. VENTURE breaches or fails to observe or perform, any of the obligations,
covenants, conditions, services or responsibilities under this
AGREEMENT, unless,
-60-
within thirty (30) days after written notice from PSE&G specifying the
nature of such breach or failure, VENTURE either cures such breach or
failure or, if such cure cannot be completed within thirty (30) days,
commences and diligently pursues such cure.
2. There is an assignment for the benefit of VENTURE's creditors, or
VENTURE is adjudged bankrupt, or a petition is filed by or against
VENTURE under the provisions of any state insolvency law or under the
provisions of the Federal Bankruptcy Code, or the business or principal
assets of VENTURE are placed in the hands of a receiver, assignee or
trustee, or VENTURE is dissolved, or VENTURE's existence is terminated,
or its business is discontinued; provided, however, that the events
described in this Paragraph 2 shall not constitute an Event of Default
or otherwise affect the validity of this AGREEMENT, so long as the
terms, covenants and conditions of this AGREEMENT on the part of VENTURE
are performed, and in such event, this AGREEMENT shall continue to
remain in full force in accordance with the terms herein contained.
3. VENTURE takes any actions which prevent PSE&G from performing any of the
obligations, covenants, conditions, responsibilities or services under
this AGREEMENT, unless, within thirty (30) days
-61-
after written notice from PSE&G specifying the nature of such action or
failure to act, VENTURE either cures such action or failure to act, or,
if a cure cannot be completed within thirty (30) days, submits a plan to
cure which is acceptable to PSE&G and commences and diligently pursues
such plan.
4. VENTURE, subsequent to the DATE OF COMMERCIAL OPERATION, fails to
deliver electric power to PSE&G for two hundred forty (240) days of
three hundred sixty-five (365) consecutive days for any reason other
than Force Majeure or a curtailment in accordance with ARTICLE II,
Section D(2), (3), (4), (5) or (6) of this AGREEMENT.
SECTION B
DEFAULT BY PSE&G
PSE&G shall be in default under this AGREEMENT upon the happening or
occurrence of any of the following events or conditions, each of which shall be
deemed to be an "Event of Default" and each of which shall be considered a
breach of contract for purposes of this AGREEMENT unless (i) it is cured in
accordance with the provisions specified below, and (ii) PSE&G compensates
VENTURE for any direct damages which VENTURE suffers as a result of such
default.
1. PSE&G breaches or fails to observe or perform any of the obligations,
covenants, conditions, services or responsibilities under this
AGREEMENT, unless within thirty (30) days after written notice from
VENTURE
-62-
specifying the nature of such breach or failure, PSE&G either cures such
breach or failure, or, if such cure cannot be completed within thirty
(30) days, commences and diligently pursues such cure.
2. PSE&G fails to accept deliveries of electricity from the COGENERATION
FACILITY for any reason other than a reason permitted under ARTICLE II
or ARTICLE XII of the AGREEMENT and such failure continues for a period
of thirty (30) days following receipt of notice of such failure.
3. There is an assignment for the benefit of PSE&G's creditors, or PSE&G is
adjudged bankrupt, or a petition is filed by or against PSE&G under the
provisions of any state insolvency law or under the provisions of the
Federal Bankruptcy Code, or the business or principal assets of PSE&G
are placed in the hands of a receiver, assignee or trustee, or PSE&G is
dissolved, or PSE&G's existence is terminated, or its business is
discontinued; provided, however, that the events described in this
Paragraph 3 shall not constitute an Event of Default or otherwise affect
the validity of this AGREEMENT, so long an the payment for twenty-four
and two tenths percent (24.2%) of the NET ELECTRICAL POWER OUTPUT
delivered by the VENTURE to PSE&G as provided under ARTICLE IV hereof
continues to be paid and the terms, covenents and conditions of this
AGREEMENT on
-63-
the part of PSE&G are performed, and in such event, this AGREEMENT shall
continue to remain in full force in accordance with the terms herein
contained.
4. PSE&G takes any actions which prevent VENTURE from performing any of the
obligations, covenants, conditions, responsibilities or services under
this AGREEMENT, unless within thirty (30) days after written notice from
VENTURE specifying the nature of such action or failure to act, PSE&G
either cures such action or failure to act, or, if such cure cannot be
completed within thirty (30) days, submits a plan to cure which is
acceptable to VENTURE and commences and diligently pursues such cure.
5. PSE&G fails to pay, when due, the payment provided under ARTICLE IV, and
such failure continues for a period of ten (10) days following the
receipt by PSE&G of notice of such failure; provided, however, PSE&G
shall not be considered in default if (i) it has paid the undisputed
portion of any payment due under this AGREEMENT and (ii) the PARTIES are
in the process of resolving any disputed portion in accordance with the
terms set forth in ARTICLE V of this AGREEMENT.
SECTION C
REMEDIES
In the event a PARTY claims that an Event of Default has occurred,
such PARTY shall provide the other
-64-
PARTY with written notice thereof (hereinafter referred to as Notice of Breach).
The Notice of Breach shall state the basis for such claim and any remedy sought.
The PARTIES shall have thirty (30) days within which to resolve the dispute via
negotiation. If within such thirty (30) day period after service of the Notice
of Breach, the PARTIES are unable to resolve their differences by negotiation,
either PARTY shall have the right to submit the dispute for resolution either to
arbitration pursuant to ARTICLE XVII or to any regulatory body having
jurisdiction.
The nature and extent of any damage incurred or sustained by the non-
breaching PARTY, as a result of any Event of Default shall be determined and
calculated as of the date the Event of Default commenced.
Except as otherwise provided in ARTICLE V and ARTICLE XVI of this
AGREEMENT, neither PARTY shall refuse to make, suspend or delay any payment(s)
otherwise required to be made under this AGREEMENT or refuse to carry out any of
its obligations under this AGREEMENT for or on account of or as a result of an
alleged breach of this AGREEMENT or Event of Default.
Any waiver by a PARTY of any breach or Event of Default shall be
deemed to extend only to the particular breach or Event of Default waived and
shall not limit or otherwise affect any right(s) that such PARTY may have with
respect to any other or future breach or Event of Default,
-65-
whether of a similar or different nature.
ARTICLE XVII
ARBITRATION
Any controversy, dispute or claim between the PARTIES to this
AGREEMENT, which the PARTIES are unable to resolve by negotiation or over which
any regulatory body lacks jurisdiction, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (AAA), then in effect, and the provisions of this ARTICLE XVII. If
arbitration is chosen by either PARTY, no suit at law which seeks to resolve any
controversy, dispute or claim which is the subject of this arbitration
proceeding between the PARTIES shall be instituted by either PARTY hereto,
except where such suit is instituted to confirm an arbitration award received
pursuant to this ARTICLE XVII. However, nothing contained herein shall deprive
either PARTY of any right to: (i) obtain injunctive or other equitable relief in
any court in the State of New Jersey, on an interim basis in accordance with
ARTICLE XVIII of this AGREEMENT or otherwise pending disposition of the
arbitration of any controversy, dispute or claim if such relief is available
under applicable principles of law and equity; and/or (ii) assert any crossclaim
or third-party claim in any suit at law instituted by a third-party; and/or
(iii) file and prosecute
-66-
any complaint at and with the regulatory agency having jurisdiction or make and
prosecute any claim or position in any filing made with such regulatory agency
by either PARTY or some third-party.
Except as provided under ARTICLE XVIII, any controversy, dispute or
claim submitted to arbitration shall be settled by arbitration in Newark, New
Jersey in accordance with the laws of the State of New Jersey. Any award entered
pursuant to such arbitration shall be binding on both PARTIES and judgment upon
the award rendered or received may be entered in the Superior Court of the State
of New Jersey pursuant to N.J.S.A. 2A:24-1 et seq.
Exclusive jurisdiction relative to the entry of judgment on any
arbitration award relative to any controversy or claim between the PARTIES shall
be in any court of appropriate subject matter jurisdiction located in New
Jersey, and the PARTIES to this AGREEMENT expressly subject themselves hereby to
the personal jurisdiction of said court for entry of any such judgment and for
the resolution of any dispute, action, or suit arising in connection with the
entry of such judgment.
The controversy or claim to be arbitrated shall be referred to three
(3) arbitrators, one to be selected by each PARTY and the third to be selected
by the AAA. The selections to be made by the PARTIES shall be made from the list
of the National Panel of Arbitrators maintained by the AAA. The arbitrator to be
selected by the AAA shall be
-67-
qualified to pass on any technical or engineering matters and shall be
independent of and acceptable to both PARTIES. All decisions and awards shall be
made by a majority of the arbitrators, except for decisions relating to
discovery as set forth herein.
In the event any arbitrator dies, or refuses to act, or becomes
incapable, incompetent or unfit to act before hearings have been completed
and/or before an award has been rendered, a successor arbitrator may be selected
by the Party, or the American Arbitration Association, as the case may be, who
originally made the selection. The selection of the successor arbitrator shall
be made consistent with the selection procedure set forth in the preceding
paragraph.
The arbitrators selected pursuant to this AGREEMENT shall be governed
by and apply the laws of the State of New Jersey and federal law, as applicable,
in conducting any arbitration proceeding and/or in making any award provided
that the PARTIES agree that the arbitrators may impose the remedy of specific
performance without regard to otherwise applicable New Jersey law.
Notice of a demand for arbitration (hereinafter referred to as Demand
for Arbitration) of any controversy or dispute between the PARTIES shall be
filed in writing with the AAA by the PARTY seeking arbitration and a copy of
same shall be served contemporaneously with such filing on the other PARTY. The
notice shall state, with specificity, the
-68-
nature of the dispute and the remedy sought. After such notice has been filed,
the PARTIES may make discovery of any matter relevant to such dispute before the
hearing, to the extent and in the manner provided by the Rules Governing Civil
Practice in the Superior Court contained in the Rules Governing the Courts of
the State of New Jersey. Any question that may arise with respect to the
obligations of the PARTIES relative to discovery and/or relative to the
protection of the discovery materials shall be referred solely to the arbitrator
selected by the AAA. His determination shall be final and conclusive. Discovery
shall be completed not later than ninety (90) days after filing of the notice of
arbitration unless such period for discovery is extended by the arbitrator
selected by the AAA, upon a showing of good cause by either PARTY to the
arbitration.
The arbitrators may consider any material which is relevant to the
subject matter of any such controversy even if such material might also be
relevant to an issue or issues not subject to arbitration hereunder. A
stenographic record shall be made of any arbitration hearing.
Any costs associated with any arbitration under this ARTICLE XVII,
including but not limited to attorney fees and witness expenses, shall be paid
by the PARTY against whom an award is entered unless the arbitrators by their
award otherwise provide.
-69-
Arbitration may not be utilized and the arbitrators selected in
accordance with this ARTICLE XVII shall not possess the authority or power to
alter, amend or modify any of the terms or conditions or charges set forth in
this AGREEMENT, and further, the arbitrators may not enter any award which
alters, amends or modifies such terms, conditions or charges in any form or
manner.
ARTICLE XVIII
SPECIFIC PERFORMANCE
Without regard to any provisions of this AGREEMENT to the contrary, in
addition to any of the rights and/or remedies referred to in this AGREEMENT,
either PARTY shall have the right to institute an action against the other PARTY
in a court of equity in the State of New Jersey or at the NJBPU to obtain
specific performance by such other PARTY of any of such other PARTY's
obligations under this AGREEMENT if available in accordance with applicable
principles of law and equity. Without regard to rights available at law or in
equity, PARTIES agree that arbitrators shall have the right to impose the remedy
of specific performance in any arbitration under ARTICLE XVII of this AGREEMENT
and neither PARTY shall have the right to object to such remedy on the basis
that such remedy is not otherwise available at law or in equity.
-70-
ARTICLE XIX
ENTIRE AGREEMENT
This AGREEMENT constitutes the entire agreement between the PARTIES
with respect to the matters contained herein and all prior agreements with
respect thereto are superseded hereby. Each PARTY confirms that it is not
relying on any oral representations or warranties of the other PARTY except as
specifically set forth herein. No additions, amendments or modifications hereof
or of any terms included herein shall be binding unless duly executed by both
PARTIES.
ARTICLE XX
ASSIGNMENT/TRANSFER
VENTURE may at any time and from time to time during the term of this
AGREEMENT, assign its rights in this AGREEMENT to FINANCIER. PSE&G shall, at
VENTURE's request, execute a Consent to Assignment in a form similar to that
attached as Exhibit 3, provided that in connection with any such request,
VENTURE submits to PSE&G for review any relevant documents requested by PSE&G,
which documents shall be treated by PSE&G as confidential, and not disclosed to
any third-party without the written consent of VENTURE. Upon written notice to
PSE&G, VENTURE may transfer its rights and obligations under this AGREEMENT to
any entity controlling, controlled by or under common control with VENTURE.
Except as otherwise provided herein with respect to
-71-
FINANCIER or any entity controlling, controlled by or under common control with
VENTURE, VENTURE may not assign its rights and/or transfer its rights and
obligations in this AGREEMENT without the prior written consent of PSE&G, which
consent shall not be unreasonably withheld or delayed. Nothing contained herein
shall prevent VENTURE from pledging or mortgaging all or any part of the
property of the PROJECT in connection with financing the PROJECT.
Except with respect to any entity controlling, controlled by or under
common control with VENTURE, no assignee, transferee, pledgee or mortgagee
and/or any person designated by such assignee, transferee, pledgee or mortgagee
may operate the PROJECT, pursuant to any rights such PARTY may have under any
mortgage, assignment, transfer, or security agreement, unless such entity or
person has been approved and authorized by PSE&G to operate the PROJECT, and in
connection with seeking to obtain such approval and authorization, agrees to be
bound by, subject to and to comply with the terms and conditions of this
AGREEMENT while operating the PROJECT. PSE&G shall not unreasonably delay or
withhold any such approval or authorization.
PSE&G may, on written notice to VENTURE, assign its rights and
transfer its obligations in this AGREEMENT to any entity controlling, controlled
by or under common control with PSE&G. Additionally, PSE&G may, on notice to and
with the prior written approval of VENTURE, assign and
-72-
transfer its rights and obligations under this AGREEMENT to any entity which is
not controlling, controlled by or under common control with PSE&G. VENTURE shall
not unreasonably delay or withhold any approval of an assignment or
assignment/transfer by PSE&G provided that the assignee or assignee/transferee
agrees to be bound by, subject to and to comply with the terms and conditions of
this AGREEMENT.
ARTICLE XXI
CURE BY FINANCIER
During any term of this AGREEMENT, VENTURE shall provide PSE&G with
such information as to enable it to know the name(s) and address(es) of any
FINANCIER on a current basis. PSE&G acknowledges that VENTURE's present
FINANCIER is the Prudential Insurance Company of America, c/o PruCapital
Management, Inc., Xxxxx Xxxxxxx Xxxxxx, Xxxxxx, XX 00000, Attn: Regional Vice
President-Special Industries (East). For so long as VENTURE shall have
outstanding and unpaid any financing liabilities, PSE&G agrees to promptly
furnish to all FINANCIERS, then known to PSE&G, a copy of any Notice of Breach
or Demand for Arbitration given to VENTURE. Additionally, PSE&G shall not
terminate this AGREEMENT unless any notice of such termination or breach, as the
case may be, and the reasons therefor have been given to and received by each
FINANCIER then known to PSE&G thirty (30) days prior to the effective date of
the termination. PSE&G shall not terminate this AGREEMENT if, after notice
-73-
thereof, and prior to any effective date of termination, FINANCIER has:
(i) cured the condition precipitating the Notice of Breach under ARTICLE
XVI; or
(ii) if the condition precipitating such Notice of Breach is not capable
of being cured prior to the date of termination, commenced in a
diligent manner to cure the condition precipitating the Notice of
Breach and for so long as the FINANCIER diligently continues such
efforts; or
(iii) if the condition precipitating the Notice of Breach in not capable
of being cured prior to the date of termination, FINANCIER has
caused the initiation of and is diligently prosecuting efforts to
gain possession of the PROJECT and for so long as the FINANCIER
diligently continues such efforts.
In the event FINANCIER gains possession of the PROJECT, FINANCIER
shall promptly designate a person or entity to operate the PROJECT. The name and
credentials of such person or entity so designated shall be promptly submitted
thereafter to and such person or entity so designated must be approved and
authorized by PSE&G to operate the PROJECT. Any approval of the person or entity
so designated shall not be unreasonably delayed or withheld by PSE&G. In the
event PSE&G approves the person or entity so designated, PSE&G shall not be
obligated to give
-74-
authorization to the person or entity so designated to actually operate the
PROJECT unless and until the person or entity so designated agrees in writing to
be bound by, subject to and to comply with the terms and conditions of this
AGREEMENT for the period during which the person or entity so designated intends
to operate the PROJECT. Upon execution of the aforesaid instrument, the person
or entity so designated shall thereafter, inter alia, be responsible for all
obligations incurred by it under this AGREEMENT. However, FINANCIER, and the
person or entity so designated, shall have no responsibility whatsoever for any
obligation VENTURE incurred prior to the date on which FINANCIER takes
possession of the PROJECT.
In the event of a foreclosure and a resultant sale or transfer of the
PROJECT to a new entity (other than the FINANCIER), any obligation of PSE&G to
perform its obligations under the AGREEMENT shall be conditioned upon: (i) the
approval by PSE&G of any new operator of the PROJECT, which approval shall not
be unreasonably withheld or delayed; (ii) agreement by the now entity to comply
with the rules and regulations of the NJBPU, the FERC, and any other agency
having jurisdiction over the PROJECT relative to the sale or transfer of same;
(iii) receipt by such new entity of any license(s), permit(s) and approval(s) as
may be required in connection with the sale or transfer of the PROJECT; and (iv)
the execution and delivery of a written assumption agreement, in form
satisfactory to PSE&G,
-75-
pursuant to which the now entity and/or operator agree to assume all obligations
under and agree therein to be bound by, subject to and to comply with the terms
and conditions of this AGREEMENT.
Notwithstanding any rights which FINANCIER may have, in the event
PSE&G interrupts acceptance and purchase of twenty-four and two tenths percent
(24.2%) of the NET ELECTRICAL POWER OUTPUT in connection with the occurrence of
the condition or event which precipitated the Notice of Termination or Notice
of Breach, PSE&G shall not be obligated to resume acceptance and purchase of
such NET ELECTRICAL POWER OUTPUT unless the condition or event or cause thereof
which precipitated the Notice of Termination or Notice of Breach is or has been
remedied in accordance with the provisions of this AGREEMENT. Prior to PSE&G
being obligated to resume such acceptance and purchase from the COGENERATION
FACILITY, PSE&G shall have the right to require FINANCIER to provide adequate
assurance to PSE&G that the condition or event precipitating the Notice of
Breach will not reoccur.
ARTICLE XXII
FINANCIER SECURITY AGREEMENTS
As provided in ARTICLE XX, VENTURE may assign any rights in this
AGREEMENT to FINANCIER and may pledge or mortgage any or all of the property of
the PROJECT. In the event FINANCIER alleges that a breach or an event of default
-76-
has occurred under any operative agreement between FINANCIER and VENTURE and
FINANCIER thereafter elects to exercise any right(s) under any applicable
security, mortgage, assignment or other agreement then in effect between
FINANCIER and VENTURE, it is agreed that, upon receipt of such notice from
FINANCIER, PSE&G shall provide notice to VENTURE and thereafter PSE&G shall
accept the instructions of FINANCIER in accordance with the terms of any
applicable security, mortgage or assignment agreement. In such event, VENTURE
shall have no claim against PSE&G for, and hereby agrees to release PSE&G from,
any liability for any cost, expense, loss, damage or liability VENTURE may incur
or sustain arising out of, relating to or resulting from any action(s) which
PSE&G determines it is obligated to take pursuant to any operative agreement
between VENTURE and FINANCIER.
Notwithstanding the foregoing, in the event PSE&G provides a notice
to VENTURE under this ARTICLE XXII, and VENTURE notifies PSE&G that it disagrees
with and is actively contesting the FINANCIER'S allegation that an event of
default has occurred under any operative agreement between FINANCIER and
VENTURE, PSE&G may in its reasonable discretion elect not to accept the
instructions of such FINANCIER, provided that VENTURE shall (i) indemnify PSE&G
in accordance with the terms of ARTICLE XIII for any cost, expense, loss, damage
or liability which PSE&G may incur or sustain as a result of PSE&G's failure to
follow the instructions of such FINANCIER, and (ii) provide PSE&G with
-77-
a non-cancellable surety bond, irrevocable bank letter of credit or other
security in form, substance and amount acceptable to PSE&G upon which PSE&G can
draw in the event it incurs or sustains any expense, loss, damage or liabilities
as a result of its failure to follow the instructions of such FINANCIER.
ARTICLE XXIII
DETERMINATION OF PSE&G COSTS
The costs for any work done or service performed by PSE&G personnel, as
required by this AGREEMENT, which costs are to be billed to and to be paid by
VENTURE pursuant to this AGREEMENT, shall be determined by PSE&G in accordance
with PSE&G's "Procedures for Work Done at the Expense of Others" then in effect.
ARTICLE XXIV
STANDARD FOR PERFORMANCE
Unless otherwise expressly provided for in this AGREEMENT, PSE&G
shall undertake and discharge any obligation it has in this AGREEMENT to, inter
alia, design, construct, install, operate, maintain, repair, replace, reinforce,
rearrange, purchase, select, examine, review, inspect or accept any facility or
equipment pursuant to and in accordance with any applicable PSE&G practice(s),
standard(s) and/or procedure(s). PSE&G shall use the same care and diligence in
controlling the costs of any such
-78-
activity(ies) VENTURE is required to make payment for under this AGREEMENT as if
the activity(ies) were being performed by and for PSE&G's own account.
ARTICLE XXV
STANDBY ELECTRIC SERVICE
In the event VENTURE requires standby electric service to the
COGENERATION FACILITY same shall be furnished by PSE&G pursuant to an applicable
tariff on file with the NJBPU.
ARTICLE XXVI
SUCCESSORS AND ASSIGNS
This AGREEMENT shall be binding upon and shall inure to the benefit
of, or may be performed by, the successors and assigns of the PARTIES, except
that no assignment, pledge or other transfer of this AGREEMENT by any PARTY
shall operate to release the assignor, pledgor or transferor from any of its
obligations under this AGREEMENT, unless consent to the release is given in
writing by the other PARTY,, which consent shall not be unreasonably delayed or
withheld, or unless such transfer is incident to a reorganization or merger or
consolidation with or transfer of all or substantially all of the assets of the
transferor to another person or business entity which person or entity shall, as
part of such succession, assume all the
-79-
obligations of the transferor under this AGREEMENT.
ARTICLE XXVII
CHOICE OF LAW
This AGREEMENT shall be interpreted, construed, governed by,
performed and enforced in accordance with the laws of the State of New Jersey
and federal law, where applicable. All questions concerning the validity,
construction and enforceability of this AGREEMENT as well as questions
concerning the sufficiency or other aspects of performance under this AGREEMENT
shall be determined under the laws of the State of Now Jersey without recourse
to the law governing conflict of laws.
ARTICLE XXVIII
CAPTIONS
The subject headings of the articles of this AGREEMENT are inserted
solely for the purpose of convenient reference and are not intended to, nor
shall same affect the meaning of any provision of this AGREEMENT.
ARTICLE XXIX
COUNTERPARTS
This AGREEMENT may be executed in counterparts. Each shall be deemed
an original but together shall constitute one and the same instrument.
-80-
ARTICLE XXX
MISCELLANEOUS
This AGREEMENT and the obligations of the PARTIES hereunder are
subject to all present and future valid laws and to all valid present and future
orders, rules and regulations of any court or regulatory authority having
jurisdiction to the extent consistent with Section D of ARTICLE IV of this
AGREEMENT.
In case of conflict between any provisions hereof and any applicable
law, regulation or regulatory order, such applicable law, regulation or
regulatory order shall govern to the extent consistent with Section D of ARTICLE
IV of this AGREEMENT.
All terms defined in this AGREEMENT shall have the same defined
meanings when used in any notice, correspondence, report or other document made
or delivered pursuant to or in connection with this AGREEMENT, unless the
context shall otherwise require.
Each reference herein to VENTURE and PSE&G shall be deemed to
include their respective successors and assigns.
All of the covenants, warranties, undertakings and agreements of
VENTURE and PSE&G shall bind the respective PARTIES, their successors and
assigns.
-81-
ARTICLE XXXI
RESERVATIONS
No PARTY shall be prejudiced or bound, except as otherwise
specifically provided herein, nor shall any PARTY be deemed to have approved,
accepted, agreed or consented to any concept, theory or principle underlying or
supposed to underlie any of the matters contained herein, including but not
limited to any concept, theory, principle or method used to calculate the rates
provided for herein.
The PARTIES further understand and agree that the provisions of this
AGREEMENT relate only to the specific matter referred to herein and no PARTY or
person waives any claim or right which it may otherwise have with respect to any
matter not expressly provided for herein.
ARTICLE XXXII
SURVIVAL OF OBLIGATIONS
Termination of this AGREEMENT for any reason shall not relieve
PSE&G or VENTURE of any obligation accruing or arising prior to such
termination.
ARTICLE XXXIII
NOTICES
Any notice, request, demand, communication or statement which either
PSE&G or VENTURE may desire to give to the other shall be in writing and, except
as otherwise provided for in this AGREEMENT, shall be considered as duly
-82-
delivered when mailed by certified mail or delivered against receipt by
messenger or overnight courier addressed to said PARTY as follows:
(a) If to PSE&G:
Public Service Electric and Gas Company
00 Xxxx Xxxxx - Mail Code T11A
X.X. Xxx 000
Xxxxxx, Xxx Xxxxxx 00000-0000
ATTENTION: MANAGER - COGENERATION
(b) If to VENTURE:
COGEN Technologies NJ Venture
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
ATTENTION: Xxxxxx X. XxXxxx
or to such other person or address as PSE&G or VENTURE may have specified in a
notice duly given as provided herein.
-83-
IN WITNESS WHEREOF, this AGREEMENT has been executed and delivered as
of the date and year first above written.
COGEN TECHNOLOGIES NJ VENTURE
By: COGEN Technologies NJ, Inc.,
Managing Venturer
By: /s/ [SIGNATURE APPEARS HERE]
----------------------------------
Xxxxxx X. XxXxxx, President
PUBLIC SERVICE ELECTRIC
AND GAS COMPANY
By: /s/ [SIGNATURE APPEARS HERE]
----------------------------------
