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Exhibit 10.2
CERTAIN PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, WHICH ARE IDENTIFIED BY THE SYMBOL
"XXXX", HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
SUPPLEMENT GENERATION AGREEMENT
This Supplemental Generation Agreement (the "Agreement") is entered
into this 21 day of December, 2000 (the "Effective Date") by and between GENEVA
STEEL COMPANY, a Utah corporation ("Geneva"), and Utah Power & Light Company, an
assumed business name of PACIFICORP, an Oregon corporation ("Utah Power").
Geneva and Utah Power will sometimes be referred to individually as Party and
collectively as Parties.
RECITALS
A. On February 10, 1989, Utah Power and Geneva entered into an
agreement (the "1989 Agreement"), as amended, by which Utah Power supplies
interruptible power and energy to Geneva's steel production facility in Lindon,
Utah.
B. On July 1, 1997, Utah Power and Geneva entered into the Generation
Cooperation Agreement (the "Cooperation Agreement") by which Utah Power may call
on Geneva to increase the output of its steam electric generating plant (the
"Generating Plant") at its steel production facility up to 1,314 hour per
contract year as an offset to Geneva's demand for electric service under the
1989 Agreement.
C. Utah Power now desires to call on Geneva to operate the Generating
Plant for the purpose of selling a portion of its output to Utah Power, in
addition to that portion of the output that is dedicated to offsetting Geneva's
demand for electric service in accordance with the Cooperation Agreement.
D. Geneva is willing to operate the Generating Plant and sell a portion
of its output to Utah Power on the terms stated herein.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Parties agree as follows:
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1. DEFINITIONS.
1.1 "Baseline Generation Capability" means 38.6 MWh per hour.
1.2 "Contract Purchase Cost" means the following amounts during the
following time periods:
TIME PERIOD $/MWh
Through 6/30/2001 23.595
7/1/2001 - 6/30/2002 24.303
7/1/2002 - 12/31/2002 25.032
1.3 "On-Peak Hours" means all hours from 7 AM - 11 PM Prevailing
Mountain Time, Monday through Saturday excluding the following WSCC holidays:
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
1.4 "Off-Peak Hours" means all hours that are not included in On-Peak
Hours excluding all hours on Sundays and the following WSCC holidays: New Year's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day.
1.5 "Sundays and WSCC Holiday Hours" means all hours on Sundays and the
following holidays: New Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
1.6 "Maximum Dependable Continuous Rating" means 47.0 MWh per hour.
1.7 "Point of Delivery" means that point of interconnection between
Utah Power's electrical facilities and the electrical facilities owned by
Geneva.
1.8 "Supplemental Generation Capability" means the amount of generation
capacity available from the Geneva Plant greater than the Baseline Generation
Capability.
1.9 "Supplemental Generation" means the hourly generation amounts
provided by the Generating Plant separate from Utah Power's right to call on
Geneva to offset its power purchases in accordance with the Cooperation
Agreement. Provided, however, that the Supplemental Generation scheduled by and
delivered to Utah Power shall not exceed the following cumulative number of
hours for the indicated periods:
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TIME PERIOD HOURS
Through 8/31/01 4,880
9/1/01 - 8/31/02 6,500
9/1/02 - 12/31/02 2,155
2. TERM.
This Agreement shall commence on the Effective Date and shall terminate
on December 31, 2002 unless extended by written agreement of the Parties or
unless earlier terminated in accordance with the terms this Agreement. Either
party can cancel this Agreement with 45 days written notice.
3. SUPPLEMENTAL GENERATION.
3.1 Right to Call. Utah Power shall have the right, at its option and
at any time during the term of this Agreement, to call on Geneva to supply
Supplemental Generation to Utah Power at the Point of Delivery.
3.2 Ability to Provide. Geneva shall use reasonable commercial efforts
to operate and maintain the Geneva Plant, at its sole expense, in such a manner
that Geneva is ready at all times during the term of this Agreement to provide
Supplemental Generation. Geneva shall not be liable for its inability or failure
to provide Supplemental Generation.
3.3 Scheduling. Geneva shall notify Utah Power's Dispatch Center prior
to 1000 hours Prevailing Mountain Time on the last mutually recognized work day
prior to the following week (normally Friday) of the days and hours that Geneva
expects the Supplemental Generation will not be available during the following
Saturday through Friday period. No later that 1300 hours on the date that Utah
Power timely receives the foregoing information from Geneva, Utah Power shall
pre-schedule the day(s) during the upcoming week that Geneva shall provide
Supplemental Generation. Utah Power shall provide a schedule for On-Peak,
Off-Peak and Sundays/WSCC Holidays and shall indicate when it is calling for
Supplemental Generation Capability under this Agreement and when it is calling
for offsets under the Cooperation Agreement. For the current contract year under
the Cooperation Agreement, Utah Power shall call for offsets to the Cooperation
Agreement during the months of May, June, July, and August, 2000; provided,
however, that Utah Power may carry forward into the next Contract Year any such
summer hours that Geneva is unable to provide such generation when called upon
due to outages of its generator.
3.4 Revised Schedule. Utah Power shall have the right, upon at least 8
hours notice, to revise the amounts pre-scheduled by Utah Power under Section
3.3 and such revised schedule shall supercede the pre-schedule.
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4. BILLING AND PAYMENT.
4.1 For Supplemental Generation during each hour scheduled by Utah
Power and subsequently provided by Geneva, and when the generated amount is
greater than the Maximum Dependable Continuous Rating, Utah Power shall pay
Geneva XXXX% of the Dow Xxxxx Palo Verde Firm ("Index") plus 50% of the
generation cost of $28/MWh less the Contract Purchase Price multiplied by the
difference between the generated amount for that hour and the Baseline
Generation Capability. The Dow Xxxxx Palo Verde On-Peak Firm Index shall be used
for Supplemental Generation provided during On-Peak Hours. The Dow Xxxxx Palo
Verde Off- Peak Firm Index shall be used for Supplemental Generation provided
during Off-Peak Hours. The Dow Xxxxx Palo Verde Sunday/WSCC Firm Index shall be
used for Supplemental Generation provided during Sundays/WSCC holidays. For
purposes of calculating payments to Geneva under this Agreement, the applicable
index shall never be less that $32/Mwh. Utah Power will not pay for any hourly
generation that is below the Maximum Dependable Continuous Rating or that is not
scheduled by Utah Power. The Baseline Generation Capability, the Maximum
Dependable Continuous Rating and/or the generation cost specified in this
Agreement may be modified to accommodate changed circumstances for specified
periods of time, upon agreement of both parties. Any such modifications shall
not be enforceable without written confirmation (by facsimile or otherwise) from
Utah Power confirming any agreed-upon modifications and the periods during which
the same shall apply. The amount Utah Power will pay Geneva for Supplemental
Generation is summarized as follows:
TIME PERIOD $/MWh CREDIT ON
GENEVA XXXX
Through 6/30/2001 XXXX*Index - 9.595
7/1/2001 - 6/30/2002 XXXX*Index - 10.303
7/1/2002 - 12/31/2002 XXXX*Index - 11.032
Example 1: Generation Meter on March 31, 2001 reflects 50 MWh generated
during hour 1000 and the Index Price is $105/MWh. Supplemental Generation to be
credited would be 11.4 MWh (50 MWh - 38.6 MWh = 11.4 MWh). Utah Power would pay
Geneva $XXXX/MWh [XXXX * $105/MWh +0.5 * $28/MWh -$23.595/MWh = $XXXX/MWh -
$9.595/MWh =$XXXX/MWh] or $XXXX (11.4 MW * $XXXX) for this hour.
Example 2: Generation Meter reflects 42 MW generated during hour 1000.
No Supplemental Generation would be credited for this hour since the generated
amount was less than 47 MW.
4.2 Billing. If Utah Power calls on Geneva to deliver Supplemental
Generation under Section 3, then Geneva shall receive a credit on its monthly
electric usage xxxx per the terms identified in this Section for all
Supplemental Generation energy provided. All hours in which Geneva provides
Supplemental Generation energy by this agreement shall be accounted for
separately from the 1,314 hours provided under the Cooperation Agreement.
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5. METERING.
Utah Power's existing metering equipment, as Utah Power may modify such
equipment from time to time, shall be used to meter all Supplemental Generation
provided under this Agreement.
6. MISCELLANEOUS.
6.1 Amendment. Any amendment to this Agreement must be in writing and
signed by both parties.
6.2 Governing Law. This Agreement shall be subject to and construed
under the laws of the State of Utah.
6.3 Notices. Except as otherwise stated in Section 3, all notices
hereunder shall be directed as follows by fax, personal delivery or U.S.
registered or certified mail:
To Geneva: Xxxxx Xxxxxxx
Director of Energy
X.X Xxx 0000, XX00
Xxxxx, XX 00000
000-000-0000, Fax
To Utah Power: Xxxxx Xxxxxx
X.X. Xxx 000
00 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
000-000-0000, Fax
6.4 Assignment. Neither party shall assign this Agreement without the
prior written consent of the other Party, which consent shall not be
unreasonably withheld. Provided, however, that no consent is required for an
assignment to any business entity: (i) into which or with which the assigning
Party is merged or consolidated or to which the assigning Party transfers
substantially all of its assets; or (ii) wholly owning, wholly owned by or
wholly owned in common with the assigning Party. This Agreement shall be binding
on the successors and permitted assigns of each party.
6.5 Confidentiality. Each Party shall maintain the terms and conditions
of this Agreement in confidence and shall not disclose them to any third party
other than its advisors and consultants who likewise shall be bound by the same
terms and conditions of confidentiality except upon written consent of the other
Party or as required under operation of law, court order, governmental
regulation or pursuant to requirements of a Governmental agency.
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6.6 Waiver. Any waiver by a Party with respect to a default hereunder,
or any other matter arising in connection herewith, shall not be deemed to be a
waiver with respect to any subsequent default or matter.
6.7 Indemnification. Each Party shall indemnify, defend and hold
harmless the other Party against any claims, demands, or suits brought by, or
losses, or damages incurred with respect to any third party to the extent caused
by any act or omission of the indemnifying Party in violation of this Agreement.
6.8 Limitations of Liability. Neither Party shall be liable to the
other for any indirect, special, incidental or consequential damages in
connection with this Agreement.
6.9 Authority. Each party represents that it has full authority to
enter into this Agreement and that no further approvals of any kind are
necessary.
6.10 Other Agreements. This Agreement is intended to be consistent with
the terms of the Cooperation Agreement and the 1989 Agreement.
UTAH POWER GENEVA STEEL COMPANY
By: /s/ Xxxx XxxXxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Its: SVP Power Delivery Its: VP - Operations, Customer Service
Date signed: December 21, 2000 Date signed: December 18, 2000
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