FIRST AMENDMENT TO
POWER PURCHASE AND INTERCONNECTION AGREEMENT
BETWEEN
Public Service Electric & Gas Company
and
Camden Cogen, L.P.
This First Amendment to the Power Purchase and Interconnection Agreement by
and between Public Service Electric & Gas Company ("PSE&G") and Camden Cogen,
L.P. ("SELLER") constitutes the First Amendment ("First Amendment") to the Power
Purchase and Interconnection Agreement ("Agreement") between the Parties.
Recitals
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WHEREAS, the Parties executed the Agreement on April 15, 1988 which
provides for the financing, design, construction and operation of a
grid-connected cogeneration facility (the "Facility") at the property of
Xxxxxxxx Soup Company in the City of Camden, County of Camden and State of
New Jersey; and
WHEREAS, the New Jersey Board of Public Utilities ("NJBPU"), after
reviewing the Joint Petition filed by the Parties, approved the Agreement by
order dated June 29, 1989; and
WHEREAS, subsequent to the execution of the Agreement and the approval of
same by the NJBPU, the Parties were notified of the decision of Xxxxxxxx Soup
Company ("Xxxxxxxx") that Xxxxxxxx would be terminating its food processing and
manufacturing activities at the site proposed for the Facility; and
WHEREAS, the SELLER has entered into a twenty year steam supply agreement
with the Camden Paperboard Corporation ("Paperboard") which is located within
the City of Camden and within the service territory of PSE&G; and
WHEREAS, the loss of Xxxxxxxx and the substitution of Paperboard as the
Project's thermal host requires certain amendments to the Agreement; and
NOW, THEREFORE, in consideration of the recitals and mutual covenants
contained herein, the Parties hereto agree as follows:
(1) The Agreement be and hereby is amended to delete each and every
reference to the property of XXXXXXXX SOUP COMPANY or "Xxxxxxxx" and inserting
in the place and stead thereof, "the property on, adjacent to or in the vicinity
of Camden Paperboard Corporation" or "PAPERBOARD", (hereinafter referred to as
the "Project Site").
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(2) Article II, Section F is amended to read as follows:
Section F
Condition Precedent
The following shall be conditions precedent to the effectiveness of this
AGREEMENT: (i) A subsequent 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 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 SELLER; and (ii) recertification by the
FERC that the COGENERATION FACILITY is a Qualifying Facility in accordance with
18 C.F.R. Section 292.203.
After the foregoing conditions have been satisfied, the Parties shall,
within thirty (30) days, affirm in writing, executed by both Parties, that the
conditions precedent have been satisfied. In the event said conditions
precedent are not satisfied, this AGREEMENT shall be void.
This Agreement is further conditioned upon an Order of the NJBPU approving
the First Amendment to this Agreement, upon terms and conditions acceptable to
the parties, and authorizing the relocation of the COGENERATION FACILITY from
the property of Xxxxxxxx Soup Company in Camden, New Jersey, to the Project
Site.
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(2) Article IV, Section G is amended in its entirety to read as follows:
Section G
Abandonment, Cancellation or Failure to Complete
If SELLER abandons, cancels or fails to complete the PROJECT before the
DATE OF COMMERCIAL OPERATION and this AGREEMENT is therefore terminated in
accordance with the provisions of ARTICLE XXIII, and if SELLER has not provided
written notice of such abandonment, cancellation or failure within four (4)
months of the date of NJBPU Order approving the First Amendment to the Agreement
it is acknowledged and agreed that PSE&G will suffer damages which, as the
result of PSE&G's dependence upon the delivery of the COGENERATION FACILITY'S
energy and capacity hereunder, PSE&G would be unable to mitigate fully. SELLER
and PSE&G agree that the occurrence of one or more of the following events shall
be the sole basis upon which SELLER may terminate the Agreement during such four
(4) month period: (x) an unanticipated land use or environmental limitation
which substantially and adversely impacts the financial viability of the Project
or (y) incremental estimated electric or gas interconnection costs substantially
in excess of the costs estimated by PSE&G for the original interconnections such
that the Project is no longer financially viable. PSE&G and SELLER further agree
that the amount of actual damages suffered by PSE&G under the foregoing
circumstances would be difficult or impossible to measure. Therefore, PSE&G and
SELLER agree that if the COGENERATION FACILITY shall fail to commence COMMERCIAL
OPERATION on or before the DATE OF COMMERCIAL OPERATION, as the same may be
extended, pursuant to ARTICLE XXIII of this AGREEMENT, SELLER shall pay PSE&G a
one-time liquidated damage amount equal to $721,556.
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(3) Article XXIII is amended in its entirety to read as follows:
EVENTS OF TERMINATION
SELLER has provided PSE&G with a schedule for the development, engineering,
permitting, financing and construction of the PROJECT, which schedule is annexed
hereto as Schedule A, reflecting Critical Path Items and the milestone dates
thereof for PROJECT development. SELLER shall complete each Critical Path Item
on or before the milestone date therefore as set forth in Schedule A.
Within five (5) business days of the date of Financial Closing, SELLER
shall submit a detailed schedule for the construction, start-up and testing of
the PROJECT ("Construction Schedule"), which Construction Schedule shall be
acceptable to PSE&G. The items listed thereon shall, for the purposes of this
Article, be deemed Critical Path Items.
Beginning on July 1, 1990, and subsequently thereafter, SELLER shall
provide quarterly status reports to PSE&G describing the progress of
engineering, permitting, purchasing (including delivery dates) and construction
of the PROJECT. Such reports shall include in sufficient detail explanations of
any delays in meeting scheduled dates for commencement completion of any listed
items. SELLER shall promptly notify PSE&G thereafter of any material revisions,
modifications or changes to such schedules.
Either Party may terminate this AGREEMENT without liability to the other
Party, except as otherwise provided in this AGREEMENT, upon the occurrence of
any of the following events: (i) SELLER's failure to meet the DATE OF INITIAL
OPERATION by November 1, 1992, unless extended by mutual agreement or by Force
Majeure; (ii) SELLER's
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failure to have the COGENERATION FACILITY placed in COMMERCIAL OPERATION on or
before December 1, 1992, unless extended by mutual agreement or by Force
Majeure; (iii) SELLER's failure to complete any Critical Path Item(s) that would
delay either the DATE OF INITIAL OPERATION or the DATE OF COMMERCIAL OPERATION
past the November 1, 1992 or December 1, 1992 dates, respectively, unless
extended by mutual agreement or by Force Majeure; (iv) a final and
non-appealable order/judgement that on the effective date of this AGREEMENT the
PROJECT fails to meet the requirements for certification of a qualifying
facility established as of the effective date of the AGREEMENT in accordance
with Title 18, Code of Federal Regulations, Part 292, Subpart B, Section 292.203
through 292.207, inclusive; provided, however, that any such determination shall
not constitute an Event of Termination pursuant to this ARTICLE XXIII if
thereafter SELLER uses reasonable efforts to regain qualifying facility status;
(v) termination of the acquisition agreement between the landowners of the
Project Site and SELLER, on or before the DATE OF INITIAL OPERATION, unless a
new such acquisition agreement shall be promptly entered into by SELLER.
However, if any of events (i), (ii) or (iii) as described above occurs, the
COGENERATION FACILITY is under a bona fide program of continuous construction,
the November 1, 1992 date and the December 1, 1992 date shall be extended for
the period reasonably required to satisfy such requirement by mutual written
agreement, but in no event shall any extensions be allowed beyond twelve (12)
months of either of these respective dates. Notwithstanding the foregoing,
should SELLER fail to have the COGENERATION FACILITY placed in COMMERCIAL
OPERATION on or before December 1, 1992 and such failure is attributable to an
event of Force Majeure as provided in Article XVIII of this AGREEMENT, no
extension of this AGREEMENT shall be allowed beyond June 1, 1994 at which time
this AGREEMENT at the election and in the sole discretion of PSE&G shall
terminate,
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provided, however the June 1, 1994 date will be extended if at such xxxx XXXXXX
is capable of delivering a minimum of 75-80 MW at the nominated SUMMER SEASON
conditions in ARTICLE II, Section C and subject to PSE&G's acceptance of
SELLER's plans to achieve COMMERCIAL OPERATION within a reasonable time period.
If any Event of Termination occurs and either Party elects to exercise its
right, as provided in the preceding Paragraph, to terminate this AGREEMENT, such
Party shall provide the other Party with written notice of termination of this
AGREEMENT (hereinafter referred to as Notice of Termination). The Notice of
Termination shall specify the basis for such termination. The AGREEMENT and the
Parties obligations hereunder shall terminate effective thirty (30) days after
receipt by the other Party of such Notice of Termination.
Termination of the AGREEMENT for and on account of any Event of Termination
specified in this ARTICLE XXIII shall not relieve SELLER from any obligation
under this AGREEMENT to pay PSE&G for any unpaid costs associated with the
design, construction and installation of the INTERCONNECTION, including but not
limited to INTERCONNECTION COSTS, CANCELLATION COSTS, or any other unpaid xxxx
or BILLING STATEMENT and/or Replacement Energy and Replacement Capacity Costs as
provided in ARTICLE IV, Section G, Paragraph 5 of this AGREEMENT.
(4) SELLER shall permit PSE&G, its officers, agents, servants and
employees, its successors and assigns, when and as requested, access to, egress
and ingress, from and over the Project, at any time and upon reasonable notice,
as same may be necessary to discharge its obligations or to exercise its
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rights under the Agreement, as amended by the First Amendment, including but not
limited to access to: (i) permit PSE&G to determine that the Project is being
completed in accordance with the specifications provided by SELLER to PSE&G for
its review and (ii) permit PSE&G to determine that the Project is progressing
according to the schedules submitted by SELLER as required by the Agreement, as
amended by the First Amendment. In addition, SELLER shall upon request by PSE&G
provide PSE&G with all necessary data pertaining to the detailed engineering,
permitting, purchasing and construction schedules for the PROJECT in order to
permit PSE&G to determine that such schedules are reasonable and that the DATE
OF INITIAL OPERATION and the DATE OF COMMERCIAL OPERATION will be met.
(5) SELLER and PSE&G agree that a condition precedent to the effectiveness
of the First Amendment shall be its approval by the NJBPU. In the event approval
of the First Amendment by the NJBPU occurs later than July 1, 1990, the parties
shall renegotiate the milestone dates set forth in Schedule A. Such approval by
the NJBPU shall be in the form of a written order, under terms and conditions
acceptable to the parties in their sole discretion, including but not limited to
NJBPU approval of the recoverability from ratepayers, on a full and timely
basis, through the Levelized Energy Adjustment Clause or its successor,
consistent with the Order of Approval approving the Agreement, of all capacity
and energy related
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replacement power costs which arise out of or are incurred by PSE&G in
connection with the Agreement, as amended by the First Amendment.
(6) SELLER's procurement construction contract ("Construction Contract")
shall provide for significant bonus/penalty financial incentive provisions in
order to ensure Commercial Operation by December 1, 1992. Within five (5)
business days of the execution of the Construction Contract, SELLER shall
provide PSE&G with a summary of the terms and conditions of the Construction
Contract's bonus/penalty provisions.
(7) All terms and conditions contained in the Agreement and not otherwise
amended herein shall remain in full force and effect.
IN WITNESS WHEREOF, this First Amendment to Power Purchase and
Interconnection Agreement is executed and delivered on the 12th day of June,
1990.
CAMDEN COGEN, L.P.
By: /s/
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PUBLIC SERVICE ELECTRIC & GAS COMPANY
By: /s/
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