Second Amended and Restated Rent Supplement (ERCOT Transmission Lease) January 1, 2015
Exhibit 10.16
Second Amended and Restated Rent Supplement
(ERCOT Transmission Lease)
January 1, 2015
This Second Amended and Restated Rent Supplement (this “Second Amended Supplement”) between Sharyland Distribution and Transmission Services, L.L.C. (“Lessor”) and Sharyland Utilities, L.P. (“Lessee”) is executed and delivered on January 14, 2015, to memorialize supplements to the ERCOT Transmission Lease (as defined below), effective as of January 1, 2015. Capitalized terms used herein that are not otherwise defined will have the meanings assigned to them in the ERCOT Transmission Lease.
WHEREAS, Lessor and Lessee are Parties to a Lease Agreement (ERCOT Transmission Assets) dated December 1, 2014 (as amended from time to time in accordance with its terms, the “ERCOT Transmission Lease”);
WHEREAS, the Parties executed an Amended and Restated Rent Supplement (ERCOT Transmission Lease) dated January 1, 2015 (the “Amended and Restated Supplement”);
WHEREAS, on August 15, 2014, Lessee filed an application for interim update of wholesale transmission rates pursuant to PUC SUBST. R. 25.192(h) (the “August TCOS Filing”), and on October 3, 2014, the PUCT approved the August TCOS filing, allowing Lessee to begin billing based on the updated wholesale transmission rate; and
WHEREAS, additional Capital Expenditures subsequent to those included in the August TCOS Filing have been placed in service under the other leases between Lessor (or its subsidiary) and Lessee, and the Parties wish to amend and restate the Amended and Restated Supplement to memorialize the effect of the additional Capital Expenditures on the ERCOT Transmission Rate Allocation.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Parties hereto agree to the following:
1. The Amended and Restated Supplement is hereby amended and restated in its entirety as set forth below.
2. The ERCOT Transmission Lease, except as supplemented by this Second Amended Supplement, shall remain in full force and effect.
Incremental CapEx:
2014 |
$ | 18,276,969 | ||
2015 |
$ | 17,000,000 | * |
* | Represents the amount of transmission Incremental CapEx that is expected to be placed in service in 2015, with a weighted average in service date of September 1, 2015. Rent supplements with respect to this transmission Incremental CapEx were agreed to and memorialized as part of the Amended and Restated Supplement effective January 1, 2015. |
Lessee CapEx:
2014 |
$ | 0 | ||
2015 |
$ | 0 | ||
2016 |
$ | 0 | ||
2017 |
$ | 0 | ||
2018 |
$ | 0 | ||
2019 |
$ | 0 | ||
2020 |
$ | 0 | ||
2021 |
$ | 0 | ||
2022 |
$ | 0 |
ERCOT TRANSMISSION LEASE
1
Base Rent:
2014 |
$ | 484,276 | ||
2015 |
$ | 2,204,265 | * | |
2016 |
$ | 3,590,281 | ||
2017 |
$ | 3,222,506 | ||
2018 |
$ | 3,100,132 | ||
2019 |
$ | 2,985,572 | ||
2020 |
$ | 2,878,102 | ||
2021 |
$ | 2,775,545 | ||
2022 |
$ | 2,674,523 |
* | Lessee will make a monthly 2015 Base Rent payment of $158,795 on the 15th day of each month beginning on March 15, 2015 through December 15, 2015 (with respect to January 2015 through October 2015). Following these payments, Lessee will make a monthly 2015 Base Rent payment of $308,155 on each of January 15, 2016 and February 15, 2016 (with respect to November and December 2015). Following these payments, the aggregate amount of 2015 Base Rent paid to Lessor will equal the asterisked amount above. |
Percentage Rent
Percentages:
2014 |
35.8 | % | ||
2015 |
35.1 | % | ||
2016 |
31.1 | % | ||
2017 |
28.2 | % | ||
2018 |
27.2 | % | ||
2019 |
26.2 | % | ||
2020 |
25.3 | % | ||
2021 |
24.4 | % | ||
2022 |
23.5 | % |
Annual Percentage Rent
Breakpoints:
2014 |
$ | 484,276 | ||
2015 |
$ | 2,204,265 | ||
2016 |
$ | 3,590,281 | ||
2017 |
$ | 3,222,506 | ||
2018 |
$ | 3,100,132 | ||
2019 |
$ | 2,985,572 | ||
2020 |
$ | 2,878,102 | ||
2021 |
$ | 2,775,545 | ||
2022 |
$ | 2,674,523 |
ERCOT TRANSMISSION LEASE
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Revenues Attributable to
Lessee CapEx:
2014 |
$ | 0 | ||
2015 |
$ | 0 | ||
2016 |
$ | 0 | ||
2017 |
$ | 0 | ||
2018 |
$ | 0 | ||
2019 |
$ | 0 | ||
2020 |
$ | 0 | ||
2021 |
$ | 0 | ||
2022 |
$ | 0 |
ERCOT Transmission Rate
Allocation: | before October 3, 2014: 0% between October 3, 2014 and March 31, 2015: 2.1% between April 1, 2015 and August 31, 2015: 2.1% starting September 1, 2015: 3.6% |
Term of Rent Supplement: Expires 12/31/22
ERCOT TRANSMISSION LEASE
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The Parties have executed this Second Amended Supplement to the ERCOT Transmission Lease as of the date set forth above.
SHARYLAND UTILITIES, L.P. | ||
By: | /s/ Xxxx Xxxxx | |
Name: | Xxxx Xxxxx | |
Title: | Chief Financial Officer | |
SHARYLAND DISTRIBUTION & TRANSMISSION SERVICES, L.L.C. | ||
By: | /s/ Xxxxx Xxxxxxx | |
Name: | Xxxxx Xxxxxxx | |
Title: | Chief Financial Officer |
ERCOT TRANSMISSION LEASE
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