Exhibit 10.65
ENERGY AND OPERATING CAPACITY PURCHASE AGREEMENT
BETWEEN
BALTIMORE GAS AND ELECTRIC COMPANY
AND
LG&E POWER MARKETING INC.
This Agreement enables Baltimore Gas and Electric Company to purchase energy and
operating capacity from LG&E Power Marketing Inc.
ENERGY AND OPERATING CAPACITY PURCHASE AGREEMENT
BETWEEN
BALTIMORE GAS AND ELECTRIC COMPANY
AND
LG&E POWER MARKETING INC.
This Energy Purchase Agreement ("Agreement") dated May 15, 1995 by and between
Baltimore Gas and Electric Company, a Maryland corporation ("BGE") and LG&E
Power Marketing Inc., a California corporation ("Supplier"), hereinafter
referred to individually as a "Party" and collectively as "Parties". This
Agreement will enable BGE to purchase from Supplier energy and/or operating
capacity in accordance with the following terms and conditions. This Agreement
does not obligate the Supplier to make available or BGE to purchase any amount
of energy and/or operating capacity, except as mutually agreed by the Parties
pursuant to this Agreement.
1. SUPPLIER'S REPRESENTATIONS
Supplier represents that it is a power marketer as defined by the Federal
Energy Regulatory Commission ("FERC"). Sales to BGE under this Agreement
shall be made pursuant to Supplier's FERC Electric Rate Schedule Number 1
as accepted by FERC in Docket No. ER 941188000.
2. FORM OF CONTRACT
(a) At any time during the term of this Agreement, Supplier may notify BGE
that amounts of energy and/or operating capacity are available for
purchase. Transactions for the sale and delivery and purchase and receipt
of energy and/or operating capacity shall be documented by a Confirmation
Letter, the form of which is set forth herein as Exhibit "A", prior to the
commencement of a Transaction. The documentation of the Transaction shall
include, at a minimum (i) the period of delivery, (ii) the contract price,
(iii) the delivery point(s), (iv) the contract quantity and (v) the nature
of the transaction. Each Transaction, and the documentation of such
Transaction, shall constitute an integral part of this Agreement and shall
be read and construed as one with this Agreement. Any conflict not
reasonably capable of reconciliation between this Agreement and the
documentation of a Transaction shall be resolved in favor of this
Agreement. Nothing in this Agreement shall obligate BGE to purchase any
energy and/or operating capacity that Supplier makes available for
purchase.
(b) Terms and conditions for each Transaction shall be set forth in a
Confirmation Letter executed by both Parties prior to the commencement of
the Transaction. However, for Transactions of one (1) day or less, the
Parties may agree orally, provided
1
that the terms and conditions are confirmed in writing and executed by both
Parties as soon as practicable, but in no event later than one (1) week
after commencement of the Transaction.
3. SERVICE RENDERED
(a) Unless mutually agreed to by the Parties, the Supplier shall be
responsible for obtaining any necessary transmission service (including
provision for losses) to deliver the energy and/or operating capacity to
the delivery point(s) and BGE shall be responsible for obtaining any
necessary transmission service (including provision for losses) to deliver
the energy and/or operating capacity after the delivery point(s).
(b) Unless otherwise agreed to by the Parties, if Supplier fails to
deliver capacity and energy under a Transaction, and such failure to
perform is not excused pursuant to Section 9 below, then BGE shall be
entitled to recover from the Supplier any additional cost incurred by BGE
attributable to Supplier's failure to perform ("Replacement Power Costs").
BGE's Replacement Power Costs, which shall be determined solely by BGE,
shall be calculated as the difference between BGE's total cost to replace
such energy and/or operating capacity under this Agreement (including any
self-generation costs) and the cost BGE would have incurred had Supplier
performed its obligation under the Transaction. BGE shall use reasonable
efforts to mitigate such Replacement Power Costs.
4. SERVICE REQUIREMENTS
(a) For all Transactions hereunder, all energy shall be of the character
commonly known as three-phase sixty (60) hertz energy and shall be
delivered by Supplier at the mutually agreed upon point(s) of delivery.
(b) Prior to the commencement of any Transaction hereunder, the Supplier
shall demonstrate to BGE's satisfaction that it has arranged for all
transmission service agreements necessary to deliver the capacity and/or
operating capacity to the delivery point(s) under the agreed upon terms and
conditions.
(c) The Supplier shall immediately contact BGE's schedulers in the event
of sudden curtailment or interruption of energy and/or operating capacity
under this Agreement. The Supplier shall contact BGE's schedulers as
appropriate with as much advance notice as possible regarding any such
impending curtailment or interruption.
(d) In addition to any interruption/curtailment rights BGE may have under
any Transaction, BGE shall also have the unilateral right to direct
Supplier to immediately curtail or interrupt a Transaction during system
conditions that prevent BGE from receiving energy or during times BGE
determines that an emergency condition exists.
5. TERM
2
(a) This Agreement shall become effective on May 15 and shall remain in
effect until terminated by either party upon thirty (30) days advance
written notice to the other Party; provided, however, that no such
termination shall affect any existing Transaction(s) established hereunder,
unless otherwise agreed to by the Parties.
(b) In addition to any other remedy available to it, either Party may
terminate this Agreement or any Transaction hereunder if: (i) the other
party fails to make any payment due hereunder, with the exception of
payments in dispute pursuant to Section 6(d) below, and such failure shall
continue for twenty (20) days after it receives written notice demanding
such payment, or (ii) the other Party dissolves or liquidates.
(c) Notwithstanding the above, the applicable provisions of this Agreement
shall remain in effect after termination to the extent necessary to provide
for final billing, billing adjustments and payments, and to give effect to
those provisions of the Agreement, if any, which explicitly survive
termination.
6. BILLING AND PAYMENTS
(a) Unless otherwise agreed to by the Parties, all energy and/or operating
capacity purchases under this Agreement shall be accounted, billed and paid
for on the basis of delivered hourly quantities net of any Replacement
Power Costs pursuant to Section 3(b) above. The Parties involved in the
Transaction shall maintain records of hourly schedules for accounting and
operating purposes. The accounting period for Transaction hereunder shall
be one (1) calendar month ("Billing Period"). Both Parties shall maintain
or have available records of hourly schedules and deliveries made pursuant
to a Transaction.
(b) Supplier shall xxxx BGE for a Billing Period within six (6) working
days following the end of each Billing Period. BGE shall pay the xxxx on
the first banking day common to the Parties following the fourteenth (14)
day of the month following the Billing Period ("Due Date"). Payments shall
be made by electronic wire transfer to Supplier as set forth in Section
6(f) below.
(c) Amounts not paid by the Due Date shall be payable with interest
accrued daily at the prime rate of interest per annum established by Chase
Manhattan Bank (National Association) or its successor, on the last
business day of the month in which service was rendered, but in no event
greater than the maximum interest rate permitted by law.
(d) In the event that BGE disputes any portion of any xxxx, BGE shall have
the right to withhold the disputed amount. BGE shall have the right to
dispute any xxxx or portion thereof within twelve (12) months after its due
date. The Parties shall use their best efforts to amicably and promptly
resolve the dispute. Any underpayment, including amounts in dispute, shall
bear interest at the rate provided in Section 6(c) above and shall
3
be assessed from the time of underpayment to the date of issuance of the
revised xxxx. Any overpayment shall bear interest at the rate provided in
Section 6(c) above and shall be assessed from the time of overpayment to he
date the amount is refunded to BGE. Payment for underpayments shall be
made as provided in 6(b) above. Refunds for overpayments shall be made in
the manner specified by BGE at the time.
(e) All xxxxxxxx to BGE shall be sent to:
Baltimore Gas and Electric Company
Attn.: Director, Bulk Power Arrangements
Energy Operations Building
X.X. Xxx 0000
Xxxxxxxxx, XX 00000
(f) All payments to Supplier shall be wire transferred to:
LG&E Power Marketing Inc.
Xxxxx Fargo Bank
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
ABA #000000000
Account #4660018540
7. TAXES AND EXPENSES
The Seller shall be responsible for all costs, taxes, and charges of any
kind relating to the production and/or deliver of energy and/or capacity
prior to the delivery point(s). BGE shall be responsible for all costs,
taxes, and charges of any kind relating to the delivery of such energy
and/or capacity beyond the delivery point(s).
8. LIMITATIONS OF LIABILITY.
Neither Party hereto shall be liable for any consequential, incidental,
punitive or other special damages, with the exception of those damages
identified in Section 3(b) above, relating to the performance or
nonperformance of this Agreement or any Transaction hereunder. Each Party
shall be solely responsible, as between the Parties hereto, for any costs,
damages, charges or liabilities associated with its physical facilities and
shall hold the other Party harmless from such costs, damages, charges or
liabilities.
9. FORCE MAJEURE
The term "Force Majeure", as used herein, shall be physical causes of the
kind hereafter listed which are beyond the control of the Party affected:
flood, earthquake, tornado, storm, fire, civil disobedience, sabotage,
restraint by court order or public authority (whether valid or invalid),
and action or non-action by or inability to obtain or keep the necessary
authorizations or approvals from any governmental agency or authority,
which by exercise of due diligence such Party could not reasonably have
been expected to avoid and which by exercise of due diligence it has been
unable to overcome. Neither Party shall be considered to be in default in
the performance of any obligations under this Agreement when a failure of
performance shall be due to Force Majeure. No Party shall, however, be
relieved of liability for failure of performance if such failure is due
4
to causes arising out of its own negligence or due to removable or
remediable causes which it fails to remove or remedy within a reasonable
time period. Either Party rendered unable to fulfill any of its obligations
under this Agreement by reason of Force Majeure shall give prompt written
notice of such fact to the other Party and shall exercise due diligence to
remove such inability with all reasonable efforts.
10. SECURITY PROVISIONS
In order to obtain adequate assurance of Supplier's ability to perform its
obligations under this Agreement, BGE may require the Supplier to furnish
sufficient security in advance of a Transaction(s). The need for and form
of such security shall be acceptable to BGE in its sole judgment.
11. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties
relating to the subject matter hereof and supersedes any other agreements,
written or oral, between the Parties concerning such subject matter.
12. CHOICE OF LAW
The formation, validity, interpretation, execution, amendment and
termination of this Agreement shall be governed by the laws of the State of
Maryland.
13. ASSIGNMENT
The rights of either Party under this Agreement shall not be assigned,
pledged or otherwise transferred without the prior written consent of the
other Party. In the event of such mutually agreed assignment, any such
assignee or transferee shall be required to assume all of the obligations
of the assignor or transferor under this Agreement pursuant to a written
agreement which is acceptable to the non-assigning Party.
14. NON-WAIVER OF DEFAULTS
No waiver by either Party of any default of the other Party under this
Agreement shall operate as a waiver of a future default whether of a like
or different character.
15. WRITTEN AMENDMENTS
No modification of the terms and provisions of this Agreement shall be or
become effective except by written amendment executed by the Parties.
16. SEVERABILITY AND RENEGOTIATION
Should any provision of this Agreement for any reason be declared invalid
or unenforceable by final and non-appealable order of any court or
regulatory body having jurisdiction, such decision shall not affect the
validity of the remaining portions, and the remaining portions shall remain
in full force and effect as if this Agreement had been executed without the
invalid portion. In the event any provision of this Agreement is declared
invalid, the parties shall promptly renegotiate to restore this Agreements
near as possible to its original intent and effect.
5
17. CONFIDENTIALITY
The Parties shall keep the terms of any Transaction confidential, except to
the extent such information: (i) must be disclosed for the purposes of
effectuating any Transaction, (ii) is required by the Pennsylvania-New
Jersey-Maryland Power Pool of which BGE is a member, or (iii) is required
to be disclosed to a court or regulatory body.
ACCEPTED AND AGREED TO THIS 15TH DAY OF MAY, 1995.
Company: BALTIMORE GAS AND ELECTRIC COMPANY
By:
------------------------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
Company: LG&E POWER MARKETING INC.
By:
------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
6
EXHIBIT "A"
FORM OF CONFIRMATION LETTER
[DATE]
------------------------
------------------------
------------------------
------------------------
CONFIRMATION LETTER
This letter shall confirm the agreement reached on ____________________,
19___ between _____________________ ("Supplier") and Baltimore Gas and Electric
Company ("BGE") regarding the sale/purchase of energy and/or operating capacity
under the terms and conditions as follows:
BGE to purchase and receive; Supplier to sell and deliver.
CONTRACT QUANTITY:
------------------------------------
DELIVERY POINT(S):
------------------------------------
CONTRACT PRICE:
------------------------------------
NATURE OF TRANSACTION:
------------------------------------
PERIOD OF DELIVERY:
------------------------------------
OTHER:
------------------------------------
This Confirmation Letter is being provided pursuant to and in accordance
with the Energy and Operating Capacity Agreement dated ______________________,
19____ ("Agreement") between Supplier and BGE, and constitutes part of and is
subject to all of the terms and provisions of such Agreement. Terms used but
not defined herein shall have the meanings ascribed to them in the Agreement.
7
Please confirm that the terms stated herein accurately reflect the
agreement reached on ____________________, 19___ between you and BGE by
returning an executed copy of this letter by facsimile to BGE. Your response
should reflect the appropriate Party in your organization who has the authority
to enter into this Transaction, and should be received by BGE no later than
____________________________.
-------------------------------------------
BALTIMORE GAS AND ELECTRIC COMPANY
Title:
-------------------------------------
-----------------------------------------------
Supplier:
-------------------------------------
Title:
-------------------------------------
8
