CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
Exhibit 10.4
------------
SECOND AMENDMENT TO POWER PURCHASE AGREEMENT
MENDOTA BIOMASS POWER, LTD. (PG&E Log No. 25C013)
THIS SECOND AMENDMENT TO POWER PURCHASE AGREEMENT
("Agreement"), dated November 6th, 1997 is by and between MENDOTA
BIOMASS POWER, LTD. ("Seller") a California limited partnership,
and PACIFIC GAS AND ELECTRIC COMPANY ("PG&E"), a California
corporation. PG&E and Seller are sometimes referred to herein
individually as "Party" and collectively as the "Parties."
RECITALS
--------
A. There is a Long-Term Energy and Capacity Power Purchase
Agreement between Seller and PG&E signed by PG&E on January 7,
1985, and by Seller on November 16, 1984, as amended by First
Amendment (the "PPA"), for the 25,000 kw generator nameplate
biomass-fueled facility (PG&E Log No. 25C013) located at the City
of Mendota Industrial Park, California (the "Facility"); and,
--------
B. The intent of the Parties is for all terms and
conditions of the PPA to remain in full force and effect except
where expressly amended. Unless otherwise defined herein, all
capitalized and underlined terms shall have the same meaning as
defined in the PPA.
C. Seller believes that sufficient fuel is available for
delivery to the Facility to operate the Facility at 27,000 kw
--------- --------
under the PPA throughout the remainder of the Fixed Price Period.
----- ----- ------
D. The Parties wish to restructure the PPA as set forth
herein in ways which each Party believes will be to its benefit.
E. The Parties have had a variety of disputes under the
PPA, including PG&E's administration of Curtailment Option B as
set forth in Appendix C of the PPA.
F. To accomplish these restructuring changes and resolve
the Curtailment Option B dispute, the Parties have agreed to the
terms and conditions set forth below.
Remaining portion of this page intentionally left blank.
PAGE
AGREEMENT
THEREFORE, in consideration of the mutual covenants in this
Agreement, the Parties agree as follows:
SECTION 1
1. DEFINITIONS
Whenever used in this Agreement, the following terms shall
have the following meanings:
1.01 Curtailment Option B Adder: the adder to energy
payments for the Facility as provided in the first paragraph of
--------
Appendix B at page B-1 of the PPA.
1.02 Fixed Price Period: This term shall have the same
----- ----- ------
meaning in this Agreement as it has in the PPA for the Facility
--------
which is the subject of this Agreement.
1.03 kw: Kilowatts
1.04 kwh: Kilowatt-hours
1.05 California Power Exchange.: The California Power
Exchange Corporation ("CA PX"), a California not-for-profit
public benefit corporation, which has been established in order
to conduct competitive auctions for electric power in the State
of California as described in Section 355 of the California
Public Utilities Code.
1.06 PPA Curtailment Provisions: Article 7 and Appendix C
of the PPA. Section A-7 of Appendix A of the PPA is not included
in this definition.
1.07 Monthly Curtailment Period: A continuous period of one
calendar month commencing at 00:00 hours on first day and ending
at 23:59 hours on last day of the calendar month (any one month
from January through May, or September through December during
the Fixed Price Period) during which, at PG&E's sole option,
------------------
Seller shall physically curtail all deliveries of power from the
Facility to PG&E to zero.
--------
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2PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
SECTION 2
2. BLOCK CURTAILMENT DURING THE FIXED PRICE PERIOD
----- ----- ------
2.01 For the period beginning on January 1, 1998 through the
end of the Fixed Price Period applicable to the Facility, the PPA
----- ----- ------ --------
Curtailment Option B Provisions shall be superseded in the
entirety by curtailment in accordance with this Section 2 which
defines "Block Curtailment." After the expiration of the Fixed
-----
Price Period in the PPA, this Section 2, and the resulting
----- ------
amendments to the PPA contained herein, shall have no force or
effect with the sole exception of Section 2.10 which shall
continue in effect.
2.02 Effective January 1, 1998 PG&E may, at its discretion,
curtail the Facility for up to *** hours per calendar year
--------
through the remaining period in the Fixed Price Period in the
----- ----- ------
PPA.
2.03 In the final calendar year of the Fixed Price Period,
----- ----- ------
the total annual amount of Block Curtailment provided by the
Facility will be prorated based on the percentage of the calendar
--------
year which is in the Fixed Price Period.
----- ----- ------
2.04 If, as a result of a decision by a the court in the
Judicial Council Coordination Proceeding No. 3241 or by a court
or by the California Public Utilities Commission in any action
relating to the end of Fixed Price Period, the Facility's Fixed
----- ----- ------ ---------- -----
Price Period is determined to end on a date that is later than
----- ------
PG&E's current interpretation of the Fixed Price Period end date,
----- ----- ------
Seller will be required to provide additional Block Curtailment
from the Facility to PG&E on a prorated basis as provided in
--------
Section 2.03 above.
2.05 PG&E shall schedule the Block Curtailments from the
Facility in blocks of a minimum of *** consecutive off-peak and
--------
super off-peak hours of curtailment, except for *** block of
curtailment per calendar year which may be less than *** hours.
PG&E shall provide Seller written notice by telecopy (followed by
telephone verification of the telecopy notice) at least 12 hours
prior to each Block Curtailment period. Such notice shall be
provided to Seller's plant manager or representative [fax number
(000) 000-0000; telephone number (000) 000-0000] in accordance
with PG&E's notice provision described above.
3PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
2.06 During Block Curtailment, Seller may reduce its energy
deliveries to PG&E from the Facility to zero. If the Facility
-------- --------
delivers power during the Block Curtailment hours, PG&E shall pay
for up to *** kwh per half-hour in energy deliveries at a price
equal to ***% of the CA PX day-ahead energy price or, in the
absence of a CA PX day-ahead energy price, at ***% of PG&E's
short-run avoided cost (SRAC) energy prices for the corresponding
hours. PG&E will not pay Seller for deliveries from the Facility
--------
which exceed *** kwh per half-hour during the Block Curtailment
period. It is the intent of this Section for the Facility to
--------
minimize its energy deliveries to PG&E during the Block
Curtailment subject to the Facility's physical and regulatory
--------
constraints effecting safe and prudent operation of the Facility.
--------
2.07 PG&E will have the right to cancel Block Curtailment
after it has begun. However, should a Block Curtailment be so
canceled, PG&E will pay a price equal to ***% of the CA PX
day-ahead energy price or, in the absence of a CA PX day-ahead
energy price, at ***% of PG&E's short-run avoided cost (SRAC)
energy prices for the corresponding hours for energy deliveries
for the period from the commencement to the cancellation of that
particular Block Curtailment. No additional payment of any kind
will be due from PG&E for such deliveries. After any Block
Curtailment is canceled, (i) the Facility will be required to
--------
start deliveries on a best efforts basis (ii) payment for any
energy deliveries from the time cancellation of each individual
Block Curtailment period becomes effective will be made in
accordance with the PPA provisions , and (iii) any hours
remaining in a period of scheduled Block Curtailment canceled by
PG&E will be credited by PG&E against the remaining hourly
calendar year limit of Block Curtailment under this Agreement.
PG&E may, at its option, provide a schedule for Block Curtailment
by December 31 or earlier of the preceding year for curtailment
to occur in the following year. However, PG&E may revise that
schedule as long as it provides the Seller with a minimum of 12
hours advance notice of that change. Seller may elect to perform
maintenance during a Block Curtailment. Any scheduled
maintenance performed during Block Curtailment shall reduce the
allowance of annual scheduled maintenance hours available to
Seller.
2.08 The Block Curtailment provisions of this Agreement are
not intended to affect Seller's capacity payments, since those
payments are based on deliveries during on-peak and partial peak
hours.
2.09 For the period October 1, 1997 through December 31,
1997, each of PG&E and Seller shall retain its existing rights
under the PPA Curtailment Provisions.
4PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
2.10 Effective January 1, 1998, all provisions of the PPA
pertaining to Curtailment Option B, including those provisions
contained in Article 7 and Appendix C of the PPA, shall be deemed to
have been rescinded in their entirety and shall no longer have any
force or effect for any purpose whatsoever, except as provided below.
PG&E agrees to continue to adjust the forecasted off-peak and super
off-peak hours' energy prices listed in Table X-0, Xxxxxxxx X of the
PPA upward by ***% for Period A and ***% for Period B ("the
"Curtailment Option B Adder") on and after January 1, 1998, through
the end of Fixed Price Period except during Block Curtailment hours
----- ----- ------
and the Monthly Curtailment periods covered under Section 3 of this
Agreement. The Curtailment Option B Adder will apply to all off-peak
and super off-peak energy deliveries prior to the successful
completion of the 48-Hour Test covered under Section 3.09 of this
Agreement. The provisions of Appendix A, Section A-7 of the PPA shall
continue to apply for the term of the PPA.
SECTION 3
3. PAYMENT FOR MONTHLY CURTAILMENT DURING THE FIXED PRICE
----- -----
PERIOD
------
3.01 For the period beginning January 1, 1998 through the end of
the Fixed Price Period, the following terms set forth in this Section
----- ----- ------
3 shall apply. After the end of the Fixed Price Period, this Section
----- ----- ------
3 will have no further force or effect and the PPA provisions shall
apply unmodified by this Section 3.
3.02 Seller shall physically curtail all deliveries of power from
the Facility for *** calendar months each year during the years 1998
--------
and 1999 ("Monthly Curtailment"), except as described in Section 3.07
and Section 3.09 below. Monthly Curtailment may occur only in those
calendar months which are at least 2 calendar months apart. For
calendar year 1998, PG&E has the right to schedule (i) *** months of
Monthly Curtailment during any months from January through May, or
(ii) ******** of Monthly Curtailment during January through May and
******** of Monthly Curtailment during any month from September
through December. For the calendar year 1998, PG&E may not schedule
*** months of Monthly Curtailment during the month of September
through December. For calendar year 1999 *** months of Monthly
Curtailment will occur during the months of January through May.
3.03 If, as a result of a decision in the Judicial Council
Coordination Proceeding No. 3241 or by a court or by the California
Public Utilities Commission in any action relating to the end of Fixed
-----
Price Period, the Facility's Fixed Price Period is determined to end
----- ------ ------ ----- ------
on a date that is later than PG&E's current interpretation of the
Fixed Price Period end date, Seller will be
----- ----- ------
5PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
required to provide additional Monthly Curtailment. This
additional Monthly Curtailment and the resulting reduction in
annual scheduled maintenance hours in accordance with Sections
3.02 and 3.08 will be prorated based on the ratio of the number
of Fixed Price Period hours remaining in that year to the total
----- ----- ------
number of hours in the calendar year. Any additional Monthly
Curtailment that Seller must provide under this Section 3.03 will
be scheduled and provided before the end of the Fixed Price
----- -----
Period. Regardless of the end of the Fixed Price Period, for
------ ----- ----- ------
calendar year 1999 Seller will be deemed to have satisfied its
Monthly Curtailment obligations by providing *** months of
Monthly Curtailment by the end of May 1999.
3.04 PG&E will provide Seller with at least 30 days advance
written notice for the first Monthly Curtailment period in
January through May 1998. PG&E will provide Seller with a
schedule no later than December 31, 1997 should the second
Monthly Curtailment period occur in the January through May 1998
period. For the September through December 1998 Monthly
Curtailment period, if any, PG&E will provide a schedule by June
30, 1998. For the January through May 1999 Monthly Curtailment
period, PG&E will provide Seller with a schedule no later than
October 31, 1998. If PG&E fails to provide a 1999 Monthly
Curtailment schedule by October 31, 1998, Seller may propose to
PG&E the *** months from the designated curtailment months during
which Seller plans to provide Monthly Curtailment. However, PG&E
reserves the right to make changes to Seller's proposed schedule.
3.05 PG&E may revise a Monthly Curtailment schedule provided
that Seller is notified of such revision by telecopy at least
ninety (90) days prior to the originally scheduled Monthly
Curtailment.
3.06 In consideration of the mutual benefits of Monthly
Curtailment, PG&E will pay Seller a Monthly Curtailment Energy
Payment, for each Monthly Curtailment period in the years 1998
and 1999 as set forth in the Table below. The Monthly
Curtailment Energy Payment for the first month of curtailment for
the Facility shall be the amount specified for the corresponding
--------
month in the Table below for the "First Month of Monthly
Curtailment." The Monthly Curtailment Energy Payment for the
second month of curtailment for the Facility shall be the amount
--------
specified for the corresponding month in the Table below for the
"Second Month of Monthly Curtailment." The amount shall be paid
by PG&E to Seller at the time required by the PPA, and is subject
to the provisions of Section 3.09 below. Should Seller be
required to provide additional Monthly Curtailment during its
Fixed Price Period as described under Section 3.03 multiplied by
----- ----- ------
the amount specified in the Table below for the "First Month of
Monthly Curtailment" for the month in which Seller provides such
additional curtailment.
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6PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
**************************************
Note: Monthly Curtailment may occur only in those calendar
months which are at least two calendar months apart.
3.07 Seller may begin energy deliveries 48 hours before the
end of each Monthly Curtailment period applicable to the
Facility. PG&E shall not pay Seller for energy and/or capacity
--------
deliveries during this 48-hour period. Since this Agreement
requires Seller to shut down the Facility after it has qualified
--------
to commence Monthly Curtailment pursuant to Section 3.09 below,
if Seller continues to deliver power to PG&E after the Facility
--------
has commenced Monthly Curtailment, Seller shall not receive any
payment for any such deliveries which take place after the
commencement of Monthly Curtailment.
3.08 During the designated Monthly Curtailment periods,
Seller is allowed to perform maintenance. The Facility's annual
-----------
allowance (based on a scheduled maintenance year) of *** hours of
scheduled maintenance as found in Section E-3 of Appendix E of
the PPA will be reduced by *** hours for the first Monthly
Curtailment that occurs in any one month from January to May. A
second Monthly Curtailment that occurs in any month from January
to May will not further reduce the Facility's remaining allowance
----------
of annual scheduled maintenance hours. However, for any second
Monthly Curtailment period that occurs is any month from
September through December, Facility's remaining allowance of
----------
scheduled maintenance hours will be further reduced by *** hours.
Any scheduled maintenance performed in non-Monthly Curtailment
months shall be treated in accordance with the PPA provisions.
After the end of the Fixed Price Period and through the remaining
----- ----- ------
term of the PPA, Seller will be charged for the actual number of
hours used for performing scheduled maintenance under the
unamended PPA terms.
3.09 (a) It is the express purpose of this Agreement that
Seller shall be compensated only for curtailment it would not
otherwise have provided without the payments provided for in this
Section 3. The tests below in Section 3.09 (b) provide an
objective and exclusive criteria for determining whether this
purpose has been fulfilled.
(b) Seller shall be paid 100% of the Monthly
Curtailment Energy Payment set forth in Section 3.06 above for
the Monthly Curtailment periods of each year, if the Facility can
--------
successfully satisfy item 1) and item 2) below (the "Performance
Requirement"):
1) The Facility delivers power to PG&E at or
--------
above an average of 22,000 kwh per hour for a continuous 48 hour
period, as measured using PG&E's conventional 30-minute metering
7PAGE
process ("48-Hour Test"), immediately preceding (i) the Monthly
Curtailment period, or (ii) Block Curtailment that immediately
precedes a Monthly Curtailment, and
2) The Facility is not fully forced out of
--------
operation, except when caused by PG&E during the period between
successful completion of item 1) above and prior to
discontinuance of energy deliveries during the Facility's
preparations to begin the Monthly Curtailment shutdown.
The remaining portion of this page intentionally left blank.
The 48-Hour Test will not be required if within 72 hours prior to
the start of a Monthly Curtailment (i) a Block Curtailment
occurs, provided the Facility had delivered at or above an
--------
average of 22,000 kwh per hour for a continuous 48 hour period
preceding the start of that Block Curtailment; or (ii) any PG&E
caused or invoked interruption of deliveries occurs pursuant to
Appendix A, Section A-7 of the PPA or, (iii) any interruption of
deliveries occurs pursuant to Appendix A, Section A-8 of the PPA.
(c) Seller shall provide written notice by telecopy
(followed by telephone verification of the telecopy notice) to
PG&E at such time that Seller determines the Facility has met the
--------
Performance Requirement set out in Section 3.09(b) 1) & 2) above.
Such notice will include Seller's metering data which supports
the successful completion of item 1) of Section 3.09(b), as well
as Seller's confirmation of successfully meeting the requirement
of item 2) of Section 3.09(b), the date and time the Facility has
--------
met the Performance Requirement and the date and time Monthly
Curtailment has commenced or will commence. Such notice shall be
provided by telecopy and confirmed by telephone to PG&E's
Manager, Utility Electric Supply or its successor organization
per notice provided by PG&E [fax number (000) 000-0000; telephone
number (000) 000-0000] and to the PG&E Administrator of the
Mendota PPA or its successor [current fax number (000) 000-0000;
current telephone number (000) 000-0000]. PG&E shall notify
Seller by telecopy (confirmed by telephone) within two business
days of receipt of notice from Seller, if it does not concur with
Seller that the Facility has met Performance Requirement.
--------
Notices to Seller under this Section 3.09 shall be provided by
telecopy to the Facility's plant manager or representative and
----------
confirmed by telephone [fax number (000) 000-0000; telephone
number (000) 000-0000]. Failure by PG&E to respond within two
business days of receipt of notice from Seller shall be deemed to
be notification by PG&E that PG&E concurs with Seller that the
Facility has satisfied the 48-Hour Test.
--------
8PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
(d) If the Facility does not meet the Performance
--------
Requirement as of the beginning of the Monthly Curtailment
period, Monthly Curtailment shall not begin until the Facility
--------
subsequently passes the 48-Hour Test, at which time Monthly
Curtailment will commence. Seller shall make reasonable efforts
to successfully pass the 48-Hour Test. The Facility's allowance
----------
of *** and *** hours during the First and Second Monthly
Curtailment periods, respectively, will be prorated based on the
number of hours of curtailment provided to the total number of
hours in the calendar month. Seller shall provide written notice
to PG&E by telecopy (confirmed by telephone) at such time that
Seller determines the Facility has met the 48-Hour Test and the
--------
Monthly Curtailment has commenced. PG&E shall notify Seller by
telecopy (confirmed by telephone) within two business days of
receipt of notice from Seller if it does not concur with
Seller that the Facility has passed the 48-Hour Test.
--------
Failure by PG&E to respond within the two business days of
receipt of notice from Seller shall be deemed to be notification
by PG&E that it concurs with Seller that the Facility has
--------
satisfied the 48-Hour Test.
(e) If the Facility passes the 48-Hour Test after the
---------
designated Monthly Curtailment period has begun, the Monthly
Curtailment Energy Payment will be prorated based upon the ratio
of (i) the number of hours remaining in the Monthly curtailment
period after the Facility has successfully passed the 48-Hour
--------
Test and commenced Monthly Curtailment to (ii) the total number
of hours in the Monthly Curtailment period. For all energy
deliveries in a Monthly Curtailment period prior to the
commencement of Monthly Curtailment, Seller shall receive ***% of
the Forecast Energy Prices under Energy Payment Option 1 at Table
B-1, Appendix B, of the PPA, including the Curtailment Option B
Adder, if applicable, subject to the limitation in the last
sentence of this paragraph (e). The total energy payment for
such designated curtailment month will be the sum of (i) the
payment for energy delivered prior to commencement of the Monthly
Curtailment plus (ii) the prorated Monthly Curtailment Energy
Payment, provided, however that the total energy payment for such
Monthly Curtailment period will be limited to a maximum amount
equal to 100% of the Monthly Curtailment Energy Payment for the
applicable month as set forth in Section 3.06 above.
(f) Because the first and second Monthly Curtailment
periods during each year shall always be non-consecutive, Seller
is required to satisfy the Performance Requirement individually
for each Monthly Curtailment period by successfully passing the
48-Hour Test.
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
9PAGE
3.10 Capacity payments for each Monthly Curtailment period
shall be calculated using the Facility's past
----------
********************* average historic energy deliveries in the
corresponding month (not including months where Monthly
Curtailment was taken at the Facility), provided that the
--------
Facility meets the Performance Requirement as set forth in
--------
Section 3.09 above.
The Monthly Curtailment firm capacity payment for the
---- --------
Facility will be calculated
--------
in accordance with Section E-5 of Appendix E of the PPA. For
purposes of the calculation, the Monthly Capacity Factor ("MCF")
will be deemed to be equal to the ************************
historic average Performance Factor in the corresponding month
(not including months where Monthly Curtailment was taken at the
Facility).
--------
If the Facility has not met the Performance Requirement
--------
as of the beginning of a Monthly Curtailment period, the Monthly
Curtailment firm capacity payment for the month will be
---- --------
calculated in accordance with Section E-5 of Appendix E of the
PPA, substituting the following factors for P and MCF:
P= A +Y <= (1.0)
------------
Cx(B-S)x(.8)
A= Total kilowatt-hours delivered during all on-peak and
partial-peak hours in the Monthly Curtailment period prior to
successfully passing the 48-Hour Test and commencement of Monthly
Curtailment excluding any energy associated with generation
levels greater than firm capacity
-------------
Y= ****** historic average Performance Factor for the
corresponding applicable month (not including Monthly Curtailment
months) multiplied by C (firm capacity in kilowatts) multiplied
---- --------
by the sum of on-peak hours and partial peak hours in the Monthly
Curtailment period remaining after successfully passing the
48-Hour Test and commencing Monthly Curtailment.
C= Firm capacity in kilowatts
---- --------
B= Total on-peak and partial peak hours during the month
S= Total on-peak and partial peak hours during the month
the Facility is out of service on scheduled maintenance or due to
--------
a PG&E forced outage prior to successfully passing the 48-Hour
Test.
For purposes of the Monthly Curtailment firm capacity
---- --------
payment, MCF will be deemed to be equal to the Performance Factor
(P) as calculated above.
10PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
For purposes of determining the Monthly Curtailment
as-delivered capacity payment, the Facility will receive a
-- --------- -------- --------
payment based upon its ************************ historic average
energy deliveries to PG&E in excess of firm capacity in the
---- --------
applicable time-of-day period for the Facility in the
--------
corresponding month (not including months where Monthly
Curtailment was taken at the Facility). The payment calculation
--------
will be in accordance with Section D-2 of Appendix D of the PPA.
If the Facility has not met the Performance Requirement as
--------
of the beginning of its Monthly Curtailment period, the Monthly
Curtailment as-delivered capacity payment for the month will be
-- --------- --------
determined in accordance with Section D-2 of Appendix D of the
PPA. For purposes of the calculations as-delivered capacity will
-- --------- --------
be calculated as follows:
As-Delivered Capacity = A + B
-- --------- --------
Where:
A= Kilowatt hour deliveries by time-of-day period in
excess of firm capacity in the Monthly Curtailment period prior
---- --------
to successfully passing the 48-Hour Test and commencing Monthly
Curtailment.
B= ****** historic average kwh deliveries by time-of-day
period in excess of firm capacity in the corresponding applicable
---- --------
month (not including Monthly Curtailment months) multiplied by
the number of applicable time-of-day periods in the Monthly
Curtailment period remaining after successfully passing the
48-Hour Test and commencing Monthly Curtailment.
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11PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
SECTION 4
4. CAPACITY AND ENERGY DELIVERIES
4.01 PG&E shall accept and pay for up to *** mw of Seller's
energy and capacity deliveries under the terms of the PPA and
where appropriate as amended by this Agreement. PG&E shall
accept and pay for Seller's energy deliveries exceeding *** mw up
to a maximum of *** mw at prices equal to ***% of the CA PX
day-ahead energy prices or, in the absence of CA PX day-ahead
energy prices, at ***% of PG&E's SRAC energy prices. PG&E will
not pay Seller for energy deliveries exceeding *** mw for the
remaining term of the PPA.
4.02 In accordance with Article 5 of the PPA, PG&E shall
accept and pay for up to 22.0 mw in firm capacity deliveries from
---- --------
Seller with payment determined in accordance with Appendix E of
the PPA. PG&E shall pay Seller for capacity delivered in excess
of firm capacity on an as-delivered capacity basis in accordance
---- -------- -- --------- --------
with As-Delivered Capacity Payment Option 2 set forth in Appendix
-- --------- --------
D up to a total maximum delivery of *** mw. PG&E will not pay
Seller for capacity deliveries exceeding *** mw for the remaining
term of the PPA.
SECTION 5
5. RELEASE
5.01 Each Party does for itself, its officers, directors,
agents, employees, attorneys, representatives, subsidiaries,
affiliates, predecessors, successors, partners, limited partners,
and assigns, hereby release and forever discharge the other Party
and its officers, directors, agents, employees, attorneys,
representatives, subsidiaries, affiliates, predecessors,
successors, partners, limited partners and assigns from any and
all claims, demands, causes of action, obligations or liabilities
of any nature whatsoever (including attorney's fees and costs of
suit), whether known or unknown, which either Party has or ever
had against the other Party including those related to the
following matters but excluding those set forth in Section 5.02
below:
***************************************************************
12PAGE
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
5.02
************************************************************
5.03 Each Party represents and warrants that it has given
any and all notices, and obtained any and all consents, powers
and authorities, necessary to permit it and the person executing
this Agreement for it, to enter into this Agreement, settle,
compromise, and release the claims settled, compromised, and
released herein, to do or undertake or forebear from any act
called herein, and to make this Agreement, and all the provisions
hereof, fully binding on and enforceable against the other Party
to this Agreement.
5.04 Each Party acknowledges that it may have claims against
the other Party of which it is currently unaware and that it
agrees that this Agreement is intended to extend to any and all
claims arising before the date of this Agreement which it may
have against the other Party, whether known or unknown, excluding
only claims based on the issues described in Section 5.02 above.
As a further inducement and consideration, each party with
respect to the subject matter of this Agreement expressly and
specifically waives any rights or benefits available to it under
California Civil Code Section 1542, which provides: "A general
release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected
his settlement with the debtor."
5.05 Each Party acknowledges that it may have sustained
damages, losses, costs, or expenses that are currently unknown or
unsuspected, and that such damages, losses, costs, or expenses as
may have been sustained may give rise to additional damages,
losses, costs, or expenses in the future. Each Party
acknowledges that the facts may be other than it now understands
them, and this Agreement has been negotiated and agreed upon in
light of this situation, and each Party hereby expressly waives,
with respect to the subject matter of this Agreement, any and all
rights which it may have under California Civil Code Section
1542.
5.06 Each Party acknowledges that the valuable consideration
for settlement of their disputes is solely for its own business
purposes and for the purpose of obtaining peace and preventing
protracted litigation between them. Neither the fact of this
Agreement, nor any of the consideration paid under it is or shall
be construed to be an admission that any claim compromised or
released by this Agreement is valid.
13PAGE
5.07 This Release is freely and voluntarily made. Neither
Party has been influenced to any extent in making this Release by
any representation or statements made by any representative,
agent, employee, attorney, or servant of PG&E or Seller.
5.08 Each Party represents and warrants that it has not
assigned to any other Party the claims being released, and that
it is fully entitled to give this release and discharge to the
other Party.
5.09 PG&E hereby accepts as complete and accurate any and
all prior calculations and related payments to Seller for the
curtailments of any sort entered into between PG&E and Seller
prior to November 5, 1997.
SECTION 6
6. MEDIATION
6.01 In the event of any disputes, excluding disputes
arising from the matters described in Section 5.02 above, between
PG&E and Seller arising out of or connected with this Agreement
which the parties are unable to resolve through direct
negotiation, either party may serve upon the other at its
principal place of business a request for mediation. Neither
party may file an action against the other in any court unless
and until the party seeking to file such an action has first
requested a mediation hearing and made a good faith effort to
complete the mediation process provided in this Agreement.
6.02 The Party requesting mediation shall recommend a
neutral, independent person with experience in dispute mediations
to act as mediator. The mediator must be selected by agreement
of all Parties. The Parties shall endeavor to hold the mediation
not less than ten or more than twenty days from the date the
Party requesting mediation gives notice of the request for
mediation to the other Party. The mediation shall be held at San
Francisco, California. The cost of mediation shall be borne by
the Parties equally.
6.03 The Parties shall maintain the mediation proceedings in
confidence and shall not disclose to third persons the statements
made therein by the other Party or the mediator. The provisions
of California Evidence Code Sections 1152, 1152.5 and 1152.6
shall apply to the mediation proceedings.
6.04 At least five days before the date of the mediation,
each Party shall provide the mediator with a statement of its
position and copies of all supporting documents. Each Party
shall send to the mediation a person who has authority to bind
the Party. If the dispute involves third parties, they shall
also be asked to participate in the mediation, but their presence
shall not be necessary for the mediation to proceed.
14PAGE
6.05 If a Party has participated in good faith in a
mediation and is dissatisfied with the outcome, that Party may
then invoke all legal rights and remedies available to the Party
at law or in equity.
SECTION 7
7. MISCELLANEOUS
7.01 This Agreement constitutes the entire agreement of the
Parties with respect to the subject matter hereof and supersedes
any and all prior negotiations, correspondence, understandings
and agreements between the Parties respecting the subject matter
of this Agreement.
7.02 This Agreement may be modified or amended only by a
written instrument signed by the authorized representatives of
both Parties.
7.03 Captions are included herein for ease of reference
only. The captions are not intended to affect the meaning of the
contents or scope of this Agreement.
7.04 No provision of this Agreement shall be interpreted for
or against PG&E or Seller because PG&E, Seller, or their
respective attorneys drafted the particular provision.
7.05 This Agreement shall be construed and interpreted in
accordance with the laws of the State of California, excluding
any choice of law rules that may direct the application of the
laws of another jurisdiction.
7.06 No term or provision herein shall be deemed waived and
no breach excused unless such waiver or consent is in writing and
signed by the Party claimed to have so waived or excused.
7.07 Seller agrees to use reasonable efforts to support the
reasonableness of this Agreement in any proceeding before the
California Public Utilities Commission in which the prudence or
reasonableness of this Agreement is examined. Each Party shall
bear its own costs and expenses in such a proceeding.
7.08 The Parties hereby terminate the Tolling and
Confidentiality Agreement between themselves dated September 25,
1995.
7.09 Except as expressly amended herein, the PPA shall
remain unchanged.
15PAGE
SECTION 8
8. CONFIDENTIALITY PROVISION
Each Party agrees not to disclose the terms and conditions
of this Agreement unless required by any governmental agency,
regulatory authority, court, or otherwise by law. PG&E may
voluntarily disclose the terms and conditions of this Agreement
to the California Public Utilities Commission, provided, however,
PG&E will request the Commission to hold the terms of this
Agreement in confidence.
Each Party may disclose the terms and conditions of this
Agreement to its tax advisors, accountants or other advisors whom
such Party may retain for financial or legal advice, but only on
the condition that all such advisors shall keep the terms and
conditions of this Agreement confidential. Seller may disclose
the terms and conditions of this Agreement to its lenders and
their advisors in order to obtain their consent to this
Agreement, but shall require such lenders and advisors to keep
the terms and conditions of this Agreement confidential, unless
disclosure is required by any governmental agency, regulatory
authority, court or otherwise by law to do so or unless
disclosure is made in connection with the enforcement by such
lenders of the loan documents between Seller and such lenders.
IN WITNESS WHEREOF, Seller and PG&E have caused this
Agreement to be executed by their duly authorized representatives
as of the date first set forth above.
PACIFIC GAS AND ELECTRIC COMPANY, MENDOTA BIOMASS POWER, LTD.,
a California corporation By: Thermendota, Inc.,
Its General Partner
By: /s/ Xxxxxx X. Xxxxx By: Xxxxx X. Xxxx
------------------- -------------
Its: Vice-president,
Asset Management
Name: Xxxxxx X. Xxxxx Name: Xxxxx X. Xxxx
--------------- --------------
Title: Vice President, Title: ___________________
Gas & Electric Supply
---------------------
Date of Signature: Date of Signature:
December 23, 1997 November 10, 1997
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