EXHIBIT 10.3.24
PLANT CONNECTION AGREEMENT
FOR THE
SECOND IMPERIAL GEOTHERMAL COMPANY POWER PLANT
BETWEEN
IMPERIAL IRRIGATION DISTRICT
AND
SECOND IMPERIAL GEOTHERMAL COMPANY
TABLE OF CONTENTS
SECTION TITLE PAGE
------- -----
1 PARTIES 1
2 RECITALS 1
3 AGREEMENT 2
4 DEFINITIONS 2
5 EFFECTIVE DATE AND TERM 3
6 CONNECTION OF PLANT 4
7 ELECTRIC SERVICE TO PRODUCER 4
8 METERING OF ENERGY DELIVERIES 4
9 PRODUCER'S DELIVERY AND IID ACCEPTANCE 4
10 PRODUCER'S GENERAL OBLIGATIONS 5
11 IID'S GENERAL OBLIGATIONS 6
12 BILLING 7
13 AUTHORIZED REPRESENTATIVES 8
14 METERS 9
15 CONTINUITY OF SERVICE 10
16 LIABILITY 11
17 UNCONTROLLABLE FORCES 13
18 INTEGRATION AND AMENDMENTS 14
19 NON-WAIVER 14
i
20 NO DEDICATION OF FACILITIES 14
21 SUCCESSORS AND ASSIGNS 15
22 EFFECT OF SECTION HEADINGS 15
23 GOVERNING LAW 15
24 ARBITRATION 16
25 ENTIRE AGREEMENT 18
26 NOTICES 18
27 SEVERAL OBLIGATIONS 19
28 SIGNATURE CLAUSE 19
ATTACHMENTS
-----------
EXHIBIT "A" - RATE SCHEDULES GL AND A2
EXHIBIT "B" - METERING ONE-LINE DIAGRAM
ii
1. PARTIES
The parties to this Agreement are IMPERIAL IRRIGATION DISTRICT ("IID"),
organized under the Water Code of the State of California and SECOND IMPERIAL
GEOTHERMAL COMPANY ("Producer"), hereinafter referred to individually as
"Party", and collectively as "Parties".
2. RECITALS
2.1 Producer intends to construct and operate, as owner or lessee, a
geothermal generating facility with a maximum 33.0 megawatt net operating
capacity at the Heber KGRA, Imperial County, California, and to sell the Plant
electrical output to Southern California Edison Company ("SCE").
2.2 SCE has entered into the Power Purchase Agreement dated April 16,
1985, ("Purchase Agreement") with Producer, to purchase all the electrical
output from the Plant.
2.3 SCE and Producer agree that the terms and conditions regarding
transmission of the Plant's Energy to an IID/SCE point of interconnection shall
be pursuant to a Transmission Service Agreement to be entered into between IID
and Producer.
2.4 Since the Plant will be built in the IID service territory, it
will be convenient to connect the Plant to the IID electric system.
Producer hereby grants the IID the right to enter the Plant site for any
reasonable purposes connected with this Agreement, by previous arrangements with
the
Plant manager. Those reasonable purposes include maintenance and repairs to IID
equipment in Producer's facilities, observing tests of said facilities, reading
of kilowatt-hour meters, and the like.
2.5 Producer desires to purchase and IID desires to sell the
electrical energy necessary to satisfy their operation and maintenance power
consumption requirements of the Plant for the life of the Plant that is not
normally generated by the Plant itself, or portable generating equipment.
2.6 The Parties desire, by means of this Agreement, to interconnect
the Plant to the IID electrical system and to establish the terms, conditions
and obligations of the Parties relating to such interconnection.
3. AGREEMENT
The Parties agree as follows:
4. DEFINITIONS
4.1 Agreement. This Plant Connection Agreement between IID and
Producer, and all Exhibits hereto, as may be amended from time to time.
4.2 Authorized Representative: The representative of a Party
designated in accordance with Section 13.
4.3 Energy: Electric energy in excess of Producer's electric energy
requirements, expressed in kilowatt-hours, generated by the Plant and measured
and delivered to the Point of Delivery.
2
4.4 Operation Date: The day on which the Plant Energy is first
accepted by IID for delivery to SCE.
4.5 Plant: A maximum of 33.0 MW net operating capacity geothermal
facility operated by Producer, as owner or lessee, including all associated
equipment and improvements necessary for generating electric energy and
transmitting it to the high voltage side of the power transformer.
4.6 Point of Delivery: The point on the high voltage side of
Producer's switchyard when IID's metering equipment measures the delivery of
Energy to the IID system as shown on Exhibit "B".
4.7 System Emergency: A condition on IID's system which is likely to
result in imminent significant disruption of service to customers or is
imminently likely to endanger life or property.
5. EFFECTIVE DATE AND TERM
This Agreement shall become effective upon the Operation Date of the Plant,
and shall remain in effect until the earlier of (i) thirty years after the plant
achieves firm operation as such term is defined in Section 2.17 of the Power
Purchase Contract dated April 16th, 1985 between Second Imperial Geothermal
Company and Southern California Edison Company, or (ii) thirty six (36) months
from the date the Plant has ceased to operate at the option of IID. It is
understood that if the Operation Date does not occur within five (5) years after
the date this Agreement was executed, this Agreement shall be of no force or
effect.
3
6. CONNECTION OF PLANT
6.1 Producer may electrically connect its Plant, in accordance with
the provisions of this Agreement, so that it can operate in parallel with the
IID electric system. Parallel operation will not commence until IID has
inspected and approved the interconnection facilities and operational
procedures.
6.2 Notwithstanding the provision that Producer has furnished the high
voltage switchyard complete, including the high voltage oil circuit breakers and
disconnect switches, the control of the high voltage oil circuit breakers and
disconnect switches shall be under the control of the IID dispatcher.
7. ELECTRIC SERVICE TO PRODUCER
IID shall provide electric service to Producer pursuant to Section 12.
8. METERING OF ENERGY DELIVERIES
Metering for electric service to Producer and for energy deliveries by
Producer to IID for delivery to SCE shall be at the Point of Delivery as shown
on Exhibit "B." Four meters shall be installed which shall measure and record
flows in each direction as shown on Exhibit "B."
9. PRODUCER'S DELIVERY AND IID ACCEPTANCE OF ENERGY FROM PLANT
Whenever electric output from the Plant exceeds Producer's power
requirements, Producer shall deliver all such excess output to IID for delivery
to SCE and IID shall accept such output for delivery to SCE and deliver such
output to SCE pursuant to a transmission service agreement to be entered into
between Producer and IID.
4
10. PRODUCER' S GENERAL OBLIGATIONS
Producer shall:
10.1 Operate the Plant in a manner consistent with applicable electric
utility industry standards, good engineering practice, and without degradation
of quality or reliability of service to IID customers.
10.2 Deliver the Plant's net electrical output to IID for the account
of SCE at the Point of Delivery.
10.3 Each Party shall provide the reactive kilovolt-ampere (KVA)
requirements of its own system so that there will be no interchange of reactive
KVA between systems. The Parties shall cooperate to control the flow of reactive
KVA to prevent the introduction of objectionable operating conditions on the
system of either Party.
10.4 Coordinate, to the greatest extent practicable, major overhaul
and inspection outages of the Plant with IID.
10.5 Give IID a written schedule on or before June 1, and December 1,
each year of the estimated amounts and rates of delivery of energy to be
delivered to IID for the account of SCE at the Point of Delivery during each
month of the succeeding twelve-month (12) period commencing July 1, and January
1.
10.6 Give IID a written schedule on or before the fifteenth (15th) day
of each month of the estimated amounts and rates of delivery of energy to be
delivered to
5
IID for the account of SCE at the Point of Delivery during each day of the
succeeding calendar month.
10.7 Give IID a schedule on or before 12:01 p.m. on Tuesday of each
seven-day (7) period of the estimated amounts and rates of delivery of energy to
be delivered to IID for the account of SCE at the Point of Delivery during each
hour of the succeeding seven-day (7) period commencing at 12:01 a.m. on the
following Monday; provided, however, that if any changes in the hourly
deliveries so scheduled become necessary, Producer shall notify IID of such
changes as far in advance as possible.
10.8 Provide IID any reasonable rights-of-way and access required for
testing and reading of meters by previous arrangement with the Plant manager.
10.9 Carry out the directions of the Authorized Representatives with
respect to the matters set forth in this Agreement.
11. IID'S GENERAL OBLIGATIONS
IID shall:
11.1 Design, acquire, construct, operate and maintain, or cause to be
designed, acquired, constructed, operated and maintained, and shall own, a
connecting transmission line between IID's transmission system and the Plant.
Following the completion of such line, IID may xxxx and Producer shall pay IID's
costs of designing, acquiring and constructing such line. Producer shall have
the right to audit IID's records and accounts to verify the cost of such line.
6
11.2 Accept the Plant's net electrical output for the account of SCE
at the Point of Delivery and simultaneously deliver an equal amount of electric
energy (less applicable transmission losses) to the SCE system at IID/SCE
point(s) of interconnection.
11.3 Coordinate, to the greatest extent practicable, major overhaul
and inspection outages of IID transmission facilities with Producer and notify
Producer of any changes as far in advance as possible.
11.4 Carry out the directions of the Authorized Representative with
respect to the matters set forth in this Agreement.
11.5 Operate its system in a manner consistent with applicable utility
industry standards and good engineering practices.
12. BILLING
12.1 IID shall read the meters monthly according to its regular meter
reading schedule beginning no more than thirty (30) days after the date that
electric energy is first supplied to Producer. IID monthly shall send Producer
within ten (10) working days after the meter is read a xxxx for electric
service. Producer shall pay IID the total amount billed within thirty (30) days
of receipt of the xxxx.
12.2 IID shall xxxx Producer for Producer's consumption of energy from
IID's resources in accordance with Rate Schedule GL or Rate Schedule A-2, as
applicable, as it may be revised from time to time. Copies of current Rate
Schedule GL and current Rate Schedule A-2 are attached as Exhibit "A."
7
12.3 If Producer disputes a xxxx, payment shall be made as if no
dispute existed pending resolution of the dispute by the Authorized
Representatives. If the xxxx is determined to be in error, the disputed amount
shall be refunded by IID including interest at the rate of one and one-half
percent (1 1/2%) per month, compounded monthly, from the date of payment to the
date the refund check or adjusted xxxx is mailed.
13. AUTHORIZED REPRESENTATIVES
13.1 Within thirty (30) days after the date this Agreement is signed,
each Party shall designate, by written notice to the other Party, an Authorized
Representative who is authorized to act in its behalf in the implementation of
this Agreement and with respect to those matters contained herein which are the
functions and responsibilities for the Authorized Representatives. Either Party
may, at any time, change the designation of its Authorized Representative by
written notice to the other Party.
13.2 IID's Authorized Representative shall develop detailed written
procedures necessary and convenient to administer this Agreement within six (6)
months after the date signed. Such procedures shall be submitted to Producer's
Authorized Representative for review, comment, discussion and concurrence before
they are put into effect. Such procedures shall include, without limitation: (i)
communication between Producer and IID's electric system dispatcher with regard
to daily operating matters, (ii) billing and payments, (iii) specified equipment
tests, and (iv) operating matters which affect or may affect quality and
reliability of service to electric customers and continuity of deliveries to
SCE.
8
13.3 The Authorized Representative shall have no authority to modify
any of the provisions of this Agreement.
14. METERS
14.1 All meters shall be sealed and the seal shall be broken only upon
occasions when the meters are to be inspected, tested or adjusted.
14.2 IID shall inspect and test all meters upon their installation and
at least once every year thereafter. If requested to do so by Producer, IID
shall inspect or test a meter more frequently than every year, but the expense
of such inspection or test shall be paid by Producer unless the meter is found
to register inaccurately by more than two percent (2%) from the measurement made
by a standard meter. Each Party shall give reasonable notice to the other Party
of the time when any inspection or test shall take place and that Party may have
representatives, present at the test or inspection. If a meter is found to be
inaccurate or defective, it shall be adjusted, repaired or replaced in order to
provide accurate metering. All adjustments due to inaccurate meters shall be
limited to the preceding six (6) months.
14.3 If a meter fails to register, or if the measurement made by a
meter during a test varies by more than two percent (2%) from the measurement
made by the standard meter used in the test, adjustment shall be made correcting
all measurements made by the inaccurate meter for:
(i) the actual period during which inaccurate measurements were made,
if the period can be determined, or if not,
9
(ii) the period immediately preceding the test of the meter equal to
one-half (1/2) the time from the date of the last previous test
of the meter; provided, however, that the period covered by the
correction shall not exceed six (6) months;
14.4 Producer shall telemeter information to IID's Dispatch Center
regarding the kilowatts, kilowatt-hours, kilovars and kilovar-hours delivered to
or received from IID at the Point of Delivery over phone line leased by
Producer.
IID shall purchase, own, and shall design, install, operate, maintain, or
cause to be designed, installed, operated, and maintained, equipment to
automatically transmit from the Plant to IID's Dispatch Center continuous values
of Plant output expressed as megawatts, megavars and megawatt-hours. IID may
thereupon xxxx and Producer shall promptly pay IID's cost of design, purchase
and installation of said equipment. Producer shall have the right to audit IID's
records and accounts to verify the cost of said equipment.
15. CONTINUITY OF SERVICE
IID shall not be obligated to accept and IID may require Producer to
temporarily curtail, interrupt or reduce deliveries of energy upon advance
notice to Producer, when such curtailment, interruption or reduction is required
in order for IID to construct, install, maintain, repair, replace, remove,
investigate or inspect any of its equipment or any part of its system or if IID
determines that such curtailment, interruption or reduction is necessary because
of a System Emergency, forced outages or
10
abnormal operating conditions on its system. IID shall use reasonable efforts to
keep interruptions and curtailments to a minimum time.
16. LIABILITY
16.1 Except for any loss, damage, claim, costs, charge or expense
resulting from Willful Action, neither Party (the "released Party"), its
directors or other governing body, officers or employees shall be liable to the
other Party for any loss, damage, claim, cost, charge, or expense of any kind or
nature incurred by the other Party (including direct, indirect or consequential
loss, damage, claim, cost, charge or expense; and whether or not resulting from
the negligence of a Party, its directors or other governing body, officers,
employees or any person or entity whose negligence would be imputed to a Party)
from engineering, repair, supervision, inspection, testing, protection,
operation, maintenance, replacement, reconstruction, use or ownership of the
released Party's electrical system, Plant(s) or associated facilities in
connection with the implementation of this Agreement. Except for any loss,
damage, claim, cost, charge or expense resulting from Willful Action, each Party
releases the other Party, its directors or other governing body, officers and
employees from any such liability.
16.2 For the purpose of this Section 16, Willful Action shall be
defined as action taken or not taken by a Party at the direction of its
directors or other governing body, officers or employees having management or
administrative responsibility affecting its performance under this Agreement, as
follows:
11
16.2.1 Action which is knowingly or intentionally taken or not
taken with conscious indifference to the consequences thereof or with intent
that injury or damage would result or would probably result therefrom.
16.2.2 Action which has been determined by final arbitration
award or final judgment or judicial decree to be a material default under this
Agreement and which occurs or continues beyond the time specified in such
arbitration award or judgment or judicial decree for curing such default or, if
no time to cure is specified therein, occurs or continues thereafter beyond a
reasonable time to cure such default.
16.2.3 Action which is knowingly or intentionally taken or not
taken with the knowledge that such action taken or not taken is a material
default under this Agreement.
16.3 Willful Action does not include any act or failure to act which
is merely involuntary, accidental or negligent.
16.4 The phrase "employees having management or administrative
responsibility," as used in Section 16.2, means the employees of a Party who are
responsible for one or more of the executive functions of planning, organizing,
coordinating, directing, controlling and supervising such Party's performance
under this Agreement with responsibility for results.
16.5 Subject to the foregoing provisions of this Section 16, each
Party agrees to defend, indemnify and save harmless the other Party, its
officers, agents, or employees against all losses, claims, demands, costs or
expenses for loss of or damage to
12
property, or injury or death of persons, which directly or indirectly arise out
of the indemnifying Party's performance pursuant to this Agreement; provided,
however, that a Party shall be solely responsible for any such losses, claims,
demands, costs or expenses which result from its sole negligence or Willful
Action.
17. UNCONTROLLABLE FORCES
Neither Party shall be considered to be in default in the performance of
any of its obligations under this Agreement when a failure of performance shall
be due to an uncontrollable force. The term "uncontrollable force" shall mean
any cause beyond the control of the Party affected including, but not restricted
to, failure of or threat of failure of facilities which have been maintained in
accordance with generally-accepted engineering and operating practices in the
electrical utility industry, flood, drought, earthquake, tornado, storm fire,
pestilence, lightning and other natural catastrophes, epidemic, war, riot, civil
disturbance or disobedience, strike, labor dispute, labor or material shortage,
sabotage, government priorities and restraint by court order or public authority
(whether valid or invalid) and actions or nonaction 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. Nothing contained herein shall be construed as to require a
Party to settle any strike or labor dispute in which it may be involved. Either
Party rendered unable to fulfill any of its obligations under this Agreement by
reason of an uncontrollable force shall give
13
prompt written notice of such fact to the other Party and shall exercise due
diligence to remove such inability with all reasonable dispatch.
18. INTEGRATION AND AMENDMENTS
This Agreement constitutes the entire agreement between the Parties
relating to the interconnection of Producer's Plant to IID's electric system,
the acceptance of energy by IID from Producer and the providing of electric
service by IID. No oral agreement or prior written agreement between the Parties
shall be of any effect whatsoever; provided, however, that any arrangements
agreed upon by the Authorized Representatives within the limits of their
authority, and consistent with this Agreement shall be binding upon the Parties.
All changes to this Agreement shall be in writing and shall be signed by an
officer of each Party.
19. NON-WAIVER
None of the provisions of this Agreement shall be considered waived by
either Party except when such waiver is given in writing. The failure of either
Party to insist in any one or more instances upon strict performance of any of
the provisions of this Agreement or to take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights for the future; but the same shall continue
and remain in full force and effect.
20. NO DEDICATION OF FACILITIES
Any undertaking by one Party to the other Party under any provision of this
Agreement shall not constitute the dedication of the system or any portion
thereof by the
14
Party to the public or to the other Party, and it is understood and agreed that
any such undertaking under any provision of this Agreement by a Party shall
cease upon the termination of its obligations hereunder.
21. SUCCESSORS AND ASSIGNS
21.1 This Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of the Parties.
21.2 This Agreement may be assigned by Producer only (i) to a
purchaser or co-owner of the Plant or to a person who will operate the Plant
pursuant to a contract or other arrangement with such purchaser and in either
case with the prior written consent of IID (which shall not be unreasonably
withheld) or (ii) for security purposes, to a bank or other entity which
provides financing for the Plant or any electrical transmission facilities
associated therewith. Producer and IID agree that nothing in this Section 21.2
may be amended, modified or waived without the prior written consent of each and
every Party to the Funding and Construction Agreement (except for any Parties in
default thereunder.)
22. EFFECT OF SECTION HEADINGS
Section headings appearing in this Agreement are inserted for convenience
only, and shall not be construed as interpretations of text.
23. GOVERNING LAW
This Agreement shall be interpreted, governed and construed under the laws
of the State of California or the laws of the United States as applicable.
15
24. ARBITRATION
24.1 Any dispute arising out of or relating to this Agreement, or the
breach thereof, which is not resolved by the Parties acting through their
Authorized Representatives shall be settled by arbitration to the extent
permitted by the laws applicable to the Parties; provided, however, that no
Party to the dispute shall be bound to any greater extent than any other Party
to the dispute. Arbitration shall not apply to any dispute or matter that is
within the jurisdiction of any regulatory agency.
24.2 Any demand for arbitration shall be made by written notice to the
other Party setting forth in adequate detail the nature of the dispute, the
issues to be arbitrated, the amount or amounts, if any involved in the dispute,
and the remedy sought. Within twenty (20) days from the receipt of such notice,
the other Party may submit its own written statement of the dispute and may set
forth in adequate detail any additional related matters or issues to be
arbitrated.
24.3 Within thirty (30) days after delivery of the written notice
demanding arbitration, the Parties acting through their Authorized
Representatives shall meet for the purpose of selecting an arbitrator. The
Parties may agree upon a single arbitrator, but in the event that they cannot
agree, three arbitrators shall be used. Each Party shall designate one
arbitrator, and the two arbitrators shall then select a third arbitrator. All
arbitrators shall be persons skilled and experienced in the field in which the
dispute has arisen and no person shall be eligible for appointment as an
arbitrator who is or has been an officer or employee of either of the Parties or
otherwise interested in the
16
matter to be arbitrated. Should either party refuse or neglect to appoint an
arbitrator or to furnish the arbitrators with any papers or information
demanded, the arbitrators are empowered, by both Parties, to proceed without the
participation or assistance of that Party.
24.4 Except as otherwise provided in this Section, the arbitration
shall be governed by the rules and practices of the American Arbitration
Association, or a similar organization if the American Arbitration Association
should not at the time exist.
24.5 Arbitration proceedings shall be held in Imperial, California, at
a time and place to be selected by the arbitrators. The arbitrators shall hear
evidence submitted by the Parties and may call for additional information which
shall be furnished by the Party having such information. The arbitrators shall
have no authority to call for information not related to the issues included in
the dispute or to determine other issues not, in dispute.
24.6 If there is only one arbitrator, his decision shall be binding
and conclusive on the Parties. If there are three arbitrators, the decision of
any two shall be binding and conclusive. The decision of the arbitrators shall
contain findings regarding the issues involved in the dispute, including the
merits of the positions of the Parties, the materiality of any default, and the
remedy or relief to which a Party shall be entitled. The arbitrators may not
grant any remedy or relief which is inconsistent with this Agreement, nor shall
the arbitrators make findings or decide issues not in dispute.
17
24.7 The fees and expenses of the arbitrators shall be shared equally
by the Parties, unless the decision of the arbitrator specifies some other
apportionment. All other expenses and costs of the arbitration shall be borne by
the Party incurring such expenses and costs.
24.8 Any decision or award granted by the arbitrators shall be final
and judgement may be entered on it in any court of competent jurisdiction. This
agreement to arbitrate shall be specifically enforceable.
25. ENTIRE AGREEMENT
25.1. The complete agreement of the Parties is set forth in this
Agreement and all communications regarding subject interconnected operations
whether oral or written, are hereby abrogated and withdrawn.
26. NOTICES
Any formal communication or notice in connection with this Agreement shall
be in writing and shall be deemed properly given if delivered in person or sent
first class mail, postage prepaid to the person specified below:
SECOND IMPERIAL GEOTHERMAL COMPANY
000 Xxxxxx Xxxxxx, Xxxxx X
Xxx Xxxxx, XX 00000
IMPERIAL IRRIGATION DISTRICT
c/o General Manager
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
18
27. SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the
duties, obligations and liabilities of the Parties are intended to be several
and not joint or collective. Nothing contained in this Agreement shall ever be
construed to create an association, trust, partnership, or joint venture, or
impose a trust or partnership duty, obligation or liability on or with regard to
either Party. Each Party shall be individually and severally liable for its own
obligations under this Agreement.
28. SIGNATURE CLAUSE
The Parties have caused this Agreement to be executed in their respective
names, in duplicate, by their respective officers hereunto this 27th day of
October, 1992.
SECOND IMPERIAL GEOTHERMAL COMPANY
By:/s/ Xxxxx X. Xxxxxx Xx.
--------------------------------------
ATTEST:
By: /s/ Indecipherable
----------------------------------
Secretary
IMPERIAL IRRIGATION DISTRICT
By: /s/ Indecipherable
--------------------------------------
President, Board of Directors
ATTEST:
By: /s/ Indecipherable
----------------------------------
Secretary
19
