Exhibit 10.3.31
9-21-89
EXECUTION COPY
TRANSMISSION SERVICE AGREEMENT
FOR THE
ORMESA I, ORMESA IE AND ORMESA IH GEOTHERMAL POWER PLANTS
BETWEEN
IMPERIAL IRRIGATION DISTRICT
AND
ORMESA GEOTHERMAL
EXECUTION COPY
9-21-89
TABLE OF CONTENTS
Section Title Page
------- ----- ----
1 PARTIES 1
2 RECITALS 1
3 AGREEMENT 1
4 DEFINITIONS 1
5 TERM 3
6 TRANSMISSION SERVICE 4
7 TRANSMISSION LOSSES 8
8 CHARGES 9
9 BILLING AND PAYMENT 10
10 LIABILITY 12
11 AUDITING 12
12. AUTHORIZED REPRESENTATIVES 15
13 NO DEDICATION OF FACILITIES 15
14 NON-WAIVER 15
15 NO THIRD PARTY RIGHTS 15
16 UNCONTROLLABLE FORCES 15
17 ASSIGNMENTS 16
18 GOVERNING LAW 18
19 NOTICES 18
20 SIGNATURE CLAUSE 19
EXHIBIT I - DEVELOPMENTS AND METHODOLOGIES FOR TRANSMISSION
SERVICE CHARGES AND SCHEDULING FEE
EXHIBIT II- TRANSMISSION SERVICE FOR ORMESA I, ORMESA IE, AND ORMESA IH
GEOTHERMAL POWER PLANTS
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1. PARTIES: The Parties to this Agreement are Imperial Irrigation District,
organized under the Water Code of the State of California ("IID"), and Ormesa
Geothermal ("Producer"), hereinafter sometimes referred to individually as
"Party," and collectively as "Parties."
2. RECITALS: This Agreement is made with reference to the following facts, among
others:
2.1 Ormesa I, Ormesa IE and Ormesa IH have caused to be constructed
alternate energy resource facilities located in IID's service area.
2.2 Ormesa I, Ormesa IE and Ormesa IH and IID have entered into Plant
Connection Agreements.
2.3 Producer desires to purchase, and IID desires to sell firm transmission
service of power from the Plants to Edison's Mirage Substation subject to the
terms and conditions specified herein.
2.4 Producer and IID are parties to that certain Funding and Construction
Agreement dated June 29, 1987, providing for the funding and construction of
transmission lines within IID's service area.
3. AGREEMENT: The Parties agree as follows:
4. DEFINITIONS: The following terms, when used herein with initial
capitalization, whether in the singular or plural, shall have the meanings
specified:
4.1 AGREEMENT: This IID - Producer Transmission Service Agreement for
Alternative Resources between Ormesa Geothermal and IID, and all Exhibits
attached hereto, as
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such Agreement may subsequently be amended for firm transmission service between
each Plant and Edison's Mirage Substation.
4.2 Authorized Representative: The representative of a party
designated in accordance with Section 12.
4.3 Date of Initial Service: The date when the output from each Plant
is first available for delivery to Edison, as notified to IID pursuant to
Section 5.2.
4.4 Edison: Southern California Edison Company.
4.5 Funding and Construction Agreement: An agreement entered into by
LED and others dated June 29, 1987, providing for the funding and construction
of the Heber-Mirage Transmission Project, to which a form of this agreement is
attached as Exhibit III.
4.6 Maximum Transmission Service Entitlement: The Maximum
Transmission Service Entitlement as specified in Exhibit[s] II, Transmission
Service, and in any subsequent Plant Amendments.
4.7 Normal Transmission Capacity: The maximum transfer capability,
expressed in megawatts (MW), from the Point of Receipt to the Point of Delivery.
Such transfer capability, as determined by IID, in its sole judgment, shall be
consistent with prudent operating procedures and with generally-accepted
engineering and operating practices in the electrical utility industry.
4.8 Operating Transmission Capability: The maximum transfer capability,
expressed in megawatts (MW), available to IID at any given time to transmit
power from Point of Receipt to Point of Delivery. Such transfer capability shall
be as determined by IID in its sole judgment,
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may vary from time-to-time depending on system conditions, and shall be
consistent with prudent operating procedures and generally-accepted engineering
and operating practices in the electrical utility industry.
4.9 Plants: The electrical generating alternative energy resource
facilities developed by Producer and Ormesa IH respectively for which IID shall
provide transmission service, as specified in Exhibit(s) II, Transmission
Service, and in any subsequent Plant Amendments.
4.10 Plant Amendment: An agreement reached by the Parties, as an
amendment to this Agreement, for transmission service to be provided by IID for
a Plant added by Producer or for Producer's account subsequent to the execution
of this Agreement.
4.11 Plant Connection Agreements: The agreements between IID and
Producer and between IID and Ormesa IH respectively providing for the connection
of the Plants to IID's electrical system, as specified in Exhibit[s] II,
Transmission Service, and in any subsequent Plant Amendments. The existing
Ormesa I, Ormesa IE and the Ormesa IH Plant each operate under a separate Plant
Connection Agreement. This 38 MW Transmission Service Agreement covers all
facilities because all plants deliver energy to IID at the same point.
4.12 Point(s) of Delivery: The 230-kV switchrack at the Mirage
Substation site where Edison's 230-kV facilities are attached to IID's 230-kV
Coachella-Mirage Line or other points as may be mutually agreed upon by the
Authorized Representatives.
4.13 Point of Receipt: The point on the high voltage side of the
Plant's transformer where IID's metering equipment measures the delivery of
energy to the IID system.
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4.14 Transmission Service Entitlement: The amount of transmission
service, expressed in megawatts (MW), provided by IID for the Plants, from the
applicable Point of Receipt to the applicable Point(s) of Delivery.
5. TERM:
5.1 Unless otherwise agreed to by the Parties, this Agreement shall be
effective on the Completion Date for the transmission lines being constructed
pursuant to the Funding and Construction Agreement, as the term Completion Date
is defined in Article I thereof, and shall remain in effect until October 12,
2017. It is understood that if such Completion Date does not occur, this
Agreement shall be of no force or effect.
5.2 The Transmission Service Entitlement to be provided by IID for each
Plant shall be contingent on Plant Connection Agreements being in effect.
Transmission service for each Plant shall commence on the Date of Initial
Service of such Plant. Producer's Authorized Representative shall give IID's
Authorized Representative written notice of the Date of Initial Service at least
thirty (30) days before the Date of Initial Service.
6. TRANSMISSION SERVICE:
6.1 Subject to the terms of this Agreement, IID shall provide to
Producer and Producer shall purchase from IID transmission service over IID's
transmission system for each Plant. IID shall make arrangements with Edison to
provide, at Producer's or Edison's expense, for the transfer of the electrical
power to be delivered to Edison hereunder from IID's transmission system to
Edison's transmission system at the Point(s) of Delivery.
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6.2 The Transmission Service Entitlement for the Plants shall be the
Maximum Transmission Service Entitlement for such Plants specified in Exhibit(s)
II, Transmission Service, or any subsequent Plant Amendments, or such lesser
amount as may be established as follows. Beginning on the Date of Initial
Service for each Plant, Producer shall be entitled to specify a Transmission
Service Entitlement by advance written notice given to IID's Authorized
Representative at least thirty (30) days prior to the Date of Initial Service.
The Transmission Service Entitlement to be provided by IID subsequent to the
Date of Initial Service may be adjusted at six (6) month intervals thereafter
until two (2) years after the Date of Initial Service for such Plant (the "Trial
Period"). Such adjustments shall be made by having Producer's Authorized
Representative give IID's Authorized Representative a ninety (90) day advance
written notice as to the adjustment required. Beginning two (2) years after the
Date of Initial Service for such Plant, Producer shall be entitled to specify a
Transmission Service Entitlement for each successive two-year period during the
remaining term of this Agreement by written notice from Producer's Authorized
Representative to IID's Authorized Representative given at least ninety (90)
days prior to the beginning of each two-year period.
6.3 The Transmission Service Entitlement selected by Producer for the
Plants in accordance with Section 6.2 may be any amount which is less than or
equal to the Maximum Transmission Service Entitlement for such Plant specified
in Exhibit[s] II, Transmission Service and in any subsequent Plant Amendments,
provided, however, that the following shall apply to each Plant after the Trial
Period for such Plant has elapsed.
6.3.1 If (i) the sum of the Transmission Service Entitlements
for all Plants which are no longer in their Trial Periods is less than the sum
of the Maximum Transmission Service Entitlements for such Plants, as shown in
Exhibit(s) II, Transmission Service and in any
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subsequent Plant Amendments, (the "Aggregate Maximum Transmission Service
Entitlement"), and (ii) provided that IID requires additional capacity for
transmitting electric power to Edison's transmission system for another person
(or, following the Credit Installment Period as defined in the Funding and
Construction Agreement, for itself) and (iii) IID's use of such required
capacity would be in conflict with Producer's right as provided herein to
increase the sum of the Transmission Service Entitlements for such Plants to the
Aggregate Maximum Transmission Service Entitlement, then IID shall so notify
Producer in writing, specifying in such notice the portion, expressed in
megawatts (MW), of the excess of the Maximum Transmission Service Entitlement
over the Transmission Service Entitlement for each such Plant which it desires
to use as stated above. Producer shall have ninety (90) days after receipt of
IID's notice to notify IID in writing that it desires to increase the
Transmission Service Entitlements of such Plants. To the extent that Producer
does not elect to increase the Transmission Service Entitlement of each such
Plant up to the Maximum Transmission Service Entitlement for such Plant, IID
shall be entitled to use such unclaimed capacity to satisfy the transmission
requirements specified in its notice to Producer, and to the extent that IID
does so, Producer shall thereafter be foreclosed from increasing the
Transmission Service Entitlement for such Plant in a manner which would conflict
with such usage by IID.
6.3.2 IID shall treat Producer and each other person who has
entered into a transmission service agreement similar in substance to this
Agreement in a fair and nondiscriminatory manner in requesting additional
transmission capacity as provided In this Section 6.3. Without limiting the
generality of the foregoing, IID shall request additional transmission capacity
from Producer and such other persons on a pro rata basis, in proportion to the
Aggregate Maximum Transmission Service Entitlement for each person less the sum
of the
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Transmission Service Entitlements for each of such persons' generating plants
which is no longer in a Trial Period.
6.4 In the event that the Original Capacity Nomination designated by
Producer (or the Participant associated with Producer) is adjusted pursuant to
Section 3.07 of the Funding and Construction Agreement, the Parties agree to
amend this Agreement in such a way that the sum of the Maximum Transmission
Service Entitlements for all Plants hereunder is equal to such Original Capacity
Nomination as so adjusted. As used in this Section 6.4, the terms Original
Capacity Nomination and Participant shall have the meanings assigned to them in
Article I of the Funding and Construction Agreement.
6.5 IID reserves the right to interrupt or curtail the transmission
service provided hereunder as follows:
6.5.1 If the Operating Transmission Capability is reduced to
less than Normal Transmission Capacity from a Point of Receipt to a Point of
Delivery, and when continuity of service within IID's service area is not being
jeopardized, IID may curtail the transmission service currently being provided
from such Point of Receipt to such Point of Delivery, to an amount "A"
determined by the following formula:
A = Operating Transmission Capability X Transmission Service
------------------------------------------------ Entitlement
Normal Transmission Capacity
The transmission service shall be curtailed by multiplying the
Transmission Service Entitlement in accordance with Exhibit[s] II, Transmission
Service and in any subsequent Plant Amendments by the same percentage (expressed
as a decimal) as used in the determination of "A." However, any such curtailment
shall occur only after IID has made all reasonable efforts to
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eliminate the cause of the reduction in Operating Transmission Capability, and
IID shall then employ reasonable efforts to eliminate expeditiously the cause of
said reduction.
6.5.2 If continuity of service within IID's control area is
being jeopardized, as determined by IID in its sole judgment, ITO may interrupt
or curtail the transmission service provided hereunder to the extent necessary
to avoid or eliminate such jeopardy; provided that (i) such interruptions or
curtailments may be made so that IID may fully utilize all generating resources
owned by it or available to it under contract in order to avoid damage to IID's
electrical system caused by overloading, (ii) such interruption or curtailment
shall occur only after IID has made all reasonable efforts to avoid or eliminate
such jeopardy and (iii) to the extent feasible any curtailment of transmission
service provided hereunder from a Point of Receipt to a Point of Delivery shall
be made in accordance with the formula set forth in Section 6.5.1.
6.6 If IID's efforts do not avoid or eliminate such jeopardy, the
Parties shall endeavor to develop some other arrangement to avoid or eliminate
such jeopardy and minimize the effects of IID's interruption or curtailment on
both parties.
6.7 In the event of any curtailments or interruptions made pursuant to
Section 6.5.1 or Section 6.5.2, Producer shall, immediately after being orally
notified by IID, reduce the electrical output of the Plants by the amounts
requested by IID.
6.8 The transmission service to be provided by IID and purchased by
Producer for the Plants shall not exceed the Transmission Service Entitlement
for the Plants.
6.9 Subject to Section 6.5, IID shall, during the periods that IID has
agreed to provide the transmission service at the specified Transmission Service
Entitlements, accept hourly
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scheduled energy deliveries at each Point of Receipt and simultaneously deliver
the same amount of energy (less transmission losses as provided herein) at the
Point(s) of Delivery mutually agreed upon by the Parties' dispatchers and/or
schedulers.
6.10 Hourly scheduled energy deliveries at each Point of Receipt shall
conform with the practices and procedures developed by the Parties' dispatchers
and schedulers and agreed to by the Authorized Representatives.
7. TRANSMISSION LOSSES:
7.1 IID shall determine, by transmission power flow analysis, the
electrical losses (expressed as a percent amount of hourly scheduled energy
deliveries) associated with the electrical output from the Plants. Such analysis
shall be performed by IID at its sole expense. The initial percent amount, for
each Plant, representing the electrical losses as determined herein shall be as
specified in Exhibit(s) II, Transmission Service and in any subsequent Plant
Amendments.
7.2 Unless otherwise agreed to by Producer's and IID's schedulers and
dispatchers, IID shall reduce the amount of all hourly scheduled energy
deliveries for Producer or Producer's account by the percent amount of such
hourly deliveries for each Plant in accordance with Exhibit[s] II, Transmission
Service and in any subsequent Plant Amendments.
7.3 If either Party believes that there has been a significant change
in IID's electrical system and the electrical losses associated with any Plant
should be redetermined, either Party's Authorized Representative may submit a
written request to the other Party's Authorized Representative that the
electrical losses be redetermined. Following such request, a transmission
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flow analysis shall be performed by IID as approved by the Authorized
Representatives and paid for by the requesting Party. Whenever the percent
amount for electrical losses is redetermined, such percent amount shall become
effective as of the first day of the month following the date of such
redetermination; provided, that such a redetermination may be no sooner than
twelve (12) months after the most recent redetermination. Any redetermination of
electrical losses made pursuant to this Section 7 shall be based on conditions
in existence at the time of such redetermination.
7.4 Along with the monthly billing pursuant to Section 9.1, for the
transmission service for each Plant, IID shall submit a monthly summary of
hourly scheduled energy deliveries and of electrical losses for each Plant.
8. CHARGES:
8.1 For transmission service provided by IID, Producer shall pay IID at
a rate to be determined by IID pursuant to the methodologies specified in
Exhibit I.A. The initial rate is specified in Exhibit[s] II, Transmission
Service and revisions thereto will be specified in any subsequent Plant
Amendments. Any specific facility charge to Producer for connecting the Plant(s)
to the IID transmission system shall be included only in the Plant Connection
Agreement(s) between IID and Producer.
8.2 The transmission rate shall be reviewed annually and may be
revised. Any revision of the rates shall be based on the methodologies in
Exhibit I.A and on the conditions in existence at the time of the revision.
Producer shall have the right to review any exhibits or work papers prepared by
IID to revise the rates.
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8.3 An initial monthly scheduling fee, as specified in Exhibit[s] II,
Transmission Service and revisions thereto specified in any subsequent Plant
Amendments, shall be paid by Producer to IID for those months in which there
were scheduled energy deliveries from the Plant(s). The initial scheduling fee
has been determined by IID pursuant to the methodology specified in Exhibit I.B.
The scheduling fee shall be reviewed annually and may be revised. Any revision
of the scheduling fee shall be based on the methodology in Exhibit I.B and on
the conditions in existence at the time of the revision. Producer shall have the
right to review any exhibits or work papers prepared by IID to revise the
scheduling fee.
9. BILLING AND PAYMENT:
9.1 IID shall render bills to Producer, beginning in the month of the
Date of Initial Service, on or before the fifteenth (15th) day of each month for
the transmission service to be provided during the month. Producer shall pay
such bills within twenty (20) days after receipt thereof.
All payments by Producer shall be sent to:
Imperial Irrigation District
c/o Manager, Finance and Accounting
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
All xxxxxxxx by IID shall be sent to:
Ormesa Geothermal
X.X. Xxx 000
Xx Xxxxxx, Xxxxxxxxxx 00000
9.2 Either Party's Authorized Representative may at any time, by
advance written notice to the other Party's Authorized Representative, change
the address to which payments or xxxxxxxx shall be sent.
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9.3 Bills which are not paid in full by said due date shall thereafter
bear an additional charge of one and one-half percent (1-1/2%) per month, or the
maximum legal rate of interest, whichever is less, compounded monthly on the
unpaid amount prorated by days from the due date until payment is received by
IID.
9.4 In the event any portion of any xxxx is disputed, the disputed
amount shall be paid when due under protest. If the protested portion of the
payment is found to be incorrect by the Authorized Representatives, the disputed
amount shall be paid by IID to Producer, including interest at the rate of
1-1/2% per month, or the maximum legal rate, whichever is less, compounded
monthly from the date of payment by Producer to the date the refund check or
adjusted xxxx is received by Producer.
9.5 For a fractional part of a calendar month at the beginning or end
of the period for which the transmission service is provided hereunder, the
charge pursuant to Section 8.1 shall be proportionately adjusted by the ratio of
days that service is furnished by IID to Producer during such month to the total
number of days in such month.
9.6 The charge for the transmission service pursuant to Section 8.1
shall be proportionately reduced to the extent the duration of the interruptions
or curtailments of the transmission service which may occur pursuant to Section
6.5.1 or Section 6.5.2 exceed a cumulative total of twenty-four (24) hours
during any calendar month based on 730 hours per month representing the full
transmission service charge. The amount of such prorata reduction in any month
shall reflect the duration and amount of such interruptions or curtailments
which exceed said cumulative 24 hours. Such prorata reduction shall be reflected
as a credit to Producer as soon as possible in a subsequent monthly xxxx.
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9.7 The charge for the transmission service shall not be reduced if IID
can deliver, but Edison's transmission system cannot receive, the hourly
scheduled energy deliveries independent of the duration of time this condition
exists.
10. LIABILITY:
10.1 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.
10.2 For the purpose of this Section 10, 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:
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10.2.1 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.
10.2.2 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.
10.2.3 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.
10.3 Willful Action does not include any act or failure to act which is
merely involuntary, accidental or negligent.
10.4 The phrase "employees having management or administrative
responsibility," as used in Section 10.2, 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.
10.5 Subject to the foregoing provisions of this Section 10, 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 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
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losses, claims, demands, costs or expenses which result from its sole negligence
or Willful Action.
11. AUDITING
11.1 IID shall make its books, records, and other supporting
information, as requested, available to Producer or to Producer's designated
contracted representative(s) with a CPA firm, for the purpose of auditing any
charges or accounts to be kept by IID hereunder. All such audits shall be
undertaken at reasonable times and in conformance with generally-accepted
auditing standards.
11.2 If as a result of such audits Producer believes its charges or
accounts should be adjusted, the findings shall be presented to the Authorized
Representatives. If the Authorized Representatives agree that any audit finding
should result in a revision of charges or accounts, such revisions shall be
retroactive to the first billing for such charges and accounts and shall be made
as soon as practical after determination.
11.3 The amount of any unresolved dispute shall accrue interest at the
rate of one and one-half percent (1-1/2%) per month, or the maximum legal rate,
whichever is less, compounded monthly for any amount of money ultimately
refunded to Producer.
12. AUTHORIZED REPRESENTATIVES: Within thirty (30) calendar days after the
Completion Date, as defined in Article I of the Funding and Construction
Agreement, each Party shall designate by written notice to the other Party a
representative who is authorized to act on its behalf in the implementation of
this Agreement. Either Party may at any time change the designation of its
Authorized Representative by written notice to the other Party.
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13. 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 of the 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 obliqations
hereunder.
14. 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.
15. NO THIRD PARTY RIGHTS: The Parties do not intend to create rights in or to
grant remedies to any Third Party or others as a beneficiary of this Agreement
or of any duty, covenant, obligation or undertaking established hereunder.
16. 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
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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, the
failure or inability of Edison to receive the electric power to be transmitted
hereunder at the Point(s) of Delivery, 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
prompt written notice of such fact to the other Party and shall exercise due
diligence to remove such inability with all reasonable dispatch.
17. ASSIGNMENTS:
17.1 Any assignment by Producer of its interest in this Agreement which
is made without the written consent of IID (which shall not be unreasonably
withheld) shall not relieve Producer from its primary liability for any of its
duties and obligations hereunder, and in the event of any such assignment
Producer shall continue to remain primarily liable for payment of any and all
money due IID hereunder and for the performance and observance of all other
covenants, duties and obligations to be performed and observed hereunder by it
to the same extent as though no assignment has been made.
17.2 Notwithstanding any provision of Section 17.1 to the contrary,
prior to the end of the Credit Installment Period, as defined in Article I of
the Funding and Construction Agreement, Producer's right to transmission service
under this Agreement with respect to one or more of the Plants may be assigned
only (i) to a purchaser or co-owner of such Plants or to a person who will
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operate such Plants pursuant to a contract or other arrangement with such
purchaser and in either case only 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 such Plants or any electrical
transmission facilities associated therewith. Producer and IID agree that
nothing in this Section 17.2 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).
17.3 Whenever an assignment of Producer's interest in this Agreement is
made with the written consent of IID, Producer's assignee shall expressly assume
in writing the duties and obligations hereunder of Producer and, within thirty
(30) days after any such assignment and assumption of duties and obligations,
Producer shall furnish or cause to be furnished to IID a true and correct copy
of such assignment and assumption of duties and obligations.
17.4 Subject to the foregoing restrictions on assignments, all of the
terms of this Agreement shall be binding upon and inure to the benefit of both
of the Parties and their respective successors, permitted assigns and legal
representatives.
18. GOVERNING LAW: This Agreement shall be interpreted, governed by and
construed under the laws of the State of California or the laws of the United
States, as applicable.
19. NOTICES: Any notice, demand or request provided for in this Agreement, or
served, given or made in connection with it, shall be in writing and shall be
deemed properly served, given or made if delivered in person or sent by United
States mail, postage prepaid, to the persons specified below unless otherwise
provided for in this Agreement:
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All payments by Producer shall be sent to:
Imperial Irrigation District
c/o General Manager
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
All xxxxxxxx by IID shall be sent to:
Ormesa Geothermal
c/o Plant Manager
X.X. Xxx 000
Xx Xxxxxx, Xxxxxxxxxx 00000
Either Party may at any time, by notice to the other Party, change the
designation or address of the person so specified as the one to receive notices
pursuant to this Agreement.
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20. SIGNATURE CLAUSE: The signatories hereto represent that they have been
appropriately authorized to enter into this IID-Ormesa Geothermal Transmission
Service Agreement for Alternative Resources (Standard Form) on behalf of the
Party for whom they signed. This Agreement is hereby executed as of the 3rd day
of October, 1989.
IMPERIAL IRRIGATION DISTRICT
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
President, Board of Directors
ORMESA GEOTHERMAL
BY ORMAT GEOTHERMAL, INC.
Managing General Partner
By: /s/ Indecipherable
--------------------------------
Its: V. Pres.
-------------------------------
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EXHIBIT I.A
DEVELOPMENT AND METHODOLOGY FOR THE
TRANSMISSION SERVICE CHARGE
IID's transmission service charge shall be recalculated during the month of
April of each year, using the methodology summarized in this Exhibit. The
recalculated transmission service charge shall be effective on June 1 of the
year of recalculation.
EI.A-1 Plant Investment
TAI = WP + PA - TR + GP + M&S
where
TAI = Total adjusted investment at the time of calculation.
WP = Estimate of weighted Transmission Plant Cost ($40,980,291) as
December 31, 1983 calculated using the following formula:
WP = (0.7 x OC) + (0.3 x RCN); where
OC = Cumulative original cost of Transmission Plant as shown in
IID's accounting records, obtained by summing the actual cost of
all yearly additions to Transmission Plant from 1938 to the end
of 1983, (i.e., $20,700,415).
RCN = Estimate of the cumulative reproduction cost to build the
Transmission Plant items identified in OC in 1983 dollars.
Calculated by summing the escalated cost of each yearly addition
to Transmission Plant starting in 1938 up to the end of calendar
year 1983 using the Xxxxx-Xxxxxxx Index for Total Transmission
Plant for the Pacific Region, (i.e., $88,300,000).
PA = Cumulative sum of additions to Transmission Plant from January 1,
1984 to the end of the year preceding the year of calculation. Thus,
if the calculation takes place in 1996, PA is sum of Transmission
Plant additions at actual cost from January 1, 1984 to December 31,
1995.
PA = Sum of [TPA(i) + OA(i)]
where TPA(i) = Annual additions to Transmission Plant for each year
associated with the Transmission Project, as defined in
Section 7.05 of the Funding and Construction Agreement.
TPA(i) is calculated for each year from Completion Date
of Transmission Project to end of year preceding year
of calculation.
OA(i) = Other annual additions to Transmission Plant by 11D
each year. OA(i) is calculated for each year from
January 1, 1984 to end of year preceding year of
calculation.
-EIA-1-
TR = Sum of (i) and (ii) where:
(i) = For facilities placed in service prior to 1984, the cumulative sum
of the annual Weighted Retirement Costs (WRC) for retirements from
Transmission Plant from January 1, 1984 to the end of the year
preceding the year of calculation. Thus, if the calculation takes
place in 1996, TR is comprised of the sum of annual Transmission Plant
retirements from January 1, 1984 to December 31, 1995 with each year's
original cost adjusted to account for the weighted cost of retirement.
where WRC = Weighted Retirement Cost for transmission retired
in a given year.
OCI = Original cost of transmission facilities retired
in a given year.
WRC = 70%*0CI + 30%*OCI*RCN/OC
(ii)= Cumulative sum of original cost of annual transmission retirements
for facilities placed in service after January 1, 1984.
GP = General plant investment as shown in IID's accounting records, as of
the year preceding the year of calculation, allocated to transmission
use by the ratio of total allocated transmission O&M cost to the sum
of production O&M cost excluding fuel, distribution O&M cost,
transmission O&M cost, dispatching cost, and customer accounting and
services costs.
M&S = Materials and supplies inventory held by IID as of the year
preceding the year of calculation, allocated to transmission use by
the ratio of Transmission Plant Original Cost to Total Electric
Plant original cost as reflected in IID's accounting records for the
year preceding the year of calculation.
EI.A-2 Annual Cost
TAC = (1.25 x CRF x TAI) + OM + A&G
where
TAC = Total Annual Cost.
CRF = Annual capital recovery factor calculated for a 33-year amortization
using the average interest rate for the year preceding the year of
calculation from the "Xxxxxxx Xxxxx 500 Municipal Bond Index
Electric-Retail."
OM = Total allocated transmission O&M cost during the year preceding the
year of calculation, equal to the sum of (i) dispatching costs and
(ii) transmission O&M cost allocated to transmission use by the ratio
of Transmission Plant original cost (OC) to Total Transmission Plant
original cost including the cost of subtransmission plant) as shown
in IID's accounting records.
A&G = Administrative and general cost during the year preceding the year
of calculation, allocated to transmission use by the ratio of total
allocated transmission cost (OM) to the sum of production O&M cost
excluding fuel, distribution O&M cost, transmission O&M cost,
dispatching cost, and customer accounting and services cost.
-EIA-2-
Administrative and general cost is comprised of Power Department plus
Joint Department A&G less Customer Account Expense.
EI.A-3 Monthly Transmission Service Charge
TSC= TAC
----------
12 x APL
where
TSC= Monthly transmission service charge, in $/kW.
APL= Annual peak load during the year preceding the year of calculation,
expressed in kW, which is equal to the sum of IID's service peak load
plus all transmission wheeling commitments (including all Transmission
Service Entitlements).
Examples
(1) Recalculation of 1985 Transmission Service Charge Plant Investment
OC = 20,700,415
RCN= 88,300,000
WP = (0.7 x 0C) + (0.3 x RCN) = 40,980,291
PA = 0 + 4,111,000 = 4,111,000
GP =
1,526,849 x 574,528 + 189,450
-----------------------------------------------------
3,085,080 + 4,080,868 + 694,545 + 1,621,252 + 189,450
= 1,526,849 x 0.079 = 120,621
M&S= 6,151,304 x 20,700,415
-------------
162,700,978
= 6,151,304 x 0.1272 = 782,629
TAI= 40,980,291 + 4,111,000 + 120,621 + 782,629
= 45,994,541
Annual Cost
CRF= (33 years, 10.41%) = 10.8221%
OM = 694,545 x 20,700,415
--------------
25,025,093
694,545 x 0.8272 = 574,528
A&G=
4,086,530 x 574,528 + 189,450
----------------------------------------------------------
3,085,080 + 4,080,868 + 694,545 + 189,450 + 1,621,252
= 4,086,530 x 0.079 = 322,836
TAC= (1.25 x 0.108221 x 45,994,541) + 574,528 + 322,836
= 7,119,333
-EIA-3-
Examples (Continued)
Monthly Transmission Service Charge
APL= 369,000 + 63,000 = 432,000
TSC= 7,119,333 = 1.37 $/kW
------------
12 x 432,000
(2) Sample Calculation, 1996
Assumptions
o Weighted cost of Transmission Plant to 12-31-83; $40,980,291.
o Transmission Additions to 12-31-95; $67,000,000.
o Transmission Credit to rate base through 12-31-94; $30,000,000.
o Transmissin credits used during 1995 were $6,000,000; IID'S Reserved
Capacity is 40 MW, and the Deemed Capacity is 600 MW.
o No accumulated retirements.
o General plant investment as of 12-31-95, from IID records, is
$2,000,000.
o All allocation factors are assumed the same as in the previous example
but, in general, would not be identically the same each year.
o Materials and supplies inventory as of 12-31-95; from IID records, is
$8,000,000.
o The 12-month average Xxxxxxx-Xxxxx Index interest rate is 8% in 1995.
o Dispatching costs in 1995 were $1,000,000.
o IID'S transmission O&M costs in 1995 were $1,000,000.
o IID'S administrative and general costs in 1995 were $5,000,000.
o IID'S service peak load in 1995 was 543 MW.
o IID'S total transmission commitments in 1995 were 320 MW.
Adjusted Investment 1996
------------------- ------------
WP = Weighted Plant to 12-31-83...................... $ 40,980,291
0A[1984-1995] = Transmission Plant Additions Through 12-31-95
(excludes Transmission Project)................. 67,000,000
TPA[1984-1994]= Transmission Credit to Rate Base Through
12-31-94........................................ 30,000,000
TPA[1995] = Transmission Credit to Rate Base during 1995;
6,000,000 x 600 - 40
--------
600 ............................ 5,600,000
GP = General Plant Allocated; 2,000,000 x 0.079 ..... 158,000
M&S = M&S Allocated; 8,000,000 x 0.1272 .............. 1,017,600
------------
TAI = $144,755,891
- EIA-4 -
Annual Cost
CRF = (33 years, 8%) = 8.6852
OM = 1,000,000 + 1,000,000 x 0.8272 = 827,200
A&G = 5,000,000 x 0.079 = 395,000
TAC = 1.25 x 0.086852 x $144,755,891 + 1,827,200 + 395,000
= $16,937,623
Monthly Transmission Service Charge
APL = 543,000 + 320,000 = 863,000
TSC = $16,937,623 = $1.64/kW
------------
12 x 863,000
88A.1/EXHIBITA-A1
4-19-89/du/R2
-EIA-5-
EXHIBIT I.B
METHODOLOGY AND CALCULATION OF SCHEDULING FEE
ANNUAL DETERMINATION
OF
IID SCHEDULING FEES
IID, in April each year, will calculate monthly fees for scheduling
services related to Alternative Energy Resources and transactions with other
utilities as follows:
A. An appropriate number of scheduling units will be assigned to every
IID resource, Alternative Energy Resource, and transaction with other
utilities in operation during the preceeding year. The number of
scheduling units assigned to each resource and/or transaction will
depend upon the total daily number of functions and therefore, esti-
mated time required to schedule the resource and/or transaction. This
estimate will be directly related to the complexity of the scheduling
service being provided. Table 1 shows how the total scheduling units
were determined for the IID system.
B. The expenses related to dispatching and scheduling services will be
equal to the sum of the following:
1. IID FPC Account 556 for the year preceeding the year of calcula-
tion
2. A portion of the annual expenses related to the SCADA and AGC
systems for the year preceeding the year of calculation, deter-
mined by multiplying one half of the levelized debt service
payments for the systems by the percentage that FPC Account 556
is of the total of FPC Accounts 556, 561 and 581. Table 2 shows
calculations involved with this step.
C. The annual scheduling fee per scheduling unit will be determined by
dividing the expenses related to scheduling found in Step B by the
total scheduling units from Step A. The per unit fee will then be
multiplied by the number of scheduling units assigned to each resource
and/or transaction to develop an appropriate annual scheduling fee
for that resource and/or transaction. The monthly scheduling fee will
then be calculated by dividing the annual fee by 12. Table 3 shows the
calculation.
The revised scheduling fee will be effective on June 1 of the year in which they
are calculated.
R1
-EIB-1-
-----------------
IID-Edison
Service Agreement
for Alternative
Energy Resources
-----------------
TABLE I
IMPERIAL IRRIGATION DISTRICT
SCHEDULING FEE METHODOLOGY
DETERMINATION OF TOTAL SCHEDULING UNITS
Hours Payback/ Pre- On AGC Off Loss
Energy Capacity Variable Banking Scheduling System System Accounting
(X=2) (X=2) (X=l) (X=2) (X=l) (X=l) (X=l) (X=l) Total
------ -------- -------- -------- ---------- ------ ------ ---------- -----
IID'S Generatinq Units:
Pilot Knob X X X X 6
Drop No. 1 X X X X 6
Drop Xx. 0 X X X X 0
Xxxx Xx. 0 X X X X 6
Drop Xx. 0 X X X X 0
Xxxx Xx. 0 X X X X 6
East Highline X X X X 6
Turnip and Double Xxxx X X X X 0
Xx Xxxxxx Xxxx Xx. 0 X X X X 0
Xx Xxxxxx Xxxx Xx. 0 X X X X 0
Xx Xxxxxx Xxxx Xx. 0 X X X X 0
Xx Xxxxxx Xxxx Xx. 0 X X X X 6
Coachella Units No. 1 and 2 X X X X 6
Coachella Units No. 3 and 4 X X X X 6
Rockwood X X X X 6
Brawley X X X X 6
---
Subtotal 96
Alternative Energy Resources:
Earth Energy X X X X X X X 10
Magma (East Masa) X X X X X X X 10
Heber HGC X X X X X X X 10
Vulcan Power X X X X X X X 10
Ormesa I X X X X X X X 10
Ormesa II X X X X X X X 10
Western Biomas X X X X X X X 00
Xxx Xxxxx X X X X X X X 00
X.X. Xxxxxx X X X X X X X 10
Desert Power X X X X X X X 10
---
Subtotal 100
Transactions with Other Utilities:
DOE X X X X X 7
EPE X X X X X 7
SCE X X X X X 7
SDG&E X X X X X X X 10
APS (Yucca) X X X X X 7
SCE GT's (Axis) X X X X X X 9
APS (Axis) X X X X X X 9
YCWUA X X X X X X 9
---
Subtotal 65
Total Scheduling Units 261
---
EIB-2
TABLE 2
IMPERIAL IRRIGATION DISTRICT
SCHEDULING FEE METHODOLOGY
EXPENSES RELATED TO SCHEDULING
IID 1986 Actual
FPC Account 556 (3) $413,810 (54.67%)
FPC Account 561 $234,475 (30.98%)
FPC Account 581 $108,627 (14.35%)
-------- ---------
$756,912 (100.0%)
SCADA and AGC Systems
Investment (2) = $4,896,766
Annual Expense
$4,896,766 x 0.1170923 (1) = $ 573,374
Expenses Related to Scheduling
FPC Account 556 = $413,810
54.67% of SCADA and AGC Systems
Annualized Expense ($573,374 x 0.5467) = $313,463
--------
Total Expense Related to Scheduling = $727,273
(1) Capital Recovery Factor determined from levelized debt service payments of
$7,611,000 for $65,000,000 - May, 1983 COP issue.
(2) Fifty percent of total investment for SCADA and AGC, $9,793,532, is assume
related to transmission service.
(3) Related to load dispatching for system control.
EIB-3
TABLE 3
IMPERIAL IRRIGATION DISTRICT
SCHEDULING FEE METHODOLOGY
CALCULATION OF SCHEDULING FEE
Annual Charge per Scheduling Unit
Total Expenses Related to Scheduling (from Table 2) = $727,273
Total Scheduling Units (from Table 1) 261
--------
Annual Charge per Scheduling Unit ($727,273/261) = $ 2,786
Alternative Energy Resource Scheduling Fee
All Plants:
Annual Charge (10 Scheduling Units x $2,786) = $ 27,860/year
(1) Monthly Charge ($27,860/12) = $ 2,321/month
(1) Also applies to new plants to be on-line in 1989
89PC2AER/AER4
88A. 1EXHIBITB3
4-19-89 EIB-4
EXHIBIT II
TRANSMISSION SERVICE
FOR THE ORMESA I, ORMESA IE AND ORMESA IH
GEOTHERMAL POWER PLANTS
EII-1. DESCRIPTION:
EII-2. APPLICABILITY: Applicable to the transmission service to be provided
by IID to Producer for transmitting the electrical output from the
Ormesa Plant Point of Receipt to the Point(s) of Delivery.
El1-3. PLANT CONNECTION AGREEMENT: The Ormesa I and Ormesa IE Plant
Connection Agreement to be executed between IID and Producer and IID
and Ormesa IH respectively.
El1-4. MAXIMUM TRANSMISSION SERVICE ENTITLEMENT: 38 MW.
TRANSMISSION SERVICE ENTITLEMENT: 38 MW, as specified in accordance
with Sections 6.2 and 6.3.
El1-5. POINT OF RECEIPT: See Section 4.13.
EII-6. POINT(S) OF DELIVERY: The 230-kV switchrack at Edison's Mirage
Substation.
EII-7. TERM: The term of the Transmission Service Entitlement for the Ormesa
Power Plant shall be effective from the Date of Initial Service and
shall terminate on October 9, 2017.
EII-8. TRANSMISSION SERVICE CHARGE: $1.29 per kilowatt-month, or as revised
in accordance with Section 8.2, times Transmission Service
Entitlement.
El1-9. SCHEDULING FEE: $2,321 per month or as revised in accordance with
Section 8.3.
EII-10. TRANSMISSION LOSSES: 1.8% or as revised in accordance with Section 7.
EII-1
