Exhibit 10.21
PUBLIC RELEASE VERSION
CONTRACT FOR THE
PURCHASE OF FIRM CAPACITY AND ENERGY
BETWEEN
GEORGIA POWER COMPANY
AND
SOUTHERN POWER COMPANY
AT
PLANT XXXXXXX
July 26, 2001
Table of Contents
ARTICLE 1 DEFINITIONS....................................................................................2
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1.1 Certain Definitions..........................................................................2
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1.2 Interpretation...............................................................................4
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ARTICLE 2 CONDITIONS PRECEDENT...........................................................................5
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2.1 Regulatory Approvals and Transfer of Assets..................................................5
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2.2 Recovery of Payments from Customers..........................................................5
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2.3 Consequences of Termination..................................................................7
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ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................8
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3.1 Representations and Warranties of Seller.....................................................8
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3.2 Representations and Warranties of Buyer......................................................9
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3.3 Covenants...................................................................................10
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ARTICLE 4 THE PROJECT AND TERM OF AGREEMENT.............................................................11
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4.1 The Project.................................................................................11
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4.2 Term........................................................................................11
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ARTICLE 5 SALE OF CAPACITY AND ENERGY...................................................................11
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5.1 Agreement to Sell and Purchase..............................................................11
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5.2 Calculation of Monthly Payments.............................................................12
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ARTICLE 6 BILLING AND COLLECTIONS.......................................................................15
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6.1 Capacity and Energy Billing and Payment.....................................................15
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ARTICLE 7 PROJECT IMPLEMENTATION AND CONSTRUCTION.......................................................15
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7.1 Project Implementation......................................................................15
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7.2 Design and Construction of the Facility.....................................................15
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7.3 Failure to Meet Required Commercial Operation Date..........................................16
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7.4 Right to Advance Commercial Operation.......................................................16
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ARTICLE 8 INTERCONNECTION AND METERING..................................................................17
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8.1 Interconnection Facilities..................................................................17
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8.2 Protective Devices..........................................................................18
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8.3 Meters......................................................................................18
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ARTICLE 9 COMMERCIAL OPERATION, TESTING AND DESIGNATION OF CAPACITY.....................................19
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9.1 Commercial Operation Test...................................................................19
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9.2 Monthly Capacity Increments.................................................................19
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ARTICLE 10 OPERATION AND MAINTENANCE....................................................................20
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10.1 Operation and Maintenance...................................................................20
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10.2 Maintenance Scheduling......................................................................20
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10.3 Fuel Supply.................................................................................20
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ARTICLE 11 DELIVERY OF CAPACITY AND ENERGY..............................................................21
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11.1 Coordination, Scheduling and Dispatch.......................................................21
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ARTICLE 12 FORCE MAJEURE................................................................................21
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12.1 Definition of Force Majeure Event...........................................................21
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12.2 No Breach or Liability......................................................................22
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12.3 Capacity and Energy Payments................................................................22
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12.4 Mitigation..................................................................................22
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12.5 Suspension of Performance...................................................................22
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12.6 Extended Force Majeure Events...............................................................23
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ARTICLE 13 DEFAULT AND REMEDIES.........................................................................23
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13.1 Failure of Performance by Seller............................................................23
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13.2 Remedies....................................................................................25
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ARTICLE 14 COMPLIANCE WITH LAWS, RULES AND REGULATIONS..................................................25
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14.1 Compliance..................................................................................25
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14.2 Change of Law...............................................................................25
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14.3 NOx Allowances..............................................................................26
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ARTICLE 15 ASSIGNMENT AND TRANSFER OF INTERESTS.........................................................26
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15.1 Assignment and Assumption of Obligations....................................................26
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15.2 Assignment to Lenders.......................................................................27
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ARTICLE 16 MISCELLANEOUS PROVISIONS.....................................................................27
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16.1 Amendments..................................................................................27
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16.2 Binding Effect..............................................................................27
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16.3 Counterparts................................................................................27
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16.4 Entire Agreement............................................................................27
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16.5 Governing Law...............................................................................28
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16.6 Waiver......................................................................................28
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16.7 Headings....................................................................................28
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16.8 Third Parties...............................................................................28
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16.9 Severability................................................................................28
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CONTRACT FOR THE PURCHASE
OF FIRM CAPACITY AND ENERGY
THIS POWER PURCHASE AGREEMENT ("Agreement"), dated as of July 26, 2001,
between Georgia Power Company, a corporation organized and existing under the
laws of the State of Georgia, having its principal place of business in Atlanta,
Georgia ("Buyer"), and Southern Power Company, a corporation organized and
existing under the laws of the State of Delaware, having its principal place of
business in Atlanta, Georgia ("Seller") (Buyer and Seller collectively referred
to as the "Parties").
W I T N E S S E T H:
WHEREAS, Buyer is authorized by its Certificate of Incorporation and by
the State of Georgia to engage in the purchase, generation, transmission, sale
and distribution of electricity for heat, light and power to the public;
WHEREAS, Buyer is presently certified by the Georgia Public Service
Commission to provide certain capacity and energy from the Facility (as
hereinafter defined) to its retail customers pursuant to that certain Essential
Terms and Conditions of Georgia Power Company's Proposal to Build Two Combined
Cycle Units at Plant Xxxxxxx, which were approved by the Commission in GPSC
Docket No. 11086-U, on March 30, 2000 (the "Essential Terms and Conditions").
WHEREAS, Buyer is currently developing the Facility at its Plant
Xxxxxxx site;
WHEREAS, Buyer wishes to transfer the Facility to Seller pursuant a
separate asset transfer agreement; WHEREAS, Seller agrees to provide
the capacity and associated energy from the Facility to Buyer on the
same terms and conditions as the Essential Terms and Conditions approved by the
Georgia Public Service Commission so that Buyer's retail customers are not
adversely affected;
WHEREAS, Seller intends to own and operate the Facility;
WHEREAS, Buyer has agreed to purchase from Seller and Seller has agreed
to sell to Buyer capacity and associated energy generated by the Facility all in
accordance with the provisions of this Agreement;
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual
promises and agreements set forth herein and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, Buyer and Seller each intending to be legally bound, hereby agree
as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. In addition to the terms and phrases defined
in the preamble or body of this Agreement, the following initially capitalized
terms and phrases when used in this Agreement shall have the meanings set forth
below:
1.1.1 "Affiliate" - means any other existing or future
entity directly or indirectly controlled by or under direct or indirect common
control of Southern Company.
1.1.2 "Commercial Operation Date" - means, with respect to
a Unit, the date on which such Unit achieves commercial operation, which shall
be deemed to have occurred when start-up and testing of such Unit has been
completed in accordance with Article 9 and the Unit is capable of and available
for producing energy and delivering same to the Southern Electric Transmission
System on a reliable basis.
1.1.3 "Contract Capacity Ratio" - means 932/1132.
1.1.4 "Facility" - means the two 566 MW gas fired combined
cycle units (referred to individually as a "Unit" and collectively as the
"Facility") located at the Plant Xxxxxxx site, which Seller proposes to own,
operate and use to fulfill its obligations under this Agreement.
1.1.5 "FERC" - means the Federal Energy Regulatory
Commission or any Governmental Authority succeeding to the powers and functions
thereof under the Federal Power Act.
1.1.6 "Georgia ITS" - means the Georgia Integrated
Transmission System, the high voltage electricity transmission system owned by
Buyer, Georgia Transmission Corporation, the Municipal Electric Authority of
Georgia, and the City of Dalton, Georgia, and operated in an integrated fashion
by the Georgia ITS participants, as modified or expanded from time-to-time.
1.1.7 "Governmental Authority" - means any local, state,
regional or federal administrative, legal, judicial or executive agency, court,
commission, department or other such entity, but excluding any such agency,
court, commission, department or other such entity acting in its capacity as
lender, guarantor or mortgagee.
1.1.8 "GPSC" - means the Georgia Public Service Commission
or any Governmental Authority succeeding to the powers and functions thereof.
1.1.9...."Required Commercial Operation Date" - means June 1,
2002; provided, however, that such date may be extended due to a Force Majeure
Event for a term equal to the period of the delay caused by said Force Majeure
Event.
1.1.10 "Southern Electric Transmission System" - means the
high voltage electricity transmission system of Buyer, either singularly or as a
part of the integrated transmission systems of the electric utility operating
companies of Southern Company (currently Alabama Power Company, Georgia Power
Company, Gulf Power Company, Mississippi Power Company, and Savannah Electric
and Power Company), including without limitation, the Georgia ITS, as modified
or expanded from time-to-time, as well as any successor in function.
1.1.11 "Term" - means the term of this Agreement.
1.1.12 "Unit" - means the natural gas-fired combined cycle
generating unit having a nominal capability of producing approximately 566 MW to
be constructed at the Facility. The Unit will be comprised of two combustion
turbines with two heat recovery steam generators, a common steam turbine
generator, and associated equipment, systems, and structures as necessary for
the operation of the Unit.
1.1.13 "Xxxxxxx XX Facility Assets" - means the Facility and
associated support system assets and associated real property and rights
transferred from Buyer to Seller pursuant to the definitive Xxxxxxx XX Facility
asset transfer agreement(s).
1.2 Interpretation. In this Agreement and the Appendices hereto,
unless the context otherwise requires:
1.2.1 words generally importing the singular shall include
the plural and vice versa; 1.2.2....references to "entity"
include, without limitation, corporations, partnerships,
associations and governmental authorities.
1.2.3 Appendix A attached hereto is incorporated by
reference herein.
ARTICLE 2
CONDITIONS PRECEDENT
2.1 Regulatory Approvals and Transfer of Assets
2.1.1....The obligations of the Parties are conditioned on the
following: (i) acceptance by the GPSC of this Agreement as a substitute for the
Essential Terms and Conditions which was certified in GPSC Docket No. 11086-U;
(ii) approval by FERC of this Agreement without modification; and (iii) the
closing of the expected transfer of the Xxxxxxx XX Facility Assets to Seller
necessary to perform this Agreement and of Seller's financing of such transfer.
2.1.2....The Parties shall use its reasonable best efforts to
obtain the GPSC acceptance and FERC approval in a timely manner without material
modification to the terms and conditions of this Agreement.
2.2 Recovery of Payments from Customers.
2.2.1....Notwithstanding any other provision of this
Agreement, if Buyer, at any time after the GPSC Approval is issued, is denied
authorization of (i) the GPSC to recover from its customers any or all of the
payments to be made thereafter to Seller pursuant to this Agreement, (ii) the
FERC to make payments to Seller as specified herein or to recover from its
partial requirements or full requirements customers any or all of the payments
to be made thereafter to Seller pursuant to this Agreement, or (iii) any other
Governmental Authority which now has, or in the future may have, jurisdiction
over Buyer's retail rates or wholesale partial requirements or full requirements
rates, to recover from its customers any or all of the payments to be made
thereafter to Seller pursuant to this Agreement; subject to the provisions of
Section 2.2.4, then Buyer may, at its sole option, adjust the payments made
under this Agreement to the amount(s) which Buyer is authorized by such
Governmental Authority to recover from Buyer's customers ("Payment Adjustment
Event").
2.2.2....For purposes of the recovery of the payments made to
Seller under this Agreement, Buyer shall not take any action which would
distinguish this Agreement from other resources available to Buyer in its
allocation of capacity and associated energy from the Facility between retail
and wholesale customers, if or, to the extent that so distinguishing this
Agreement would adversely affect Seller.
2.2.3....If, at any time, Buyer receives notice that the GPSC,
FERC or any other Governmental Authority seeks or will seek to prevent full
recovery by Buyer from its customers of any and all payments already made or
required to be made to Seller under this Agreement, then Buyer shall, as soon as
reasonably practical after Buyer's receipt of such notice, give written notice
thereof to Seller. Buyer shall use its reasonable best efforts to defend and
uphold the validity of this Agreement and its right to recover from its
customers all payments required to be made by Buyer to Seller hereunder, and
will cooperate in any effort by Seller to intervene in any proceeding
challenging the validity of this Agreement and the right of Buyer to recover
from its customers all payments to be made by it hereunder.
2.2.4....In the event that pursuant to Section 2.2.1, Buyer
adjusts the payments to be made by Buyer to Seller pursuant to this Agreement
due to a Payment Adjustment Event, Seller may, at its sole option and pursuant
to the provisions of this Section 2.2.4, terminate this Agreement and, except as
otherwise provided herein, the Parties shall have no further liability or
obligation to the other Party.
.........2.2.4.1 Buyer agrees to provide Seller prior written notice of its
intent to adjust the payments to be made hereunder. Such notice shall specify
the effective date of the Payment Adjustment Event. Within [redacted] of
Seller's receipt of such notice, Seller shall inform Buyer if it intends to
terminate this Agreement or continue to supply the contracted capacity and
energy to Buyer for the remainder of the Term at the adjusted rates in
accordance with Section 2.2.4.3 of this Agreement.
.........2.2.4.2 In the event Seller determines to terminate this
Agreement, Seller may do so no earlier than the date which is [redacted] after
the otherwise effective date of the Payment Adjustment Event. During such
period, Buyer shall pay Seller the unadjusted rates as set forth herein.
Notwithstanding the foregoing, Buyer shall have the right to terminate this
Agreement at the end of such [redacted] period upon [redacted] written notice to
Seller during such [redacted] period.
.........2.2.4.3 In the event Seller determines to continue to
supply the contracted capacity and energy to Buyer for the remainder of the
Term, Buyer agrees to pay Seller the unadjusted rates set forth herein for a
period of [redacted] from the effective date of the Payment Adjustment Event,
but may adjust the payments thereafter to the new rates.
2.3 Consequences of Termination. In the event of a termination of this
Agreement pursuant to Section 2.1 or 2.2, the Parties shall have no further
obligation to each other under this Agreement following termination, except that
such termination shall not affect the liability of either Party for obligations
arising prior to termination or for damages, if any, resulting from any breach
of this Agreement.
ARTICLE 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Representations and Warranties of Seller. Seller hereby
makes the following representations and warranties to Buyer:
3.1.1....Seller is a corporation that is duly organized,
validly existing and in good standing under the laws of the State of Delaware,
that is qualified to do business in the State of Georgia and that has the legal
power and authority to own its properties, to carry on its business as now being
conducted and to enter into this Agreement and carry out the transactions
contemplated hereby and perform and carry out all covenants and obligations on
its part to be performed under and pursuant to this Agreement.
3.1.2....The execution, delivery and performance by Seller of
this Agreement have been duly authorized by all necessary corporate action, and
do not and will not require any consent or approval, other than that which has
been obtained.
3.1.3....The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement, do not and will not conflict
with or constitute a breach of or a default under, any of the terms, conditions
or provisions of any Legal Requirements, or any deed of trust, mortgage, loan
agreement, other evidence of indebtedness or any other agreement or instrument
to which Seller is a party or by which it or any of its property is bound, or
result in a breach of or a default under any of the foregoing.
3.1.4....This Agreement constitutes the legal, valid and
binding obligation of Seller enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws relating to or affecting the enforcement of creditors' rights
generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
3.1.5....There is no pending, or to the knowledge of Seller,
threatened action or proceeding affecting Seller before any Governmental
Authority which purports to affect the legality, validity or enforceability of
this Agreement.
3.2 Representations and Warranties of Buyer Buyer hereby makes
the following representations and warranties to Seller:
3.2.1....Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, that is
qualified to do business in the State of Georgia and that has the legal power
and authority to own its properties, to carry on its business as now being
conducted and to enter into this Agreement and carry out the transactions
contemplated hereby and perform and carry out all covenants and obligations on
its part to be performed under and pursuant to this Agreement.
3.2.2....The execution, delivery and performance by Buyer of
this Agreement have been duly authorized by all necessary corporate action, and
do not and will not require any consent or approval other than that which has
been obtained.
3.2.3....The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement do not and will not conflict
with or constitute a breach of or a default under, any of the terms, conditions
or provisions of any Legal Requirements, or any partnership agreement, deed of
trust, mortgage, loan agreement, other evidence of indebtedness or any other
agreement or instrument to which Buyer is a party or by which it or any of its
property is bound, or result in a breach of or a default under any of the
foregoing.
3.2.4....This Agreement constitutes the legal, valid and
binding obligation of Buyer enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws relating to or affecting the enforcement of creditors' rights
generally or by general equitable principles, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
3.2.5....There is no pending or, to the knowledge of Buyer,
threatened action or proceeding affecting Buyer before any Governmental
Authority which purports to affect the legality, validity or enforceability of
this Agreement.
3.3 Covenants.
3.3.1....Seller shall complete construction of the Facility or
cause construction of the Facility to be completed; and (i) own, lease or
control the entire electrical output of; and (ii) operate and maintain the
Facility in accordance with this Agreement for the Term.
3.3.2....Seller shall at all times during the Term pay or
cause to be paid all charges, taxes, assessments and fees which may be assessed
by a Governmental Authority (i) upon or against the Facility or (ii) upon or
against Seller by reason of the sale or purchase of electricity hereunder.
Notwithstanding the above covenant in this Section 3.3.2, Seller shall have the
right to contest, in good faith, such charges, taxes, assessments and fees.
3.3.3....Seller shall obtain and maintain at all times during
the Term all environmental approvals, permits and plans required by all
Governmental Authorities for construction, operation and maintenance of the
Facility as contemplated pursuant to this Agreement.
ARTICLE 4
THE PROJECT AND TERM OF AGREEMENT
4.1 The Project. The Project comprises the design, engineering,
financing, construction, testing and commissioning of the Facility and the
ownership, operation, management and maintenance of the Facility in accordance
with and pursuant to the terms of this Agreement.
4.2 Term. This Agreement shall become effective when executed and
delivered by both Buyer and Seller and Seller's obligations to sell and Buyer's
obligations to purchase capacity and energy from the Facility pursuant to the
terms of this Agreement shall commence on the Required Commercial Operation Date
of the Facility and remain in full force and effect through December 31, 2009,
subject to termination as provided herein. Applicable provisions of this
Agreement shall continue in effect after termination or expiration of this
Agreement as set forth herein and to the extent necessary to provide for final
xxxxxxxx and adjustments.
ARTICLE 5
SALE OF CAPACITY AND ENERGY
5.1 Agreement to Sell and Purchase.
5.1.1....Seller shall at all times during the Term of the
Agreement following the later of (i) the Required Commercial Operation Date, and
(ii) the first Commercial Operation Date for the Facility, subject to scheduled
outages, forced outages, and the provisions of Article 12, make available to
Buyer up to the Buyer's Contract Capacity Ratio of entire electrical output of
the Facility, net of station service under this Agreement, except during periods
of scheduled maintenance. Buyer agrees to pay for Buyer's Contract Capacity
Rating and the associated energy delivered as provided in Sections 5.2 and
8.1.2.
5.1.2....At any time, Seller may deliver the energy obligated
under this Agreement to the Southern Electric Transmission System from (i) the
Facility or (ii) an alternative resource other than the Facility or (iii) any
combination of (i) and (ii).
5.1.3....Seller shall deliver the energy to Buyer at the Southern Electric
Transmission System. 5.2 Calculation of Monthly Payments. Beginning June 1,
2002, and ending December 31, 2009, Buyer shall pay Seller a Monthly Capacity
and Energy Payment calculated as follows:
5.2.1....Capacity Price ($/kW-mo.): [redacted] applied to the
Contract Capacity Rating (as defined in Article 9.1) for the months of
[redacted] and [redacted] applied to the Contract Capacity Rating for
[redacted];
5.2.2....FO&M ($/kW-yr.): [redacted] applied to the Contract
Capacity Rating (as defined in Article 9.1) payable in equal monthly amounts.
5.2.3 Start-up Cost [redacted] per Unit per normal start applied after
the first [redacted] beginning [redacted] of each year. A normal start is
defined as any hour in which the Unit output is changed from zero (0) megawatts
to anything greater than zero (0) megawatts.
5.2.4 Fixed Fuel Transportation As provided in Article 10.3.2.
5.2.5 Energy Charge Each month, the energy charge shall be the
sum across the month of the
[redacted].
Where:
VO&M ($/MWh) = [redacted] Hourly Energy Cost = [redacted].
Actual Average Fuel Cost of the Units = [redacted]
The Hourly Commodity Price shall be determined by adding all the costs of the
gas commodity (including applicable taxes) each hour and dividing by the hourly
volume of gas necessary to meet the hourly operation. For gas consumed in any
hour, the Commodity price may be any combination of the following: [redacted].
In the event the energy is delivered [redacted], the Hourly Commodity Price
shall be equal to [redacted].
The Variable Transportation Costs shall be the effective [redacted]
Delivered MWH shall be [redacted], including ramp-up and ramp-down energy, or
energy delivered from an alternative resource.
5.2.6 Contract Availability: For each season, the Seasonal Availability
Factor ("SAF") shall not be less than [redacted]. [redacted] for variations in
SAF above and below [redacted] will be calculated as set forth in Article 5.2.8.
5.2.7 [redacted] for non-delivery of capacity and energy shall be
limited to the reductions in capacity payments set forth in Article 5.2.9.
5.2.8 Seasonal Availability [redacted] will be calculated as soon as
practical after each season based on the SAF for the season as follows:
Seasonal Availability Factor = [redacted]
Where:
FOH = Unplanned (Forced) Outage Hours
EFDH = Equivalent Unplanned (Forced) Derated Hours
ARDH = Alternative Resource Delivery Hours which are the hours
[redacted] in which delivery is made from an alternative resource.
PH = Period Hours.
5.2.8.1 The Summer Season shall be comprised of the months of [redacted].
The Non-Summer Season shall be comprised of [redacted].
5.2.8.2 Scheduled maintenance hours shall be excluded from the calculation of
SAF.
5.2.9 [redacted]
5.2.10 The Contract Heat Rate for each Unit shall be based on the
Delivered MW for each Unit in each hour as follows:
5.2.10.1 For Normal Operation : If the MW are between the month's Minimum
Normal Capability and the month's Maximum Normal Capability, then the summer and
winter heat rates are calculated according to the curves supplied in Appendix A.
(In all instances described in this Article 5.2.10 and its sub-parts, summer
heat rate curves will be applicable for the months [redacted], and winter heat
rate curves will be used for the months of [redacted].)
5.2.10.2 If the MW exceed the month's Maximum Normal Capability and is less
than or equal to the month's Over Pressure Mode Capability, then the Unit output
shall be calculated assuming a [redacted] block at a heat rate of [redacted],
plus the remaining Unit output calculated using appropriate summer or winter
heat rate calculation.
5.2.10.3 If the MW exceed the month's Over Pressure Mode Capability and is
less than or equal to the month's Capability in Over Pressure Mode with Power
Augmentation, then the Unit output shall be calculated assuming a [redacted]
block at a heat rate of [redacted] plus the [redacted] block of over pressure
output at [redacted] plus the remaining Unit output calculated using the
appropriate summer or winter heat rate calculation. Power augmentation is not
available at temperatures below [redacted] and is limited to [redacted]
5.2.10.4 If energy is delivered from an alternative resource, [redacted].
ARTICLE 6
BILLING AND COLLECTIONS
6.1 Capacity and Energy Billing and Payment.
6.1.1 The Buyer and Seller shall agree to a mutually
acceptable billing and payment process prior to the Required Commercial
Operation Date.
ARTICLE 7
PROJECT IMPLEMENTATION AND CONSTRUCTION
7.1 Project Implementation Seller shall:
7.1.1....complete construction of the Facility and thereafter
(i) own, lease or control the entire output of, and (ii) operate and maintain
the Facility for the Term;
7.1.2....apply for, and use diligent efforts to obtain, all
Consents, all renewals thereof, and any other approvals of Government
Authorities that are required in connection with Seller's obligations.
7.2 Design and Construction of the Facility.
7.2.1....Seller shall provide to Buyer, so that Buyer may
provide to the GPSC, Seller's preliminary start-up and test schedule for the
Facility at least ninety (90) days prior to start-up and testing of the
Facility.
7.2.2....Seller shall provide to Buyer, so that Buyer may
provide to the GPSC, a Milestone Schedule which shall set forth the Required
Commercial Operation Date as well as the scheduled Initial Synchronization Date
of the Facility to the Georgia ITS. Seller shall notify Buyer, so that Buyer may
notify the GPSC, of any changes in the Milestone Schedule as they may occur from
time to time; provided, however, that such notification shall not relieve Seller
from any of its obligations set forth elsewhere herein.
7.3 Failure to Meet Required Commercial Operation Date. Seller is
responsible for meeting the Required Commercial Operation Date of June 1, 2002.
If the Seller is unable to meet the Required Commercial Operation Date, it may
supply the capacity and energy from an alternative resource as allowed in
Article 5.1.2. If delivery is made from an alternative resource, [redacted]. If
the Seller is unable to meet the Required Commercial Operation Date and it fails
to, or elects not to, supply the capacity and energy from an alternative
resource as allowed in Article 5.1.2, [redacted] not to exceed one-half of one
(1) year's annual capacity payment for the Unit.
7.4 Right to Advance Commercial Operation. Seller may notify Buyer of
advancement of the Commercial Operation Date. Notification must be given by
[redacted], and at least [redacted] in advance of the modified Commercial
Operation Date. Once notification is given, the Seller will be accountable to
meet the advanced Commercial Operation Date and [redacted]. In the event that
the Commercial Operation Date is advanced, payments and guarantees will be
advanced accordingly.
ARTICLE 8
INTERCONNECTION AND METERING
8.1 Interconnection Facilities.
8.1.1....Buyer shall complete, or cause the completion of, the
design, financing, construction, installation, maintenance and testing of the
interconnection facilities in a manner consistent with Prudent Utility Practices
and as necessary to allow the flow of energy from the Facility. For purposes of
this Agreement, whenever it is used, "Prudent Utility Practices" means, at a
particular time, any of the practices, methods and acts engaged in or approved
by a significant portion of the electric utility industry prior to such time, or
any of the practices, methods and acts which, in the exercise of reasonable
judgment in light of the facts known at the time the decision was made, could
have been expected to accomplish the desired results at a reasonable cost
consistent with good business practices, reliability, safety and expedition.
Prudent Utility Practices is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to be a spectrum of
possible practices, methods or acts expected to accomplish the desired results,
having due regard for, among other things, manufacturers' warranties and the
requirements of Governmental Authorities of competent jurisdiction and the
requirements of this Agreement.
8.1.2 Seller shall be responsible for all reasonable costs
and expenses (including overheads) incurred in connection with the design,
construction, and installation of all or part of the interconnection facilities
and Buyer shall pay to Seller for the Term of the Agreement per [redacted]
kW-mo. (applied to Buyer's Contract Capacity Rating) for interconnection costs.
8.1.3 Buyer shall obtain any and all necessary rights of
way and easements, including adequate and continuing access rights on and across
the Facility to install, operate, maintain, replace and/or remove the
interconnection facilities located at the Facility.
8.2 Protective Devices. Seller shall, at its own cost, provide, install
and maintain internal breakers, relays, switches, synchronizing equipment and
other associated protective control equipment necessary to maintain the
reliability, quality and safety of the electric power production of the
Facility.
8.3 Meters.
8.3.1 Seller shall design, locate, construct, install, own,
operate and maintain the Metering System in accordance with Prudent Utility
Practices in order to measure and record the amount of energy and capacity
delivered from the Facility.
8.3.2 Seller shall inspect and test all meters at such
times as will conform to Prudent Utility Practices, but not less often than once
every two (2) years. 8.3.3 If any seal securing the Metering System is found
broken, if the Metering System fails to register, or if the measurement made by
a metering device is found upon testing to vary by more than one half percent
(0.5%) from the measurement made by the standard meter used in the test, an
adjustment shall be made correcting all measurements of energy made by the
Metering System during (i) the actual period when inaccurate measurements were
made by the Metering System, if that period can be determined, or (ii) if such
actual period cannot be determined, the later half of the period from the date
of the last test of the Metering System to the date such failure is discovered
or such test is made (such period herein the "Adjustment Period"). The amount of
the adjustment shall be determined (i) by correcting the error if the percentage
of error is ascertainable by calibration, tests or mathematical calculation, or
(ii) if not so ascertainable, by estimating on the basis of deliveries under
similar conditions during the period since the last test.
ARTICLE 9
COMMERCIAL OPERATION, TESTING AND DESIGNATION OF CAPACITY
9.1 Commercial Operation Test. The nominal capacity of the Facility is
expected to be 1132 MW (566 MW per Unit).. The Contract Capacity Rating for the
first year following Commercial Operation shall be based on actual demonstrated
capability following performance testing with over pressure and power
augmentation as corrected to [redacted] and [redacted] relative humidity. Seller
will have the right to re-demonstrate within [redacted] of the initial
demonstration. Thereafter, the annual Contract Capacity Rating will be declared
prior to June 1 for each year of the term of the Agreement. All
capacity-dependent payments or calculations will utilize the figure determined
in this manner for each twelve-month period beginning June 1 of each year. For
the term of the Agreement, [redacted]. The capacity dedicated to and obligated
to Buyer under this Agreement shall be the Contract Capacity Ratio times the
annual Contract Capacity Rating (Buyer's "Contract Capacity Rating").
9.2 Monthly Capacity Increments. Each year, at the time of
demonstration or declaration of the Contract Capacity Rating, the following
additional capacity increments shall be declared for each month of the
twelve-month period beginning June 1: Minimum Normal Capability, Maximum Normal
Capability, Over Pressure Mode Capability, and Capability in Over Pressure Mode
with Power Augmentation. For the months of June through September, the
Capability in Over Pressure Mode with Power Augmentation shall not be less than
the Contract Capacity Rating for the year.
ARTICLE 10
OPERATION AND MAINTENANCE
10.1 Operation and Maintenance.
10.1.1 Seller shall manage, control, operate and maintain
the Facility in a manner consistent with Prudent Utility Practices. Seller shall
also operate the Facility in accordance with applicable reliability criteria and
guides of the SERC and NERC.
10.1.2 Seller shall employ at the Facility all safety
devices and safety practices required by Prudent Utility Practices.
10.2 Maintenance Scheduling. Maintenance schedules will be determined
based on the manufacturer's recommendations and Prudent Utility Practices. All
scheduled maintenance will be coordinated to minimize the impact of scheduled
maintenance on the availability of the Units, but such scheduled maintenance
hours shall not count in the calculation of the SAF as set forth in Articles
5.2.8 and 5.2.9.
10.3 Fuel Supply.
10.3.1 The Parties intend to optimize the commodity price by
[redacted]. In addition, the Parties intend to manage the [redacted] to keep
these costs at a minimum necessary to maintain reliable gas service. The actual
cost of the commodity will be used in calculating the energy charges as
described in Article 5.2.
10.3.2 Buyer shall pay to Seller as an additional payment
[redacted] associated with Buyer's Contract Capacity Rating. Actual charges are
anticipated to be the effective fixed portion of the [redacted] for gas
transported from [redacted] to Plant Xxxxxxx multiplied by the pipeline capacity
sufficient to meet the peak hourly gas requirements plus allocated storage
charges necessary to maintain [redacted]of firm gas storage deliverability
connected to Transco, plus all applicable taxes. [redacted] will be included in
the Energy Charge and will not be recovered separately.
ARTICLE 11
DELIVERY OF CAPACITY AND ENERGY
11.1 Coordination, Scheduling and Dispatch. The Seller intends to
operate the Facility in the Southern electric system economic dispatch. However,
the Seller and Buyer reserve the right to schedule the dispatch of the Units
under an appropriate non-discriminatory scheduling procedure.
ARTICLE 12
FORCE MAJEURE
12.1 Definition of Force Majeure Event. For the purposes of this
Agreement, a "Force Majeure Event" means any occurrence, nonoccurrence or set of
circumstances that is beyond the reasonable control of Seller and is not caused
by Seller's negligence or lack of due diligence, including, without limitation,
flood, ice, earthquake, windstorm or eruption; fire; explosion; invasion, civil
war, commotion or insurrection; sabotage or vandalism; military or usurped
power; or act of God or of a public enemy. The term Force Majeure Event shall
not include (i) the inability to meet a Legal Requirement or the change in a
Legal Requirement; (ii) a site-specific strike, walkout, lockout or other labor
dispute; (iii) equipment failure, unless such equipment failure results directly
from the Force Majeure Event, or (iv) changes in market conditions that affect
the cost or availability of the Facility's primary or secondary fuel supply or
the cost of power from resources other than the Facility.
12.2 No Breach or Liability. Seller shall be excused from performance
and shall not be construed to be in default in respect of any obligation
hereunder for so long as failure to perform such obligation shall be due to a
Force Majeure Event.
12.3 Capacity and Energy Payments. [redacted].
12.4 Mitigation. Following the occurrence of a Force Majeure
Event, Seller shall:
12.4.1...give to Buyer, so Buyer can give to the GPSC, notice
thereof, followed by written notice if the first notice is not written, as
promptly as possible after Seller becomes aware of such Force Majeure Event,
describing the particulars of such Force Majeure Event;
12.4.2...use its reasonable best efforts to remedy its
inability to perform as soon as practicable; provided, however, that this
Article shall not require the settlement of any strike, walkout, lockout or
other labor dispute on terms which, in the sole judgment of Seller, are contrary
to its interest, and provided further, that the settlement of strikes, lockouts
or other labor disputes shall be entirely within the discretion of Seller; and
12.4.3...when it is able to resume performance of its
obligations under this Agreement, give the GPSC and Buyer written notice to that
effect.
12.5 Suspension of Performance. The suspension of performance due to a
Force Majeure Event shall be of no greater scope and of no longer duration than
is required by such Force Majeure Event. No Force Majeure Event shall extend
this Agreement beyond its stated Term.
12.6 Extended Force Majeure Events. Seller may terminate this Agreement
upon [redacted] prior written notice if a Force Majeure Event prevents it from
substantially performing its obligations hereunder for a period of [redacted].
Upon termination of this Agreement pursuant to this Article, Seller shall no
longer be entitled to recover Monthly Capacity and Energy Payments.
ARTICLE 13
DEFAULT AND REMEDIESDEFAULT AND REMEDIESDEFAULT AND REMEDIES
13.1 Failure of Performance by Seller. The occurrence of any of
the following events shall constitute a "Failure of Performance" by Seller:
13.1.1...Seller fails to cause the Facility to achieve the
Commercial Operation Date on or before that date which is twelve (12) months
after June 1, 2002;
13.1.2...Seller fails both (i) to perform or observe any of
its material obligations under this Agreement due to its inability or failure to
comply with a Legal Requirement and (ii) to promptly commence and diligently
pursue action to cure and cures such inability or failure to perform within
[redacted]. Seller agrees to give Buyer, so Buyer may give to the GPSC, notice
as promptly as practicable after Seller becomes aware that a Legal Requirement
will prohibit Seller from performing. If Seller reasonably believes that its
inability or failure to perform or observe any of its material obligations under
this Agreement will extend beyond [redacted], Seller shall submit a plan for
curing such inability or failure (the "Cure Plan") as soon as reasonably
practicable but in no event more than [redacted] after Seller's inability or
failure first arose;
13.1.3...A court having jurisdiction shall enter (i) a decree
or order for relief in respect of Seller in an involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law, or (ii) a decree or order adjudicating Seller bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Seller under any
applicable Federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of Seller
(collectively, "Trustee") or of any substantial part of its affairs;
13.1.4...Seller shall (i) commence a voluntary case or
proceeding under any applicable Federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent, or (ii) consent to the entry of a decree or
order for relief in respect of Seller in any involuntary case or proceeding
under any applicable Federal or state bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or (iii) file any petition, answer or consent seeking
reorganization or relief under any applicable Federal or state law, or (iv)
consent to the filing of any petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of Seller (collectively, a "Receiver") or of any substantial
part of its property or (v) make an assignment for the benefit of creditors, or
(vi) be unable, or admit in writing its inability, to generally pay its debts as
they become due, or (vii) take any action in furtherance of any of the
foregoing;
13.2 Remedies If a Failure of Performance by Seller has occurred, then
Buyer may terminate this Agreement by giving [redacted] written notice thereof
to Seller and in that event Seller will not be entitled to recover Monthly
Capacity and Energy Payments.
ARTICLE 14
COMPLIANCE WITH LAWS, RULES AND REGULATION
14.1 Compliance. Seller covenants that as of the Commercial Operation
Date and for the Term, Seller shall be in compliance with all legal requirements
with respect to the ownership, operation and maintenance of the Facility.
14.2 Change of Law.
14.2.1...A "Change of Law" means a change in legal
requirements which constitutes a new environmental or tax law or regulation or a
new interpretation of such law or regulation, which is enacted after September
17, 1999, and which generally affects the cost of natural gas-fired electrical
generation.
14.2.2...Except as provided in Articles 14.2.3 and 14.2.4,
Buyer's capacity and energy payments allowed under this Agreement shall not be
altered as a result of a Change in Law which cause Seller to incur additional
costs or realize savings in carrying out its obligations under this Agreement.
14.2.3...If after September 17, 1999, there is a Change of Law
which causes Seller to incur additional costs which are projected to increase
Seller's annual costs of carrying out its obligations under this Agreement by
[redacted], then Seller may notify Buyer of such increase in annual costs. Upon
receiving such notice, Buyer shall apply to the GPSC to increase the amount of
allowed capacity and energy expenses to recover the increased costs resulting
from the Change of Law, and if that increase is allowed, then Buyer shall
increase its payments to Seller, on a pro-rata basis, and shall be allowed to
recover these increased payments from its rate payers. If the GPSC either
refuses to allow an increase in the authorized expenses or fails to act within
twelve (12) months of the request to increase having been filed, Seller may
terminate its obligations under this Agreement by providing the Buyer thirty
(30) days written notice of its intent to terminate the Agreement effective
between the next October 1 and December 31. If Seller fails to terminate this
Agreement or until the effective date of any termination, Buyer shall continue
to pay the capacity and energy charges as allowed by this Agreement, as it may
have been amended by the GPSC after it was initially approved.
14.2.4... If after September 17, 1999, there is a Change of
Law which causes Seller to incur a reduction in costs which are projected to
decrease Seller's annual costs of carrying out its obligations under this
Agreement by [redacted], then Seller shall reduce its capacity and energy
payments to reflect its pro-rata share of those savings.
14.3 NOx Allowances The costs incurred to purchase or create or
otherwise obtain NOx and VOC allowances and NOx and VOC set-asides are not
included in the proposed Capacity and Energy Payments described in this
Agreement, but will be recovered separately. [redacted].
ARTICLE 15
ASSIGNMENT AND TRANSFERS OF INTERESTS
15.1 Assignment and Assumption of Obligations. Seller may assign its
obligations under this Agreement or any portion thereof to an affiliate with
equal or greater creditworthiness characteristics; provided, however, (i) any
assignee shall expressly assume Seller's obligations hereunder and (ii) unless
expressly approved by the GPSC, no assignment, whether or not consented to,
shall relieve the Seller of its obligations hereunder in the event its assignee
fails to perform.
15.2 Assignment to Lenders. Notwithstanding Article 15.1, Seller may,
without the consent of the Buyer, assign this Agreement to a Lender for
collateral security purposes in connection with any financing or the refinancing
of the Company's assets which includes in whole or in part the Facility.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 Amendments. This Agreement may be amended by and only by a written
instrument duly executed by each of Buyer and Seller, which has received all
approvals of Governmental Authorities of competent jurisdiction necessary for
the effectiveness thereof.
16.2 Binding Effect. This Agreement and any extension shall inure
to the benefit of and shall be binding upon the Parties and their respective
permitted successors and assigns.
16.3 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
16.4 Entire Agreement. This Agreement constitutes the entire
understanding between the Parties and supersedes any previous agreements between
the Parties. The Parties have entered into this Agreement in reliance upon the
representations and mutual undertakings contained herein and not in reliance
upon any oral or written representations or information provided by one Party to
the other Party not contained or incorporated herein.
16.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia, without giving
effect to conflict of laws principles.
16.6 Waiver The failure of either Party to enforce at any time any of
the provisions of this Agreement, or to require at any time performance by the
other Party of any of the provisions hereof, shall in no way be construed to be
a waiver of such provisions, nor in any way to affect the validity of this
Agreement or any part hereof, or the right of such Party hereafter to enforce
every such provision. No modification or waiver of all or any part of this
Agreement shall be valid unless it is reduced to a writing, which expressly
states that the Parties hereby agree to a waiver or modification as applicable,
and is signed by both Parties.
16.7 Headings. The headings contained in this Agreement are used solely
for convenience and do not constitute a part of the Agreement between the
Parties hereto, nor should they be used to aid in any manner in the construction
of this Agreement.
16.8 Third Parties This Agreement is intended solely for the benefit of
the Parties hereto. Except as otherwise expressly provided herein, nothing in
this Agreement shall be construed to create any duty to, or standard of care
with reference to, or any liability to, any person not a Party to this
Agreement.
16.9 Severability. If any term or provision of this Agreement or the
application thereof to any person, entity, or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, entities or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
IN WITNESS WHEREOF, the undersigned Parties hereto have duly
executed this Agreement under seal in Atlanta, Georgia as of the date first
above written.
GEORGIA POWER COMPANY("Buyer")
By: .........
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
Attest: .........
Title: .........
[SEAL]
SOUTHERN POWER COMPANY ("Seller")
By: .........
Name: Xxxxxxx X. Xxxxx
Title: Vice President
Attest: .........
Title: .........
[SEAL]
Appendix A
Heat Rate and Input / Output Curves
[redacted]
