AMENDMENT NO. 2 TO THE
LONG-TERM AGREEMENT FOR THE PURCHASE AND SALE OF ELECTRICITY
BETWEEN SIERRA PACIFIC POWER COMPANY
AND XXXXX POWER PARTNERS
This Amendment ("AMENDMENT NO. 2") is entered into as of June __, 2002, by and
between Xxxxx Power Partners, a Nevada general partnership, by ORNI 1, LLC, its
managing general partner, by ORNI 2, LLC, its sole general partner ("BPP") and
Sierra Pacific Power Company, a Nevada corporation ("SIERRA"). BPP and Sierra
are sometimes referred to individually as "PARTY" and collectively as "PARTIES".
1. RECITALS. This Amendment No. 2 is based upon the following facts:
1. WHEREAS, on October 5, 1990, the Parties entered into a Long-Term
Agreement for the Purchase and Sale of Electricity ("PPA"). On July
12, 1991, the Parties executed an amendment to the PPA titled
Amendment to the Long-Term Agreement for Purchase and Sale of
Electricity, attached as Exhibit A. The Parties have also exchanged
various correspondence and performed consents and assignments which
have modified some terms, conditions and exhibits in the PPA since
October 5, 1990 ("AMENDING DOCUMENTS"). Attached as Exhibit B to this
Amendment No. 2 is a detailed list of, as well as a complete copy of
the Amending Documents which the Parties have in their possession at
the time of execution of the Amendment No. 2. The PPA and all such
above referenced documents shall be considered or referred to as the
PPA, As Amended ("PPA, AS AMENDED");
2. Whereas, on or about June 26, 1998, Xxxxx filed case number 24846 in
the Third Judicial District Court for the County of Xxxxxxxxx, State
of Nevada ("CASE 24846");
3. Whereas, on or about January 5, 2000, the Court granted MOTIONS FOR
PARTIAL SUMMARY JUDGMENT ("SUMMARY JUDGMENT");
4. Whereas on or about June 20, 2000, the Court issued ORDER DENYING THE
PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW & ORDER OF JUDGMENT
("FINAL ORDER");
5. Whereas, on or about July 19, 2000, Sierra appealed the Court's
decision granting summary judgment, Nevada Supreme Court case number
36480 ("CASE 36480");
6. WHEREAS, a Settlement Agreement between Sierra and BPP was entered
into on February 16, 2001 ("SETTLEMENT AGREEMENT") as an agreement by
the Parties to settle and resolve, among others, their disputes
arising from Case 24846 and Case 36480;
7. WHEREAS, BPP has requested that Sierra grant a one-time waiver of the
August 2002 rolling average capacity deration provision to allow time
for BPP to bring the plant up to capacity;
8. All capitalized terms not defined herein shall have the meaning set
forth in the PPA, As Amended.
In consideration of the promises and covenants contained herein, the
Parties agree as follows:
2. AMENDMENT TERM. This Amendment No. 2 shall be effective upon the date of
its execution and shall continue in effect until the PPA, As Amended, is
terminated.
3. ROLLING AVERAGE CALCULATION. The Parties agree to the following items:
3.1 Sierra shall grant a one-time waiver of the three year rolling average
calculation to be performed on the Contract Year ending with the
August 2002 invoice, as described in clause 6.(b) of the PPA, As
Amended, with the following conditions:
a. Unless changed below, all provisions of the PPA, As Amended,
shall remain as they currently are through and including the
August 2002 invoice performed by Sierra.
b. Sierra shall calculate the new three year rolling average in
September 2002 for the immediately preceding thirty-six months.
i) If the new rolling average calculated is equal to or greater
than 85% of the Peak Period Capacity value in Exhibit B, all
payments shall be made according to the terms of the PPA, As
Amended.
ii) If the new rolling average calculated is less than said 85%,
then:
a) The PPA capacity rates will be reduced accordingly to
reflect the new rolling average, (i.e. if the new
rolling average is determined to be 81% of the Peak
Period Capacity value in Exhibit B, the capacity rates
will be reduced to (.81 x $20.25) and (.81 x $14.62)).
b) The new PPA capacity rates will be used to calculate
capacity payments for the 2002/2003 Contract Year up
through the December 2002 invoice that would contain
readings through approximately January 13, 2003.
c) Sierra shall perform a new rolling average calculation
in January 2003.
d) The monthly capacity values for the 2001/2002 Contract
Year will be used as the maximum amount that can be
paid for capacity in each of those invoice months for
the 2002/2003 Contract Year up to and including the
December 2002 invoice.
3.2 Sierra shall issue a half-month invoice for the period from
approximately January 14, 2003 until the end of that calendar month,
which shall be deemed the January 2003 monthly invoice. The capacity
payment shall be prorated for that month.
3.3 In January 2003 and every January thereafter, a new rolling average
shall be calculated by Sierra for the immediately preceding thirty-six
monthly invoices and such average will then be effective starting with
that January's billing.
3.4 The rolling average calculation shall be performed pursuant to Section
6 (b).
4. SELLER'S PROJECT. The Parties agree to comply with Section 3 of the
Settlement Agreement, entitled Desert Peak Generation, with regard to the entire
generating capability of the existing generator, turbine, and associated
equipment and all energy produced by such generator, turbine, and associated
equipment, even if said generator, turbine and associated equipment is altered,
modified or improved, shall be sold to Sierra pursuant to the PPA, As Amended.
BBP may choose to further develop the Desert Peak Geothermal Resource by adding
separate generator(s), turbine(s), and associated equipment, and the energy
produced thereby will not be subject to Section 3 of the Settlement Agreement.
5. STATION SERVICE. BPP shall not use diesel generating units or
non-geothermal fueled generating units for any purpose under the terms and
conditions of the PPA, As Amended, other than for emergency service,
synchronization or black-start capability for the BPP facility.
6. INSTALLATION OF METERING EQUIPMENT. Sierra shall install the necessary
metering and communications equipment to allow for automatic metering of the BPP
facility on 00:00 hours on the first day of each month. BPP shall pay for
Sierra's actual costs of such installation, up to $5,000. Such installation
shall be completed and fully operational prior
to January 1, 2003. Sierra shall not require a dedicated communications line for
the purpose of meter reading, except and until such time that Sierra has to read
the meter manually two (2) times in any calendar year due to the lack of
availability of the communications line. In the event of two (2) such manual
readings in a calendar year, BPP will, at their sole cost, then be required to
install and maintain a dedicated communications line, as approved by Sierra,
from that time forward. Such approval shall not be unreasonably withheld.
7. STATUS OF AMENDMENT. It is expressly understood and agreed by the Parties
hereto that this Amendment No. 2 is supplemental to and made a part of the PPA,
As Amended. It is further understood and agreed that all the terms, conditions,
and provisions of the PPA, As Amended, unless specifically modified herein are
to apply to this Amendment No. 2. . Except as expressly contained herein, all
other terms and conditions of the PPA, As Amended, shall remain in full force
and effect.
In the event either Party locates additional Amending Documents that would be
considered part of the Amending Documents contained in Exhibit B up through the
execution of the Amendment No. 2, then the locating Party shall provide those
documents to the other Party for review. Subject to the mutual written agreement
of both Parties, those additional documents shall be included as part of the
Amending Documents. Such agreement by either Party shall not be unreasonably
withheld.
8. JUDGMENTS AND SETTLEMENTS. The Parties shall continue to comply with the
judgments and orders listed in the recitals herein, issued by the Third Judicial
District Court of the State of Nevada in Case 24864 and the terms and conditions
of the Settlement Agreement shall be binding on the Parties.
9. HEADINGS. The headings or section titles contained in this Amendment No. 2
are inserted solely for convenience and do not constitute a part of this
Amendment No. 2 between the Parties, nor should they be used to aid in any
manner in the construction of this Amendment No. 2.
10. COUNTERPARTS AND INTERPRETATION.
1) This Amendment No. 2 may be executed in any number of
counterparts, each of which shall be deemed an original.
2) In the event of ambiguity or question of intent or interpretation
arises, this Amendment No. 2 shall be construed as if drafted
jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of
authorship of any of the provisions of this Amendment No. 2.
11. BINDING EFFECT. This Amendment No. 2 shall inure to the benefit of and be
binding upon the Parties and their respective heirs, successors and permitted
assigns. This
Amendment No. 2 is not intended to create, and shall not create, any rights in
any person who is not a Party to this Amendment No. 2.
12. GOVERNING LAW. The laws of the State of Nevada applicable to contracts made
or to be wholly performed there, without giving effect to conflict of law or
choice of law principles, shall govern the validity, construction, performance
and effect of this Amendment No. 2.
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment No. 2 to
be executed by their duly authorized representative on the date first stated
above.
-------------------------------------- ----------------------------------------
SIERRA PACIFIC POWER COMPANY XXXXX POWER PARTNERS
By: /s/ Xxxxxxx Xxxxx By: ORNI 1, LLC
---------------------------------- General Partner
Name: Xxxxxxx Xxxxx
By: Ormat Nevada Inc.
Title: Vice President Sole Member of ORNI 1, LLC
/s/ Ran Raviv
Date: 6/24/02 ------------------------------
--------------------------------- Name: Ran Raviv
Title: Vice President
Date: June 17, 2002
By: ORNI 2, LLC
General Partner
By: Ormat Nevada Inc.
Sole Member of ORNI 2, LLC
/s/ Ran Raviv
-------------------------------
Name: Ran Raviv
Title: Vice President
Date: June 17, 2002
-------------------------------------- ----------------------------------------
EXHIBIT A
Copy of the amendment to the PPA titled Amendment to the Long-Term Agreement for
Purchase and Sale of Electricity dated July 12, 1991
EXHIBIT B
DETAILED LIST OF THE AMENDING DOCUMENTS:
1. Consent to Assignment between Sierra and Xxxxx Hot Springs Geothermal
Associates dated 7/12/1991
2. Consent to Assignment between Sierra and Nevada Geothermal Power
Partners, Limited Partnership dated 7/12/1991
3. Assignment and Assumption Agreement between Sierra and Xxxxx Hot
Springs Geothermal Associates dated 7/12/1991
4. Consent to Collateral Assignments and Agreement of Sierra Pacific
Power Company dated 7/18/1991
5. Letter from Sierra to Hot Springs Power Company dated 8/28/1991
6. Consent to Collateral Assignments and Agreement of Sierra Pacific
Power Company dated 6/30/1992
7. Letter from BPP to Sierra dated 6/30/1992
8. Letter Agreement dated 9/30/1992 from First Security Bank of Utah, NA
to Sierra
9. Letter from Hot Springs Power Company to Sierra dated 11/6/1992
10. Letter from BPP to Sierra dated 6/28/1995
11. Consent to Assignment dated 6/29/2001
COMPLETE COPY OF THE AMENDING DOCUMENTS:
