SPECIAL FACILITIES AGREEMENT
BETWEEN
SIERRA PACIFIC POWER COMPANY
AND
FIRST INTERSTATE BANK OF NEVADA, N.A., as Owner Trustee
SPECIAL FACILITIES AGREEMENT
BETWEEN
SIERRA PACIFIC POWER COMPANY
AND
FIRST INTERSTATE BANK OF NEVADA, N.A., as Owner Trustee
1. Recitals....................................................................1
2. Effective Date and Term.....................................................3
3. Services to Be Provided.....................................................3
4. Construction To Be Completed By Seller......................................4
5. Changes in Scope............................................................5
6. Advances and Payment Schedule...............................................6
7. Target Date.................................................................8
8. Prior Approval and Design Review............................................8
9. Operation and Maintenance..................................................10
10. Reliability of Service....................................................11
11. Ownership.................................................................12
12. Easements and Rights-of-Way...............................................12
13. Rules and Regulations.....................................................12
14. Notice....................................................................12
15. Assignment................................................................13
16. Collateral Assignments....................................................14
17. Successors in Interest....................................................14
18. Force Majeure.............................................................14
19. Seller Representative.....................................................15
20. Liability and Indemnification.............................................15
21. Insurance.................................................................16
22. Entire Agreement..........................................................16
23. Governing Law.............................................................16
24. Dispute Resolution........................................................16
25. Multiple Originals........................................................18
Exhibit A - page 1 - Far West Interconnection Steamboat Substation
page 2 - Steamboat II and III-Estimated Interconnection Project Cost
page 3 - Detailed Cost Breakdown
Exhibit B - Payment Schedule
Exhibit C - Generation Interconnection Report
SPECIAL FACILITIES AGREEMENT
This Agreement is entered into as of the date of execution by and
between First Interstate Bank of Nevada, N.A., a national banking association as
Owner Trustee ("Seller"), and Sierra Pacific Power Company, a Nevada corporation
("Sierra"). Seller and Sierra are sometimes referred to collectively as
"Parties".
1. Recitals. This Agreement is based upon the following facts:
(a) Sierra is a public utility engaged in the purchase, production,
transmission, distribution, and sale of electric energy, natural gas, and water.
(b) Seller will construct, own and operate a geothermal facility located
near the existing Steamboat generating plant in a portion of the Towne Lease,
Section 28, T.18N R.20E, MDBM, Washoe County, Nevada comprised of multiple units
("Project") which will generate an estimated net maximum output of 32,000 KW.
(c) On January 18, 1991 and January 24, 1991, Sierra and Far West Capital,
Inc. a Utah Corporation ("Far West") executed Agreements whereby Far West agrees
to sell and Sierra agrees to purchase electricity generated and delivered to
Sierra's Steamboat Substation from the Project ("Power Purchase Agreements").
This Special Facilities Agreement is required by Section 17 of the Power
Purchase Agreements.
(d) Far West requested and on June 5, 1991 Sierra consented to the
assignment of the Power Purchase Agreements from Far West to Steamboat
Development Corporation, a Utah corporation ("Steamboat") and a subsidiary of
Far West, pursuant to which Far West remains liable to Sierra for duties and
obligations under the Power Purchase Agreements.
Page 1
(e) On November 12, 0000, Xxxxxx, Xxx Xxxx, Xxxxxxxxx, General Electric
Capital Corporation, a New York corporation ("G. E Capital"), and Seller entered
into a Consent to Assignment and Agreement ("Consent"). Both Far West and
Steamboat, individually and collectively, remain liable to Sierra to perform all
duties and obligations under this Agreement and the Power Purchase Agreements.
This Agreement is subject to the terms of the Consent.
(f) As of November 12, 1991, Steamboat entered into the Construction Loan
Trust Agreements referred to in such Consent with the Seller as Owner Trustee
and the Power Purchase Agreements and other assets were transferred to Seller as
Owner Trustee.
(g) Seller wishes to interconnect the Project to Sierra's system in order
to deliver such electricity.
(h) In order for the Project to be connected to Sierra's system, certain
transmission and substation facilities must be designed and constructed, and
part of such design and construction must be performed by Sierra.
(i) Seller acknowledges the receipt of a Generation Interconnection Report
for Far West Capital, Inc. dated November 1, 1991 from Sierra. The generation
interconnection report ("Generation Interconnection Report") presents what
Sierra considers to be the minimal interconnection requirements necessary to
provide a high level of reliable service to Seller with a minimal potential for
outages to Seller. Because of cost constraints, Seller requested that Sierra
review other interconnection possibilities. The facilities selected to encompass
the Scope of Work described herein will not provide the same high level of
service that would have been provided with the facilities recommended by Sierra
in the Generation Interconnection Report.
In consideration of the covenants and conditions herein contained, the
Parties agree as follows:
Page 2
2. Effective Date and Term. This Agreement shall be effective on the date of its
execution by both Parties and shall continue thereafter until either (a) the
Power Purchase Agreements terminate, or (b) this Agreement is terminated upon
mutual written agreement of the Parties.
3. Services to Be Provided. Sierra, at Seller's expense, shall perform the
following:
(a) Design, procure, construct, install, maintain and inspect the following
facilities and all associated equipment ("Interconnection Facilities") at the
Project:
(1) A 120 kV terminal at Sierra's Steamboat substation which consists
of one 120 kV circuit breaker in the 126 position, protective relaying,
expansion of the existing remote terminal unit and communications
facilities, disconnect switches, bus work and structures, meterhouse,
batteries, site work and any other equipment necessary to accommodate the
installation of such facilities.
(2) Permitting, Right-of-Way, and constructing the new 120 kV line
("Project Line") from Sierra's Steamboat substation up to and including the
termination structure and the 120 KV switch on the termination structure.
The termination structure will accommodate Seller's 120 KV lightning
arresters and underground dip.
(3) Appropriate 4.16 kV generation metering, backup metering,
potential transformers, current transformers and associated equipment
installed at the Seller's facility.
(4) Seller's contractor, at Sierra's request, is to install potential
transformers and current transformers to Sierra's specifications at the
time of manufacture of the Seller's switch gear. Sierra is to inspect,
approve and test the potential transformers and the current transformers at
the time of switch gear installation at the Project.
Page 3
(b) Review Seller's design and installation of the protection and relaying
scheme to be installed at the Project by Seller for the sole purpose of
establishing that the equipment installed is compatible with Sierra's electric
system.
(c) Participate in and witness protection and control equipment testing
performed by Seller. Any other testing reasonably determined by Sierra to be
necessary may be required and will be performed by the Seller upon Sierra's
request.
(d) Initiate ordering of a dedicated voice telephone circuit into the
Project and test and accept the completed installation.
Facilities and services described above shall be considered the entire scope of
work ("Scope of Work").
4. Construction To Be Completed By Seller. Seller, at its own expense, shall
perform the following work in accordance with NEC, NESC, Standard Utility
Practices and any other applicable standards and codes:
(a) Design, procure, construct, install, and inspect the following
equipment at the Project:
(1) All protection and relaying equipment.
(2) A 120 kV step-up transformer, circuit switcher, and associated
protection equipment, control equipment, and any other equipment necessary
to install the transformer at the Project.
(3) An underground 120 kV line an approximate distance of 100 feet,
from the Project to the point of delivery into Sierra's system at the
termination structure.
(4) Underground cable, pot heads and lightning arresters located on
Sierra's termination structure prior to energization of the line.
(5) A fenced area no less than 52' x 28' around Sierra's termination
Page 4
structure. The fencing material shall be 6' fabric topped with 16" barbed
wire. The grounding in this area shall be a part of the plant ground and
shall include a layer of approximately 3" of gravel. The gate access shall
be a 20' vehicle gate and shall accomodate a Sierra padlock. The fence
shall be a minimum of 8' from the centerline of each structure leg on the
north, south, and east sides and a minimum of 20' from the centerline of
the structure on the overhead line side (west side).
(6) Relaying on the 120 kV interrupting device.
(7) Any other electrical equipment necessary at the Project.
(b) Seller shall be responsible for:
(1) Providing Sierra with adequate space and a suitable sealed
enclosure to house metering, revenue metering, back up metering, potential
transformers and current transformers at the Project site.
(2) Providing design drawings and specifications to Sierra for the
Project to be constructed by Seller. Sierra shall review such drawings and
specifications in accordance with Section 3(b) and Section 8.
(3) Providing test reports to Sierra for equipment as necessary.
(4) Payment of monthly charges for the required telephone circuit into
the Project.
5. Changes in Scope. (a) If Seller determines that a change in the Scope of Work
is desirable, a written request shall be issued by Seller, setting forth in
reasonable detail the nature of the change requested.
If Sierra determines that such change in Scope of Work is reasonable with
respect to the impact of the change to Sierra's system, then Sierra shall
prepare a written submittal detailing the effects, if any, upon the completion
schedule and the total price to be paid by Seller.
Page 5
If Seller accepts such modifications to the total price and the completion
schedule, it shall send a written request to Sierra to do the work associated
with said change in Scope of Work at the expense of Seller.
If Seller does not accept such modifications to the total price and the
completion schedule, Sierra will not perform the work associated with said
change in Scope of Work.
(b) If Sierra determines that a change in the Scope of Work is required,
then Sierra shall prepare a written submittal detailing the requirement, the
reason, and the effects, if any, upon the completion schedule and total price to
be paid by Seller. Seller shall approve any change in the Scope of Work which
has a cumulative dollar change greater than $10,000. Seller's approval shall not
be unreasonably withheld. If Sierra determines the change necessary in order to
provide reliable service to Seller and Seller withholds approval, Seller accepts
full responsibility for increased risk of outage or degradation in reliability
directly or indirectly resulting from Sierra's inability to make the change it
deemed necessary.
6. Advance and Payment Schedule. (a) Seller shall pay to Sierra the actual costs
of the Scope of Work performed. Sierra shall use best efforts to complete the
Scope of Work within the Estimated Cost. The total estimated cost for the Scope
of Work is $994,000 (the "Estimated Cost"), further described in Exhibit A,
attached hereto and incorporated herein by reference. Of that amount, Seller has
already advanced $50,000 on December 10, 1991 for breaker cancellation fees.
Seller shall further advance the sum of $944,000 for the Scope of Work according
to the payment schedule described in Exhibit B, attached hereto and incorporated
herein by reference. If payments for the estimated costs are not received by
Sierra within the dates specified in Exhibit B, then Sierra reserves the right,
upon written notification to Seller, to discontinue activities under this
Agreement and
Page 6
Seller shall pay the actual costs associated with such discontinuance and any
resulting renewal of activities hereunder.
(b) If, during the term of this Agreement, Sierra determines that the
Estimated Cost is insufficient to cover the Scope of Work, Sierra may replace
Exhibit A with a revision to reflect such revised estimate. Seller shall, within
thirty (30) days of written notice of such revised estimate, submit payment of
the amount by which the new estimate exceeds the Estimated Cost (the "Increased
Amount"). If payment of the Increased Amount is not received within thirty (30)
days of written notice then Sierra reserves the right, upon written notification
to Seller, to discontinue activities under this Agreement and Seller shall pay
the actual costs associated with such discontinuance and any resulting renewal
of activities hereunder.
(c) In the event this Agreement is terminated prior to completion of the
Scope of Work for any reason other than the negligence or willful misconduct of
Sierra, Seller shall pay any equipment or cancellation charges and other costs
resulting from such noncompletion.
(d) Within four (4) months after completion of the Scope of Work, Sierra
will determine the actual cost thereof. Actual costs shall be those costs
recorded in the book of accounts kept by Sierra. If the actual cost exceeds the
Estimated Cost plus any Increased Amount, Sierra will xxxx to Seller, and Seller
shall pay said difference to Sierra within thirty (30) days of receipt of said
xxxx. If the actual cost is less than the Estimated Cost plus any Increased
Amount, Sierra shall refund the difference to Seller within thirty (30) days
after the difference is determined.
(e) All records relating to the Scope of Work will at all reasonable times,
and for a period of one year following completion of the installation of the
Interconnection Facilities, be available for inspection and audit by Seller.
Page 7
(f) All or a portion of the payments received by Sierra for the facilities
installed and services provided by Sierra pursuant to this Agreement and the
cost of equipment that is contributed to Sierra pursuant to this Agreement may
in the future be considered taxable income to Sierra pursuant to Internal
Revenue Service (IRS) code, regulations thereunder, published revenue rulings,
or private letter rulings. In the event such payments become taxable income to
Sierra, Sierra shall determine the amount of tax liability resulting from such
payments and the tax liability shall be billed directly to Seller. Seller shall
submit payment of the tax liability within thirty (30) days of such billing.
Should Seller fail to pay the amount of such billing, Sierra may offset future
payments to Seller pursuant to the Power Purchase Agreements by such amounts.
(g) Seller assumes responsibility and liability for the cancellation
deposit on one 120 KV breaker instead of the two 120 KV breakers placed on order
in December 1991 for the interconnection. Seller agrees that the cancellation
charges thus released on the one 120 KV breaker will be applied to other costs
incurred for the Scope of Work. Seller herewith relinquishes any and all rights
that may have accrued to Seller in the one 120 KV breaker and releases said 120
KV breaker to Sierra for use elsewhere.
7. Target Date. Sierra shall exercise its best efforts to complete the Scope of
Work on or before August 15, 1992. However, Sierra shall have no liability for
failure to meet this target date.
8. Prior Approval and Design Review. (a) Equipment specifications, test reports
and detailed plans for the installation of the equipment specified in Section 4
of this Agreement and control and protective devices, and facilities to
accommodate Sierra's meters must be submitted to Sierra for review and advance
written approval prior to actual installation. Test reports shall include, but
not be limited to, transformer, circuit switcher, all relays, generators, and
underground
Page 8
cable. Such review and written approval shall only constitute acknowledgement
that the facilities are compatible with Sierra's system and such review and
approval shall not be unreasonably withheld. Sierra shall not, by reason of such
review or failure to review, be responsible for strength, details of design,
adequacy, or capability of any of Seller's facilities or equipment, nor shall
Sierra's written approval be deemed an endorsement of such facilities or any
item of equipment. Seller and Sierra acknowledge that the equipment
specifications and detailed plans submitted to Sierra are intended only for the
specific site and installation of the Project as described in this Agreement.
(b) If additional equipment is necessary to complete the interconnection of
the Project with Sierra's electrical system, Sierra shall provide Seller with
written notice, setting forth in detail the nature and type of additional
equipment required, and the reasons therefore. Seller shall approve the required
additional equipment prior to Sierra ordering the additional equipment and will
be responsible for the cost of purchasing and installing such additional
equipment. Seller's approval will not be unreasonably withheld. Seller
acknowledges the potential for delay of the Project if approval of the required
additional equipment is withheld or delayed. If such additions are to be
installed on or in place of Sierra owned facilities, Sierra will perform the
purchase and installation of such facilities at the cost of Seller.
(c) Sierra's obligation to interconnect the Project is contingent upon the
approval of plans, equipment specifications and test reports described above.
Seller shall not make any modification to its facilities, protection or control
equipment, or any other equipment which affects the delivery of electricity
without advance written notification to Sierra. Sierra shall use best efforts,
but in no event longer than sixty (60) days from the receipt of such
notification to review
Page 9
such modifications subject to the terms and conditions set forth in Section 8(a)
above, and to notify Seller in writing of the outcome of its review.
(d) In the event an entity other than Seller or Sierra requires Seller or
Sierra to move or relocate all or any portion of the facilities installed
pursuant to Section 3 and Section 11, Sierra shall pay all costs for relocation
or removal of those facilities owned by Sierra and installed pursuant to this
Agreement unless Seller desires to remain interconnected with Sierra's system.
If Seller desires to remain interconnected with Sierra's system, Seller shall
pay all costs for relocation of all or any portion of those facilities required
to be relocated and necessary for Seller's continued interconnection. If any
compensation is received from any entity other than Seller or Sierra for moving
or relocating of all or any portion of the facilities installed pursuant to
Section 3 and Section 11, that compensation related to the relocation of all or
any portion of those facilities required for Seller's continued interconnection,
shall be credited to Seller for the purpose of offsetting Seller's costs of
continued interconnection.
9. Operation and Maintenance. Not less often than annually, Seller shall
reimburse Sierra pursuant to Sections 14 and 17 of the Power Purchase
Agreements, for all of Sierra's operation and maintenance and refurbishment
costs as determined by Sierra, resulting from Sierra's installation of
facilities and equipment specified in Section 3 of this Agreement.
Pursuant to Section 16 of the Power Purchase Agreements, Seller shall be
responsible for the operation, maintenance and refurbishment of the facilities
specified in Section 4 of this Agreement in accordance with accepted utility
practices.
Seller shall notify Sierra prior to performing any maintenance on or near
the termination structure and such maintenance shall only be performed under the
control of a Sierra inspector on site.
Page 10
In accordance with accepted utility practices, Seller shall test and
maintain, all protective relays, interrupting devices, transformers, generators
and other equipment at the Project, and any facilities described in Section 4 of
this Agreement with qualified personnel at intervals not to exceed three (3)
years. Each relay test shall include both a calibration check and an actual trip
of the circuit breaker from the device being tested. A complete record of the
tests shall be submitted to Sierra within thirty (30) days of the test.
10. Reliability of Service. Seller acknowledges, understands and accepts that
the Interconnection Facilities presented under the Scope of Work herein will not
provide the same high level of service that would have been provided by
installation of the facilities described in the Generation Interconnection
Report, Exhibit C, attached hereto and incorporated herein by reference. Seller
understands and accepts full responsibility for (a) the increased risk of
outages as a result of a reduced Scope of Work, and (b) all risks associated
with forced generator outages (full load rejection) caused by planned and
unplanned interruptions to Seller's interconnection. Sierra will use best
efforts to provide reasonable notice to Seller of planned interruptions that
would affect Seller's Project.
Seller agrees to hold Sierra harmless for any damages to Seller's plant
facilities resulting from the reduced Scope of Work.
Seller further acknowledges, understands and accepts that Seller's
facilities will be placed at additional risk if Seller elects not to fund the
addition of the 1003 breaker and complete the ring bus in the Steamboat
Substation at the point when Sierra installs the 161 breaker. Installation of
the 161 breaker may occur when the second Steamboat 120/24.9 KV transformer is
added or when other substation modifications occur. Sierra shall notify Seller
in writing as soon as reasonably practicable when Sierra intends to install the
161 breaker. Seller agrees to hold
Page 11
Sierra harmless for any damages to Seller's plant facilities resulting from
Seller's decision to not fund the addition of the 1003 breaker.
Seller further acknowledges, understands and accepts that any future plant
additions or expansions, beyond the current Power Purchase Agreements, will
require Seller to add the 1003 breaker, two 120 KV switches and complete the
ring bus in the Steamboat Substation. This will be a requirement whether or not
Sierra has added the 161 breaker in Steamboat Substation, as shown in Exhibit A.
11. Ownership. All facilities constructed pursuant to Section 3 shall become
property owned, maintained, operated and controlled by Sierra. Title to the
Facilities shall at all times be vested in Sierra. The underground cable, pot
heads and lightning arresters located on Sierra's termination structure shall
become property owned, maintained and operated by Seller.
12. Easements and Rights-of-Way. Seller shall execute upon terms acceptable to
Sierra, such grants, conveyances, deeds, or other documents, together with
easements, rights-of-way, and enforcement of leasehold agreements as may be
deemed necessary by Sierra to provide services under this Agreement.
13. Rules and Regulations. This Agreement has been made by Sierra pursuant to
its rules and regulations governing all matters contained herein, filed with and
approved by the Public Service Commission of Nevada ("PSCN"), and this Agreement
is subject to any changes or modifications to such rules and regulations made by
the PSCN.
14. Notice. Whenever in this Agreement it shall be required, permitted, or
desired that notice or demand be given by either Party to or on the other,
including notice of change of address of either Party, such notice or demand
shall be in writing and may be either personally served or sent by United States
mail and shall be deemed to have been given when personally served or when
deposited in the United States mail, certified or registered, with postage
prepaid, and
Page 12
properly addressed, or when transmitted by facsimile; provided, however, notices
delivered by facsimile shall only be effective if delivered on a day that is
considered a regular business day by both Parties. For the purposes hereof the
addresses of the Parties hereto (until notice of change thereof is given as
provided in this paragraph) shall be as follows:
IF TO SIERRA PACIFIC:
Sierra Pacific Power Co.
Director, Power and Fuel Contracts Department
0000 Xxxx Xxxx, Xxxx, XX 00000
P. O. Xxx 00000
Xxxx, XX 00000
Phone: (000) 000-0000
Telecopy: (000)000-0000
IF TO SELLER:
First Interstate Bank of Nevada, N.A.
Corporate Trust Department
Xxx Xxxx Xxxxxxx Xxxxxx, Xxxxx Xxxxx
P. O. Xxx 00000
Xxxx, XX 00000
Telephone: (000)000-0000
Telecopy: (000)000-0000
15. Assignment. Subject to Section 16 below, neither Party shall voluntarily
assign this Agreement without the prior written consent of the other Party. Such
Page 13
consent shall not be withheld provided assignee has the demonstrated
capabilities to undertake and assume all of the obligations under this
Agreement. Any assignment made without first obtaining such consent will not
serve to relieve the assignor of any of its obligations under this Agreement,
nor shall the nonassigning Party have any obligations or liabilities of any kind
to the assignee under such assignment.
16. Collateral Assignments. Either Party shall have the right, without the other
Party's consent, but with prior written notice to the other Party, to make a
collateral assignment of its rights under this Agreement to satisfy the
requirements of any development, construction, or other long-term financing.
A collateral assignment as described above shall not constitute a
delegation of Seller's obligations under this Agreement, and this Agreement
shall not bind the collateral assignee. Any collateral assignee succeeding to
any portion of the ownership interest of Seller in the Project shall be
considered Seller's successor in interest and shall thereafter be bound by this
Agreement.
17. Successors in Interest. This Agreement shall be binding on both Parties, and
on their heirs, successors in interest and permitted assigns.
18. Force Majeure. (a) The term Force Majeure as used herein means acts of God,
labor disputes, and sudden actions of the elements.
(b) If either Party because of Force Majeure is rendered wholly or partly
unable to perform its obligations under this Agreement, that Party shall be
excused from whatever performance is affected by the Force Majeure to the extent
so affected, provided that:
(1) the Party claiming Force Majeure promptly gives the other Party
oral notice, followed by written confirmation, describing the particulars
of the occurrence.
Page 14
(2) the suspension of performance is of no greater scope and of no
longer duration than is required by the Force Majeure.
(3) the nonperforming Party uses reasonable efforts to remedy its
inability to perform. This subsection shall not require settlement of any
strike, walkout, lockout or other labor dispute on terms which in the sole
judgement of the Party involved in the dispute, are contrary to its
interest. It is understood and agreed that settlement of strikes, walkouts,
lockouts, or other labor disputes shall be at the sole discretion of the
Party having the difficulty.
(4) when the nonperforming Party is able to resume performance of its
obligation under this Agreement, that Party shall give the other Party
written notice to that effect.
19. Seller Representative. Seller shall designate a representative who shall
have authority and responsibility to define and agree upon the Scope of Work and
specifications of the work and the phases of the Scope of Work to be performed
from time to time, to make changes in the specification of the work, to require
and receive reports of the progress of the work, to inspect the work, and to
terminate the performance of the work or any phase thereof in accordance with
the provisions of this Agreement. Such designation shall be provided in writing
upon execution of this Agreement.
20. Liability and Indemnification. Each Party shall indemnify and hold harmless
the other Party against and from any and all loss and liability for personal
injury or property damage, resulting from or arising out of (a) the engineering,
design, construction, maintenance or operation of, or (b) the making of
replacements, additions, or betterments to, the indemnitor's facilities. Neither
Party shall be indemnified for liability or loss to the extent such liability or
loss results from, or is contributed to, that Party's negligence or willful
misconduct.
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The indemnitor shall, on the other Party's request, defend any suit asserting a
claim covered by this indemnity and shall pay all costs, including reasonable
attorney fees, that may be incurred by the other Party in enforcing this
indemnity.
21. Insurance. During the term of this Agreement, Sierra shall maintain Workers'
Compensation or self insurance which satisfies the applicable requirements of
Nevada law and comprehensive general liability insurance appropriate for
coverage of duties to be performed under this Agreement. During the term of this
Agreement, Seller shall maintain the insurance requirements as described in the
Power Purchase Agreements. Certificates or other acceptable evidence of
compliance with said requirement shall be delivered to Sierra prior to the start
of construction.
22. Entire Agreement. This document constitutes the entire Agreement of the
Parties and supersedes all previous Agreements for these services, whether
written or oral. This Agreement may be amended only by an instrument in writing
signed by both Parties hereto.
23. Governing Law. This Agreement shall be interpreted, governed by and
construed according to the laws of the State of Nevada, as if executed and to be
performed wholly within the State of Nevada. Any litigation under this Agreement
shall be filed in a court of competent jurisdiction in the State of Nevada.
24. Dispute Resolution. In the event that a dispute should arise between Sierra
and Seller concerning the terms and enforcement of this Agreement, the Parties
agree to resolve their dispute by means of binding arbitration conducted in
Reno, Nevada, under the rules and procedures of the American Arbitration
Association. The Parties shall first endeavor to select a single arbitrator who,
by reason of his/her education and experience, is mutually acceptable to both
Parties. If the Parties are unable to agree upon a single arbitrator, they shall
each choose
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one (1) arbitrator, and the two arbitrators thus selected shall choose a third
arbitrator to form a three member panel to hear and resolve the dispute. In
preparing their cases for presentation to the arbitrator(s), the Parties shall
have the same rights of discovery afforded to litigants under the Nevada Rules
of Civil Procedure and the local rules of the Second Judicial District Court for
Washoe County, Nevada.
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25. Multiple Originals. Four (4) copies of this Agreement have been executed by
the Parties. Each executed copy shall be deemed an original.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
this 24th day of Apr 1992.
SELLER:
FIRST INTERSTATE BANK OF NEVADA, N.A., as Owner Trustee
BY: /s/ XXXXX XXXXX /s/ XXXXXXXX X. XXXX
------------------------------- -----------------------------------
TITLE: XXXXX XXXXX, CLU, Ch FC XXXXXXXX X. XXXX
AVP & Trust Services Officer Assistant Vice President and
Trust Services Officer
SIERRA:
SIERRA PACIFIC POWER COMPANY
--------
BY: /s/ Illegible APPVD.
------------------------------- --------
TITLE: VICE PRESIDENT __ ___
--------
__ ___
--------
CONSENTED AND ACKNOWLEDGED BY
FAR WEST:
FAR WEST CAPITAL, INC.
BY: /s/ Illegible
-------------------------------
TITLE: VICE PRESIDENT
STEAMBOAT:
STEAMBOAT DEVELOPMENT CORPORATION
BY: /s/ Illegible
-------------------------------
TITLE: VICE PRESIDENT
Page 18
EXHIBIT A
Page 1 of 3
FAR WEST INTERCONNECTION
STEAMBOAT SUBSTATION
[GRAPHIC]
"Continue Ring Bus"
Work Description
Add new breaker
EXHIBIT A
Page 2 of 3
STEAMBOAT II AND III
ESTIMATED INTERCONNECTION PROJECT COST
As of 1/31/92
I. Substation 775,000
II. Transmission Line and Right of Way 149,000
III. Termination Structure and Switch 55,000
IV. Revenue Metering 15,000
--------
Total $994,000
Less Payments Received 50,000
--------
Cash Flow Balance Required $944,000
EXHIBIT A
Page 3 of 3
STEAMBOAT II AND III
ESTIMATED DETAILED COST BREAKDOWN
As of 1/31/92
Substation
Labor Transp Stores Vouchers Total
------- ------ ------ -------- -------
12/91-2/92 44,389 0 0 10,400 54,789
3/92-5/92 79,730 27,040 5,928 249,600 362,298
6/92-8/92 101,456 53,560 29,640 173,257 357,913
225,575 80,600 35,568 433,257 775,000
Line & Right-of-Way
Labor Transp Stores Vouchers Total
------ ------ ------ -------- -------
12/91-2/92 1,000 0 0 0 1,000
3/92-5/92 13,500 0 0 29,000 42,500
6/92-8/92 54,500 9,200 41,800 0 105,500
69,000 9,200 41,800 29,000 149,000
Termination Structure & Switch
Labor Transp Stores Vouchers Total
------ ------ ------ -------- ------
12/91-2/92 0 0 0 0 0
3/92-5/92 3,000 0 0 0 3,000
6/92-8/92 28,000 4,000 0 20,000 52,000
31,000 4,000 0 20,000 55,000
Revenue Metering
Labor Transp Stores Vouchers Total
----- ------ ------ -------- ------
12/91-2/92 0 0 0 0 0
3/92-5/92 0 0 0 0 0
6/92-8/92 2,600 400 9,000 3,000 15,000
2,600 400 9,000 3,000 15,000
Totals
Labor Transp Stores Vouchers Total
------- ------ ------ -------- -------
12/91-2/92 45,389 0 0 10,400 55,789
3/92-5/92 96,230 27,040 5,928 278,600 407,798
6/92-8/92 186,556 67,160 80,440 196,257 530,413
328,175 94,200 86,368 485,257 994,000
EXHIBIT B
Page 1 of 1
PAYMENT SCHEDULE
Date Due Amount
-------- --------
1. Order Breakers (cancellation
charges only) Payment #1 Funded $ 50,000
2. Start of Sierra Construction
Payment #2 2/07/92 $142,218
3. Payment #3 2/28/92 $ 78,554
4. Payment #4 3/31/92 $192,815
5. Payment #5 4/30/92 $246,006
6. Payment #6 5/29/92 $222,221
7. Payment #7 6/30/92 $ 62,186
--------
Total $994,000
EXHIBIT C
Sierra Pacific Power Company
Generation Interconnection Report
for
Far West Capital, Inc.
Power Supply Transmission Planning
November 1, 1991
Prepared by Xxxxx Xxxxxxxx ______________
Approvals /s/ Xxxxx Xxxxxx /s/ Xxxx Xxxxx /s/ Xxx Xxxxxx
---------------------- -------------------- --------------------
Xxxxx Xxxxxx Xxxx Xxxxx Xxx Xxxxxx
Supervisor Manager Vice President
TABLE OF CONTENTS
I. Introduction 1
II. Summary 1
III. Design/Facilities 2
IV. Design Criteria 2
A. Quality of Service
B. Voltage Regulation
C. Motor Starting, Switching Operations, and Generator Starting/Dropping
D. Maximum Transfer Capability
E. Basic Insulation Level
V. Facility Requirements 4
A. Sierra Pacific Power Company l. Substation
2. Transmission Line/Disconnect Switch
3. Protective Relaying
4. Metering
5. Communications
B. Far West Capital, Inc. l. Transformers
2. Generators
3. Voltage Regulation
4. Telephone Communications
VI. Cost Estimates 7
VII. Permits and Rights-of-Way 7
VIII. Electrical Losses 7
IX. Operational Considerations 7
Appendix A. General Topographic Map
Appendix B. Interconnection One-Line Diagram (Far West)
Appendix C. Interconnection One-Line Diagram (SPPCo. - Option 1)
Appendix D. Interconnection One-Line Diagram (SPPCo. - Option 2)
Appendix E. SPPCo.'s Engineering and Construction Standard 2.2GN02
Appendix F. Interconnection Cost Estimates
November 1991
FAR WEST CAPITAL, INC. (FAR WEST)
STEAMBOAT QUALIFYING FACILITY (QF) INTERCONNECTION STUDY
I Introduction
Far West Capital, Inc. (Far West) is developing a geothermal power
production plant approximately one third of a mile east of the existing
Steamboat 120kV substation. This project is a successful bidder in Sierra
Pacific Power Company's (SPPCo.) Request For Proposals (RFP) for capacity
additions beginning in 1991. A geographic location map is shown in Appendix
A. Appendix B, C and D are single line diagrams of the SPPCo. and Far West
systems.
The two proposed Far West plants consist of two synchronous generators
each. Expected maximum net output of the Far West project (gross
generation less station loads) is approximately 16 MW for each plant, or a
total of 32 MW. The commercial operating date is November 1, 1992, for the
first plant (16 MW) and November 1, 1993, for the second plant (16 MW).
Contract provisions allowing an additional two plants in the future
increase the potential net output to 64 MW. It should be noted that for 64
MW, Option 2 has been planned for the Steamboat substation, but the impacts
on the rest of the system will still need to be studied.
Far West has funded this study to determine the requirements and costs
of interconnecting to the SPPCo. system. The Far West generation facilities
and the step up transformer will be designed and constructed by Far West.
The expansion of the Steamboat 120 kV substation and the overhead portion
of the 120 kV interconnection line will be designed, installed, operated,
maintained and owned by SPPCo. with associated costs being the
responsibility of Far West.
II Summary
The Steamboat 120 kV lines have sufficient capacity to accept delivery
of the Far West generation. On-peak and off-peak powerflow studies indicate
adequate performance of the Far West facilities when equipment is rated for
operation on a 120 kV nominal system.
This project will require the expansion of the existing Steamboat
substation. The existing Remote Terminal Unit (RTU) at the site will be
upgraded in capacity to provide remote control and indication of the
project by SPPCo.'s Electric System Control Center (ESCC).
1
Referring to Appendix C or D, SPPCo. will install, own, operate and
maintain the 120 kV switch, two (or three) 120 kV breakers, transmission
line, metering, line protection and RTU communications at Far West's
expense. Operation and maintenance costs will be billed to Far West on a
periodic basis.
III Design/Facilities
The proposed project will consist of: a 120 kV line switch; two (or
three) 120 kV breakers; one 120/4.16 kV (18.62/37.24 MVA) transformer; four
4.16 kV synchronous machines (four additional future machines may be
proposed). Each unit will have a maximum net generation of 8 MW for a total
maximum net generation of 32 MW. The total maximum net generation with the
future proposed additional four machines would be 00 XX. Xxxxxxxx X is the
one line of the proposed Far West system. The one line diagrams for the
proposed interconnection to the Steamboat substation are shown in Appendix
C and D.
For the proposed 32 MW of generation, there are two possible options
for interconnection. Option 1 (Appendix C) consists of the addition of two
new breakers and adding a section of south bus to the Steamboat substation.
This is the minimal design acceptable to SPPCo. for 32 MW of generation.
Option 2 (Appendix D) consists of the addition of three new breakers and
adding a complete south bus to the Steamboat substation. If the Far West
generation increased beyond the net output of 32 MW, Option 2 would be the
required design. SPPCo. recommends to Far West that Option 2 be selected
and built now because required maintenance or a possible single point
failure will cause Far West to be out of service with the Option 1 design.
Also, if Option 1 is built for the 32 MW, and then the Far West generation
increased to require Option 2, the cost to upgrade from Option 1 to Option
2 is higher than originally building Option 2 (see Appendix F).
IV Design Criteria
A. Quality of Service
Quality of service to existing customers is not to be degraded due to
the interconnecting of the Far West project. Adverse impacts to SPPCo.
power quality will require mitigating measures including installation of
protective devices or special operating constraints.
Although this interconnection study did not indicate an adverse impact
to the quality of service, any negative impacts if found at a later date
will be mitigated by Far West at their expense.
2
B. Voltage Regulation
SPPCo.'s desired 120 kV transmission system voltage range is limited to
117-123 kV. Far West's equipment must be designed to assist in maintaining the
desired system voltages or at SPPCo's discretion, operating procedures must be
developed to minimize deviation from these ranges. Emergency system voltages may
significantly exceed this range, therefore, Far West's equipment must either
withstand or be protected from such voltage excursions.
C. Motor Starting, Switching Operations, and Generator Starting/Dropping
Motor starting, switching operations, and generator starting/dropping are
to be limited such that the momentary voltage change does not exceed four
percent at the 120 kV interconnection point.
Far West must design the control system or provide operating procedures
which prevent excursion of greater than four percent during start up and shut
down of the generators.
Far West has indicated that the largest motor to be started is 1100
horsepower (hp) on the 4.16 kV bus with an inrush current of 7000 KVA at rated
motor voltage. Starting this motor will cause a voltage flicker of 3.31% on the
4.16 kV bus and 0.40% on the Steamboat 120 kV bus. The voltage flicker at the
120 kV bus is well within SPPCo.'s four percent guideline.
D. Maximum Transfer Capability
Maximum transfer capability across any SPPCo. system element is limited by
many factors. One of those factors is the continuous thermal capacity (in
amperes) of that element. During emergency conditions, special time-limited
capacity ratings may be applicable. Exceeding this criteria would require
replacement of the limiting element, such as line reconductoring.
The proposed 32 MW Far West project does not violate this criteria.
E. Basic Insulation Level
Basic insulation level (BIL) should be 550 kV for external 120 kV bushings,
The protection of Far West's transformer and equipment from the SPPCo. system is
solely their responsibility.
3
V. Facility Requirements
A. SPPCo.
1. Substation
The existing SPPCo. Steamboat 120 kV substation will be
expanded to accommodate the equipment to interconnect to the Far
West generation plant. The substation design that SPPCo. has
determined to be a minimum will require the addition of two 120
kV circuit breakers in the Steamboat substation.
It should be noted that with this design, a single breaker
failure or maintenance of certain elements will cause Far West to
be out of service. Because of this possibility, SPPCo. recommends
that Far West agree to a more extensive design including an
additional circuit breaker (see Appendix D). The additional
breaker would be required for the proposed potential 64 MW.
2. Transmission Line and Disconnect Switch
The following discussion assumes that the interconnection
point will be a structure at or near the fence of the Far West
plant which supports 120 kV underground cable terminators. The
cable originates within the Far West plant site.
A SPPCo. standard 120 kV non-load break, lockable disconnect
switch providing visible isolation is required at the
interconnection point (see Appendix C and D). The switch will be
owned, maintained and operated by SPPCo. The transmission line
conductor will be shielded 954 ACSR.
The distance from SPPCo.'s Steamboat 120 kV substation to
the interconnection point is approximately 0.3 miles.
3. Protective Relaying
All SPPCo. required protective relay equipment will be
located within the Steamboat substation meter house.
The following relays are required by SPPCo. to isolate
faults between the Steamboat substation and Far West's facilities
as well as to prevent Far West from islanding with a portion of
SPPCo.'s system under abnormal system conditions:
4
a. Over/under frequency
b. Over/under voltage
c. Synchronism check
d. Overcurrent (phase and ground, possible directional)
This list is not exhaustive and may be expanded and refined.
SPPCo's relaying and protection design personnel will make a
final determination concerning the required hardware and
equipment settings.
4. Metering
SPPCo. will require revenue metering for the generation
delivered by Far West and for the power supplied by SPPCo. when
Far West is a load customer. Due to separate contracts and
different power purchase rates, the metering for the proposed
first plant (16 MW) must be separate from the proposed second
plant (16 MW). All equipment is to be contained within a lockable
enclosure on Far West's site, as determined by the SPPCo. Meter
Operations Department. The following metering equipment will be
required:
a. Revenue metering accuracy current and potential
transformers.
b. A three register time of delivery solid state meter
which will also initiate pulses to record:
1) kWh load
2) kWh generation
3) kVARh lagging
4) kVARh leading
5) V_h (voltage)
c. Transformer loss compensator which will subtract
transformer and 120 kV cable losses from the gross
generation of the plant automatically.
5. Communications
A Remote Terminal Unit (RTU) will be required to enable
supervisory control and indication of the Steamboat breakers by
SPPCo. The existing RTU at the Steamboat substation will have to
be expanded in order to accommodate the proposed Far West
project.
5
B. Far West Capital, Inc.
1. Transformer
A high side (120 kV) grounded wye transformer connection is
required on the 120/4.16 kV step-up transformer. Far West has
indicated a delta connection on the secondary side of the
transformer. The transformer impedance has been estimated to be
8% (on the OA base). A nominal high side rating of 120 kV is
required. The MVA rating of the transformer should have
sufficient capacity for the proposed plant (each plant consists
of two 8 MW generators for a total of 16 MW per plant).
Recommended taps are two taps above the center position and
two taps below the center position with a 2 1/2 percent voltage
change between each tap position. Voltage ratings are to be
compatible with SPPCo. normal and emergency operating standards.
ANSI Standards are to be maintained. 120 kV BIL ratings should be
550 kV.
Final nameplates and test reports are to be forwarded to
SPPCo. upon installation of this equipment.
2. Generators
The Customer Design Requirements of SPPCo.'s Engineering and
Construction Standard 2.2GN02 provides the minimum requirements
that the Qualifying Facility (QF) developer must meet for major
equipment, design review, and design responsibility (see Appendix
E).
3. Voltage Regulation
This interconnection study has concluded that generator
voltage regulation controls will be required. The transformer
voltage drop must be automatically accounted for within the
regulator controls. Initially the voltage on the 120 kV side of
the step up transformer should be held to 122 kV. After the plant
has become operational, Far West and SPPCo. will have to evaluate
whether this is a workable voltage.
4. Telephone Communications
Far West will be required to provide and maintain a
telephone communications path between their plant operator and
SPPCo.'s ESCC.
5. Relaying
Sierra has recently discovered the need to make an addition
to the standard for protective relaying equipment. It is
necessary to install
6
breaker failure relaying to trip adjacent breaker(s) if the high
side breaker should fail to trip when required to do so. The
breaker failure relay scheme shall be initiated by all protective
relays that trip the breaker on the high side of the transformer
and shall include current supervision and a manual reset lockout
relay. SPPCo. shall not accept responsibility for protection of
any of Far West's equipment.
VI Cost Estimates
Appendix F lists the estimated cost for Far West to interconnect with
the SPPCo. system. There are two different totals based on the two options
described in section III of this document. The total cost of Option 1 is
$1,326,676, Option 2 is $1,630,380, and the cost to build Option 1 and then
upgrade to Option 2 at a later date is $1,892,223.
VII Permits and Rights-of-Way
A future U.S. 395 Highway interchange may be built west of the
Steamboat 120 kV substation. The exact site has not yet been determined.
SPPCo. values access to the substation and therefore requires ownership of
the transmission line serving this project.
The rights-of-way estimate (see Appendix F) includes land costs due to
the fact that the proposed transmission line design will be crossing land
belonging to a third party who has no involvement in the Far West project.
Embedded in the estimate is $10,000 in case a condemnation proceeding is
required.
Far West is responsible for payment or reimbursement to SPPCo. of all
expenses associated with the acquisition of rights-of-way, or permits which
may be required from the substation to the generation plant.
VIII Electrical Losses
Powerflow studies indicate the addition of 32 MW of generation at
Steamboat will not increase SPPCo. system losses. The losses associated
with Far West's step-up transformer and 120 kV underground cable are to be
netted out of generation output by SPPCo.'s revenue metering.
IX Operational Considerations
In addition to normal system operation, SPPCo. will rely on generation
from Far West during certain system disturbances. SPPCo. expects the Far
West generation units to remain on-line during system disturbances that
would reasonably be expected to be survivable. If SPPCo. determines the Far
West plant operation to
7
be deficient, corrective actions including, but not limited to, control
modifications will be required to be implemented by Far West.
Far West must be able to operate with either leading or lagging power
factors, up to the machine limits (0.8 lagging power factor and 0.9 leading
power factor) which Far West provided in their machine data, to control
system voltage. If Far West anticipates any operational changes, they must
first contact SPPCo.'s ESCC Department, before implementing the changes.
8
APPENDIX A
[GRAPHIC]
APPENDIX B
[GRAPHIC]
APPENDIX C
STEAMBOAT SUBSTATION
OPTION 1
[GRAPHIC]
"Start breaker and a half"
Work Description
Add 2-new breakers
Add section of south bus
