CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
EXHIBIT 10.3
FIRST AMENDMENT TO POWER PURCHASE AGREEMENT
WOODLAND BIOMASS POWER, LTD. (PG&E Log No. 06PO22)
THIS FIRST AMENDMENT TO POWER PURCHASE AGREEMENT
("Agreement"), dated November 6th, 1997 is by and between
WOODLAND BIOMASS POWER, LTD. ("Seller") a California limited
partnership, and PACIFIC GAS AND ELECTRIC COMPANY ("PG&E"), a
California corporation. PG&E and Seller are sometimes referred
to herein individually as "Party" and collectively as the
"Parties."
RECITALS
--------
A. There is a Long-Term Energy and Capacity Power Purchase
Agreement between Seller and PG&E signed by PG&E on
January 24, 1985, and by Seller on November 16, 1984,
(the "PPA"), for the 25,000 kw generator nameplate
biomass-fueled facility (PG&E Log No. 06PO22) located in
the City of Woodland, California (the "Facility"); and,
------------
B. The intent of the Parties is for all terms and
conditions of the PPA to remain in full force and effect
except where expressly amended. Unless otherwise defined
herein, all capitalized and underlined terms shall have
the same meaning as defined in the PPA.
C. Seller believes that sufficient fuel is available for
delivery to the Facility to operate the Facility at
-------- --------
25,000 kw under the PPA throughout the remainder of the
Fixed Price Period.
----------- ------
D. The Parties wish to restructure the PPA as set forth
herein in ways which each Party believes will be to its
benefit.
E. The Parties have had a variety of disputes under the PPA,
including PG&E's administration of Curtailment Option B
as set forth in Appendix C of the PPA.
F. To accomplish these restructuring changes and resolve the
Curtailment Option B dispute, the Parties have agreed to
the terms and conditions set forth below.
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PAGE
AGREEMENT
THEREFORE, in consideration of the mutual covenants in this
Agreement, the Parties agree as follows:
SECTION I
1. DEFINITIONS
Whenever used in this Agreement, the following terms shall
have the following meanings:
1.01 Curtailment Option B Adder: The adder to energy
payments for the Facility as provided in the first paragraph of
--------
Appendix B at page B-1 of the PPA.
1.02 Fixed Price Period: This term shall have the same
-------------------
meaning in this Agreement as it has in the PPA for the Facility
--------
which is the subject of this Agreement.
1.03 kw: Kilowatts.
1.04 kwh: Kilowatt-hours.
1.05 California Power Exchange.: The California Power
Exchange Corporation ("CA PX"), a California not-for-profit
public benefit corporation, which has been established in order
to conduct competitive auctions for electric power in the State
of California as described in Section 355 of the California
Public Utilities Code.
1.06 PPA Curtailment Provisions: Article 7 and Appendix C of
the PPA. Section A-7 of Appendix A of the PPA is not included in
this definition.
1.07 Monthly Curtailment Period: A continuous period of one
calendar month commencing at 00:00 hours on first day and ending
at 23:59 hours on last day of the calendar month (any one month
from January through May, or September through December during
the Fixed Price Period) during which, at PG&E's sole option,
-------------------
Seller shall physically curtail all deliveries of power from the
Facility to PG&E to zero.
--------
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SECTION 2
2. BLOCK CURTAILMENT DURING THE FIXED PRICE PERIOD
2.01 For the period beginning on January 1, 1998 through the
end of the Fixed Price Period applicable to the Facility, the PPA
----------- ------ --------
Curtailment Option B Provisions shall be superseded in their
entirety by curtailment in accordance with this Section 2 which
defines "Block Curtailment." After the expiration of the Fixed
-----
Price Period in the PPA, this Section 2, and the resulting
------------
amendments to the PPA contained herein, shall have no force or
effect with the sole exception of Section 2.10 which shall
continue in effect.
2.02 Effective January 1, 1998 PG&E may, at its discretion,
curtail the Facility for up to *** hours per calendar year
--------
through the remaining period in the Fixed Price Period in the
------------------
PPA.
2.03 In the final calendar year of the Fixed Price Period,
the total annual amount of Block Curtailment provided by the
Facility will be prorated based on the percentage of the calendar
--------
year which is in the Fixed Price Period.
------------------
2.04 If, as a result of a decision by the court in the
Judicial Council Coordination Proceeding No. 3241 or by a court
or by the California Public Utilities Commission in any action
relating to the end of Fixed Price Period, the Facility's Fixed
------------------ ----------------
Price Period is determined to end on a date that is later than
------------
PG&E's current interpretation of the Fixed Price Period end date,
------------------
Seller will be required to provide additional Block Curtailment
from the Facility to PG&E on a prorated basis as provided in
--------
Section 2.03 above.
2.05 PG&E shall schedule the Block Curtailments from the
Facility in blocks of a minimum of *** consecutive off-peak and
--------
super off-peak hours of curtailment, except for *** block of
curtailment per calendar year which may be less than *** hours.
PG&E shall provide Seller written notice by telecopy (followed by
telephone verification of the telecopy notice) at least 12 hours
prior to each Block Curtailment period. Such notice shall be
provided to Seller's plant manager or representative [fax number
(000) 000-0000; telephone number (916) 000- 0000] in accordance
with PG&E's notice provision described above.
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2.06 During Block Curtailment, Seller may reduce its energy
deliveries to PG&E from the Facility to zero. If the Facility
-------- --------
delivers power during the Block Curtailment hours, PG&E shall pay
for up to *** kwh per half-hour in energy deliveries at a price
equal to ***% of the CA PX day-ahead energy price or, in the
absence of a CA PX day-ahead energy price, at ***% of PG&E's
short-run avoided cost (SRAC) energy prices for the corresponding
hours. PG&E will not pay Seller for deliveries from the Facility
--------
which exceed *** kwh per half-hour during the Block Curtailment
period. It is the intent of this Section for the Facility to
--------
minimize its energy deliveries to PG&E during Block Curtailment
subject to the Facility's physical and regulatory constraints
----------
effecting safe and prudent operation of the Facility.
--------
2.07 PG&E will have the right to cancel Block Curtailment
after it has begun. However, should a Block Curtailment be so
canceled, PG&E will pay a price equal to ***% of the CA PX
day-ahead energy price or, in the absence of a CA PX day-ahead
energy price, at ***% of PG&E's short-run avoided cost (SRAC)
energy prices for the corresponding hours for energy deliveries
for the period from the commencement to the cancellation of that
particular Block Curtailment. No additional payment of any kind
will be due from PG&E for such deliveries. After any Block
Curtailment is canceled, (i) the Facility will be required to
--------
start deliveries on a best efforts basis (ii) payment for any
energy deliveries from the time cancellation of each individual
Block Curtailment period becomes effective will be made in
accordance with the PPA provisions, and (iii) any hours remaining
in a period of scheduled Block Curtailment canceled by PG&E will
be credited by PG&E against the remaining hourly calendar year
limit of Block Curtailment under this Agreement. PG&E may, at
its option, provide a schedule for Block Curtailment by December
31 or earlier of the preceding year for curtailment to occur in
the following year. However, PG&E may revise that schedule as
long as it provides the Seller with a minimum of 12 hours advance
notice of that change. Seller may elect to perform maintenance
during a Block Curtailment. Any scheduled maintenance performed
during Block Curtailment shall reduce the allowance of annual
scheduled maintenance hours available to Seller.
2.08 The Block Curtailment provisions of this Agreement are
not intended to affect Seller's capacity payments, since those
payments are based on deliveries during on-peak and partial peak
hours.
2.09 For the period October 1, 1997 through December 31,
1997, each of PG&E and Seller shall retain its existing rights
under the PPA Curtailment Provisions.
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SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS
2.10 Effective January 1, 1998, all provisions of the PPA
pertaining to Curtailment Option B, including those provisions
contained in Article 7 and Appendix C of the PPA, shall be deemed
to have been rescinded in their entirety and shall no longer have
any force or effect for any purpose whatsoever, except as
provided below. PG&E agrees to continue to adjust the forecasted
off-peak and super off-peak hours' energy prices listed in Table
X-0, Xxxxxxxx X of the PPA upward by ***% for Period A and ***%
for Period B ('the 'Curtailment Option B Adder') on and after
January 1, 1998, through the end of Fixed Price Period except
during Block Curtailment hours and the Monthly Curtailment
periods covered under Section 3 of this Agreement. The
Curtailment Option B Adder will apply to all off-peak and super
off-peak energy deliveries prior to the successful completion of
the 48-Hour Test covered under Section 3.09 of this Agreement.
The provisions of Appendix A, Section A-7 of the PPA shall
continue to apply for the term of the PPA.
SECTION 3
3. PAYMENT FOR MONTHLY CURTAILMENT DURING THE FIXED PRICE
PERIOD
3.01 For the period beginning January 1, 1998 through the
end of the Fixed Price Period, the following terms set forth in
----------- ------
this Section 3 shall apply. After the end of the Fixed Price
----- -----
Period, this Section 3 will have no further force or effect and
------
the PPA provisions shall apply unmodified by this Section 3.
3.02 Seller shall physically curtail all deliveries of power
from the Facility for *** calendar months each year during the
--------
years 1998 and 1999 ("Monthly Curtailment"), except as described
in Section 3.07 and Section 3.09 below. Monthly Curtailment may
occur only in those calendar months which are at least 2 calendar
months apart. For calendar year 1998, PG&E has the right to
schedule (i) *** months of Monthly Curtailment during any months
from January through May, or (ii) ******** of Monthly Curtailment
during January through May and ********* of Monthly Curtailment
during any month from September through December. For the
calendar year 1998, PG&E may not schedule *** months of Monthly
Curtailment during the month of September through December. For
calendar year 1999 *** months of Monthly Curtailment will occur
during the months of January through May.
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3.03 If, as a result of a decision in the Judicial Council
Coordination Proceeding No. 3241 or by a court or by the
California Public Utilities Commission in any action relating to
the end of Fixed Price Period, the Facility's Fixed Price Period
----------------------
is determined to end on a date that is later than PG&E's current
interpretation of the Fixed Price Period end date, Seller will be
------------------
required to provide additional Monthly Curtailment. This
additional Monthly Curtailment and the resulting reduction in
annual scheduled maintenance hours in accordance with Sections
3.02 and 3.08 will be prorated based on the ratio of the number
of Fixed Price Period hours remaining in that year to the total
number of hours in the calendar year. Any additional Monthly
Curtailment that Seller must provide under this Section 3.03 will
be scheduled and provided before the end of the Fixed Price
-----------
Period. Regardless of the end of the Fixed Price Period, for
------
calendar year 1999 Seller will be deemed to have satisfied its
Monthly Curtailment obligations by providing *** months of
Monthly Curtailment by the end of May 1999.
3.04 PG&E will provide Seller with at least 30 days advance
written notice for the first Monthly Curtailment period in
January through May 1998. PG&E will provide Seller with a
schedule no later than December 31, 1997 should the second
Monthly Curtailment period occur in the January through May 1998
period. For the September through December 1998 Monthly
Curtailment period, if any, PG&E will provide a schedule by June
30, 1998.
For the January through May 1999 Monthly Curtailment period,
PG&E will provide Seller with a schedule no later than October
31, 1998. If PG&E fails to provide a 1999 Monthly Curtailment
schedule by October 31, 1998, Seller may propose to PG&E the ***
months from the designated curtailment months during which Seller
plans to provide Monthly Curtailment. However, PG&E reserves the
right to make changes to Seller's proposed schedule.
3.05 PG&E may revise a Monthly Curtailment schedule provided
that Seller is notified of such revision by telecopy at least
ninety (90) days prior to the originally scheduled Monthly
Curtailment.
3.06 In consideration of the mutual benefits of Monthly
Curtailment, PG&E will pay Seller a Monthly Curtailment Energy
Payment, for each Monthly Curtailment period in the years 1998
and 1999 as set forth in the Table below. The Monthly
Curtailment Energy Payment for the first month of curtailment for
the Facility shall be the amount specified for the corresponding
month in the Table below for the "First Month of Monthly
Curtailment." The Monthly Curtailment Energy Payment for the
second month of curtailment for the Facility shall be the amount
specified for the corresponding month in the Table below for the
6PAGE
"Second Month of Monthly Curtailment." The amount shall be paid
by PG&E to Seller at the time required by the PPA, and is subject
to the provisions of Section 3.09 below. Should Seller be
required to provide additional Monthly Curtailment during its
Fixed Price Period as described under Section 3.03 above, PG&E
shall pay Seller an amount equal to the ratio described in
Section 3.03 above, multiplied by the amount specified in the
Table below for the "First Month of Monthly Curtailment" for the
month in which Seller provides such additional curtailment.
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*****************************************************
3.07 Seller may begin energy deliveries 48 hours before the
end of each Monthly Curtailment period applicable to the
Facility. PG&E shall not pay Seller for energy and/or capacity
deliveries during this 48-hour period. Since this Agreement
requires Seller to shut down the Facility after it has qualified
to commence Monthly Curtailment pursuant to Section 3.09 below,
if Seller continues to deliver power to PG&E after the Facility
has commenced Monthly Curtailment, Seller shall not receive any
payment for any such deliveries which take place after the
commencement of Monthly Curtailment.
3.08 During the designated Monthly Curtailment periods,
Seller is allowed to perform maintenance. The Facility's annual
allowance (based on a scheduled maintenance year) of *** hours of
scheduled maintenance as found in Section E-3 of Appendix E of
the PPA will be reduced by *** hours for the first Monthly
Curtailment that occurs in any one month from January to May. A
second Monthly Curtailment that occurs in any month from January
to May will not further reduce the Facility's remaining allowance
of annual scheduled maintenance hours. However, for any second
Monthly Curtailment period that occurs in any month from
September through December, Facility's remaining allowance of
scheduled maintenance hours will be further reduced by *** hours.
Any scheduled maintenance performed in non-Monthly Curtailment
months shall be treated in accordance with the PPA provisions.
After the end of the Fixed Price Period and through the remaining
term of the PPA, Seller will be charged for the actual number of
hours used for performing scheduled maintenance under the
unamended PPA terms.
3.09 (a) It is the express purpose of this Agreement that
Seller shall be compensated only for curtailment it would not
otherwise have provided without the payments provided for in this
Section 3. The tests below in Section 3.09 (b) provide an
objective and exclusive criteria for determining whether this
purpose has been fulfilled,
(b) Seller shall be paid 100% of the Monthly
Curtailment Energy Payment set forth in Section 3.06 above for
the Monthly Curtailment periods of each year, if the Facility can
successfully satisfy item 1) and item 2) below (the "Performance
Requirement"):
1) The Facility delivers power to PG&E at or above an average
of 22,000 kwh per hour for a continuous 48 hour period, as
measured using PG&E's conventional 30-minute metering process
("48-Hour Test"), immediately preceding (i) the Monthly
Curtailment period, or (ii) Block Curtailment that immediately
precedes a Monthly Curtailment, and
8PAGE
2) The Facility is not fully forced out of operation, except
when caused by PG&E during the period between successful
completion of item 1) above and prior to discontinuance of energy
deliveries during the Facility's preparations to begin the
Monthly Curtailment shutdown.
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The 48-Hour Test will not be required if within 72 hours
prior to the start of a Monthly Curtailment (i) a Block
Curtailment occurs, provided the Facility had delivered at or
above an average of 22,000 kwh per hour for a continuous 48 hour
period preceding the start of that Block Curtailment; or (ii) any
PG&E caused or invoked interruption of deliveries occurs pursuant
to Appendix A, Section A-7 of the PPA or, (iii) any interruption
of deliveries occurs pursuant to Appendix A, Section A-8 of the
PPA.
(c) Seller shall provide written notice by telecopy
(followed by telephone verification of the telecopy notice) to
PG&E at such time that Seller determines the Facility has met the
Performance Requirement set out in Section 3.09(b) 1) & 2) above.
Such notice will include Seller's metering data which supports
the successful completion of item 1) of Section 3.09(b), as well
as Seller's confirmation of successfully meeting the requirement
of item 2) of Section 3.09(b), the date and time the Facility has
met the Performance Requirement and the date and time Monthly
Curtailment has commenced or will commence. Such notice shall be
provided by telecopy and confirmed by telephone to PG&E's
Manager, Utility Electric Supply or its successor organization
per notice provided by PG&E [fax number (000) 000-0000; telephone
number (000) 000-0000] and to the PG&E Administrator of the
Woodland PPA or its successor [current fax number (000) 000-0000;
current telephone number (000) 000-0000]. PG&E shall notify
Seller by telecopy (confirmed by telephone) within two business
days of receipt of notice from Seller, if it does not concur with
Seller that the Facility has met the Performance Requirement.
Notices to Seller under this Section 3.09 shall be provided by
telecopy to the Facility's plant manager or representative and
confirmed by telephone [fax number (000) 000-0000; telephone
number (000) 000-0000]. Failure by PG&E to respond within two
business days of receipt of notice from Seller shall be deemed to
be notification by PG&E that PG&E concurs with Seller that the
Facility has satisfied the 48-Hour Test.
(d) If the Facility does not meet the Performance
Requirement as of the beginning of the Monthly Curtailment
period, Monthly Curtailment shall not begin until the Facility
subsequently passes the 48-Hour Test, at which time Monthly
Curtailment will commence. Seller shall make reasonable efforts
to successfully pass the 48-Hour Test. The Facility's allowance
of *** and *** hours during the First and Second Monthly
Curtailment periods, respectively, will be prorated based on the
number of hours of curtailment provided to the total number of
hours in the calendar month. Seller shall provide written notice
to PG&E by telecopy (confirmed by telephone) at such time that
Seller determines the Facility has met the 48-Hour Test and the
Monthly Curtailment has commenced. PG&E shall notify Seller by
telecopy (confirmed by telephone) within two business days of
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receipt of notice from Seller if it does not concur with Seller
that the Facility has passed the 48-Hour Test. Failure by PG&E
to respond within the two business days of receipt of notice from
Seller shall be deemed to be notification by PG&E that it concurs
with Seller that the Facility has satisfied the 48-Hour Test.
(e) If the Facility passes the 48-Hour Test after the
designated Monthly Curtailment period has begun, the Monthly
Curtailment Energy Payment will be prorated based upon the ratio
of (i) the number of hours remaining in the Monthly Curtailment
period after the Facility has successfully passed the 48-Hour
Test and commenced Monthly Curtailment to (ii) the total number
of hours in the Monthly Curtailment period. For all energy
deliveries in a Monthly Curtailment period prior to the
commencement of Monthly Curtailment, Seller shall receive ***% of
the Forecast Energy Prices under Energy Payment Option 1 at Table
B-1, Appendix B, of the PPA, including the Curtailment Option B
Adder, if applicable, subject to the limitation in the last
sentence of this paragraph (e). The total energy payment for
such designated curtailment month will be the sum of (i) the
payment for energy delivered prior to commencement of the Monthly
Curtailment plus (ii) the prorated Monthly Curtailment Energy
Payment, provided, however that the total energy payment for such
Monthly Curtailment period will be limited to a maximum amount
equal to 100% of the Monthly Curtailment Energy Payment for the
applicable month as set forth in Section 3.06 above.
(f) Because the first and second Monthly Curtailment
periods during each year shall always be non-consecutive, Seller
is required to satisfy the Performance Requirement individually
for each Monthly Curtailment period by successfully passing the
48-Hour Test.
3.10 Capacity payments for each Monthly Curtailment period
shall be calculated using the Facility's *************** average
historic energy deliveries in the corresponding month (not
including months where Monthly Curtailment was taken at the
Facility), provided that the Facility meets the Performance
Requirement as set forth in Section 3.09 above.
The Monthly Curtailment firm capacity payment for the
Facility will be calculated in accordance with Section E-5 of
Appendix E of the PPA. For purposes of the calculation, the
Monthly Capacity Factor ("MCF") will be deemed to be equal to the
************************ historic average Performance Factor in
the corresponding month (not including months where Monthly
Curtailment was taken at the Facility). If the Facility has not
met the Performance Requirement as of the beginning of a Monthly
Curtailment period, the Monthly Curtailment firm capacity payment
for the month will be calculated in accordance with Section E-5
of Appendix E of the PPA, substituting the following factors for
P and MCF:
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P = A+Y < = (1.0)
---
CX(B-S)X(.8)
A= Total kilowatt-hours delivered during all on-peak and
partial-peak hours in the Monthly Curtailment period prior to
successfully passing the 48-Hour Test and commencement of Monthly
Curtailment excluding any energy associated with generation
levels greater than firm capacity
Y= ******* historic average Performance Factor for the
corresponding applicable month (not including Monthly Curtailment
months) multiplied by C (firm capacity in kilowatts) multiplied
by the sum of on-peak hours and partial peak hours in the Monthly
Curtailment period remaining after successfully passing the
48-Hour Test and commencing Monthly Curtailment.
C = Firm capacity in kilowatts
B = Total on-peak and partial peak hours during the month
S = Total on-peak and partial peak hours during the month the
Facility is out of service on scheduled maintenance or due to a
PG&E forced outage prior to successfully passing the 48-Hour
Test.
For purposes of the Monthly Curtailment firm capacity
payment, MCF will be deemed to be equal to the Performance Factor
(P) as calculated above. For purposes of determining the Monthly
Curtailment as-delivered capacity payment, the Facility will
receive a payment based upon its ********************************
historic average energy deliveries to PG&E in excess of firm
capacity in the applicable time-of-day period for the Facility in
the corresponding month (not including months where Monthly
Curtailment was taken at the Facility). The payment calculation
will be in accordance with Section D-2 of Appendix D of the PPA.
If the Facility has not met the Performance Requirement as of the
beginning of its Monthly Curtailment period, the Monthly
Curtailment as-delivered capacity payment for the month will be
determined in accordance with Section D-2 of Appendix D of the
PPA. For purposes of the calculations as-delivered capacity will
be calculated as follows:
As-Delivered Capacity = A+B
Where:
A = Kilowatt hour deliveries by time-of-day period in excess of
firm capacity in the Monthly Curtailment period prior to
successfully passing the 48-Hour Test and commencing Monthly
Curtailment.
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B= ****** historic average kwh deliveries by time-of-day period
in excess of firm capacity in the corresponding applicable month
(not including Monthly Curtailment months) multiplied by the
number of applicable time-of-day periods in the Monthly
Curtailment period remaining after successfully passing the
48-Hour Test and commencing Monthly Curtailment.
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SECTION 4
4. CAPACITY AND ENERGY SALES TO THIRD PARTY
4.01 (a) Any time after January 1, 1998, Seller may, at its sole
discretion, sell additional power (i.e, energy and capacity
exceeding **** mw, and/or ancillary services) from the Facility
to any other party, subject to the limitations set forth in this
Section 4. If Seller decides to sell power in excess of **** mw
from the Facility, Seller will first offer that power for sale to
PG&E before Seller agrees to sell that additional power to any
other party. Seller's offer shall be in writing and shall
include, at a minimum, all pertinent information of proposed sale
including quantity of additional power, price, duration of sale,
time periods of sale, and terms and conditions on which Seller
intends to sell such additional power ("Terms"). Within fifteen
(15) business days of receipt of such written offer, PG&E will
notify Seller that either PG&E rejects Seller's offer or PG&E
will accept Seller's offer to purchase such additional power upon
Seller Terms. Failure by PG&E to respond within fifteen (15)
business days of receipt of Seller's offer shall be deemed to be
rejection by PG&E of Seller's offer. Upon rejection of Seller's
offer by PG&E, Seller shall thereafter be free to sell such
additional power to any other party. Should any of the Terms of
Seller's offer to sell such additional power to a third party
change from the Terms of its offer to PG&E, Seller is required to
resubmit its offer to PG&E to sell such additional power under
the revised Terms. Each xxxx Xxxxxx decides to sell power,
Seller must provide PG&E the right of first refusal as per the
protocol described above in this Section 4.01.
(b) Prior to engaging in any power sales to a third party
under this Section 4.01, Seller agrees to execute any and all
agreements deemed necessary by PG&E, the California Independent
System Operator Corporation (ISO) and/or CA PX to engage in such
sales. Seller shall hold PG&E harmless from all charges
associated with the sale or transmission of power to third
parties assessed by the ISO and/or CA PX, including but not
limited to the ISO Grid Management charge, ancillary services
charges, congestion charges, or imbalance energy. All such
charges, if incurred by PG&E, shall be repaid by Seller to PG&E
with interest if applicable.
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4.02 In accordance with Article 5 of the PPA, PG&E shall
accept and pay for up to **** mw in firm capacity deliveries from
Seller with payment determined in accordance with Appendix E of
the PPA. PG&E shall pay Seller for capacity delivered in excess
of firm capacity on an as-delivered capacity in accordance with
As-Delivered Capacity Payment Option 2 set forth in Appendix D of
the PPA up to a total maximum delivery of **** mw. PG&E will not
pay Seller under the terms of the PPA for any energy and capacity
deliveries exceeding **** mw for the remaining term of the PPA.
4.03 Seller agrees that it will take no action under this
Section 4 which will directly or indirectly interfere with the
recovery by PG&E of competition transition charges (CTCs) or
stranded distribution costs (as determined by the California
Public Utilities Commission or other regulatory, legislative or
judicial body of competent jurisdiction), from PG&E's retail
customers as of December 20, 1995, and Seller agrees to make PG&E
whole for any such loss caused by Seller.
SECTION 5
5. RELEASE
5.01 Each Party does for itself, its officers, directors,
agents, employees, attorneys, representatives, subsidiaries,
affiliates, predecessors, successors, partners, limited partners,
and assigns, hereby release and forever discharge the other Party
and its officers, directors, agents, employees, attorneys,
representatives, subsidiaries, affiliates, predecessors,
successors, partners, limited partners and assigns from any and
all claims, demands, causes of
action, obligations or liabilities of any nature whatsoever
(including attorney's fees and costs of suit), whether known or
unknown, which either Party has or ever had against the other
Party including those related to the following matters but
excluding those set forth in Section 5.02 below:
****************************************************************
5.02 ******************************************************
5.03 Each Party represents and warrants that it has given
any and all notices, and obtained any and all consents, powers
and authorities, necessary to permit it and the person executing
this Agreement for it, to enter into this Agreement, settle,
compromise, and release the claims settled, compromised, and
released herein, to do or undertake or forebear from any act
called for herein, and to make this Agreement, and all the
provisions hereof, fully binding on and enforceable against the
other Party to this Agreement.
15PAGE
5.04 Each Party acknowledges that it may have claims against
the other Party of which it is currently unaware and that it
agrees that this Agreement is intended to extend to any and all
claims arising before the date of this Agreement which it may
have against the other Party, whether known or unknown, excluding
only claims based on the issues described in Section 5.02 above.
As a further inducement and consideration, each party with
respect to the subject matter of this Agreement expressly and
specifically waives any rights or benefits available to it under
California Civil Code Section 1542, which provides: "A general
release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected
his settlement with the debtor."
5.05 Each Party acknowledges that it may have sustained
damages, losses, costs, or expenses that are currently unknown or
unsuspected, and that such damages, losses, costs, or expenses as
may have been sustained may give rise to additional damages,
losses, costs, or expenses in the future. Each Party
acknowledges that the facts may be other than it now understands
them, and this Agreement has been negotiated and agreed upon in
light of this situation, and each Party hereby expressly waives,
with respect to the subject matter of this Agreement, any and all
rights which it may have under California Civil Code Section
1542.
5.06 Each Party acknowledges that the valuable consideration
for settlement of their disputes is solely for its own business
purposes and for the purpose of obtaining peace and preventing
protracted litigation between them. Neither the fact of this
Agreement, nor any of the consideration paid under it is or shall
be construed to be an admission that any claim compromised or
released by this Agreement is valid.
5.07 This Release is freely and voluntarily made. Neither
Party has been influenced to any extent in making this Release by
any representation or statements made by any representative,
agent, employee, attorney, or servant of PG&E or Seller.
5.08 Each Party represents and warrants that it has not
assigned to any other Party the claims being released, and that
it is fully entitled to give this release and discharge to the
other Party.
5.09 PG&E hereby accepts as complete and accurate any and
all prior calculations and related payments to Seller for the
curtailments of any sort entered into between PG&E and Seller
prior to November 5, 1997.
16PAGE
SECTION 6
6. MEDIATION
6.01 In the event of any disputes, excluding disputes
arising from the matters described in Section 5.02 above, between
PG&E and Seller arising out of or connected with this Agreement
which the parties are unable to resolve through direct
negotiation, either party may serve upon the other at its
principal place of business a request for mediation. Neither
party may file an action against the other in any court unless
and until the party seeking to file such an action has first
requested a mediation hearing and made a good faith effort to
complete the mediation process provided in this Agreement.
6.02 The Party requesting mediation shall recommend a
neutral, independent person with experience in dispute mediations
to act as mediator. The mediator must be selected by agreement
of all Parties. The Parties shall endeavor to hold the mediation
not less than ten or more than twenty days from the date the
Party requesting mediation gives notice of the request for
mediation to the other Party. The mediation shall be held at San
Francisco, California. The cost of mediation shall be borne by
the Parties equally.
6.03 The Parties shall maintain the mediation proceedings in
confidence and shall not disclose to third persons the statements
made therein by the other Party or the mediator. The provisions
of California Evidence Code Sections 1152, 1152.5 and 1152.6
shall apply to the mediation proceedings.
6.04 At least five days before the date of the mediation,
each Party shall provide the mediator with a statement of its
position and copies of all supporting documents. Each Party
shall send to the mediation a person who has authority to bind
the Party. If the dispute involves third parties, they shall
also be asked to participate in the mediation, but their presence
shall not be necessary for the mediation to proceed.
6.05 If a Party has participated in good faith in a
mediation and is dissatisfied with the outcome, that Party may
then invoke all legal rights and remedies available to the Party
at law or in equity.
SECTION 7
7. MISCELLANEOUS
7.01 This Agreement constitutes the entire agreement of the
Parties with respect to the subject matter hereof and supersedes
any and all prior negotiations, correspondence, understandings
and agreements between the Parties respecting the subject matter
of this Agreement.
17PAGE
7.02 This Agreement may be modified or amended only by a
written instrument signed by the authorized representatives of
both Parties.
7.03 Captions are included herein for ease of reference
only. The captions are not intended to affect the meaning of the
contents or scope of this Agreement.
7.04 No provision of this Agreement shall be interpreted for
or against PG&E or Seller because PG&E, Seller, or their
respective attorneys drafted the particular provision.
7.05 This Agreement shall be construed and interpreted in
accordance with the laws of the State of California, excluding
any choice of law rules that may direct the application of the
laws of another jurisdiction.
7.06 No term or provision herein shall be deemed waived and
no breach excused unless such waiver or consent is in writing and
signed by the Party claimed to have so waived or excused.
7.07 Seller agrees to use reasonable efforts to support the
reasonableness of this Agreement in any proceeding before the
California Public Utilities Commission in which the prudence or
reasonableness of this Agreement is examined. Each Party shall
bear its own costs and expenses in such a proceeding.
7.08 The Parties hereby terminate the Tolling and
Confidentiality Agreement between themselves dated September 25,
1995.
7.09 Except as expressly amended herein, the PPA shall
remain unchanged.
SECTION 8
8. CONFIDENTIALITY PROVISION
Each Party agrees not to disclose the terms and conditions
of this Agreement unless required by any governmental agency,
regulatory authority, court, or otherwise by law. PG&E may
voluntarily disclose the terms and conditions of this Agreement
to the California Public Utilities Commission, provided, however,
PG&E will request the Commission to hold the terms of this
Agreement in confidence.
Each Party may disclose the terms and conditions of this
Agreement to its tax advisors, accountants or other advisors whom
such Party may retain for financial or legal advice, but only on
the condition that all such advisors shall keep the terms and
conditions of this Agreement confidential. Seller may disclose
the terms and conditions of this Agreement to its lenders and
their advisors in order to obtain their consent to this
18PAGE
Agreement, but shall require such lenders and advisors to keep
the terms and conditions of this Agreement confidential, unless
disclosure is required by any governmental agency, regulatory
authority, court or otherwise by law to do so or unless
disclosure is made in connection with the enforcement by such
lenders of the loan documents between Seller and such lenders.
IN WITNESS WHEREOF, Seller and PG&E have caused this
Agreement to be executed by their duly authorized representatives
as of the date first set forth above.
PACIFIC GAS AND ELECTRIC COMPANY, WOODLAND BIOMASS POWER,
a California corporation LTD.
By: /s/ Xxxxxx X. Xxxxx By: Woodland Biomass
--------------------
Power Inc.
Its General Partner
By: /s/ Xxxxx X.Xxxx
-----------------
Its: Vice-president,
Asset Management
Name: Xxxxxx X. Xxxxx Name: Xxxxx X. Xxxx
--------------- --------------
Title: Vice President,
Gas & Electric Supply Title:
--------------------- -------------------
Date of Signature: Date of Signature:
December 23, 1997 November 10, 1997
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