EXHIBIT 10.30
POWER PURCHASE
AND
INTERCONNECTION AGREEMENT
BETWEEN
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
AND
CAMDEN COGEN, LIMITED PARTNERSHIP
TABLE OF CONTENTS
PAGE
RECITALS....................................................... 1
ARTICLE I DEFINITIONS.................................................... 4
ARTICLE II GENERAL CONDITIONS OF DELIVERY AND ACCEPTANCE
OF ELECTRIC ENERGY AND CAPACITY................................ 12
Section A Warranty of Qualifying Facility
Status............................................... 13
Section B Repeal of PURPA...................................... 13
Section C Verification and Nomination
of Capacity.......................................... 14
Section D Exceptions to Obligations to Accept
Net Electrical Power Output.......................... 16
Section E Obligation to Provide Reactive
Power................................................ 19
Section F Condition Precedent.................................. 19
ARTICLE III TERM........................................................... 21
ARTICLE IV PURCHASE PRICE AND PAYMENT CONDITIONS.......................... 21
Section A Monthly Energy Charge................................ 22
Section B Monthly Capacity Charge.............................. 25
Section C Monthly Service charge............................... 28
Section D PSE&G Right of First Refusal......................... 28
Section E Excessive Rate....................................... 29
Section F Replacement Energy and Capacity
Costs................................................ 31
Section G Abandonment Cancellation or
Failure to Complete.................................. 35
Section H Security Provision................................... 36
ARTICLE V PHASE-IN PERIOD................................................ 45
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ARTICLE VI BILLING AND PAYMENT........................................... 46
ARTICLE VII INTERCONNECTION............................................... 48
Section A Design, Construction and
Installation of Interconnection..................... 48
Section B Interconnection Costs............................... 51
Section C Credit for Interconnection Costs.................... 56
Section D Cancellation Costs.................................. 58
ARTICLE VIII OPERATIONS COORDINATION....................................... 60
ARTICLE IX NET ELECTRICAL POWER OUTPUT SPECIFICATIONS.................... 63
ARTICLE X METERING/RECORDS.............................................. 64
ARTICLE XI USE OF THE PUBLIC SERVICE SYSTEM.............................. 73
ARTICLE XII EASEMENTS..................................................... 73
ARTICLE XIII PERMITS/APPROVALS............................................. 75
ARTICLE XIV DEDICATION OF FACILITIES...................................... 77
ARTICLE XV REARRANGEMENT................................................. 77
ARTICLE XVI COGENERATION FACILITY/SUBSTATION FACILITY..................... 79
ARTICLE XVII LIABILITY..................................................... 87
ARTICLE XVIII FORCE MAJEURE................................................. 88
ARTICLE XIX PROTECTIVE DEVICES............................................ 90
ARTICLE XX INDEMNIFICATION............................................... 91
ARTICLE XXI INSURANCE..................................................... 93
ARTICLE XXII WARRANTIES.................................................... 96
ARTICLE XXIII EVENTS OF TERMINATION......................................... 96
ARTICLE XXIV EVENTS OF DEFAULT AND BREACH OF CONTRACT......................100
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Section A Default by SELLER...............................100
Section B Default by PSE&G................................103
Section C Remedies........................................105
ARTICLE XXV ARBITRATION...............................................106
ARTICLE XXVI SPECIFIC PERFORMANCE......................................110
ARTICLE XXVII ENTIRE AGREEMENT..........................................111
ARTICLE XXVIII ASSIGNMENT/TRANSFER.......................................111
ARTICLE XXIX CURE BY FINANCIER.........................................113
ARTICLE XXX FINANCIER SECURITY AGREEMENTS.............................116
ARTICLE XXXI DETERMINATION OF PSE&G COSTS..............................118
ARTICLE XXXII STANDARD FOR PERFORMANCE..................................118
ARTICLE XXXIII STANDBY ELECTRIC SERVICE..................................119
ARTICLE XXXIV SUCCESSORS AMD ASSIGNS....................................120
ARTICLE XXXV CHOICE OF LAW.............................................121
ARTICLE XXXVI CAPTIONS..................................................121
ARTICLE XXXVII COUNTERPARTS..............................................121
ARTICLE XXXVIII MISCELLANEOUS.............................................122
ARTICLE XXXIX RESERVATIONS..............................................122
ARTICLE XL SURVIVAL OF OBLIGATIONS...................................123
ARTICLE XLI NOTICES...................................................123
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CAMDEN COGEN
POWER PURCHASE
AND
INTERCONNECTION AGREEMENT
This AGREEMENT made and entered as of the 15th day of April, 1988 by and
between PUBLIC SERVICE ELECTRIC AND GAS COMPANY, a New Jersey corporation
(PSE&G) and CAMDEN COGEN, L. P., a partnership (SELLER) initially consisting of
subsidiaries of the GENERAL ELECTRIC POWER FUNDING CORPORATION.
RECITALS
WHEREAS, SELLER proposes to finance, design, construct, own and operate a
grid connected COGENERATION FACILITY which is to be located within the electric
service territory of PSE&G at the property of XXXXXXXX SOUP COMPANY (XXXXXXXX)
at the, City of Camden, County of Camden, State of New Jersey;
WHEREAS, SELLER intends to sell exclusively to PSE&G electric energy and
capacity produced by the COGENERATION FACILITY, net of energy and capacity
consumed by in-plant loads, and PSE&G, in recognition of its obligation under
the Public Utility Regulatory Policies Act Of 1978 (16 U.S.C. Section 796 et
seq.) (PURPA) as
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implemented by the Federal Energy Regulatory Commission (FERC or Commission) and
the State of New Jersey Board of Public Utilities (NJBPU), will purchase
pursuant to the terms and conditions set forth herein one hundred percent (100%)
of such NET ELECTRICAL POWER OUTPUT from the COGENERATION FACILITY;
WHEREAS, SELLER will obtain pursuant to the rules and regulations of the
FERC, set forth at 18 C.F.R. 292.207(a), a certification that the COGENERATION
FACILITY is a qualifying facility in accordance with 18 C.F.R. Section 292.203;
WHEREAS, SELLER intends to construct and shall maintain the COGENERATION
FACILITY in compliance with the regulations of the FERC applicable to qualifying
facility status during the term of this AGREEMENT;
WHEREAS, SELLER has advised PSE&G that the NET ELECTRICAL POWER OUTPUT of
the COGENERATION FACILITY will be approximately one hundred (100) megawatts on
an average annual basis;
WHEREAS, SELLER anticipates that it will commence pre-operational testing
of PROJECT equipment and facilities within 20 MONTHS of SELLER's issuance of the
RELEASE NOTICE to PSE&G;
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WHEREAS, SELLER anticipates that the DATE OF INITIAL OPERATION for the
PROJECT will occur within 22 MONTHS of SELLER's issuance of the RELEASE NOTICE
to PSE&G;
WHEREAS, SELLER anticipates that the DATE OF COMMERCIAL OPERATION for the
PROJECT will occur within 25 MONTHS of SELLER's issuance of the RELEASE NOTICE
to PSE&G;
WHEREAS, SELLER intends to enter into an agreement with XXXXXXXX pursuant
to which XXXXXXXX will agree to purchase and SELLER will agree to sell to
XXXXXXXX thermal energy;
WHEREAS, PSE&G is a public utility as defined in N.J.S.A. 48:2-13 and, as
such, is required by applicable statutes and regulations to furnish safe,
adequate and proper service to its retail and sale-for-resale customers and
further, to have and maintain its property, plant and equipment in such
condition as to enable it to do so;
WHEREAS, SELLER has requested PSE&G to design, construct, install, operate
and maintain the INTERCONNECTION so as to interconnect the PROJECT with the
electric transmission facilities of PSE&G emanating from PSE&G's Gloucester
Switching Station.
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WHEREAS, PSE&G is a member of the Pennsylvania-New Jersey-Maryland
Interconnection (PJM);
WHEREAS, PJM is a fully coordinated power pool which, pursuant to an
agreement executed by and among its members, affords to the member utilities for
the benefit of their customers reliable electric service at the lowest possible
cost;
WHEREAS, PSE&G has conducted engineering studies and has determined that it
is feasible to design, construct, install, operate and maintain the
INTERCONNECTION and to receive NET ELECTRICAL CAPACITY and associated NET
ELECTRICAL ENERGY produced by the COGENERATION FACILITY and delivered to the
RECEIPT POINT, over the term of this AGREEMENT; and
NOW, THEREFORE, in consideration of the recitals and mutual covenants
contained herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms when used herein with capitalization shall have the
following meanings, unless a different meaning shall be expressly stated:
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AGREEMENT means this Power Purchase and Interconnection Agreement between
SELLER and PSE&G.
CANCELLATION COSTS means the actual costs and/or liabilities PSE&G incurs
in connection with: (i) cancellation of supplier and/or contractor
orders/agreements entered into to install and construct the INTERCONNECTION;
and, (ii) completion of specific unfinished portions of the INTERCONNECTION
and/or removal of INTERCONNECTION FACILITIES which have been installed to the
extent such completion or removal is required to maintain the integrity, safety
or reliability of the PSE&G transmission network.
COGENERATION FACILITY means the waste heat boilers, gas and steam turbines,
generators, fuel oil storage and all appurtenant structures and equipment to be
constructed, installed, owned/leased, operated and maintained by SELLER at
XXXXXXXX, for the purpose of generating steam and electricity and other forms of
useful thermal energy output and having an installed name plate rating of 153.2
megawatts.
COMMERCIAL OPERATION means the production of electric power and energy by
all the electric generation units at the COGENERATION FACILITY and the supply of
such electric power and energy to PSE&G at the RECEIPT POINT after the DATE OF
COMMERCIAL OPERATION.
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CREDIT means the escrow account to be established by SELLER with the ESCROW
AGENT or an Irrevocable Letter of Credit to be established by SELLER with ISSUER
for and issued to PSE&G, as beneficiary, pursuant to and in accordance with the
provisions of ARTICLE VII of this AGREEMENT.
DATE OF COMMERCIAL OPERATION means the date the Parties hereto designate by
mutual agreement not to be unreasonably withheld as the date on which all
electric generation units at the COGENERATION FACILITY have been completed,
satisfactorily tested and inspected and are available for and capable of: (i)
production of electrical capacity and energy; and (ii) the delivery thereof to
PSE&G at the RECEIPT POINT.
DATE OF INITIAL OPERATION means the date on which SELLER synchronizes, for
the first time, any electric generation unit at the COGENERATION FACILITY with
the PUBLIC SERVICE SYSTEM.
FINANCIER means any individual(s) or entity(ies) and any representative(s)
or trustee(s) for any such individual(s) or entity(ies)):(i) lending money to
SELLER for: (a) the construction or term financing of the PROJECT; (b) the
establishment and/or maintenance of working capital requirements; and/or (c) the
refinance or take-out of any
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such loan(s); and/or (ii) participating as an equity investor in the PROJECT;
and/or (iii) any lessor under a lease finance arrangement.
INITIAL OPERATION means the production of electric capacity and energy
after the DATE OF INITIAL OPERATION and prior to the DATE OF COMMERCIAL
OPERATION by any electric generation unit(s) at the COGENERATION FACILITY and
the supply of such electric capacity and energy to PSE&G at the RECEIPT POINT.
INTERCONNECTION means the 69,000-volt circuit reinforcements, extensions
and associated terminal facility reinforcements to the PUBLIC SERVICE SYSTEM to
be designed, constructed, and installed by PSE&G to interconnect the PROJECT
with and to the PUBLIC SERVICE SYSTEM for the purpose of enabling PSE&G to
receive the NET ELECTRICAL POWER OUTPUT from the COGENERATION FACILITY pursuant
to the terms and conditions of this AGREEMENT. The Proposed Plan for the
INTERCONNECTION is set forth in Exhibit 1.
ISSUER means commercial bank or other entity issuing the CREDIT.
LOAN AGREEMENT means any agreement between SELLER and one or more
FINANCIERS pursuant to which SELLER arranges
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for and obtains debt financing to construct and/or operate the PROJECT.
MONTH means the calendar month commencing at 12:00.01 a.m. Eastern Time on
the first day of the calendar month and concluding at midnight Eastern Time on
the final day of the same calendar month.
NET ELECTRICAL CAPACITY means the average monthly amount of electrical
capacity in kilowatts produced by any electric generation unit(s) at the
COGENERATION FACILITY during ON PEAK PERIODS and delivered to PSE&G at the
RECEIPT POINT.
NET ELECTRICAL ENERGY means the amount of electrical energy in kilowatt
hours produced by any electric generation unit(s) at the COGENERATION FACILITY
and delivered to PSE&G at the RECEIPT POINT.
NET ELECTRICAL POWER OUTPUT means the amount of NET ELECTRICAL ENERGY and
NET ELECTRICAL CAPACITY delivered to PSE&G at the RECEIPT POINT which is that
electric energy and capacity generated by the COGENERATION FACILITY less
electric energy and capacity consumed by the COGENERATION FACILITY'S in-plant
load.
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OFF PEAK PERIOD means all other hours of a week exclusive of the ON PEAK
PERIOD.
ON PEAK PERIOD means, as specified in PSE&G's Purchased Electric Power
Tariff, the period from 7:00 a.m. to 9:00 P.M. (Eastern Time) Monday through
Friday, or as otherwise designated in PSE&G's Purchased Electric Power Tariff
then in effect.
PAYMENT SCHEDULE means the statement reflecting the amount of money PSE&G
estimates it will expend and SELLER will pay each MONTH during procurement
and/or construction to pay the costs associated with the design, construction
and installation of the INTERCONNECTION and other interconnection tasks, the
costs for which are denominated in this AGREEMENT as costs associated with the
design, construction and installation of the INTERCONNECTION.
PROJECT means the COGENERATION FACILITY, SUBSTATION FACILITY and associated
facilities and equipment to be constructed, owned/leased, operated and
maintained by SELLER at XXXXXXXX for the purpose of producing, among other
things, electric power.
PUBLIC SERVICE SYSTEM means the electric power generation, transmission,
subtransmission and distribution
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facilities owned, operated and maintained by PSE&G, which will include, after
construction and installation, the circuit reinforcements, extensions and
associated terminal facility reinforcements required to complete the
INTERCONNECTION.
RECEIPT POINT, also referred to as POINT OF INTERCONNECTION, means the
point of physical connection of the PROJECT to the PSE&G 69kV subtransmission
system located at the point at which the PSE&G 69kV subtransmission system meets
with and connects to the SUBSTATION FACILITY. The RECEIPT POINT is identified in
the Proposed Plan for the INTERCONNECTION (hereinafter sometimes referred to as
Exhibit 1).
RELEASE NOTICE means the written notice SELLER gives to PSE&G authorizing
PSE&G to commence the tasks associated with the design, construction and
installation of the INTERCONNECTION.
REQUIRED PERMIT means any permit, license or approval from any regulatory
or governmental body which is required to be obtained by PSE&G to install,
construct, own, operate and/or maintain the INTERCONNECTION.
SUBSTATION FACILITY means the new 69kV substation to be designed,
constructed, installed, owned, operated and
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maintained by SELLER at the PROJECT which is required to connect the
COGENERATION FACILITY with the PUBLIC SERVICE SYSTEM so as to enable SELLER to
supply to PSE&G at the RECEIPT POINT, in a safe and reliable manner the NET
ELECTRICAL POWER OUTPUT.
SUMMER SEASON means the period of time from June 1 to September 30
inclusive of any year.
SYSTEM EMERGENCY means the existence of a physical or operational condition
and/or the occurrence of an event on the PUBLIC SERVICE SYSTEM (or PJM System)
which in PSE&G's sole judgment is: (i) imminently likely to endanger life or
property; or (ii) impairs and/or imminently will impair: (a) PSE&G's ability to
discharge its statutory obligation(s) to provide safe, adequate and proper
service to its retail and sale-for-resale customers; and/or (b) the safety
and/or reliability of the PUBLIC SERVICE SYSTEM (or PJM System).
WINTER SEASON means the consecutive period of time from December 1 to the
last day in February inclusive.
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ARTICLE II
GENERAL CONDITIONS OF DELIVERY AND
ACCEPTANCE OF ELECTRIC ENERGY AND CAPACITY
Except as otherwise provided herein, SELLER agrees to deliver and PSE&G
agrees to accept during the term of this AGREEMENT the NET ELECTRICAL POWER
OUTPUT from the COGENERATION FACILITY.
SECTION A
WARRANTY OF QUALIFYING FACILITY STATUS
SELLER warrants that at the date of first power deliveries from SELLER's
COGENERATION FACILITY and subject to Section B of this ARTICLE, during the term
of this AGREEMENT, the COGENERATION FACILITY shall meet the requirements for a
Qualifying Facility as established by the FERC's Rules and Regulations set forth
in Title 18, Code of Federal Regulations, Part 292, Subpart B, Section 292 et
seq. Subject to Section B of this ARTICLE, SELLER's obligation to supply and
PSE&G's obligation to accept NET ELECTRICAL POWER OUTPUT shall be conditioned
on SELLER's obtaining the requisite Qualifying Facility status as set forth in
PURPA and the Rules and Regulations of the FERC implementing same and
maintaining those conditions during the term of this AGREEMENT as applicable to
the COGENERATION FACILITY with respect to Qualifying Facility status.
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SECTION D
REPEAL OF PURPA
In the event that (i) PURPA is for any reason no longer in effect, or (ii)
the COGENERATION FACILITY ceases to qualify as a Qualifying Facility under PURPA
for any reason not within the control of SELLER, including but not limited to a
reduction or cessation in thermal energy use at XXXXXXXX, the rights and
obligations of SELLER and PSE&G under this AGREEMENT will continue so long as
the NJBPU does not take any action which would prevent PSE&G from full and
timely recovery from its customers of all costs and charges paid to SELLER for
capacity and energy delivered to PSE&G, and so long as the continued operation
of the COGENERATION FACILITY and the continued purchase of the NET ELECTRICAL
POWER OUTPUT by PSE&G at the rates set forth herein does not violate any
federal, state or local law, ordinance or regulation or subject SELLER or its
owners to regulation under the Public Utility Holding Company Act of 1935
(PUHCA) where such regulation is unreasonably burdensome. If the continued
operation of the COGENERATION FACILITY as a result of the occurrence of the
events specified in (i) or (ii) above would violate any such law, ordinance or
regulation or would subject SELLER or its owners to regulation under PUHCA where
such regulation is unreasonably burdensome, the Parties shall negotiate in good
faith to attempt to reach an agreement on a power sale contract, lease or other
arrangement which will provide for the continued purchase of
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the NET ELECTRICAL POWER OUTPUT by PSE&G under terms which provide the same
economic benefit to the Parties as is provided under this AGREEMENT. If the
NJBPU no longer permits such full and timely recovery or the existing recovery
mechanism for such costs is changed, modified, and/or eliminated; and if an
event specified in (i) or (ii) above has occurred, the Parties shall negotiate
in good faith to attempt to reach an agreement on a power sale contract, lease
or other arrangement which will provide for the continued purchase of the NET
ELECTRICAL POWER OUTPUT by PSE&G at a rate which provides substantially similar
economic benefits to the Parties as is provided under this Agreement and which
the NJBPU will permit PSE&G to recover from its ratepayers. If, after such
negotiations, the Parties are unable to reach such an agreement, either Party
may exercise any other remedy provided under the AGREEMENT.
SECTION C
VERIFICATION AND NOMINATION OF CAPACITY
In order to establish SELLER's obligation to deliver NET ELECTRICAL
CAPACITY to PSE&G and PSE&G's obligation to pay for such NET ELECTRICAL CAPACITY
in accordance with the terms and conditions of this AGREEMENT, SELLER has
nominated the following nominal net seasonal capacity levels, specific to the
reference ambient temperature indicated:
SUMMER SEASON 117 MW /at/ 72 /degrees/ F
WINTER SEASON 124 MW /at/ 33 /degrees/ F
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The parties agree that NET ELECTRICAL CAPACITY delivered is a function of
ambient temperature and that nominated values are to be adjusted to actual
prevailing average ambient temperature conditions for purposes of determining
whether any excess capacity has been delivered pursuant to ARTICLE IV B 1.
SELLER shall be entitled to an initial renomination of the SUMMER SEASON
and WINTER SEASON nominal net season capacity based upon performance, test or
demonstrated results from actual operations prior to ninety (90) days after the
DATE OF COMMERCIAL OPERATION. These renominated values shall be in effect until
a future renomination is made in accordance with this Section C, for all
purposes of this AGREEMENT.
SELLER shall be entitled to renominate the value(s) of the SUMMER SEASON
and/or WINTER SEASON net seasonal capacity levels every three years, starting
from the date of the initial renomination or the DATE OF COMMERCIAL OPERATION if
no initial renomination is made, for the balance of the term of this AGREEMENT.
In no event however shall any renominated capacity value lie outside a range of
plus or minus 10% of the SUMMER SEASON and/or WINTER SEASON net seasonal
capacity values determined for the initial renomination or the values set forth
in this section if no initial renomination is made.
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Each subsequent renomination after the initial renomination shall be based
on the COGENERATION FACILITY's projected performance based on actual or test
results during expected ambient conditions in the SUMMER SEASON and/or WINTER
SEASON. SELLER agrees to provide PSE&G with all data reasonably necessary for
PSE&G to confirm the renominated value(s).
SECTION D
EXCEPTIONS TO OBLIGATION TO ACCEPT
NET ELECTRICAL POWER OUTPUT
Notwithstanding the above, and in addition to the provisions of ARTICLE
XVIII of this AGREEMENT, PSE&G shall be excused from accepting all or a portion
of SELLER's NET ELECTRICAL POWER OUTPUT if:
(1) The COGENERATION FACILITY fails to comply with the Interconnection,
Protection and Safety Requirements and Standards for Customer-Owned
Generating Facilities as set forth in Exhibit 2.
(2) PSE&G is unable to back down its own generation sufficiently to accept
the NET ELECTRICAL POWER OUTPUT from the COGENERATION FACILITY without
jeopardizing the integrity of the PUBLIC SERVICE SYSTEM (or the PJX
System).
(3) Transmission facilities are loaded to their published ratings and
continued or increased power output from the COGENERATION FACILITY
would adversely affect the reliability of the PUBLIC SERVICE SYSTEM
(or the PJM System).
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(4) During any light load period within the meaning of 18 C.F.R. Section
292.304(f) which, due to operational circumstances, purchases from the
COGENERATION FACILITY will result in costs greater than those which
PSE&G would incur if it did not make such purchases but instead
generated an equivalent amount of energy itself. PSE&G will use its
best efforts to treat SELLER equally with all other non-utility
generation on the PUBLIC SERVICE SYSTEM in accordance with
established procedures. PSE&G shall give notice to SELLER in time for
SELLER to cease the delivery of NET ELECTRICAL POWER OUTPUT which
shall be no less than two (2) hours.
(5) During any SYSTEM EMERGENCY if such purchases would contribute to such
SYSTEM EMERGENCY.
(6) PSE&G intentionally interrupts acceptance of the COGENERATION
FACILITY'S NET ELECTRICAL POWER OUTPUT to conduct planned
maintenance of the interconnection or adjacent transmission, and/or
subtransmission facilities.
All cases of PSE&G's refusal to purchase from SELLER shall be subject
subsequently to verification by the NJBPU, if requested by SELLER. Where
practicable, PSE&G shall give SELLER advance notice of any interruption,
curtailment or reduction effected pursuant to this ARTICLE, the circumstances
requiring or necessitating the
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interruption, curtailment or reduction of PSE&G's acceptance of the COGENERATION
FACILITY'S NET ELECTRICAL POWER OUTPUT and, if able, the reasons therefor, and
the extent and duration thereof. In the event PSE&G is unable, for any reason,
to give SELLER advance notice of such an interruption, curtailment or reduction
of such acceptance of the COGENERATION FACILITY'S NET ELECTRICAL POWER OUTPUT,
PSE&G shall, as soon thereafter as practicable, contact SELLER to confirm such
interruption, curtailment or reduction, explaining the circumstances requiring
or necessitating the interruption, curtailment or reduction, and, if able,
furnish the reasons therefor and the extent and duration thereof. At SELLER's
request, PSE&G shall provide written notice to SELLER explaining the
circumstances requiring or necessitating any interruption, curtailment or
reduction of service effective pursuant to this ARTICLE. PSE&G will resume the
acceptance of the COGENERATION FACILITY'S NET ELECTRICAL POWER OUTPUT when the
reason for the interruption, curtailment or reduction no longer exists.
In the event acceptance of the COGENERATION FACILITY'S NET ELECTRICAL POWER
OUTPUT is interrupted, curtailed or reduced by PSE&G for any reason specified in
this ARTICLE, PSE&G agrees to use its best efforts (consistent with PSE&G's
existing obligations to restore service to its retail and wholesale customers)
to correct any condition and to restore acceptance of such power.
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SELLER expressly agrees that PSE&G is not liable for damages of any kind to
SELLER or any third party, all as more fully set forth in ARTICLE XVII and
ARTICLE XX of this AGREEMENT, due to PSE&G's failure to accept the COGENERATION
FACILITY'S NET ELECTRICAL POWER OUTPUT for any of the reasons expressed above.
SECTION E
OBLIGATION TO PROVIDE REACTIVE POWER
PSE&G may request, and, when requested, SELLER shall use best efforts to
provide reactive power, leading or lagging, from the COGENERATION FACILITY up to
the operating limits of the COGENERATION FACILITY to the extent that it does not
require a reduction in NET ELECTRICAL POWER OUTPUT and further, in the event of
a SYSTEM EMERGENCY, PSE&G may request SELLER to provide reactive power, leading
or lagging, from the COGENERATION FACILITY and, if PSE&G makes such a request,
SELLER shall use its best efforts to provide same up to the operating limits of
the COGENERATION FACILITY, whether or not same requires a reduction in NET
ELECTRICAL POWER OUTPUT.
SECTION F
CONDITIONS PRECEDENT
The following shall be conditions precedent to the effectiveness of this
AGREEMENT: (i) A subsequent finding by the NJBPU in an Order that this
AGREEMENT, as presently constituted, is reasonable and prudent throughout the
term of this AGREEMENT and that PSE&G will be able to flow
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through to and/or fully and timely recover from its ratepayers through the
Levelized Energy Adjustment Clause or its successor all purchased power costs
incurred by PSE&G pursuant to this AGREEMENT, which approval by the NJBPU shall
be under terms and conditions reasonably acceptable to both PSE&G and SELLER;
(ii) Execution of a Thermal Energy Sale Contract between SELLER and XXXXXXXX,
and delivery of a copy of such Contract to PSE&G which shall be subject to
PSE&G's review and approval. PSE&G's review and approval shall be made solely
for the purpose of ensuring that such Contract is reasonably compatible with the
terms and conditions of this AGREEMENT. PSE&G's review and approval shall not be
unreasonably withheld or delayed, and (iii) recertification by the FERC that the
COGENERATION FACILITY is a Qualifying Facility in accordance with 18 C.F.R.
Section 292.203.
After the foregoing conditions have been satisfied, the Parties shall,
within thirty (30) days, affirm in writing, executed by both Parties, that the
conditions precedent have been satisfied. In the event said conditions precedent
are not satisfied, this AGREEMENT shall be void.
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ARTICLE III
TERM
Subject to the condition precedent set forth in ARTICLE II above, this
AGREEMENT shall enter into effect as of the date first above written and shall
continue in effect for an initial term ending twenty (20) years from the DATE OF
COMMERCIAL OPERATION. Upon the expiration of the initial term, this AGREEMENT
may be renewed for two (2) successive five (5) year renewal terms subject to
mutual agreement of the parties provided written notice of intent to renew is
given by either PSE&G or SELLER to the other no less than three (3) years prior
to the expiration of the then pending term.
At the expiration of the initial term or a renewal term, if applicable,
this AGREEMENT and each party's obligation(s) hereunder shall automatically
terminate as of the effective date thereof; provided, however, expiration of
this AGREEMENT shall not relieve either party from any obligation arising under
this AGREEMENT to pay any monies due to the other party which monetary
obligation was incurred prior to the date of expiration of this AGREEMENT.
ARTICLE IV
PURCHASE PRICE AND PAYMENT CONDITIONS
During the period of INITIAL OPERATION, PSE&G agrees to pay SELLER a
Monthly Energy Charge determined in accordance with Section A of this ARTICLE.
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Thereafter, PSE&G agrees to pay SELLER during years one (1) through twenty
(20) of this AGREEMENT, a Monthly Energy Charge and a Monthly Capacity Charge as
defined below for all NET ELECTRICAL POWER OUTPUT delivered in accordance with
Sections A and B of this ARTICLE IV.
SECTION A
MONTHLY ENERGY CHARGE
The Monthly Energy Charge shall be the total of the kilowatthours delivered
by SELLER to PSE&G during any MONTH times SELLER's Adjusted Base Rate. The
Adjusted Base Rate is composed of the sum of a Fixed Component, a Fuel Component
and a GNP Deflator Component, as follows:
(1) The Fixed Component is equal to two (2) cents/kWh, and is unchanged
for the initial twenty (20) year term of this AGREEMENT.
(2) The Fuel Component starts at one and seventy three hundredths (1.73)
cents/kWh on January 1, 1988 and shall remain in effect for the month
of January 1988. On the first day of each subsequent MONTH the Fuel
Component in effect for the previous MONTH is multiplied by an
Escalation Factor as determined below and that Fuel Component will
remain in effect for that MONTH. The Escalation Factor shall be
determined as follows:
(a) For any MONTH during which gas for the COGENERATION FACILITY is
purchased from PSE&G at Rate Schedule CIG or its successor rate
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(CIG), the Escalation Factor shall be a fraction, the numerator of
which is the CIG rate for the MONTH during which energy is being
delivered and the denominator of which is the CIG rate for the
prior MONTH.
(b) For any MONTH during which fuel for the COGENERATION FACILITY is
purchased from SELLER or others, the Escalation Factor shall be a
fraction, the numerator of which is the average cost of gas
applicable to the CIG rate for the MONTH during which energy is
being delivered and the denominator of which is the average cost
of gas applicable to the CIG rate for the prior MONTH.
During any MONTH in which the COGENERATION FACILITY uses CIG gas
for a minimum of ten (10) days, the Escalation Factor shall be
determined as set forth in Subparagraph (a) above. For any MONTH
in which the COGENERATION FACILITY does not use CIG gas for a
minimum of ten (10) days, the Escalation Factor shall be
determined as set forth in subparagraph (b) above.
(3) The GNP Deflator Component on January 1, 1988 shall be ninety three
hundredths (.93) cent/kWh, which shall remain in effect for the twelve
months of the year 1988. On January 1, 1989 and on
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January 1 of each year thereafter the GNP Deflator Component in effect
for the previous year is multiplied times an escalation factor as
determined below. The escalation factor shall be determined using the
annual Implicit Price Deflator for Gross National Product (GNP) in the
Survey of Current Business published by the United States Department
of Commerce/Bureau of Economic Analysis as follows:
(a) Multiply the current GNP Deflator Component by the fraction of
which the numerator is the GNP Deflator (preliminary) for the
calendar year prior to the current year and the denominator which
is the GNP Deflator (final) for the second calendar year prior to
the current year.
(b) When the GNP Deflator (final) is published, re-calculate the
current GNP Deflator Component by using the fraction of which the
numerator is the GNP Deflator (final) for the calendar year prior
to the current year and the denominator which is the GNP Deflator
(final) for the second calendar year prior to the current year.
(c) The total energy payment for months in which the GNP Deflator
(Preliminary) was used shall be recalculated and the appropriate
-25-
adjustment shall be made during the next Billing Period.
SECTION B
MONTHLY CAPACITY CHARGE
The Monthly Capacity Charge shall be the number of kilowatthours delivered
by SELLER's COGENERATION FACILITY during PSE&G's ON PEAK PERIOD during that
month divided by the hours in such ON PEAK PERIOD during a given month times a
capacity credit equal to $8.57/kW-month effective on January 1, 1988 and
escalated at 5% on January 1 of each year thereafter for the term of this
AGREEMENT.
1. Payment of the Monthly Capacity Charge shall be made in accordance with
the following:
(a) During the months of June, July, August and September, PSE&G shall pay
SELLER a level of capacity not to exceed the level established for the SUMMER
SEASON in Section C of ARTICLE II.
(b) During the months of December, January and February PSE&G shall pay
SELLER a level of capacity not to exceed the level established for the WINTER
SEASON in Section C of ARTICLE II.
2. At the end of each SUMMER SEASON, PSE&G shall determine whether capacity in
excess of the then current nominated capacity by SELLER in Section C of
ARTICLE II has been delivered. The total capacity delivered in such season
shall be determined by dividing the total number of kWh's actually delivered
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by SELLER's COGENERATION FACILITY during the ON PEAK PERIOD of each month of the
SUMMER SEASON by the total of all ON PEAK hours during such SUMMER SEASON. The
excess capacity shall be the amount by which the total capacity exceeds that
nominated by SELLER in Section C of ARTICLE II, as adjusted for the actual
average prevailing ambient temperature.
If PSE&G has paid for such excess capacity, PSE&G shall be entitled to and
SELLER shall refund a portion of the Capacity Charges paid pursuant to this
paragraph, such refund to be equal to four times the product of: (a) the excess
capacity determined in this Section B 2 of ARTICLE IV, and (b) the Monthly
Capacity Charge determined pursuant to this ARTICLE IV Section B. Any such
refund shall be credited against and an adjustment made on the September
Statement of Payment to SELLER.
3. At the end of each three (3) month period beginning on December 1 and
ending on February 28, PSE&G shall determine whether capacity in excess of
the then current nominated capacity has been delivered. For purposes of this
Section B 3, the WINTER SEASON nominated capacity prevailing shall be used.
The total capacity shall be determined by dividing the total number of kWh's
actually delivered by SELLER's COGENERATION FACILITY during the ON PEAK
PERIOD of each month of the aforesaid three (3) month period by the
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total of all ON PEAK hours during such three (3) month period. The excess
capacity shall be the amount by which the total capacity exceeds the then-
current WINTER SEASON capacity nominated by SELLER pursuant to Section C of
ARTICLE II, as adjusted for the actual average prevailing ambient temperature.
If PSE&G has paid for such excess capacity, PSE&G shall be entitled to and
SELLER shall refund any excess Capacity Charges for said three (3) month period,
such refund to be equal to three times the product of: (a) the three (3) month
excess capacity and (b) the Monthly Capacity Charge pursuant to this ARTICLE IV
Section B. Any such refund shall be credited against and an adjustment made on
the February Statement of Payment to SELLER.
For purposes of this ARTICLE IV Sections B 2 and 3, it is agreed and
understood that the capacity nominated shall be value adjusted to the average
ambient temperature which actually prevailed during the ON PEAK periods of the
applicable season. Such adjustments shall be made by SELLER using established
correlations and/or vendor-based performance curves or data depicting capacity
output of the COGENERATION FACILITY as a function of ambient temperature. SELLER
shall provide PSE&G with all the information and calculations used to make such
adjustments if so requested by PSE&G.
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Prevailing average ambient temperature for purposes of adjusting the
applicable nominated capacity shall be determined from available meteorological
data for the Philadelphia area.
SECTION C
MONTHLY SERVICE CHARGE
PSE&G shall charge SELLER a Monthly Service Charge for metering and
administrative expenses, as set forth under the service charge portion of the
applicable Purchased Electric Power ("PEP") tariff then on file with the NJBPU.
SECTION D
PSE&G RIGHT OF FIRST REFUSAL
SELLER will not offer for sale any power output from the COGENERATION
FACILITY in excess of the COGENERATION FACILITY'S NET ELECTRICAL POWER OUTPUT
without first offering the power output to PSE&G. If PSE&G declines to purchase
the offered power output, SELLER may offer it to third parties; provided,
however, that in no event may a sale of such power output be made: (1) to any
customer served by PSE&G or which PSE&G is authorized to serve except other
investor owned electric utilities (IOU's), or (2) on terms and conditions more
favorable than those offered to PSE&G.
In the event PSE&G declines to purchase such power output, PSE&G will
transmit such power output consistent with PSE&G's then current transmission
service policy for qualifying facilities to an IOU purchaser provided that:
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(1) such sale to an IOU purchaser is consistent with the provisions of this
Section; (2) the transmission of such power output shall be made only after (i)
a determination by PSE&G that the provision of such transmission service is
consistent with PSE&G's obligation to render safe, adequate and proper service
to its customer at minimum cost, and (ii) PSE&G's primary obligations to
customers, the PJIM interconnection and the Kid-Atlantic Area Coordination Group
are fulfilled, and (3) PSE&G and SELLER enter into an agreement for the
interconnection and transmission of such power output under terms and conditions
as well as a transmission service rate that are mutually acceptable to the
Parties hereto.
SECTION E
EXCESSIVE RATE
Each party, having entered into this AGREEMENT in good faith, hereby waives
all rights on its part now or hereafter to undertake any proceeding for the sole
purpose of having the purchase rate, as calculated in this ARTICLE IV of this
AGREEMENT, set aside as being unjust and unreasonable or of impairing or
disallowing the full and timely recovery of any payment made by PSE&G under this
AGREEMENT. Each party recognizes, however, that subsequent to execution and
approval of this AGREEMENT, if any legislative or judicial body or governmental
agency having jurisdiction impairs or disallows the full and timely recovery of
any payments made by PSE&G under this AGREEMENT
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for ratemaking purposes, then the parties shall, within thirty (30) days
thereafter, execute an amendment to this AGREEMENT implementing the appropriate
purchase rate, which is that rate, which the NJBPU or any successor will permit
PSE&G to recover on a full and timely basis from its ratepayers. Such a revised
purchase rate shall be effective as of the effective date of the legislative,
judicial or governmental agency pronouncement requiring such a revised purchase
rate. Such amendment and such revised rate shall be null and void ab initio in
the event that any such legislative, judicial or governmental agency
pronouncement is not upheld on appeal, and PSE&G shall, within thirty (30) days
thereafter, pay to SELLER the amount by which the payments which would have been
made under the contract in the absence of such amendment exceed the amount paid
under such amendment.
It is expressly agreed and understood that a prospective change in the
amount or the calculation of PSE&G's avoided cost within the meaning of PURPA
for purposes of purchases from future facilities shall not give rise to a
revision of the purchase price under this AGREEMENT unless any legislative or
judicial body or governmental agency having jurisdiction disallows payments made
by PSE&G hereunder for ratemaking purposes in accordance with the provision of
this Section F.
PSE&G agrees to give notice to SELLER of any challenge to the validity of
the AGREEMENT or to the full
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and timely recovery of the purchased energy costs from its ratepayers in any
regulatory or judicial proceeding, so as to permit SELLER to intervene in such
proceeding provided that the failure of PSE&G to give notice shall not be deemed
a breach of this AGREEMENT so long as such failure was due to good faith error
or omission; PSE&G further agrees to refrain from objecting or in any way
opposing any application by SELLER to intervene before any regulatory body or
judicial forum, or otherwise fully participate before such body or forum, in
which the validity or consequences of the AGREEMENT is subject to challenge.
SELLER and PSE&G further agree to use their best efforts to defend the AGREEMENT
before such regulatory body or judicial forum.
SECTION F
REPLACEMENT ENERGY AND CAPACITY COSTS
SELLER shall generate and sell NET ELECTRICAL POWER OUTPUT to PSE&G
throughout the term of this AGREEMENT and in accordance with the terms and
conditions thereof.
Effective on January 1 of each year following the first full year of
COMMERCIAL OPERATION if SELLER fails to generate and sell NET ELECTRICAL POWER
OUTPUT to PSE&G, and if this AGREEMENT has not been terminated pursuant to
ARTICLE XXIV, SELLER shall pay PSE&G Replacement Energy Costs and/or Replacement
Capacity Costs as provided below:
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1. Replacement Energy costs
SELLER shall generate and sell a total amount of NET ELECTRICAL ENERGY to
PSE&G at a level for all ON PEAK hours during the SUMMER SEASON and WINTER
SEASON which shall not be less than 85% of the NET ELECTRICAL CAPACITY
shown in Section C of ARTICLE II for such season, adjusted for the average
ambient temperature, multiplied by all ON PEAK hours during such season
(Average Generation). If the actual amount of NET ELECTRICAL ENERGY
delivered by SELLER to PSE&G during all ON PEAK hours, for either the
SUMMER SEASON or WINTER SEASON including any credits calculated pursuant to
Subparagraph 3 of this Section G (Actual Generation) is less than the
Average Generation, then SELLER shall pay PSE&G Replacement Energy Costs
equal to the number of Kilowatthours by which the Average Generation
exceeds the Actual Generation, multiplied by PSE&G's Cost of Replacement
Energy. The Cost of Replacement Energy during the SUMMER SEASON or WINTER
SEASON shall be the amount by which the projected average PJM Billing Rate
for all hours as shown on Exhibit 3 during such year exceeds the Adjusted
Base Rate in effect during such season.
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2. Replacement Capacity costs
SELLER shall provide NET ELECTRICAL CAPACITY to PSE&G at an average level
for all ON PEAK hours during the SUMMER SEASON and WINTER SEASON which
shall not be less than 85% of the NET ELECTRICAL CAPACITY then nominated
pursuant to Section C of ARTICLE II for each season adjusted to the average
ambient temperature (Average Capacity). If the actual amount of NET
ELECTRICAL CAPACITY provided by SELLER to PSE&G during all ON PEAK hours
during such season, including any credits calculated pursuant to
Subparagraph 3 of this Section G (Actual Capacity) is less than the Average
Capacity, then the capacity charge paid to SELLER for such season shall be
multiplied times the ratio of the Actual Capacity divided by the Average
Capacity. The difference between the reduced capacity charge determined
above and the actual capacity charge paid to SELLER shall be refunded to
PSE&G.
3. Performance Waiver Provision
In the event SELLER shall incur (i) an event of Force Majeure in accordance
with ARTICLE XVIII, or (ii) a curtailment in accordance with ARTICLE II,
Section D(2), (3), (4), (5) or (6), then a credit towards SELLER's Actual
Generation (Generation
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Credit) during either the SUMMER SEASON or WINTER SEASON shall be
calculated as follows:
GC /equals/ AG x (Nu /divided by/ Nt) x (He /divided by/ Ht)
Where GC /equals/ Generation Credit Per Affected Generator
AG /equals/ Average Generation
Nu /equals/ Nameplate Rating of Affected Generator
Nt /equals/ Total Nameplate Rating of all Generators
He /equals/ Lost On-Peak Hours
Ht /equals/ Total On-Peak Hours
In addition, should SELLER incur an event described in (i), (ii), as set
forth above, then a credit towards SELLER's Actual Capacity (Capacity Credit)
shall be calculated as follows:
CC /equals/ AC x (Nu /divided by/ Nt) x (He /divided by/ Ht)
Where CC /equals/ Capacity Credit per Affected Generator
AC /equals/ Average Capacity
4. Payment of Replacement Energy and Capacity Costs
Within sixty (60) days subsequent to the close of each season, PSE&G shall
submit to SELLER a Replacement Energy Cost and Replacement Capacity Cost
Statement ("Statement"), setting forth the
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amount of any payment to be made by SELLER to PSE&G pursuant to this
ARTICLE IV, Section G. SELLER shall make payment to PSE&G within thirty
(30) days of the date of the Statement.
This ARTICLE IV, Section G sets forth the methodology for calculating
Replacement Energy Costs and Replacement Capacity Costs to be paid to PSE&G in
the event SELLER fails to fulfill certain performance obligations and if this
AGREEMENT has not been terminated pursuant to ARTICLE XXIV. The inclusion of
such provision is not intended to create any express or implied right in SELLER
to terminate this AGREEMENT. Termination of this AGREEMENT by SELLER, except as
provided for in ARTICLE XXIII or in the exercise of its rights under ARTICLE
XXIV following a determination that PSE&G has breached this AGREEMENT, shall
constitute a breach of this AGREEMENT.
SECTION A
ABANDONMENT, CANCELLATION OR FAILURE TO COMPLETE
If SELLER abandons, cancels or fails to complete the PROJECT before the
DATE OF COMMERCIAL OPERATION and this AGREEMENT is therefore terminated in
accordance with the provisions of ARTICLE XXIII, and if SELLER has not provided
written notice of such abandonment, cancellation or failure within eighteen (18)
months of the date of NJBPU Order approving this agreement, it is acknowledged
and agreed that PSE&G will suffer damages which, as the result of PSE&G's
dependence upon the delivery of the COGENERATION FACILITY'S
-36-
energy and capacity hereunder, PSE&G would be unable to mitigate fully. PSE&G
and SELLER agree that the amount of actual damages suffered by PSE&G under the
foregoing circumstances would be difficult or impossible to measure. Therefore,
PSE&G and SELLER agree that if the COGENERATION FACILITY shall fail to commence
COMMERCIAL OPERATION on or before the DATE OF COMMERCIAL OPERATION, as the same
may be extended, pursuant to ARTICLE XXIII of this AGREEMENT, SELLER shall pay
PSE&G a one-time liquidated damage amount equal to $721,556.
SECTION H
SECURITY PROVISION
1. A Payment Tracking Account, a projection of which is made a part of this
AGREEMENT as Exhibit 3, shall be established on the DATE OF COMMERCIAL OPERATION
to define the cumulative difference between the projected payments for
electricity to be made by PSE&G to SELLER under this AGREEMENT and the projected
payments which would have been made if such payments were based on the PJM
Billing Rate for energy and the PJM Capacity Deficiency Rate for capacity
(hereinafter referred to as the PJM Price), as shown in Exhibit 3. The Payment
Tracking Account shall not be funded, and any balance in the Payment Tracking
Account shall accrue interest at a rate equal to the Prime Rate of The Chase
Manhattan Bank, N.A., New York, New York, on January 1st of each year but in no
event shall the interest rate applied to this account exceed 13%.
-37-
2. For each twelve (12) month period ("Period") after the DATE OF
COMMERCIAL OPERATION, the Payment Tracking Account shall be calculated by PSE&G
pursuant to Exhibit 3 as follows:
(a) The difference (the "Difference Value") between the Projected Contract
Payment (Rate A) and the total PJM rate (Rate B) shown in column
headed Rate A - Rate B, is fixed, for the term of the contract, as
shown for each year.
(b) The Energy column is shown for illustrative purposes only, and the
actual energy delivered for each Period will be used to calculate the
annual amount to be included in the Tracking Account.
(c) The interest rate shown in the Cumulative column is shown for
illustrative purposes only. The interest rate to be applied annually
to the balance in the Cumulative column is specified in ARTICLE IV,
Section I, Paragraph 1 of this AGREEMENT.
(d) The Cumulative amount in the tracking account at the end of the first
Period will be determined by multiplying the Difference Value
(cents/kWh) for year one (1) by the Energy (kWh) actually delivered
during the Period.
(e) The Cumulative amount for each subsequent Period will be the algebraic
sum of the (i) Cumulative amount in the Tracking Account at the start
of
-38-
each Period; (ii) interest rate multiplied by the Cumulative amount in
the Tracking Account from (i) above; (iii) Difference Value for that
year from (a), multiplied by the Energy actually delivered during such
Period minus (iv) all replacement energy payments during such Period.
3. The Payment Tracking Account shall be closed at the end of the Period
in which the account equals zero or has a credit balance to SELLER. If the
Payment Tracking Account has not been closed by the end of the initial twenty
(20) year term of this AGREEMENT, SELLER shall at PSE&G's option either: (1) pay
any credit balance due to PSE&G and the Payment Tracking Account shall thereupon
be closed; or (2) continue the operation of the facility under terms that will
reduce the balance due to PSE&G to zero over a maximum period of five (5) years;
provided, however, that if this AGREEMENT is terminated prior to the end of the
twenty year term specified in ARTICLE III following a breach of this AGREEMENT
by SELLER, SELLER shall pay any balance in the Payment Tracking Account to PSE&G
over the remaining years of the initial term of this AGREEMENT or over a five
(5) year period, whichever is shorter, including interest that will accumulate
as long as a balance exists in the Payment Tracking Account. The Payment
Tracking Account shall be deemed closed at such time as SELLER has repaid all
such monies to PSE&G.
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Notwithstanding the foregoing, if this AGREEMENT is terminated prior to the
end of the twenty year term specified in ARTICLE III following a breach by PSE&G
resulting in termination of the AGREEMENT, SELLER shall pay PSE&G the amount, if
any, by which any balance in the Payment Tracking Account exceeds the damages
found to be due to SELLER as a result of such default. SELLER shall not be
required to make any such payments following a default by PSE&G until there has
been a final determination of the amount of damages due to SELLER (the
"Determination Date"). Following the Determination Date, any amount due to PSE&G
shall be paid ratably during the period of time between the Determination Date
and the date on which, based on circumstances in existence as of such date, the
Payment Tracking Account would have terminated if PSE&G had not defaulted. The
unpaid portion of such an amount due PSE&G shall bear interest at the rate
specified in Paragraph 1 of this Section 1.
4. To secure the obligation of SELLER described in this Section, SELLER
shall provide security in accordance with the terms of this paragraph.
(a) Definitions. When used in this paragraph, the following terms shall
have the respective meanings set forth below (such definition to be applicable
to both the singular and plural forms of the terms defined):
(1) Fair Market Value - The Fair Market Value of the COGENERATION
FACILITY determined pursuant to Subparagraph (c).
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(2) First Lien - A lien or other security interest in the COGENERATION
FACILITY created in connection with the financing or refinancing
of the COGENERATION FACILITY and secured by the COGENERATION
FACILITY.
(3) Second Lien Value - At any time, the Second Lien Value shall be
the Fair Market Value of the COGENERATION FACILITY less the
outstanding principal amount of any obligation secured by a First
Lien.
(b) Grant of Lien.
(1) In order to secure the repayment obligation of SELLER under this
ARTICLE IV, SELLER hereby grants PSE&G a Second Lien on the
COGENERATION FACILITY, which Lien is and shall remain superior to
all liens and other claims against the COGENERATION FACILITY,
other than First Liens. If the Payment Tracking Account is closed
pursuant to Paragraph 3 before the termination date of this
AGREEMENT, the Second Lien shall terminate on the date that the
Payment Tracking account is closed.
(2) In the event of the termination of the AGREEMENT, if SELLER fails
to pay any amount which is due to PSE&G pursuant to this Section,
PSE&G shall in addition to any other
-41-
remedies it may have under this AGREEMENT, have the right to
either:
(A) Cause the COGENERATION FACILITY to be sold to an unrelated
purchaser, subject to the provisions of any First Lien, in which
case PSE&G shall retain the net proceeds of the sale up to the
amount of such unpaid amount, and any net proceeds of the sale in
excess of such unpaid amount shall be paid to SELLER; or
(B) Assume operation of the COGENERATION FACILITY, in which case
PSE&G shall retain the net revenue from such operation up to the
amount of such unpaid amount, and any net revenue from the
operation of the COGENERATION FACILITY in excess of such unpaid
amount shall be paid to SELLER.
(3) During the period of PSE&G's operation and maintenance of the
COGENERATION FACILITY pursuant to this Section, PSE&G shall (i)
operate and maintain the COGENERATION FACILITY in accordance with
prudent utility practices; (ii) exercise the same standard of care
in the operation and maintenance of the COGENERATION FACILITY
which it exercises in the operation and maintenance of its own
generating facilities, and (iii) perform all
-42-
of SELLER's obligations under any permit or legal regulation or
requirement pertaining to the COGENERATION FACILITY, and any other
agreement pertaining to the COGENERATION FACILITY, including but
not limited to any thermal energy sale agreement between SELLER
and XXXXXXXX.
Notwithstanding the foregoing, PSE&G and/or its agent shall
have no responsibility whatsoever for any obligations of SELLER
which were incurred prior to such exercise of its rights.
Possession and/or operation of the COGENERATION FACILITY shall not
constitute an assumption by PSE&G or such agent of SELLER's
existing or future liabilities and obligations of any kind; and
any undertaking by PSE&G to comply with such obligations is
intended only as a condition of keeping agreements and permits
between SELLER and third parties in force, but not as any
agreement to be legally responsible therefor or for any
consequences arising from noncompliance therewith.
(c) Valuation.
(1) PSE&G or its agent shall have the right to conduct an
appraisal of the fair market value of the COGENERATION
FACILITY. SELLER shall
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provide all data reasonably required to perform such an
appraisal. The cost of any such appraisal shall be paid by
PSE&G.
(2) The Second Lien Value
In order to evaluate the need for additional security in each
twelve (12) month period ("Period") after the DATE OF COMMERCIAL OPERATION, the
Reference Cumulative Balance column in the Payment Tracking Account shall be
calculated by PSE&G pursuant to Exhibit 3 as follows:
(a) The difference (the "Difference Value") between the
Projected Contract Payment. (Rate A) and the total PJM rate
(Rate B) shown in column headed Rate A - Rate B, is fixed, for
the term of the contract, as shown for each year.
(b) The calculated Energy delivered for Periods one (1) through
three (3) will be calculated using nominated capacity and a
capacity factor of the greater of .85 or the actual capacity
factor achieved during each Period; for Periods four (4)
through twenty (20) the energy delivered will be calculated
using the greater of .85 or the average of the actual capacity
factors achieved during Periods one through three (3). The
results of these calculations will be used to determine the
annual amount to be included in the Tracking Account.
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(c) The interest rate shown in the Reference Cumulative column is shown
for illustrative purposes only. The interest rate to be applied
annually to the balance in the Reference Cumulative column is
specified in ARTICLE IV, Section I, Paragraph 1 of this AGREEMENT.
(d) The Reference Cumulative amount in the tracking account at the end of
the first Period will be determined by multiplying the Difference
Value (cents/kWh) for year one (1) by the calculated Energy (kWh)
during the Period.
(e) The Reference Cumulative amount for each subsequent Period will be the
algebraic sum of the (i) Reference Cumulative amount in the Tracking
Account at the start of each Period; (ii) interest rate multiplied by
the Reference Cumulative amount in the Tracking Account from (i)
above; and (iii) Difference Value for that year from (a), multiplied
by the Calculated Energy delivered during such Period.
If the actual amount in the Cumulative column for any Period exceeds the
balance in the Reference Cumulative column by more than ten percent (10%) for
such Period, PSE&G may, at its sole option, require SELLER to provide and
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maintain a letter of credit satisfactory to PSE&G which shall insure payment of
the amount by which the Projected Repayment Obligation exceeds one hundred
percent (100%) of the Reference Cumulative Repayment obligation.
ARTICLE V
PHASE-IN PERIOD
SELLER plans to commence pre-operation testing of certain PROJECT equipment
and facilities within 20 months of start of PROJECT construction. SELLER shall
notify PSE&G in writing of any change in its current projection for the
commencement of pre-operation testing.
Upon completion of pre-operation testing of PROJECT equipment and
facilities, SELLER plans to commence phasing in and conducting test operations
of its electric generation units. SELLER anticipates that the phasing-in and
test operations of such units will take approximately 4 MONTHS (hereinafter
referred to as the "Phase-In Period"). The Phase-In Period will commence on the
DATE OF INITIAL OPERATION and, except as otherwise provided in this ARTICLE V,
will terminate upon mutual agreement of both PSE&G and SELLER not to be
unreasonably withheld.
SELLER anticipates that during the Phase-In Period electric power will be
produced at the COGENERATION FACILITY and supplied to PSE&G at the RECEIPT
POINT. PSE&G shall purchase the electric power produced at the energy rate
specified in Section A of ARTICLE IV above. After
-46-
completion of the INTERCONNECTION and completion of the inspection process
specified in ARTICLE XVI, PSE&G shall be obligated to receive at the RECEIPT
POINT the electric power and energy produced at the COGENERATION FACILITY and
supplied to the RECEIPT POINT.
Upon termination of the Phase-In Period, the DATE OF COMMERCIAL OPERATION
shall be deemed to have occurred for the purposes of determining the start of
the term of the AGREEMENT and payment of charges specified in Section A and
Section B of ARTICLE IV.
ARTICLE VI
BILLING AND PAYMENT
After the date of INITIAL OPERATION, PSE&G shall read its recording
meter(s) at the COGENERATION FACILITY monthly to determine the amount of payment
to be made to SELLER for any MONTH in accordance with the provisions of ARTICLE
IV and shall thereafter prepare and present to SELLER, on or before the last day
of the subsequent MONTH, a statement and payment for electrical power delivered
to PSE&G during the MONTH. Such statement shall indicate the total
kilowatthours; delivered during the MONTH for both the ON PEAK PERIOD and the
OFF PEAK PERIOD, the Monthly Energy Charge, the Monthly Capacity Charge and the
Monthly Service Charge as set forth in ARTICLE IV.
If the payment is not received by the due date specified above, PSE&G shall
pay to SELLER an interest
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charge on unpaid amounts which shall accrue daily from the due date until the
date upon which payment is made at the then current late payment charge for
commercial customers prescribed in PSE&G's Standard Terms and Conditions as may
be amended from time to time.
In the event SELLER disputes any statement, SELLER shall present the
dispute in writing and submit supporting documentation to PSE&G within a thirty
(30) day period from receipt of such statement. Upon receipt of notice of the
dispute and supporting documentation, PSE&G shall have thirty (30) days from
receipt of such notice to resolve any dispute with SELLER. In the event the
dispute is not resolved within the thirty (30) day period, either party may
submit the matter to arbitration for resolution in accordance with ARTICLE XXV.
The disputed amount of any statement disputed by SELLER, in accordance with the
provisions of this ARTICLE, which is ultimately determined to be due and owing
by PSE&G to SELLER, from the date originally due shall; until payment, accrue
interest at the then current late payment charge for commercial customers
prescribed in PSE&G's Standard Terms and Conditions as may be amended from time
to time.
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ARTICLE VII
INTERCONNECTION
SECTION A
DESIGN, CONSTRUCTION AND INSTALLATION OF INTERCONNECTION
PSE&G shall design, construct and install the INTERCONNECTION for the
purpose of enabling PSE&G to interconnect the PROJECT with the PUBLIC SERVICE
SYSTEM. However, PSE&G shall not initiate any activity in connection with the
design, construction or installation of the INTERCONNECTION until receipt of the
RELEASE NOTICE.
Upon receipt of the RELEASE NOTICE, PSE&G shall promptly review its then
existing manpower requirements and construction commitments in order to
formulate an estimated completion date for the INTERCONNECTION. PSE&G shall not
unreasonably delay or withhold the formulation of an estimated completion date.
In connection with formulating a completion date, PSE&G shall use best efforts
to establish an estimated completion date consistent with SELLER's estimated
date of pre-operation testing. After formulation of the estimated completion
date PSE&G shall provide SELLER with written notice thereof.
PSE&G shall use best efforts to: (i) initiate the tasks required to obtain
any REQUIRED PERMIT, easement(s), license(s), rental(s) or right(s)-of-way for
the construction and installation of the INTERCONNECTION; and (ii) complete the
design, construction and installation of the INTERCONNECTION on or before the
DATE OF INITIAL
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OPERATION. Best efforts, as herein provided, means the commencement and pursuit,
in good faith, of a program of design, construction, installation, review and
examination so as to complete the INTERCONNECTION in accordance with the
applicable estimated completion date; provided, however, it is expressly
understood and agreed that PSE&G's best efforts to complete same on or by the
estimated completion date shall be subordinate and subject to and construed in
light of and consistent with any suspension effected pursuant to and in
accordance with Section B of this ARTICLE VII and PSE&G's primary obligation to
provide and maintain safe, adequate and proper service to its retail and sale-
for-resale customers and to operate and maintain its plant, property and
equipment in such condition as to enable it to do so. SELLER has been advised
and acknowledges and agrees that certain of the activities necessary to initiate
and complete the construction and installation of the INTERCONNECTION may be
affected and/or influenced by conditions, events and/or factors which are not
within the direct control of PSE&G.
PSE&G shall advise SELLER when the INTERCONNECTION is completed.
Thereafter, subject to and in accordance with the provisions of ARTICLE XVI,
PSE&G will permit SELLER to synchronize its electric generation units with the
PUBLIC SERVICE SYSTEM.
PSE&G shall not be liable to SELLER for any direct or indirect cost(s),
expense(s), loss(es), liability(ies) or
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damage(s) which SELLER may incur or sustain, which cost, expense, loss,
liability or damage arises out of, relates to or results from any delay in the
completion of the INTERCONNECTION, except where the delay in the completion of
the INTERCONNECTION results from PSE&G's failure to use best efforts, as defined
herein.
SELLER shall indemnify and hold harmless PSE&G and each and every of its
officers, agents, servants and employees, its successors and assigns of, from
and against, any and all claims, demands, suits and actions, and/or
liabilities, damages, and/or judgments, as well as against any fees, costs,
charges or expenses which PSE&G, its officers, agents, servants and employees,
its successors and assigns incur in the defense of any such claims, suits,
actions or similar such demands, made or filed by any third-party with whom
SELLER is in privity of contract or claims to be in privity of contract with
SELLER if such claim is ultimately upheld, to the extent such claims, suits,
actions or similar demands arise out of, relate to, or result from PSE&G's
failure to complete the INTERCONNECTION in a timely manner as herein provided,
except where such failure results from PSE&G's failure to use best efforts as
defined in this Section A to complete the INTERCONNECTION. In affecting and
implementing any right of or obligation to indemnify pursuant to and in
accordance with the provisions of this paragraph, the procedural provisions set
forth in ARTICLE XX of this AGREEMENT shall be applicable.
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The INTERCONNECTION shall be constructed and installed reasonably in
accordance with the Proposed Plan (Exhibit 1). It is understood that change(s)
in the Proposed Plan may be necessary from time to time prior to and/or during
construction. PSE&G shall have the right and the authority to make any change(s)
in the Proposed Plan for or route of the INTERCONNECTION, where PSE&G, in its
reasonable judgment, determines such change(s) is necessary or appropriate;
provided, however, in the event any change in the Proposed Plan which PSE&G
determines is necessary or appropriate will result in an increase of more than
five percent (5%) of the estimated cost for same, PSE&G shall not be permitted
to make such change(s) without SELLER's consent. SELLER shall not unreasonably
delay or withhold its consent for any such change(s). In the event such
change(s) in PSE&G's sole judgment is necessary or appropriate to enable the
PROJECT to operate with the PUBLIC SERVICE SYSTEM in a safe and reliable manner
and SELLER withholds or delays its consent, PSE&G shall have the right to
suspend design, construction and installation of the INTERCONNECTION and/or
terminate this AGREEMENT in accordance with ARTICLE XXIII. Changes in the
Proposed Plan shall not require any amendment to this AGREEMENT.
SECTION 9
INTERCONNECTION COSTS
SELLER shall be liable for and shall pay to PSE&G all costs PSE&G incurs in
designing, constructing and
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installing the INTERCONNECTION as well as all other costs which PSE&G incurs in
effecting the interconnection of the PROJECT with the PUBLIC SERVICE SYSTEM,
which costs are denominated in this AGREEMENT as costs associated with the
design, construction and installation of the INTERCONNECTION (herein
collectively referred to as costs associated with or costs incurred in
connection with the design, construction and installation of the
INTERCONNECTION).
PSE&G estimates that the total cost associated with the design,
construction and installation of the INTERCONNECTION will be $________. This
estimate shall not in any way diminish, change or affect SELLER's responsibility
for and obligation to pay to PSE&G all costs PSE&G actually incurs associated
with the design, construction and installation of the INTERCONNECTION. PSE&G's
anticipated expenditure pattern associated with these costs is contained in the
PAYMENT SCHEDULE.
SELLER's responsibility for and obligation to pay to PSE&G the costs
associated with the design, construction and installation of the INTERCONNECTION
shall be discharged as follows: commencing on or prior to the last day of the
MONTH mutually agreed by and between SELLER and PSE&G subsequent to the receipt
by PSE&G of the RELEASE NOTICE (MONTH 1) and thereafter on or prior to the last
day of each of the successive ______ (___) MONTHS (MONTH ___ through and
including MONTH ___), SELLER shall remit to PSE&G for each such MONTH the
payment specified in the following PAYMENT SCHEDULE:
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PAYMENT SCHEDULE
TO BE ESTABLISHED
TOTAL OF PAYMENTS FOR ESTIMATED COSTS $_______________
The PAYMENT SCHEDULE above establishes the amortization schedule by which
SELLER makes payment of the costs contained in the estimate specified in this
Section of this ARTICLE VII. Said estimate is effective through ___________,
19__. In the event SELLER does not issue the RELEASE NOTICE to PSE&G on or
before ___________, 19__, PSE&G shall have the right to adjust said estimate and
therefor the amortization schedule in the PAYMENT SCHEDULE to reflect any change
in estimated costs. In such event, PSE&G shall furnish written notice to SELLER
of any new cost estimate and will furnish to SELLER a revised PAYMENT SCHEDULE.
The revised estimate and revised PAYMENT SCHEDULE shall be incorporated into
this AGREEMENT as modification pursuant to and in accordance with ARTICLE XXVII
of this AGREEMENT.
In the event SELLER fails to remit any payment specified in and in
accordance with the schedule specified in the PAYMENT SCHEDULE above, PSE&G may,
in addition to any other remedy or right PSE&G may have under this AGREEMENT,
immediately suspend performance of its obligations under
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Section A of this ARTICLE. PSE&G shall provide SELLER with written notice of any
such suspension (hereinafter referred to as Notice of Suspension). In such
event, and in addition to any other right or remedy it may have under this
AGREEMENT, PSE&G shall have the right to make demand for and receive payment
from ISSUER under the CREDIT for: (i) any costs associated with the design,
construction and installation of the INTERCONNECTION which PSE&G has incurred,
as of the date of suspension, and for which SELLER has failed to make payment
therefor on or by the date of demand; and/or (ii) any costs associated with the
design, construction and installation of the INTERCONNECTION which PSE&G incurs
thereafter as a consequence of a commitment made or liability incurred by PSE&G
prior to the date of suspension in connection with performance of its
obligations under Section A of this ARTICLE.
Within ninety (90) days of completion of construction of the
INTERCONNECTION, PSE&G shall furnish to SELLER a Final Reconciliation. The Final
Reconciliation shall contain a statement setting forth the nature and amount of
costs actually incurred by PSE&G in connection with the design, construction and
installation of the INTERCONNECTION, as well as a reconciliation between the
total payments made by SELLER, in accordance with the provisions of this Section
B, and the amount of costs actually incurred in connection with the design,
construction and installation of the INTERCONNECTION.
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In the event that the total cost actually incurred in connection with the
design, construction and installation of the INTERCONNECTION exceeds the total
payments made by SELLER, SELLER shall be responsible for and shall make payment
to PSE&G of any differential resulting from such reconciliation. SELLER shall
make payment for any such differential within thirty (30) days of the date of
the delivery to SELLER of the Final Reconciliation. In such event, the Final
Reconciliation shall constitute PSE&G's xxxx to SELLER for payment of any such
differential.
In the event the total of the payments made by SELLER to PSE&G, in
accordance with the provisions of this ARTICLE VII, exceeds the costs actually
incurred in connection with the design, construction and installation of the
INTERCONNECTION, PSE&G shall remit to SELLER, with the Final Reconciliation, a
payment to reimburse SELLER for any such overpayment.
In connection with effecting the Final Reconciliation, SELLER shall have
the right to review, after a timely request therefor, any documentation or data
available to PSE&G to enable SELLER to verify the accuracy of the Final
Reconciliation. However, such review shall not extend the due date of, or extend
or postpone or otherwise affect SELLER's obligation to pay in a timely manner
any payment due, as specified in and required by the Final Reconciliation.
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SECTION C
CREDIT FOR INTERCONNECTION COSTS
In connection with, and for the purposes of, securing performance by SELLER
of its obligation to pay PSE&G for the costs which PSE&G incurs in connection
with the design, construction and installation of the INTERCONNECTION, SELLER
shall establish a CREDIT as set forth below:
1. Letter of Credit
In the event SELLER establishes as CREDIT an irrevocable letter of
credit, it shall be issued to PSE&G as beneficiary and shall be established at
and made payable by a commercial bank (ISSUER) acceptable to PSE&G on reasonable
terms and conditions acceptable to PSE&G; provided, however, PSE&G shall not
unreasonably withhold approval of any letter of credit. The CREDIT shall be
established for and structured so as to permit PSE&G to make a demand(s) for and
receive payment from ISSUER and shall require the ISSUER to honor on sight any
written demand(s) for payment under the CREDIT as specified in and in accordance
with the provisions of Sections B and D of this ARTICLE. The CREDIT shall be
established following the receipt of the RELEASE NOTICE to be effective not
later than thirty (30) days following a written notice from PSE&G and shall have
an Expiry Date ___ months after the date of issuance of such CREDIT (which
period is hereinafter referred to as the Effective Period). The aggregate amount
of the CREDIT shall be
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established and maintained during the Effective Period in an amount of ______
dollars ($________).
2. Escrow Account
In the event SELLER establishes as CREDIT an ESCROW ACCOUNT, the
ESCROW ACCOUNT shall be established with ESCROW AGENT pursuant to and
substantially in accordance with the terms and conditions of the form of ESCROW
AGREEMENT agreed to by and between SELLER and PSE&G prior to the execution of
this AGREEMENT (Exhibit 4). The ESCROW ACCOUNT shall be established/for and
structured so as to permit PSE&G to make a demand(s) for and receive payment
from ESCROW AGENT and shall require the ESCROW AGENT to honor written demand(s)
by PSE&G for payment for CANCELLATION COSTS. The ESCROW AGENT shall be
established to be effective not later than fifteen (15) days of the date of the
RELEASE NOTICE and shall remain in effect until the Expiry Date (hereinafter
referred to as the Effective Period). The aggregate amount of the CREDIT shall
be established and maintained until the Expiry Date. The aggregate amount of the
ESCROW ACCOUNT and the Expiry Date shall be specified by PSE&G in a notice to be
issued by PSE&G to SELLER as soon as practicable after execution of this
AGREEMENT.
In the event SELLER fails to have established for and have issued to PSE&G,
as beneficiary, the CREDIT, in accordance with the provisions of this ARTICLE,
PSE&G may, in addition to any other remedy it may have under this
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AGREEMENT, suspend performance of its obligations under Section A of this
ARTICLE.
SECTION D
CANCELLATION COSTS
In order to complete the design, construction and installation of the
INTERCONNECTION, PSE&G shall be required to enter into contractual arrangements
with, inter alia, equipment/material suppliers and third-party contractors. Upon
occurrence of any Event of Termination as specified in ARTICLE XXIII during the
construction period, PSE&G shall have the right to cancel or terminate any
supplier and/or contractor agreements entered into in connection with
discharging its obligations to design, construct and install the
INTERCONNECTION. In the event PSE&G exercises any right pursuant to and in
accordance with this Section D to cancel or terminate any supplier and/or
contractor agreements/orders, PSE&G may incur CANCELLATION COSTS. In such event,
SELLER shall be liable for and make payment to PSE&G for all CANCELIATION COSTS
which PSE&G incurs.
Additionally, upon occurrence of an Event of Termination as defined in
ARTICLE XXIII during the construction period, PSE&G may be required to remove
and/or complete the construction work in progress in order to maintain the
integrity, safety and reliability of the PUBLIC SERVICE SYSTEM. In such event,
PSE&G may also incur CANCELLATION COSTS. SELLER shall be liable for and make
payment to PSE&G for all such CANCELLATION COSTS which PSE&G incurs.
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In the event PSE&G incurs any CANCELLATION COSTS, PSE&G shall have the
right to demand payment for and receive payment from ISSUER under the CREDIT for
all such costs; provided, however, in the event the CREDIT is insufficient,
PSE&G retains the right to demand payment from SELLER for any such deficiency,
and in such event, SELLER shall be obligated to make payment to PSE&G for any
such CANCELLATION COSTS not paid under the CREDIT.
In connection with determining the amount of any demand(s) for payment of
ISSUER to be made by PSE&G for any CANCELLATION COSTS incurred, PSE&G shall give
SELLER a monetary credit for the value to PSE&G of any facilities or equipment
received by and which are thereafter useful to PSE&G.
In the event PSE&G terminates or cancels any supplier and/or contractor
agreements/orders as permitted in this Section D, PSE&G shall have complete
discretion relative to the manner of resolving any claim and/or demand by any
contractor and/or supplier in connection therewith and further, PSE&G shall be
the sole judge of the acceptability of any compromise in settlement or
resolution of any such claim or demand. Additionally, PSE&G shall be the sole
judge as to what is necessary to maintain the safety, integrity or reliability
of the PUBLIC SERVICE SYSTEM relative to the removal or completion of the
construction work in progress. PSE&G shall exercise reasonable care in resolving
contractor/supplier
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claim(s)/demand(s) and in effecting any required removal or completion of the
construction work in progress so as to mitigate the dollar amount paid in
effecting the resolution of such claim(s)/demand(s) or in the dollar amount
expended in completing such removal or completion tasks; provided, however, that
PSE&G shall have no liability to SELLER for or on account of the dollar
amount(s) paid in effecting the resolution of any such claim(s)/demand(s) or in
effecting such removal/completion tasks, except where the resolution of any such
claim(s)/demand(s) or the completion of such tasks were effected by PSE&G in a
manner which was in willful disregard of its obligation to mitigate, as defined
in this paragraph.
ARTICLE VIII
OPERATIONS COORDINATION
Effective with the DATE OF INITIAL OPERATION and during any term of this
AGREEMENT, SELLER shall coordinate the operation of the PROJECT with the
operation of the PUBLIC SERVICE SYSTEM. To discharge its best efforts obligation
to coordinate operation of the PROJECT with the PUBLIC SERVICE SYSTEM, SELLER
shall: (i) maintain a power factor at or as near unity as practicable at the
point of connection of the PROJECT with and to the PUBLIC SERVICE SYSTEM, unless
requested otherwise by PSE&G; (ii) control its voltage and speed to values
acceptable to PSE&G consistent with sound utility practice; (iii) coordinate its
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relaying and fusing so as to conform with PSE&G's system protection practices,
in effect from time to time; (iv) maintain the PROJECT in a safe and reliable
operating condition; (v) submit to PSE&G the monthly schedules and estimates
required by this ARTICLE VIII; and (vi) perform such other actions, as may be
reasonably requested by PSE&G, to enable PSE&G to (a) operate the PUBLIC
SERVICE SYSTEM in a safe and reliable manner; and (b) operate the PUBLIC
SERVICE SYSTEM so as to discharge PSE&G's statutory obligations to provide safe,
adequate and proper service to its retail and sale-for-resale customers. Each of
SELLER and PSE&G shall use its best efforts to operate the COGENERATION FACILITY
and the PUBLIC SERVICE SYSTEM with due regard for the PUBLIC SERVICE SYSTEM and
the COGENERATION FACILITY.
As of the DATE OF COMMERCIAL OPERATION, SELLER shall provide to PSE&G by
the first (1st) day of each MONTH the following: (i) an hourly schedule of the
estimated NET ELECTRICAL CAPACITY SELLER plans to supply to the RECEIPT POINT
for receipt by PSE&G in the succeeding MONTH; (ii) an estimate of the generation
of NET ELECTRICAL ENERGY which SELLER plans to supply to the RECEIPT POINT for
receipt by PSE&G, in the succeeding MONTH; (iii) an estimate of the generation
of NET ELECTRICAL ENERGY which SELLER plans to supply to the RECEIPT POINT for
receipt by PSE&G for the succeeding twelve (12) MONTHS; and (iv) the names and
telephone numbers of responsible management level employees
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for contact by PSE&G personnel at any time during the succeeding MONTH relative
to any matter arising out of, relating to, or resulting from PSE&G's obligation
to provide SERVICE to SELLER under this AGREEMENT. In addition, SELLER shall
furnish to PSE&G annually a schedule of planned maintenance and/or repair
activities for the succeeding thirty-six (36) months. SELLER agrees to use its
best efforts to schedule planned maintenance only during the months of October,
November, April and May.
SELLER agrees to notify PSE&G of its planned maintenance at least one (1)
month prior to a scheduled outage. PSE&G will review the effect of the proposed
schedule on the overall maintenance schedules of PJM and PSE&G and advise SELLER
of problems that may be created by SELLER's scheduled outage within ten (10)
days of receipt of SELLER's notice and suggest reasonable alternative schedules.
Except in an emergency, SELLER shall give prior notice of not less than
eight (8) hours for any anticipated outage other than planned maintenance.
SELLER agrees to attempt to give notice to PSE&G as soon as practical in the
event of emergencies or other unanticipated outages.
SELLER shall maintain and classify (in a timely manner) outage statistics
in accordance with the then current PJM Interconnection outage classification
procedures and shall supply such statistics to PSE&G as requested.
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Pursuant to and consistent with SELLER's obligation to coordinate operation
of the PROJECT with the operation of the PUBLIC SERVICE SYSTEM, SELLER shall
install and maintain, at its expense, during any term of this AGREEMENT, a
telephone line reserved for communication by and between PSE&G operating
personnel and SELLER operating personnel.
PSE&G shall use best efforts to coordinate PUBLIC SERVICE SYSTEM
maintenance, repair, rearrangement, relocation, removal or reinforcement
activities with SELLER's planned maintenance of the COGENERATION FACILITY so as
to minimize any interruption, curtailment or reduction of acceptance of the
COGENERATION FACILITY's NET POWER OUTPUT; provided, however, the scheduling,
implementation and conduct of such activities by PSE&G shall remain within the
sole discretion of PSE&G. PSE&G will provide a schedule of planned maintenance
to SELLER as soon as is practicable after such a schedule is available for
distribution.
ARTICLE IX
NET ELECTRICAL POWER OUTPUT SPECIFICATIONS
The NET ELECTRICAL POWER OUTPUT supplied by SELLER to the RECEIPT POINT for
receipt by PSE&G during the term of this AGREEMENT shall be at a nominal voltage
of 69,000 volts, 60 hertz, balanced three-phase alternating current produced by
synchronous generator(s) equipped with automatic voltage regulation and
automatic speed control. The NET
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ELECTRICAL POWER OUTPUT shall be free from harmonics which would interfere with
PSE&G's metering accuracy, the PUBLIC SERVICE SYSTEM, or the quality of PSE&G's
service to its retail and sale-for-resale customer loads. In no event shall the
operation of the COGENERATION FACILITY result in total harmonic distortion as
defined by NEMA MG 1-22, as revised, greater than-five percent (5%) of the
fundamental component as measured at the POINT OF INTERCONNECTION.
ARTICLE X
METERING/RECORDS
PSE&G shall install, own, operate and maintain an electricity recording
meter at the SUBSTATION FACILITY which, in the judgment of PSE&G, is required or
necessary to enable PSE&G to make an accurate measurement of the quantity of NET
ELECTRICAL POWER OUTPUT received at the RECEIPT POINT from the COGENERATION
FACILITY. The electricity recording meter shall be of a type suitable for
interconnection billing purposes. The electricity recording meter, as installed,
shall have full load and light load "as left" accuracies that do not deviate
more than (plus or minus) 0.3% from 100%. The lag load "as left" accuracy shall
be within 0.5% of the full load accuracy. PSE&G shall operate and maintain such
electricity recording meter so as to assure, to the maximum extent practicable,
that such meter provides an accurate record of the quantities supplied to and
received by PSE&G at the RECEIPT POINT from the COGENERATION FACILITY.
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PSE&G shall designate, select and specify all associated electricity
recording equipment (Associated Equipment) required by PSE&G to make measurement
of the NET ELECTRICAL POWER OUTPUT supplied by SELLER to the RECEIPT POINT,
including but not limited to current transformers, potential transformers,
conduits, cables and accessories. PSE&G shall purchase and arrange for the
delivery of such Associated Equipment to SELLER at the PROJECT for installation
by SELLER at SELLER's expense. PSE&G shall own, operate and maintain such
Associated Equipment.
The costs of the electricity recording meter and Associated Equipment
described in the preceding two paragraphs shall be paid by SELLER as a cost
associated with the design, construction and installation of the INTERCONNECTION
as provided in and in accordance with ARTICLE VII.
PSE&G shall have the right to secure and safeguard the electricity
recording meter and Associated Equipment installed and maintained at the
SUBSTATION FACILITY. Neither SELLER nor any person, other than PSE&G, shall be
permitted to operate, maintain, repair, alter, remove, replace, rearrange,
reconstruct, relocate, tamper or interfere with in any way said meter or
Associated Equipment.
Unless otherwise agreed to by PSE&G and/or except as otherwise provided in
this AGREEMENT, PSE&G's electricity recording meter shall be utilized for the
determination of
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the monthly charges reflected in any billing statement submitted to SELLER for
payment under this AGREEMENT.
SELLER may install, own, operate and maintain, its own expense, an at
electricity recording meter and Associated Equipment at the SUBSTATION FACILITY
or measuring and recording the quantity of NET ELECTRICAL POWER OUTPUT received
by PSE&G at the RECEIPT POINT from the COGENERATION FACILITY; provided that the
installation, operation and/or maintenance of such equipment does not utilize or
connect to PSE&G's electricity recording meter or Associated Equipment and does
not interfere, in any way, with the operation of such meter or equipment.
Unless otherwise agreed to by PSE&G and/or except as otherwise provided in
this AGREEMENT, the electricity recording meter installed and maintained by
SELLER at the SUBSTATION FACILITY shall not be utilized for any determination of
the charges to be included in any statement submitted to SELLER for payment by
PSE&G under this AGREEMENT.
The accuracy of PSE&G's electricity recording meter shall be verified by
PSE&G by testing once each year. Such accuracy test shall be conducted in
accordance with the standards set forth in the American National Standard Code
for Electricity Metering. Reasonable advance notice of such accuracy test(s)
shall be given by PSE&G to SELLER. SELLER representatives may attend any such
accuracy test. In the event SELLER's representatives elect to be present at any
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accuracy test, the test and any necessary adjustment to the electricity
recording meter shall be made in the presence of and observed by SELLER
representatives. SELLER may, for good cause, request PSE&G to conduct an
accuracy test of PSE&G's electricity recording meter. In the event good cause is
shown, PSE&G shall conduct an accuracy test at SELLER's request. Any cost or
expense associated with any accuracy test performed by PSE&G on PSE&G's
electricity recording meter shall be billed to and paid by SELLER; provided,
however, in the event an accuracy test is conducted in connection with a billing
dispute and PSE&G's electricity recording meter is determined as a result of
such test to be registering inaccurately in excess of one percent (1%), PSE&G
shall pay the costs of such accuracy test.
The accuracy of any electricity recording meter maintained by SELLER at the
SUBSTATION FACILITY shall be verified by test at least once each year. Such
accuracy test shall be conducted in accordance with the standards set forth in
the American National Standard Code for Electricity Metering. SELLER shall
establish, at the time of installation, and maintain the accuracy of such
electricity recording meter in accordance with the standard of accuracy set
forth in the American National Standard Code for Electricity Metering.
Reasonable advance notice of such accuracy test(s) shall be given by SELLER to
PSE&G. PSE&G may attend any such accuracy test(s). PSE&G may, for good
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cause, request SELLER to conduct or have conducted an accuracy test(s) of
SELLER's electricity recording meter. In the event good cause is shown, SELLER
shall conduct or have conducted an accuracy test of SELLER's electricity
recording meter. Any cost or expense associated with any accuracy test(s) shall
be paid by SELLER, except where such test(s) was conducted at PSE&G's request.
In the event PSE&G's electricity recording meter is out of service or is
registering inaccurately, the amount of inaccuracy shall be determined and such
meter shall be repaired, replaced and/or adjusted so as to accurately measure
the NET ELECTRICAL POWER OUTPUT supplied by SELLER to the RECEIPT POINT. Any
meter reading(s) and statement(s) for the period of the inaccuracy shall be
adjusted so as to reflect any correction of such inaccuracy as far as such
inaccuracy can be reasonably ascertained; provided, however, no adjustment shall
be made in any meter reading(s) nor shall any billing statement be adjusted for
or on account of a registration inaccuracy of one percent (1%) or less.
In the event a registration inaccuracy of greater than one percent (1%) is
found on PSE&G's electricity recording meter, a billing adjustment shall be
made. The billing adjustment shall be made for the period of inaccuracy, if
ascertainable, or in the event the period of the inaccuracy cannot be reasonably
ascertained, the period of inaccuracy shall be deemed to have encompassed one-
half (1/2) of the time period since the last accuracy test of the
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meter (hereinafter referred to as the Surrogate Period). The quantities
delivered for the period of inaccuracy, if ascertainable, or, if not
ascertainable, the Surrogate Period, shall be determined and adjustments made
for billing purposes by determining or estimating the quantity received by PSE&G
during the relevant period from the best available source/data, which
source/data may include but not be limited to: (i) registration data obtained
from the electricity recording meter maintained by SELLER at the SUBSTATION
FACILITY; and/or (ii) receipts by PSE&G during an equivalent or similar period
when such meter was registering accurately; and/or (iii) correction of the
error, if the percentage of error is ascertainable, by calibration, test or
mathematical calculation; provided, however, in the event SELLER metering
equipment meets applicable PSE&G standards and PSE&G determines that such
equipment has been installed, operated and maintained in accordance with
applicable PSE&G standards/practices/procedures, the period of inaccuracy and
the quantities delivered for such period shall be determined and the
adjustment(s) made for payment purposes solely by reference to SELLER
electricity recording equipment.
PSE&G and SELLER shall retain the records each prepares and maintains in
the ordinary course of business relative to the amount of NET ELECTRICAL POWER
OUTPUT produced by the COGENERATION FACILITY and supplied to and received by
PSE&G at the RECEIPT POINT and any records each prepares and maintains relative
to any maintenance, repair
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or testing of any electricity measuring meter maintained at the SUBSTATION
FACILITY. The records possessed by one party shall be made available for
inspection by the other party upon reasonable notice of request therefor. All
such records shall be maintained for a period of six (6) years.
SELLER shall install equipment at the PROJECT to enable a measurement of
the following electrical quantities: (i) gross real electrical power output of
each COGENERATION FACILITY generator; (ii) gross reactive electrical power
output of each COGENERATION FACILITY generator; (iii) terminal voltage of each
COGENERATION FACILITY generator; (iv) voltage at the POINT OF INTERCONNECTION;
(v) real power flow on the INTERCONNECTION at the POINT OF INTERCONNECTION; (vi)
reactive power flow on the INTERCONNECTION at the POINT OF INTERCONNECTION; and
(vii) kilowatthours of NET ELECTRICAL ENERGY received by PSE&G at the POINT OF
INTERCONNECTION. PSE&G shall designate, select and specify the equipment to be
installed at the PROJECT to enable a measurement of the aforementioned
electrical quantities. PSE&G shall purchase and arrange for the delivery of such
equipment to SELLER at the PROJECT for installation by SELLER at SELLER's
expense. The costs of such equipment shall be paid by SELLER as a cost
associated with the design, construction and installation of the INTERCONNECTION
as provided in and in accordance with ARTICLE VII of this AGREEMENT. PSE&G shall
operate and maintain the equipment installed to measure the electrical
quantities specified in
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this paragraph. SELLER shall pay PSE&G for any costs associated with the
operation and maintenance and/or repair of such equipment. SELLER shall pay any
billing for operation and maintenance of such equipment within thirty (30) days
of the date of the billing.
SELLER shall be permitted to synchronize any electric generation unit with
the PUBLIC SERVICE SYSTEM if, but only if, the equipment PSE&G has directed
SELLER to install, pursuant to the preceding paragraph, has been installed, has
been inspected by PSE&G and pursuant to such inspection, such installation is
determined by PSE&G to meet applicable standards for operation. PSE&G shall
conduct and complete the inspection of such installation within fifteen (15)
working days of receipt of notice from SELLER that the installation of the
equipment has been completed and is available for inspection. In the event PSE&G
determines, as a result of its inspection of the installation, that such
installation does not meet applicable standards for operation, PSE&G shall,
within five (5) working days, furnish written notice to SELLER of such fact
setting forth the basis for the determination and any corrective actions SELLER
will be required to take to make the installation acceptable to PSE&G.
Additionally, SELLER shall: (i) lease, at its expense, a telephone circuit
or otherwise establish a telecommunications link(s) to permit telemetering by
means of both digital data links and analog signals, of the
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measurements of the electric quantities as specified in this AGREEMENT at
PSE&G's Electric System Operations Center in Newark, New Jersey; (ii) pay the
costs associated with the installation by PSE&G of equipment required (a) to
provide an indication at PSE&G's Electric System Operations Center of the status
of circuit breakers at the COGENERATION FACILITY and SUBSTATION FACILITY; (b) to
provide an alarm indication of hard lockout relays; and (c) to enable PSE&G to
open circuit breaker(s) or other switching equipment at the SUBSTATION FACILITY
through supervisory control from PSE&G's Electric System Operations Center to
permit the rapid separation of the PROJECT from the PUBLIC SERVICE SYSTEM; and
(iii) pay the costs associated with the purchase and installation of equipment
for the purpose of integrating any telemetered information into PSE&G's Electric
System Operations Center, including the cost of equipment necessary to receive,
display, record and process such telemetered information.
The costs described in subparagraphs (ii) and (iii) in the preceding
paragraph shall be paid by SELLER as a cost associated with the design,
construction and installation of the INTERCONNECTION as provided in and in
accordance with ARTICLE VII of this AGREEMENT. Such equipment shall be owned,
operated and maintained by PSE&G.
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ARTICLE XI
USE OF THE PUBLIC SERVICE SYSTEM
The nature and extent of and the terms and conditions relating to SELLER's
use of the PUBLIC SERVICE SYSTEM are set forth in their entirety in this
AGREEMENT. Except as otherwise provided in and pursuant to the terms and
conditions of any applicable PSE&G Tariff on file with the NJBPU or the FERC,
SELLER shall not be permitted to use the PUBLIC SERVICE SYSTEM nor shall PSE&G
be obligated to provide any service to SELLER, other than as provided in this
AGREEMENT. Any rights to or interest in the PUBLIC SERVICE SYSTEM which SELLER
has or may claim as a result of this AGREEMENT shall cease or expire upon
termination of this AGREEMENT.
ARTICLE XII
EASEMENTS
Except as otherwise specifically provided in this ARTICLE XII, PSE&G shall
acquire any permit(s), easement(s), license(s), rental(s) or right(s)-of-way
necessary to interconnect the PROJECT with the PUBLIC SERVICE SYSTEM. Any costs
associated with the acquisition of any such easement(s), license(s), rental(s)
or right(s)-of-way of a non-recurring nature shall be billed to and paid by
SELLER as a cost associated with the design, construction and installation of
the INTERCONNECTION in accordance with ARTICLE VII of this AGREEMENT. Any costs
associated with
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the acquisition of any easement(s), license(s), rental(s) or right(s)-of-way of
a recurring nature associated with the acceptance of the COGENERATION FACILITY's
NET ELECTRICAL POWER OUTPUT under this AGREEMENT shall be billed to SELLER and
SELLER shall make payment for any billing of any such recurring costs within
thirty (30) days of the receipt thereof.
In order to interconnect the PROJECT with the PUBLIC SERVICE SYSTEM, PSE&G
may be required to maintain certain facilities and equipment on property owned
by SELLER. In such event and to enable PSE&G to operate, maintain, repair,
reinforce, rearrange, replace, relocate or remove the facilities and equipment
necessary to effect, operate and maintain an interconnection between the PROJECT
and the PUBLIC SERVICE SYSTEM, SELLER shall obtain from XXXXXXXX for conveyance
to PSE&G an easement to the property owned by the XXXXXXXX for a term, i.e., a
duration and in a form and containing terms and conditions acceptable to and
approved by PSE&G. The easement, inter alia, shall permit PSE&G, its agents,
servants and employees, at any time upon reasonable notice, to have access to
such property so as to permit PSE&G, its agents, servants and/or employees to
perform any tasks associated with any incident to the operation, maintenance,
repair, reinforcement, rearrangement, relocation and/or removal of the
facilities and equipment necessary to effect, operate and maintain the
interconnection of the PROJECT with the PUBLIC SERVICE SYSTEM.
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ARTICLE XIII
PERMITS/APPROVALS
PSE&G shall proceed with and use best efforts to obtain any REQUIRED
PERMIT. In the event a third-party files any pleading with any regulatory or
other governmental body or institutes a suit at law or in equity challenging the
right of PSE&G to receive any REQUIRED PERMIT or in the event any such body
challenges the propriety of the issuance to PSE&G of any REQUIRED PERMIT, PSE&G
shall not be obligated to commence or, in the event construction has commenced,
to complete construction of the INTERCONNECTION until PSE&G obtains a final and
non-appealable order/judgment relative to the issuance of such REQUIRED PERMIT
or, in the event of a challenge to the issuance thereof, a final and non-
appealable order/judgment upholding the issuance of any REQUIRED PERMIT. SELLER
agrees to cooperate fully with PSE&G to the extent PSE&G deems such cooperation
necessary to secure any REQUIRED PERMIT and/or, in the event same is secured,
to defend the issuance of any REQUIRED PERMIT.
However, in the event the issuance to PSE&G of any REQUIRED PERMIT is
challenged by a third-party and a final and non-appealable order/judgment has
not been issued in connection with such challenge and, absent an order
restraining such further construction, PSE&G shall be obligated to commence or
complete construction of the INTERCONNECTION, despite the absence of a final and
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non-appealable order/judgment relative to such challenge, if, but only if:
(i) SELLER submits a request in writing to PSE&G requesting PSE&G to
commence or complete construction of the INTERCONNECTION; and
(ii) SELLER agrees in such writing to indemnify and hold harmless PSE&G and
each and every of its officers, agents, servants and employees, its
successors and assigns, from and against any and all claims, demands,
suits, actions and liabilities, losses, damages, and/or judgments, which
may arise from the particular action being challenged as well as against
any fees, costs, charges or expenses which PSE&G, its officers, agents,
servants and employees, its successors and assigns incur in the defense
of any such claims, suits, actions or similar such demands made or filed
by any third party which in any manner arise out of, relate to, or result
from PSE&G's actions which are being challenged.
PSE&G shall not be obligated to commence or complete construction of the
INTERCONNECTION in the event issuance of any REQUIRED PERMIT is denied to PSE&G.
Further, PSE&G shall not be obligated to commence or complete construction in
the event that any decision of any governmental body to issue any REQUIRED
PERMIT is overturned by any court or regulatory body or any court or regulatory
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body has issued a stay, pending a final adjudication of a challenge, prohibiting
construction activity under any REQUIRED PERMIT issued to PSE&G.
Any cost(s) and/or expense(s) associated with obtaining such REQUIRED
PERMIT and/or any cost(s) and/or expense(s) associated with defending the
issuance of any such REQUIRED PERMIT shall be paid by SELLER as a cost/expense
associated with the design, construction and installation of the INTERCONNECTION
as provided in and in accordance with ARTICLE VII of this AGREEMENT.
ARTICLE XIV
DEDICATION OF FACILITIES
No undertaking by PSE&G under any provision of this AGREEMENT shall
constitute the dedication to SELLER or to the public of the PUBLIC SERVICE
SYSTEM.
ARTICLE XV
REARRANGEMENT
PSE&G represents to SELLER that it has no present plans or intention to
convert its PUBLIC SERVICE SYSTEM in the area of the PROJECT to a higher
voltage. However, in the event PSE&G should decide, for cause, at any time or
from time to time to convert the PUBLIC SERVICE SYSTEM at the point of
connection of the PROJECT to the PUBLIC SERVICE SYSTEM, or in the vicinity
thereof, to a different voltage PSE&G shall advise SELLER in writing as soon as
PSE&G shall
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make such decision, but at least three (3) years in advance of making any such
conversion. SELLER shall have no obligation to pay for any of the costs
associated with the conversion of the PUBLIC SERVICE SYSTEM (including the
INTERCONNECTION) to a higher voltage. However, SELLER shall be obligated to
install and shall be responsible to pay for the facilities and equipment
required to be installed at the PROJECT to continue the interconnected operation
of the PUBLIC SERVICE SYSTEM and the COGENERATION FACILITY. Additionally, SELLER
shall be responsible to pay for any modification to or replacement of any PSE&G
electricity recording meter and associated electricity recording equipment which
PSE&G requires to be modified or replaced at the SUBSTATION FACILITY as a
consequence of any such conversion. Unless other billing and payment
arrangements are mutually agreed upon by PSE&G and SELLER, SELLER shall be
billed and shall pay any billing(s) for such costs as such costs are incurred by
PSE&G, in accordance with ARTICLE VII of this AGREEMENT. Cause, as specified in
this ARTICLE, shall include but not be limited to obsolescence, changing
patterns of demand and usage of electric power and energy by PSE&G's retail and
sale-for-resale customers or physical destruction of plant, whether the result
of deterioration or casualty.
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ARTICLE XVI
COGENERATION FACILITY/SUBSTATION FACILITY
In view of PSE&G's statutory obligations to its retail and sale-for-resale
customers, PSE&G has adopted general requirements relative to the construction
of generation and substation facilities by others. These requirements have been
adopted by PSE&G to ensure that any facilities a party plans to construct for
connection to the PUBLIC SERVICE SYSTEM are designed, constructed and installed
so as to be compatible with the PUBLIC SERVICE SYSTEM and to ensure that
operation of these facilities does not adversely affect the integrity,
reliability and/or safe operation of any interconnection facility and/or the
PUBLIC SERVICE SYSTEM. In connection with the construction of such facilities,
PSE&G requires that the plans and specifications for such generation and
substation facilities be submitted to PSE&G for review prior to the design,
construction and installation of these facilities solely to enable PSE&G to
determine, and thus ensure, that the contemplated design, construction and
installation for such facilities comport with the aforementioned requirements.
SELLER shall, at its own expense, design, construct, install, own/lease,
operate and maintain the COGENERATION FACILITY and SUBSTATION FACILITY. In order
to fulfill its obligation to supply, SELLER shall use its best efforts to secure
financing on terms acceptable to SELLER in its sole discretion and, upon
securing financing, use best
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efforts to: (i) initiate the tasks required to obtain any REQUIRED PERMIT,
easement(s), license(s), rental(s) or right(s)-of-way for the construction and
installation of the PROJECT; and (ii) complete the design, construction and
installation of the PROJECT.
Prior to or in connection with execution of this AGREEMENT, a copy of
"Interconnection Protection and Safety Requirements and Standards for Customer-
Owned Generating Facilities" (Exhibit 2) has been furnished to SELLER. SELLER
shall design, construct and install the COGENERATION FACILITY consistent with
the requirements set forth in Exhibit 2. Deviations from the requirements set
forth in Exhibit 2, relative to the design, construction and installation of the
COGENERATION FACILITY, may be permitted; provided, however, any deviation
therefrom must be submitted to and accepted by PSE&G. Notwithstanding any
implication to the contrary contained in this ARTICLE, the right of acceptance
by PSE&G with respect to the COGENERATION FACILITY, as specified by this ARTICLE
shall be limited to a determination as to whether the design of the COGENERATION
FACILITY is consistent with the requirements contained in Exhibit 2.
As soon as practicable after execution of this AGREEMENT, SELLER shall
furnish to PSE&G the following:
A. Plans and specifications for the COGENERATION FACILITY and SUBSTATION
FACILITY.
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B. Single line diagram and details of the proposed protection schemes.
C. Instruction manuals for all protective components.
D. Component specifications and internal wiring diagrams of protection
components if not provided in instruction manuals.
E. All protective equipment ratings if not provided in instruction manuals.
F. Generator data required to analyze fault contributions and load flows,
including, but not limited to, equivalent impedances and time constants.
Subsequent to submission to and review by PSE&G of Items A through F
enumerated above, PSE&G shall prepare and submit to SELLER "Recommendations and
Specifications for a 69,000-Volt Customer Substation" (hereinafter referred to
as Recommendations). SELLER shall design the facilities and equipment for the
69kV SUBSTATION FACILITY consistent with the requirements set forth in
Recommendations. After preparation of the plans and specifications for the
facilities and equipment for the 69kV SUBSTATION FACILITY, SELLER shall submit
same to PSE&G for its review and acceptance. The plans and specifications for
the SUBSTATION FACILITY may deviate from the requirements set forth in
Recommendations; provided, however, any deviation therefrom must be submitted
and be acceptable to PSE&G. The final plans and specifications relating to the
design of the
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facilities and equipment for the 69kV SUBSTATION FACILITY must be submitted to
and accepted by PSE&G in accordance with the provisions of this ARTICLE XVI. The
SUBSTATION FACILITY, as completed, shall be consistent with the final plans and
specifications submitted to and accepted by PSE&G.
PSE&G shall use best efforts to complete any review of any submissions made
to PSE&G by SELLER pursuant to and in accordance with the provisions of this
ARTICLE XVI within thirty (30) days of receipt of any such submission.
Prior to the DATE Of INITIAL OPERATION, PSE&G will perform the functional
tests on the relays required by PSE&G located in the SUBSTATION FACILITY. PSE&G
will specify and effect the settings of such relays. During the term of this
AGREEMENT, PSE&G shall have access to and the right to inspect and perform
scheduled maintenance on such relays as well as the right to readjust the
settings of such relays as required.
Upon completion of the INTERCONNECTION, the PUBLIC SERVICE SYSTEM shall be
available for and capable of accepting NET ELECTRICAL POWER OUTPUT of SELLER.
Thereafter, SELLER shall notify PSE&G when SELLER decides to place any electric
generation unit(s) into INITIAL OPERATION. At that time, SELLER shall permit
PSE&G to examine the SUBSTATION FACILITY and such electric generation unit(s) to
enable PSE&G to determine whether the SUBSTATION FACILITY and the electric
generation unit(s) satisfy the final plans and specifications submitted to and
accepted by
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PSE&G and the requirements contained in Exhibit 2, respectively. PSE&G shall be
obligated to synchronize any electric generation unit with the PUBLIC SERVICE
SYSTEM and receive electric power and energy from the COGENERATION FACILITY at
the RECEIPT POINT from any such electric generation unit at the PROJECT if but
only if: (i) PSE&G has determined, after inspection, that the SUBSTATION
FACILITY has been completed and the construction and installation thereof has
been effected consistent with and in accordance with the final plans and
specifications therefor which have been submitted to and accepted by PSE&G;
(ii) SELLER has made the installation at the SUBSTATION FACILITY required by
ARTICLE X and the installation meets the standards set forth in that ARTICLE;
(iii) PSE&G has examined and pursuant to such examination determined that any
electric generation unit(s) being placed into INITIAL OPERATION satisfies the
requirements contained in Exhibit 2; and, (iv) SELLER has the installation
inspected and approved by an electrical inspection authority approved by the New
Jersey Department of Community of Affairs and receives and furnishes
satisfactory evidence to PSE&G of issuance of a Certificate of Approval relative
to the inspection. Thereafter, PSE&G shall permit synchronization of any such
electric generation unit(s) with the PUBLIC SERVICE SYSTEM and shall be
obligated, at SELLER's request, to commence receipt of electric power and energy
supplied to the RECEIPT POINT from any such electric generation unit(s).
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As SELLER decides to place other electric generation unit(s) into INITIAL
OPERATION, SELLER shall notify PSE&G and permit PSE&G to conduct an examination
thereof to determine whether same satisfies the requirements set forth in
Exhibit 2. SELLER shall not be permitted to synchronize such electric generation
unit(s) with the PUBLIC SERVICE SYSTEM nor shall PSE&G be obligated to receive
electrical power and energy supplied to the RECEIPT POINT from such electric
generation unit(s) unless and until: (i) PSE&G has examined, and pursuant to
such examination, determines that such successively completed electric
generation unit(s) satisfies the requirements set forth in Exhibit 2; and (ii)
SELLER has the installation inspected and approved by an electrical inspection
authority approved by the New Jersey Department of Community Affairs and
receives and furnishes satisfactory evidence to PSE&G of issuance of a
Certificate of Approval. Thereafter, PSE&G shall permit SELLER to synchronize
such electric generation unit(s) with the PUBLIC SERVICE SYSTEM and PSE&G shall
be obligated to receive electrical power and energy supplied to the RECEIPT
POINT from such electric generation unit(s).
SELLER shall not synchronize any electric generation unit(s) with the
PUBLIC SERVICE SYSTEM at any time without notification to and without obtaining
the consent of PSE&G, which consent shall not be withheld except pursuant to and
in accordance with the provisions of ARTICLE X and this ARTICLE XVI.
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Upon appropriate notification by SELLER, PSE&G shall use best efforts to
conduct and complete any examination of the COGENERATION FACILITY, SUBSTATION
FACILITY required under the provisions of this ARTICLE within fifteen (15)
business days. PSE&G shall not unreasonably delay any such examination nor
unreasonably withhold any acceptance required to trigger the DATE OF INITIAL
OPERATION. PSE&G's acceptance of the COGENERATION FACILITY and SUBSTATION
FACILITY consistent to and in accordance with the provisions of this ARTICLE
shall constitute the agreement required by PSE&G to trigger the DATE OF INITIAL
OPERATION.
After the DATE OF INITIAL OPERATION, SELLER shall not rearrange,
reconfigure, modify, alter or change in a material way: (i) the SUBSTATION
FACILITY without notice to and the acceptance by PSE&G of such rearrangement,
reconfiguration, modification, alteration or change which acceptance will not be
unreasonably delayed or withheld; or, (ii) any electric generation unit(s)
without notice to and acceptance by PSE&G of such rearrangement,
reconfiguration, modification, alteration or change, which acceptance will not
be unreasonably delayed or withheld and shall be governed by the requirements
specified in Exhibit 2.
Any review made by PSE&G of the Plans and Specifications of the
COGENERATION FACILITY or SUBSTATION FACILITY or any examination made by PSE&G of
the actual design, construction and/or installation of the COGENERATION
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FACILITY or SUBSTATION FACILITY and/or any determination made by PSE&G in
connection with any such review of examination shall be solely for the purpose
of permitting PSE&G, consistent with its statutory obligations to its retail and
sale-for-resale customers, to: (i) determine whether the design, construction
and installation of such facilities are compatible with the PUBLIC SERVICE
SYSTEM; and (ii) ensure that operation of the COGENERATION FACILITY and
SUBSTATION FACILITY will not adversely affect the integrity, reliability or safe
operation of the PUBLIC SERVICE SYSTEM.
PSE&G's review or examination, and any determination made in connection
therewith, is not intended to be, nor will same be made by PSE&G for the purpose
of, nor should same be interpreted, construed and/or relied upon by SELLER, or
any other person or entity, as an endorsement, approval, confirmation and/or
warranty of or by PSE&G relative to any aspect of the design, construction or
installation of SELLER's facilities, reliability, economic performance and/or
their safety, and/or technical feasibility, operational capability and/or the
suitability of same for their intended purpose(s). SELLER shall not represent to
any third-party that PSE&G's review was undertaken for any reason other than the
reasons expressly stated in this ARTICLE.
SELLER shall permit PSE&G, its officers, agents, servants and employees,
its successors and assigns, when and
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as requested, access to, egress and ingress, from and over the PROJECT, at any
time and upon reasonable notice, as same may be necessary or required by PSE&G,
to permit PSE&G, its officers, agents, servants and employees, its successors
and assigns, to take any action necessary to discharge its obligations or to
exercise its rights under this AGREEMENT, including but not limited to access
to: (i) permit PSE&G to examine, inspect, test, operate, maintain, repair,
remove, rearrange and/or replace its electricity recording equipment and
associated electricity measuring equipment; (ii) permit PSE&G to perform
switching operations on switchgear located in the SUBSTATION FACILITY; and (iii)
permit PSE&G to examine, inspect, test and set protective relays required by
PSE&G. SELLER shall not deny, refuse or delay PSE&G's access to the PROJECT,
provided that while at the PROJECT such PSE&G representatives shall observe such
reasonable safety precautions as may be required by SELLER.
ARTICLE XVII
LIABILITY
Neither Party nor its officers, directors, partners, agents, servants,
employees, affiliates, parent, subsidiaries or respective successors or assigns
shall be liable to the other Party (except for Replacement Energy and Capacity
Costs as provided for in ARTICLE IV of this AGREEMENT or as otherwise provided
in this AGREEMENT) for claims for incidental, special, direct, indirect or
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consequential damages (Damages) whether such Damages claim is based on a cause
of action based in warranty, negligence, strict liability, contract, operation
of law or otherwise except where such claim for Damages arises out of, relates
to or results from the gross negligence of such Party or the willful disregard
by a Party of its obligations under this AGREEMENT; provided, however, each
Party shall have the right to seek to recover from the other Party direct
damages upon the occurrence of a breach of this AGREEMENT as defined in and
which has been established pursuant to and in accordance with ARTICLE XXIV of
this AGREEMENT.
ARTICLE XVIII
FORCE MAJEURE
An event of "Force Majeure" as used herein means an event beyond the
reasonable control of and which occurs without the fault or negligence of the
Party claiming Force Majeure which events may include but are not limited to:
acts of God; strikes, lockouts or other similar such industrial disturbances;
acts of the public enemy, wars, civil disturbances, blockades, military actions,
insurrections or riots; landslides, floods, washouts, lightning, earthquakes,
tornadoes, hurricanes, blizzards or other storms or storm warnings; explosions,
fires, sabotage or vandalism; mandates, directives, orders or restraints of any
governmental, regulatory or judicial body or agency (other than mandates,
directives, orders or restraints
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either sought, approved or not contested by the party asserting Force Majeure or
issued in any bankruptcy or insolvency proceeding for the relief the party
asserting Force Majeure); breakage, defects, malfunctioning, or accident to
machinery, equipment, materials or lines of pipe or wires; freezing of
machinery, equipment, materials or lines of pipe or wires; inability or delay in
the obtaining of materials or equipment; inability to obtain or utilize any
permit, approval, easement, license or right-of-way. The settlement of strikes,
lockouts or other similar such industrial disturbances shall be entirely within
the discretion of the Party directly affected. The requirement herein that any
event of Force Majeure shall be remedied with all reasonable dispatch shall not
require the settlement of strikes, lockouts or other similar such industrial
disturbances when such course is, in the opinion of the Party directly affected,
inadvisable.
Notwithstanding this ARTICLE XVIII, for purposes of determining SELLER's
payment of Replacement Energy and Replacement Capacity Costs as provided in
ARTICLE IV, Section G, an event of Force Majeure shall not include equipment
failures due to (a) wear and tear and (b) defects in manufacture, design or
construction.
In the event PSE&G or SELLER is rendered unable, wholly or in part, by an
event of Force Majeure, to perform any obligation it has under this AGREEMENT,
it is agreed that, on PSE&G or SELLER giving notice and full particulars
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of such event of Force Majeure to the other Party, as soon thereafter as
practicable, the obligations of PSE&G or SELLER, so far as they are affected by
such event of Force Majeure, shall be suspended during the continuance of any
inability or incapacity so caused, but for no longer period; provided however,
neither Party shall be relieved from any obligation to make payment to the other
for expenses already incurred. PSE&G or SELLER shall use best efforts to remedy
the cause of such inability or incapacity with all reasonable dispatch.
Neither Party shall be liable to the other for any claim(s), loss(es),
damage(s), liability(ies) or expense(s) sustained or incurred by PSE&G or
SELLER, arising out of, relating to, or resulting from PSE&G's or SELLER's
inability or incapacity to perform its obligations under this AGREEMENT due to
any event of Force Majeure, as herein defined.
ARTICLE XIX
PROTECTIVE DEVICES
SELLER has been advised and acknowledges that actions, conditions, and/or
events on the PUBLIC SERVICE SYSTEM may adversely impair PROJECT operations
and/or PROJECT and/or XXXXXXXX equipment and facilities. As such, SELLER agrees
to install, operate and maintain protective devices at the PROJECT and institute
and maintain procedures to minimize damage to PROJECT and/or XXXXXXXX equipment
and
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facilities and to minimize any interruption in the supply of steam to XXXXXXXX,
arising as a result of the occurrence of any such PUBLIC SERVICE SYSTEM (or PJM
System) condition.
ARTICLE XX
INDEMNIFICATION
Each Party shall indemnify and hold harmless the other Party and each and
every of its officers, agents, servants and employees, its successors and
assigns of, from and against any and all claims, demands and suits, actions, and
liabilities, losses, damages, and/or judgments, which may arise therefrom, as
well as against any fees, costs, charges or expenses which PSE&G or SELLER, its
officers, agents, servants and employees, its successors and assigns, incur in
the defense of any such claims, suits, actions or similar such demands made or
filed by any third-party, which in any manner arise out of, relate to, or result
from negligence, strict liability or breach of this AGREEMENT by the
indemnifying Party including but not limited to the design, construction,
engineering, installation, operation, maintenance, repair, replacement,
supervision, inspection, testing, protection, reinforcement, reconstruction,
decommissioning, removal, use, control or ownership of its facilities.
In case a claim is asserted or action brought against either Party as to
which it believes it is entitled to indemnification under this ARTICLE XX, the
party seeking
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indemnification shall promptly notify the other in writing of such claim or
action. Prompt notice as contemplated in the preceding sentence shall mean such
notice as would be required to enable the indemnitor to assert and prosecute
appropriate defenses relative to such claim or such action in a timely fashion.
If the Party seeking indemnification fails to give the other Party prompt notice
of any claim or action as provided in this Paragraph, that Party shall have no
obligation to indemnify pursuant to this ARTICLE XX. Upon receipt of such
notice request for indemnification, that Party shall promptly make a
determination of whether it believes is required to indemnify and shall promptly
notify the Party seeking indemnification in writing of that determination. If
the Party to whom such notice and request is directed determines that it is
required to indemnify the other Party pursuant to this ARTICLE XX, it shall
assume the defense of such claim or action, including the employment of counsel
and shall assume thereafter the payment of all costs and expenses relative to
the defenses of such claim or action. The non indemnifying Party shall cooperate
in all reasonable respects with the indemnifying Party in the defense of such
claim or action. The non indemnifying Party shall have the right, at its own
expense, to employ separate counsel in any such action and to participate in the
defense thereof. The indemnifying Party shall not be liable for any settlement
of any such claim or action effected without its consent. Before settling any
claim or action, the
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indemnifying Party shall demonstrate to the other that it has sufficient
financial means or has made adequate arrangements to make all payments under any
such settlement as and when due.
ARTICLE XXI
INSURANCE
At or prior to closing of the LOAN AGREEMENT, SELLER shall obtain and
maintain in force as hereinafter provided, property insurance, comprehensive
general liability insurance, including contractual liability coverage with a
combined single limit of not less than five million dollars ($5,000,000) for
each occurrence, to the extent commercially available on reasonable terms.
SELLER shall also obtain and maintain in force a xxxxxxx'x compensation or
employee's liability insurance policy in accordance with applicable New Jersey
statutory requirements. The insurance carrier or carriers and form of policy
shall be subject to prior review and approval of PSE&G to assure compliance with
provisions of this Paragraph, and shall be furnished by SELLER to PSE&G within
thirty (30) days of the closing of the LOAN AGREEMENT and thereafter on or
before January 1 of each year until this AGREEMENT is terminated. SELLER hereby
agrees to provide PSE&G with at least thirty (30) days notice of:
(i) the cancellation of any policy of insurance required by this
ARTICLE; or
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(ii) the reduction of any coverage below the levels required by this
ARTICLE.
SELLER shall also provide to PSE&G fifteen (15) days prior to the Commencement
of Construction evidence of satisfactory xxxxxxx'x compensation coverage.
Prior to the date SELLER's FACILITY is first operated in parallel with
PSE&G's electric system, SELLER shall furnish certificate of insurance to PSE&G
which certificate shall provide that such insurance shall not be terminated nor
expire except. upon thirty (30) days prior written notice to PSE&G, and shall
bear in substance the following clauses:
A. In consideration of the premium charged, PSE&G is named as an additional
insured on SELLER's comprehensive general liability insurance with respect
to all covered liabilities arising out of SELLER's use and ownership of
SELLER's COGENERATION FACILITY.
B. The inclusion of more than one insured under this policy shall not operate
to impair the rights of one insured against another insured; and the
coverages afforded by this policy will apply as though separate policies
had been issued to each insured. The inclusion of more than one insured
will not, however, operate to increase the limit of the carriers'
liability. PSE&G will not, by reason of its inclusion under this policy,
incur
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liability to the insurance carrier for payment of premium for this policy.
C. Any other insurance carried by PSE&G which may be applicable shall be
deemed excess insurance and SELLER's insurance primary for all purposes
despite any conflicting provision in SELLER's policy to the contrary.
D. It is expressly agreed and understood that the insurer(s) of SELLER's
COGENERATION FACILITY, naming PSE&G as an additional insured, shall waive
any right it has to subrogation with respect to PSE&G.
SELLER shall maintain such insurance in effect for so long as SELLER's
COGENERATION FACILITY is operated in parallel with PSE&G's electric system. If
SELLER fails to comply with the provisions of this Section, SELLER shall, at its
own cost, defend, indemnify, and hold harmless PSE&G, its directors, officers,
employees, agents, assigns, and successors in interest from and against any and
all loss, damage, claim, cost, charge, or expense of any kind of nature
(including direct, indirect, or consequential loss, damage, claim, cost, charge,
or expense, including attorney's fees and other costs of litigation) resulting
from the death or injury to any person or damage to any property, including the
personnel and property of PSE&G, to the extent that PSE&G would have been
protected had SELLER complied with all of the provisions of this ARTICLE.
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ARTICLE XXII
WARRANTIES
Except with respect to any lien possessed by a FINANCIER, SELLER warrants
and shall be obligated to supply to the RECEIPT POINT NET ELECTRICAL POWER
OUTPUT free and clear of any liens and/or adverse claims which might attach to
said electric power and energy prior to its supply to and receipt by PSE&G.
SELLER agrees to indemnify and hold harmless PSE&G against any and all claims,
demands, suits, actions, costs, and liabilities, damages, losses and/or
judgments arising out of, relating to or resulting from any such adverse claim
or lien, as well as against any fees, costs, charges or expenses which PSE&G
might incur in the defense of any such claim, suit, action or similar such
demand made or filed by such person, its successors or assigns, asserting such
adverse claim. In effecting the right of or obligation to indemnify pursuant-to
and in accordance with the provisions of this ARTICLE XXII the procedural
provisions set forth in ARTICLE XX of this AGREEMENT shall govern.
ARTICLE XXIII
EVENTS OF TERMINATION
The DATE OF INITIAL OPERATION shall occur on or prior to December 31, 1991,
unless extended by mutual written agreement of PSE&G and SELLER as provided in
this ARTICLE XXIII. SELLER on or before December 31, 1988 shall
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provide PSE&G with a schedule for detailed engineering, permitting, purchasing
and construction for the PROJECT, from which SELLER and PSE&G shall by mutual
agreement identify, in each case, critical path items for PROJECT development.
SELLER shall promptly notify PSE&G thereafter of any material revisions,
modifications or changes to such schedules.
Subsequent to submission of the schedules and up to the DATE OF INITIAL
OPERATION, SELLER shall provide quarterly status reports describing the progress
of engineering, permitting, purchasing (including delivery dates) and
construction of the PROJECT. Such reports shall include in sufficient detail
explanations of any delays in meeting scheduled dates for commencement or
completion of any listed items.
Either Party may terminate this AGREEMENT without liability to the other
Party, except as otherwise provided in this AGREEMENT, upon the occurrence of
any of the following events: (i) SELLER's failure to meet the DATE OF INITIAL
OPERATION as extended by Force Majeure; (ii) SELLER's failure to have the
COGENERATION FACILITY placed in COMMERCIAL OPERATION on or before July 1, 1992,
as extended by Force Majeure; (iii) SELLER's failure to complete any critical
path item(s) that would delay either the DATE OF INITIAL OPERATION or the DATE
OF COMMERCIAL OPERATION past the December 31, 1991 or July 1, 1992 dates as
extended by Force Majeure; (iv) a final and non-appealable
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order/judgment that on the effective date of this AGREEMENT the PROJECT fails to
meet the requirements for certification of a qualifying facility established as
of the effective date of the AGREEMENT in accordance with Title 18, Code of
Federal Regulations, Part 292, Subpart B, Section 292.203 through 292.207,
inclusive; provided, however, that any such determination shall not constitute
an Event of Termination pursuant to this ARTICLE XXIII if thereafter SELLER uses
reasonable efforts to regain qualifying facility status; (v) termination of the
agreement of lease between XXXXXXXX and SELLER, on or before the DATE OF INITIAL
OPERATION, unless a new such lease shall be promptly entered into by XXXXXXXX.
However, if any of events (i), (ii) or (iii) as described above occurs, and the
COGENERATION FACILITY is under a bona fide program of continuous construction,
the December 31, 1991 date and the July 1, 1992 date shall be extended for the
period reasonably required to satisfy such requirement by mutual written
agreement, but in no event shall any extension be allowed beyond twelve (12)
months of either of these respective dates. Notwithstanding the foregoing,
should SELLER fail to have the COGENERATION FACILITY placed in COMMERCIAL
OPERATION on or before July 1, 1992 and such failure is attributable to an event
of Force Majeure as provided in ARTICLE XVIII of this AGREEMENT, no extension of
this AGREEMENT shall be allowed beyond June 1, 1994 at which time this AGREEMENT
at the election and in the sole discretion of PSE&G shall terminate, provided,
however, the
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June 1, 1994 date will be extended if at such xxxx XXXXXX is capable of
delivering a minimum of 75-80 MW at the nominated SUMMER SEASON conditions in
ARTICLE II, Section C and subject to PSE&G's acceptance of SELLER's plans to
achieve COMMERCIAL OPERATION within a reasonable time period.
If any Event of Termination occurs and either Party elects to exercise its
right, as provided in the preceding Paragraph, to terminate this AGREEMENT, such
Party shall provide the other Party with written notice of termination of the
AGREEMENT (hereinafter referred to as Notice of Termination). The Notice of
Termination shall specify the basis for such termination. The AGREEMENT and the
Parties obligations hereunder shall terminate effective thirty (30) days after
receipt by the other Party of such Notice of Termination.
Termination of the AGREEMENT for and on account of any Event of Termination
specified in this ARTICLE XXIII shall not relieve SELLER from any obligation
under this AGREEMENT to pay PSE&G for any unpaid costs associated with the
design, construction and installation of the INTERCONNECTION, including but not
limited to INTERCONNECTION COSTS, CANCELLATION COSTS, or any other unpaid xxxx
or BILLING STATEMENT and/or Replacement Energy and Replacement Capacity Costs as
provided in ARTICLE IV, Section G, Paragraph 5 of this AGREEMENT.
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ARTICLE XXIV
EVENTS OF DEFAULT AND BREACH OF CONTRACT
SECTION A
DEFAULT BY SELLER
SELLER shall be in default under this AGREEMENT up on the happening or
occurrence of any of the following events or conditions, each of which shall be
deemed to be an "Event of Default," and each of which shall be considered a
breach of contract for purposes of this AGREEMENT unless (i) it is cured in
accordance with the provisions specified below, and (ii) SELLER compensates
PSE&G for any direct damages which PSE&G suffers as a result of such default.
1. SELLER breaches or fails to observe or perform, any of the obligations,
covenants, conditions, services or responsibilities under this AGREEMENT,
unless, within thirty (30) days after written notice from PSE&G specifying
the nature of such breach or failure, SELLER either cures such breach or
failure or, if such cure cannot be completed within thirty (30) days,
commences and diligently pursues such cure.
2. There is an assignment for the benefit of SELLER's creditors, or SELLER is
adjudged a bankrupt, or a petition is filed by or against SELLER under the
provisions of any state insolvency law or under the provisions of the
Federal Bankruptcy Laws, or the business or principal assets of SELLER are
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placed in the hands of a receiver, assignee or trustee, or SELLER is
dissolved, or SELLER's existence is terminated, or its business is
discontinued; provided, however, that the events described in this
Paragraph 2 shall not constitute an Event of Default or otherwise affect
the validity of this AGREEMENT, so long as the terms, covenants and
conditions of this AGREEMENT on the part of SELLER are performed, and in
such event, this AGREEMENT shall continue to remain in full force in
accordance with the terms herein contained.
3. SELLER takes any actions which prevent PSE&G from performing any of the
obligations, covenants, conditions, responsibilities or services under this
AGREEMENT, unless, within thirty (30) days after written notice from PSE&G
specifying the nature of such action or failure to act, SELLER either cures
such action or failure to act, or, such cure cannot be completed within
thirty (30) days, commences and diligently pursues such cure.
4. SELLER, subsequent to the DATE OF COMMERCIAL OPERATION fails to deliver
electric power to PSE&G for two hundred and forty (240) out of three
hundred and sixty five (365) days for any reason other than Force Majeure
or a curtailment in accordance with ARTICLE II, Section D(2), (3), (4), (5)
or (6) of this AGREEMENT.
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5. SELLER fails to complete regular and required maintenance, testing or
inspection of the COGENERATION FACILITY and appurtenant equipment as
required by this AGREEMENT within thirty (30) days after written notice of
the need therefor by PSE&G; provided, however, if such maintenance testing
or inspection cannot be completed within thirty (30) days SELLER shall not
be in default if it has commenced and is diligently pursuing such
activities.
6. SELLER continues to violate any code, regulation and/or statute applicable
to the construction, installation or operation of the interconnection
equipment and devices on SELLER's side of the RECEIPT POINT and such
violation is adverse to PSE&G, in accordance with this AGREEMENT, after
written notice by PSE&G of such violation; provided, however, that if an
immediate cessation of such violation is not possible or required by the
nature of such violation SELLER shall not be in default if it immediately
commences and diligently pursues steps necessary to cease any such
violation.
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SECTION B
DEFAULT BY PSE&G
PSE&G shall be in default under this AGREEMENT upon the happening or
occurrence of any of the following events or conditions, each of which shall be
deemed to be an "Event of Default" and each of which shall be considered a
breach of contract for purposes of this AGREEMENT unless (i) it is cured in
accordance with the provisions specified below, and (ii) PSE&G compensates
SELLER for any direct damages which SELLER suffers a result of such default.
1. PSE&G breaches or fails to observe or perform any of the obligations,
covenants, conditions, services or responsibilities under this AGREEMENT,
unless, within thirty (30) days after written notice from SELLER specifying
the nature of such breach or failure, PSEW either cures such breach or
failure, or, if such cure cannot be completed within thirty (30) days,
commences and diligently pursues such cure.
2. PSE&G fails to accept deliveries of electricity from the COGENERATION
FACILITY for any reason other than a reason permitted under ARTICLE II or
ARTICLE XVIII of the AGREEMENT and such failure continues for a period of
thirty (30) days following receipt of notice of such failure.
3. There is an assignment for the benefit of PSE&G's creditors, or PSE&G is
adjudged bankrupt, or a
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petition is filed by or against PSE&G under the provisions of any state
insolvency law or under the provisions of the Federal Bankruptcy Law, or
the business or principal assets of PSE&G are placed in the hands of a
receiver, assignee or trustee, or PSE&G is dissolved, or PSE&G's existence
is terminated, or its business is discontinued; provided, however, that the
events described in this Paragraph 3 shall not constitute an Event of
Default or otherwise affect the validity of this AGREEMENT, so long as the
payment for energy and capacity delivered by the COGENERATION FACILITY to
PSE&G as provided under ARTICLE IV hereof continues to be paid and the
other terms, covenants and conditions of this AGREEMENT on the part of
PSE&G are performed, and in such event, this AGREEMENT shall continue to
remain in full force in accordance with the terms herein contained.
4. PSE&G takes any actions which prevent SELLER from performing any of the
obligations, covenants, conditions, responsibilities or services under this
AGREEMENT, unless within thirty (30) days after written notice from SELLER
specifying the nature of such action or failure to act, PSE&G either cures
such action or failure to act, or, if such cure cannot be completed within
thirty (30) days, commences and diligently pursues such cure.
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5. PSE&G fails to pay, when due, the payment provided under ARTICLE IV, and
such failure continues for a period of thirty (30) days following the
receipt by PSE&G of notice of such failure; provided, however, PSE&G shall
not be considered in default if (i) it has paid the undisputed portion of
any payment due under this AGREEMENT and (ii) the Parties are in the
process of resolving any disputed portion in accordance with the terms set
forth in ARTICLE VI of this AGREEMENT.
SECTION C
REMEDIES
In the event a party claims that an Event of Default has occurred, such
party shall provide the other party with written notice thereof (hereinafter
referred to as Notice of Breach). The Notice of Breach shall state the basis for
such claim and any remedy sought. The Parties shall have thirty (30) days within
which to resolve the dispute via negotiation. If within such thirty (30) day
period after service of the Notice of Breach, the Parties are unable to resolve
their differences by negotiation, either Party shall have the right to submit
the dispute for resolution to either arbitration or to any regulatory body
having jurisdiction.
The nature and extent of any damage incurred or sustained by the non-
breaching Party, as a result of any Event of Default shall be determined and
calculated as of the date the Event of Default commenced.
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Except as otherwise provided in ARTICLE XVIII and ARTICLE XXIV of this
AGREEMENT, neither Party shall refuse to make, suspend or delay any payment(s)
otherwise required to be made under this AGREEMENT or refuse to carry out any of
its obligations under this AGREEMENT for or on account of or as a result of an
alleged breach of this AGREEMENT or Event of Default.
Any waiver by a Party of any breach or Event of Default shall be deemed to
extend only to the particular breach or Event of Default waived and shall not
limit or otherwise affect any right(s) that such party may have with respect to
any other of future breach or Event of Default, whether of a similar or
difference nature.
ARTICLE XXV
ARBITRATION
Any controversy, dispute or claim between the Parties to this AGREEMENT,
which the Parties are unable to resolve by negotiation or over which any
regulatory body lacks jurisdiction, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (AAA), then in effect, and the provisions of this ARTICLE. If
arbitration is chosen by either Party, no suit at law which seeks to resolve
any controversy, dispute or claim between the Parties shall be instituted by
either Party hereto, except where such suit is instituted to confirm an
arbitration award received pursuant
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to this ARTICLE. However, nothing contained herein shall deprive either Party of
any right to: (i) obtain injunctive or other equitable relief in any Court in
the State of New Jersey, on an interim basis in accordance with ARTICLE XXVI of
this AGREEMENT or otherwise pending disposition of the arbitration of any
controversy, dispute or claim if such relief is available under applicable
principles of law and equity; and/or (ii) assert any crossclaim or third-party
claim in any suit at law instituted by a third-party; and/or (iii) file and
prosecute any complaint at and with the regulatory agency having jurisdiction or
make and prosecute any claim or position in any filing made with such regulatory
agency by either party or some third-party.
Any controversy, dispute or claim submitted to arbitration shall be settled
by arbitration in Newark, New Jersey in accordance with the laws of the State of
New Jersey. Any award entered pursuant to such arbitration shall be binding on
both Parties and judgment upon the award rendered or received may be entered in
the Superior Court of the State of New Jersey pursuant to N.J.S.A. 2A:24-1 et
seq.
Exclusive jurisdiction relative to the entry of judgment on any arbitration
award relative to any controversy or claim between the parties shall be in any
court of appropriate subject matter jurisdiction located in New Jersey, and the
Parties to this AGREEMENT expressly subject themselves hereby to the personal
jurisdiction of said court for entry of any such judgment and for the
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resolution of any dispute, action, or suit arising in connection with the entry
of such judgment.
The controversy or claim to be arbitrated shall be referred to three (3)
arbitrators, one to be selected by each party and the third to be selected by
the AAA. The selections to be made by the parties shall be made from the list of
the National Panel of Arbitrators maintained by the AAA. The arbitrator to be
selected by the AAA shall be qualified to pass on any technical or engineering
matters and shall be independent of and acceptable to both PSE&G and SELLER. All
decisions and awards shall be made by a majority of the arbitrators, except for
decisions relating to discovery as set forth herein.
In the event any arbitrator dies, or refuses to act, or becomes incapable,
incompetent or unfit to act before hearings have been completed and/or before an
award has been rendered, a successor arbitrator may be selected by the party who
originally made the selection. The selection of the successor arbitrator shall
be made consistent with the selection procedure set forth in the preceding
paragraph.
The arbitrators selected pursuant to this AGREEMENT shall be governed by
and apply the laws of the State of New Jersey and federal law, as applicable, in
conducting any arbitration proceeding and/or in making any award.
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Notice of a demand for arbitration (hereinafter referred to as Demand for
Arbitration) of any controversy or dispute between the Parties shall be filed in
writing with the AAA by the Party seeking arbitration and a copy of same shall
be served contemporaneously with such filing on the other Party. The notice
shall state, with specificity, the nature of the dispute and the remedy sought.
After such notice has been filed, the Parties may make discovery of any matter
relevant to such dispute before the hearing, to the extent and in the manner
provided by the Rules Governing civil Practice in the Superior Court contained
in the Rules Governing the Courts of the State of New Jersey. Any question that
may arise with respect to the obligations of the Parties relative to discovery
and/or relative to the protection of the discovery materials shall be referred
solely to the arbitrator selected by the AAA. His determination shall be final
and conclusive. Discovery shall be completed not later than ninety (90) days
after filing of the notice of arbitration unless such period for discovery is
extended by the arbitrator selected by the AAA, upon a showing of good cause by
either Party to the arbitration.
The arbitrators may consider any material which is relevant to the subject
matter of any such controversy even if such material might also be relevant to
an issue or issues not subject to arbitration hereunder. A stenographic record
shall be made of any arbitration hearing.
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Any costs associated with any arbitration under this ARTICLE, including but
not limited to attorney fees and witness expenses, shall be paid by the Party
against whom an award is entered unless the arbitrators by their award otherwise
provide.
Arbitration may not be utilized and the arbitrators selected in accordance
with this ARTICLE shall not possess the authority or power to alter, amend or
modify any of the terms or conditions or charges set forth in this AGREEMENT,
and further, the arbitrators may not enter any award which alters, amends or
modifies such terms, conditions or charges in any form or manner.
ARTICLE XXVI
SPECIFIC PERFORMANCE
Without regard to the requirements or provisions of this AGREEMENT, in
addition to any of the rights and/or remedies referred to in this AGREEMENT,
either Party shall have the right to institute an action against the other
Party in a court of equity in the State of New Jersey or at the NJBPU to obtain
specific performance by such other Party of any of such other Party's
obligations under this AGREEMENT if available in accordance with applicable
principles of law and equity.
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ARTICLE XXVII
ENTIRE AGREEMENT
The AGREEMENT constitutes the entire AGREEMENT between the Parties with
respect to the matters contained herein and all prior AGREEMENTS with respect
thereto are superseded hereby. Each Party confirms that it is not relying on any
oral representations or warranties of the other Party except as specifically set
forth herein. No additions, amendments or modifications hereof or of any terms
included herein shall be binding unless duly executed by both Parties.
ARTICLE XXVIII
ASSIGNMENT/TRANSFER
SELLER may at any time and from time to time during the term of this
AGREEMENT, assign its rights in this AGREEMENT to FINANCIER. PSE&G shall, at
SELLER's request, execute a Consent to Assignment provided that the terms and
conditions of same are reasonably acceptable to PSE&G and, in connection with
any such request, SELLER submits to PSE&G for review any relevant documents
requested by PSE&G, which documents shall be treated by PSE&G as confidential,
and not disclosed to any third-party without the written consent of SELLER. Upon
written notice to PSE&G, SELLER may transfer its rights and obligations under
this AGREEMENT to any entity controlling, controlled by or under common control
with SELLER. Except as otherwise provided herein with
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respect to FINANCIER or any entity controlling, controlled by or under common
control with SELLER, SELLER may not assign its rights and/or transfer its rights
and obligations in this AGREEMENT without the prior written consent of PSE&G,
which consent shall not be unreasonably withheld or delayed. Nothing contained
herein shall prevent SELLER from pledging or mortgaging all or any part of the
property of the PROJECT in connection with financing the PROJECT.
Except with respect to any entity controlling, controlled by or under
common control with SELLER, no assignee, transferee, pledgee or mortgagee and/or
any person designated by such assignee, transferee, pledgee or mortgagee may
operate the PROJECT, pursuant to any rights such party may have under any
mortgage, assignment, transfer, or security agreement, unless such entity or
person has been approved and authorized by PSE&G to operate the PROJECT, and in
connection with seeking to obtain such approval and authorization, agrees to be
bound by, subject to and to comply with the terms and conditions of this
AGREEMENT while operating the PROJECT. PSE&G shall not unreasonably delay or
withhold any such approval or authorization.
PSE&G may, on notice to and with the approval of SELLER, assign its rights
in this AGREEMENT. Additionally, PSE&G may, on notice to and with the approval
of SELLER, assign and transfer its rights and obligations under this AGREEMENT
to any entity controlling, controlled by or under
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common control with PSE&G. SELLER shall not unreasonably delay or withhold any
approval of an assignment or assignment/transfer by PSE&G provided that the
assignee or assignee/transferee agrees to be bound by, subject to and to comply
with the terms and conditions of this AGREEMENT.
ARTICLE XXIX
CURE BY FINANCIER
During any term of this AGREEMENT, SELLER shall provide PSE&G with such
information as to enable it to know the name(s) and address(es) of any FINANCIER
on a current basis. For so long as SELLER shall have outstanding and unpaid any
financing liabilities, PSE&G agrees to promptly furnish to all FINANCIERS, then
known to PSE&G, a copy of any Notice of Cancellation, Notice of Nonperformance,
Notice of Suspension, Notice of Breach, Demand for Arbitration or Notice of
Termination given to SELLER. Additionally, PSE&G shall not terminate this
AGREEMENT unless any written notice of such termination or breach, as the case
may be, and the reasons therefor have been given to and received by each
FINANCIER then known to PSE&G thirty (30) days prior to the effective date of
the termination. PSE&G shall not terminate this AGREEMENT if, after notice
thereof, and prior to any effective date of termination FINANCIER has:
(i) cured the condition precipitating the Notice of Breach under ARTICLE
XXIV or Notice of Termination under ARTICLE XXIII; or
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(ii) if the condition precipitating such Notice of Breach or such Notice
of Termination is not capable of being cured prior to the date of
termination, commenced in a diligent manner to cure the condition
precipitating the Notice of Breach or Notice of Termination and for
so long as the FINANCIER diligently continues such efforts; or
(iii) if the condition precipitating the Notice of Breach or Notice of
Termination is not capable of being cured prior to the date of
termination, caused the initiation of and is diligently prosecuting
efforts to gain possession of the PROJECT and for so long as the
FINANCIER diligently continues such efforts.
In the event FINANCIER gains possession of the PROJECT, FINANCIER shall promptly
designate a person to operate the PROJECT. The name and credentials of the
person so designated shall be promptly submitted thereafter to and such person
so designated must be approved and authorized by PSE&G to operate the PROJECT.
Any approval of the person so designated shall not be unreasonably delayed or
withheld by PSE&G. In the event PSE&G approves the person so designated, PSE&G
shall not be obligated to give authorization to the person so designated to
actually operate the PROJECT unless and until the person so designated agrees in
writing to be bound by, subject to and
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to comply with the terms and conditions of this AGREEMENT for the period during
which the person so designated intends to operate the PROJECT. Upon execution of
the aforesaid instrument, the person so designated shall thereafter, inter alia,
be responsible for all obligations incurred by it under this AGREEMENT and
commence payment. However, FINANCIER, and the person so designated, shall have
no responsibility whatsoever for any obligation SELLER incurred prior to the
date on which FINANCIER takes possession of the PROJECT.
In the event of a foreclosure and a resultant sale or transfer of the
PROJECT to a new entity, any obligation of PSE&G to perform its obligations
under the AGREEMENT shall be conditioned upon: (i) the approval by PSE&G of any
new operator of the PROJECT, which approval shall not be unreasonably withheld
or delayed; (ii) agreement by the new entity to comply with the rules and
regulations of the NJBPU, the FERC, and any other agency having jurisdiction
over the PROJECT relative to the sale or transfer of same; (iii) receipt by such
new entity of any license(s), permit(s) and approval(s) as may be required in
connection with the sale or transfer of the PROJECT; and (iv) the execution and
delivery of a written assumption agreement, in form satisfactory to PSE&G,
pursuant to which the new entity and/or operator agree to assume all obligations
under and agree therein to be bound by, subject to and to comply with the terms
and conditions of this AGREEMENT.
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Notwithstanding any rights which FINANCIER may have, in the event PSE&G
interrupts acceptance of the NET ELECTRICAL POWER OUTPUT from the COGENERATION
FACILITY in connection with the occurrence of the condition or event which
precipitated the Notice of Termination or Notice of Breach, PSE&G shall not be
obligated to resume acceptance of such NET ELECTRICAL POWER OUTPUT unless the
condition or event or cause thereof which precipitated the Notice of Termination
or Notice of Breach is or has been remedied in accordance with the provisions,
of this AGREEMENT. Prior to PSE&G being obligated to resume such acceptance from
the COGENERATION FACILITY, PSE&G shall have the right to require FINANCIER to
provide adequate assurance to PSE&G that the condition or event precipitating
the Notice of Termination or Notice of Breach will not reoccur.
ARTICLE XXX
FINANCIER SECURITY AGREEMENTS
As provided in ARTICLE XXVIII, SELLER may assign any rights in this
AGREEMENT to FINANCIER and may pledge or mortgage any or all of the property of
the PROJECT. In the event FINANCIER alleges that a breach or an event of default
has occurred under any operative agreement between FINANCIER and SELLER and
FINANCIER thereafter elects to exercise any right(s) under any applicable
security, mortgage, assignment or other agreement then in affect between
FINANCIER and SELLER, it is agreed that, upon receipt of such notice from
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FINANCIER, PSE&G shall provide notice to SELLER and thereafter PSE&G shall
accept the instructions of FINANCIER in accordance with the terms of any
applicable security, mortgage or assignment agreement. In such event, SELLER
shall have no claim against PSE&G for, and hereby agrees to release PSE&G from,
any liability for any cost, expense, loss, damage or liability SELLER may incur
or sustain arising out of, relating to or resulting from any action(s) which
PSE&G determines it is obligated to take pursuant to any operative agreement
between SELLER and FINANCIER.
Notwithstanding the foregoing, in the event PSE&G provides a notice to
SELLER under this Section, and SELLER notifies PSE&G that it disagrees with and
is actively contesting the FINANCIER'S allegation that an event of default has
occurred under any operative agreement between FINANCIER and SELLER, PSE&G may
in its reasonable discretion elect not to accept the instructions of such
FINANCIER, provided that SELLER shall (i) indemnify PSE&G in accordance with the
terms of ARTICLE xx for any cost, expense, loss, damage or liability which PSE&G
may incur or sustain as a result of PSE&G's failure to follow the instructions
of such FINANCIER, and (ii) provide PSE&G with a non-cancellable surety bond,
irrevocable bank letter of credit or other security in form, substance and
amount acceptable to PSE&G upon which PSE&G can draw in the event it incurs or
sustains any expense, loss, damage or liabilities as a result of its failure to
follow the instructions of such FINANCIER.
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ARTICLE XXXI
DETERMINATION OF PSE&G COSTS
The costs for any work done or service performed by PSE&G personnel, as
required by this AGREEMENT including without limitation the costs of the
INTERCONNECTION, which costs are to be billed to and to be paid by SELLER
pursuant to this AGREEMENT shal1 be determined by PSE&G in accordance with
PSE&G's "Procedures for Work Done at the Expense of others," then in effect.
ARTICLE XXXII
STANDARD FOR PERFORMANCE
Unless otherwise expressly provided for in this AGREEMENT, PSE&G shall
undertake and discharge any obligation it has in this AGREEMENT to, inter alia,
design, construct, install, operate, maintain, repair, replace, reinforce,
rearrange, purchase, select, examine, review, inspect or accept any facility or
equipment pursuant to and in accordance with any applicable PSE&G practice(s),
standard(s) and/or procedure(s). PSE&G shall use the same care and diligence in
controlling the costs of any such activity(ies) SELLER is required to make
payment for under this AGREEMENT as if the activity(ies) was being performed by
and for PSE&G's own account.
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ARTICLE XXXIII
STANDBY ELECTRIC SERVICE
In the event SELLER requires standby electric service to the COGENERATION
FACILITY same shall be furnished by PSE&G pursuant to an applicable tariff on
file with the NJBPU. In such event, pursuant to and in accordance with the
provisions of The Order of the NJBPU in "In the Matter of the Consideration and
Determination of Cogeneration and Small Power Production Standards Pursuant to
the Public Utility Regulatory Policies, Act of 1978, Docket No. 8010-687,"
PSE&G will establish a credit (Credit) for SELLER in an amount determined in
accordance with the following:
ESTIMATED COST FOR STANDBY FACILITY ACTUAL COST FOR = CREDIT
----------------------------------- X INTERCONNECTION
ESTIMATED COST FOR INTERCONNECTION
The estimated cost for standby facility will be furnished to SELLER as soon
as practicable after execution of this AGREEMENT.
This Credit will be refunded to SELLER without interest, in whole or in
part, in annual payments over the ten (10) year period following the DATE OF
COMMERCIAL OPERATION. The amount of refund for each annual period will be
calculated as follows:
TOTAL OF PAYMENTS MADE FOR
ELECTRIC SERVICE SUPPLIED BY PSE&G
UNDER THE APPLICABLE PREVAILING X 10% = AMOUNT OF REFUND
RATE SCHEDULE DURING THE PRECEDING
ANNUAL PERIOD
The total refund during such ten (10) year period shall not exceed the amount of
the Credit determined pursuant to and
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in accordance with the provisions of this Paragraph. If after such ten (10) year
period SELLER has not received, based on its annual payments for electric
service, a total refund of the Credit, SELLER shall forfeit any further
entitlement to any balance of the Credit remaining at the end of such ten (10)
year period.
ARTICLE XXXIV
SUCCESSORS AND ASSIGNS
This AGREEMENT shall be binding upon and shall inure to the benefit of or
may be performed by, the successors and assigns of the Parties, except that, no
assignment, pledge or other transfer of this AGREEMENT by any Party shall
operate to release the assignor, pledgor or transferor from any of its
obligations under this AGREEMENT, unless consent to the release is given in
writing by the other Party, which consent shall not be unreasonably delayed or
withheld, or unless such transfer is incident to a reorganization or merger or
consolidation with or transfer of all or substantially all of the assets of the
transferor to another person or business entity which person or entity shall, as
part of such succession, assumes all the obligations of the transferor under
this AGREEMENT.
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ARTICLE XXXV
CHOICE OF LAW
This AGREEMENT shall be interpreted, construed, governed by, performed and
enforced in accordance with the laws of the State of New Jersey and federal law,
where applicable. All questions concerning the validity, construction and
enforceability of this AGREEMENT as well as questions concerning the sufficiency
or other aspects of performance under this AGREEMENT shall be determined under
the laws of the State of New Jersey without recourse to the law governing
conflict of laws.
ARTICLE XXXVI
CAPTIONS
The subject headings of the ARTICLES of this AGREEMENT are inserted solely
for the purpose of convenient reference and are not intended to, nor shall same
affect the meaning of any provision of this AGREEMENT.
ARTICLE XXXVII
COUNTERPARTS
This AGREEMENT may be executed in counterparts. Each shall be deemed an
original but together shall constitute one and the same instrument.
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ARTICLE XXXVIII
MISCELLANEOUS
This AGREEMENT and the obligations of the Parties hereunder are subject to
all present and future valid laws and to all valid present and future orders,
rules and regulations of any court or regulatory authority having jurisdiction.
In case of conflict between any provisions hereof and any applicable law,
regulation or regulatory order, such applicable law, regulation or regulatory
order shall govern.
All terms defined in this AGREEMENT shall have the same defined meanings
when used in any notice, correspondence, report or other document made or
delivered pursuant to or in connection with this AGREEMENT, unless the context
shall otherwise require.
Each reference herein to SELLER and PSE&G shall be deemed to include their
respective successors and assigns.
All of the covenants, warranties, undertakings and agreements of SELLER and
PSE&G shall bind the respective Parties, their successors and assigns.
ARTICLE XXXIX
RESERVATIONS
No Party shall be prejudiced or bound, except as otherwise specifically
provided herein, nor shall any Party be deemed to have approved, accepted,
agreed or consented to any concept, theory or principle underlying or supposed
to
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underlie any of the matters contained herein, including but not limited to any
concept, theory, principle or method used to calculate the rates provided for
herein.
All Parties further understand and agree that the provisions of this
AGREEMENT relate only to the specific matter referred to herein and no Party or
person waives any claim or right which it may otherwise have with respect to any
matter not expressly provided for herein.
ARTICLE XL
SURVIVAL OF OBLIGATIONS
Termination of this AGREEMENT for any reason shall not relieve PSE&G or
SELLER of any obligation accruing or arising prior to such termination.
ARTICLE XLI
NOTICES
Any notice, request, demand, or statement which either PSE&G or SELLER may
desire to give to the other shall be in writing and except as otherwise provided
for in this AGREEMENT shall be considered as duly delivered when mailed by
certified mail or delivered against receipt by messenger or overnight courier
addressed to said Party as follows:
(a) If to PUBLIC SERVICE ELECTRIC AND GAS COMPANY:
Public Service Electric and Gas Company
00 Xxxx Xxxxx - Mail Code T11A
P. 0. Xxx 000
Xxxxxx, Xxx Xxxxxx 00000-0000
ATTENTION: MANAGER - COGENERATION
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(b) If to SELLER or to such other person or address as the addressee may
have specified in a notice duly given as provided herein.
Except as otherwise provided in this AGREEMENT, routine communication's and
BILLING STATEMENTS shall be considered as duly delivered when mailed by either
certified or ordinary mail:
(a) If to PUBLIC SERVICE ELECTRIC AND GAS COMPANY:
Public Service Electric and Gas Company
00 Xxxx Xxxxx - Mail Code T11A
P. 0. Xxx 000
Xxxxxx, Xxx Xxxxxx 00000-0000
ATTENTION: MANAGER - COGENERATION
(b) If to SELLER or to such other person or address as the addressee may
have specified in a notice duly given as provided herein.
General Electric Power Funding
0 Xxxxx Xxxx
Xxxxxxxx 0, Xxxx 000
Schenectady, N.Y. 12345
Attn: Vice President Investments
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IN WITNESS WHEREOF, this AGREEMENT has been executed and delivered as of
the date and year first above written.
SELLER
By: CAMDEN COGEN, L. P.
By:
___________________________
PUBLIC SERVICE ELECTRIC
AND GAS COMPANY
By: /s/ SIGNATURE APPEARS HERE
___________________________
