Exhibit 10.4
98PAP-236148
INTERCONNECTION AGREEMENT
BETWEEN
TENNESSEE VALLEY AUTHORITY
AND
LSP ENERGY LIMITED PARTNERSHIP
THIS AGREEMENT, made and entered into as of the 22nd day of July, 1998,
by and between Tennessee Valley Authority ("TVA"), a corporation created by
and existing under and by virtue of the Tennessee Valley Authority Act of
1933, as amended, and LSP Energy Limited Partnership ("LSP"), a limited
partnership organized under the laws of the State of Delaware. TVA and LSP
are also hereinafter sometimes referred to individually as "Party" and
collectively as "Parties."
RECITALS
WHEREAS, LSP intends to construct, own, and operate a facility for the
generation and sale of electric energy, which facility is located in the City of
Batesville, Panola County, Mississippi ("Facility"); and
WHEREAS, the Facility is to be located near the transmission facilities of
TVA; and
WHEREAS, LSP has requested and TVA has agreed to enter into an
Interconnection Agreement with LSP in order for LSP to be able to transmit
energy from the Facility to and across TVA's transmission system; and
WHEREAS, as a result of the Facility being located near the transmission
facilities of Entergy Mississippi, Inc. ("EMI"), LSP and EMI have entered into
an Interconnection and Operating Agreement, dated May 18, 1998, which provides
for the Facility being interconnected with the EMI system;
WHEREAS, since the Facility will be interconnected with the systems of TVA
and EMI, joint operating arrangements among TVA, Entergy Services, Inc.
("Entergy"), acting as agent for EMI, and LSP will be required;
NOW, THEREFORE, in consideration of the above premises and of the mutual
covenants herein set forth, TVA and LSP agree as follows:
ARTICLE 0
DEFINITIONS
Whenever the following terms appear in this Agreement, including without
limitation any Exhibits thereto, whether in the singular or in the plural,
present or past tense, they shall have the meaning set forth in this Article.
0.1 Definitions.
"Authorization Date" shall mean the date on which TVA receives notice, in
writing, from LSP to proceed with the detailed design and construction of the
TVA Interconnection Facilities and the Upgraded Facilities in accordance with
Section 6.1 of this Agreement.
"Billed Party" shall have the meaning set forth in Article 9 of this
Agreement.
"Billing Party" shall have the meaning set forth in Article 9 of this
Agreement.
"Business Day" shall mean any Day except Saturday, Sunday, or a weekday
that is observed by TVA as a Federal holiday (Federal holidays currently include
New Year's Day, Xxxxxx Xxxxxx Xxxx'x Birthday, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Veteran's Day, Thanksgiving Day, and
Christmas Day).
"Central Time" shall mean Central Standard Time or Central Daylight
Savings Time, whichever is then prevailing.
"Commercially Reasonable" shall mean, with respect to any action required
to be made, attempted or taken by a Party under this Agreement, such efforts as
a reasonably prudent business would undertake for the protection of its own
interest under the conditions affecting such action, including without
limitation, the amount of notice of the need to take such action, the duration
and type of such action, the competitive environment in which such action occurs
and the risk to the Party required to take such action.
"Control Area" - An electric power system or combination of electric power
systems to which a common automatic generation control scheme is applied in
accordance with Good Utility Practice in order to:
(a) match, at all times, the power output of the generators within the
electric power system(s) and capacity and energy purchased from
entities outside the electric power system(s), with the load within
the electric power system(s);
(b) maintain scheduled interchange with other Control Areas;
(c) maintain the frequency of the electric power system(s) within
reasonable limits; and
(d) provide sufficient generating capacity to maintain operating
reserves.
"Day or Calendar Day" - The 24-hour period beginning at 00:00 and ending
at 12:00 midnight Central Time. The terms Day and Calendar Day may be used
interchangeably and shall have the same definition.
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"Delivery Point" shall have the meaning set forth in Section 8.4 of this
Agreement.
"Exhibit A" shall mean Exhibit A, INTERCONNECTION CRITERIA, to this
Agreement as the same may be amended, supplemented, revised, altered, or changed
by TVA from time to time in its sole reasonable discretion to deal with matters
involving reliability of the TVA system, system emergencies, and safety matters,
provided, however, that any amendments, supplements, revisions, alterations, or
changes to the INTERCONNECTION CRITERIA shall be consistent with Good Utility
Practice and with applicable laws and regulations. To the extent required by
applicable laws and regulations, the requirements set forth in the
INTERCONNECTION CRITERIA, including any amendments, supplements, revisions,
alterations, or changes to the INTERCONNECTION CRITERIA as provided for above,
shall be consistent with the requirements applied by TVA to similar power
production facilities located in the TVA Control Area in comparable
circumstances, including without limitation size, age, location, and operating
characteristics, whether owned by TVA or third parties.
"Exhibit B" shall mean Exhibit B, INTERCONNECTION FACILITIES, to this
Agreement which sets forth an electrical equipment diagram of the
Interconnection Facilities.
"Exhibit C" shall mean Exhibit C, COMMUNICATION FACILITIES, to this
Agreement which sets forth the communication specification diagrams of the
Interconnection Facilities.
"Facilities Study" shall have the meaning set forth in Article 5 of this
Agreement. The project scoping workshop is considered a part of the Facilities
Study.
"Facility Electrical Output" shall mean the actual amount of net
electrical energy generated by the Facility up to a nominal amount of 800 MW in
the summer and up to a nominal amount of 900 MW in the winter, but in no event
shall such amount exceed 840 MW in the summer and 945 MW in the winter.
"FERC" shall mean the Federal Energy Regulatory Commission or any such
successor regulatory agency.
"Force Majeure" shall have the meaning set forth in Article 11 of this
Agreement.
"Good Utility Practice" shall mean any of the practices, methods, and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period, or practices, methods, and acts which, in the
exercise of reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the desired result at
a reasonable cost consistent with good business practices, reliability, safety,
and expedition. Good Utility Practice is not intended to be limited to any
particular set of optimum practices, methods, or acts to the exclusion of all
others, but rather is intended to include a spectrum of acceptable practices,
methods, or acts.
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"Guidelines" shall mean TVA's Transmission Service Guidelines, as such
Guidelines now exist or may hereafter be modified, or any replacement providing
for transmission service over the TVA system.
"Initial Synchronization Date" - The first date upon which energy is
generated by the Facility as provided in Section 6.6 of this Agreement.
"Interconnection Criteria" means TVA's criteria for interconnecting the
LSP Interconnection Facilities to the TVA electrical system, as described in
Exhibit A.
"Interconnection Facilities" - All facilities presently in place or
presently proposed to be installed, as delineated on Exhibits B and C, or
required to be installed in the future in order to interconnect and deliver
Facility Electrical Output from the Facility to TVA's system, including, but not
limited to, TVA Interconnection Facilities, LSP Interconnection Facilities,
Upgraded Facilities, and metering, communication, relaying, protection, and
safety equipment. Interconnection Facilities shall include any additions and/or
reinforcements to TVA's system that TVA, in the exercise of its sole judgment,
deems necessary, provided, however, that any additions and/or reinforcements
deemed necessary by TVA shall be consistent with Good Utility Practice and with
applicable laws and regulations.
"LSP Interconnection Facilities" shall mean all Interconnection Facilities
to be installed and thereafter owned, operated and maintained by LSP on LSP's
side of the Point of Interconnection, and which facilities are more fully
described, and are subject to, the provisions of Article 3 of this Agreement.
"Month or Calendar Month" - The period beginning at 00:00 hours on the
first Day of the current calendar month and ending at 12:00 midnight on the last
Day of the current calendar month. The terms "Month" and "Calendar Month" may be
used interchangeably and shall have the same definition.
"Operation Date" shall mean the day commencing at 00:00 hours, following
the day during which the Interconnection Facilities have been completed to TVA's
and LSP's mutual satisfaction and energized in parallel operation of TVA's and
LSP's systems as confirmed in writing.
"Parties" - TVA and LSP, except in Section 6.4 only where "Parties" shall
refer to TVA, LSP, and Entergy.
"Party" - TVA or LSP as the sections of this Agreement so require, except
in Section 6.4 only where "Party" shall refer to TVA, LSP, or Entergy.
"Point of Interconnection" - The point, shown in Exhibit B, where the TVA
Interconnection Facilities connect to the LSP Interconnection Facilities.
"Scheduled Completion Date" shall mean the estimated date, as determined
by TVA following the completion of the Facilities Study, by which TVA
anticipates completing the
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design, construction, and installation of the TVA Interconnection
Facilities and the Upgraded Facilities. The Scheduled Completion Date may be
revised by TVA in accordance with the provisions of Section 6.1.
"Site" means the real property on which the Facility is located.
"System Protection Facilities" shall mean the equipment, including, but
not limited to relays and their associated settings, monitoring and control
equipment, and power circuit breakers, installed and maintained by LSP, at its
expense, on the LSP side of the Point of Interconnection required to protect (1)
TVA's system and its customers from faults occurring at LSP's facilities, and
(2) LSP facilities from faults occurring on TVA's system or the system of others
to which TVA's system is directly or indirectly connected.
"Transferable LSP Interconnection Facilities" shall mean those certain LSP
Interconnection Facilities, including any easements and rights-of-way, that may
be transferred from LSP to TVA or to a third party pursuant to Section 3.11 of
this Agreement. LSP's three (3) step-up transformers and 161-kV power circuit
breaker installations C, E, G, H, I, J, and K, including without limitation
switches, foundations, busses, and associated equipment, are not included in the
Transferable LSP Interconnection Facilities.
"TVA Act" shall mean the Tennessee Valley Authority Act of 1933, as
amended (16 U.S.C. ss.831-831dd (1994)).
"TVA Interconnection Facilities" shall mean those certain Interconnection
Facilities presently in place, presently proposed to be installed or required to
be installed in the future, which facilities were installed or shall be
installed and thereafter owned, operated, and maintained by TVA, but at LSP's
expense, and which facilities are more fully described, and are subject to, the
provisions of Article 2 of this Agreement. The communication equipment provided
by TVA under Section 2.2(e) and the metering and data equipment provided by TVA
under Section 2.3 of this Agreement are included in this definition.
"Upgraded Facilities" shall mean those certain Interconnection Facilities
to be installed by TVA, but at LSP's expense, which are more fully described,
and are subject to, the provisions of Article 4 of this Agreement.
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ARTICLE 1
TERM OF AGREEMENT
1.1 Term of Agreement. Except as provided in Section 1.2, this Agreement
shall become effective as of the date first above written and shall continue in
effect for a term ending thirty-five (35) years from the Operation Date;
provided, however, TVA may, at the end of an initial period ending five (5)
years from the Operation Date or from time to time during the remaining thirty
(30) year period of this Agreement, offer to LSP one or more amendments to this
Agreement which shall make the terms and conditions of this Agreement consistent
with those then currently being offered by TVA under interconnection agreements
with companies with generating facilities similar to the Facility; provided,
however, no such amendment shall reduce the thirty-five (35) year term or the
notice period, period of negotiation, and requirement of one (1) year prior
written notice for termination provided for in the next sentence. If, despite
the Parties' good faith negotiation, any such amendment has not been executed by
LSP within six (6) months after TVA offers to LSP a signature copy of the
amendment, then, after the expiration of said six (6) month period, TVA may
terminate this Agreement upon one (1) year's prior written notice to LSP.
1.2 Default. In addition to its termination rights specified in Section
1.1, TVA shall have the right to terminate this Agreement, (except as provided
in Section 1.2(ii) below) upon sixty (60) Days' written notice ("Notice
Period"), without any liability or responsibility hereunder, under the following
conditions:
(i) in the event LSP:
(A) becomes bankrupt or insolvent (however evidenced) or otherwise
makes an assignment or any general arrangements for the benefit of
creditors,
(B) files a petition or otherwise commences, authorizes, or
acquiesces in the commencement of a proceeding or case under any
bankruptcy or similar law for the protection of creditors, or such a
petition is filed against it and such proceeding remains undismissed
for sixty (60) Days, or
(C) is unable to pay its debts as they fall due;
provided that, there shall be no termination of this Agreement for any of the
foregoing in this paragraph (i) if LSP cures such default within the Notice
Period or continues to perform its obligations pursuant to this Agreement and
pursuant to applicable law and with any required court approval, a process to
cause this Agreement to be assumed by a trustee is commenced within the Notice
Period and completed within one hundred eighty (180) Days of such event or such
additional period of time as is reasonable and LSP is diligently pursuing
efforts to complete the process within such period of time; provided such
assumption provides for payment in full of all sums due and owing TVA, payable
consistent with applicable law, and for the cure of all LSP material defaults;
and provided further that TVA receives reasonable written assurance of LSP's
continued performance of its material obligations hereunder within the Notice
Period;
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(ii) in the event LSP fails to pay TVA any amount due under this Agreement
and such failure is not cured within the Notice Period, which in this case shall
be thirty (30) Days;
(iii) in the event LSP refuses to comply with the provisions of Section
8.1 of this Agreement regarding the balancing on an hourly basis of Facility
Electrical Output and the scheduling of energy to third parties; provided that,
there shall be no termination of this Agreement if, during the Notice Period,
LSP takes all actions that are within its reasonable capability and within the
reasonable capabilities of the Facility to comply with the provisions of Section
8.1; or
(iv) in the event LSP, or the Facility, is not in compliance with any of
the terms of this Agreement (or the Operating Procedures developed pursuant to
Section 6.4(d)), except for any noncompliance covered by items (i) through (iii)
above, and such default is not cured within the Notice Period. If the default is
not reasonably capable of being cured within the Notice Period, then the default
shall be deemed cured if LSP commences and diligently pursues action to remedy
the default within the Notice Period and thereafter remedies such default within
a reasonable period of time after receipt of such notice.
1.3 Survival of Obligations. Termination of this Agreement shall not
relieve the Parties of obligations that by their nature should survive such
termination, including without limitation, final billing, billing adjustment and
payments, warranties, remedies, promises of indemnity and confidentiality.
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ARTICLE 2
TVA INTERCONNECTION FACILITIES
2.1 Interconnection Point. Upon completion, testing, and acceptance of the
Interconnection Facilities pursuant to this Agreement and subject to the other
terms and conditions of this Article 2, TVA shall operate and maintain the TVA
Interconnection Facilities as necessary to accept electrical energy from the
Facility at the Point of Interconnection. Upon its completion as hereinafter
provided, a 000-xX xxxxxxxxxxxxxxx xxxxx shall be established between TVA and
LSP at the Point of Interconnection of the TVA and LSP Interconnection
Facilities at the dead-end structure located outside of the fence at TVA's
Batesville 161-kV Substation. The Point of Interconnection shall be established
and maintained by TVA and LSP in accordance with Articles 2 and 3 of this
Agreement.
2.2 TVA Interconnection Facilities. (a) TVA shall, at LSP's expense,
install or cause to be installed and thereafter own, operate, and maintain in
the TVA's Batesville 161-kV Substation the facilities necessary to connect LSP's
two 161-kV transmission lines referred to in Article 3 at the Point of
Interconnection and two (2) new 161-kV power circuit breaker installations,
including without limitation switches, foundations, structures, busses, and
associated equipment.
(b) TVA shall, at LSP's expense, install or cause to be installed and
thereafter own, operate, and maintain the communication facilities specified in
Exhibit C. LSP shall also pay to TVA all actual costs, including applicable
overheads, incurred by TVA in removing and disposing of any existing
communication facilities to be retired as specified on Exhibit C, and the
undepreciated portion of the cost of installing the communication facilities
specified for retirement on Exhibit C. The cost of installing said communication
facilities specified for retirement shall be deemed to be the actual total
installed cost, including applicable overheads, less salvage received for
reusable materials and equipment.
(c) LSP shall grant to TVA such land rights including easements and
rights-of-way and rights of ingress and egress in, on, over, and across property
owned or controlled by LSP and/or its affiliates, as may be necessary during the
term of this Agreement to permit TVA to design, construct, maintain, operate,
alter, repair, replace, and remove the TVA Interconnection Facilities. For the
purposes set forth in this Agreement, TVA shall have free access to the TVA
Interconnection Facilities located on LSP's premises at all reasonable times.
All such access rights shall be at locations mutually satisfactorily to TVA and
LSP.
2.3 Metering and Data Equipment. (a) TVA, at LSP's expense, shall be
responsible for the purchase, installation, operation, maintenance, repair, and
replacement of all data acquisition equipment (including meters, remote terminal
units (RTUs), related protection equipment, and any other associated equipment
and software) necessary for the establishment of the Point of Interconnection at
the location shown in Exhibit B. LSP, at its expense, shall be responsible for
the purchase, installation, operation, maintenance, repair, and replacement of
all data acquisition equipment (including meters, remote terminal units (RTUs),
related protection equipment, and any other associated equipment and software)
necessary to measure the Facility Electrical Output at the locations shown in
Exhibit B in
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LSP's 161-kV Substation. All such equipment of TVA and LSP shall conform to Good
Utility Practice and the standards and practices of TVA's Control Area. LSP and
TVA shall review the metering and other equipment prior to its installation to
ensure conformance with such standards or practices.
Real-time telemetry is to be used to provide data to be received by TVA
from the data acquisition equipment provided by TVA and LSP referred to above.
TVA shall, at LSP's expense, install and maintain any equipment and software
necessary for providing the telemetry signals to TVA. LSP shall also be
responsible for the cost of making any computer modifications or changes
required to TVA's computer system(s) as necessary to implement this Section 2.3.
(b) Each Party shall, at LSP's expense, test its respective metering
equipment provided under this Section 2.3, including but not limited to meters
and RTUs, at least biennially. Representatives of TVA, LSP, and Entergy shall be
afforded an opportunity to witness such tests.
(c) Either Party shall, upon request of the other Party, make additional
tests of any of the metering equipment provided under this Section 2.3. The cost
of making such additional tests shall be paid by the requesting Party if such
additional tests show that the measurements made with this metering equipment
are accurate within one (1) percent (positive or negative).
(d) In the event any metering equipment used in the measurement of
capacity and energy fails to register or is found to be inaccurate, appropriate
billing adjustments shall be made based on the best information available. If
testing shows that the measurements made with any metering equipment are
accurate within one (1) percent (positive or negative), there shall be no
correction of billing. If testing shows that the measurements made with any
metering equipment are not accurate within one (1) percent (positive or
negative), any necessary adjustments, repairs, or replacements shall be made to
the metering equipment at LSP's expense as soon as practicable. Measurements
previously taken shall be corrected for accounting and billing purposes
according to the percentage of inaccuracy so found for any known or agreed upon
period of inaccuracy; in the absence of any such knowledge or agreement, the
adjustment shall be limited to one-half the period of the time from the date of
the last previous test of the meter and the most recent test but in no event
shall the period covered by the correction exceed one hundred eighty (180) Days.
(e) Either Party, at its expense, shall have the right to install and
maintain suitable metering equipment at the metering points specified in Section
2.3(a) for the purpose of checking the metering equipment installed by the other
Party hereunder.
(f) LSP shall provide, or at TVA's option TVA shall provide at LSP's
expense, the telecommunication circuits necessary to provide the telemetered
load signals to TVA's Control Center.
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(g) TVA shall provide LSP with access to the output information from the
meter installed by TVA at its Batesville 161-kV Substation pursuant to this
Section 2.3(a) only when necessary for billing purposes under this Agreement.
2.4 Reimbursement by LSP. LSP shall pay TVA for all actual costs,
including applicable overheads, incurred by TVA in connection with all phases of
TVA's design, construction, installation, and modification of the facilities
provided by TVA under Articles 2 and 4, including the acquisition of all
necessary land rights including easements and rights of way and rights of
ingress and egress in, on, over, and across property owned or controlled by LSP
and/or its affiliates as well as any necessary environmental reviews. Upon
completion of the Facilities Study, TVA shall develop a detailed cost estimate,
including any applicable retirement costs ("Estimated Cost"), associated with
the TVA Interconnection Facilities and the Upgraded Facilities. As soon as
practicable following the Authorization Date, TVA shall invoice LSP for an
amount equal to the Estimated Cost divided by 6.5 ("Quarterly Payment").
Thereafter, every ninety (90) Days TVA will issue an additional invoice for the
Quarterly Payment until a total of seven (7) invoices have been issued by TVA to
LSP; provided, however, that the last Quarterly Payment shall be reduced by
one-half (1/2). (For example, if the Estimated Cost was $13 million, TVA would
invoice LSP for six (6) consecutive Quarterly Payments of $2 million followed by
a seventh (7th) Quarterly Payment of $1 million). Upon completion of
construction of the TVA Interconnection Facilities and the Upgraded Facilities,
the Parties agree to make a final adjustment to correct for any overpayment or
underpayment resulting from any difference between the Estimated Cost and the
actual cost, including applicable overheads, incurred by TVA associated with the
TVA Interconnection Facilities and the Upgraded Facilities. At LSP's request,
TVA shall provide LSP with a cost accounting setting forth in reasonable detail
the expenditures for all necessary equipment and materials comprising the TVA
Interconnection Facilities and the Upgraded Facilities. The provisions of
Articles 9 and 14 shall apply to invoices issued by TVA under this Section 2.4.
2.5 Operation and Maintenance of TVA Interconnection Facilities. TVA
shall, at LSP's expense, operate, maintain, and repair the TVA Interconnection
Facilities. LSP shall reimburse TVA for TVA's actual costs, including applicable
overheads, incurred in operating, maintaining, and repairing the TVA
Interconnection Facilities. TVA shall invoice LSP on a monthly basis for the
actual costs, including applicable overheads, incurred by TVA under this Section
2.5. The provisions of Articles 9 and 14 shall apply to invoices issued by TVA
under this Section 2.5.
2.6 Service to Others. Regardless of anything in this Agreement that might
be construed to the contrary, TVA may in the future use the TVA Interconnection
Facilities for serving others; provided that TVA does not unreasonably interfere
with the use of the TVA Interconnection Facilities by LSP pursuant to this
Agreement.
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2.7 Changes to TVA Interconnection Facilities. The Parties hereby
recognize that, in the future, circumstances may require changes in the TVA
Interconnection Facilities provided under this Article 2. Such changes may
include additions or replacements, including, but not limited to, changes to
ensure the protection and continued safe and reliable operation of TVA's
electric system. When, in TVA's sole discretion, changes to the TVA
Interconnection Facilities become necessary, or when LSP requests them, such
changes shall be made by TVA at LSP's expense, provided, however, such changes
required by TVA shall be limited to those consistent with Good Utility Practice
and with applicable laws and regulations. LSP shall reimburse TVA for the cost
of any changes TVA makes to the TVA Interconnection Facilities under this
Section 2.7 in accordance with the provisions of Section 2.5. TVA shall give LSP
not less than sixty (60) Days' notice prior to commencing work on any such
changes.
2.8 Standards. TVA shall cause the construction, operation, and
maintenance of the TVA Interconnection Facilities to be consistent with the
procedures, practices, and standards routinely employed by TVA with respect to
the construction, operation, and maintenance of its own similar facilities,
consistent with Good Utility Practice, including without limitation, any
applicable bidding or other cost control procedures.
2.9 Facilities Retirement. If this Agreement terminates, other than by
TVA's breach, LSP shall pay TVA for the cost of retiring the TVA Interconnection
Facilities, (including removal and disposal costs), offset by any salvage
received for reusable materials and equipment of removed TVA Interconnection
Facilities, and TVA shall cause to be abandoned any land rights including
easements and rights-of-way and rights of ingress and egress in, on, over, and
across property owned or controlled by LSP and/or its affiliates from which TVA
Interconnection Facilities are removed for which TVA no longer has any need.
Said abandonment shall be made after payment by LSP to TVA of TVA's costs
incurred under this Section 2.9. The obligations of the Parties under this
paragraph shall survive any such termination until they are discharged.
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ARTICLE 3
LSP INTERCONNECTION FACILITIES
3.1 LSP Interconnection Facilities. Upon completion, testing, and
acceptance of the Interconnection Facilities pursuant to this Agreement and
subject to the other terms and conditions of this Agreement, LSP shall operate
and maintain the LSP Interconnection Facilities as necessary to deliver, when
LSP so elects, electrical energy from the Facility at the Point of
Interconnection. Except as otherwise provided in this Agreement, LSP, at its
expense, shall be responsible for designing, installing, owning, operating, and
maintaining the LSP Interconnection Facilities up to the Point of
Interconnection.
3.2 Description of LSP Interconnection Facilities. (a) The LSP
Interconnection Facilities shall include without limitation: three (3) step-up
transformers; nine (9) 161-kV power circuit breaker installations, including
without limitation foundations, structures, busses, and associated equipment; a
230/161-kV transformer bank; two (2) 161-kV transmission lines extending from
the LSP 161-kV Substation to TVA's Batesville 161-kV Substation, a 230-kV
transmission line extending from the LSP 161-kV Substation to Entergy's
Batesville 230-kV Substation; and the System Protection Facilities.
(b) LSP shall, at its expense, provide the battery and station service
power requirements for the TVA Interconnection Facilities located in the LSP
161-kV Substation.
(c) LSP shall make available to TVA, without cost to TVA, a portion of
LSP's switchhouse located in the LSP 161-kV Substation to be maintained and used
by TVA as it deems appropriate in connection with the operation of the
facilities provided under this Agreement, including, without limitation, any
relaying, metering, and communication and control equipment.
3.3 Standards and Review. (a) The LSP Interconnection Facilities shall
meet standards of Good Utility Practice, shall be capable of providing for the
Facility's continuous parallel operation with TVA's electric system, and shall
include a switching device(s) capable of disconnecting the Facility from said
electric system as required under this Agreement. Said switching device(s) shall
be capable of being operated manually, shall be lockable, and shall provide
visual indication of an open circuit when so operated. The LSP Interconnection
Facilities shall be capable of satisfactory coordination with any protective,
monitoring, and control equipment installed by TVA, shall be consistent with the
Interconnection Criteria, and shall be reviewed and approved by TVA pursuant to
Section 3.3(b) of this Agreement.
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(b) LSP shall provide TVA, for review, inspection, and approval by TVA,
the technical specifications and design drawings for the System Protection
Facilities as are reasonably required to enable TVA to accommodate the
electrical interconnection of the LSP Interconnection Facilities at the Delivery
Point in accordance with Good Utility Practice consistent with the
Interconnection Criteria. Within sixty (60) Days of receiving such complete
material, TVA shall inform LSP, in writing, if said System Protection Facilities
are in accordance with Good Utility Practice and otherwise satisfy the
requirements for interconnection specified in this Agreement; provided, however,
if TVA receives at least sixty (60) Days prior notice of LSP's delivery date for
such complete material and the complete material is delivered on or before the
scheduled delivery date, TVA's review shall be completed within thirty (30) Days
of such scheduled delivery date. Any notice of disapproval shall contain an
explanation of the reason for disapproval and a description of the modifications
that would render the disapproved diagrams or specifications acceptable. TVA's
inspection and approval of the technical specifications and design drawings for
the System Protection Facilities shall only be for the purposes of protection
and safety of TVA's system and employees and shall not constitute a guarantee or
warranty of the System Protection Facilities or of the safety or adequacy of the
System Protection Facilities for LSP's purposes. If these are not found to
satisfy such requirements, LSP shall make such corrections as necessary to
provide System Protection Facilities meeting such requirements. All information
and data required under this Section 3.3(b) must (i) be submitted in a manner
reasonably acceptable to TVA and (ii) be completely submitted at least two
hundred ten (210) Days prior to the Operation Date. TVA shall have no
responsibility to LSP for damages, liabilities, costs and expenses caused by
LSP's failure to install and maintain equipment necessary to protect the
Facility and the LSP Interconnection Facilities from faults and other conditions
on either side of the Point of Interconnection. Each Party, at its own expense,
may install such additional equipment as it deems necessary for the protection
of its own property and operations.
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(c) Prior to any modification proposed by LSP during the term of this
Agreement to any LSP Interconnection Facilities, including System Protection
Facilities, or to any Facility equipment or specifications previously reviewed
by TVA pursuant to the System Impact Study Agreement, dated February 23, 1998,
between TVA and LSP, LSP shall supply to TVA, for review and written approval,
proposed diagrams and specifications for such modification. No modification
shall be made prior to TVA approval. TVA shall make reasonable efforts to
provide notice of approval or disapproval within sixty (60) Days of complete
submittal by LSP, provided, however, if, in TVA's sole judgment and consistent
with Good Utility Practice, a new system impact study is required as a result of
the proposed modification by LSP, or due to the complexity of a proposed
modification and the required additional coordination among TVA, Entergy, and
LSP, TVA may require additional time to provide its approval or disapproval. The
standard for review shall be as provided in Section 3.3(b). Any notice of
disapproval shall contain an explanation of the reason for disapproval and a
description of the modifications that would render the disapproved diagrams or
specifications acceptable. The diagrams and specifications shall be consistent
with good engineering practice and shall specify the equipment to be used as to
manufacturer, model, type, technical specifications, and other pertinent
information. Such approvals and review are provided only insofar as required for
the safe and efficient operation of TVA's facilities and properties and are not
to be construed as confirming or endorsing the design or as any warranty of
safety, durability, or reliability of the LSP Interconnection Facilities.
3.4 Changes to LSP Interconnection Facilities. During the term of this
Agreement, LSP shall be responsible for all costs associated with complying with
changes in or additions to the LSP Interconnection Facilities that TVA may from
time to time determine to be reasonably necessary to meet changing conditions
and requirements on TVA's electric system and for the continued safe and
reliable connection and operation of the Facility in parallel with TVA's
electric system in accordance with this Agreement. Any such changes or additions
shall be limited to those changes or additions which are reasonably necessary
for the safe and reliable operation of the Facility in parallel with TVA's
system and as are consistent with Good Utility Practice and with applicable laws
and regulations. LSP shall be given reasonable notice and adequate time to make
any modifications or changes to its facilities and operations necessary to
maintain compliance with such electric system safety and reliability
requirements.
3.5. TVA's Inspection and Approval. As soon as reasonably practicable, but
in no event more than thirty (30) Days after notification from LSP that the LSP
Interconnection Facilities are installed and operational, TVA shall inspect the
LSP Interconnection Facilities to determine compliance with the provisions of
this Agreement and for the protection and safety of TVA's system and employees
and TVA shall provide written approval or notice of defects. If a notice of
defects is given, TVA shall reinspect the LSP Interconnection Facilities as soon
as reasonably practicable, but in no event more than thirty (30) Days after
notification from LSP that the defect has been corrected, and provide written
approval or notice of defects. TVA's inspection and approval shall only be for
the purposes stated in this Section 3.5 and shall not constitute a guarantee or
warranty of the LSP Interconnection Facilities or of the safety or adequacy of
the LSP Interconnection Facilities for LSP's purposes.
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3.6. Energizing LSP Interconnection Facilities. The LSP Interconnection
Facilities shall not be energized until (i) the written approval by TVA has been
given or (ii) LSP has corrected the material defects specified by TVA and TVA
has inspected and given its written approval of the corrections, in either case
as described in Section 3.5. As a further condition to energizing the LSP
Interconnection Facilities, LSP shall provide TVA with evidence reasonably
satisfactory to TVA that LSP has closed on the construction financing required
to complete the Facility and the LSP Interconnection Facilities and that the
agreements providing for the disbursement of such financing are still in full
force and effect.
3.7. Additional Equipment to be Provided by LSP. LSP shall provide at its
expense: (i) A voice telephone extension for the purpose of TVA accessing TVA's
dial-up metering equipment and for communicating with the TVA's Operations
Center; (ii) An extension of TVA's Operations Center's PBX system in the control
room of the Facility; and (iii) Equipment to transmit and receive telecopies.
Items provided by LSP in accordance with this Section 3.7 shall be subject to
the approval of TVA, which approval shall not be unreasonably withheld.
3.8 Inspection. TVA shall have the right, but shall have no obligation or
responsibility, to:
(i) observe LSP's tests and/or inspection of any of LSP's Interconnection
Facilities, including the System Protection Facilities;
(ii) review the settings of LSP's System Protection Facilities and,
consistent with Good Utility Practice, require LSP to make changes to such
settings; and
(iii) review LSP's maintenance records relative to LSP's Interconnection
Facilities, including the System Protection Facilities.
The foregoing rights may be exercised by TVA from time to time as deemed
necessary by TVA upon reasonable notice to LSP. However, the exercise or
non-exercise by TVA of any of the foregoing rights of observation, review, and
inspection shall be construed neither as an endorsement or confirmation of any
aspect, feature, element, or condition of LSP's Interconnection Facilities,
including System Protective Facilities, or the operation thereof, nor as a
warranty as to fitness, safety, desirability, or reliability of same.
3.9 Operation and Maintenance. LSP shall operate and maintain the LSP
Interconnection Facilities, including the System Protection Facilities, in
accordance with Good Utility Practice and the other provisions of this
Agreement. In the event of an emergency condition on the TVA or Entergy systems,
notwithstanding any other provision in this Agreement that may be construed to
the contrary, LSP agrees to operate the LSP Interconnection Facilities in a
manner as reasonably requested by TVA and Entergy and to the extent LSP
determines that it is reasonably able to respond to such request, consistent
with Good Utility Practice.
3.10 Access to Property and Equipment. LSP shall provide for TVA and its
agents free access to LSP's property to the extent necessary for monitoring and
conducting tests and inspections as provided for in this Agreement. All of TVA's
representatives entering upon LSP's property shall at all times comply with
LSP's applicable safety and security
15
procedures that have been conveyed to TVA. TVA shall use its best efforts to
minimize disruption of LSP's operations which might result from the presence of
TVA's employees on LSP's property.
3.11 Transferable LSP Interconnection Facilities. (a) Following the
Operation Date, LSP shall have the option, exercisable upon thirty (30) Days
prior written notice to TVA to transfer ownership of and any associated
operation and maintenance responsibility for the Transferable LSP
Interconnection Facilities to TVA or to any third party affiliated with LSP or
to an unaffiliated third party, in any such case at no cost to TVA. A transfer
of the Transferable LSP Interconnection Facilities to TVA shall be made pursuant
to a xxxx of sale or such other documentation as required by law and reasonably
acceptable to TVA to effect a transfer of title of the Transferable LSP
Interconnection Facilities with all legal warranties. Such documentation
("Transfer Documents") shall include without limitation a conveyance or
assignment in a form reasonably acceptable to TVA of any land rights including
easements and rights-of-way and rights of ingress and egress in, on, over, and
across property necessary for TVA to own, operate, and maintain the Transferable
LSP Interconnection Facilities. Such transfer of the Transferable LSP
Interconnection Facilities to TVA shall be for no additional consideration by
either Party to the other. Prior to effecting the transfer of the Transferable
LSP Interconnection Facilities to any other party, LSP shall demonstrate to
TVA's reasonable satisfaction that it has made arrangements for any required
maintenance and the continued operation of the Transferable LSP Interconnection
Facilities to be performed consistent with the provisions of this Agreement at
no cost to TVA. Any transfer and assignment to TVA shall be effective upon the
execution and delivery of the Transfer Documents by LSP, provided that the
effective date of such transfer and assignment shall be subject to the
provisions of Section 12.1 of this Agreement. Any costs incurred by TVA to
effectuate such transfer and assignment shall be reimbursed by LSP pursuant to
the provisions of Articles 9 and 14.
(b) TVA shall use due diligence and cooperate in good faith to cause such
transfer and assignment to be effective as soon as possible after LSP's notice
under Section 3.11(a). Upon the effective date of such transfer and assignment
to TVA, the Transferable LSP Interconnection Facilities shall become TVA
Interconnection Facilities and the provisions of Sections 2.5, 2.6, 2.7, 2.8,
and 2.9 of this Agreement shall apply to such facilities transferred to TVA
under this Section 3.11.
(c) The transfer of the Transferable LSP Interconnection Facilities to a
third party to the extent consistent with the provisions of this Section 3.11
shall not require the additional consent of TVA; provided, however, that LSP
shall remain liable for all obligations under this Agreement with respect to
such transferred facilities; and provided further, that, notwithstanding
anything contained in this Section 3.11 that may be construed to the contrary,
said transfer and assignment shall not be effective until TVA, the third party,
and LSP have executed in a manner reasonably acceptable to TVA, all new
agreements and modifications to existing agreements with TVA that TVA, in its
reasonable judgment, deems necessary to effectuate such transfer and continued
interconnection; and provided further, that LSP shall cause LSP's agreements
with said third party to contain appropriate provisions whereby said third party
agrees to operate and maintain the Transferable LSP Interconnection Facilities
in accordance with the provisions of this Agreement.
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(d) The transfer of the Transferable LSP Interconnection Facilities
to a third party shall be at no cost to TVA. LSP agrees to reimburse TVA
for any costs incurred by TVA as a result of such transfer and which would
not have been incurred by TVA had LSP continued to own such transferred
facilities.
(e) TVA's acceptance of the Transferable LSP Interconnection Facilities is
subject to TVA's having the ability to remotely operate any and all of the
161-kV power circuit breakers included as Transferable LSP Interconnection
Facilities in accordance with the provisions of the last paragraph of Section
7.2 after the effective date of transfer of the Transferable LSP Interconnection
Facilities to TVA.
17
ARTICLE 4
UPGRADED FACILITIES
4.1 Upgraded Facilities. It is recognized that TVA shall perform work on
the TVA transmission system to upgrade certain facilities owned by TVA in
conjunction with the establishment of the Point of Interconnection. The Upgraded
Facilities include (i) replacement of 161-kV breaker installation No.934 in the
Oxford, MS 161-kV Substation, (ii) replacements of 161-kV Oxford line breaker
installation No. 934 and 115-kV bank breaker installation No. 724 in TVA's
Batesville, MS 161-kV Substation, (iii) rebuilding of the approximately 24-mile
long Batesville-Sardis Tap-Oxford 161-kV Transmission Line using steel-pole
construction and 2034.5 kcmil ACSR conductor, and (iv) installation of current
monitoring equipment on the Batesville 161-115-kV transformer bank,
Batesville-Sardis Tap-Oxford 161-kV Transmission Line and the Batesville-Water
Valley-Coffeeville 161-kV Transmission Line.
4.2 Cost of Upgraded Facilities. TVA shall, at LSP's expense, perform the
work provided for in Section 4.1. LSP shall pay TVA for all actual costs,
including applicable overheads, incurred by TVA in connection with all phases of
TVA's design, construction, and installation of the Upgraded Facilities provided
by TVA under this Article 4 including the necessary acquisition of any
rights-of-way or land rights, in the event the existing rights-of-way and land
rights are not adequate for the upgrade, and any necessary environmental
reviews. LSP shall also pay to TVA all actual costs, including applicable
overheads, incurred by TVA in removing and disposing of the three (3) breaker
installations and the 161-kV transmission line ("Replaced Facilities") to be
replaced by the Upgraded Facilities, and the undepreciated portion of the cost
of installing the Replaced Facilities. The cost of installing the Replaced
Facilities shall be deemed to be the actual total installed cost, including
applicable overheads, less salvage received for reusable materials and
equipment. Payments by LSP to TVA for costs incurred by TVA under this Section
4.2 shall be made in accordance with the provisions of Section 2.4.
4.3 Operation and Maintenance of the Upgraded Facilities. TVA shall, at
its expense, operate and maintain the Upgraded Facilities and the remainder of
the TVA system in accordance with Good Utility Practice. Upon completion of the
Upgraded Facilities and subject to the other terms and conditions of this
Agreement, TVA shall operate and maintain the Upgraded Facilities to maintain at
least the design capacity to which they were upgraded under this Agreement.
4.4 Service to Others. Regardless of anything in this Agreement that might
be construed to the contrary, the Upgraded Facilities are considered to be a
part of the TVA integrated transmission system and may therefore be used by TVA
for serving others.
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4.5 Standards. TVA shall cause the construction, operation, and
maintenance of the Upgraded Facilities to be consistent with the procedures,
practices, and standards routinely employed by TVA with respect to the
construction, operation, and maintenance of its own similar facilities,
consistent with Good Utility Practice, including without limitation, any
applicable bidding or other cost control procedures.
4.6 Synchronization Before Completion of Upgraded Facilities. In the event
that the Upgraded Facilities are not completed by the Initial Synchronization
Date, LSP shall nonetheless be allowed to synchronize the Facility, subject to
the provisions of Section 6.7, and deliver Facility Electrical Output to the TVA
transmission system but only to the extent TVA's transmission system can accept
such energy.
4.7 Changes to Upgraded Facilities. The Parties hereby recognize that, in
the future, circumstances may require changes in the Upgraded Facilities
provided under this Article 4. Such changes may include additions or
replacements, including without limitation changes to maintain the protection
and continued safe and reliable operation of TVA's electric system. When, in
TVA's opinion, changes to the Upgraded Facilities become necessary due to LSP's
continued connection to the TVA electric system, or when LSP requests them, such
changes shall be made by TVA at LSP's expense, provided, however, such changes
required by TVA shall be limited to those consistent with Good Utility Practice
and with applicable laws and regulations. LSP shall reimburse TVA for any
changes TVA makes to the Upgraded Facilities under this Section 4.7 in
accordance with the provisions of Section 2.4. TVA shall give LSP not less than
sixty (60) Days' notice prior to commencing work on any such change.
4.8 Certain Limitations. It is recognized that under certain conditions
identified in the System Impact Study prepared by TVA for LSP, dated May 21,
1998, TVA's Batesville 161-115-kV transformer bank and the Batesville-Water
Valley-Coffeeville 161-kV Transmission Line could become overloaded following
the interconnection of the Facility to the TVA system. While TVA agrees that the
installation of current monitoring equipment on these facilities is consistent
with Good Utility Practice, TVA nonetheless reserves the right to disconnect the
Facility or curtail deliveries from the Facility upon TVA's request in
accordance with Section 7.2 if these facilities become overloaded due to the
Facility. Such rights will be in addition to any other right of Curtailment or
Disconnection TVA may have under Section 7.2.
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4.9 Batesville-Sardis Tap-Oxford 161-kV Transmission Line. Subject to
TVA's right to delay or suspend performance pursuant to Section 9.1(c), TVA
shall use due diligence to complete, or cause to be completed and placed in
service, the rebuilt Batesville-Sardis Tap-Oxford Transmission Line on or before
the Scheduled Completion Date. If LSP reasonably determines that, due to a
willful or negligent act or omission by TVA, the rebuilding of the
Batesville-Sardis Tap-Oxford 161-kV Transmission Line will not be completed by
the Scheduled Completion Date, LSP may provide TVA with written notice of its
determination setting forth in reasonable detail the actions necessary to cure
the failure. If, within thirty (30) Days after such notice, TVA fails to provide
LSP with reasonably satisfactory evidence that it has cured or has plans that
will cure such failure, LSP may, upon thirty (30) Days' notice to TVA, without
prejudice to any other remedies it may have, cause the remaining work to be
completed in accordance with the design specifications and standards for such
work prepared by TVA pursuant to this Agreement by an independent contractor
selected from a list provided by TVA; provided, however, that the provisions of
Section 3 of the TVA Act regarding the payment of the prevailing rate of wages
shall apply to any independent contractor selected by LSP to work on the
Batesville-Sardis Tap-Oxford 161-kV Transmission Line. Notwithstanding the
provisions of this Section 4.9 that may be construed to the contrary, LSP shall
remain responsible for reimbursing TVA, in accordance with the provisions of
Section 4.2, for all of TVA's actual costs, including applicable overheads,
incurred in connection with the rebuilding of the Batesville-Sardis Tap-Oxford
161-kV Transmittion Line.
20
ARTICLE 5
FACILITIES STUDY (INCLUDING SCOPING WORKSHOP)
5.1 Facilities Study. A detailed Facilities Study, which shall include a
project scoping workshop, shall be conducted by TVA at LSP's expense. TVA shall
use reasonable efforts, consistent with Good Utility Practice, to complete the
Facilities Study within sixty (60) Days of receiving authorization to complete
the Facilities Study from LSP. The Facilities Study is an engineering study that
includes a detailed cost estimate for the modifications needed to interconnect
the Facility with the TVA transmission system and the Scheduled Completion Date.
It is scheduled for TVA and LSP to participate in the project scoping workshop
in August 1998, or as soon as reasonably practicable thereafter at LSP's
election, as a joint effort between the Parties to develop a detailed scope of
work activities under this Agreement, including without limitation preliminary
design specifications, construction schedule, and budget estimates. Under TVA's
normal operating practices, TVA would not execute this Agreement prior to the
completion of the Facilities Study. However, LSP has informed TVA that time is
of the essence in completing this Agreement. Therefore, in response to the
request of LSP, TVA is agreeable to executing this Agreement subject to the
Parties' understanding and agreement that the specific equipment and facilities
specified in, and associated responsibility for costs under, the provisions of
Articles 2, 3, and 4 and Exhibits A, B, and C are preliminary in nature and
cannot be finalized until after the completion of the Facilities Study;
provided, however, it is the understanding of the Parties that, in order to
establish an interconnection between the LSP Facility and the TVA transmission
system, no other major facilities are to be added to the TVA Interconnection
Facilities or the Upgraded Facilities other than those facilities specified in
Articles 2 and 4. The Parties understand and agree that an amendment to this
Agreement may be necessary after the completion of the Facilities Study to
better define the facilities arrangements and the responsibilities of the
Parties under Articles 2, 3, and 4 of this Agreement. The Parties agree to
exercise good faith efforts and shall cooperate with each other in developing
any required amendment to this Agreement, consistent with the determinations
made in the Facilities Study. In consideration of TVA's executing this Agreement
prior to the completion of the Facilities Study, the Parties agree that after
completion of the Facilities Study TVA shall provide LSP with final versions of
Exhibits A, B, and C which Exhibits shall be attached hereto and made a part of
this Agreement without further action of the Parties. The Parties also agree
that in the future, after final versions of Exhibits B and C are provided by TVA
to LSP, additional changes to Exhibit B and C's specification diagrams may be
necessary. Any such additional changes to Exhibits B and C which have been
mutually agreed to by the Parties, as evidenced by the Parties' authorized
representatives initialing such changed Exhibits, shall be provided by TVA to
LSP and shall be attached hereto and made a part of this Agreement without
further action of the Parties.
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5.2 Cost of Facilities Study. LSP shall reimburse TVA for its actual
costs, including applicable overheads, incurred in conducting the Facilities
Study. As soon as practicable after completion of the Facilities Study, TVA
shall submit to LSP an invoice, in writing, for such costs. The provisions of
Articles 9 and 14 shall apply to the invoice issued by TVA under this Article 5.
22
ARTICLE 6
PREOPERATIONAL PERIOD
6.1 Construction of Facilities. TVA shall not commence detailed design or
construction of, or purchase any equipment for, any TVA Interconnection
Facilities or Upgraded Facilities prior to the Authorization Date. Subject to
TVA's right to suspend performance pursuant to Section 9.1(c), TVA shall use due
diligence, consistent with Good Utility Practice, to obtain any applicable
approvals, grants, or permits and to complete the design, any applicable
environmental review, construction, and installation of the TVA Interconnection
Facilities and the Upgraded Facilities on or before the Scheduled Completion
Date. The preliminary estimate for the Scheduled Completion Date is the later of
eighteen (18) Months from either (i) the completion of the scoping workshop
pursuant to Section 5.1 or (ii) the Authorization Date. TVA shall notify LSP of
any changes to the Scheduled Completion Date and shall provide LSP with a
revised Scheduled Completion Date.
6.2 Permits and Licenses. LSP shall be responsible at its own expense for
obtaining and maintaining all Federal, State, and local permits, licenses, and
approvals that are necessary to construct, operate, and maintain the Facility
and any related or associated facilities owned by LSP, including the LSP
Interconnection Facilities. LSP shall also be responsible for the cost of
completing all environmental reviews, analyses, and studies and any associated
public review processes that are necessary for the permitting, licensing, and
approval of the Facility and any related or associated facilities owned by LSP,
including the LSP Interconnection Facilities. TVA shall not have any
responsibility whatsoever for obtaining any permits, licenses, and approvals
necessary to operate, construct, or alter the Facility and any related or
associated facilities owned by LSP, including the LSP Interconnection
Facilities. The Facility and the LSP Interconnection Facilities shall meet all
requirements of applicable safety and/or engineering codes, and further, shall
meet all requirements of any duly constituted regulatory authority having
jurisdiction over the Facility and the LSP Interconnection Facilities.
6.3 Start-Up and Test Schedule. LSP shall submit for TVA's review and
approval a start-up and test schedule for the Facility at least thirty (30) Days
prior to start-up and testing of the Facility. Subject to LSP's reasonable Site
rules conveyed to TVA and with reasonable notice to LSP, TVA shall have the
right to monitor the start-up and testing of the Facility to the extent
necessary to assure compliance with the provisions of this Agreement. LSP shall
cooperate in such monitoring of the Facility as may be reasonably required by
TVA during the start-up and testing of the Facility. TVA's technical review and
inspection of the Facility during the start-up and testing phase shall not be
construed as TVA's approval or endorsement of the design thereof or as any
warranty of the safety, durability, or reliability of the Facility.
6.4 Operating Committee. (a) Following the execution of this Agreement,
the Parties shall each appoint two representatives and one alternate to an
Operating
23
Committee. Each such Party shall notify the other Parties of its appointments in
writing. Such appointments may be changed at any time by similar notice. The
Operating Committee shall meet as necessary, but no less than once each calendar
year, to carry out the duties set forth herein. The Operating Committee shall
hold a meeting at the request of any Party, at a time and place agreed upon by
the representatives. Each representative and alternate shall be a responsible
person working with the day-to-day operations of his or her respective
facilities or system. The Operating Committee shall represent the Parties in all
matters arising under this Agreement which may be delegated to it by mutual
agreement of such Parties.
(b) The operating matters subject to coordination under this section shall
include the following:
(i) Matters pertaining to the establishment and maintenance of
control and operating procedures (as described below);
(ii) Matters pertaining to the scheduling of maintenance of the
generating and transmission facilities of the Parties;
(iii) Matters pertaining to the control of energy flow, kilovar
flow, voltage, and other similar matters bearing upon the satisfactory
synchronous operation of the systems of the Parties; and
(iv) Such other matters not specifically provided for herein upon
which cooperation and coordination are necessary in order to carry out the
purposes and provisions of this Agreement.
(c) The Parties shall cooperate in providing to the Operating Committee
all information required in the performance of the Committee's duties. All
decisions and agreements, if any, made by the Operating Committee shall be
evidenced in writing. The Operating Committee shall have no power to amend or
alter the provisions of this Agreement.
(d) The Operating Committee shall mutually develop written operating
procedures (the "Operating Procedures") no later than sixty (60) Days prior to
the Initial Synchronization Date. The Operating Procedures shall be established
by mutual agreement by the Parties based on the designs of the Facility, the LSP
Interconnection Facilities, the TVA Interconnection Facilities, the Upgraded
Facilities, other facilities located on the TVA system, and facilities located
on the Entergy system. The Operating Procedures shall be used as a guide on how
to integrate the Facility and the Facility Electrical Output into TVA's and
Entergy's bulk electric systems. Topics covered shall include without limitation
methods of day-to-day communications, key personnel list for the Parties'
Operations Centers, clearances and switching practices, outage scheduling, daily
estimates of capacity and energy, unit operations log and reactive power
support.
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6.5 Voltage Schedule. (a) TVA shall prepare and submit to LSP a written
voltage schedule (consistent with Good Utility Practice and with applicable laws
and regulations) no later than thirty (30) Days prior to the Operation Date. TVA
may change such voltage schedule upon thirty (30) Days' prior written notice.
Said voltage schedules shall be coordinated and be consistent with the voltage
schedules provided to LSP by Entergy. LSP shall comply with the voltage schedule
specified by TVA as related to the operation of the Facility and shall be
responsible for installing, operating, and maintaining the appropriate equipment
necessary to comply with the voltage schedule specified by TVA. This voltage
schedule shall be based on the normally expected operating conditions for the
Facility and the reactive power requirements of TVA's system; provided that, in
no event shall the voltage schedule require the Facility to be operated at a
power factor outside the range of .95 lagging to .95 leading. TVA may request
LSP to operate the Facility at a power factor outside the range specified above,
but LSP shall not be obligated to do so if such operation would be inconsistent
with the Facility's design limits. Furthermore, if LSP agrees to such request
from TVA, prior to operating outside the range specified above, TVA and LSP
shall agree on the compensation LSP is to receive for operating the Facility at
a power factor outside the range specified in this Section 6.5.
(b) LSP shall reimburse TVA for costs associated with installation on
TVA's system of power factor correction equipment which is or becomes necessary
as a result of LSP failing to operate the Facility in accordance with
appropriate voltage schedules as provided in this Section 6.5(a). Prior to
installing such correction equipment at LSP's expense, TVA shall inform LSP of
the need to do so and shall provide LSP reasonable opportunity to correct the
situation.
(c) If Facility Electrical Output is transmitted across the TVA
transmission system, to the extent applicable and consistent with the
Guidelines, an appropriate adjustment to the charge for reactive supply and
voltage control under the applicable transmission service agreement shall be
made to reflect the contribution to reactive supply and voltage support made by
the Facility.
6.6 Initial Synchronization Date. For purposes of start-up and testing
prior to the Operation Date, LSP shall notify TVA of the planned Initial
Synchronization Date in writing no less than two (2) weeks prior to the first
scheduled occurrence of such date. TVA shall approve the Initial Synchronization
Date (which approval shall not be unreasonably withheld) within two (2) Business
Days of LSP's notice and shall have the right to have representatives present at
the Facility for the initial synchronization to the extent necessary to assure
compliance with the provisions of this Agreement.
6.7 Change in Initial Synchronization Date. TVA reserves the right to
delay the Initial Synchronization Date due to problems with the Facility which
would give TVA a right to disconnect the Facility pursuant to Section 7.2. In
such event, TVA shall give LSP notice of such problems and LSP shall, at its
expense, remedy any such problems with facilities or equipment which LSP is
responsible for installing and/or maintaining.
25
6.8 Purchase of Capacity and/or Energy. TVA shall not be purchasing any
capacity and/or energy from LSP under this Agreement. Any purchase by TVA of
capacity and/or energy generated by the Facility shall be covered under a
separate agreement between TVA and LSP.
6.9 Power Supply to LSP. Any needs LSP may have for electric capacity
and/or energy for the operation of its Facility must be obtained under
arrangements separate from this Agreement. Any deliveries of such capacity
and/or energy must be metered and accounted for separately from the Facility
Electrical Output generated by the Facility. Any provision of such capacity
and/or energy by TVA shall be in accordance with the applicable rates, rules and
regulations, and service policies governing such service by TVA to LSP.
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ARTICLE 7
CONTROL AND OPERATION OF THE FACILITY
7.1 Communications. LSP shall inform TVA as to the next Day forecasted
hourly generation levels of the Facility, including, without limitation, any
anticipated outages. LSP shall notify and coordinate with TVA prior to the
commencement of any work by LSP (or contractors or agents performing on LSP's
behalf) that may directly or indirectly have an adverse effect on the TVA,
Entergy, or other electric systems. LSP shall immediately notify TVA at the time
when any unscheduled or forced outages occur to the LSP Interconnection
Facilities or the Facility that would substantially impact the reliable
operation of the TVA, Entergy, or other electric systems. LSP shall immediately
notify TVA upon the occurrence of any changes to the information provided by LSP
to TVA under this Section 7.1. In the event TVA temporarily loses the
telemetered load signals provided to the TVA Control Center under Section 2.3,
LSP shall, when requested by TVA, provide TVA verbally with the metered data,
such data to include periodic updates during each hour of the MW amounts and the
MWh amounts at the end of the hour. It is the responsibility of the Parties to
utilize their best efforts to perform the work necessary to restore the
telemetered load signals as soon as possible.
7.2 Disconnection of Facility or Curtailment of Deliveries. Subject to
Good Utility Practice and consistent with applicable laws and regulations, TVA
may require LSP to disconnect the Facility from the TVA system ("Disconnection")
or to interrupt, suspend, or curtail deliveries from the Facility (the
occurrence of the foregoing referred to collectively as "Curtailment") in the
following circumstances:
(i) if, in TVA's sole opinion, a condition exists which presents a
physical threat to persons or property and Disconnection or Curtailment appears
necessary to protect TVA's customers, employees, or agents or TVA's and its
customers' property; or
(ii) to overcome system reliability problems caused by an emergency; or
(iii) if such Disconnection or Curtailment is necessary to construct,
install, maintain, repair, replace, remove, investigate, inspect or test any
part of the Interconnection Facilities or any other affected part of TVA's
system; or
(iv) to facilitate restoration of line or equipment outages; or
(v) to overcome system reliability problems caused by an outage of TVA's
equipment or generation facilities; or
(vi) in the event LSP refuses to comply with the provisions of Section 8.1
of this Agreement regarding the balancing on an hourly basis of Facility
Electrical Output and the scheduling of energy to third parties; provided that,
there shall be no Disconnection or Curtailment under this Section 7.2 if LSP
takes all actions that are within its control and within the reasonable
capabilities of the Facility to comply with the provisions of Section 8.1; or
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(vii) in accordance with the other express provisions of this Agreement
providing for any such Disconnection or Curtailment including Sections 4.8, 7.4,
7.5, 7.6, 7.7(b), 7.7(c), 8.2, 8.4, and 8.5(b).
TVA shall make a reasonable effort to notify and coordinate such
Disconnection or Curtailment with LSP. Except in the case of an emergency, TVA
shall provide LSP with as much notice in advance of any such Disconnection or
Curtailment as reasonably possible. Such notice may be given orally or by
telecopy to the Facility. Any Disconnection or Curtailment required of LSP
hereunder shall be implemented and completed as soon as possible consistent with
Good Utility Practice. TVA shall keep LSP informed as to the anticipated
duration of each Disconnection or Curtailment. TVA shall restore connection and
resume acceptance of deliveries from the Facility as soon as practicable to the
extent the condition resulting in the Disconnection or Curtailment has abated
sufficiently to permit such resumption.
Notwithstanding anything contained in this Section 7.2, TVA shall have the
right to Disconnect without notice the Facility (or, in lieu of Disconnecting
the entire Facility, open one or more of the 161-kV power circuit breakers
identified as TVA Interconnection Facilities) if, in TVA's sole opinion, a
hazardous condition exists and immediate Disconnection or opening of the 161-kV
power circuit breakers is necessary to protect persons, TVA facilities, or other
customer facilities from damages or interference caused by LSP's interconnection
and/or generating equipment, or lack of properly operating System Protection
Facilities.
7.3 LSP Qualified Personnel. LSP shall ensure that there are a sufficient
number of qualified personnel for operating and monitoring the Facility and for
coordinating operations of the Facility with TVA's system. LSP shall ensure that
such personnel are on duty at all times, twenty-four (24) hours a Day and seven
(7) Days a week.
7.4 Interconnection. LSP and TVA agree that the implementation of this
Agreement shall comply with the then existing (or amended) manuals, standards,
and guidelines of the North American Electric Reliability Council ("NERC") and
the Southeastern Electric Reliability Council ("SERC"), or any successor agency
assuming or charged with similar responsibilities related to the operation and
reliability of the North American electric interconnected transmission grid. To
the extent that this Agreement does not specifically address or provide the
mechanisms necessary to comply with such NERC or SERC manuals, standards, or
guidelines, LSP and TVA hereby agree that both Parties shall provide to the
other Party, upon request, all such information as may be required to comply
with such manuals, standards, or guidelines and shall operate, or cause to be
operated, their respective facilities in accordance with such manuals,
standards, or guidelines. In the event LSP does not comply with such NERC or
SERC requirements, TVA shall have the right, after reasonable notice, to take
any action(s) necessary, consistent with Good Utility Practice, to correct the
situation and charge LSP for the costs incurred to perform such action(s).
28
7.5 Failure to Comply. In addition to any other rights TVA may have under
this Agreement, TVA shall have full authority to inspect (upon reasonable
advance notice) the Facility and its records, to the extent necessary to
determine compliance with this Agreement. LSP shall have the right to redact
information regarding costs, revenues, pricing, profit, or losses contained in
such records which LSP can reasonably demonstrate are commercially sensitive.
TVA shall have the right to disconnect the Facility and suspend the performance
of any TVA duties and obligations hereunder upon the occurrence of any of the
following: (i) Subject to thirty (30) Days' prior written notice, LSP fails to
comply with any of the material terms and conditions of this Agreement (or the
Operating Procedures developed pursuant to Section 6.4(d)) that affect operation
of the TVA system, including the construction, installation, and maintenance of
equipment or adherence to any Exhibit to this Agreement, excluding, however,
matters provided for under Section 7.2; or (ii) LSP fails to make any required
payments under this Agreement after receipt of the required notice from TVA as
required in Section 9.1(c); or (iii) Subject to thirty (30) Days' prior written
notice, LSP fails to allow TVA employees and inspectors reasonable access to
inspect, test, examine, or repair, as applicable, the Facility, the LSP or TVA
Interconnection Facilities, System Protection Facilities, metering, or other
electrical equipment where such access is required under the terms of this
Agreement, after reasonable notice by TVA of the need to do so, excluding,
however, matters provided for under Section 7.2.
Upon LSP's resolving any failures by LSP in the performance of its
obligations as provided for under this Section 7.5, TVA shall, as soon as
practicable, restore connection of the Facility and resume performance of any
TVA obligations hereunder.
7.6 Limitations on Services Provided by TVA. TVA shall not supply capacity
and/or energy to LSP or others from its own sources or from its purchases from
other neighboring systems in a manner inconsistent with the TVA Act, and nothing
in this Agreement or in LSP's agreements with others shall have the effect of
making, nor shall anything in this Agreement or said agreements with others be
construed to require TVA to take any action which would make TVA, directly or
indirectly, a source of power supply to LSP or others outside the TVA area in a
manner inconsistent with the TVA Act. The statutory limitations in the first
three paragraphs of subsection (a) of Section 15d of the TVA Act are
incorporated herein by reference as fully as though set out herein, and this
Agreement shall not be construed as permitting any transaction by TVA which
would be inconsistent with those limitations.
29
7.7 Control Area Operations. (a) All of the Facility Electrical Output
must be delivered to either the TVA or Entergy Control Areas. At least one (1)
year prior to the Initial Synchronization Date, LSP shall notify TVA in writing
of its initial designation of the Control Area to receive the Facility
Electrical Output. LSP may change its Control Area designation upon one (1)
year's prior written notice to TVA. LSP shall reimburse TVA for all costs
incurred by TVA as a result of LSP changing its Control Area designation. TVA
and LSP recognize that, regardless of the Control Area selected by LSP, if the
Facility Electrical Output is creating an adverse effect on the TVA system which
condition is of the type, magnitude, or duration which, regardless of which
Control Area the Facility was located in or to which system the Facility
Electrical Output was being delivered, would give rise to a right of
Disconnection or Curtailment pursuant to Section 7.2, LSP shall be responsible
for taking whatever action is required to alleviate the condition on the TVA
system to the extent necessary to overcome the adverse effect giving rise to
such right of Disconnection or Curtailment.
(b) TVA and LSP recognize that when LSP has designated Entergy as the
Control Area under Section 7.7(a), unscheduled energy from the Facility may flow
over the TVA system as an indirect, unavoidable, and unintentional consequence
of the physical and electrical characteristics of the interconnected network of
transmission lines of which the transmission systems of TVA and Entergy are a
part. TVA shall permit such flows to occur on its transmission system subject,
however, to the understanding that such flows shall not be of such type,
magnitude, or duration as would create an adverse effect on the TVA system
which, if the Facility Electrical Output were being delivered to TVA, would give
rise to a right of Disconnection or Curtailment pursuant to Section 7.2. Should
such flows of energy become of such type, magnitude, or duration as to cause the
adverse effects set forth above, TVA shall notify Entergy and LSP shall promptly
undertake such action or actions requested by Entergy, up to and including
curtailment of generation, as are necessary to reduce such energy flows to the
extent necessary to overcome the adverse effect giving rise to such right of
Disconnection or Curtailment . Nothing in this Section 7.7(b) shall be construed
to require LSP to take any action inconsistent with Good Utility Practice or a
more specific practice applied by Entergy to generation in its Control Area or
with applicable laws and regulations. LSP agrees that LSP's Interconnection and
Operating Agreement with Entergy, dated May 18, 1998, provides a basis for the
remedial action to be taken as provided above and LSP will make no amendment
that would remove the provision that provides for such remedial action or has
the effect of substantially reducing Entergy's right to take such remedial
action.
30
(c) TVA and LSP recognize that when LSP has designated TVA as the Control
Area under Section 7.7(a), unscheduled energy from the Facility may flow over
the Entergy system or other electrical systems (collectively referred to as
"Other System(s)") as an indirect, unavoidable, and unintentional consequence of
the physical and electrical characteristics of the interconnected network of
transmission lines of which the transmission systems of TVA and the Other
System(s) are a part. Should the Other System(s) notify TVA that such flows of
energy have become of such type, magnitude, or duration as would create an
adverse effect on the Other System(s) which, if the Facility Electrical Output
were being delivered to the Other System(s), would give rise to a right of
Disconnection or Curtailment pursuant to Section 7.2 by the Other System. LSP
shall, upon being notified by TVA to such effect, promptly undertake such action
or actions requested by TVA, up to and including curtailment of generation, as
are necessary to reduce such energy flows to the extent necessary to overcome
the adverse effect giving rise to such right of Disconnection or Curtailment. In
the event that LSP, for whatever reasons, does not undertake such action or
actions requested by TVA, TVA may disconnect the Facility from the TVA system.
(d) Notwithstanding the provisions of Section 7.7(a), LSP may, upon one
(1) year's prior written notice to TVA, designate that the Facility Electrical
Output from one (1) or two (2) of the generators at the Facility be delivered to
the TVA Control Area; provided, however, that the implementation of the
arrangements provided for under this Section 7.7(d) shall be contingent upon (i)
the execution of any necessary contractual arrangements required by TVA, (ii)
agreement among TVA, LSP, and Entergy of any necessary operational arrangements,
and (iii) the provision by LSP, at its expense, of any equipment required by TVA
to accommodate such an arrangement. LSP shall reimburse TVA for all costs
incurred by TVA as a result of LSP changing its Control Area designation under
this Section 7.7(d).
7.8 Operation of LSP Interconnection Facilities. If none of the generators
at the Facility are operating, LSP shall not be required to maintain
simultaneous energized interconnection to both the TVA and Entergy systems. If
one or more of the generators at the Facility are operating, LSP shall normally
maintain simultaneous energized interconnection to both the TVA and Entergy
systems. In the event LSP is unable to maintain such simultaneous energized
interconnection due to a facility outage or other circumstances, LSP shall be
allowed to operate generation at the Facility consistent with the provisions of
this Agreement, including without limitation TVA's right of Disconnection or
Curtailment pursuant to Section 7.2. In the event LSP transfers ownership of the
Transferable LSP Interconnection Facilities to any affiliated or unaffiliated
party excluding TVA, LSP shall require said party to agree to comply with the
provisions of this Section 7.8.
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ARTICLE 8
TRANSMISSION, DELIVERY POINT, CONDITIONS OF DELIVERY
8.1 Transmission of Facility Electrical Output. Except as provided below,
if utilization of the TVA transmission system is needed to deliver the Facility
Electrical Output to third parties, LSP, or an eligible transmission customer
purchasing the Facility Electrical Output, shall arrange and be solely
responsible for any necessary transmission of the Facility Electrical Output to
third parties, in accordance with the Guidelines. Any shortfall in Facility
Electrical Output preventing LSP from meeting its commitments to third parties
shall be the sole responsibility of LSP. Notwithstanding any other provisions of
this Agreement, except as agreed to by the Parties and consistent with
applicable law, TVA shall at no time be obligated to deliver any kilowatt
amounts to third parties in excess of the actual Facility Electrical Output that
is scheduled and delivered to the TVA Control Area ("Designated Output").
Consistent with Good Utility Practice, LSP shall take all actions that are
within its control and within the reasonable capabilities of the Facility to
assure that during each hour the amount of Designated Output shall be equal to
or greater than the schedule of energy (including any applicable transmission
losses) delivered by TVA to said third parties. LSP shall immediately notify TVA
of any circumstances which would cause the Designated Output to be less than the
schedule of energy ("Difference") and shall take immediate corrective action. In
order to account for said Difference, said schedule of energy shall be
appropriately reduced or curtailed as soon as possible by the Parties so that
over the hour, as is reasonably practicable, the Designated Output shall be
equal to or greater than the schedule of energy (including any applicable
transmission losses). In the event a Difference nevertheless occurs over an hour
between the scheduled amount and the Designated Output, LSP shall pay, or cause
a third party to pay, the appropriate charges or other compensation applied to
said Difference consistent with the charges or other compensation applied to
similar power production facilities under comparable circumstances located in
the TVA Control Area.
8.2 Delivery of Facility Electrical Output from TVA to Entergy Control
Area. It is recognized that the transmission systems of TVA and Entergy are
interconnected with the Facility. Therefore, if LSP designates the TVA Control
Area to receive the Facility Electrical Output in accordance with Section 7.7,
as long as consistent with Federal open access regulations and FERC decisions
and other applicable law, TVA, at the time of execution of this Agreement, shall
not require LSP or purchasers of the Facility Electrical Output to pay a
transmission service charge (excluding any charges or compensation provided for
in Section 8.1) for the delivery of Facility Electrical Output from the TVA
Control Area to the Entergy Control Area, provided that the Facility remains
directly connected to the Entergy system and that no such transmission service
charge is imputed to TVA or its customers under the Guidelines, and provided,
further, that the scheduling provisions of the Guidelines shall remain in full
force and effect and shall apply to any such deliveries. In the event the
contract path pricing and contracting methodology for transmission service
provided under the Guidelines is changed by TVA to a flow-based pricing and
contracting methodology, the provisions of this Section 8.2 shall be of no force
and effect as of the effective date of such change to the Guidelines.
32
8.3 Credit for Transmission Charges. As a result of TVA's installing
the Upgraded Facilities, at LSP's expense, under Article 4, LSP, or upon LSP's
designation (said designation to be provided to TVA prior to the end of the
then-current calendar Month), an eligible transmission customer purchasing
Facility Electrical Output, shall receive a corresponding credit on its monthly
invoice applied to any network, firm point-to-point, or non-firm point-to-point
transmission services charges incurred under the Guidelines for transmitting
Facility Electrical Output, provided, however, any applicable credit applied to
the transmission service charges for network transmission service in a Month
shall be determined as if point-to-point transmission service was used (the
point-to-point transmission rate applied to the highest amount of Facility
Electrical Output in a Month). The total amount available for said credit shall
be up to the amount paid by LSP to TVA for providing the Upgraded Facilities.
8.4 Delivery Point and Conditions of Delivery. The Delivery Point for
Facility Electrical Output shall be the Point of Interconnection of the LSP
Interconnection Facilities to the TVA Interconnection Facilities, as depicted in
Exhibit B. The Facility Electrical Output delivered to TVA at the Delivery Point
shall be in the form of 3-phase, alternating current at a frequency of
approximately 60 hertz and a nominal voltage of 161,000 as defined by the then
latest revision of ANSI C84.1 Standard for Electric Power Systems and Equipment
- Voltage Ratings (60 HZ). In addition to TVA's right to disconnect the Facility
from the TVA system as provided elsewhere in this Agreement, TVA may disconnect
the Facility from the TVA system at any time that the limits on voltage and
frequency provided for under this Section 8.4 are not maintained and the
deviations by LSP from the voltage and frequency limits specified above are
adversely affecting TVA or a third party.
8.5 Fluctuations or Disturbances on TVA's Electric System Facilities. (a)
LSP shall operate its Facility and the LSP Interconnection Facilities in such
manner that the Facility Electrical Output delivered by LSP shall meet the
requirements for voltage level, power factor, harmonics, and other electrical
specifications specified in writing by TVA in the Interconnection Criteria,
consistent with Good Utility Practice and, to the extent required by applicable
laws and regulations, with the requirements applied by TVA to similar power
production facilities located in the TVA Control Area in comparable
circumstances, including without limitation size, age, location, and operating
characteristics, whether owned by TVA or third parties. In this regard, TVA
shall have the right to inspect, test, and monitor the operation of the Facility
and the LSP Interconnection Facilities to the extent necessary to establish
whether the delivery of the Facility Electrical Output from LSP meets those
requirements. LSP is responsible for conducting whatever tests and inspections
it deems appropriate for its own purposes. Except in an emergency affecting
TVA's system, TVA shall endeavor to (i) conduct all tests and inspections of the
Facility and the LSP Interconnection Facilities during mutually agreeable
periods and (ii) unless otherwise agreed by the Parties, notify LSP at least two
(2) Business Days in advance of any proposed test or inspection. TVA shall use
its best efforts to minimize any disruption of LSP's operations which might
result from any such tests or inspections. All of TVA's representatives entering
upon LSP's property shall at all times comply with LSP's applicable safety and
security procedures that have been conveyed to TVA.
33
(b) LSP shall provide, at its expense, suitable equipment which shall meet
the specifications provided by TVA pursuant to this Section 8.5. In the event,
however, that the Facility fails to meet such specifications and such failure
causes, or may cause, a material adverse effect on TVA's electric system, TVA
shall notify LSP of the circumstances, and TVA shall have the right to have the
Facility disconnected from TVA's electric system until the condition causing
such effect is corrected by LSP. LSP shall be given written notice of these
circumstances in addition to the above-mentioned notice, but the requirement of
providing such written notice shall not limit or delay TVA's right to disconnect
the Facility from TVA's electric system to the extent immediate action is
necessary to protect TVA's customers, employees, contractors, or agents or TVA's
and its customers' property. LSP shall notify TVA when satisfactory corrective
measures have been taken and, upon consent of TVA (which shall not be
unreasonably withheld), operations shall be restored as soon as practicable.
34
ARTICLE 9
BILLING AND PAYMENT
9.1 Invoicing and Payment. (a) Except as otherwise provided herein, the
Party owed any amount due under this Agreement (the "Billing Party") shall
submit to the other Party (the "Billed Party") an invoice, in writing, as soon
as practicable after the end of each calendar Month for amounts owed by one
Party to the other. Subject to the remaining provisions of this Section 9.1, the
Billed Party shall pay the invoice on or before the twentieth (20th) Day after
the date of the invoice. If the due date falls on a non-business day, then the
payment shall be due on the next following Business Day. The invoice shall
contain the contract number assigned to this Agreement by TVA (98PAP-236148).
(b) If the Billed Party fails to pay the amount of the Billing Party's
invoice when due, the Billed Party shall pay interest on the unpaid amount based
on the maximum rate under the United States Prompt Payment Act, (31 U.S.C.
ss.3901-3906) as published in the Federal Register and adjusted periodically
(currently semi-annually). Interest shall accrue from the date that the amount
was due to the date on which the Billing Party receives payment. The Billing
Party shall submit an invoice to the Billed Party for such added charge, which
shall be due and payable upon receipt.
(c) If the Billed Party fails to pay the amount due by the due date, the
Billing Party shall have the right to delay or suspend the work or services
being performed until after such payment failure has been satisfactorily
resolved, provided that, TVA shall notify LSP at least five (5) Business Days
prior to delaying or suspending the work or services being performed by TVA
under this Agreement. After the Operation Date, said notification period shall
be increased to ten (10) Business Days. Nothing herein contained shall be
construed as relieving the Billed Party of the obligation to pay the Billing
Party for the work or services completed as of the date such work or services
are delayed or suspended.
(d) The Billed Party must notify the Billing Party of any portion of the
invoice that it disputes on or before twelve (12) Months following the date of
the invoice. The Billed Party shall advise the Billing Party in writing of the
reasons for disputing all or a portion on the invoiced amount. At LSP's request,
TVA shall provide LSP with a cost accounting setting forth in reasonable detail
the expenditures for all labor and materials for which LSP is required to
reimburse TVA under this Agreement. Notwithstanding a Party's disputing all or a
portion of an invoiced amount, the full amount of the invoice (including the
amount in dispute) shall be paid in accordance with Section 9.1(a). The Billing
Party shall refund any amount paid and subsequently determined not to have been
owed, promptly after that determination, and with interest at the rate specified
in Section 9.1(b) from the date of overpayment.
9.2 Offset. Each Party reserves to itself all rights, set-offs,
counterclaims and other remedies and defenses (to the extent not expressly
waived or denied in this Agreement) that it has or to which it may be entitled
arising from or out of this Agreement. All obligations to make payment in
connection with or under this Agreement may be offset against each other,
set-off, or recouped from other payments for amounts determined to be due and
owing.
35
ARTICLE 10
ASSIGNMENT
10.1 Assignment. This Agreement shall be binding upon and shall
inure to the benefit of, and may be performed by, the successors and assigns of
the Parties, except that, no assignment, pledge, or other transfer of this
Agreement by either Party shall operate to release the assignor, pledgor, or
transferor from any of its obligations under this Agreement unless (a) the other
Party consents in writing to such assignment, pledge, or other transfer, and
releases, in writing, the assignor, pledgor, or transferor from any of its
obligations under this Agreement, which consent and release shall not be
unreasonably withheld; (b) the assignment, pledge, or other transfer is to an
affiliate of the assignor, pledgor, or transferor and the assignee, pledgee, or
transferee has assumed, in writing, all of the obligations of the assignor,
pledgor, or transferor under this Agreement, provided that such assignee,
pledgee, or transferee has demonstrated financial capacity at least equal to
that of the assignor, pledgor, or transferor; or (c) such transfer is incident
to a merger or consolidation with, or transfer of all, or substantially all, of
the assets of the transferor to another person, entity, political subdivision,
or public corporation which shall, as part of such succession, assume all of the
obligations of the assignor, pledgor, or transferor under this Agreement,
provided that such person, entity, political subdivision, or public corporation
has demonstrated financial capacity at least equal to that of the assignor,
pledgor, or transferor. LSP, without the need for consent from TVA (but without
relieving LSP of its obligations hereunder) may also assign, pledge, or transfer
its rights under this Agreement as security for the financing of the Facility.
TVA shall execute and deliver such consent to assignment and opinion of counsel,
as reasonably acceptable to TVA, and as may be reasonably necessary to effect
such assignment as security for the financing of the Facility; provided that no
such assignment shall modify or amend, in any respect, any provision of this
Agreement without the express written agreement of TVA. LSP may also assign such
of its rights under this Agreement (but without relieving LSP of its obligations
hereunder) to the extent such assignment is to any party but TVA, as necessary
to effect a transfer of the Transferable LSP Interconnection Facilities
permitted pursuant to Section 3.11. Except as provided above, neither Party may
assign, pledge, or otherwise transfer its rights under this Agreement to any
other entity without the consent of the other Party, which consent shall not be
unreasonably withheld.
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ARTICLE 11
FORCE MAJEURE
11.1 Force Majeure Excuse. Neither Party shall be responsible or liable
for or deemed in breach of this Agreement for any delay or failure in the
performance of their respective obligations under this Agreement (except for
obligations to pay money which shall not be excused due to Force Majeure) to the
extent such delay or failure is due solely to circumstances beyond the
reasonable control of the Party experiencing such delay or failure (such Party
referred to herein as the "Non-Performing Party"), including but not limited to
acts of God; labor disturbance; extraordinarily severe weather conditions; war;
riots; requirements, actions or failures to act on the part of governmental
authorities preventing or delaying performance; fire; damage to or breakdown of
necessary facilities (such causes hereinafter called "Force Majeure"); provided
that:
(i) The Non-Performing Party gives the other Party written notice
within two (2) Business Days, with details to be supplied within ten (10)
Days further describing the particulars of the occurrence;
(ii) The suspension of performance is of no greater scope and of no
longer duration than is attributable to the Force Majeure;
(iii) The Non-Performing Party uses its best efforts to remedy its
inability to perform;
(iv) When the Non-Performing Party is able to resume performance of
its obligations under this Agreement, that Party shall give the other
Party written notice to that effect; and
(v) The Force Majeure was not caused by or connected with any
negligent or intentional acts, errors or omissions, or failure to comply
with any law, rule, regulation, order or ordinance or for any breach or
default of this Agreement by the Non-Performing Party.
11.2 Records. Each Party shall retain records of events it claims under
Section 11.1 as Force Majeure and of its efforts to remedy the effects of the
Force Majeure and, on request, shall make those records available to the other
Party.
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ARTICLE 12
GOVERNMENTAL JURISDICTION AND AUTHORIZATION
12.1 Laws, Regulations, Orders, Approvals, and Permits. This Agreement is
made subject to present and future applicable local, state, and Federal laws and
to the regulations or orders of any local, state, or Federal regulatory
authority having jurisdiction over the matters set forth herein, and performance
under this Agreement is conditioned upon securing and retaining such local,
state, or Federal approvals; grants; or permits and upon the satisfactory
performance of all necessary environmental reviews as may from time to time be
necessary with respect to such performance. Each Party shall use its
Commercially Reasonable best efforts to secure and retain all such approvals,
grants, and permits within such time as shall permit it to perform all of its
obligations under this Agreement.
12.2 Rights Under the Federal Power Act or Other Law. The Parties have
agreed upon the terms of this Agreement and no Party shall file a request for an
order or other relief from a regulatory authority having jurisdiction in the
matter; provided, however, if TVA exercises the right to terminate this
Agreement under Section 1.1 or changes terms or requirements under this
Agreement then nothing in this Agreement shall restrict the rights of any Party
to file a request for an order or other relief from a regulatory authority
having jurisdiction in the matter or make any other filing provided for under
any law or regulation applicable to any other matter set forth under this
Agreement. Notwithstanding this provision, neither Party is waiving the right to
challenge the authority of any regulatory authority to which any such request
for order or relief is made.
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ARTICLE 13
RECORDS, RECORD RETENTION, AND CONFIDENTIALITY
13.1 Imaged Agreement. An original executed version of this Agreement or
notice or other communication given under this Agreement may be photocopied and
stored on computer tapes and disks (the "Imaged Agreement"); provided a copy of
the Imaged Agreement is made available to the other Party. The Imaged Agreement,
if introduced as evidence on paper in any judicial, arbitration, mediation, or
administrative proceedings, shall be admissible as between the Parties to the
same extent and under the same conditions as other business records originated
and maintained in documentary form. Neither Party shall contest the
admissibility of the Imaged Agreement under either the business records
exception to the hearsay rule or the best evidence rule on the basis that such
were not originated or maintained in documentary form.
13.2 Confidentiality. A Party may not disclose any information designated
as proprietary or confidential that it receives from the other Party under the
provisions of this Agreement, to a third party (other than on a strict
need-to-know basis to the Party's officers, investors, consultants, lenders,
counsel, or accountants or prospective buyers of the Facility Electrical Output
or assignees permitted pursuant to Article 10 (but only as to the consideration
of an assignment) that have agreed to keep the terms confidential) except to
comply with any applicable law, order, or regulation; provided, however, each
Party shall notify the other Party of any proceeding of which it is aware that
may result in disclosure and use reasonable efforts to prevent or limit the
disclosure consistent with its obligations with respect to such disclosure
required by law or the affected proceeding. The Parties shall be entitled to all
remedies available at law or in equity to enforce, or seek relief in connection
with this confidentiality obligation; provided, however, that all monetary
damages shall be limited to actual direct damages.
13.3 Records Generally. Each Party shall keep complete and accurate
records and all other data required for the purposes of proper administration of
this Agreement.
(a) All such records shall be maintained for a minimum of five (5) years
after the creation of such record or data and for any additional length of time
required by regulatory agencies with jurisdiction over the Parties.
(b) LSP shall maintain an accurate and up-to-date operating log at the
Facility with records of:
(i) real and reactive power production for each clock hour;
(ii) changes in operating status, scheduled maintenance and other
outages of the Facility; and
(iii) any unusual conditions found during inspections.
39
(c) Either Party, consistent with the other provisions of this Agreement,
shall have the right, at its expense, to examine and inspect all such records
insofar as may be necessary for the purpose of ascertaining the reasonableness
and accuracy of all relevant data, estimates, statements, or charges submitted
to it hereunder. Such records that are designated to be proprietary and
confidential shall only be made available to the Party requesting the
examination on the condition that the records and information are not disclosed,
except as required by law, to third parties without the express written approval
of the Party whose records and cost information are being examined. Each Party
shall notify the other Party of any proceeding of which it is aware that may
result in disclosure and use reasonable efforts to prevent or limit the
disclosure, consistent with its obligations with respect to such disclosure
required by law or the affected proceeding. The Parties shall be entitled to all
remedies available at law or in equity to enforce, or seek relief in connection
with this confidentiality obligation; provided, however, that all monetary
damages shall be limited to actual direct damages.
40
ARTICLE 14
NOTICES, INVOICES, PAYMENTS
14.1 Notices. Except as otherwise expressly provided in other sections of
this Agreement, any notice provided for in this Agreement must be in writing and
shall be effective on the Business Day following the Day on which it is actually
received (provided that such Day is a Business Day, otherwise it shall be
effective on the Business Day immediately following such Day), in person by U.S.
Mail or other nationally recognized delivery service, or by facsimile
transmission (unless it confirms a prior oral communication, in which case it
shall be deemed effective on the Day received) at the following address:
If to TVA:
Tennessee Valley Authority
0000 Xxxxxx Xxxxxx, XX 0X
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Executive Vice President, Transmission/Power Supply Group
Facsimile: (000) 000-0000
If to LSP:
LSP Energy Limited Partnership
c/o LS Power, LLC
000 Xxxxx Xxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Batesville Project Manager
Facsimile: (000) 000-0000
14.2 Invoices. Invoices should be mailed by the Billing Party to the
Billed Party at the following addresses, unless other billing procedures have
been agreed to in writing by the Parties:
If TVA is the Billed Party:
TVA Accounts Payable Department
P.O. Box 15500 (400 Xxxx Xxxxxx Xxxx Xxxxx)
Xxxxxxxxx, Xxxxxxxxx 00000-0000 (37902-1499)
If LSP is the Billed Party:
LSP Energy Limited Partnership
c/o LS Power, LLC
000 Xxxxx Xxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Batesville Project Manager
Facsimile: (000) 000-0000
14.3 Payments. All payments required under this Agreement shall be made by
Automated Clearing House (ACH) to the following accounts (unless an alternate
payment method has been agreed to by the Parties), with the amounts deemed
received as of the date the electronic fund transfer to the recipient's account
is deemed effective:
If to TVA:
41
Cash Link-ACH Receiver
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Routing Transit No. 000000000
Account No. 349000, for the credit of
Tennessee Valley Authority
If to LSP:
The Chase Manhattan Bank, N.A.
New York, New York
Account No. 000-0-000000
ABA Routing No. 000-000-000
P.T.I.S. Division
Account No. 00000000, for the credit of
LSP Energy Limited Partnership
14.4 Change. A Party may change the location for its notices, invoices, or
payments by notice to the other Party, which change shall be binding on the
other Party no earlier than the second Business Day following the receipt of
notice of change.
42
ARTICLE 15
INSURANCE
15.1 Insurance Requirements. Without limiting any obligations or
liabilities under this Agreement, LSP shall, at its own expense, on or before
the Authorization Date, provide and maintain, in effect for the term of this
Agreement, the following policies of insurance:
(a) Workers Compensation insurance which complies with applicable laws and
Employers' Liability Insurance with limits of at least $1,000,000; and
(b) Comprehensive or Commercial General Liability insurance with bodily
injury and property damage combined single limits of at least $4,000,000 per
occurrence/annual aggregate. Such insurance shall include, but not necessarily
be limited to, broad form property damage liability, personal injury liability,
explosion and collapse hazard coverage, products/completed operations liability,
and, where applicable, watercraft protection and contractual liability; and
(c) Comprehensive Automobile Liability insurance with bodily injury and
property damage combined single limits of at least $5,000,000 per occurrence
covering vehicles owned, hired, or non-owned; and
(d) Excess Umbrella Liability Insurance with a single limit of at least
$5,000,000 per occurrence/annual aggregate in excess of the limits of insurance
provided in subsections (a), (b), and (c) above.
The insurance to be provided hereunder shall be written by one or more
nationally reputable insurance companies authorized to do business in
Mississippi, which shall be either Lloyds Companies reasonably acceptable to TVA
or rated B+ VII by AM Best. All of LSP's policies of insurance shall provide TVA
with thirty (30) Days prior written notice of cancellation, expiration, or
material adverse modification (except that notice of cancellation for nonpayment
of premiums shall be ten (10) Days). TVA may require LSP at any time to obtain
and maintain increased minimum amounts of insurance coverage to the extent it
reasonably believes such increased minimum amounts of insurance coverage are
necessary in accordance with standard insurance industry practice to cover
changes caused by inflation.
43
15.2 Umbrella Liability Policy, Change to Requirements. The amounts of
insurance required in Section 15.1 above may provide for Commercially Reasonable
deductible amounts and may be satisfied by LSP purchasing or causing to be
purchased primary coverage in the amounts specified or by buying a separate
excess Umbrella Liability policy together with lower limit primary underlying
coverage. The structure of the coverage is at LSP's option, so long as the total
amount of insurance meets TVA's requirements. In the event that any insurance
required under Section 15.1, or any requirement applicable thereto set forth in
Sections 15.3 or 15.4, becomes unavailable on Commercially Reasonable terms and
conditions, LSP may request a revision in such requirements as necessary to
accommodate such change, subject to TVA's approval, not to be unreasonably
withheld.
15.3 Occurrence Form Policies. The coverages requested in Section 15.1(b)
above and any Umbrella or Excess coverage may be "occurrence" form policies or
the AEGIS "claims-made" form coverage. In the event LSP has any other
"claims-made" form coverage, such insurance shall provide for a retroactive date
and continuing "tail" coverage commencing not later than the Authorization Date
and such insurance shall be maintained by LSP, with a retroactive date not later
than the retroactive date required above, for a minimum of five (5) years after
the term of this Agreement.
15.4 Implementing Insurance Requirements. On or before the Authorization
Date, LSP shall cause its insurers to amend its Comprehensive or Commercial
General Liability and, if applicable, Umbrella or Excess Liability policies with
the following endorsement items (a) through (e); and to amend LSP's Workers'
Compensation and Auto Liability policies with endorsement item (e):
(a) TVA, its directors, officers and employees are additional Insureds
under this Policy; and
(b) This insurance is primary with respect to the interest of TVA, its
directors, officers and employees and any other insurance maintained by them is
excess and not contributory with this insurance; and
(c) The following cross liability clause is made a part of the policy: "In
the event of claims being made by reason of (i) personal and/or bodily injuries
suffered by any employee or employees of one insured hereunder for which another
insured hereunder is or may be liable, or (ii) damage to property belonging to
any insured hereunder for which another insured is or may be liable, then this
policy shall cover such insured against whom a claim is made or may be made in
the same manner as if separate policies have been issued to each insured
hereunder, except with respect to the limits of insurance"; and
(d) Insurer hereby waives all rights of subrogation against TVA, its
officers, directors and employees; and
(e) Notwithstanding any provision of the policy, this policy may not be
canceled, non-renewed or materially changed by the insurer without giving thirty
(30) Days' prior
44
written notice to TVA (except that notice of cancellation for nonpayment of
premiums shall be ten (10) Days).
15.5 Evidence of Insurance. LSP shall cause its insurers or agents to
provide TVA with annual certificates of insurance evidencing the policies and
endorsements listed above. Failure of TVA to receive certificates of insurance
does not relieve LSP of the insurance requirements set forth herein. Failure to
obtain the insurance coverage required by this Article 15 shall in no way
relieve or limit LSP's obligations and liabilities under other provisions of
this Agreement.
45
ARTICLE 16
LIABILITY
16.1 Indemnification. LSP agrees to fully indemnify and hold TVA, and its
directors, officers, agents, contractors, and employees, harmless from and
against any and all claims, demands, liability, losses, damage, costs, or
expenses (including attorney's fees and other costs of defense), of any nature
or kind whatsoever, including, but not limited to, claims, demands and/or
liability for personal injury to (including death of) any person whomever
(including payments and awards made to LSP's employees or others under any
worker's compensation law or under any plan for employees' disability and death
benefits) and for damage to any property whatsoever (including the Facility, LSP
Interconnection Facilities, TVA Interconnection Facilities, Upgraded Facilities,
and TVA's system) arising out of or otherwise resulting from the use, ownership,
maintenance, or operation of the Facility or the LSP Interconnection Facilities,
regardless of whether such claims, demands, or liability are alleged to have
been contributed to or caused in part by the negligence of TVA, its directors,
officers, agents, contractors, or employees or to have arisen out of TVA's
status as the owner or operator of its facilities; provided, however, that the
provisions of this Section 16.1 shall not apply to the extent any such personal
injury or property damage is caused by the sole negligence or the sole willful
misconduct of TVA, its directors, officers, agents, contractors, or employees.
16.2 Damages. Neither Party shall be liable in contract, in tort
(including negligence), or otherwise to the other Party, its agents,
representatives, its affiliated and associated companies, and/or its assigns,
for any indirect, incidental, consequential or punitive damages resulting from
either Party's performance or non-performance of an obligation imposed on it by
this Agreement.
46
ARTICLE 17
MISCELLANEOUS
17.1 Entirety. This Agreement, including any operating arrangements
developed pursuant to Section 6.4, and the Exhibits to this Agreement constitute
the entire Agreement between the Parties relating to the subject matter
contemplated by this Agreement. There are no prior or contemporaneous agreements
or representations (whether oral or written) affecting the subject matter other
than those herein expressed. An amendment or modification to this Agreement
shall be enforceable only if reduced to writing and executed by both Parties.
17.2 Interpretation. Unless otherwise expressly stated, references in this
Agreement to "Articles" and "Sections" are to Articles and Sections of this
Agreement, and references to "Exhibits" are to the Exhibits attached to this
Agreement. Headings as found in this Agreement are used solely for convenience
and do not constitute a part of this Agreement, nor should they be used to aid
in any manner in the construction of the Agreement. Words defined in the
singular have the corresponding meaning in the plural and vice versa. Use of
"including" means including without limitation. References to one gender include
all others. Any capitalized terms used in the Exhibits to this Agreement which
are not specifically defined in such Exhibits shall have the meanings ascribed
to them in this Agreement. Such Exhibits shall constitute a material part of
this Agreement and the provisions of such Exhibits shall be interpreted and
enforced as if such provisions were directly set forth in this Agreement.
17.3 Governing Law and Choice of Forum. This Agreement and the rights and
duties of the Parties relating to this Agreement shall be governed by and
construed in accordance with the Federal laws of the United States of America,
without regard to the laws requiring the application of the laws of another
jurisdiction. Any action arising out of this Agreement or the Parties' rights
and duties under it may be brought, if at all, only in the United States
District Court of the Eastern District of Tennessee and each Party submits
itself to the jurisdiction of that court.
17.4 Creates No Special Relationship. This Agreement shall not be
interpreted or construed to create an association, joint venture or partnership
between the Parties or to impose any partnership obligation or liability upon
either Party. Neither Party shall have any right, power or authority to enter
into any agreement or undertaking for, or act on behalf of, or to act as or be
an agent or representative of the other Party.
17.5 Joint Preparation of Agreement. This Agreement shall be considered
for all purposes as prepared through the joint efforts of the Parties and shall
not be construed against one Party or the other as a result of the preparation,
substitution, submission or other event of negotiation, drafting or execution
hereof.
17.6 Non-Waiver. A waiver by either Party of any one or more defaults by
the other in the performance of any of the provisions of this Agreement shall
not be construed as a waiver of any other default or defaults, whether of a like
kind or different nature.
47
17.7 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be considered an original and all of which shall constitute
but one and the same instrument.
17.8 Section References. All references to sections or articles in this
Agreement are to sections and articles in the body of this Agreement unless
otherwise noted. All references to sections in the exhibits to this Agreement
are to the section in the exhibit in which they appear unless otherwise noted.
17.9 Standards. Unless expressly provided otherwise in the specific
provisions of this Agreement, TVA and LSP shall exercise all rights and
discharge all obligations under this Agreement in a prudent manner and in
accordance with Good Utility Practice and applicable laws and regulations and
any exercise by either Party of any right of approval, inspection, or review or
other provisions requiring mutual agreement under this Agreement shall not be
unreasonably withheld or delayed.
17.10 No Third Party Benefits. Nothing in this Agreement, express or
implied, shall be construed to create rights in, or to grant remedies to, or
delegate any duty, obligation, or undertaking established herein to any third
party as a beneficiary to this Agreement.
17.11 Limitation of Liability. Each Party acknowledges and agrees that in
no event shall any partner, shareholder, owner, officer, director, or employee
of either Party be personally liable to the other Party for any payments,
obligations, or performance due under this Agreement, or any breach or failure
of either Party and the sole recourse for payment or performance of the
obligations hereunder shall be against LSP or TVA and each of their respective
assets and not against any other person, except for such liability as expressly
assumed by an assignee pursuant to an assignment of this Agreement in accordance
with the terms hereof.
IN WITNESS WHEREOF, the Parties, by their respective duly authorized
representatives, have executed this Agreement effective as of the date written
first above.
TENNESSEE VALLEY AUTHORITY LSP ENERGY LIMITED PARTNERSHIP
By: LSP Energy, Inc. its general partner
By:/s/ Xxxxxxx X. Xxxxxxx By:/s/ Xxxx X. Xxxxxxx
----------------------- --------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx
Title: Executive Vice President Title: Assistant Vice President
Tranmission/Power Supply Group
WITNESS: WITNESS
/s/ Xxxxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
-------------------------- ------------------------
Name: Xxxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxx
48
PRELIMINARY-6/30/98
EXHIBIT A
INTERCONNECTION CRITERIA
In accordance with Article 5, the Parties understand and agree that Exhibit A is
preliminary in nature and cannot be finalized until after the completion of the
Facilities Study. Following the completion of the Facilities Study, TVA will
provide LSP with a final version of Exhibit A which Exhibit shall be attached
hereto and made a part of this Agreement without further action of the Parties.
INTERCONNECTION CRITERIA
LSP GENERATION FACILITY
TO
TENNESSEE VALLEY AUTHORITY
I. INTRODUCTION
These Interconnection Criteria are requirements for interconnecting the LSP
Power Project (LSP) to the TVA electric transmission system. The purpose of
these criteria are to ensure the safe operation, integrity, and reliability of
TVA's system and of the facilities to which it is connected.
These requirements are not intended as a design specification. More specific
project scope, available short circuits, and relay and protection schemes are
reflected on Specification Diagram SKM-667 and Communication Specification
Diagram CSD-L-1751- (5 sheets) and are described in Interconnection Agreement
98PAP-236148 (hereinafter referred to as the "INTERCONNECTION AGREEMENT"),
which serves as the controlling legal authority. Reference to the
Interconnection Agreement appears throughout this Exhibit.
Except as set forth in the INTERCONNECTION AGREEMENT, it is recognized that LSP
or its contractor will design, install, own, operate, and maintain all
facilities on the plant side of the Delivery Point. Arrangements for cooperative
review, comment, and approval of the design and installation of such facilities
prior to interconnection are also set forth in the INTERCONNECTION AGREEMENT.
As also set forth in Section 6.4(d) of the INTERCONNECTION AGREEMENT, LSP, TVA,
and Entergy shall mutually develop written Operating Procedures that shall
further define and expand the information provided by this Exhibit.
II. GENERAL REQUIREMENTS
A. Applicable Codes, Standards, Criteria, and Regulations
(see Appendix)
B. Delivery Point (ref. INTERCONNECTION AGREEMENT Section 8.4)
C. Safety and Operation (ref. INTERCONNECTION AGREEMENT Sections 3.4,
6.4(d), 7.4)
D. Inspection, Test, Calibration, and Maintenance
(ref. INTERCONNECTION AGREEMENT Sections 2.5, 3.3(b), 3.3(c), 3.5,
3.8, 6.3)
E. Metering and Telemetering (ref. INTERCONNECTION AGREEMENT
Section 2.3)
III. PERFORMANCE REQUIREMENTS
A. LSP shall comply with the following requirements (ref.
INTERCONNECTION AGREEMENT Section 8.5):
1. Electrical Disturbances
LSP shall avoid producing or causing effects such as:
a. An abnormal flow of power including but not limited to
unusual fluctuations of power output and motoring of the
generator.
b. Over/undervoltage and over/underfrequency.
c. Local breaker failure.
d. Degraded reliability of the interconnected electric
system.
2. Voltage Flicker
LSP shall limit to acceptable levels the production of voltage
fluctuations (flicker) at the Delivery Point consistent with
the IEEE Recommended Practices and Requirements for Harmonic
Control in Electrical Power Systems (IEEE Standard 519, or its
successor).
3. Harmonic Current Injection
LSP shall limit the production of total harmonic current
distortion (THCD) and individual harmonic current distortion
injected into the TVA system to the levels indicated in IEEE
Standard 519, or its successor. (Exceptions to these harmonic
requirements may be considered by TVA on an individual basis.)
4. Phase Unbalance
The LSP generator shall not cause phase current unbalance
greater than 10 percent.
B. Grounding
LSP shall provide a ground source to the TVA system. LSP shall be
effectively grounded (X0/X1 less than or equal to 3 and R0/X1 less
than or equal to l) up to the Delivery Point. This may be
accomplished using a generator step-up transformer with the high
voltage (TVA) side in a grounded wye and low voltage (LSP) side in
a closed delta or a closed delta tertiary configuration.
2
LSP grounding requirements shall be in compliance with the National
Electric Safety Code, ANSI/IEEE Std. 665 - Guide for Generator
Station Grounding, ANSI/IEEE Std. 80 - Guide for Safety in AC
Substation Grounding and any applicable State and Local codes, or
their successors.
C. Voltage Rating, Regulation, and Power Factor
1. It is recommended that the nominal rating of the high-voltage
winding of the generator step-up transformers shall be 165 kV
with a minimum of five high-side taps in 2.5 percent
intervals, utilizing two steps above and two below the nominal
voltage rating. A minimum basic impulse insulation level (BIL)
of 650 kV is recommended. Further, it is recommended that the
neutral end of the high-voltage winding be insulated for 46 kV
(250 kV BIL).
2. LSP shall:
a. Not impose any restrictions for TVA to operate between a
range of 172 and 159 kV, regardless of the effects on
the Facility generators. LSP's generator continuous
capability curve, including over/underexcited operation,
shall not be restricted by auxiliary voltage levels,
main or auxiliary transformer tap settings, control, and
protection, etc.
b. Be capable of operating over a power factor range of at
least 0.95 lagging to 0.95 leading. LSP shall operate
according to voltage schedules specified by TVA (ref.
INTERCONNECTION AGREEMENT Section 6.5) within the
continuous reactive capability of the generator. This
may require the generator to produce or absorb reactive
power depending on day to day operating requirements
specified by TVA. (The normal operating voltage range is
expected to be approximately 165 to 161 kV.)
c. Have an exciter ceiling voltage that is not less than
1.5 times the rated output field voltage.
d. Notify the TVA dispatchers when the generator will not
be operated in automatic voltage control.
e. Test and document the reactive capability of the
generators with the cooperation of the TVA dispatchers,
in accordance with NERC guidelines.
D. Governor Speed/Frequency Control
A speed governor system shall be required, except as noted, with the
following capabilities:
1. The governor shall be set to provide a five percent (5%) droop
characteristic (a 0.15 hertz change in the generator speed
will cause a five percent change in the generator load).
3
2. The overspeed control shall be capable of arresting the speed
rise following a full load rejection to a value below the unit
trip setting. The unit shall return to synchronous speed in
preparation for resynchronization with the TVA electric
system. If such capability cannot be provided then LSP shall
discuss and provide technical information to TVA that supports
such limited capabilities. TVA may then agree to other
requirements.
E. Special Generator Disturbance Studies
TVA uses switched and fixed shunt capacitors and reactors for system
voltage control, high-speed reclosing, and single-pole switching at
various locations on the TVA electric system. These devices and
operating modes, as well as other disturbances and imbalances, may
cause or increase stress on LSP. This includes potential
electromechanical resonance (e.g. subsynchronous resonance) between
the generator and the power system. LSP shall be responsible for any
necessary studies to evaluate these stresses and to determine if any
special devices are required to protect LSP.
F. Excitation System and Power System Stabilizers
A modern, solid-state, high-speed excitation system with automatic
voltage regulation shall be provided.
At such time that industry standards, regulations, or TVA requires
Power System Stabilizer (PSS) technology, a PSS shall be provided
and used by LSP for each of its generators at the Facility. The PSS
shall have provisions for accepting a supplemental signal from TVA.
A Line Drop Compensator is required that will compensate for a
minimum of fifty percent (50%) of the step-up transformer impedance.
IV. RELAY AND PROTECTION REQUIREMENTS
It is recognized that primary protection and synchronizing of the LSP
generators are provided by LSP's 161-kV generator step-up transformer
breakers.
It is also recognized that the primary LSP generator step-up transformer
protection is provided by LSP's 161-kV generator step-up transformer
breakers and that failure of these breakers to trip locally will be backed
up via tripping to the appropriate LSP power circuit breakers in the LSP
161-kV Substation.
It is also recognized that primary LSP station service supply will be
connected to the 161 kV bus in the LSP 161-kV Substation. Switching and
primary protective devices shall be provided for station service and other
auxiliary feeds.
TVA's new 161-kV power circuit breakers A and B located in TVA's
Batesville 161-kV Substation provide primary protection for LSP's new
161-kV transmission lines that connect TVA's Batesville 161-kV Substation
to LSP's Facility.
4
Relays protecting the LSP generator and generator step-up transformer
shall be utility grade, conforming to ANSI/IEEE C37.90, C37.90.l, or its
successor, and both the relays and relay settings shall be coordinated
with TVA. TVA may at its option duplicate some relays or relay functions
provided for generator or generator step-up protection by LSP.
The following are required but are not intended by TVA to be a
comprehensive list of all relays or relay and protection functions
necessary to protect the generator and generator step-up transformer:
A. Isolating and Synchronizing
1. A manual switch(s) shall be provided that physically and
visibly opens the interconnecting circuit to LSP (ref.
INTERCONNECTION AGREEMENT Section 3.3(a)).
2. LSP shall not energize a TVA line or bus that is de-energized
unless such energization is specifically approved by the TVA
Dispatcher.
3. LSP shall synchronize its generator to the TVA system only
when supervised by a synchronizing relay. LSP shall not
connect to the TVA system in an out-of-synchronization
condition.
B. Generator Step-Up Transformer Protection
Consistent with Specification Diagram SKM-667 LSP shall provide
complete protection of the generator step-up transformer. Such
protection should include but not be limited to bank differential,
overcurrent, hot spot, sudden pressure, etc. LSP shall use generator
step-up transformer high-side neutral current for backup ground
relaying and/or for transmission line relay polarizing if required
by TVA.
C. Over/Underfrequency, Over/Undervoltage Relays
LSP shall provide over/underfrequency and over/undervoltage relays
to protect the generator from severe system frequency or voltage
disturbances. The relay setting used for these relays should not
disconnect the generator from the system for the occasional small
dynamic (transient) oscillations on the power system, which are
stable and damped. The objective is to protect the generators while
at the same time utilize the total machine capability to support the
system and prevent unnecessary loss of load.
The last step of TVA's system-wide underfrequency load-shedding
scheme is 58.7 hertz after a time delay of 30 cycles. To prevent a
generator trip before TVA's load-shedding scheme has completed, the
LSP underfrequency relay shall be capable of both lower and slower
settings. The overfrequency relay shall be capable of mirroring the
underfrequency settings. These settings are required to protect the
generator during system abnormal frequency as described in ANSI/IEEE
C37.106 IEEE Guide for Abnormal Frequency Protection for Power
Generating Plants, or its successor.
5
D. Generator Out-of-Step Relay
LSP shall provide an out-of-step relay to prevent damage to LSP's
generators and the TVA transmission system resulting from
system/generator dynamic instability.
E. Breaker Failure and Backup Protection
1. LSP shall trip the TVA high-voltage line power circuit
breakers only for backup protection due to failure of the
primary protection of the generator, generator step-up
transformer, and secondary equipment and feeds.
2. TVA shall provide appropriate breaker failure relays to ensure
that a failure to trip by the TVA high voltage line power
circuit breakers will result in the tripping of appropriate
LSP and Xxxxxxx 000-xX power circuit breakers.
3. LSP shall provide appropriate breaker failure and backup
relays to ensure that a failure to trip by the LSP low voltage
equipment/feed protection will be transferred to the next
level of protection.
F. Reverse Power
LSP shall provide a reverse power relay that will operate for
reverse power between 1 and 3 percent of the generator rating.
G. Relay Settings
(ref. INTERCONNECTION AGREEMENT Sections 3.3(b)and 3.3(c))
H. Exchange of Secondary Circuits for Control and Protection
LSP shall provide to `EVA secondary circuits for control and
protection including currents, potentials, dc trips, breaker
position indication, etc. This is critical to the proper
generator-to-system interconnection.
I. Machine and Transformer Modeling Data (ref. System Impact Study
Agreement 98PAP-229184, dated February 23, 1998, between TVA and
LSP)
J. Transformer Bank and Transmission Line Overload Protection
In accordance with Article 4 of the INTERCONNECTION AGREEMENT, TVA
shall install relays and sensing devices to detect thermal overload
of TWA's Batesville 161-115-kV transformer bank, the
Batesville-Water Valley-Coffeeville 161-kV Transmission Line, and
the Batesville-Sardis Tap-Oxford 161-kV Transmission Line. These
devices shall automatically notify TVA and LSP operators of such
overload condition and TVA will designate any action that needs to
be taken by the Parties to reduce such overload condition.
6
APPENDIX
Applicable Codes, Standards, Criteria, and Regulations
Except for changes that may be required retroactively by NERC Planning
Standards, all standards (ref. INTERCONNECTION AGREEMENT Section 7.4) shall
apply to initial LSP plant design and construction and to future plant
modifications. Standards are, but are not limited to, the following:
NERC Planning Standards
Insofar as future NERC Planning Standards require modifications or additions to
TVA generating plant design and/or operations, LSP shall likewise abide by and
perform any necessary changes required by future NERC standards. Although all of
the standard applies, the following sections of the NERC Planning Standards may
be of particular interest:
I. System Adequacy and Security
A.Transmission Systems
D.Voltage Support and Reactive Power
II. System Modeling Data Requirements
A.System Data
B.Generation Equipment
III. System Protection and Control
C.Generation Control and Protection
D.Underfrequency Load Shedding
E.Undervoltage Load Shedding
ANSI and IEEE Standards
ANSI/NFPA 70 National Electric Code
ANSI/IEEE C2 National Electrical Safety Code
IEEE 32 Standard Requirements, Terminology, and Test Procedures for
Neutral Grounding Devices
IEEE 80 Guide for Safety in AC Substation Grounding
IEEE 519 Recommended Practices and Requirements for Harmonics
Control in Electric Power Systems
IEEE 665 Guide for Generating Station Grounding
IEEE 693 Recommended Practices for Seismic Design of Substations
IEEE 979 Guide for Substation Fire Protection
IEEE 980 Guide for Containment and Control of Oil Spills in
Substations
IEEE 1001 Guide for Interfacing Dispersed Storage and Generation
Facilities with Electric Utility Systems
IEEE C37.04 Rating Structure for AC High-Voltage Circuit Breakers Rated
on a Symmetrical Current Basis
ANSI C37.06 Preferred Ratings and Related Required Capabilities for AC
High-Voltage Circuit Breakers
7
IEEE C37.013 Standard for AC High-Voltage Generator Circuit Breakers
Rated on a Symmetrical Current Basis
ANSI C37.16 Preferred Ratings, Related Requirements, and Application
Recommendations for Low-Voltage Power Circuit Breakers
IEEE C37.30 Standard Requirements for High-Voltage Air Switches
ANSI C37.32 High-Voltage Air Switches, Bus Supports, and Switch
Accessories-Schedules of Preferred Ratings, Manufacturing
Specifications, and Application Guide
IEEE C37.48 Guide for Application, Operation, and Maintenance of
High-Voltage Fuses, Distribution Enclosed Single-Pole Air
Switches, Fuse Disconnecting Switches, and Accessories
IEEE C37.90 Standard for Relays and Relay System Associated with
Electric Power Apparatus
IEEE C37.91 Guide for Protective Relay Applications to Power Transformers
IEEE C37.95 Guide for Protective Relaying of Utility-Consumer
Interconnections
IEEE C37.97 Guide for Protective Relay Applications to Power System Buses
IEEE C37.102 Guide for AC Generator Protection
IEEE C57.12.00 Standard General Requirements for Liquid-Immersed
Distribution, Power, and Regulating Transformers
IEEE C57.12.01 Standard General Requirements for Dry-Type Distribution and
Power Transformers
IEEE C57.13 Standard Requirements for Instrument Transformers
IEEE C57.13.3 Guide for the Grounding of Instrument Transformer Secondary
Circuits and Cases
IEEE C57.116 Guide for Transformers Directly Connected to Generators
IEEE C62.11 Standard for Metal-Oxide Surge Arresters for AC Power Circuits
IEEE C62.22 Guide for the Application of Metal Oxide Surge Arresters
IEEE C62.92.1 Guide for the Application of Neutral Grounding in Electric
Utility Systems, Part I - Introduction
IEEE C62.92.2 Guide for the Application of Neutral Grounding in Electric
Utility Systems, Part II - Grounding of Synchronous Generator
Systems
IEEE C62.92.5 Guide for the Application of Neutral Grounding in Electrical
Utility Systems, Part V - Transmission Systems and
Subtransmission Systems
ANSI C84.1 Voltage Ratings for Electric Power Systems and Equipment
IEEE 1313 Standard for Power Systems - Insulation Coordination
Uniform Building Code
8
PRELIMINARY-6/30/98
EXHIBIT B
INTERCONNECTION FACILITIES
In accordance with Article 5, the Parties understand and agree that Exhibit B is
preliminary in nature and cannot be finalized until after the completion of the
Facilities Study. Following the completion of the Facilities Study, TVA will
provide LSP with a final version of Exhibit B which Exhibit shall be attached
hereto and made a part of this Agreement without further action of the Parties.
The Parties also agree that in the future, after a final version of Exhibit B is
provided by TVA to LSP, additional changes to Exhibit B's specification diagram
may be necessary. Any such additional changes to Exhibit B which have been
mutually agreed to by the Parties, shall be provided by TVA to LSP and shall be
attached hereto and made a part of this Agreement without further action of the
Parties other than initialing the revised Exhibit.
PRELIMINARY-6/30/98
EXHIBIT C
COMMUNICATION FACILITIES
In accordance with Article 5, the Parties understand and agree that Exhibit C is
preliminary in nature and cannot be finalized until after the completion of the
Facilities Study. Following the completion of the Facilities Study, TVA will
provide LSP with a final version of Exhibit C which Exhibit shall be attached
hereto and made a part of this Agreement without further action of the Parties.
The Parties also agree that in the future, after a final version of Exhibit C is
provided by TVA to LSP, additional changes to Exhibit C's specification diagrams
may be necessary. Any such additional changes to Exhibit C which have been
mutually agreed to by the Parties, shall be provided by TVA to LSP and shall be
attached hereto and made a part of this Agreement without further action of the
Parties other than initialing the revised Exhibit.
49
