Exhibit 10.11.3
SECOND AMENDMENT
TO
POWER PURCHASE AGREEMENT
_________________
This SECOND AMENDMENT, dated as of March 1, 1988 ("Second
Amendment"), to the Power Purchase Agreement, dated March 10,
1986, between O'Brien Energy Systems, Inc. ("Seller") and Jersey
Central Power & Light Company ("JCP&L").
W I T N E S S E T H :
WHEREAS, the Power Purchase Agreement provides for the
purchase by JCP&L of the capacity and energy from Seller's
Cogeneration Facility with a nameplate rating of 52 MW/Hr. to be
constructed by Seller at the Newark Boxboard plant in Newark, New
Jersey;
WHEREAS, by letter agreement dated June 2, 1986 ("First
Amendment"), the Parties have amended the Power Purchase
Agreement in certain respects (the Power Purchase Agreement, as
so amended by the First Amendment being hereinafter referred to
as the "Agreement");
WHEREAS, Seller has advised JCP&L that construction of the
Facility has been delayed and has requested that the Date of
Initial Commercial Operation as provided in the Agreement
therefore be extended;
WHEREAS, JCP&L is willing to extend the Date of Initial
Commercial Operation as requested by Seller, subject, however, to
the terms and conditions hereof; and
WHEREAS, the Parties desire to amend the Agreement in
certain other respects.
NOW THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the Parties hereby agree as
follows:
1. Article III - Definitions. Article III of the Agreement is
hereby amended as follows:
(a) By revising the definition of "Contract Capacity" in
Article 3.6 to read in its entirety as follows:
3.6 "Contract Capacity" means the maximum summer Peak
Period producing capability the Generating Facility shall
demonstrate according to GPU/PJM guidelines, as in effect
from time to time, in MWH/Hr. which, in any event, shall not
be less than 52 MWH/Hr.
(b) By adding the following defined term therein:
3.16(a) "Major Facility Overhaul" means an outage of
the Cogeneration Facility for a complete replacement or
reconditioning of the Cogeneration Facility's electrical
prime mover, one or more of its turbine-generators or its
related boiler(s) due to ordinary wear and tear. Each such
outage may occur not more often than once every five (5)
years for a period of up to ninety (90) days each.
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(c) By revising the definition of "On-Peak Period" in
Article 3.19 to read in its entirety as follows:
3.19 "On-Peak Period" means all hours from 8:00 A.M.
to 8:00 P.M. prevailing time Monday through Friday, other
than on New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving and Christmas.
(d) By adding definitions of the terms "Off-Peak Season"
and "On-Peak Season" as follows:
3.18(a) "Off-Peak Season" means the months of March,
April, May, October and November.
3.19(a) "On-Peak Season" means the months of December
through February and June through September.
2. Article 4.1 - Duration of Agreement. Paragraph B of Article
4.1 of the Agreement is hereby amended in its entirety and
new Paragraphs (C) through (H) are hereby added thereto to
read in full as follows:
(B) Seller has furnished JCP&L with a revised detailed
engineering, permitting and construction schedule identifying all
critical path items for project development and providing for
Initial Commercial Operation of the Facility by April 1, 1990.
Seller shall promptly advise JCP&L of any material revisions,
modifications or changes to such schedules.
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(C) Seller shall furnish JCP&L with quarterly status
reports describing the progress of the engineering,
permitting and construction of the Facility. Such reports
shall include, in reasonably sufficient detail, explanations
of any delays in meeting scheduled dates for commencement or
completion of any listed item.
(D) Seller shall immediately notify JCP&L if Seller
has not (i) obtained all critical path Federal, State and
local environmental construction permits and authorizations
to construct and operate the Facility and (ii) issued a
purchase order, or entered into a legally binding
commitment, for the Facility's principal energy conversion
device on or prior to the dates specified in the schedules
as initially submitted to JCP&L or as such schedules may
subsequently be revised.
(E) If the Initial Delivery Date has not occurred on
or prior to April 1, 1990, JCP&L may terminate this
Agreement upon written notice to Seller unless prior to such
date, (1) Seller demonstrates to JCP&L's reasonable
satisfaction that Seller has (a) commenced and there is
ongoing a program of continuous construction of the Facility
pursuant to which Seller has incurred or legally obligated
itself to pay for direct construction expenses of not less
than fifty (50%) percent of the projected direct
construction costs of the Facility (which Seller shall
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certify to JCP&L on the basis of appropriate documentation)
and (b) furnished JCP&L with a revised construction schedule
for the Facility under which the Facility will be in
Commercial Operation not later than April 1, 1991 and
(2) Seller pays to JCP&L the full amount of liquidated
damages set forth in Article XXII hereof, subject to refund
as provided in paragraph (G) below. In such event, the
Initial Delivery Date shall be extended to April 1, 1991, or
such earlier date as Seller shall specify in such revised
construction schedule.
(F) If the Initial Delivery Date has not occurred on
or prior to April 1, 1991, JCP&L may terminate this
Agreement upon written notice to Seller unless prior to such
date (a) Seller demonstrates to JCP&L's reasonable
satisfaction that a continuous program of construction of
the Facility is ongoing pursuant to which Seller has
incurred or legally obligated itself to pay for direct
construction expenses of not less than seventy-five (75%)
percent of the projected direct construction costs of the
Facility (which Seller shall certify to JCP&L on the basis
of appropriate documentation) and (b) Seller has furnished
JCP&L with a revised construction schedule for the Facility
under which the Facility will be in Commercial Operation not
later than April 1, 1992. In such event, the Initial
Delivery Date shall be extended to April 1, 1992, or such
earlier date as Seller shall specify in such revised
construction schedule.
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(G) In the event this Agreement is not otherwise
terminated pursuant to the provisions of this Article IV and
Seller pays to JCP&L the liquidated damages amount as
provided in Paragraph (E) above, then within thirty (30)
days of the end of the billing period following the Initial
Delivery Date, JCP&L shall credit Seller for amounts due to
JCP&L hereunder or otherwise reimburse Seller for the full
amount of such liquidated damage payment but without
interest thereon.
(H) If the Initial Delivery Date has not occurred for
any reason, including but not limited to Force Majeure, on
or prior to April 1, 1992, this Agreement may be terminated
by JCP&L upon written notice to Seller.
3. Article V - Operation and Maintenance.
Article V of the Agreement is hereby amended in the
following respects:
(a) Paragraph A of Article 5.5 is amended to read in
its entirety as follows:
A. Each Party shall keep the other Party's Operating
Representative informed as to the operating schedules of their
respective facilities affecting each other's obligations
hereunder, including any reduction in availability of Contract
Capacity. In addition, Seller shall furnish JCP&L with an annual
forecast not later than January 1 of each year following the
Initial Delivery Date setting forth the expected dates
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and anticipated duration of each scheduled outage for
the succeeding twelve (12) months. Seller shall notify
JCP&L not less than thirty (30) days prior to the
commencement of any scheduled outage, and of the
anticipated duration thereof, and as soon as possible
with respect to any unscheduled outage.
(b) Article 5.7 is hereby amended to read in its
entirety as follows:
5.7 Seller shall use its best efforts to schedule and
conduct routine maintenance outages of the
Facility only during the Off-Peak Season except
that Seller may conduct such scheduled outages of
the Facility up to a total of thirty (30) hours
during On-Peak Periods in the On-Peak Season in
any year, exclusive, however, of a Major Facility
Overhaul and any inspections required by law.
(c) Article 5.8 is amended by adding the following at
the end thereof:
Seller shall furnish to JCP&L on each January 1
following the Initial Delivery Date reasonably
satisfactory evidence that Seller has performed or
caused to be performed all manufacturer-recommended
maintenance and testing with respect to the Facility
and any protective apparatus and interconnection
equipment, including circuit breakers, relays and
auxiliary equipment. Seller shall provide JCP&L with
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at least thirty (30) days prior written notice of its
intent to test such equipment and JCP&L personnel may,
if JCP&L desires, observe such testing.
(d) Article 5.10 of is amended to read in its entirety
as follows:
5.10 (a) Seller shall generate and sell
electric energy to JCP&L throughout the term of
this Agreement and any extensions or renewals
hereof at an annual level for On-Peak Periods
which, commencing on January 1 of the fourth full
year of operation of the Facility following the
Initial Delivery Date and for each year thereafter
("Production Year"), shall be not less than 85% of
the average annual generation output achieved for
On-Peak Periods during the three (3) immediately
preceding years of operation of the Facility
("Average Generation").
(b) If the actual annual amount of electric
energy delivered from the Facility to JCP&L during
On-Peak Periods for any Production Year ("Actual
Generation") is less than 85% of the Average
Generation, then Seller shall pay JCP&L a
performance deficiency payment equal to the number
of kwh by which (x) 85% of the Average Generation
exceeds (y) the Actual Generation, multiplied by
the then variable pricing component as paid during
On-Peak Periods in cents per kwh.
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(c) For purposes of calculating the Actual
Generation of the Facility during a Production
Year, there shall be added to the actual amount of
electricity delivered from the Facility to JCP&L
during On-Peak Periods 85% of any kwh which the
Facility does not deliver (based upon the Contract
Capacity of the Facility) during On-Peak Periods
during such Production Year due to (i) Force
Majeure as provided in Article XI hereof, (ii) a
Major Facility Overhaul and (iii) a disconnection
of the Facility or an interruption, curtailment or
reduction of purchases of electricity by JCP&L
pursuant to Articles 5.3 or 7.6 hereof, other than
pursuant to Article 7.6(e) hereof.
(d) Seller shall make any performance
deficiency payment due to JCP&L in six (6) equal
monthly payments by applying said monthly payments
against amounts due from JCP&L for electric energy
delivered during the first six (6) months of the
year following the year for which the performance
deficiency payment statement applies. If Seller
does not deliver sufficient electric energy to
JCP&L in any month to allow the full set-off of
the monthly payment as provided herein, Seller
shall pay to JCP&L within ten (10) days after the
end of such month, any amount which cannot be set-
off. Any and all amounts due and owing to JCP&L
under this Article V shall be immediately due
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