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EXHIBIT 10.22
TRANSITION ENERGY SALES AGREEMENT
BETWEEN
XXXXXX KILL POWER LLC
AND
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
Dated as of June 1, 1999
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TABLE OF CONTENTS
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Page
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ARTICLE 1 DEFINITIONS................................................. 2
ARTICLE 2 TERM........................................................ 5
ARTICLE 3 ENERGY PURCHASES AND PAYMENTS............................... 6
(a) Energy Conversion Payments..................................... 7
(b) Equivalent Forced Outage Penalty And Incentive Payments........ 7
ARTICLE 4 SCHEDULING.................................................. 9
ARTICLE 5 FUEL........................................................ 11
ARTICLE 6 ENVIRONMENTAL............................................... 12
6.1 Use of NOx Allowances.......................................... 12
ARTICLE 7 BILLING AND PAYMENT PROCEDURES.............................. 14
7.1 Billing and Payments........................................... 14
7.2 Billing Disputes............................................... 16
7.3 Survival....................................................... 16
ARTICLE 8 INDEMNIFICATION
8.1 Indemnification............................................... 17
8.2 Third Party Claims Procedures................................. 19
8.3 Survival...................................................... 20
ARTICLE 9 LIMITATION OF LIABILITY..................................... 20
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ARTICLE 10 FORCE MAJEURE............................................... 21
ARTICLE 11 DEFAULT AND TERMINATION..................................... 22
ARTICLE 12 ADDITIONAL REMEDIES......................................... 22
ARTICLE 13 DISPUTES.................................................... 23
ARTICLE 14 REPRESENTATIONS AND WARRANTIES.............................. 23
14.1 Representations and Warranties of Con Edison.................. 23
14.2 Representations and Warranties of AK Power.................... 24
ARTICLE 15 ASSIGNMENT; NO THIRD PARTY BENEFICIARIES.................... 25
ARTICLE 16 EXTENSION; WAIVER........................................... 26
ARTICLE 17 COUNTERPARTS................................................ 27
ARTICLE 18 GOVERNING LAW............................................... 27
ARTICLE 19 SEVERABILITY................................................ 27
ARTICLE 20 AMENDMENT................................................... 27
ARTICLE 21 ENTIRE AGREEMENT............................................ 28
ARTICLE 22 FURTHER ASSURANCES.......................................... 28
ARTICLE 23 INTERPRETATION.............................................. 28
ARTICLE 24 CONFIDENTIALITY............................................. 29
ARTICLE 25 INDEPENDENT CONTRACTOR STATUS............................... 30
ARTICLE 26 JURISDICTION................................................ 30
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ARTICLE 27 CONFLICTS................................................... 31
ARTICLE 28 NOTICES..................................................... 31
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TRANSITION ENERGY SALES AGREEMENT BETWEEN
XXXXXX KILL POWER LLC AND
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
This Agreement is made and entered into as of June 1, 1999 between
Xxxxxx Kill Power LLC ("AK Power"), a Delaware limited liability company having
its principal place of business at 0000 Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, and Consolidated Edison Company of New York, Inc. ("Con Edison"), a New
York corporation having its principal place of business at 0 Xxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000. AK Power and Con Edison shall each be referred to as a
"Party", and shall be referred to collectively as the "Parties."
WHEREAS, Con Edison offered for sale by auction certain electric
generating facilities located at the Xxxxxx Kill Generating Station and the
Astoria Gas Turbine site and certain other assets primarily related thereto
("Auctioned Assets");
WHEREAS, NRG Energy, Inc. ("NRG Energy") and Con Edison have entered
into the Generating Plant and Gas Turbine Asset Purchase and Sale Agreement
("APSA"), dated January 27, 1999, and NRG Energy will assign to AK Power prior
to the Closing Date (as defined below) its rights and obligations under the APSA
relating to the purchase from Con Edison of the Generating Plant (as defined
below) and certain other assets primarily related thereto in accordance with the
terms and conditions of the APSA, and NRG Energy will assign to Astoria Gas
Turbine Power LLC ("Astoria Power") prior to the Closing Date its rights and
obligations under the APSA relating to the purchase from Con Edison of the Gas
Turbines (as defined below) and certain other assets primarily relating thereto
in accordance with the terms and conditions of the APSA;
WHEREAS, the rights and obligations of AK Power and Con Edison
relating to generators of electric generating capacity, energy, transmission and
ancillary services may be modified by a proposal (the "Proposal") currently
pending before the Federal Energy Regulatory Commission ("FERC") to restructure
the New York Power Pool, which contemplates the formation of the New York
Independent System Operator ("ISO") and the implementation of the ISO Tariff
filed on December 19, 1997, as approved by FERC in FERC Docket Nos.
ER971523-000, OA97-470-000 and ER97-4234-000, as such tariff may be amended from
time to time;
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WHEREAS, FERC may approve, accept, modify, or reject the Proposal, and
its actions may affect the Parties' rights and obligations under this Agreement;
WHEREAS, FERC has accepted for filing certain market power mitigation
measures applicable to sales of capacity, energy and certain other services from
specified electric generating units in New York City in FERC Docket No.
ER98-3169-000 (such measures, as may be modified from time to time, and any
other applicable market power mitigation measures that may be imposed by FERC,
ISO or the New York Public Service Commission ("PSC"), the "Mitigation
Measures");
WHEREAS, sales of capacity, energy and certain other services from the
Auctioned Assets will be subject to, and the rights and obligations of the
Parties under this Agreement may be affected by, the Mitigation Measures;
WHEREAS, in recognition of Con Edison's requirements to provide Energy
to its firm customers, AK Power and Con Edison agree to enter into this
Transition Energy Sales Agreement, whereby Con Edison will purchase from AK
Power and AK Power will sell to Con Edison various amounts of Energy for the
term of this Agreement.
NOW THEREFORE, in consideration of the mutual agreements and
commitments contained herein, AK Power and Con Edison hereby agree as follows:
ARTICLE 1 DEFINITIONS
The following terms shall have the meanings set forth below. Any term
used in this Agreement that is not defined herein shall have the meaning that is
in the APSA or, if the term is not defined in the APSA, then the term shall have
the meaning customarily attributed to it by the electric utility industry.
"Agreement" shall mean this Transition Energy Sales Agreement between
AK Power and Con Edison, as it may be amended from time to time.
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"Business Day" shall mean any day other than Saturday, Sunday or any
day on which banking institutions in the State of New York are authorized by law
or other governmental action to close.
"Closing Date" shall mean the date and time at which the closing of
the transactions contemplated by the APSA actually occurs.
"Continuing Site Agreement" means the Xxxxxx Kill Continuing Site
Agreement between Con Edison and NAG Energy, dated January 27, 1999.
"EFOR" shall mean the equivalent forced outage rates set forth in
Appendix A hereto.
"Energy" shall mean the amount of energy in megawatt hours ("MWH")
that AK Power will generate in the Generating Plant and deliver to Con Edison.
"Energy Control Center" shall mean the headquarters of Con Edison's
electric transmission and distribution operations.
"FERC" shall mean the Federal Energy Regulatory Commission or its
successor.
"Firm Commitment" shall mean Con Edison's designation of a Unit for
dispatch during a Week, which designation is communicated in writing to AK Power
by 5 p.m. an the Thursday preceding the Week.
"Fuel" shall mean natural gas, which is commonly burned in the
Generating Plant.
"Gas Turbines" means the gas turbine units GT2 through GT5 and GT7
through GT13 located at the Astoria Gas Turbine site.
"Generating Plant" means the units 2 and 3 steam-powered generating
facilities and gas turbine unit GT 1 located at the Xxxxxx Kill Generating
Station.
"Good Utility Practices" mean any of the practices, methods or acts
engaged in or approved by a significant portion of the electric utility industry
with respect to similar facilities during the relevant time period which in each
case, in the exercise of reasonable judgment in light of
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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, law, regulation, environmental protection, and
expedition. Good Utility Practices are not intended to be limited to the optimum
practices, methods or acts to the exclusion of all others, but rather to
delineate the acceptable practices, methods or acts generally accepted in such
industry.
"Holiday" shall mean any day which is a day on which banking
institutions in the State of New York are authorized by law or other
governmental action to close.
"ISO" shall mean the New York Independent System Operator, as
described in the Supplemental Filing, or its successors.
"ISO Commencement Date" shall mean the date on which the ISO
officially commences operations of a spot market for energy, spinning and
non-spinning reserves and automatic generator control, as signified by the first
day that resources such as the Generating Plant are allowed to bid into each
market on a non-trial or non-experimental basis.
"ISO Tariff" shall mean the tariff described in the Supplemental
Filing, as it may be amended from time to time.
"Maintenance Outage Schedule" shall mean a timetable detailing AK
Power's schedule for removal (full or partial) from service of one or more of
the Units for inspection, maintenance or repair.
"Month" shall mean calendar month, and not a specific 30 day time
period.
"Metering Point" shall mean the Point of Interconnection (as defined
in the Continuing Site Agreement), which is the point to which the Revenue
Meters installed pursuant to Section 3.05 of the Continuing Site Agreement
measure the Energy.
"NERC" shall mean the North American Electric Reliability Council or
its successors.
"NYPP" shall mean the New York Power Pool or its successors.
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"Summer Capability Period" shall have the meaning provided by the
NYPP, or its successor(s), as may be modified from time to time. Summer
Capability Period is currently May 1 through October 31 of each year.
"Supplemental Filing" shall mean the December 19, 1997 Supplemental
Filing to the Comprehensive Proposal to Restructure the New York Wholesale
Electric Market in FERC Docket Nos. ER97-1523000, OA97-470-000, and
ER97-4234-000.
"Time Period" shall mean the period from 10:00 a.m. to 6:00 p.m. on
each of the days from Monday through Friday of each week, excluding Holidays.
"Unit" shall mean any unit comprising the Generating Plant.
"Week" shall mean the period from any Monday at 12:00 a.m. to the
immediately following Sunday at 11:59 p.m.
"Winter Capability Period" shall have the meaning provided by the
NYPP, or its successor(s), as may be modified from time to time. Winter
Capability Period is currently each November 1 through April 30 of the following
calendar year.
ARTICLE 2 TERM
(a) The obligations of the Parties under this Agreement shall commence
on the Closing Date and continue until the ISO Commencement Date; provided,
however, that (i) if, within 30 days after the ISO Commencement Date or the ISO
Resumption Date (as defined below) the ISO suspends operations for any reason,
the parties' obligations under this Agreement shall recommence and continue
until the ISO resumes operation (the "ISO Resumption Date"); and (ii) in the
event that the ISO Commencement Date does not occur by March 1, 2000, either
Party may request the other Party to renegotiate in good faith the terms and
conditions, including payment terms, for Energy purchases under this Agreement.
If, upon such request by either Party, the Parties are unable to reach agreement
on such revised terms and conditions, AK Power shall file tariffs governing such
purchases with the appropriate regulatory agency or agencies, to become
effective as of June 1, 2000, and, upon the effectiveness of such tariffs, as
may be modified by such regulatory agency or agencies, the terms and
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conditions contained in the approved tariffs shall be binding upon the Parties
and shall govern the purchases of Energy under this Agreement; provided,
however, that Con Edison shall have the right to protest the tariffs filed by AK
Power to such regulatory agency or agencies.
(b) This Agreement is subject to all necessary regulatory
authorizations without any modifications or conditions. If any regulatory agency
having jurisdiction over this Agreement requires any modification to, or imposes
any condition of acceptance or approval of, this Agreement, then the Parties
shall engage in good faith negotiations for a period of 30 days following the
issuance of that modified or conditional acceptance or approval in order to
agree to revisions to this Agreement to satisfy, or otherwise address, such
modification or condition. If the Parties fail to agree mutually to such
changes, then AK Power may make a unilateral filing to such regulatory agency to
satisfy the modification or condition, which filing shall attempt to satisfy the
intent of the Parties under this Agreement; provided, however, that Con Edison
shall have the right to protest the manner in which AK Power has proposed to
satisfy such modification or condition.
(c) AK Power shall file this Agreement with FERC prior to commencement
of services with a request that it be accepted for filing to be effective no
later than the Closing Date. Notwithstanding the foregoing, the Parties agree
that the effectiveness of clause (ii) of paragraph (a) of this Article shall not
be contingent upon FERC approval.
(d) This Agreement is further conditioned upon FERC not modifying or
rejecting Articles 2(a) and 3 of the First Amendment to the APSA ("APSA
Amendment"), dated as of June 1, 1999, between Con Edison and NRG Energy;
provided, however, that in the event that FERC modifies the APSA Amendment, the
Parties will, if and to the extent necessary, modify this Agreement to conform
it to the modified APSA Amendment under the procedures sot forth in paragraph
(b) of this Article. Notwithstanding the foregoing, the Parties agree that the
effectiveness of Article 2(b) of the APSA Amendment shall not be contingent upon
FERC approval.
ARTICLE 3 ENERGY PURCHASES AND PAYMENTS
Con Edison shall receive and purchase from AK Power, and AK Power
shall deliver and sell to Con Edison, Energy at the Metering Point during the
term of, and in accordance with the terms and conditions of,
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this Agreement. The Energy to be delivered by AK Power to Con Edison shall be
generated at the Generating Plant. AK Power shall operate the Generating Plant
in accordance with Good Utility Practices.
(a) Energy Conversion Payments
Con Edison shall pay AK Power an Energy Conversion Payment ("ECP") of
$1/MWH multiplied by the average net electrical output of each Unit at the
Generating Plant sold to Con Edison on an hourly basis. For purposes of this
Agreement, the net electrical output sold to Con Edison shall mean, on a monthly
basis, the Energy generated by the Generating Plant minus the auxiliary power
consumed by the Generating Plant and other related Auctioned Assets assigned by
NRG Energy to AK Power, each measured by Con Edison at their associated Metering
Points, less Energy generated by AK Power for delivery to third parties.
(b) Equivalent Forced Outage Penalty And Incentive Payments
Con Edison shall either pay to AK Power an Incentive Payment or AK
Power shall pay to Con Edison a Penalty Payment, as determined below, based on
the availability of the steam-powered Generating Plant units subject to a Firm
Commitment relative to the historical EFOR of the Generating Plant as set forth
in Appendix A. Penalty and Incentive Payments shall be based on performance of
the Generating Plant only during the Time Period. Calculation of the Penalty and
Incentive Payments shall exclude (i) the performance of any Unit scheduled for
maintenance during the applicable Time Period in accordance with a Maintenance
Outage Schedule, a maintenance outage request or a load limitation request
approved by Con Edison in accordance with Article 4 (f), and (ii) AK Power's
inability to comply with the Firm Commitment due to Con Edison's failure to
provide Fuel in accordance with Article 5, Con Edison's inability to accept
Energy generated by the Generating Plant into its transmission system or a Force
Majeure Event specified in Article 10. The formulas for computing such Penalty
and Incentive Payments are set forth below and illustrative computations are
included in Appendix E hereto.
Penalty and Incentive Payments based an the performance of each
steam-powered unit at the Generating Plant shall be calculated as follows:
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1. The number of MWs as committed by Con Edison in the Firm Commitment;
2. The historic EFOR, expressed as a decimal, set forth in Appendix A hereto;
3. Penalty Payment Rate is equal to $10/MWh;
4. Incentive Payment Rate is equal to Penalty Payment Rate times historic EFOR,
divided by 1 minus historic EFOR;
5. For each hour in the Time Period, the Penalty Payment is equal to the number
of MWs not available for dispatch times the Penalty Payment Rate;
6. For each hour in the Time Period, the Incentive Payment is equal to the
number of MWs available for dispatch times the Incentive Payment Rate;
7. At the end of the month, hourly Penalty and Incentive Payments are summed;
8. For the month, if the total Incentive Payments less the total Penalty
Payments is a positive value (net Incentive Payment), Con Edison will pay the
net Incentive Payment to AK Power. If the difference is a negative value (net
Penalty Payment), AK Power will pay the net Penalty Payment to Con Edison.
(c) Billing and payment of the ECP and Incentive and Penalty Payments
shall be made in accordance with Article 7. Con Edison shall reimburse AK Power
for all taxes, surcharges, adjustments or other assessments imposed by law, rule
or regulation, other than those based on income (such as federal income taxes),
which are of general applicability and imposed on the sales of Energy hereunder.
(d) Except as otherwise provided in this Agreement, Con Edison shall
make no other payment to AK Power for Energy actually provided under this
Agreement.
(e) Notwithstanding anything in the foregoing to the contrary,
calculations of Penalty and Incentive Payments shall also be based upon the
performance of the Generating Plant during the entire 64-hour period beginning
at 6 p.m. on Friday, December 31, 1999 and ending on 10 a.m. on Monday, January
3, 2000, which performance shall not be excused by a Year 2000 (Y2K) computer
error, malfunction, or problem.
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ARTICLE 4 SCHEDULING
(a) AK POWER and Con Edison shall comply in all material respects with
the applicable Energy scheduling requirements under NYPP rules and regulations.
Unless otherwise provided for under NYPP rules and regulations, Con Edison shall
have the sole authority to dispatch any of the Generating Plant units specified
in the Firm Commitments, up to their full capability, from Con Edison's Energy
Control Center. For the steam-powered Generating Plant, the Unit(s) specified in
the Firm Commitments must be on-line at minimum load and available for dispatch
by 12:01 a.m. Monday morning of the applicable Week for the Unit's minimum run
time. Con Edison retains the option to dispatch the Units to their full
capability for the entire Monday to Sunday period. The full capability, minimum
loads and minimum run times for each Unit are specified in Appendix B.
(b) Con Edison shall specify Firm Commitments for each Week by 5 p.m.
on the Thursday preceding the Week. If at any time after receipt of Con Edison's
Firm Commitment, AK Power determines that it cannot comply with such Firm
Commitment with respect to any Unit, AK Power shall immediately notify Con
Edison of such determination.
(c) AK Power shall have the right to enter into a bilateral contract
for the sale of Energy generated by a Unit not subject to a Firm Commitment to a
third party. Con Edison shall provide transmission service under Con Edison's
Open Access Transmission Tariff ("OATT") to AK Power for sales to third parties
within and outside Con Edison's service area. In the event and to the extent
that undergeneration by AK Power during a bilateral sale is covered and provided
by Con Edison, AK Power shall reimburse Con Edison for the amount OF SUCH
undergeneration based upon Con Edison's incremental power costs coincident with
the undergeneration period, as determined by Con Edison. When Con Edison
provides AK Power with transmission service for deliveries to third parties
outside Con Edison's service area, the transmission service will be provided up
to the interconnection point between Con Edison's transmission system and the
transmission system of the third party or the transmission system of an
intervening party through which such deliveries are to be made. AK Power shall
notify Con Edison of bilateral transactions made with third parties and shall
reserve and pay for Con Edison OATT transmission services required to support
these sales. If AK Power does not enter into a bilateral contract for the sale
of Energy from a Unit not subject to a Firm Commitment,
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Con Edison shall have the right to commit and dispatch that Unit on a real-time
basis. For the purpose of the penalty and Incentive calculations as described in
Article 3(b), such real-time commitment and dispatch shall be considered a Firm
Commitment.
(d) On a real-time basis, Con Edison shall dispatch a Unit from the
Con Edison Energy Control Center using signals from the NYPP or modified NYPP
signals based on Con Edison's transmission control area regulation requirements
or local reliability rules. Con Edison shall commit or dispatch a Unit to
respond to system conditions, including, but not limited to: storm watch,
maximum generation levels, minimum oil burn and remote start.
(e) Whenever the Units are committed or dispatched by Con Edison, the
Units shall provide Energy and ancillary services on a real time dispatch basis
(including appropriate levels of 10 minute spinning, 10 minute non-spinning, and
30 minute operating reserves as required by the NYPP, voltage support such as
supplying or absorbing VoltAmpere-Reactive (VARS) power, frequency control and
automatic generation control) as required by Con Edison. AK Power shall receive
no additional payment for any such ancillary services,
(f) Within 14 days of the Closing Date, AK Power shall provide to Con
Edison a Maintenance Outage Schedule relating to the Generating Plant for the
first year following the Closing Date. AK Power shall provide subsequent
Maintenance Outage Schedules to Con Edison one year from the Closing Date, and
annually thereafter until this Agreement is terminated. All Maintenance Outage
Schedules shall be subject to Con Edison's approval within 30 days of receipt by
Con Edison, such approval not to be unreasonably withheld; provided, however,
that Con Edison may require AK Power to subsequently amend an approved
Maintenance Outage Schedule with respect to any Unit, at any time prior to the
date that the Unit is scheduled to be removed from service, due to Con Edison's
concerns with the reliability of the electric system, unless the planned
maintenance cannot be delayed pursuant to Good Utility Practices. As necessary,
AK Power shall provide Con Edison with maintenance outage requests and load
limitation requests in order to perform necessary maintenance that is not
indicated on a Maintenance Outage Schedule. If necessary, such request shall be
renewed by AK Power on a weekly basis in accordance with the Firm Commitment.
All such changes to the Maintenance Outage Schedules
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shall be subject to Con Edison's approval, such approval not to be unreasonably
withheld.
(g) If AK Power enters into a bilateral transaction with a third party
as provided by Article 4(c), such transactions must be scheduled in advance with
Con Edison. These transactions must conform to all NYPP scheduling requirements,
including NERC tagging requirements. All bilateral transactions must be
scheduled with Con Edison on a daily basis as soon as they are finalized, but no
later than noon of the day prior to the day the transaction will occur.
Intra-day transactions between AK Power and a third party will be scheduled by
Con Edison provided that they do not conflict with or otherwise reduce Con
Edison's electric system reliability. Notwithstanding the foregoing, Con Edison
reserves the right to curtail all bilateral transactions that may jeopardize
system reliability in accordance with NYPP standards.
(h) AK Power shall immediately notify Con Edison of any change in the
availability and/or capability of any Unit and the expected duration of any
outage or derating.
ARTICLE 5 FUEL
(a) Con Edison shall, at its own cost, procure and supply all Fuel
required by the Generating Plant to operate for Energy sales to Con Edison. All
such fuel shall meet Con Edison's specifications in effect as of the Closing
Date. Con Edison shall provide and be responsible for all costs for all services
associated with the delivery of Fuel, including but not limited to natural gas
balancing and all local gas transportation costs associated with the supply of
natural gas to the Generating Plant.
(b) AK Power shall procure and supply all the natural gas required to
support a bilateral sale to a third party and shall be responsible for all
incremental costs associated with such natural gas supply incurred by Con
Edison, including but not limited to balancing the natural gas supply and all
incremental local transportation costs associated with AK Power's bilateral
sales incurred by Con Edison. Upon reasonable request by AK Power, Con Edison
shall make available daily information on gas balancing and nomination,
(c) Con Edison shall be responsible for all required Fuel sampling and
shall provide copies of sample results to AK Power.
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(d) If AK Power returns the FO6-1 fuel oil tank at the Generating
Plant to service or installs a new FO6 system, Con Edison shall not have the
right under this Agreement to require AK Power to burn FO6 in the Generating
Plant. AK Power shall take all appropriate notification and other actions with
respect to oil spills as required by law and regulation.
(e) Fuel provided by Con Edison will be compliant with all applicable
Environmental Laws.
(f) Con Edison shall use the historic monthly average heat rates, as
set forth in Appendix C hereto, to monitor each Unit's performance. For each
month, the historic average heat rates shall be adjusted for average load level.
Adjustments to historic heat rates due to changes in average load level will be
made using a ratio based on the most recent NYPP MP-3 test data. For each month,
the actual net generation from each Unit will be multiplied by the adjusted
historic average heat rate for that specific month, yielding a target BTU heat
input ("Target"). The Target will be compared to the actual BTU heat input to
the Unit. AK Power shall pay Con Edison for all BTU consumed in excess of 104%
of the Target. Con Edison shall pay AK Power for BTU consumption savings below
96% of the Target. Such payments shall be based on Con Edison's average BTU
costs (in $/MBTU) for that specific month for Fuel supplied to the Generating
Plant. The preceding performance measurement methodology and payment obligations
shall apply to steam-powered units at the Generating Plant.
ARTICLE 6 ENVIRONMENTAL
6.1 Use of NOx Allowances
(a) All nitrogen oxide (NOx) allowances allocated to the Generating
Plant by the Department of Environmental Conservation (DEC) under 6 NYCRR Part
227-3.5 (a) may be used by Con Edison for NOx emissions from either the
Ravenswood Generating Station or Ravenswood Gas Turbines, or Xxxxxx Kill and
Astoria Generating Stations or Narrows, Gowanus or Astoria Gas Turbines
(hereinafter collectively referred to as "Generators"); provided, however, that
such allowances may be so used at the Generators other than the Xxxxxx Kill
Generating Station only to the extent that NOx emissions exceed allowances
allocated to those Generators under 6 NYCRR Part 227-3.5(a), and only to the
extent that NOx allowances from those
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Generators are also made available to Con Edison for similar use. AK Power shall
provide NOx allowances for its bilateral transactions with third parties
pursuant to Article 4(c).
(b) AK Power agrees to utilize either the 3-year historic NOx emission
values measured by Con Edison's CEMS or the NOx Emission Target Values developed
by Con Edison as set forth in Appendix D, whichever is greater, for each Unit in
the Generating Plant as the NOx emission performance criteria.
(c) At the end of each ozone season (May 1 through September 30), Con
Edison shall determine the number of tons of NOx emissions that were emitted
from the Generators. This amount shall be subtracted from the NOx allowances
allocated to the Generators under 6 NYCRR Part 227-3.5 (a) to determine if any
of these Part 227-3.5(a) NOx allowances remain. Only to the extent that such NOx
allowances remain, Con Edison shall have the right to direct the reallocation by
November 15 of each year of these NOx allowances an a pro-rata basis in relation
to the total NOx allowances allocated to the Generator under 6 NYCRR Part 227 -
3.5 (a); provided, however, that such allocation may be proportionately
increased or decreased by Con Edison based on the performance of the Generators
in relation to the NOx emission performance criteria as described in Article
6.1(b). At the end of each ozone season, AK Power shall transfer the Part
227-3.5(a) NOx allowances in the Xxxxxx Kill Generating Station account to the
Generators as determined by Con Edison pursuant to this paragraph, provided that
the owners of the other Generators similarly make such transfers as determined
by Con Edison. If the NOx allowances allocated to the Generators under 6 NYCRR
Part 227-3.5 (a) are not sufficient to satisfy the NOx emissions from the
Generators during the ozone season, then Con Edison shall be responsible for the
allowance deficiency except to the extent that such deficiency is due to
operation above the NOx emission performance criteria described in Article
6.1(b).
(d) Con Edison shall include the Generating Plant in its NOx RACT
System-wide Averaging Program ("Program") and shall be responsible for meeting
the 24-hour allowable system-wide NOx average for all generators included in the
Program. Con Edison shall monitor the hourly NOx emissions at the Generating
Plant via the existing CEMS computers. Con Edison shall prepare and file with
DEC the quarterly NOx RACT Report on the system-wide averaging. In the event of
a forced outage of a Unit at the Generating Plant, Con Edison shall
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prepare, with the support of AK Power, the documentation required by the DEC
regulations (6 NYCRR Section 227-2.5(b)(1)). Con Edison shall provide to AK
Power bi-weekly reports on NOx allowances estimated usage by all Generators. Con
Edison has the right to curtail any third-party bilateral transaction that may,
in its sole opinion, jeopardize the 24-hour allowable system-wide NOx average.
(e) AK Power shall be responsible for the operation and maintenance of
the CEMS equipment including, but not limited to, the daily calibration of the
analyzers. Con Edison shall be responsible for the preparation for AK Power's
approval, and AK Power shall submit, the quarterly electronic data report to the
U.S. Environmental Protection Agency as required by the DEC NOx Budget Rule.
(f) In the event that the DEC does not approve the inclusion of the
Generating Plant in Con Edison's NOx RACT System-wide Averaging Program, the
Parties shall renegotiate the provisions of this Article 6 to otherwise carry
out the intent of this Article 6 and other pertinent provisions.
ARTICLE 7 BILLING AND PAYMENT PROCEDURES
7.1 Billing and Payment
(a) In respect of each Month ending after the Closing Date, AK Power
shall, on or prior to the twentieth day of the following Month prepare and
render an invoice to Con Edison for the ECP, less any Penalty Payments or plus
any Incentive Payments as described in Article 3, due from Con Edison to AK
Power for the preceding Month, calculated in accordance with Article 3. The
Payments owed shall be due and payable 10 Business Days after Con Edison
receives an invoice. All payments due under this Agreement shall be made in
immediately available funds by wire transfer to accounts designated by the
Parties.
(b) If any payment falls due on a day that is not a Business Day, then
the payment shall be made on the next Business Day.
(c) Interest on unpaid amounts, payments received after the due date
or payments in dispute that are held in escrow shall accrue at a rate equal to
the prime commercial lending rate established from time to time by Chase
Manhattan Bank, N.A., New York, New York, or its
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successor, from the due date until the date upon which payment is
made.
(d) All xxxxxxxx to Con Edison shall be sent to:
Consolidated Edison Company of New York, Inc.
0 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: (To Be Specified By Con Edison Prior To The
Closing Date)
All xxxxxxxx to AK Power shall be sent to:
Xxxxxx Kill Power LLC
0000 Xxxxxxxx Xxxx; Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx, 00000
Attention: (To Be Specified By AK Power Prior To The Closing
Date)
(e) Any payments owed directly by AK Power to the NYPP, shall be made
pursuant to the procedures established by the NYPP. AK Power shall be
responsible for its share of the NYPP Control Performance System payments or
penalties, as the case may be, as applied to Con Edison based on the performance
of the Generating Plant. Con Edison shall determine the allocation of NYPP
Control Performance System payments or penalties to the Generating Plant.
Invoices for such payments or penalties shall be submitted by Con Edison to AK
Power, and payments by AK Power shall be made to Con Edison, in accordance with
the timeframe set forth in Article 7.1(a).
(f) Any other payments due under this Agreement (such as, for fuel
handling and labor and for excess BTU consumption and BTU savings) shall be
invoiced and paid in accordance with the timeframe set forth in Article 7.1(a).
To the extent the auxiliary power consumed by the Generating Plant and other
related Auctioned Assets owned by AK Power is not fully offset in any month by
Energy generated by the Generating Plant, as contemplated in Article 3(a)(1),
such remaining auxiliary power shall be carried forward in an account to be so
offset by Energy generated by the Generating Plant in the next month, and AK
Power shall reimburse Con Edison for any auxiliary power remaining in the
account at the termination of this Agreement based upon the
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payments for Energy made by Con Edison in the last month prior to the
termination of this Agreement.
(g) The Parties shall maintain records, accounts and other documents
sufficient to reflect accurately all transactions hereunder for a period of four
years from the time of the transactions. Each Party shall, at its own expense,
have the right to audit such records, accounts and other documents of the other
Party during such four-year period upon reasonable prior notice to the other
Party, subject to Article 24.
7.2 Billing Disputes
If a Party contests the amount billed in accordance with Article 7.1
before such amount is due, the contesting Party shall pay the undisputed billed
amount when due and promptly provide written notice to the other Party of the
disputed amount, identifying the reason for the dispute. If neither Party
disputes a xxxx within six Months after the due date of such xxxx, such xxxx
shall be deemed correct. The Parties shall engage in good faith negotiations to
resolve any disputed amounts within 30 days, after receipt of the written notice
identifying the dispute. If the Parties are unable to resolve a dispute within
such period, the disputed amounts shall, if requested by the billing party, be
paid into an escrow account within 30 days of such request pending resolution of
the dispute. Thereafter, either Party may exercise such remedies as may be
available under this Agreement, at law or in equity. However, such billing
dispute under this Section 7.2 shall not constitute an Event of Default as that
term is defined in Article 9(c) and such remedies do not include the temporary
or long-term cessation of the supply of Energy from AK Power to Con Edison in
accordance with the terms of this Agreement. Interest at the rate specified in
Section 7.1(c) shall accrue on any amount due hereunder, if any, that is
refunded or credited to the contesting Party or that is released from escrow to
the non-contending Party, when the contested amount is resolved.
7.3 Survival
The provisions of this Agreement shall survive termination, expiration,
cancellation, suspension, or completion of this Agreement to the extent
necessary to allow for final billing and payment.
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ARTICLE 8 INDEMNIFICATION
8.1 Indemnification
(a) AK Power shall indemnify and hold harmless Con Edison and its
Affiliates and their respective officers, directors, trustees, employees and
agents (collectively with Con Edison and its Affiliates, the "Con Edison
Indemnitees") from and against any and all claims, demands, liabilities, costs,
losses, judgments, damages, obligations, payments and expenses (including
reasonable legal fees and expenses and including costs and expenses incurred in
connection with investigations and settlement proceedings) (each, an
"Indemnifiable Loss"), as incurred, asserted against or suffered by any Con
Edison Indemnitee relating to, resulting from or arising out of (A) damage to
property or (B) injury to or death of any person, including Con Edison
Indemnitees, AK Power's Indemnitees (as defined below), or any third parties, in
each case, to the extent caused by the gross negligence or willful misconduct of
AK Power, its Affiliates or their respective officers, directors, trustees,
employees, agents, subcontractors and successors and arising out of or in
connection with this Agreement and not caused by the negligence or willful
misconduct of such Con Edison Indemnitee, or (C) any breach by AK Power of any
covenant or agreement by AK Power, or representation or warranty of AK Power
that survives Closing pursuant to Article 14.3, contained in this Agreement.
(b) Con Edison shall indemnify and hold harmless AK Power and its
Affiliates and their respective officers, directors, trustees, employees and
agents from and against (collectively with AK Power and its Affiliates, the "AK
Power Indemnitees") any and all Indemnifiable Losses, as incurred, asserted
against or suffered by any AK Power Indemnitee relating to, resulting from or
arising out of (A) damage to property, or (B) injury to or death of any person,
including AK Power Indemnitees, Con Edison's Indemnitees or any third parties,
in each case, to the extent caused by the gross negligence or willful misconduct
of Con Edison, its Affiliates or its their respective officers, directors,
trustees, employees, agents, subcontractors and successors and arising out of or
connected with this Agreement and not caused by the negligence or willful
misconduct of such AK Power Indemnitee, or (C) any breach by Con Edison of any
covenant or agreement by Con Edison, or representation or warranty of Con Edison
that survives Closing pursuant to Article 14.3, contained in this Agreement.
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(c) The amount of any Indemnifiable Loss shall be reduced to the extent
that the relevant AK Power Indemnitee or Con Edison Indemnitee (each, an
"Indemnitee") receives any insurance proceeds with respect to an Indemnifiable
Loss. If the amount of any Indemnifiable Loss, at any time subsequent to the
making of an indemnity payment in respect thereof, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or pursuant
to any claim, recovery, settlement or payment by or against any other person,
the amount of such reduction, less any costs, expenses or premiums incurred in
connection therewith, will promptly be repaid by the Indemnitee to the Party
required to provide indemnification hereunder (the "Indemnifying Part") with
respect to such Indemnifiable Loss.
(d) To the fullest extent permitted by law, neither Party nor any AK
Power Indemnitee or any Con Edison Indemnitee shall be liable to the other Party
or any other AK Power Indemnitee or Con Edison Indemnitee for any claims,
demands or suits for consequential, incidental, special, exemplary, punitive,
indirect or multiple damages connected with or resulting from any breach of this
Agreement, or any actions undertaken in connection with or related hereto,
including any such damages which are based upon breach of contract, tort
(including negligence and misrepresentation), breach of warranty, strict
liability, statute, operation of law or any other theory of recovery.
(e) The rights and remedies of Con Edison and AK Power under this
Article 8 are, solely as between Con Edison and AK Power, exclusive and in lieu
of any and all other rights and remedies which Con Edison and AK Power may have
under this Agreement or otherwise for monetary relief with respect to (i) any
breach of, or failure to perform, any covenant or agreement set forth in this
Agreement by Con Edison or AK Power or (ii) any breach of any representation or
warranty by Con Edison or AK Power. Each Party agrees that the previous sentence
shall not limit or otherwise affect any non-monetary right or remedy which
either Party may have under this Agreement or otherwise limit or affect either
Party's right to seek equitable relief, including the remedy of specific
performance.
(f) AK Power and Con Edison agree that, notwithstanding Section 8.1(e),
each Party shall retain, subject to the other provisions of this Agreement,
including Sections 8.1(d), all remedies at law or in
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equity with respect to fraud or willful or intentional breaches of this
Agreement.
8.2 Third Party Claims Procedures
(a) If any Indemnitee receives notice of the assertion of any claim or
of the commencement of any claim, action, or proceeding made or brought by any
person who is not a Party or an Affiliate of a Party (a "Third Party claim")
with respect to which indemnification is to be sought from an Indemnifying
Party, the Indemnitee will give such Indemnifying Party reasonably prompt
written notice thereof, but in any event not later than 20 Business Days after
the Indemnity's receipt of notice of such Third Party Claim; provided, however,
that a failure to give timely notice will not affect the rights or obligations
of any Indemnitee except if, and only to the extent that, as a result of such
failure, the Indemnifying Party was actually prejudiced. Such notice shall
describe the nature of the Third Party Claim in reasonable detail and will
indicate the estimated amount, if practicable, of the Indemnifiable Loss that
has been or may be sustained by the Indemnitee.
(b) If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided, however, that such counsel is not reasonably
objected to by the Indemnitee; and provided further that the Indemnifying Party
first admits in writing its liability to the Indemnitee with respect to all
material elements of such claim. Should the Indemnifying Party elect to assume
the defense of a Third Party Claim, the Indemnifying Party will not be liable to
the Indemnitee for any legal expenses subsequently incurred by the Indemnitee in
connection with the defense thereof. If the Indemnifying Party elects to assume
the defense of a Third Party Claim, the Indemnitee will (i) cooperate in all
reasonable respects with the Indemnifying Party in connection with such defense,
(ii) not admit any liability with respect to, or settle, compromise or
discharge, any Third Party Claim without the Indemnifying Party's prior written
consent and (iii) agree to any settlement, compromise or discharge of a Third
Party Claim which the Indemnifying Party may recommend and which by its terms
obligates the Indemnifying Party to pay the full amount of the liability in
connection with such Third Party Claim and releases the Indemnitee completely in
connection with such Third Party Claim. in the event the Indemnifying
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Party shall assume the defense of any Third Party Claim, the Indemnitee shall be
entitled to participate in (but not control) such defense with its own counsel
at its own expense. If the Indemnifying Party does not assume the defense of any
such Third Party Claim, the Indemnitee may defend the same in such manner as it
may deem appropriate, including settling such claim or litigation after giving
notice to the Indemnifying Party of the terms of the proposed settlement and the
Indemnifying Party will promptly reimburse the Indemnitee upon written request.
Anything contained in this Agreement to the contrary notwithstanding, no
Indemnifying Party shall be entitled to assume the defense of any Third Party
Claim if such Third Party Claim seeks an order, injunction or other equitable
relief or relief for other than monetary damages against the Indemnitee which,
if successful, would materially adversely affect the business of the Indemnitee.
8.3 Survival
The indemnification obligations of each Party under this Article 8
shall become effective upon the occurrence of the Closing Date, and, for acts
and occurrences prior to expiration, termination, completion, suspension or
cancellation of this Agreement, shall continue in full force and effect
regardless of whether this Agreement expires, terminates, or is suspended,
completed or canceled. Such obligations shall not be limited in any way by any
limitation on insurance or by any compensation or benefits payable by the
Parties under workers' compensation acts, disability benefit acts or other
employee acts, or otherwise.
ARTICLE 9 LIMITATION OF LIABILITY
(a) Subject to indemnity obligations set forth in Article 8, upon an
Event of Default by Con Edison under this Agreement, which Event of Default is
not excusable due to a Force Majeure Event or due to an Event of Default by AK
Power under this Agreement, Con Edison's liability to AK Power shall be limited
to AK Power's direct damages incurred by AK Power as a result of such Event of
Default by Con Edison.
(b) Subject to indemnity obligations set forth in Article 8, upon an
Event of Default by AK Power under this Agreement, which Event of Default is not
excusable due to a Force Majeure Event or due to an Event of Default by Con
Edison under this Agreement, AK Power's
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liability to Con Edison shall be limited to Con Edison's direct damages incurred
by Con Edison as a result of such Event of Default by AK Power,
(c) Unless excused by a Force Majeure Event, or an Event of Default by
the other Party, each of the following events individually shall constitute an
"Event of Default" by a Party hereunder: failure by such Party, in any material
respect, to comply with, observe, or perform any covenant, warranty or
obligation under this Agreement, if such failure is not cured or rectified
within 30 days after receipt of written notice of such failure from the other
Party or such longer period as may be reasonably required provided, however,
that the defaulting Party diligently attempts to cure such Event of Default.
(d) The provisions of this Article 9 shall survive termination,
cancellation, suspension, completion, or expiration of this Agreement.
ARTICLE 10 FORCE MAJEURE
(a) Notwithstanding anything in this Agreement to the contrary,
neither Party shall have any liability or be otherwise responsible to the other
for its failure to carry out its obligations, with the exception of any
obligation to pay money, under this Agreement if and only to the extent that
it becomes impossible for either Party to so perform as a result of any
occurrence or event which is beyond the reasonable control, and does not result
from any negligence, of the Party affected (each, a "Force Majeure Event"),
including any act of God, strike or any other labor disturbance, act of a public
enemy, war, act of terrorism, riot, any other civil disturbance, fire, storm,
lightning, flood, earthquake, any other natural disasters, explosion, any order
or regulation or restriction imposed by any Governmental Authority, failure of a
contractor or subcontractor caused by a Force Majeure Event and transportation
delays or stoppages.
(b) Nothing contained in this Article 10 shall relieve any Party of
the obligation to make payments when due pursuant to this Agreement.
(c) If a Party shall rely on the occurrence of a Force Majeure Event
as a basis for being excused from performance of its obligations under this
Agreement, then the Party relying on such occurrence shall (i) provide prompt
written notice of such Force Majeure Event to the other
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Party giving an estimate of its expected duration and the probable impact on the
performance of its obligations hereunder; (ii) exercise its reasonable best
efforts to continue to perform its obligations under this Agreement; (iii)
reasonably and expeditiously take action to correct or cure the Force Majeure
Event, provided, however, that settlement of strikes or any other labor
disturbance will be completely within the sole discretion of the Party affected
by such strike or labor dispute; (iv) exercise its reasonable best efforts to
mitigate or limit damages to the other Party; and (v) provide prompt written
notice to the other Party of the cessation of the Force Majeure Event.
(d) The provisions of this Article 10 shall survive termination,
cancellation, suspension, completion or expiration of this Agreement.
ARTICLE 11 DEFAULT AND TERMINATION
(a) This Agreement shall automatically terminate if the APSA is
terminated.
(b) Con Edison and AK Power agree that, notwithstanding any other
provision of this Agreement or in the APSA, this Agreement may not be terminated
prior to its expiration by either Party under any circumstances, including as a
result of a breach, whether or not material, by the other Party, except pursuant
to an agreement in writing executed by each Party.
ARTICLE 12 ADDITIONAL REMEDIES
The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, the non-defaulting Party may pursue
any remedies and may begin proceedings at the FERC to terminate this Agreement
by giving at least ten days advance written notice to the defaulting Party, such
termination to be effective as of the date specified in such notice, subject to
the approval of the FERC, in accordance with FERC regulations.
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ARTICLE 13 DISPUTES
Any disputes between Con Edison and AK Power as to their rights and
obligations under this Agreement shall first be addressed by the Parties. If
representatives of the Parties are unable in good faith to satisfactorily
resolve their disagreement, the Parties shall refer the matter to their
respective senior management. If after using their reasonable best efforts to
try to resolve the dispute, senior management cannot resolve the dispute within
30 days, either Party may exercise any right or remedy available pursuant to
this Agreement.
ARTICLE 14 REPRESENTATIONS AND WARRANTIES
14.1 Representations and Warranties of Con Edison
Con Edison represents and warrants to AK Power as follows:
(a) Organization. Con Edison is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York and Con
Edison has all requisite corporate power and authority to carry on its business
as currently conducted.
(b) Authority Relative to this Agreement. Con Edison has all necessary
corporate power and authority to execute and deliver this Agreement and, subject
to the procurement of applicable regulatory approvals, to perform its
obligations under this Agreement. To the extent necessary, the execution and
delivery by Con Edison of this Agreement and the performance by Con Edison of
its obligations hereunder have been duly and validly authorized by the Board of
Trustees of Con Edison or by a committee thereof to whom such authority has been
delegated and no other corporate proceedings on the part of Con Edison are
necessary to authorize this Agreement or the performance of its obligations
hereunder. This Agreement has been duly and validly executed and delivered by
Con Edison and, assuming that this Agreement constitutes a valid and binding
agreement of AK Power, constitutes a valid and binding agreement of Con Edison,
enforceable against Con Edison in accordance with its terms.
(c) Regulatory Approval. Con Edison has obtained or made, as the case
may be, or will obtain or make, as the case may be, by the Closing Date any and
all declarations, filings, registrations, notices,
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authorizations, consents or approvals of or to any public authority that are
required for Con Edison to execute and deliver this Agreement and to perform its
obligations hereunder, other than such declarations filings, registrations,
notices, authorizations, consents or approvals which, if not obtained or made,
would not, individually or in the aggregate, create a material adverse effect in
respect of the performance by Con Edison of its obligations under this
Agreement.
(d) Compliance With Law. Con Edison is in compliance with all
applicable laws, statutes, orders, rules, regulations, ordinances or judgments
of any Federal, state, or local governmental authority other than such failures
to be in compliance with such applicable laws, statutes, orders, rules,
regulations, ordinances or judgments which would not, individually or in the
aggregate, create a material adverse effect in respect of the performance by Con
Edison of its obligations under this Agreement. Con Edison has not received any
written notification that it is in violation of any of such laws, statutes,
orders, rules, regulations, ordinances or judgments, except for notification of
violations which would not, individually or in the aggregate, create a material
adverse effect in respect of the performance by Con Edison of its obligations
under this Agreement.
14.2 Representations and Warranties of AK Power
AK Power represents and warrants to Con Edison as follows:
(a) Organization. AK Power is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and AK Power has all requisite power and authority to carry on its
business as is now being conducted.
(b) Authority Relative to this Agreement. AK Power has all necessary
power and authority to execute and deliver this Agreement and, subject to the
procurement of applicable regulatory approvals, to perform its obligations under
this Agreement. To the extent necessary, the execution and delivery of this
Agreement and the performance by AK Power of its obligations hereunder have been
duly and validly authorized by the Executive Committee of AK Power or by a
committee thereof to whom such authority has been delegated and no other
proceedings on the part of AK Power are necessary to authorize this Agreement or
the performance of its obligations hereunder. This Agreement has been duly and
validly executed and delivered by AK
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Power and, assuming that this Agreement constitutes a valid and binding
agreement of Con Edison, constitutes a valid and binding agreement of AK Power,
enforceable against AK Power in accordance with its terms.
(c) Regulatory Approval. AK Power has obtained or made, as the case
may be, or will obtain or make, as the case may be, by the Closing Date any and
all declarations, filings, registrations, notices, authorizations, consents or
approvals of or to any public authority that are required for it to execute and
deliver this Agreement and to perform its obligations hereunder, other than such
declarations, filings, registrations, notices, authorizations, consents or
approvals which, if not obtained or made, would not, individually or in the
aggregate, create a material adverse effect in respect of the performance by AK
Power of its obligations under this Agreement.
(d) Compliance With Law. AK Power is in compliance with all applicable
laws, statutes, orders, rules, regulations, ordinances or judgments of any
Federal, state, or local governmental authority, other than such failures to be
in compliance with such applicable laws, statutes, orders, rules, regulations,
ordinances or judgments which would not, individually or in the aggregate,
create a material adverse effect in respect of the performance by AK Power of
its obligations under this Agreement. AK Power has not received any written
notification that it is in violation of any of such laws, statutes, orders,
rules, regulations, ordinances or judgments, except for notifications of
violations which would not, individually or in the aggregate, create a material
adverse effect in respect of the performance by AK Power of its obligations
under this Agreement.
14.3 The representations and warranties in this Article 14 (except as
set forth in Articles 14.1(d) and 14.2(d)) shall survive the Closing and
continue in full force and effect for the term of this Agreement.
ARTICLE 15 ASSIGNMENT; NO THIRD PARTY BENEFICIARIES
(a) This Agreement and all of the provisions hereof shall be binding
upon, and inure to the benefit of, the Parties and their respective successors
and permitted assigns, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by either Party, including
by operation of law, without the prior written consent of
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the other Party, except (i) in the case of Con Edison, to an Affiliate of Con
Edison or a third party that has a contractual or statutory obligation to supply
Energy to Con Edison's retail customers; (ii) in the case of AK Power, to an
Affiliate of AK Power; and (iii) in the case of either Party, to a lending
institution or trustee in connection with a pledge or granting of a security
interest in the Auctioned Assets and/or this Agreement; provided, however, that
no assignment or transfer of rights or obligations by either Party shall relieve
it from the full liabilities and the full financial responsibility, as provided
for under this Agreement, unless and until the transferee or assignee shall
agree in writing to assume such obligations and duties and the other Party has
consented in writing to such assumption. For purposes of this Agreement, the
term "Affiliate" shall have the meaning set forth in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended.
(b) Nothing in this Agreement is intended to confer upon any other
person except the Parties any rights or remedies hereunder or shall create any
other party beneficiary rights in any person.
(c) Notwithstanding anything herein to the contrary, this Agreement
shall not constitute a consent by Con Edison to any assignment by NRG Energy
pursuant to Section 12.05 of the APSA.
ARTICLE 16 EXTENSION; WAIVER
Either Party may (a) extend the time for the performance of any of the
obligations or other acts of the other Party or (b) waive compliance by the
other Party with any of the agreements or conditions contained in this
Agreement. Any agreement on the part of a Party to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such Party. The failure of a Party to this Agreement to assert any of
its rights under this Agreement or otherwise shall not constitute a waiver of
such rights. Notwithstanding anything herein to the contrary, to the extent that
either Party fails, in any particular instance, to take affirmative steps to
exercise its rights to witness, inspect, observe or approve the activities of
the other Party, such rights shall, solely with respect to such instance, be
deemed waived in respect of such activity.
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ARTICLE 21 ENTIRE AGREEMENT
This Agreement embodies the entire agreement and understanding of the
Parties in respect of the transactions contemplated by this Agreement. There are
no restrictions, promises, representations, warranties, covenants or
undertakings other than those expressly set forth or referred to herein or
therein. This Agreement supersedes all prior agreements and understandings
between the Parties with respect to the transaction contemplated by this
Agreement.
ARTICLE 22 FURTHER ASSURANCES
The Parties agree to, from time to time upon the reasonable request of
either Party, negotiate in good faith and execute and deliver amendments to this
Agreement, including in response to regulatory, technological, operational or
other changes affecting the Auctioned Assets or the electric power industry
generally, or such other documents or instruments as may be necessary, in order
to effectuate the transactions contemplated hereby.
ARTICLE 23 INTERPRETATION
When a reference is made in this Agreement to an Article or Section,
such reference shall be to an Article or Section of this Agreement unless
otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation" or equivalent words. The words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. The definitions
contained in this Agreement are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument, statute, regulation, rule or
order defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument, statute, regulation, rule
or order as from time to time amended, modified or
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supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes, regulations, rules or orders) by
succession of comparable successor statutes, regulations, rules or orders and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.
ARTICLE 24 CONFIDENTIALITY
(a) All information regarding a Party (the "Disclosing Party") that
is furnished directly or indirectly to the other Party (the "Recipient")
pursuant to this Agreement and marked "Confidential" shall be deemed
"Confidential Information". Notwithstanding the foregoing, Confidential
Information does not include information that (i) is rightfully received by
Recipient from a third party not having an obligation of confidence to the
Disclosing Party, (ii) is or becomes in the public domain through no action on
Recipient's part in violation of this Agreement, (iii) is already known by
Recipient as of the date hereof, or (iv) is developed by Recipient independently
of any Confidential Information of the Disclosing Party. Information that is
specific as to certain data shall not be deemed to be in the public domain
merely because such information is embraced by more general disclosure in the
public domain.
(b) Recipient shall keep the Confidential Information strictly
confidential and shall not (except as required by applicable law, regulation or
legal process and then only after compliance with paragraph (c) below), without
any prior written consent, disclose any Confidential Information in any manner
whatsoever to any third party for a period of two years from the date the
Confidential Information was received by Recipient, except as otherwise provided
herein; provided, however, that Recipient may disclose the Confidential
Information to its and its Affiliates' respective directors, trustees, officers,
employees, consultants, advisors and agents who need to know the Confidential
Information for the purpose of assisting Recipient with respect to its
obligations under this Agreement. Recipient shall inform all such parties, in
advance, of the confidential nature of the Confidential Information. Recipient
shall use reasonable efforts to cause such parties to observe the terms of this
Agreement and shall be responsible for any breach of this Agreement by any such
parties.
(c) If Recipient is requested pursuant to, or required by, applicable
law, regulation or legal process to disclose any of the
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Confidential Information (including pursuant to the rules or regulations of the
NYPP, ISO or FERC), Recipient will notify the Disclosing Party promptly so that
the Disclosing Party may seek a protective order or other appropriate remedy. In
the absence of a protective order, or other appropriate remedy Recipient will
furnish only that portion of the Confidential Information which its legal
counsel advises Recipient is legally required and Recipient will exercise all
reasonable efforts to obtain reliable assurance that confidential treatment will
be accorded the Confidential Information so furnished.
(d) Recipient shall promptly return to the Disclosing Party all items
containing or constituting Confidential Information, together with all copies,
extracts, or summaries thereof, upon the earlier of (i) the Disclosing Party's
request, or (ii) four years after the termination or expiration of this
Agreement.
(e) The obligations set forth in this Article 24 shall extend for a
period of four years after termination or expiration of this Agreement.
ARTICLE 25 INDEPENDENT CONTRACTOR STATUS
Nothing in this Agreement is intended to create an association, trust,
partnership or joint venture between the Parties, or to impose a trust,
partnership, or fiduciary duty, obligation or liability on or with respect to
either Party, and nothing in this Agreement shall be construed as creating any
relationship between Con Edison and AK Power other than that of independent
contractors.
ARTICLE 26 JURISDICTION
Each of the Parties irrevocably submits to the exclusive jurisdiction
of (i) the Supreme Court of the State of New York, New York County and (ii) the
United States District Court for the Southern District of New York, for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby. Each of the Parties agrees to commence
any action, suit or proceeding relating hereto either in the United States
District Court for the Southern District of New York or, if such suit, action or
proceeding may not be brought in such court for jurisdictional reasons, in the
Supreme Court of the State of New York, New York County. Each of the Parties
further agrees that service of process, summons, notice or document by hand
delivery or U.S. registered mail at the address specified for such Party in
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Article 28 (or such other address specified by such Party from time to time
pursuant to Article 28 shall be effective service of process for any action,
suit or proceeding brought against such Party in any such court. Each of the
Parties irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Supreme Court of the State of New
York, New York County, or (ii) the United States District Court for the Southern
District of New York, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
ARTICLE 27 CONFLICTS
Can Edison and AK Power agree that, except as expressly otherwise
provided herein or therein, in the event of any conflict or inconsistency
between the terms of this Agreement and the terms of the APSA or the APSA
Amendment, the terms of this Agreement shall prevail.
ARTICLE 28 NOTICES
Unless otherwise specified herein, all notices and other
communications hereunder shall be in writing and shall be deemed given (as of
the time of delivery or, in the case of a telecopied communication, of
confirmation), if delivered personally, telecopies (which is confirmed) or sent
by overnight courier (providing proof of delivery) to the parties at the
following addresses (or at such other addresses for a Party as shall be
specified by like notice):
If to Con Edison, to:
Consolidated Edison Company of New York, Inc.
0 Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
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If to AK Power to:
Xxxxxx Kill Power LLC
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx,00000
Telecopy No.: (612) 373- 5392
Attention: President
With a copy to:
Xxxxxx Kill Power LLC
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx, 00000
Telecopy No.: (000) 000-0000
Attention: Commercial Asset Manager
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IN WITNESS WHEREOF, the Parties hereto have caused this' Agreement to
be duly executed as of the date and year first above written.
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
By:/s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Executive Vice President and CFO
XXXXXX KILL POWER LLC
By:/s/ Xxxxx X. Xxxxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
