FIRST AMENDMENT TO POWER PURCHASE AGREEMENT
This First Amendment to Power Purchase Agreement ("First
Amendment") is entered into as of September 16, 1994, by and
between Panda-Brandywine, L.P. ("Seller'), a Delaware limited
partnership, and Potomac Electric Power Company ("PEPCO"), a
District of Columbia and Virginia corporation (referred to
hereinafter individually as "Party" and collectively as the
"Parties".
WITNESSETH:
WHEREAS, Seller and PEPCO entered into a Power Purchase
Agreement, dated as of August 9, 1991 ("Power Purchase
Agreement"), pursuant to the terms of which PEPCO is to purchase
capacity and energy from an approximately 230 megawatt electric
generating facility to be constructed by Seller; and
WHEREAS, Seller and PEPCO desire to amend the Power Purchase
Agreement.
NOW, THEREFORE, in consideration of these premises, the
mutual covenants set forth herein, and other good and valuable
consideration, the receipt of which is hereby acknowledged, the
Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. Capitalized terms used herein that are not
otherwise defined herein shall have the same meanings as set
forth in the Power Purchase Agreement .
ARTICLE II
AMENDMENTS
2.1 Amendments to Article I. Article I of the Power
Purchase Agreement is amended as follows:
(a) The following new section is added after Section 1.17:
1.17A "Conrail" - The Consolidated Rail Corporation or any
successor thereto.
(b) The following new section is added after Section 1.60:
1.60A "Must Run Hours" - The Hours during which PEPCO is
required to dispatch the Limited Dispatch Portion pursuant to the
first two sentences of Subsection 8.3(a).
(c) Section 1.77 is deleted in its entirety and replaced by the
following:
1.77 "Scheduled Closing Date" - The date after October 30,
1994 on which the Seller, by at least sixty ( 60 ) Days' prior
written notice to PEPCO, projects that the Closing Date will
occur, provided that Seller may replace such written notice with
a new sixty 60 Days' written notice upon Seller's determination
that; the Scheduled Closing Date shall be delayed beyond the date
specified in the previous notice.
(d) Section 1.79 is deleted in its entirety and replaced by the
following:
1.79 "Scheduled Commercial Operation Date" - The date during
the period from June 1, 1996 to June 1, 1997 on which the Seller
projects that the Actual Commercial Operation Date will occur.
Seller shall designate the Scheduled Commercial Operation Date on
or before the Closing Date.
2.2 Amendments to Article III. Article III of the Power
Purchase Agreement is amended as follows:
(a) Subsection 3.2(h)(x) is amended as follows:
(1) Change the word "or" on the first line to a comma;
(2) insert the following phrase between the words "way" and
"necessary" on the second line:
or, in the case of subparts B and D of this subsection,
occupancy permits issued by Conrail
(3) change the word "or" on the sixth line to a comma; and
(4) insert the phrase "or occupancy permit" between the
words "ways and "satisfactory" on the seventh line.
(b) Subsection 3.2(1) is deleted in its entirety and replaced by
the following:
(1) At the times specified in Subsection 4.2(a), the
Interconnection Security pursuant to Section 4.2.
(c) Subsection 3.3(a) is amended by changing the word "or" on the
twentieth line to a comma, and by inserting the phrase "or
occupancy permit" between the words "way" and "for" on the
twentieth line.
2.3 Amendments to Article IV. Article IV of the Power
Purchase Agreement is amended as follows:
(a) Subsection 4.1(b) is amended by changing the contra on the
twenty-first line to a period, and by deleting the language
beginning with the word "subject" on the twenty-first line and
continuing through the phrase "Section 4.4." on the twenty-third
line.
(b) Subsection 4.1(c) is amended as follows:
(1) Insert the word "and" following the comma at the end of
the eighth line;
(2) Change the comma following the word "Maryland" on the
nineteenth line to a period, and delete the language beginning
with the word "and" at the end of the nineteenth line and
continuing through the word "Date" on the twenty-sixth line; and
(3) Insert the following new sentence between the first and
second sentences:
Either Party may terminate this Agreement immediately
by written notice to the other Party given within thirty
(30) Days after the Closing Date, if by the Closing Date
Seller has not received easements or occupancy permits from
Conrail for construction and operation of Transmission
Facilities for the Term of this Agreement on that portion of
Conrail's right-of-way located in Prince George's County,
Maryland that extends from the Facility to that portion of
the Transmission Facilities Site that is owned by PEPCO as
of the Effective Date.
(c) Subsection 4.2(a) is amended by deleting the first sentence
in its entirety and replacing it with the following sentences:
On or before December 1, 1994, Seller shall provide PEPCO with a
security deposit in an amount equal to the Interconnection Costs
incurred by PEPCO prior to such date (including, but not limited
to, commitments incurred for future delivery of goods and
services) for which Seller has not previously paid PEPCO pursuant
to Section 9.3. On the Closing Date, Seller shall provide PEPCO
with an additional security deposit in an amount equal to the
remaining balance of Interconnection Costs estimated pursuant to
Section 9.2 for which Seller has not previously provided PEPCO a
security deposit pursuant to the first sentence of this
Subsection 4.2(a) or paid PEPCO pursuant to Section 9.3. (The
security deposits made pursuant to the first two sentences of
this Subsection 4.2(a) are defined as the "Interconnection
Security.") The Interconnection Security shall be in any form set
forth in Section 4.3.
(d) Subsection 4.2(b) is amended as follows:
(1) Change the phrase "of the amount of the Interconnection
Security" on the seventh and eighth lines to the phrase "of the
sum of the amounts of Interconnection Security";
(2) Delete the word "initially" on the eighth line; and
(3) Change the phrase "the first sentence" on the eighth
and ninth lines to the phrase "the first and second sentences".
(e) Section 4.4 is deleted in its entirety and replaced by the
following:
4.4 Extension to the Scheduled Commercial Operation Date.
If the Scheduled Commercial Operation Date designated by
Seller pursuant to Section 1.79 of this Agreement is prior
to June 1, 1997, then, upon written notice to PEPCO given at
least sixty (60) Days prior to such Scheduled Commercial
Operation Date, Seller may extend such Scheduled Commercial
Operation Date until June 1, 1997. If the Extended Scheduled
Commercial Operation Date designated by Seller pursuant to
the first sentence of this Section 4.4 is prior to June 1,
1997, then, upon written notice to PEPCO given at least
sixty (60) Days prior to such Extended Scheduled Commercial
Operation Date, Seller may further extend such Extended
Scheduled Commercial Operation Date until June 1, 1997.
(f) Subsection 4.6(a) is amended by deleting the language
beginning with "(ii)" on the seventh line and continuing through
the word "Section" on the eighth line, and by changing "(iii)"
to "(ii)" on the ninth line.
2.4 Amendments to Article VI. Article VI of the Power
Purchase Agreement is amended as follows:
(a) Subsection 6.1(a) is amended as follows:
(1) The date "June 1, 1996" on the fifth line is changed to
the date "January 1, 1997"; and
(2) In the definition of the term "CR", the date "June 1,
1996" is deleted on the eleventh and twenty-second lines and
replaced in both places by the phrase "the Actual Commercial
Operation Date".
(b) Subsection 6.1(b) is amended by inserting the following
phrase between the phrase "Subsection 6.1(a)" and the word
"using" in both places where they appear on the ninth and
fifteenth lines:
(as adjusted in accordance with Subsections 6.1(f) and 6.1(g))
(c) Subsection 6.1(c)(iii) is amended by deleting the date "June
1, 1996" on the twelfth line and replacing it with the phrase
"the Actual Commercial Operation Date".
(d) Subsection 6.1(d) is amended by inserting the phrase "or
occupancy permit" on the sixth line between the words "easement"
and "necessary".
(e) Subsection 6.1(f) is redesignated as Subsection 6.1(h) and
new Subsections 6.1(f) and 6.1(g) are added as follows:
(f) The Monthly Capacity Payments calculated pursuant to
Subsection 6.1(a) shall be adjusted to reflect the annual
capacity payment adjustments set forth in Appendix Q.
The annual capacity payment adjustments set forth in Column
2 of Appendix Q shall be made by Contract Year unless the
first Contract Year begins before January 1, 1997, in which
case such annual capacity payment adjustments shall be made
by Calendar Year (with Calendar Year 1 to begin at 12:00
midnight on December 3l, 1996 and end at 12:00 midnight on
December 31, 1997). The annual capacity payment adjustments
shall be spread evenly over the Monthly Capacity Payments in
each such Contract Year or Calendar Year, as applicable.
The annual capacity payment adjustments for each of Contract
Years 11 through 25 set forth in Column 4 of Appendix Q
shall be spread evenly over the Monthly Capacity Payments in
each such Contract Year.
(g) The Monthly Capacity Payments calculated pursuant to
Subsection 6.1(a) shall be reduced to reflect any Potential Costs
calculated in accordance with the following formula:
PC = CPWIRR Increase - TC
Where:
PC = Potential Costs
CPWIRR
Increase = The predicted increase in PEPCO`s Cumulative
Present Worth of Incremental Revenue Requirements. If the actual
peak load experienced by PEPCO during or before 1997 equals or
exceeds 5,697 MW, the CPWIRR Increase shall be determined from
Column 1 of Appendix S . If the actual peak load experienced by
PEPCO during (but not before) 1998 equals or exceeds 5,697 MW,
the CPWIRR Increase shall be determined from Column 2 of Appendix
S. If the actual peak load experienced by PEPCO during and before
1998 does not equal or exceed 5,697 MW, the CPWIRR Increase shall
be determined from Column 3 of Appendix S. For purposes of the
determination of the CPWIRR Increase, the actual peak load
experienced by PEPCO in any year shall be PEPCO's 60-minute
system peak demand for such year, weather corrected and adjusted
to account for unused available energy use management and shall
be adjusted to account for emergency procedures (voltage
reductions and rolling black-outs) occurring during the actual
peak, for the purpose of approximating what the highest actual
peak load would have been in the absence of the emergency
procedures. PEPCO shall undertake to promptly disclose to Seller
all reports made to any state or federal regulatory commission,
reliability council or power pool concerning any such emergency
procedures instituted during the actual peak, provided, however,
that PEPCO shall not incur any liability to Seller, or be deemed
to be in breach of this Agreement, if PEPCO should inadvertently
fail to make any such disclosure. Such peak load and adjustments
shall be as prepared by PEPCO for PJM Pool accounting and other
reporting purposes. Actual peak load shall also be adjusted
upward for reductions of capacity under the contract entered into
by PEPCO and Ohio Edison Company, dated March 18, 1987, as
supplemented or amended from time to time.
TC = An estimate of the costs that would be payable by
PEPCO pursuant to Subsection 15.3(b) assuming that PEPCO provided
notice of termination under Subsection 15.3(a) on the Closing
Date, which costs shall equal the sum of (x) the cost estimates
set forth in Column 1 of Appendix R for the appropriate Closing
Date and (y) a fixed fee of either three million dollars
($3,000,000.00) if the Closing Date occurs prior to May 1, 1995,
or five million dollars ($5,000,000.00) if the Closing Date occurs
on or after May 1, 1995.
PEPCO shall calculate the Potential Costs by February 1, 1999. If
this Calculation results in a positive number for Potential
Costs, then, within ten (10) Days after PEPCO notifies Seller of
the results of the calculation, the Parties shall enter into
negotiations in an effort to agree upon adjustments to the
Monthly Capacity Payments or other measures that will reduce the
Potential Costs to zero (on a net present value basis expressed
in 1994 dollars using an annual discount rate of 9.84%). If the
Parties are unable to agree upon such adjustments or measures on
or before April 1, 1999, then the Monthly Capacity Payments for
Contract Years 11 through 25 shall be reduced by the product of
the Potential Costs multiplied by 0.0335, provided that:
(i) for each of Contract Years 11 through 15, the
Monthly Capacity Payments shall be reduced by no more then
the amount shown in Column 4 of Appendix Q for such Contract
Year divided by twelve (12) (for each such Contract Year,
the amount by which the product of the Potential Costs
multiplied by O.402 exceeds the amount shown in Column 4 of
Appendix Q for such Contract Year shall be referred to as
the "Unrecovered Amount"); and
(ii) for each of Contract Years 16 through 25, the
Monthly Capacity Payments shall be reduced by an additional
amount equal to the product of the sum of the present values
(in 1994 dollars using a 9.84% discount rate) of the
Unrecovered Amounts multiplied by 0.0664.
(f) Subsection 6.2(b)(v) is amended as follows:
(1) The first paragraph is amended to read in its entirety
as follows:
The firm gas rate to be applied for Generation of the First
Dispatch Segment (FGRA) during the Must Run Hours will be
the weighted average of two (2) components. The first
component will represent natural gas supplied from natural
gas reserves, or pursuant to a firm gas supply contract
equivalent to natural gas reserves, purchased by Seller and
will have a guaranteed price throughout the Term. The
second component will represent natural gas market purchases
by Seller and be tied to natural gas market prices. The
percentage of the Fuel to be made available from Seller's
natural gas reserves (or equivalent firm gas supply
contract) for the Term which is required to operate the
Facility for the First Dispatch Segment during the Must Run
Hours is given in Appendix M as %GRCA. The firm gas rate to
be applied for generation of the First Dispatch Segment
(FGRA) during Hours other than the Must Run Hours and for
the generation of the Second Dispatch Segment (FGRB) will
represent natural gas market purchases by Seller and be tied
to natural gas market prices. The FGRA and FGRB will be
calculated in accordance with the following formulas:
FGRA During Must Run Hours =
(FGRR * %GRCA/100%) + [FGMR *
(1-%GRCA/100%)
FGRA During Hours Other Than Must Run Hours = FGMR
FGRB = FGMR
Where: FGRA = Firm Gas Rate for the First Dispatch Segment.
FGRB = Firm Gas Rate for the Second Dispatch
Segment.
FGRR = Firm Gas Reserve Rate.
FGMR = Firm Gas Market Rate.
%GRCA = Percent Gas Reserve Commitment to fuel the
First Dispatch Segment, as set forth in column 2 of
Appendix M for each Contract Year.
(2) The second paragraph is amended by changing the phrase
"column 4" on the second line to the phrase "column 3", and by
deleting the date "June 1, 1996" on the eighth and tenth lines
and replacing it in both places with the phrase "the Actual
Commercial Operation Date".
(3) The formula for the "FGMR" at the end of the third
paragraph is amended to read as follows in its entirety:
FGMR = FGMRi * [(.77*CIf) + (.23*TIf)] * P
(4) A new definition for the new term "P" is added following
the definition of the term "TIf" at the end of the third
paragraph as follows:
P = 0.9 for each of the first four (4) Contract Years and
1.0 for each Contract Year after the fourth Contract Year.
(5) The last paragraph is amended by changing the phrase
"tenth anniversary" on the fourth line to the phrase "sixth
anniversary".
2.5 Amendments to Article VII. Article VII of the Power
Purchase Agreement is amended as follows:
(a) Subsection 7.1 (a) is amended by changing the phrase "forty-
eight (48) Months" on the second line to the phrase "fifty (50)
Months".
(b) Subsection 7.1(c)(i) is amended by adding the phrase "or
occupancy permits" at the end of the second line between the word
"easements" and the semicolon.
(c) The first sentence of Subsection 7.3(a) is amended by
deleting the language beginning with the word "the" on the second
line and continuing through the phrase "Operation Date)" on the
seventh line, and replacing it with the phrase "June 1, 1996".
(d) Subsection 7.3(a)(v) is amended as follows:
(1) On the thirtieth line, change the word "or" to a comma,
and insert the phrase "or occupancy permits" between the words
"way" and "necessary"; and
(2) On the thirty-third line, change the word "or" to a
comma, and insert the phrase "or occupancy permit" between the
words "way" and "satisfactory".
2.6 Amendments to Article VIII. Article VIII of the Power
Purchase Agreement is amended as follows:
(a) The first sentence of Subsection 8.3 (a) is deleted in its
entirety and replaced by the following two sentences:
PEPCO shall dispatch the portion of the Facility's Dependable
Capacity designated as the Limited Dispatch Portion for a total
of sixty (60) Hours Monday through Friday for each Week it is
available. Initially, such dispatch shall be scheduled for the
Hours from 8:00 A.M. to 8:00 P.M. on each such Day, but this
schedule may be adjusted by the Operating Committee.
(b ) Subsection 8.7(b)(i) is amended as follows:
(1) The Phrase "first anniversary" in the first sentence is
changed to the phrase "later of December 31, 1998 or the second
anniversary";
(2) The phrase "second anniversary" in the second sentence
is changed to the phrase "later of December 31, 1999 or the third
anniversary";
(3) The phrase "third anniversary" on the seventh line is
changed to the phrase "later of December 3l, 2000 or the fourth
anniversary"; and
(4) The phrase "such third anniversary" on the tenth line is
changed to the phrase "the later of December 3l, 2000 or such
fourth anniversary".
(c) Subsection 8.7(b)(ii)(B) is amended by changing the phrase
"third anniversary" on the seventh and eighth lines to the phrase
"later of December 31, 2000 or the fourth anniversary".
2.7 Amendments to Article IX. Article IX of the Power
Purchase Agreement is amended as follows:
(a) Section 9.6 is amended as follows:
(1) Change the word "and" on the twenty-third line to a
comma;
(2) insert the phrase "or occupancy permits" between the
words "way" and "required" on the twenty-fourth line; and
(3) on the twenty-eighth line, change the word "or" to a
comma, and insert the phrase "or occupancy permit" between the
words "way" and "satisfactory".
(b) A new Section 9.7 is added as follows:
9.7 Third Party Assertion of Interest in Portion of
Transmission Facilities Site.
(a) Seller shall promptly provide PEPCO with a copy of any
revision that Seller makes to its title search for the
Transmission Facilities Site at any time up to and including the
Closing Date. Seller shall provide PEPCO with copies of Seller's
agreement(s) with Conrail for easements, occupancy permits or
other rights for the Transmission Facilities Site, and copies of
all documents related to such agreement (s). Seller shall be
responsible for any and all costs of obtaining and maintaining
rights to locate the Transmission Facilities upon the Conrail
right of-way, including, but not limited to, an initial fee,
annual rentals, relocation costs, and all other costs payable to
Conrail under the terms of Seller's agreement with Conrail,
during the Term of this Agreement plus fifteen (15) Years.
(b) If at any time during the Term of this Agreement a person
asserts an Interest in one or more parcels of land covered by an
occupancy permit issued by Conrail to Seller for any portion of
the Transmission Facilities Site and the assertion of such
interest may prevent, interrupt or delay the construction and/or
operation of Transmission Facilities on such parcel, then the
Parties shall undertake the following actions. Seller shall
notify PEPCO of such assertion of an interest, provided that if
the interest is asserted against PEPCO following the transfer of
the Transmission Facilities Site to PEPCO, PEPCO shall notify
Seller of such assertion. Seller shall use its best efforts to
resolve the matter expeditiously to eliminate the impediment to
construction and/or operation of the Transmission Facilities. If
Seller is unable to eliminate the impediment to construction
and/or operation of the Transmission Facilities within one
hundred and twenty (120) Days after the date of the notice
provided for in the second sentence of this Subsection 9.7(b) or
if a court of competent jurisdiction issues an order suspending
construction and/or operation of the Transmission Facilities
(which order Seller is unable to have modified or withdrawn to
eliminate such suspension within thirty (30) Days after the date
of such order) in a proceeding involving an assertion of an
interest in one or more parcels of land covered by an occupancy
permit issued by Conrail to Seller for any portion of the
Transmission Facilities Site, then, upon request by Seller, PEPCO
shall use good faith efforts to exercise any eminent domain
rights it may have in order to obtain title to the parcel or to
obtain an easement or other right to use the parcel for
construction and operation of the Transmission Facilities. (After
PEPCO's obligation to exercise its eminent domain rights arises
under the immediately preceding sentence, Seller shall continue
to seek to eliminate the impediment to construction and/or
operation of the Transmission Facilities (including, if
applicable, to seek modification of any order issued by a court
of competent jurisdiction suspending construction and/or
operation of the Transmission Facilities to eliminate such
suspension)). PEPCO's obligation to so exercise its eminent
domain rights is contingent upon the prior transfer by Seller to
PEPCO of Seller's rights under the certificate of public
convenience and necessity issued by the Maryland Commission to
Seller authorizing construction and operation of the Transmission
Facilities ("CPCN"). Such transfer is to be made on or prior to
the Actual Commercial Operation Date, subject to approval by the
Maryland Commission on terms satisfactory to PEPCO in its sole
discretion. If however, a third party asserts an interest in a
portion of the Transmission Facilities Site prior to such
transfer, then PEPCO and Seller shall seek authorization from the
Maryland Commission on terms satisfactory to PEPCO in its sole
discretion to transfer Seller's rights under the CPCN to PEPCO on
an expedited basis.
(c) Seller shall bear all costs incurred by PEPCO in exercising
its eminent domain rights for any portion of the Transmission
Facilities Site. Such costs shall be paid by Seller to PEPCO
pursuant to Section 6.6. If Seller fails to pay any such costs
within the thirty (30) Day period specified in Section 6.6, then,
in addition to its other rights under this Agreement in the event
of such failure, PEPCO's obligation to exercise any eminent
domain rights it may have shall cease and PEPCO may terminate any
eminent domain proceedings which have been instituted.
(d) PEPCO's good faith efforts to exercise its eminent domain
rights in order to obtain use of any portion of the Transmission
Facilities Site for construction and operation of the
Transmission Facilities shall not relieve Seller of any of its
obligations under this Agreement with respect to the Transmission
Facilities Site or the Transmission Facilities (including, but
not limited to Seller's indemnification obligation under
Subsection 16.1(c)). Seller remains responsible for fulfilling
all such obligations by the deadlines specified in this
Agreement. PEPCO shall have no liability to Seller arising out of
PEPCO's good faith efforts to exercise its eminent domain rights
as set forth in Subsection 9.7(b) hereof, including but not
limited to, any liability for any delays in the Actual Commercial
Operation Date. Furthermore, PEPCO shall not be precluded from
exercising any right that it has under this Agreement (including,
but not limited to, rights to terminate the Agreement) as a
result of PEPCO' s good faith efforts to exercise its eminent
domain rights as set forth in Subsection 9.7(b) hereof.
2.8 Amendments to Article XI. Article XI of the Power
Purchase Agreement is amended by inserting the phrase ", or
purchase sufficient natural gas pursuant to a firm gas supply
contract equivalent to natural gas reserves," between the words
"gas" and "to" on the eleventh line of Subsection 11.2(a).
2.9 Amendments to Article XIV. Article XIV of the Power
Purchase Agreement is amended as follows:
(a) the phrase "three hundred and sixty (360) Days" on the
thirteenth line of Subsection 14.1 is changed to the phrase
"three hundred and sixty-six (366) Days".
(b) The date "June 1, 1997" on the fourth line of Subsection
14.4(a) is changed to the date "June 1, 1998".
(c) The second sentence of Subsection 14.4(b) is amended to read
as follows in its entirety:
In any condition of Force Majeure excuses a Party's
performance for a time period of: (i) three hundred and sixty-six
(366) Days in the event of a Force Majeure occurring during the
period between the Closing Date and the Actual Commercial
Operation Date, or (ii) five hundred and forty (540) Days during
the period after the Actual Commercial Operation Date, and the
condition of Force Majeure continues after the conclusion of the
applicable time period, the Party not excused by such Force
Majeure may terminate this Agreement immediately by written
notice to the other Party, without further obligation, or extend
such period at its sole discretion.
2.10 Amendments to Article XV. Article XV of the Power
Purchase Agreement is amended as follows:
(a) Subsection 15.1(e) is amended by changing the date "December
1, 1994" on the second line to the date "October 1, 1995".
(b) The first sentence of Subsection 15.3(b) is amended by
changing the date "December 1, 1994" in both places where it
occurs in the first sentence to the date "May 1, 1995".
2.11 Amendments to Article XIX. Article XIX of the
Power Purchase Agreement is amended by making the following
changes to Section 19.10:
(a) Insert the phrase "persons providing corporate financing to
Panda Energy Corporation or PEPCO," between the comma and the
word "suppliers" at the beginning of the thirteenth line.
(b) Insert the phrase "to the extent required pursuant to
applicable federal securities laws or regulations of the United
States, and" between the word "Party". and the word "to" at the
beginning of the twenty-fifth line.
2.12 Amendments to Appendices. The Appendices to the Power
Purchase Agreement are amended as follows:
(a) Appendix B is amended as follows:
(1) Delete Tables 2, 6 and 8 in their entirety and replace
them with revised Tables 2, 6, and 8 respectively, as set forth
in Attachment E to this First Amendment.
(2) Add new Table 9 as also set forth in Attachment E to
this First Amendment.
(b) Appendix F is deleted in its entirety and replaced by a new
Appendix F as set forth in Attachment F to this First; Amendment.
(c) Appendix L is amended by changing the date "June 1, 1996" on
the second line of footnote 2 to the phrase "the Actual
Commercial Operation Date".
(d) Appendix M is deleted in its entirety and replaced by a new
Appendix M as set forth
(e) A new Appendix Q, as set forth in Attachment B to this First
Amendment, is added to the Power Purchase Agreement.
(f) A new Appendix R, as set for the Attachment C to this First
Amendment, is added to the Power Purchase Agreement.
(g) A new Appendix S, as set for in Attachment D to this First
Amendment, is added to the Power Purchase Agreement.
ARTICLE III
EFFECTIVE DATE OF AMENDMENTS
3.1 Effective Date of Amendments.
(a) The amendments to Subsections 4.2(a) and 4.2(b) of the Power
Purchase Agreement set forth in Sections 2.3(c) and 2.3(d) of
this First Amendment and the amendments to Subsections 15.1(e)
and 15.3(b) of the Power Purchase Agreement set forth in Section
2.10 of this First Amendment shall be effective as the date that
appears in the first paragraph of this First Amendment.
(b) All other amendments to the Power Purchase Agreement
set forth in Article II of this First Amendment, except for
those set forth in Sections 2.3(c), 2.3(d) and 2.10 of this
First Amendment, shall become effective when: (i) PEPCO has
received a final, nonappealable order from the Maryland
Commission finding that this First Amendment is consistent
with PEPCO's least cost planning and approving the First
Amendment, (ii) PEPCO has received a final, nonappealable
order from the District of Columbia Commission approving an
action plan which includes the Facility, in the context of
the District of Columbia Commission's consideration of
PEPCO's Integrated Least-Cost Resource Plan dated June 30,
1994, and (iii) each Party has notified the other Party
pursuant to Subsection 3.1(c) hereof that each such order
is satisfactory inform and substance to the notifying Party
in its sole discretion. The Parties shall seek all such
regulatory approvals expeditiously and use all reasonable
efforts to obtain the approvals specified above from the
Maryland Commission and the District of Columbia
Commission.
(c) Upon receipt by PEPCO or Seller of any order or
approval described in Subsection 3.1(b) above, such Party
shall promptly transmit to the other Party a copy of such
order or approval. Within thirty (30) Days after the date
of such transmittal, each Party shall give notice to the
other Party whether it deems the order to be satisfactory
in form and substance in its sole discretion.
ARTICLE IV
MISCELLANEOUS
4.1 Notices. Any notice or documents required or authorized
by this First Amendment to be given to a Party shall be given in
writing and shall be either: (a) personally delivered, (b)
mailed by registered or certified mail (return receipt
requested) postage prepaid, (c) sent by overnight delivery
service (with a receipt for delivery), or (d) sent by
telefacsimile with a signed acknowledgment of receipt by return
facsimile, to such Party at the following address:
For Seller: For PEPCO:
President Manager, Supply Side Resources
Panda Energy Corporation PEPCO
0000 Xxxxxx Xxxxxx 0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000 Xxxxxxxxxx, X.X. 00000
Xxxxxx, XX 00000 Telephone: (000 ) 000-0000
Telephone: (000) 000-0000 Telefacsimile: (000) 000-0000
Telefacsimile:(000) 000-0000
With a copy to:
Group Vice-President,
Energy and Market Policy and Development
PEPCO
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Each Party's designation of such person and/or address may be
changed at any time by such Party upon written notice given
pursuant to the requirements of this section. A notice served by
mail shall be effective upon receipt.
4.2 CHOICE OF LAW. THIS FIRST AMENDMENT SHALL BE
INTERPRETED, CONSTRUED AND GOVERNED BY THE LAWS OF THE STATE
OF MARYLAND AND, TO THE EXTENT APPLICABLE, FEDERAL LAW,
WITHOUT REGARD TO ANY APPLICABLE CONFLICT OF LAWS PROVISIONS.
THE PARTIES HEREBY SUBMIT TO THE JURISDICTION OF COURTS
LOCATED IN, AND VENUE IS HEREBY STIPULATED TO BE IN,
BALTIMORE, MARYLAND.
4.3 Further Assurances. If either Party determines in its
reasonable discretion that any further instruments, assurances
or other things are necessary or desirable to carry out the
terms of this First Amendment, the other Party shall execute
and deliver all such instruments and assurances and do all
things reasonably necessary or desirable to carry out the terms
of this First Amendment.
4.4 Waiver. No waiver by either Party of the performance of
any obligation under this First Amendment or with respect to any
default or any other matter arising in connection with this
First Amendment shall be deemed a waiver with respect to any
subsequent performance, default or matter.
4.5 Modification or Amendment. No modification, amendment
or waiver of any provision of this First Amendment shall be
valid unless it is in writing and signed by both Parties.
4.6 Counterparts. This First Amendment may be executed in
several counterparts, and all such counterparts shall constitute
one agreement binding on both Parties hereto and shall have the
same force and effect as an original instrument, notwithstanding
that both Parties may not be signatories to the same original or
the same counterpart.
4.7 Confidential Information. The Parties agree that this First
Amendment contains confidential information and, therefore,
shall not be disclosed to any third party without the consent of
both Parties. Further, any information provided by a Party to
the other Party pursuant to this First Amendment and labeled
"CONFIDENTIAL" shall be used by the receiving Party solely in
connection with the purposes of this First Amendment and the
Power Purchase Agreement as amended by this First Amendment and
shall not be disclosed by the receiving Party to any third
party, except with the providing Party's consent, and upon
request of the providing Party shall be returned thereto.
Notwithstanding the above, the Parties acknowledge and agree
that this First Amendment and any such information may be
disclosed to the Financing Parties, persons providing
development financing to Seller or providing corporate financing
to Panda Energy Corporation or PEPCO, consultants, suppliers and
potential suppliers of Fuel and major equipment to the Facility
and other third parries as may be necessary for PEPCO and Seller
to perform their obligations under the Power Purchase Agreement
as amended by this First Amendment (including, but not limited
to, consultants retained by PEPCO to reviews Seller's Fuel
Supply Plan, Fuel Supply Contract(s), or other contracts or
arrangements with respect to fuel for the Facility). To the
extent that such disclosures are necessary, the Parties also
agree that they shall endeavor in disclosing the First Amendment
and any such information to seek to preserve the confidentiality
of such disclosures. This provision shall not prevent either
Party from providing this-First Amendment or any confidential
information received from the other Party to the extent required
pursuant to applicable federal securities laws or regulations of
the United States, and to any court or governmental body as may
be required by such court or body, provided that, if feasible,
the disclosing Party shall have given prior notice to the other
Party of such required disclosure and, if so requested by such
other Party, shall have used all reasonable efforts to oppose
the requested disclosure, as appropriate under the
circumstances, or to otherwise make such disclosure pursuant to
a protective order or other similar arrangement for
confidentiality . Without limiting the scope of the foregoing,
the Parties explicitly agree to use all reasonable efforts to
maintain the confidentiality of this First Amendment in any
filings with, or submissions to, any governmental or regulatory
authorities.
4.8 Third Parties. This First Amendment is intended solely
for the benefit of the Parties, and nothing in this First
Amendment shall be construed to create any duty to, or standard
of care with reference to, or any liability to, any person not
a Party to this First Amendment.
4.9 Headings. The headings contained in this First Amendment
are solely for the convenience of the Parties and should not
be used or relied upon in any manner in the construction or
interpretation of this First Amendment.
4.10 Press Releases. Prior to the Actual Commercial
Operation Date, neither Party shall issue any press
release referring to this First Amendment without
coordination with, and the prior approval of the other
Party.
4.11 Continuing Effectiveness of Power Purchase
Agreement. The Power Purchase Agreement, as amended by
Article II of this First Amendment (which amendments
shall become effective at the times specified in Article
III of this First Amendment, remains in full force and
effect and is hereby ratified by the Parties.
IN WITNESS WHEREOF , the Parties have caused
this First Amendment to be executed by their respective
duly authorized officers as of the date first above
written.
POTOMAC ELECTRIC POWER COMPANY
ATTEST: By:
Title: Group Vice President
Energy & Market Policy &
Development
PANDA-BRANDYWINE, L.P.
ATTEST:
By: Xxxxxx X. Xxxxxx
Title: President
APPENDIX F
INTERCONNECTION AND COMMUNICATION SPECIFICTION
A. Dispatchable Portion
Commencing on the Actual Commercial Operation Date,
PEPCO shall have dispatch control over the Dispatchable
Portion of the Facility's Dependable Capacity in accordance
with the terms of the Agreement. Mutually acceptable
dispatch procedures shall be established by the Operating
Committee pursuant to Subsection 8.3(b) of the Agreement and
adopted prior to the Actual Commercial Operation Date, and
shall include, but shall not be limited to, the following
elements:
1. Subject to Prudent Utility Practices, Section 8.3 of
the Agreement and the provisions of Section A.3 hereof,
PEPCO shall have the right to dispatch the Dispatchable
Portion of the Facility in order to increase or decrease the
Net Electrical Output to the PEPCO System. The Dispatchable
Portion of the Facility shall have an incremental cost curve
with zero or positive slope. The Dispatchable Portion of the
Facility cannot have other variable costs that negate the
effect of the positive or zero incremental cost curve.
2. Seller shall purchase and own such
telecommunications equipment for the Facility as may be
reasonably required from time to time by PEPCO consistent
with Prudent Utility Practices in order to allow PEPCO to
maximize economic and reliable dispatch of the Facility in
coordination with the PEPCO System. The equipment that is
initially installed shall conform to the provisions set
forth in the operational requirements of section A.5 hereof.
3. Subject to Prudent Utility Practices and to the
terms and provisions of the Agreement, PEPCO shall have the
sole discretion to determine whether to dispatch the
Dispatchable Portion of the Facility. If PEPCO elects to
dispatch the Dispatchable Portion of the Facility, PEPCO
will do so at certain specified incremental steps as agreed
upon by the Parties, as such increments and rate of change
of output (ramping rate) may be modified by the Operating
Committee. PEPCO will not guarantee any minimum hourly load
or minimum annual generation in dispatching the Dispatchable
Portion of the Dependable Capacity of the Facility. However,
to the extent practicable in making decisions with respect
to dispatch of the Dispatchable Portion of the Facility,
PEPCO shall give reasonable consideration to the obligations
of Seller under the Steam Supply Contract, in accordance
with procedures to be established by the Operating Committee
which procedures shall include reasonable prior notice of
dispatch of the Dispatchable Portion of the Facility to and
from the various load levels when conditions permit such
notice.
4. PEPCO shall be entitled to the reduction of the Net
Electrical Output of the Facility as specified in Section
5 of the Agreement during Minimum Emergency Generation
Conditions for up to a maximum of two hundred (200)
cumulative hours of operation of the Limited Dispatch
portion during any Year. PEPCO may interrupt or suspend
delivery of electricity from the Facility during an
Emergency Condition or otherwise in accordance with Section
5 of the Agreement. Such occurrences shall not be included
for purposes of determining compliance with the two hundred
(200) cumulative hours limitation on reductions set forth in
the first sentence of this Section A.4.
5. The following equipment, specified by PEPCO, will
be required at the Facility Site.
(a) Remote Terminal Unit (RTU) with Redundant
Automatic Generation Control. (AGC). A single RTU
combining the functions of SCADA and Generation/
Voltage control is required. A "desired generaltion"
signal from the PEPCO Control Center will cause the
AGC at the Facility to transmit an analog or digital
signal corresponding from zero (0) to full unit load,
to the Facility's coordinated boiler/trubine control
system or product a visual display for use by the
Facility operator. The Facility will follow this
"desired generation" requirement within the limits
allowed by the Facility's coordinated contorl system.
VAR loading (voltage set points) will also be signalled
from the PEPCO Control Center to control the voltage
of the Facility's excitation system. This interface
as well as the necessary status and permissive signals
must be included in the AGC units for implementation of
both automatic WATT and VAR control. (See Attachment
"A" for block diagram of RTU/AGC equipment.)
It will be the Facility operator's responsibility to assure that the
generator is operated within its voltage limitations, and the limits of its
capability curve, at all times.
The RTU/AGC shall have a protocol compatible for communications with
PEPCO's Master Station.
(b) Telecommunications Requirements. The RTU/AGC unit will
incorporate the capability for telecommunication of three
(3) phase watts, vars, volts, and amperes measured at the
generator terminals, and three (3) phase station service
watts, vars, volts and amperes measured at the normal and
startup transformer secondaries. Other parameters, such as
those listed below, will be telemetered via the RTU/AGC from
the turbine generator equipment with the choice of parameters
to be made durinq preparation of the Interconnection Plan as
appropriate for the actual Facility design:
(1) Actual xxxxx XX.
(2) Actual station service.
(3) Actual gross MVAR.
(4) Desired generation (set point return).
(5) Unit response rate (MW)/minute).
(6) Maximum limit (MW).
(7) Minimum limit (MW).
(8) Low Boiler limit (MW).
(9) High Boiler limit (MW).
(10) Unit desired volts (set point return).
(11) Unit actual volts.
(12) Response rate (volts).
(13) Maximum operating volts.
(14) Minimum operating volts.
(c) Status Monitoring. The RTU/AGC units will also require
input for monitoring of the status of other conditions
such as those listed below, for AGC control functions
with the choice of conditions to be made during preparation
of the Interconnection Plan as appropriate for the
actual Facility design.
(1) Governor mechanical limit (on-off).
(2) Automatic control (on-off) (MW).
(3) Redundant AGC unit in control.
(4) Generator circuit breaker position (open-closed).
(5) Normal and start-up station service circuit breaker
position (open-closed).
(6) Maximum/Minimum MW limit violated.
(7) Automatic control (on-off) (volts)
(8) Plant frequency alarm.
(9) Intertie circuit breaker position (open-closed).
(10) Man/Machine Interface com. line failure alarm.
(d) Control Points. The RTU/AGC shall be equipped, as a minimum,
with control points for the intertie breakers. Other points
may be requird as determined by the seller.
(e) Billing Metering. The RTU/AGC shall be equipped for
telecomunicating 3 phase KWH and KVH as supplied by a
meter encoder.
The design of the control system which is selected by the Seller
for the Facility may influence the manner in which the above
functions are accomplished, but in any case, the Facility
control system must furnish analog and digital inputs to the
TRU/AGC unit for the parameters and conditions selected pursuant
to this Section (See Attachment "A"). Voltage measurement shall be
on a one hundred and twenty (120) volt basis and 90-130 volt range.
All transducers shall have a minimum accuracy of plus/minus of 0.5%.
6. Incremental voltage control of the generator must be
provided. PEPCO requires that the generator have reactive
characteristics consistent with manufacturers' capacities, and
as similar to PEPCO units as follows:
(a) Fifty percent (50%) of nameplate MVA at generator
minimum load (lagging NVAR).
(b) Thirty percent (30%) of nameplate MVA at generator full
load rating (lagging MVAR).
(c) Fifty percent (50%) of nameplate MVA at
generator minimum load (leading MVAR);
(d) Fifteen percent (15%) of nameplate MVA at
qenerator full load rating (leading NVAR).
7. Loan Profile Recorder. Pulse outputs from kilowatt hour and
kilovar hour meters (In/Out) are required to be sent to a load profile recorder.
8. Communication Channels. Communications channels are required
to be installed and maintained between PEPCO and the Facility. The following
list comprises the minimum presently conceived requirements for
communications links between the Facility and PEPCO. Additional
communications requirements may be required in accordance with
Section 9 of this Appendix F.
(a) Two (2) separate alternate routed full duplex
channels for AGC 1 and 2. Telecommunications of
meter outputs, circuit breaker status, and some alarm
functions, (Facility to PEPCO) will be provided in
the RtU/AGC remote unit.
(b) A dedicated voice channel to the PEPCO
Control Center from the Facility via fiber
optic/microwave/or leased line facilities. Battery back-up
must be provided for this communications facility so that
it will function under utility blackout conditions.
(c) An alternate routed dial-up phone system as back-
up for the communications equipment identified in
subsection (b) above.
(d) Four (4) dedicated, full duplex channels per
interconnection feeder are required for protective relaying
and transfer tripping, two (2) channels for each alternate route.
(e) One (1) full duplex channel for billing meter to PEPCO.
(f) One (1) full duplex channel for analog metering.
(g) One half duplex channel for load profile
recording equipment.
Two independent routes for communication must be geographically
located so that a single accident cannot render both communications
facilities inoperative. As an option to Seller, one of these communication
facilities can be provided through optic fibers integrated into the
construction of the transmission line static wire (spiraled around the
static wire is an acceptable control), separate conductors suspended on the
transmission structure or optic fibers buried underground beneath the
transmission right-of-way. Other methods may be used subject to the approval
of PEPCO.
9. Design details of the Facility which are presently
not available to PEPCO may result in modifications to the
interconnection and communication facilities. These
modifications will be documented by PEPCO as required and
implemented by the Parties.
B. Other Interconnection Requirements
The control, telecommunication and protection equipment included in the
Interconnection Facilities must be incorporated into the design of the Facility.
The equipment requires a clean and controlled environment. The equipment shall
be capable of withstanding, with no sacrifice of performance, temperatures
from -15 degrees c. with 90% percent noncondensing humidity.
The attached layout sketch (Attahment B) provides some basic
information on approximate space allocation requirements for some of the PEPCO
specified equipment racks for analog matering, tone equipment and transfer
trip, the protective relaying panels, and the 125 VDC batteries and charges.
PEPCO acknowledges that the Facility has limited floor space and will
cooperate with Sellers during Interconnection Facilities design efforts to
minimize space requirements. Associated equipment such as distribution panels
are not shown. The load profile recorders, which are usually wall mounted,
and the telephone company terminal equipment are also not shown.
The above facility as a whole require 125VDC battery and charger
systems. Two 125VDC batteries and chargers are required. Each set of
batteries shall have a minimum amp-hour capacity to supply their load under
emergency conditions for a period of eight hours. The two 125 VDC systems must
physically and electrically isolated alal the way to the systems they are
supplying. Some of the above facilities require inputs to be furnished and
installed by the Seller. Inputs to the RTU/AGC unit may be wired directly to
terminal blocks inside the RTU/AGC cabinet.
PEPCO will work closely with the Seller on the design layout and provide
information on PEPCO's design practices. PEPCO will in accordance with the
Agreement, review Facility purchase specifications and drawings to assure
compatibility with interconnection equipment, and will also review Seller's
design studies/calculations for systems such as short circuit studies and
grounding to assure safety and protection and proper operation of
interconnection equipment. These reviews are not meant to relieve the
Seller of responsibility or liability for the design of the Facility, but are
meant to assure proper coordination between Facility and Interconnection
Facility designs.
C. Limited Dispatch Portion
Commencing upon the Actual Commercial Operation Date,
the Limited Dispatch Portion of the Dependable Capacity from
the Facility will be provided to PEPCO in accordance with the
terms of the Agreement. The equipment provided by Seller
pursuant to Section A.5 of this Appendix F will suffice for
the Limited Dispatch Portion as well. Mutually acceptable
schedule and control procedures shall be established by the
Operating Committee and adopted prior to the Actual
Commercial Operation Date, and shall include, but shall not
be limited to, the followinq elements:
1. Subject to Prudent Utility Practices, Section 8.3 of
the Agreement and the provisions of Section A.4 hereof, PEPCO
shall dispatch the portion of the Facility's Dependable Capacity
designeated as the Limited Dispatch Portion for a total of sixty (60)
Hours Monday through Friday for each Week it is available. Initially,
such dispatch shall be scheduled for the Hours from 8:00 a.m. to 8:00 p.m.
on each such Day, but the schedule may be adjusted by the Operating
Committee. At all other times when the Facility is
required at less than the Facility's minimum dispatch, the Limited
Dispatch Portion may be cycled off by PEPCO's dispatchers.
ATTACHMENT A
APPENDIX M
NATURAL GAS RESERVE COMMITMENT AND PRICE
GAS RESERVE
COMMITMENT FOR UNADJUSTED
1ST CT REQUIREMENTS FIRM GAS
FIRST RESERVE
CONTRACT DISPATCH RATE
YEAR (1) SEGMENT $/MBtu
-------- (%GRCA) (FGRR)
COLUMN 1 COLUMN 2 COLUMN 3
1 100% 2.58
2 100% 2.68
3 100% 2.79
4 100% 2.90
5 100% 3.02
6 100% 3.14
7 100% 3.26
8 100% 3.33
9 100% 3.40
10 100% 3.46
11 100% 3.53
12 100% 3.60
13 100% 3.68
14 100% 3.75
15 100% 3.82
16 & thereafter 0% N/A
NOTE: (1) Contract Year shall be defined as set forth in Section 1.19 of
the agreement.
ATTACHMENT B
APPENDIX Q
ANNUAL CAPACITY PAYMENT ADJUSTMENTS
LATER OF
CALENDAR
YEARS (1) ANNUAL ANNUAL
OR CAPACITY CAPACITY
CONTRACT PAYMENT CONTRACT PAYMENT
YEARS ADJUSTMENTS YEAR ADJUSTMENTS
-------- ------------- ---------- -------------
Column 1 Column 2 Column 3 Column 4
1 ($15,000,000) 1 $ 0
2 ($16,000,000) 2 $ 0
3 $0 3 $ 0
4 ($1,000,000) 4 $ 0
5 $2,000,000) 5 $ 0
6 $0 6 $ 0
7 $0 7 $ 0
8 $0 8 $ 0
9 $0 9 $ 0
10 $0 10 $ 0
11 $0 11 $ 1,650,000
12 $0 12 $ 2,850,000
13 $0 13 $ 4,050,000
14 $0 14 $ 5,250,000
15 $0 15 $ 6,450,000
16 $0 16 $ 7,650,000
17 $0 17 $ 8,850,000
18 $0 18 $10,050,000
19 $0 19 $11,250,000
20 $0 20 $12,450,000
21 $0 21 $13,650,000
22 $0 22 $14,850,000
23 $0 23 $16,050,000
24 $0 24 $17,250,000
25 $0 25 $18,450,000
NOTES: (1) With Calendar Year 1 beginning at 12:00 midnight on 12/31/96 and
ending at 12:00 midnight on 12/31/97.
ATTACHMENT C
APPENDIX R
ESTIMATE TERMINATION COSTS (1)
CLOSING DATE TERMINATION
------------ COSTS
MONTH YEAR ESTIMATE
----- ---- -----------
Column 1
9 1994 $14,700,000
10 1994 $15,700,000
11 1994 $16,700,000
12 1994 $17,300,000
1 1995 $17,700,000
2 1995 $18,200,000
3 1995 $18,600,000
4 1995 $19,000,000
5 1995 $19,300,000
6 1995 $19,600,000
7 1995 $19,900,000
8 1995 $20,200,000
9 1995 $20,500,000
10 1995 $20,800,000
NOTE: (1) The sole purpose of this Appendix is to determine the TC component
of the formula for determining the Potental Cost under Subsection
6.1(g).
ATTACHMENT D
APPENDIX S
CPWIRR INCREASE
Actual
Commercial
Operation CPWIRR Increase for
Date Actual Peak Load of 5697 MW Occurring:
----------- ----------------------------------------------
Month Year In or before In 1998 In 1999 or
1997 Thereafter
----- ---- ------------ ------------- ------------
Column 1 Column 2 Column 3
6 1996 $ 6,000,000 $29,000,000 $39,000,000
7 1996 $ 7,857,143 $30,857,143 $40,857,143
8 1996 $ 9,714,286 $32,714,286 $42,714,286
9 1996 $11,571,429 $34,571,429 $44,571,429
10 1996 $13,428,571 $36,428,571 $46,428,571
11 1996 $15,285,714 $38,285,714 $48,285,714
12 1996 $17,142,857 $40,142,857 $50,142,857
1 1997 $19,000,000 $42,000,000 $52,000,000
2 1997 $17,713,061 $40,713,061 $50,713,061
3 1997 $16,426,122 $39,426,122 $49,426,122
4 1997 $15,139,183 $38,139,183 $48,139,183
5 1997 $13,852,244 $36,852,244 $46,852,244
6 1997 $12,565,305 $35,565,305 $45,565,305
