EXHIBIT 10.2
An asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as part
of a Confidential
Treatment Request.
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
BY AND BETWEEN
AES IRONWOOD, L.L.C.
AND
XXXXXXXX ENERGY MARKETING & TRADING COMPANY
Dated: February 5, 1999
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..........................................................2
SECTION 1.1.................................................................2
ARTICLE II TERM...............................................................13
SECTION 2.1................................................................13
SECTION 2.2................................................................13
ARTICLE III PURCHASE AND SALE OF CAPACITY AND SERVICES........................15
SECTION 3.1................................................................15
SECTION 3.2................................................................15
SECTION 3.3................................................................16
ARTICLE IV FUEL CONVERSION AND OTHER SERVICES.................................16
SECTION 4.1................................................................16
SECTION 4.2................................................................16
SECTION 4.3................................................................17
SECTION 4.4................................................................17
SECTION 4.5................................................................17
SECTION 4.6................................................................18
SECTION 4.7................................................................18
ARTICLE V PRICING.............................................................18
SECTION 5.1................................................................18
SECTION 5.2................................................................19
ARTICLE VI PROJECT DEVELOPMENT................................................19
SECTION 6.1................................................................19
SECTION 6.2................................................................19
SECTION 6.3................................................................19
SECTION 6.4................................................................20
ARTICLE VII INITIAL START-UP TESTING; COMMERCIAL OPERATION....................20
SECTION 7.1................................................................20
SECTION 7.2................................................................20
ARTICLE VIII INTERCONNECTION AND METERING EQUIPMENT...........................21
SECTION 8.1................................................................21
SECTION 8.2................................................................21
SECTION 8.3................................................................22
SECTION 8.4................................................................22
SECTION 8.5................................................................22
ARTICLE IX OPERATION; DISPATCH................................................23
SECTION 9.1................................................................23
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TABLE OF CONTENTS
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SECTION 9.2................................................................23
SECTION 9.3................................................................23
SECTION 9.4................................................................24
SECTION 9.5................................................................24
SECTION 9.6................................................................25
SECTION 9.7................................................................26
SECTION 9.8................................................................26
SECTION 9.9................................................................26
ARTICLE X MAINTENANCE.........................................................26
SECTION 10.1...............................................................26
SECTION 10.2...............................................................27
SECTION 10.3...............................................................27
SECTION 10.4...............................................................27
SECTION 10.5...............................................................28
ARTICLE XI METERING, BILLING, PAYMENT AND TAXES...............................29
SECTION 11.1...............................................................29
SECTION 11.2...............................................................29
SECTION 11.3...............................................................31
SECTION 11.4...............................................................32
SECTION 11.5...............................................................32
SECTION 11.6...............................................................32
SECTION 11.7...............................................................33
SECTION 11.8...............................................................33
ARTICLE XII DISPUTE RESOLUTION................................................34
SECTION 12.1...............................................................34
SECTION 12.2...............................................................36
SECTION 12.3...............................................................36
SECTION 12.4...............................................................38
ARTICLE XIII REPRESENTATIONS, WARRANTIES AND COVENANTS........................38
SECTION 13.1...............................................................38
SECTION 13.2...............................................................39
ARTICLE XIV LIABILITY; DEDICATION.............................................39
SECTION 14.1...............................................................39
SECTION 14.2...............................................................39
SECTION 14.3...............................................................40
ARTICLE XV INDEMNITY..........................................................40
SECTION 15.1...............................................................40
SECTION 15.2...............................................................41
SECTION 15.3...............................................................41
SECTION 15.4...............................................................41
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TABLE OF CONTENTS
Page
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ARTICLE XVI INSURANCE.........................................................42
SECTION 16.1...............................................................42
SECTION 16.2...............................................................42
SECTION 16.3...............................................................43
SECTION 16.4...............................................................43
SECTION 16.5...............................................................43
SECTION 16.6...............................................................44
SECTION 16.7...............................................................44
SECTION 16.8...............................................................44
ARTICLE XVII FORCE MAJEURE....................................................45
SECTION 17.1...............................................................45
SECTION 17.2...............................................................46
SECTION 17.3...............................................................47
SECTION 17.4...............................................................47
ARTICLE XVIII EVENTS OF DEFAULT; TERMINATION; REMEDIES........................47
SECTION 18.1...............................................................47
SECTION 18.2...............................................................49
ARTICLE XIX SECURITY..........................................................50
SECTION 19.1...............................................................50
SECTION 19.2...............................................................50
SECTION 19.3...............................................................51
ARTICLE XX SEVERAL OBLIGATIONS................................................52
SECTION 20.1...............................................................52
ARTICLE XXI WAIVER............................................................52
SECTION 21.1...............................................................52
ARTICLE XXII ASSIGNMENT.......................................................53
SECTION 22.1...............................................................53
SECTION 22.2...............................................................53
SECTION 22.3...............................................................54
SECTION 22.4...............................................................54
SECTION 22.5...............................................................54
ARTICLE XXIII NOTICES.........................................................54
SECTION 23.1...............................................................54
SECTION 23.2...............................................................55
ARTICLE XXIV GRATUITIES.......................................................55
SECTION 24.1...............................................................55
ARTICLE XXV CAPTIONS..........................................................55
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SECTION 25.1...............................................................55
ARTICLE XXVI CHOICE OF LAWS...................................................56
SECTION 26.1...............................................................56
ARTICLE XXVII MISCELLANEOUS PROVISIONS........................................56
SECTION 27.1...............................................................56
SECTION 27.2...............................................................57
SECTION 27.3...............................................................57
SECTION 27.4...............................................................57
SECTION 27.5...............................................................57
SECTION 27.6...............................................................57
ARTICLE XXVIII SUCCESSORS AND ASSIGNS.........................................58
SECTION 28.1...............................................................58
ARTICLE XXIX COUNTERPARTS.....................................................58
SECTION 29.1...............................................................58
ARTICLE XXX ENTIRE AGREEMENT; SEVERABILITY; AMENDMENT.........................58
SECTION 30.1...............................................................58
SECTION 30.2...............................................................59
SECTION 30.3...............................................................59
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TABLE OF APPENDICES
1. [*]
2. [*]
3. [*]
4. [*]
[*]
5. [*]
6. [*]
7. [*]
8. [*]
i
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
THIS AMENDED AND RESTATED POWER PURCHASE AGREEMENT (together with the
Appendices hereto, this "Agreement"), dated as of February 5, 1999, by and
between AES Ironwood, L.L.C., a Delaware limited liability company ("Seller"),
and Xxxxxxxx Energy Marketing & Trading Company, a corporation organized and
existing under the laws of the State of Delaware ("Xxxxxxxx"), (Seller and
Xxxxxxxx hereinafter referred to individually as a "Party" and collectively as
the "Parties").
WITNESSETH:
WHEREAS, Xxxxxxxx is engaged in the purchase and resale of electric
energy, capacity and ancillary services; and
WHEREAS, Seller will own, operate and maintain the Facility (as
hereinafter defined) to be located at the Site (as hereinafter defined); and
WHEREAS, Seller proposes to qualify the Facility as an Exempt Wholesale
Generator ("EWG") under the applicable rules of the Federal Energy Regulatory
Commission ("FERC"); and
WHEREAS, Xxxxxxxx intends to deliver fuel to the Facility in accordance
with this Agreement; and
WHEREAS, Seller desires to sell and Xxxxxxxx desires to purchase
Facility Capacity (as hereinafter defined), Ancillary Services (as hereinafter
defined) and Fuel Conversion Services (as hereinafter defined) under the terms
and conditions hereinafter set forth; and
WHEREAS, on July 31, 1997, the Parties entered into a Power Purchase
Agreement with respect to the purchase by Xxxxxxxx' predecessor in interest,
Xxxxxxxx Energy Service Company, of certain capacity, fuel conversion services
and excess energy from the Facility (the "Original PPA") not purchased from the
Facility by GPU (as hereinafter defined) pursuant to the terms of the GPU PPA's
(as hereinafter defined); and
WHEREAS, on October 24, 1997, the Parties entered into Amendment No. 1
to the Original PPA ("Amendment No. 1"); and
WHEREAS, on November 21, 1997, the Parties entered into a letter
agreement (the "Letter Agreement") concerning certain revisions to be made to
the Original PPA as amended by Amendment No. 1; and
1
WHEREAS, on December 15, 1998, the Parties entered into a subsequent
letter agreement ("Second Letter Agreement") concerning the desire of the
Parties to amend and restate the Original PPA in the event that the GPU PPA's
were terminated; and
WHEREAS, the GPU PPA's have been terminated and the Parties desire to
amend and restate the Original PPA in order to incorporate certain of the
revisions made by Amendment No. 1, the Letter Agreement and the Second Letter
Agreement and certain other revisions mutually agreed to by the Parties.
NOW, THEREFORE, in consideration of the mutual covenants and promises
set forth below, the Parties hereto, intending to be legally bound, hereby
covenant, promise and agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1
For purposes of this Agreement, the following definitions shall apply
unless the context clearly indicates otherwise. All capitalized terms used in
this Agreement that are not defined in this Article I shall have the definitions
contained elsewhere herein, including the Appendices hereto.
"Accepted Electrical Practices" - those practices, methods and acts
engaged in or approved by a significant portion of the electric utility industry
during the relevant time period, or any of the practices, methods and acts
which, in exercise of reasonable judgment in light of the facts known at the
time a decision is made, that could have been expected to accomplish a desired
result at reasonable cost consistent with good business practices, reliability,
safety and expedition. Accepted Electrical Practices are not intended to be
limited to the optimum practices, methods or acts to the exclusion of others,
but rather to those practices, methods and acts generally accepted or approved
by a significant portion of the electric utility industry in the relevant
region, during the relevant time period, as described in the immediately
preceding sentence.
"Affiliate" - with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
2
"Allocated Shutdown Duration" - the length of time immediately
following an Ending Requested Dispatch Hour agreed to between the Parties as the
expected duration under normal Facility conditions for the Facility to achieve
Shutdown conditions following a Facility Dispatch Period. Such period of time
will be set initially based on equipment manufacturer's guidelines, which shall
be provided by Seller to Xxxxxxxx promptly after receipt by Seller of such
guidelines from the manufacturer but in any event no later than the Commercial
Operation Date, and revised by the Parties after the first Contract Year to
reflect actual operating experience.
"Allocated Start-Up Duration" - the time period required by Seller to
permit a Cold Start, Warm Start or Hot Start of the Facility as Scheduled for a
Dispatch Period under normal Facility equipment conditions. Such period of time
will be set initially based on equipment manufacturer's guidelines, which shall
be provided by Seller to Xxxxxxxx promptly after receipt by Seller of such
guidelines from the manufacturer but in any event no later than the Commercial
Operation Date, and revised by the Parties after the first Contract Year to
reflect actual operating experience.
"Ancillary Services" - those services which the Facility is capable of
providing that are defined or described as "Ancillary Services" in the PJM Open
Access Transmission Tariff then currently in effect and on file at FERC or, in
the event such PJM tariff does not exist, then those services to the extent
commonly sold or saleable (or used or usable) in the electric power generation
or transmission industry within the PJM market from time to time.
"Anticipated Commercial Operation Date" - has the meaning given such
term in Section 2.2.
"Automatic Regulation" - the capability of a Unit to increase or
decrease automatically the megawatt output from a set point in response to a
control signal from a remote operations center.
"Beginning Requested Dispatch Hour" - the first clock hour during which
the Facility is Scheduled to deliver Net Electric Energy and/or Ancillary
Services during a Dispatch
Period.
"Billing Month" - except for the first such month under this Agreement,
one-twelfth (1/12) of a year, or the period of approximately thirty (30) Days
between two (2) regular consecutive readings of the Host Utility's electric
meter or meters, but not less than twenty-six (26) Days and not more than
thirty-five (35) Days.
"Btu" - the quantity of heat required to raise the temperature of one
pound of water one degree Fahrenheit at or near its point of maximum density
(39.1 degrees Fahrenheit).
"Business Day" - any Day on which Federal Reserve member banks in New
York, New York are open for business.
3
"Cold Start" - a start of a Unit in Combined Cycle Mode given that all
of the breakers of that Unit's combustion turbine generator have been open for
at least the previous [*] hours.
"Combined Cycle Mode" - the simultaneous operation of a combustion
turbine(s), heat recovery steam generator(s) and steam turbine for the purpose
of producing Net Electric Energy.
"Commercial Operation Date" - the Day on which (i) the Initial Start-Up
Testing of the Facility has been successfully completed to the satisfaction of
Seller and Xxxxxxxx has received written notice thereof from Seller, (ii) Seller
has received all approvals, to the extent any are required, from PJM in order to
sell capacity into or through the PJM market, and (iii) Seller has obtained all
required permits and authorizations for operation of the Facility.
"Contract Anniversary Date" - the last Day of the month in which the
Commercial Operation Date occurs and each succeeding anniversary of such Day
throughout the Term of this Agreement.
"Contract Year" - the twelve months ending on the Contract Anniversary
Date of each year except for the first Contract Year which shall also include
any portion of the month between the Commercial Operation Date and the end of
the month in which the Commercial Operation Date occurs.
"Day" - a period of twenty-four (24) consecutive hours, beginning at
12:01 a.m. local time.
"Dispatch" - the act of directing a Unit or the Facility to generate
Net Electric Energy and/or Ancillary Services.
"Dispatch Notice" - a notice delivered to Seller by or on behalf of
Xxxxxxxx directing the Dispatch of the Facility for a specific Dispatch Period
and effective until the delivery of a subsequent Dispatch Notice in a form to be
agreed to by the Parties no later than twelve (12) months after the Execution
Date, provided that when such notice is given telephonically it shall be
promptly confirmed in writing by facsimile or electronic transmission.
"Dispatch Operation" - the operation of the Facility at the direction
of Xxxxxxxx.
"Dispatch Period" - a period of time during which Xxxxxxxx has
requested delivery of Net Electric Energy and/or the provision of Ancillary
Services starting with a Beginning Requested Dispatch Hour and concluding with
an Ending Requested Dispatch Hour. A Dispatch Period may continue for more than
one calendar Day.
"Early Shutdown Notice" - a notice provided by Xxxxxxxx to Seller
during a Dispatch Period requesting an earlier Ending Requested Dispatch Hour of
a Unit or the Facility than that
4
specified in the Dispatch Notice which commenced such Dispatch Period, provided
that such earlier Ending Requested Dispatch Hour shall not be any sooner than
one (1) hour after receipt by Seller of such Early Shutdown Notice.
"Electric Delivery Point" - the physical point set forth on Appendix
4.B at which Net Electric Energy and/or Ancillary Services are delivered and
measured.
"Electric Metering Equipment" - electric meters and associated
equipment, which shall be owned by the Host Utility and operated and maintained
in accordance with the Interconnection Agreement, including, without limitation,
metering transformers and meters for measuring kilowatt-hours and reactive
volt-ampere hours, utilized in determining the amount of Net Electric Energy
and/or Ancillary Services delivered by Seller to the Electric Delivery Point
under this Agreement.
"Emergency(ies)" - a condition(s) or situation(s) which the Host
Utility, PJM or Seller reasonably deems imminently likely to endanger life or
property including the Facility; or imminently likely to impair or adversely
affect, the Host Utility's electrical system or the electrical systems of others
to which the Host Utility's electrical system is directly or indirectly
connected. Such a condition or situation may include, but is not limited to, a
forced outage of the Host Utility's electrical system, potential overloading of
the Host Utility's transmission and/or distribution circuits, unusual operating
conditions on either the Host Utility's or Seller's electrical system or
conditions such that the Host Utility is unable to accept Net Electric Energy
from the Facility without jeopardizing the Facility, the Host Utility's
electrical system or the electrical systems of others to which the Host
Utility's electrical system is directly or indirectly connected.
"Ending Requested Dispatch Hour" - the last clock hour during which the
Facility is Scheduled to deliver Net Electric Energy or Ancillary Services
during a Dispatch Period.
"Energy Market Clearing Price" - the hourly clearing price (exclusive
of capacity) for sales to the PJM energy market at the Electric Delivery Point;
provided that in the event PJM ceases to provide an independent value for
installed capacity, an adjustment will be made by the Parties to maintain, to
the extent possible, the original value of this Agreement to both Xxxxxxxx and
Seller.
"Environmental Law" - any applicable federal, state, local or other
governmental legal requirement governing or relating to (i) the environment,
(ii) releases or threatened releases of Hazardous Materials including, without
limitation, investigations, monitoring and abatement of such releases, and (iii)
the manufacture, handling, transport, use, treatment, storage or disposal of
Hazardous Materials or materials containing Hazardous Materials.
"Execution Date" - the date set forth in the preamble to this
Agreement.
5
"Expansion Capacity" - has the meaning given such term in
Section 3.1.
"Facility" - the combined cycle electric generating facility with a
design electric generating capacity of approximately 655 MW (+/- 10%) at
92(degree) F when firing on Natural Gas and approximately 604 MW (+/- 10%) at
92(degree) F when firing on Fuel Oil and consisting of two (2) 501G combustion
turbines, two (2) heat recovery steam generators and one (1) steam turbine, with
evaporative cooling on the inlet air flow, together with all of the parts,
instruments, appurtenances, accessories and other property that may be installed
in or attached to or otherwise become part of such facility.
"Facility Capacity" - the actual total net MW capability of the
Facility measured at the Electric Delivery Point (excluding the incremental
capacity associated with power augmentation in the event that power augmentation
is implemented at the Facility pursuant to Section 3.3 of this Agreement) when
operating on Natural Gas in Combined Cycle Mode at 92(degree) Fahrenheit ambient
air temperature as established during Initial Start-Up Testing of the Facility
and as demonstrated pursuant to Section 9.6 and as adjusted accordingly.
"FERC" - the Federal Energy Regulatory Commission or any successor
agency thereto.
"Final CO Date" - has the meaning given such term in Section 2.2(c).
"First Paid Extension Option" - has the meaning given such term in
Section 2.2(a).
"Force Majeure" - an event or occurrence beyond the reasonable control
of and without the fault or negligence of the Party claiming Force Majeure,
including, but not limited to, acts of God, strike, flood, earthquake, storm,
fire, lightning, epidemic, war, riot, civil disturbance, freezing of pipelines,
sabotage, acts of the public enemy, explosion, the inability of Seller to obtain
from GPU Energy, Inc., or its appropriate Affiliate, the Interconnection
Agreement, the inability of Xxxxxxxx to obtain from a transporter a commercially
reasonable gas transportation agreement or, in the event that no such agreement
can be obtained by Xxxxxxxx, to obtain necessary approvals, permits or
authorizations for Xxxxxxxx or an Affiliate to construct the required Gas
Facilities, change in law or applicable regulation subsequent to the date hereof
and action, delay or inaction by any federal, state or local legislative,
executive, administrative or judicial agency or body, including without
limitation any failure to issue, or delay in issuance of, any required permit or
authorization, which, in any of the foregoing cases, by exercise of due
diligence such Party could not reasonably have been expected to avoid, and which
wholly or in substantial part prevents such Party from performing an obligation
under this Agreement.
"Forced Outage" - a "Generator Forced Outage" as defined in the PJM
Agreement. Forced Outages include:
6
o "Total Forced Outage" - during periods other than Planned
Outages or Maintenance Outages, the Facility is unable to
engage in Dispatch Operation, or the Facility is declared by
Seller to be in a Total Forced Outage for what would otherwise
be a Partial Forced Outage.
o "Partial Forced Outage" - during periods other than Planned
Outages or Maintenance Outages, the Facility is partially able
to engage in Dispatch Operation, and has not been declared by
Seller to be in a Total Forced Outage.
[*]
"Fuel Conversion Services" - Seller's operation of the Facility in
Combined Cycle Mode to combust Natural Gas and/or Fuel Oil in order to generate
Net Electric Energy and/or Ancillary Services.
"Fuel Conversion Volume Rebate" - has the meaning given such term in
Section 11.3(a).
"Fuel Delivery Points" - the Gas Delivery Point and Oil Delivery Point,
collectively.
"Fuel Oil" - fuel oil meeting the "Jet A" quality specifications set
forth in Appendix 8.
"Fuel Plan" - the plan delivered by Xxxxxxxx to Seller in accordance
with paragraph C. of the Second Letter Agreement.
"Fully Available" - any time the Facility is not in a Forced Outage,
Maintenance Outage or Planned Outage.
"Gas Delivery Point" - each of the physical point(s) identified on
Appendix 4.A at which Natural Gas is delivered and measured.
"Gas Interconnection Facilities" - has the meaning given such term in
Section 4.2.
"Gas Metering Equipment" - gas meters and associated equipment utilized
in determining (i) the amount of Natural Gas delivered to Seller by Xxxxxxxx
under this Agreement, and (ii) the amount of Natural Gas consumed by the
Facility.
"GDPIPD" - the annual Gross Domestic Product Implicit Price Deflator as
reported by the United States Department of Commerce, Bureau of Economic
Analysis monthly in the Survey of Current Business (Index base 1992 = 100).
"GPU" - Metropolitan Edison Company, Pennsylvania Electric Company and
Jersey Central Power and Light Company, collectively doing business as GPU
Energy, Inc., and their Affiliates.
7
"GPU PPA's" - the power purchase agreements dated February 3, 1997 by
and between Seller or its Affiliates and GPU, as filed at the PAPUC on June 16,
1997.
"Guaranty Amount" - has the meaning given such term in Section 19.2.
"Hazardous Materials" - (i) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing polychlorinated biphenyls ("PCBs") and any other
chemicals, materials or substances which are now or hereafter become defined as
or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous wastes", "restricted hazardous
wastes", "toxic substances" or "toxic pollutants" under, or are regulated or
become regulated as such by Environmental Laws, including but not limited to the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. ss. 9601 et seq.); the Hazardous Material Transportation
Act, as amended (42 U.S.C ss. 1801 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. ss. 6901 et seq.); the Toxic Substances
Control Act, as amended (15 U.S.C. ss. 2601); the Clean Air Act, as amended (42
U.S.C ss. 7401 et seq.); the Federal Water Pollution Control Act, as amended (33
U.S.C. ss. 1251 et seq.); or in the regulations promulgated pursuant to said
laws.
"Heat Rate" - the amount of energy expressed in Btu's per net kWh in
higher heating value ("HHV").
"Heat Rate Target" - [*]
"HHV" - higher heating value.
"Holdings" - has the meaning given such term in Section 19.3.
"Host Utility" - the owner of the electrical system to which the
Facility is interconnected by the Interconnection Facilities.
"Hot Start" - a start of a Unit in Combined Cycle Mode given that all
of the breakers of that Unit's combustion turbine generator have been open for
no more than eight (8) hours.
"Imbalance Charges" - has the meaning given such term in Section V.E.
of Appendix 1.
"Initial Start-Up Testing" - Seller's operation and testing of the
Facility prior to the Commercial Operation Date, including performance tests, to
determine, among other things, the operating characteristics of the Facility,
the Facility Capacity and the Facility's ability to meet
8
Seller's obligations pursuant to this Agreement; provided that any transmission
costs associated with Initial Start-Up Testing shall be paid by Seller.
"Interconnect Delay" - has the meaning given such term in Section
2.2(a).
"Interconnection Agreement" - has the meaning given such term in
Section 8.2.
"Interconnection Facilities" - all structures, facilities, equipment,
auxiliary equipment, devices and apparatus including the Protective Apparatus
directly or indirectly required and installed to interconnect and deliver Net
Electric Energy and Ancillary Services from the Facility to the Electric
Delivery Point including, but not limited to, electric transmission and/or
distribution lines, transformation, switching, Electric Metering Equipment, any
other metering equipment, communications, and safety equipment, including, but
not limited to, equipment required to protect (i) the Host Utility's electrical
system and its customers from faults occurring at the Facility, and (ii) the
Facility from faults occurring on the Host Utility's electrical system or on the
electrical systems of others to which the Host Utility's electrical system is
directly or indirectly connected.
"Investment Grade" - means a rating in one of the four highest
categories (without regard to subcategories within such rating categories) by
Standard & Poor's or Moody's.
"kW" - kilowatt.
"kWh" - kilowatt-hour.
"Late Payment Interest Rate" - shall mean the Prime Rate plus one (1)
percent per annum.
"Lender" - any financial institution, Person, bondholder or noteholder
which provides debt or equity capital, loans, credit or credit support, acts as
counterparty on any interest rate or currency hedging arrangements or provides
other financing to Seller in respect of the acquisition, ownership,
construction, operation or maintenance of the Facility; such term also includes
any such financial institution, Person, bondholder or noteholder which acts in
the capacity of "Lender" in connection with any refinancing by Seller of its
then outstanding debt obligation.
"Loss" - has the meaning given such term in Section 15.1.
"Maintenance Outage" - a "Generator Maintenance Outage" as defined in
the PJM Agreement.
"Major Maintenance Reserve Account" - has the meaning given such term
in Section 11.3(b).
9
"Moody's" - Xxxxx'x Investors Services, Inc., and its successors.
"MW" - megawatt.
"MWh" - megawatt-hour.
"Natural Gas" - merchantable natural gas that meets the quality
specifications set forth in the applicable transporter's tariff or, if
applicable, the applicable transportation agreement entered into by Xxxxxxxx and
a transporter for the purpose of effecting deliveries of Natural Gas pursuant to
this Agreement; provided that Xxxxxxxx shall use its commercially reasonable
efforts to cause the transporter to deliver Natural Gas to the Gas Delivery
Point at a pressure equal to the pressure on the Texas Eastern pipeline
provided, however, that Xxxxxxxx shall not have the obligation to install, or
pay for installation of, any compressors to ensure such pressure.
"Net Electric Energy" - the gross amount of electric energy generated
by the Facility at Xxxxxxxx' direction, less station service requirements and
any transformation and transmission line losses to the Electric Delivery Point
and delivered by Seller to the Host Utility's electric system at the Electric
Delivery Point.
"New Taxes" - means (i) any Taxes or modifications therein enacted and
effective after the Execution Date, including, without limitation, that portion
of any Taxes or New Taxes that constitutes an increase in the rate thereof (but
excluding an increase in the value of the base upon or from which computed), or
(ii) any law, order, rule or regulation, or interpretation thereof, enacted and
effective after the Execution Date resulting in application of any Taxes to a
new or different class of Persons.
"Non-Dispatch Payment" - has the meaning given such term in Section
11.3(a).
"Oil Delivery Point" - the physical point identified on Appendix 4.A.
at which Fuel Oil is delivered and measured.
"Oil Metering Equipment" - oil meters and associated equipment utilized
in determining (i) the amount of Fuel Oil delivered to Seller by Xxxxxxxx under
this Agreement, and (ii) the amount of Fuel Oil consumed by the Facility.
"Operating Hour" - a clock hour (or part thereof) within a Dispatch
Period during which the Facility is providing Net Electric Energy and/or
Ancillary Services.
"PA Information" - has the meaning given such term in Section 3.3.
"PAPUC" - the Pennsylvania Public Utility Commission or any successor
agency thereto.
10
"Partially Available" - has the meaning given such term in Section V.D.
of Appendix 1.
"Person" - any individual, corporation, limited liability company,
partnership, limited partnership, trust, association or other entity.
"PJM" - the PJM Interconnection, L.L.C., acting in accordance with the
PJM Agreement or the applicable successor entity.
"PJM Agreement" - that certain Amended and Restated Operating Agreement
of PJM Interconnection, L.L.C., dated as of June 2, 1997, and applicable PJM
operating policies, as further amended, revised or superseded from time to time.
"Planned Outage" - a "Generator Planned Outage" as defined in the PJM
Agreement.
"Position Notice" - has the meaning given such term in Section 12.1(a).
"Power Factor" - the ratio of real power expressed in xxxxx to apparent
power expressed in volt-amperes.
"Prime Rate" - the prime commercial lending rate announced by Citibank,
N.A., as in effect from time to time.
"Protective Apparatus" - such equipment and apparatus on Seller's side
of the Electric Delivery Point, including, but not limited to, protective
relays, circuit breakers and the like, necessary or appropriate to isolate the
Facility from the Host Utility's electrical system consistent with Accepted
Electrical Practices.
"Protective Gas Apparatus" - such equipment and apparatus on Seller's
side of the Gas Delivery Point necessary to maintain the safety of the Facility
consistent with standard gas industry practices.
"Rating Agency" - Standard & Poor's, Moody's and each other credit
rating agency from which Seller seeks to obtain a rating on the debt it acquires
to finance the construction of the Facility.
"Schedule or Scheduled" - the act of Xxxxxxxx, Seller and the Host
Utility notifying, requesting and confirming to each other the quantity of
Ancillary Services and/or Net Electric Energy to be delivered hereunder in any
given hour.
"Second Paid Extension Option" - has the meaning given such term in
Section 2.2(c).
"Shutdown" - an actual shutdown of a Unit, as evidenced by the opening
of its combustion turbine's breaker, or the Facility, as evidenced by the
opening of all of its breakers, immediately
11
following the Ending Requested Dispatch Hour of a Dispatch Period or pursuant to
an Early Shutdown Notice.
"Site" - the location of the Facility in South Lebanon Township,
Lebanon County, Pennsylvania.
"Standard & Poor's" - Standard & Poor's Rating Group, a division of the
XxXxxx-Xxxx Companies, Inc., and its successors.
"Start-Up" - a Successful Start-Up of the Facility or a Unit necessary
to comply with the Schedule or request by Xxxxxxxx for a Dispatch Period for the
Facility immediately preceding a Beginning Requested Dispatch Hour.
"Start-Up Notification Lead Time" - means at least [*].
"Start-Up Testing Date" - has the meaning given such term in Section
4.2.
"Successful Start-Up" - [*].
"Taxes" - means any or all federal, state and/or local, municipal, ad
valorem, property, occupation, severance, generation, first use, conversion, Btu
or power, transmission, utility, gross receipts, privilege, sales, use,
consumption, excise, lease, transaction, and other taxes, governmental charges,
license fees, permit fees, assessments, or increases in or interest on or
penalties relating to any of the foregoing, other than taxes based on net income
or net worth.
"Temperature Adjusted Facility Capacity" - the capacity of the Facility
to generate Net Electric Energy at any particular temperature measured at the
gas turbine inlet between -20 and 100 degrees Fahrenheit corresponding to the
Facility Capacity, and reflecting the effect of temperature on both the Facility
Capacity while in Combined Cycle Mode and the air/gas flow into the combustion
turbine.
"Temperature Adjusted Unit Capacity" - the capacity of a Unit to
generate Net Electric Energy at any particular temperature measured at the gas
turbine inlet between -20 and 100 degrees Fahrenheit corresponding to 47.8
percent of Facility Capacity and reflecting the effect of temperature on both
the Unit Capacity while in Combined Cycle Mode and the air/gas flow into the
combustion turbine.
"Term" - [*].
12
"Third Party Engineer" - has the meaning given such term in Section
12.1.
"Total Fixed Payment" - has the meaning given such term in Appendix 1.
"Unit" - a single independent combined cycle train, consisting of a
combustion turbine, heat recovery steam generator, and steam turbine generator
operating at partial load (approximately one-half of such generator's electrical
output capability), together with associated equipment.
"Var Support" - the capability of the Facility measured at the Electric
Delivery Point to vary the phase angle of the generators' output and voltage
between a Power Factor of 0.9 leading and a Power Factor of 0.9 lagging, at the
Facility Capacity and as may be more fully described in the Interconnection
Agreement between Seller and the Host Utility.
"Variable O&M Charge" - a charge assessed for each MWh of Net Electric
Energy delivered, as more fully described in Appendix 1.
"Warm Start" - the start of a Unit in Combined Cycle Mode given that
all of the breakers of that Unit's combustion turbine generator have been open
for more than eight (8) hours but less than [*].
ARTICLE II
TERM
SECTION 2.1
The Term of this Agreement shall commence on the Execution Date and
shall continue for a period of [*] Contract Years after the first Contract
Anniversary Date.
SECTION 2.2
(a) Seller shall cause the Commercial Operation Date to occur no later
than June 30, 2001 (the "Anticipated Commercial Operation Date"). If the
Commercial Operation Date has not occurred by June 30, 2001, for any reason
whatsoever, including without limitation the continued existence of, or delay
caused by, a Force Majeure event affecting Seller (other than any delay caused
by a failure by Xxxxxxxx to provide Natural Gas to the Facility pursuant to
Article IV hereunder or by any other act or failure to act by Xxxxxxxx or an
Affiliate of Xxxxxxxx, where such action is required under this Agreement),
Xxxxxxxx shall (notwithstanding anything in this Agreement or otherwise to the
contrary except this Section 2.2(a)) have the absolute right to terminate this
Agreement upon written notice to Seller without any liability or responsibility,
[*]
13
(b) [*].
(c) [*]
14
(d) [*].
ARTICLE III
PURCHASE AND SALE OF CAPACITY AND SERVICES
SECTION 3.1
Subject to the terms and conditions set forth in this Agreement, during
the Term, commencing with the Commercial Operation Date, Seller shall sell and
make available to Xxxxxxxx on an exclusive basis, and Xxxxxxxx shall purchase
and pay for, the Facility Capacity and Ancillary Services. In the event that it
is demonstrated during Initial Start-Up Testing, or a subsequent demonstration
of capacity for PJM purposes, that the capacity of the Facility is greater than
720 MW (excluding any power augmentation requested by Xxxxxxxx), this Agreement
and Appendix 1 to this Agreement shall be amended to reflect the sale of such
additional capacity to Xxxxxxxx as mutually agreed to by the Parties. In the
event Seller increases the amount of capacity located on the Site, but such
additional capacity is not part of the Facility (the "Expansion Capacity"),
Seller agrees to negotiate a separate purchase agreement for such Expansion
Capacity with Xxxxxxxx. In the event Seller and Xxxxxxxx cannot mutually agree
to the terms and conditions of such separate purchase agreement within one
hundred twenty (120) Days of Seller's notifying Xxxxxxxx of its intent to
construct such Expansion Capacity, Seller shall have the right to sell such
Expansion Capacity to a third party or parties including into the PJM market.
SECTION 3.2
Subject to the terms and conditions set forth in this Agreement, during
the Term, commencing with the Commercial Operation Date, Seller shall perform
for Xxxxxxxx on an exclusive basis, and Xxxxxxxx shall purchase and pay for,
Fuel Conversion Services.
15
SECTION 3.3
Within fifteen (15) Days after the Execution Date, Seller shall deliver
to Xxxxxxxx information with respect to the payments required by Seller
associated with power augmentation (the "PA Information"). At the request of
Xxxxxxxx made by written notice to Seller no later than seven (7) Days after
Seller's delivery to Xxxxxxxx of the PA Information, which notice shall specify
Xxxxxxxx' agreement to such payments, Seller shall exercise its option with its
construction contractor to modify the Facility as necessary to provide for power
augmentation of between [*], provided that Seller's obligations to make such
modifications shall be subject to receipt of all necessary permits and
approvals, including modification of existing Facility air and water permits,
which Seller shall use its commercially reasonable efforts to obtain.
ARTICLE IV
FUEL CONVERSION AND OTHER SERVICES
SECTION 4.1
As instructed by Seller, Xxxxxxxx shall deliver or cause to be
delivered to Seller at the Gas Delivery Point and Oil Delivery Point on an
exclusive basis all quantities of Natural Gas and Fuel Oil, respectively, as
required by Seller (i) to generate Net Electric Energy and/or Ancillary
Services, (ii) to perform Start-Ups, (iii) to perform Shutdowns, and (iv) to
operate the Facility during any period other than a Start-Up, Shutdown or
Dispatch Period for any reason. Xxxxxxxx shall at all times retain title to all
quantities of Natural Gas and Fuel Oil delivered pursuant to clauses (i) - (iii)
of this Section 4.1, and title to Natural Gas and Fuel Oil delivered pursuant to
clause (iv) of this Section 4.1 shall transfer to Seller at the Gas Delivery
Point and Oil Delivery Point, respectively.
SECTION 4.2
Xxxxxxxx shall be responsible for the construction of all Natural Gas
interconnection and delivery facilities necessary for delivery of Natural Gas up
to and including the Gas Delivery Point (including the Gas Metering Equipment
but excluding compressors ("Gas Interconnection Facilities") and shall use all
commercially reasonable efforts to expeditiously construct or contract for the
expeditious construction of such Gas Interconnection Facilities in order to make
Natural Gas available to Seller at the Gas Delivery Point no later than
two-hundred eighty (280) Days prior to the Anticipated Commercial Operation
Date. [*]
16
[*]. Upon the expiration of this Agreement or any termination of this Agreement
as the result of a Xxxxxxxx' event of default thereunder, Seller shall have the
right to purchase the Gas Interconnection Facilities from Xxxxxxxx, free and
clear of all liens and encumbrances, for an amount equal to the depreciated net
book value of such Gas Interconnection Facilities, or in the event that Xxxxxxxx
does not own such Gas Interconnection Facilities, Xxxxxxxx shall assign to
Seller all of its rights to transportation services using such Gas
Interconnection Facilities, free and clear of any obligations of Xxxxxxxx to the
transportation services provider incurred or arising prior to the date of such
assignment.
SECTION 4.3
Xxxxxxxx shall be responsible for the cost of procurement and
installation of the Oil Metering Equipment. Except as provided in Section 4.4,
Xxxxxxxx shall be solely responsible for all costs and expenses related to the
supply and transportation of Natural Gas and Fuel Oil to the Gas Delivery Point
and Oil Delivery Point, respectively. Except as provided in Section 4.4, Seller
shall be responsible for all costs and expenses related to the transportation of
Natural Gas and Fuel Oil at and from the Gas Delivery Point and Oil Delivery
Point to the Facility.
SECTION 4.4
At the request of Seller, instead of delivering Fuel Oil to the
applicable Oil Delivery Point, Xxxxxxxx shall deliver or cause to be delivered
such quantities of Fuel Oil as requested by Seller to any off-site storage
facility approved by Xxxxxxxx and delivery thereto shall be deemed delivery to
the Oil Delivery Point. Xxxxxxxx shall be responsible for all costs and expenses
related to the delivery of Fuel Oil to the off-site storage facility. Seller
shall be responsible for all costs and expenses related to the transportation of
such delivered Fuel Oil from the off-site storage facility to the Facility.
SECTION 4.5
Seller shall be responsible for the installation, operation and
maintenance at the Site, at Seller's sole cost and expense, of Fuel Oil storage
tank(s) with reasonable offloading capability to be mutually agreed to by the
Parties (to the extent consistent with Seller's environmental and other permits)
and capable of storing a volume of usable Fuel Oil sufficient to operate the
17
Facility at maximum Facility Capacity output for [*] continuous Days; provided
that Xxxxxxxx shall be responsible for the cost of maintenance of the Fuel Oil
inventory in such tank(s), including the cost of all necessary fuel additives.
Seller shall periodically test such tank(s) and notify Xxxxxxxx when any action
is necessary to maintain Fuel Oil in the storage tank(s) in compliance with the
specifications set forth in Appendix 8 to this Agreement. Seller shall be
reimbursed by Xxxxxxxx for Seller's reasonable costs and expenses incurred
pursuant to the immediately preceding sentence.
SECTION 4.6
Seller shall not be obligated to operate the Facility on Fuel Oil for
more than the Operating Hour equivalent of [*] Days per year.
SECTION 4.7
Seller agrees to provide reasonable access to the Site to Xxxxxxxx
and/or its contractors and gas transportation providers for the purpose of their
construction of the Gas Interconnection Facilities and to take such other action
as may be reasonable necessary for such facilities to be constructed and
connected to the Facility.
ARTICLE V
PRICING
SECTION 5.1
Beginning with the date of initial delivery of Net Electric Energy from
Seller to Xxxxxxxx and up to the Commercial Operation Date, and during any
period when there is a demonstration of Facility Capacity pursuant to Section
9.6 hereof during a period other than a Dispatch Period, or any other Facility
test operation during a period other than a Dispatch Period, Xxxxxxxx will sell
to Seller the Natural Gas delivered pursuant to Section 4.1(iv) [*] and Seller
will sell at the Electric Delivery Point any available Net Electric Energy to
Xxxxxxxx [*].
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SECTION 5.2
For each month of the Term after the Commercial Operation Date,
Xxxxxxxx shall pay Seller for Facility Capacity, Ancillary Services and Fuel
Conversion Services at the applicable rates [*].
ARTICLE VI
PROJECT DEVELOPMENT
SECTION 6.1
The Facility shall be located at the Site, provided that in the event
Seller is unable to obtain all required permits and approvals for such Site
within [*] after the Execution Date, the Parties shall in good faith seek to
identify a mutually agreeable alternative site within the PJM region to be
acquired by Seller as a location for the Facility and provided further that if
such alternate site is not agreed to by the Parties within an additional [*]
period, this Agreement will terminate with no further liability to either Party.
SECTION 6.2
Seller shall furnish to Xxxxxxxx, for information purposes only,
updated quarterly (on a calendar year basis) schedules and status reports
showing and describing the progress of the engineering, permitting, purchasing
and construction of the Facility. The receipt and/or review by Xxxxxxxx of any
such schedules submitted by Seller shall not be asserted or construed by Seller
at any time to be (i) Xxxxxxxx' endorsement or approval of the schedules, (ii)
Xxxxxxxx' endorsement or approval of the design of the Facility or its
appurtenant equipment (iii) Xxxxxxxx' assumption of any responsibility for the
Facility or its appurtenant equipment and/or (iv) any waiver of any obligation
of Seller under this Agreement. Xxxxxxxx shall furnish Seller with updated
quarterly (on a calendar year basis) schedule and station reports showing and
describing the progress of the engineering, permitting and construction of the
Gas Interconnection Facilities. The updated schedules and reports provided by
the Parties pursuant to this Section 6.2 shall include, in reasonably sufficient
detail, explanations of any delays in meeting scheduled dates for commencement
or completion of any listed item.
SECTION 6.3
Seller shall provide to Xxxxxxxx not later than ten (10) Days after the
completion of Initial Start-Up Testing, pertinent written data substantiating
the Facility's capability to provide Facility Capacity. Seller shall provide to
Xxxxxxxx no later than thirty (30) Days prior to the Commercial Operation Date
written data based on design calculations depicting the Facility's Temperature
19
Adjusted Facility Capacity and Temperature Adjusted Unit Capacity as a function
of temperature between -20 and 100 degrees Fahrenheit, to the extent such
information is reasonably available from the Facility equipment manufacturer for
such range. Such written data shall be adjusted by the Parties, as necessary,
based upon actual performance of the Facility during normal operations
subsequent to the Commercial Operation Date.
SECTION 6.4
Seller shall, at its own cost and expense, obtain as and when required
all approvals, permits, licenses and other authorizations from governmental
authorities as may be required for it to construct, operate and maintain the
Facility, the Interconnection Facilities and Protective Gas Apparatus and to
perform its obligations hereunder and, during the term hereof, Seller shall
obtain all such additional governmental approvals, permits, licenses and
authorizations as may be required with respect to the Facility as soon as
practicable.
ARTICLE VII
INITIAL START-UP TESTING; COMMERCIAL OPERATION
SECTION 7.1
Seller shall provide to Xxxxxxxx (i) written notice, at least [*] in
advance, of the expected Commercial Operation Date, and (ii) a copy of the
notice of Commercial Operation within [*] after the Commercial Operation Date.
Xxxxxxxx shall have the right to be present at Initial Start-Up Testing of the
Facility.
SECTION 7.2
The receipt and/or review by Xxxxxxxx of any plans or specifications
submitted by Seller under this Agreement shall not be asserted or construed by
Seller at any time to be (i) Xxxxxxxx' endorsement or approval of the design of
the Facility or its appurtenant equipment, (ii) Xxxxxxxx' assumption of any
responsibility for the Facility or its appurtenant equipment and/or (iii) any
waiver of any obligation of Seller under this Agreement.
20
ARTICLE VIII
INTERCONNECTION AND METERING EQUIPMENT
SECTION 8.1
At its sole cost and expense, Seller shall own and design, construct,
install and maintain, or be responsible for the design, construction,
installation and maintenance of the Facility, the Interconnection Facilities and
Protective Gas Apparatus needed to generate and deliver Net Electric Energy
and/or Ancillary Services to the Electric Delivery Point in order to fulfill its
obligations as specified herein, including all Interconnection Facilities and
Protective Gas Apparatus that may be located at any switchyard and/or substation
to be built at the Facility. Not later than ninety (90) Days after the Execution
Date, Seller shall prepare and submit to Xxxxxxxx a preliminary one-line
interconnection diagram depicting the Electric Delivery Point, which diagram
shall be incorporated by reference herein as Appendix 4.B. The Facility,
Interconnection Facilities and Protective Gas Apparatus shall be designed,
constructed and completed in a good and workmanlike manner and in accordance
with Accepted Electrical Practices (with respect to the Facility and
Interconnection Facilities) or in accordance with standard gas industry
practices (with respect to Protective Gas Apparatus), such that the expected
useful life of the Facility, the Interconnection Facilities and Protective Gas
Apparatus shall be not less than the Term of this Agreement.
SECTION 8.2
Seller shall be solely responsible for the negotiation and execution of
an interconnection agreement with the Host Utility (the "Interconnection
Agreement") pursuant to which the Host Utility will own and be responsible for
the Electric Metering Equipment and the design, installation, construction and
maintenance of the electrical facilities and protective apparatus, including any
transmission equipment and related facilities, necessary to interconnect the
Host Utility's electrical system with the Facility at the Electric Delivery
Point. Seller shall provide Xxxxxxxx with a copy of the Interconnection
Agreement no later than thirty (30) Days after the execution of such agreement
with the Host Utility. [*] Seller shall use commercially reasonable efforts to
include in such Interconnection Agreement provisions allowing Seller and
Xxxxxxxx to receive electronic signals from the Electric Metering Equipment.
21
In the event that Seller is not able to include such provisions in the
Interconnection Agreement, Seller shall install back-up electric meters with
such capability and Xxxxxxxx shall reimburse Seller for the reasonable costs of
such meters.
SECTION 8.3
Xxxxxxxx shall be responsible for the installation, maintenance and
testing of the Gas Metering Equipment (to the extent not otherwise installed,
maintained and tested by the supplier of gas transportation services) and Oil
Metering Equipment, as reasonably approved by Seller. Xxxxxxxx and Seller shall
have the right to receive electronic signals from each such meters to the extent
commercially feasible.
SECTION 8.4
All Electric Metering Equipment, Gas Metering Equipment and Oil
Metering Equipment, whether owned by Seller or by a third party, shall be
operated, maintained and tested in accordance with Accepted Electrical
Practices, in the case of the Electric Metering Equipment, and in accordance
with applicable industry standards, in the case of the Gas Metering Equipment
and Oil Metering Equipment.
SECTION 8.5
Xxxxxxxx at its sole cost and expense shall inspect and calibrate, or
cause to be inspected and calibrated, all Gas Metering Equipment and Oil
Metering Equipment periodically, but not less frequently than annually. In
addition, either Party from time to time with reasonable advance notice to the
other Party may request that the Gas Metering Equipment and/or Oil Metering
Equipment be tested. When any test shall show a measurement error of more than
(i) in the case of Gas Metering Equipment, two percent (2%) or such lower
percentage as may be established by applicable tariff, or (ii) in the case of
Oil Metering Equipment, two percent (2%), correction shall be made for the
period during which the measurement instruments were in error, first, by using
the registration of Seller's check meter, if installed and registering
accurately; if no check meter is installed and registering accurately, or if the
period cannot be ascertained, correction shall be made for one-half (1/2) of the
period elapsed since the date of the last test of such meter; and such meter
shall be adjusted immediately to measure accurately. In the event that any test
requested by a Party pursuant to the second sentence of this Section 8.5 shows a
measurement error as set forth above, the owner of the tested equipment shall
pay for such test and calibration. In the event that no such error is shown, the
Party requesting such test shall pay for such test.
22
ARTICLE IX
OPERATION; DISPATCH
SECTION 9.1
The Facility, the Interconnection Facilities and the Protective Gas
Apparatus shall be operated in accordance with Accepted Electrical Practices and
applicable requirements and guidelines reasonably adopted by the Host Utility
from time to time and applied consistently to the Host Utility's electric
generating facilities (with respect to the Facility and Interconnection
Facilities) or in accordance with standard gas industry practices (with respect
to Protective Gas Apparatus). In the event of a conflict between the terms and
conditions of this Agreement and Host Utility requirements, the Host Utility
requirements shall control.
SECTION 9.2
Seller shall operate the Facility in parallel with the Host Utility's
electrical system with governor control and the Net Electric Energy to be
delivered by Seller under this Agreement shall be three-phase, 60 hertz,
alternating current at a nominal voltage acceptable to the Host Utility at the
Electric Delivery Point, shall not adversely affect the voltage, frequency,
waveshape or Power Factor of power at the Electric Delivery Point and shall be
delivered to the Electric Delivery Point in a manner acceptable to the Host
Utility.
SECTION 9.3
(a) Notwithstanding anything contained in this Agreement to the
contrary, the Host Utility shall have the right to require Seller to disconnect
the Facility from the Host Utility's electrical system (or otherwise curtail,
interrupt or reduce deliveries of Net Electric Energy) whenever the Host Utility
reasonably determines that such a disconnection, curtailment, interruption or
reduction is necessary to facilitate construction, installation, maintenance,
repair, replacement or inspection of any of the Host Utility's or Seller's
facilities or equipment; to maintain the safety and reliability of the Host
Utility's electrical system; or due to Emergencies, Forced Outages, potential
overloading of the Host Utility's transmission and/or distribution circuits or
Force Majeure. When the Host Utility disconnects the Facility for any of the
reasons described above, Xxxxxxxx shall not be responsible for any costs
incurred by Seller due to such disconnection. Notwithstanding any other
provision of this Agreement to the contrary, [*].
23
[*]
(b) Seller shall use commercially reasonable efforts to correct
promptly any condition at the Facility which necessitates the disconnection of
the Facility from the Host Utility's electrical system or the reduction,
curtailment or interruption of electrical output of the Facility.
SECTION 9.4
(a) When Dispatched by Xxxxxxxx, Seller shall operate the Facility and
each Unit with Automatic Regulation equipment in service.
(b) Seller shall provide to Xxxxxxxx response rates greater than the 5
MW/minute minimum criteria for Automatic Regulation, when such faster response
rates are within the equipment supplier's operating guidelines and the Facility
control systems are technically sufficient for such faster response rates.
(c) Automatic Regulation limits for the Facility shall be established
during Initial Start-Up Testing and shall be consistent with manufacturer's
recommendations.
SECTION 9.5
(a) Xxxxxxxx shall at all times have the exclusive right to utilize the
Net Electric Energy and Ancillary Services associated with the Temperature
Adjusted Facility Capacity, subject to the terms and conditions specified
herein.
(b) Xxxxxxxx shall have the exclusive right to Schedule the operation
of the Facility or a Unit in accordance with the provisions of this Agreement;
provided, however, that such scheduling shall be consistent with the design
limitations of the Facility, applicable law, regulations and permits, and
manufacturers' reasonable recommendations for operating limits with respect to
the Facility and major components thereof.
24
(c) Xxxxxxxx, in the absence of an Emergency, shall not Schedule a
Dispatch Period of less than eight (8) hours unless the Facility was operated
(or was requested to so operate) within the twelve (12) hours prior to the
requested Dispatch Period.
(d) When a Dispatch Period will involve a Start-Up of the Facility,
Xxxxxxxx shall provide Seller, in the absence of an Emergency, with at least the
advance notice of a Dispatch Period consistent with the Start-Up Notification
Lead Time and such Dispatch Period shall begin after the applicable Allocated
Start-Up Duration. When a Dispatch Period, including revisions to a previously
Scheduled Dispatch Period, does not involve a Start-Up of the Facility,
Xxxxxxxx, in the absence of an Emergency, shall provide Seller, with at least
[*] advance notice of such Dispatch Period or revised Dispatch Period.
(e) At any time the Facility or a Unit is in a Dispatch Period, the
Facility or such Unit shall be run at Temperature Adjusted Facility Capacity or
Temperature Adjusted Unit Capacity as the case may be, and Xxxxxxxx shall take
all of the Net Electric Energy, provided that the Host Utility is capable of
accepting such Net Electric Energy.
(f) Seller shall no later than [*] after Seller's receipt of a Dispatch
Notice notify Xxxxxxxx of the Facility's expected availability during the
Dispatch Period identified in such Dispatch Notice. To the extent Seller does
not notify Xxxxxxxx within such [*] period, the Facility shall be deemed Fully
Available.
SECTION 9.6
During Initial Start-Up Testing and up to two times each year
thereafter, Seller shall demonstrate, in accordance with the then-applicable
criteria of PJM (or the most recent such criteria if current PJM criteria no
longer exist), applicable generally to independent power and utility generating
facilities in PJM of similar technology, the capability of the Facility to
produce and maintain, as required for such demonstration, the Facility Capacity.
The demonstration of Facility Capacity shall be scheduled by Seller and
consistent with PJM requirements. Seller shall be responsible for all costs it
incurs in connection with the demonstration of Facility Capacity; provided,
however, that Seller shall have no obligation to obtain or maintain any
transmission service beyond the Electric Delivery Point that may be required for
such demonstration of Facility Capacity, such transmission service being the
sole responsibility of Xxxxxxxx for purposes of this Agreement.
25
SECTION 9.7
Xxxxxxxx shall have no right to require operation of the Facility
except in Combined Cycle Mode, unless otherwise mutually agreed to by the
Parties.
SECTION 9.8
The Facility shall be capable of being Scheduled for operation on
either Natural Gas or Fuel Oil and if the Facility is capable of switching fuel
during a Dispatch Period Xxxxxxxx may in its discretion (subject to the
availability of such fuel from Xxxxxxxx) direct Seller to switch such fuel.
Seller shall be responsible for licensing and permitting the Facility to allow
it to operate on Fuel Oil for at least the Operating Hour equivalent of [*] Days
per Contract Year with the total output equivalent to twenty-four (24) hour per
Day operation at Facility Capacity unless these standards cannot be satisfied in
a commercially reasonable manner or Seller's permits as issued do not allow such
operation.
SECTION 9.9
In the event Seller or an Affiliate does not directly operate the
Facility, Seller shall, prior to the Commercial Operation Date, enter into, and
during the Term hereof shall maintain in effect, an agreement with a reputable
firm or firms providing for the operation and maintenance of the Facility
pursuant to the terms and conditions of this Agreement at all times during the
Term of this Agreement. The choice of such firm by Seller shall be subject to
the prior review and acceptance by Xxxxxxxx which acceptance shall not be
unreasonably withheld or delayed; provided that it shall not be unreasonable for
Xxxxxxxx to withhold such acceptance if such operator is a FERC authorized power
marketer or an Affiliate of such an entity. Seller shall provide Xxxxxxxx with a
copy of such agreement and all amendments and supplements thereto promptly after
execution thereof.
ARTICLE X
MAINTENANCE
SECTION 10.1
(a) At all times during the Term of this Agreement, Seller shall, at
its sole cost and expense, maintain the Facility, the Protective Gas Apparatus,
and, consistent with the terms of the Interconnection Agreement, the
Interconnection Facilities. Said maintenance shall be performed in accordance
with Accepted Electrical Practices (with respect to the Facility and
Interconnection Facilities) and with standard gas industry practices (with
respect to Protective Gas Apparatus) and manufacturers' recommended maintenance
procedures.
26
SECTION 10.2
Seller shall furnish to Xxxxxxxx, in writing, by no later than each
February 15 following the Commercial Operation Date, a certificate together with
supporting documentation demonstrating that Seller has performed or caused to be
performed during the prior year all (i) manufacturer-recommended maintenance and
testing of the Interconnection Facilities and Protective Gas Apparatus and (ii)
maintenance of the Facility necessary for conformance with Accepted Electrical
Practices. Seller shall provide Xxxxxxxx with at least thirty (30) Days prior
written notice of any test of the Interconnection Facilities and Protective Gas
Apparatus and, to extent consistent with the terms of the Interconnection
Agreement, Xxxxxxxx personnel or its representatives may observe such testing.
SECTION 10.3
(a) Seller shall keep and maintain accurate and complete records for
the Facility, including such information regarding operation and maintenance of
the Facility and all associated equipment as is appropriate and consistent with
Accepted Electrical Practices and standard gas industry practices. Seller shall
make such records available to Xxxxxxxx for inspection and copying from time to
time as Xxxxxxxx may reasonably request.
(b) Seller shall maintain and classify outage statistics for the
Facility in accordance with outage classification procedures adopted by PJM and
shall supply such statistics to Xxxxxxxx upon Xxxxxxxx' reasonable request.
SECTION 10.4
(a) Xxxxxxxx shall furnish to Seller by the date which is three (3)
months prior to the Anticipated Commercial Operation Date and by November 1 of
each year following the Commercial Operation Date a forecast of the Dispatch of
the Facility for the following three (3) calendar years in order to provide
Seller with planning information to support Seller's scheduling of Planned
Outages. Xxxxxxxx shall provide updates to the forecast in a timely manner if
Xxxxxxxx' expectations of Facility Dispatch are revised.
(b) Seller shall furnish Xxxxxxxx with an annual forecast no later than
December 15 of each year, or such other time as may be necessary to be
consistent with regional reliability planning procedures, setting forth the
expected dates and anticipated duration of each Planned Outage for the
succeeding thirty-six (36) months. Seller and Xxxxxxxx shall mutually agree on
the scheduling of all Planned Outages. Any requested revision to a schedule for
a previously approved Planned Outage or a need for a Planned Outage which arises
after a submission of the most recent annual forecast shall be submitted by
either Party to the other as soon as reasonably practicable, but in no event
less than [*] in advance of the Planned Outage, [*]
27
[*]. The non-requesting Party shall approve or reject said request within ten
(10) Days of its receipt and, if it rejects said request shall propose an
alternate schedule with dates as close in time as practicable to the dates
originally proposed. Except as set forth in the last sentence of this Section
10.4(b), neither Party shall unreasonably withhold or delay its approval of any
requested revision(s) to the previously established Planned Outage schedule. Any
reasonable costs associated with a change requested by Xxxxxxxx to the
previously established Planned Outage schedule shall be agreed to and allocated
by the Parties at the time of Seller's consideration of Xxxxxxxx' requested
change. Planned major maintenance shall normally be scheduled as a Planned
Outage. Xxxxxxxx shall have no right to require Seller to change the time of a
previously scheduled Planned Outage if, in the reasonable judgment of Seller,
said change is imminently likely to cause significant physical damage to the
Facility and/or appurtenant equipment.
(c) Seller shall notify Xxxxxxxx of Seller's intent to remove the
Facility from service for maintenance and its intent to return the Facility to
service following the completion of maintenance. Seller shall coordinate the
scheduling of all Maintenance Outages with Xxxxxxxx.
(d) Seller shall also notify Xxxxxxxx as soon as possible concerning
the cause and anticipated duration of any Maintenance Outage or Forced Outage.
SECTION 10.5
Seller shall have full and complete responsibility for and control over
maintenance of the Facility, the Interconnection Facilities and Protective Gas
Apparatus except for the Parties' rights to test Electric Metering Equipment,
Gas Metering Equipment and Oil Metering Equipment.
28
ARTICLE XI
METERING, BILLING, PAYMENT AND TAXES
SECTION 11.1
Net Electric Energy delivered by Seller to Xxxxxxxx shall be metered at
the Electric Delivery Point, using the Host Utility's Electric Metering
Equipment on an hour-by-hour basis, or such shorter intervals as may be
necessary to implement this Agreement, are technically feasible using such
metering equipment, and are agreed to by the Host Utility. It is the assumption
of the Parties that the Host Utility will agree to own the electric meters at
the Electric Delivery Point and to provide the necessary metering services. In
the event the Host Utility elects not to do so, the Parties will amend this
Agreement to reflect that Xxxxxxxx shall own the electric meters at the Electric
Delivery Point and shall provide the necessary metering services, provided,
however, that Seller shall have the right to install check meters for auditing
purposes.
SECTION 11.2
(a) Seller shall provide to Xxxxxxxx a monthly statement using the Host
Utility's meters, or back-up Electric Metering Equipment installed by Seller in
the event that the Host Utility's electric meters are not functional, not later
than thirty (30) calendar Days after the end of each Billing Month, unless such
thirtieth (30th) Day is not a Business Day. If such thirtieth (30th) Day is not
a Business Day, Seller shall provide the statement on the next succeeding
Business Day. Such statement shall set forth the amount of Net Electric Energy
delivered by Seller to Xxxxxxxx in each hour and Seller's computation of the
amount due from Xxxxxxxx to Seller and such other amounts as may then be due and
payable by Xxxxxxxx to Seller hereunder. Xxxxxxxx shall pay Seller the net
amount shown to be due to Seller on the monthly statement by wire transfer to an
account specified by Seller not later than ten (10) calendar Days following
Xxxxxxxx' receipt of the monthly statement, unless such tenth (10th) Day is not
a Business Day. If such tenth (10th) Day is not a Business Day, Xxxxxxxx shall
render payment on the next Business Day. All said payments shall be deemed to be
made when such wire transfer is received by Seller. Overdue payments shall
accrue interest from, and including, the due date to, but excluding, the date of
payment at the Late Payment Interest Rate. If either Party, in good faith,
disputes a monthly statement, such Party shall provide to the other Party a
written explanation of the basis for the dispute and shall make payment of the
portion of such monthly statement not disputed no later than the due date. To
the extent any disputed amount is later determined to be properly due and
payable, it shall be paid within ten (10) Days of such determination, together
with interest accrued at the Late Payment Interest Rate from the due date to the
date payment is made, if made within ten (10) Days of such determination, and if
not paid within ten (10) Days of such determination, together with interest
accrued after such ten (10)
29
Days period to the date payment is made at the Late Payment Interest Rate plus
one (1) percent per annum. If a Party does not receive written notice of an
objection by the other Party to a monthly statement within ninety (90) days of
receipt thereof by such Party, such monthly statement shall be deemed conclusive
and binding absent manifest error.
(b) In the event adjustments or corrections to monthly statements are
required as a result of inaccurate Electric Metering Equipment, Gas Metering
Equipment or Oil Metering Equipment or other errors in computation or billing,
the Parties shall promptly recompute amounts due from or to each other hereunder
during the period of inaccuracy and otherwise correct any errors in such monthly
statement. If the total amount, as recomputed, due from a Party for the period
of inaccuracy varies from the total amount due as previously computed, the
payment of the previously computed amount has been made, the difference shall be
paid to the Party entitled to it within ten (10) Days after correction of the
erroneous invoice(s).
(c) Each Party has the right, at its sole expense, upon reasonable
notice and during normal working hours, to examine the records of the other
Party to the extent reasonably necessary to verify the accuracy of any
statement, charge or computation made pursuant to this Agreement. If requested,
a Party shall provide to the other Party statements evidencing the amounts of
Net Electric Energy or the quantities of Natural Gas or Fuel Oil delivered at
the Fuel Delivery Point. If any such examination reveals any inaccuracy in any
statement, the necessary adjustments in such statement and the payments thereof
will be promptly made and shall bear interest calculated at the Late Payment
Interest Rate from the date the overpayment or underpayment was made until paid;
provided, however, that no adjustment for any statement or payment will be made
unless objection to the accuracy thereof was made prior to the lapse of two
years from the rendition thereof; and provided further that this Section 11.2(c)
will survive any termination of the Agreement for a period of two (2) years from
the date of such termination for the purpose of such statement and payment
objections.
(d) Seller shall give reasonable notice to Xxxxxxxx of the time when
any Electric Metering Equipment test or back-up Electric Metering Equipment test
shall take place, and Xxxxxxxx may have representatives present during such
test(s). To the extent practicable, Seller shall provide at least twenty-four
(24) hours notice to Xxxxxxxx prior to any test it or the Host Utility may
perform on any Electric Metering Equipment or back-up electric metering
equipment.
(e) If the Host Utility Electric Metering Equipment fails to register,
or if the measurement made by said meter during a test varies by more than
one-half percent (0.5%) (i.e., varies by more than one-half percent (0.5%)
either above or below the measurement made by the standard meter used in the
test), an adjustment in payments to Seller or credits to Xxxxxxxx shall be made
utilizing the back-up electric meter provided it meets the 0.5% accuracy
requirement stated above, for the actual period during which inaccurate
measurements were made if the
30
period can be reasonably determined or, if the period of the inaccuracy cannot
be reasonably determined, for no more than one-half the period since the last
meter test.
(f) If, at any time, both the primary and back-up Electric Metering
Equipment fail to register, or the registration thereof becomes so erratic as to
be meaningless (i.e., the recording of the measurement is obviously in error),
the Net Electric Energy delivered to Xxxxxxxx shall be determined from the best
information available, including, but not limited to, Seller's additional
electric meters and operator's logs.
SECTION 11.3
(a) [*]
(b) [*]
31
SECTION 11.4
Except as otherwise specified in this Agreement, [*] each Party shall
have the right to set off against any and all amounts owed by it under this
Agreement past due amounts owed to it under this Agreement by the other Party.
SECTION 11.5
The Parties shall each keep and maintain accurate and detailed records
relating to the delivery of Net Electric Energy made under this Agreement, and
the Facility's fuel consumption for a period of not less than two (2) years,
unless a longer period is required by law, regulation or PJM policy. Such
records shall be made available for inspection by either Party or any
governmental agency having jurisdiction with respect thereto during normal
business hours upon reasonable notice.
SECTION 11.6
(a) Seller shall cooperate in the maintenance and testing of all Gas
Metering Equipment owned by Xxxxxxxx or third parties and Oil Metering Equipment
owned by Xxxxxxxx or third parties as may be required to implement this
Agreement. All Gas Metering Equipment and Oil Metering Equipment owned by Seller
used to support billing under this Agreement shall be operated, maintained and
tested by and/or on behalf of Seller in accordance with applicable industry
standards. If, at any time, any Gas Metering Equipment and Oil Metering
Equipment is out of service or fails to register, or the registration thereof
becomes manifestly erroneous, the quantity of fuel delivered to the Facility
shall be determined:
(i) by using the registration of any check meter(s) if
installed and accurately registering or, in the absence of said check
meter(s),
(ii) by correcting the error or the percentage of error if
ascertainable by calibration, test or mathematical calculation or, in
the absence of this subparagraph and subparagraph (i) above,
(iii) by estimating the quantity of receipts and deliveries
during periods under similar conditions when the meter was registering
accurately.
(b) Each Party shall have the right to be present at the time of
installing, reading, cleaning, changing, repairing, inspecting, testing,
calibrating or adjusting performed in connection with Gas Metering Equipment and
Oil Metering Equipment involved in billing and used in measuring or checking the
measurement of receipts and deliveries, including any Gas Metering Equipment and
Oil Metering Equipment involving the accurate measurement of the Natural Gas or
Fuel Oil delivered to the Facility. The records from such Gas Metering Equipment
and Oil
32
Metering Equipment shall be the property of Seller, but upon reasonable advance
notice, Seller shall make available to Xxxxxxxx its records and charts relating
to the Gas Metering Equipment and Oil Metering Equipment, together with
calculations therefrom, for inspection and verification.
SECTION 11.7
Any costs of Seller required to be reimbursed by Xxxxxxxx pursuant to
this Agreement, unless otherwise provided for in [*] to this Agreement, shall be
reimbursed to Seller by Xxxxxxxx no later than thirty (30) Days after Seller
provides to Xxxxxxxx an invoice with respect to such costs, together with
reasonable supporting information.
SECTION 11.8
(a) The payments by Xxxxxxxx to Seller do not include reimbursement
for, and Xxxxxxxx is liable for and shall pay, cause to be paid, or reimburse
Seller if Seller has paid, all Taxes imposed on or with respect to Natural Gas
or Fuel Oil or the use or consumption or transportation thereof (other than any
of such Taxes for which Seller is liable under Section 11.9(b)) or on Net
Electric Energy or the use and consumption thereof after the Electric Delivery
Point. Xxxxxxxx shall indemnify, defend and hold harmless Seller from any
liability for such Taxes.
(b) The payments by Xxxxxxxx to Seller include full reimbursement for,
and Seller shall be liable for and shall pay, or cause to be paid, or reimburse
Xxxxxxxx if Xxxxxxxx has paid, all Taxes, except as provided in Sections 11.8(a)
or 11.8(d), applicable to the sale of Facility Capacity and Ancillary Services,
payments made to Seller in respect of the performance of Fuel Conversion
Services, or otherwise relating to or arising out of this Agreement or the
transactions contemplated hereby, including all Taxes imposed on or with respect
to the Facilities, the operation or control thereof, electric energy associated
therewith and Natural Gas to which Seller takes title pursuant to Section
4.1(iv). If Xxxxxxxx is required to remit any Tax for which Seller is
responsible, the amount shall be deducted from any sums due to Seller. Seller
shall indemnify, defend and hold harmless Xxxxxxxx from any liability for such
Taxes.
(c) Either Party, upon written request of the other, shall provide a
certificate of exemption or other reasonably satisfactory evidence of exemption
if either Party is exempt from any Taxes, and shall use all reasonable efforts
to obtain or maintain, or to enable the other Party to obtain or maintain, any
exemption from or reduction of any Tax, whether currently available or becoming
available in the future. Without limiting the generality of the foregoing, the
Parties agree that, if beneficial to the efforts of either Party to obtain or
maintain any exemption from or reduction of any Tax, whether currently available
or becoming available in the future, the Parties will cooperate to restructure
the transactions contemplated by this Agreement so as to enable either Party to
obtain or maintain such exemption or reduction, as the case may be; provided,
33
however, that any such restructuring shall not affect adversely the economic
interests of either Party under this Agreement.
(d) (i) [*].
(ii) [*].
ARTICLE XII
DISPUTE RESOLUTION
SECTION 12.1
(a) If Seller and Xxxxxxxx are in dispute with respect to any matter
addressed in Sections 2.2, 4.2, Article X, Section 11.2 or 11.3 and Seller and
Xxxxxxxx do not resolve the dispute within seven (7) Days of Seller or Xxxxxxxx
notifying the other Party in writing of the existence of such dispute, a
committee consisting of two officers of Seller and two officers of Xxxxxxxx
shall meet and attempt in good faith to resolve such dispute. If such committee
does not resolve the dispute within seven (7) Days following their initial
meeting, then a single third party engineer (the "Third Party Engineer") shall
be designated to consider and decide the issues raised by such dispute unless
both Parties determine that further discussions by the committee are merited.
The selection of such Third Party Engineer shall be made from the list of
engineers
34
set forth in Appendix 7 hereto (as supplemented or otherwise modified from time
to time pursuant to paragraphs (e) and (f) below). In selecting the Third Party
Engineer, each Party (starting with Seller for the first dispute and alternating
between Seller and Xxxxxxxx for each dispute thereafter) shall alternate in
deleting one name from the list of engineers until only one such engineer shall
remain, which remaining engineer shall be the Third Party Engineer. The Third
Party Engineer shall be designated from such list not later than the third (3rd)
Business Day following the expiration of the second seven (7) Day period
described above and such designation shall become effective on the third (3rd)
Business Day following such designation. Within ten (10) Business Days of the
effectiveness of the designation of a Third Party Engineer, each of Seller and
Xxxxxxxx shall submit to the Third Party Engineer a notice (a "Position Notice")
setting forth in detail such Party's position in respect of the issues in
dispute. Such Position Notice shall include supporting documentation, if
appropriate.
(b) The Third Party Engineer shall complete all proceedings and issue
its decision with regard to the issues in dispute as promptly as reasonably
possible, but in any event within ten (10) Business Days of the date on which
both Position Notices are submitted unless the Third Party Engineer reasonably
determines that additional time is required in order to give adequate
consideration to the issues raised. In such case the Third Party Engineer shall
state in writing his reasons for believing that additional time is needed and
shall specify the additional period required, which period shall not exceed ten
(10) Days without Seller's and Xxxxxxxx' agreement.
(c) In resolving a dispute, the Third Party Engineer shall consider all
facts and circumstances it deems reasonable given the nature of the dispute.
(d) The Third Party Engineer shall choose either Seller's position or
Xxxxxxxx' position as set forth in their respective Position Notices. If the
Third Party Engineer determines that the position set forth in Seller's Position
Notice is correct, it shall so state and shall state the appropriate actions to
be taken by Xxxxxxxx. In such case, Xxxxxxxx shall promptly take such action. If
the Third Party Engineer determines that the position set forth in Xxxxxxxx'
Position Notice is correct, he shall so state and shall state the appropriate
actions to be taken by Seller. In such case, Seller shall promptly take such
actions. The decision of the Third Party Engineer shall be final and
non-appealable. The Seller and Xxxxxxxx shall each bear one-half of all
reasonable costs incurred by the Third Party Engineer in connection with a
dispute under this Section 12.1.
(e) The list of engineers referred to in paragraph (a) above shall
contain qualified engineers with experience in the design, operation and
maintenance of electric generating facilities. The initial such list shall be
proposed by Seller no later than sixty (60) Days after the Execution Date and
upon agreement of the Parties shall be incorporated into this Agreement as
Appendix 7. A Party may at any time remove a particular engineer from the list
by obtaining the other Party's reasonable consent to such removal. However,
neither Party may remove a name or
35
names from the list if such removal would leave the list without at least three
(3) names after giving effect to any concurrent addition of names pursuant to
paragraph (f) below.
(f) During January of each year, each of Seller and Xxxxxxxx shall
review the current list of Third Party Engineers and give notice to the other of
any proposed additions to the list and any intended deletions. Intended
deletions shall automatically become effective thirty (30) Days after notice is
received by the other Party unless written objection is made by the other Party
within such thirty (30) Days and provided that such deletions do not leave the
list without at least three (3) names after giving effect to any concurrent
addition of names pursuant to this paragraph (f). Proposed additions to the list
shall automatically become effective thirty (30) Days after notice is received
by the other Party unless written objection is made by such other Party within
thirty (30) Days. By mutual agreement between Seller and Xxxxxxxx, a new name or
names may be added to the list of Third Party Engineers at any time.
SECTION 12.2
(a) Each of Seller and Xxxxxxxx shall designate in writing to the other
Party from time to time a representative who shall be authorized to resolve any
dispute relating to the subject matter of this Agreement not subject to the
provisions of Section 12.1 and, unless otherwise expressly provided herein, to
exercise the authority of such Party to make decisions by mutual agreement.
(b) The Parties agree (i) to attempt to resolve all disputes arising
hereunder promptly, equitably and in a good faith manner, and (ii) to provide
each other with reasonable access during normal business hours to any and all
non-privileged records, information and data pertaining to any such dispute.
(c) If any dispute is not resolved between the Parties pursuant to this
Section 12.2 within thirty (30) Days from the date on which a Party provided to
the other Party a written notice of such dispute, then such dispute shall be
settled exclusively and finally by arbitration in accordance with Section 12.3,
except for technical disputes, as described in Section 12.1 above, which shall
be resolved in accordance with that Section.
SECTION 12.3
(a) It is specifically understood and agreed that any dispute,
controversy or claim under this Agreement that cannot be resolved between the
Parties within the time period specified in Section 12.2(c), including any
matter relating to the interpretation of this Agreement but excluding any matter
to be submitted to the Third Party Engineer pursuant to Section 12.1, shall be
submitted to arbitration irrespective of the magnitude thereof, the amount in
dispute or whether such dispute would otherwise be considered justifiable or
ripe for resolution by any court or arbitral tribunal.
36
(b) Each arbitration between the Parties shall be finally
settled in Washington, D.C. conducted pursuant to the then applicable Commercial
Arbitration Rules of the American Arbitration Association.
(c) The arbitration shall be conducted before a tribunal
composed of three arbitrators. Each Party shall appoint an arbitrator, obtain
its appointee's acceptance of such appointment and deliver written notification
of such appointment and acceptance to the other Party within fifteen (15) Days
after the expiration of the thirty (30) Day period specified in Section 12.2(c).
The two Party-appointed arbitrators shall jointly appoint the third (who shall
be the chairperson), obtain the acceptance of such appointment and deliver
written notification of such appointment within fifteen (15) Days after their
appointment and acceptance. The arbitrators shall have the power and authority
to determine the arbitrability of any dispute arising under or relating to this
Agreement or the subject matter hereof.
(d) Any arbitration commenced hereunder shall be completed
within one-hundred twenty (120) Days of the appointment of the arbitral
tribunal, absent agreement of the Parties to an extension of such period. The
Parties shall be entitled to no discovery, provided, however, that the tribunal
may permit document discovery upon a showing of good cause. All direct testimony
shall be offered by way of affidavit. The Party submitting an affidavit shall
make the affiant available for cross-examination before the tribunal. The
Parties waive any claim to any damages in the nature of special, punitive,
exemplary, consequential or statutory damages in excess of compensatory damages,
and the tribunal is specifically divested of any power to award such damages.
All decisions of the tribunal shall be pursuant to a majority vote. Any interim
or final award shall be rendered by written decision. The judgment of the
tribunal shall be final and binding (i.e., not subject to appeal) on the
Parties. The Parties agree that a judgment upon any arbitration award may be
entered by any court having jurisdiction thereof.
(e) If a Party fails to appoint its arbitrator within a period
of fifteen (15) Days after receiving notice of the arbitration, or if the two
arbitrators appointed cannot agree upon the third arbitrator within a period of
fifteen (15) Days after appointment of the second arbitrator, then such
arbitrator shall be appointed by the American Arbitration Association.
(f) No arbitrator shall be a past or present employee or agent
of, or consultant or counsel to, either Party or any Affiliate of either Party,
unless such restriction is waived in writing by the other Party.
(g) Each Party shall pay the costs of its designated
arbitrator (or the arbitrator designated upon its failure to designate an
arbitrator pursuant to Section 12.3(f)) and one-half of the costs of the third
arbitrator and out-of-pocket third party costs and expenses of an arbitration
under this Section 12.3.
37
SECTION 12.4
This Article XII shall survive the termination or expiration of this
Agreement.
ARTICLE XIII
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 13.1
Seller hereby represents, warrants and covenants as follows:
(a) Seller is a limited liability company duly organized and
validly existing under the laws of the State of Delaware.
(b) Seller has all requisite power and authority to carry on
the business to be conducted by it under this Agreement and to enter into and
perform its obligations under this Agreement.
(c) The execution and delivery of this Agreement and the
performance of Seller's obligations hereunder have been duly authorized by all
necessary action on the part of Seller and do not and will not conflict with or
result in a breach of Seller's certificate of formation or limited liability
company agreement or any indenture, mortgage, other agreement or instrument or
any statute or rule, regulation, order, judgment or decree of any judicial or
administrative body to which Seller is a party or by which Seller or any of its
properties is bound or subject.
(d) This Agreement is the valid and binding obligation of
Seller, enforceable with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency or similar laws from time to time in effect
that affect creditors' rights generally or by general principles of equity.
(e) Seller is in compliance with the material provisions of
all laws which are applicable to it or its operations, non-compliance with which
could reasonably be expected to have a material adverse effect on the ability of
Seller to perform its obligations under this Agreement including, without
limitation, Environmental Laws.
(f) There are no enforcement, clean-up, removal, mitigation or
other governmental or regulatory actions, claims or proceedings, including but
not limited to any proceedings relating to damage, contribution, cost recovery,
compensation, loss or injury, pending or to Seller's knowledge threatened, under
any Environmental Law affecting the Facility or the Site, which would reasonably
be expected to have a material adverse effect on the ability of Seller to
perform its obligations under this Agreement.
38
SECTION 13.2
Xxxxxxxx hereby represents, warrants and covenants as follows:
(a) Xxxxxxxx is a corporation duly organized and validly
existing under the laws of the State of Delaware;
(b) Xxxxxxxx has all requisite power and authority to carry on
the business to be conducted by it under this Agreement and to enter into and
perform its obligations under this Agreement;
(c) The execution and delivery of this Agreement and the
performance of Xxxxxxxx' obligations hereunder have been duly authorized by all
necessary action on the part of Xxxxxxxx and do not and will not conflict with
or result in a breach of Xxxxxxxx' charter documents or by-laws or any
indenture, mortgage, other agreement or instrument of any statute or rule,
regulation, order, judgment or decree of any judicial or administrative body to
which Xxxxxxxx is a party or by which Xxxxxxxx or any of its Affiliates is bound
or subject; and
(d) This Agreement is the valid and binding obligation of
Xxxxxxxx, enforceable with its terms except as such enforceability may be
limited by applicable bankruptcy, insolvency or similar laws from time to time
in effect that affect creditors' rights generally or by general principles of
equity.
(e) Xxxxxxxx is in compliance with the material provisions of
all laws which are applicable to it or its operations, non-compliance with which
could reasonably be expected to have a material adverse effect on the ability of
Xxxxxxxx to perform its obligations under this Agreement including, without
limitation, Environmental Laws.
ARTICLE XIV
LIABILITY; DEDICATION
SECTION 14.1
Nothing in this Agreement shall be construed to create any duty,
standard of care or liability to any Person not a Party to this Agreement.
SECTION 14.2
Notwithstanding anything contained in this Agreement, except with
respect to third party claims, in respect of which this Section 14.2 shall not
apply, neither Party shall be liable to the
39
other Party, its Affiliates, directors, officers, partners, agents,
employees, successors or assigns, for claims for incidental, special, punitive,
indirect or consequential damages of any nature arising out of, connected with
or resulting from performance or nonperformance of this Agreement, including,
without limitation, claims in the nature of lost revenues, income or profits
(other than payments specifically provided for and properly due under this
Agreement) or losses, damages or liabilities under any financing, lending or
construction contracts, agreements or arrangements to which Seller may be party
irrespective of whether such claims are based upon warranty, negligence, strict
liability, contract, operation of law or otherwise. The provisions of this
Section 14.2 shall survive the termination or expiration of this Agreement.
SECTION 14.3
No undertaking by either Party under any provision of this Agreement
shall constitute the dedication of that Party's electrical or gas reserves,
system, equipment, or facilities, or any portion thereof, to the other Party or
to the public.
ARTICLE XV
INDEMNITY
SECTION 15.1
Subject to the provisions of Section 15.2, each Party shall indemnify,
hold harmless and defend the other Party, its Affiliates, directors, officers,
partners, agents and employees from and against any and all loss, liability,
damage, cost or expense, including damage and liability for bodily injury to or
death of third Persons or damage to property of third Persons (collectively,
"Loss"), to the extent arising out of, in connection with or resulting from the
indemnifying Party's breach of any of the representations or warranties made in,
or the indemnifying Party's failure to perform any of its obligations under,
this Agreement, or the indemnifying Party's design, installation, construction,
ownership, operation, repair, relocation, replacement, removal or maintenance
of, or the failure of, any of such Party's equipment and/or facilities,
including, but not limited to, the Interconnection Facilities, the Facility, Gas
Interconnection Facilities and Protective Gas Apparatus and any Natural Gas or
Fuel Oil facilities, and/or any appurtenances thereto, and any electric
transmission facilities used in connection with this Agreement; provided,
however, that neither Party shall have any indemnification obligations hereunder
in respect of any Loss to the extent caused by such other Party's gross
negligence, bad faith or willful misconduct. Each Party hereto shall furnish the
other Party with written notification after such Party becomes aware of any
event or circumstances, or the threat thereof, (but in no event later than ten
(10) Days prior to the time any response is required by law) which might give
rise to such indemnification. At the indemnified Party's request, the
indemnifying Party shall defend
40
any suit asserting a claim covered by this indemnity and shall pay any and all
costs and expenses (including reasonable attorney's fees and expenses) that may
be incurred, including any and all costs and expenses which may be incurred by
the indemnified Party, in enforcing this indemnity. The indemnified Party may,
at its own expense, retain separate counsel and participate in the defense of
any such suit or action.
SECTION 15.2
The indemnity in Section 15.1 shall apply to all claims against each
Party including, but not limited to, all claims made or threatened by, or in the
name of or on behalf of each Party's employees for personal injuries (including
death) which arise in the course of their employment. Seller hereby waives any
defense it may otherwise have under applicable workers' compensation laws.
SECTION 15.3
As between the Parties, Xxxxxxxx shall be deemed to be in exclusive
possession and control (and responsible for any damages or injury resulting
therefrom or caused thereby) of Natural Gas and Fuel Oil prior to the Fuel
Delivery Points and the Net Electric Energy and Ancillary Services at and from
the Electric Delivery Point, and Seller shall be deemed to be in exclusive
possession and control (and responsible for any damages or injury resulting
therefrom or caused thereby) of Natural Gas and Fuel Oil at and from the Fuel
Delivery Points and the Net Electric Energy and Ancillary Services prior to the
Electric Delivery Point. Risk of loss related to Natural Gas and Fuel Oil shall
transfer from Xxxxxxxx to Seller at the applicable Fuel Delivery Point and risk
of loss related to the Net Electric Energy and Ancillary Services shall transfer
from Seller to Xxxxxxxx at the Electric Delivery Point. Xxxxxxxx shall
indemnify, defend and hold harmless Seller from and against any Loss arising out
of or in any way relating to Xxxxxxxx' possession or control of Natural Gas and
Fuel Oil prior to the Fuel Delivery Points or its possession and control of the
Net Electric Energy and Ancillary Services at and after the Electric Delivery
Point, and Seller shall indemnify, defend and hold harmless Xxxxxxxx from and
against any Loss arising out of or in any way relating to Seller's possession or
control of Natural Gas and Fuel Oil at and from the Delivery Point or its
possession and control of the Net Electric Energy and Ancillary Services prior
to the Electric Delivery Point.
SECTION 15.4
The Parties expressly acknowledge and agree that this Article XV shall
survive the termination or expiration of this Agreement.
41
ARTICLE XVI
INSURANCE
SECTION 16.1
Seller shall keep the Facility continuously insured against loss or
damage in the amounts and for the risks that property of similar character is
usually so insured by entities owning and operating like properties.
SECTION 16.2
[*]
42
[*]
SECTION 16.3
[*]
SECTION 16.4
All insurance policies identified in Section 16.2 and Section 16.3
hereof, except said Worker's Compensation Insurance, shall name Xxxxxxxx as an
additional insured.
SECTION 16.5
Seller's casualty insurance (other than its Worker's Compensation
insurance) shall include provisions or endorsements (a) stating that such
insurance is primary insurance with respect to the interest of Xxxxxxxx and that
any insurance maintained by Xxxxxxxx is excess and not contributory insurance
with the insurance required hereunder, and (b) providing that such
43
policies shall not be canceled or their limits of liability reduced except upon
sixty (60) Days prior written notice to Xxxxxxxx.
SECTION 16.6
Not less than one (1) Day prior to the date of commencement of
construction of the Facility, Seller shall provide and shall continue to provide
to Xxxxxxxx annually during the Term of this Agreement properly executed and
current certificates of insurance relative to said insurance policies. Said
certificates shall provide the following information:
(a) Name of insurance company, policy number and expiration date;
(b) The coverage required and the limits on each, including the amount
of deductibles or self-insured retentions, which shall be for the account of
Seller;
(c) A statement indicating that Xxxxxxxx shall receive at least sixty
(60) Days prior written notice of cancellation with respect to said insurance
policies (except in respect of cancellation for non payment of premiums for
which such prior written notice shall be ten (10) Days; and
(d) For all insurance policies identified in Section 16.2, except
workers' compensation insurance, a statement indicating that Xxxxxxxx has been
named as an additional insured.
SECTION 16.7
A copy of each such insurance policy, certified as a true copy by an
authorized representative of the issuing insurance company or in lieu thereof or
in addition thereto, at Xxxxxxxx' discretion, a certificate in form satisfactory
to Xxxxxxxx certifying to the issuance of such insurance, shall be furnished to
Xxxxxxxx not less than ten (10) Days prior to the commencement of construction
of the Facility and fifteen (15) Days prior to the expiration date of each such
policy and/or certificate.
SECTION 16.8
Xxxxxxxx shall have the right to inspect the original policies of
insurance applicable to this Agreement at Seller's place of business during
regular business hours by providing Seller with fifteen (15) Days notice of its
inspection.
44
ARTICLE XVII
FORCE MAJEURE
SECTION 17.1
(a) A Party shall be excused from performing its obligations under this
Agreement and shall not be liable in damages or otherwise to the other Party if
and to the extent such Party declares that it is unable to perform or is
prevented from performing an obligation under this Agreement by a Force Majeure
condition, except for any obligations and/or liabilities under this Agreement to
pay money, which shall not be excused, and except to the extent an obligation
accrues prior to the occurrence or existence of a Force Majeure condition,
provided that:
(i) the Party declaring its inability to perform by virtue of
Force Majeure, as promptly as practicable after the occurrence of the
Force Majeure condition, but in no event later than five (5) Days
thereafter, gives the other Party written notice describing, in detail,
the nature, extent and expected duration of the Force Majeure
condition;
(ii) the suspension of performance is of no greater scope and
of no longer duration than is reasonably required by the Force Majeure
condition;
(iii) the Party declaring Force Majeure uses all commercially
reasonable efforts to remedy its inability to perform; and
(iv) as soon as the Party declaring Force Majeure is able to
resume performance of its obligations excused as a result of the Force
Majeure condition, it shall give prompt written notification thereof to
the other Party.
(b) Irrespective of whether the Force Majeure condition is declared by
Xxxxxxxx or Seller, the time period of a Force Majeure shall be excluded from
the calculation of all payments [*] and Xxxxxxxx shall be under no obligation to
pay Seller any of the payments [*].
45
SECTION 17.2
Notwithstanding anything to the contrary contained in this Agreement,
except as may expressly be provided herein, the term Force Majeure shall not
include or excuse a Party's performance:
(a) Except as otherwise set forth in Section 2.1, the failure to
complete the Facility by or to achieve the Commercial Operation Date [*] which
failure is caused by, arises out of or results from the acts or omissions of
Seller, and/or from the acts or omissions of any third party, unless, and then
only to the extent that, any such acts or omissions of such third party (i)
would itself be excused hereunder by virtue of a Force Majeure condition, or
(ii) is the result of a failure of Xxxxxxxx to provide fuel to the Facility
pursuant to Section 4.1 above;
(b) Any reduction, curtailment or interruption of generation or
operation of the Facility, or of the ability of Xxxxxxxx to accept or transmit
Net Electric Energy, whether in whole or in part, which reduction, curtailment
or interruption is caused by or arises from the acts or omissions of any third
party providing services or supplies to the Party claiming Force Majeure,
including any vendor or supplier to either Party of materials, equipment,
supplies or services, or any inability of the Host Utility to deliver Net
Electric Energy to Xxxxxxxx, unless, and then only to the extent that, any such
acts or omissions would itself be excused hereunder as a Force Majeure;
(c) Any outage, whether or not due to the fault or negligence of
Seller, of the Facility attributable to a defect or inadequacy in the
manufacture, design or installation of the Facility that prevents, curtails,
interrupts or reduces the ability of the Facility to generate Net Electric
Energy or the ability of Seller to perform its obligations hereunder; or
(d) To the extent that the Party claiming Force Majeure failed to
prevent or remedy the Force Majeure condition by taking all commercially
reasonable acts (short of litigation, if such remedy requires litigation) and,
except as otherwise provided in Section 17.3 below, failed to resume performance
hereunder with reasonable dispatch after the termination of the Force Majeure
condition; or
(e) To the extent that the claiming Party's failure to perform was
caused by lack of funds; or
(f) To the extent Xxxxxxxx is unable to perform due to a shortage of
Natural Gas or Fuel Oil supply not caused by an event of Force Majeure; or
(g) Because of an increase or decrease in the market price of electric
energy/capacity, Natural Gas or Fuel Oil, or because it is uneconomic for such
Party to perform its obligations under this Agreement.
46
SECTION 17.3
Notwithstanding anything contained in this Article XVII to the
contrary, neither Party shall be required to settle any strike, walkout, lockout
or other labor dispute on terms which, in the sole judgment of the Party
involved in the dispute, are contrary to its interest, it being understood and
agreed that the settlement of strikes, walkouts, lockouts or other labor
disputes shall be entirely within the discretion of the Party having such
dispute.
SECTION 17.4
Notwithstanding anything contained in this Article XVII to the
contrary, Xxxxxxxx shall have the right to terminate this Agreement, without any
liability or responsibility whatsoever, except to the extent accruing (and not
excused) prior to such termination, in the event Force Majeure has been declared
by Seller and the effect of said Force Majeure has not been fully corrected or
alleviated within [*] after the date said Force Majeure was declared; [*].
ARTICLE XVIII
EVENTS OF DEFAULT; TERMINATION; REMEDIES
SECTION 18.1
The following shall constitute events of default under this Agreement:
(a) A breach of any term or condition of this Agreement, including, but
not limited to, (i) any failure to maintain or to renew any security as required
by Article 19 of this Agreement, (ii) any breach of a representation, warranty
or covenant made in this Agreement including the Appendices hereto, or (iii)
failure of either Party to make a required payment to the other Party of amounts
due hereunder.
(b) The Facility is not available to provide Fuel Conversion Services
to Xxxxxxxx during any period of [*] consecutive Days after the occurrence of
the Commercial Operation Date for any reason, except as may be excused by Force
Majeure, the absence of available Natural Gas, or such non-availability is
caused by an act or failure to act by Xxxxxxxx where such action is required by
this Agreement.
47
(c) Seller sells or supplies Net Electric Energy, Ancillary Services or
capacity from the Facility, or agrees to do the same, to any Person or entity
other than Xxxxxxxx, without the prior approval of Xxxxxxxx.
(d) Without duplication of the [*] period in Section 18.2, Seller fails
for [*] consecutive Days, after notification from Xxxxxxxx providing a
reasonable opportunity to cure, to perform regular and required maintenance,
testing or inspection of the Interconnection Facilities, the Facility and/or
other electric equipment and facilities as required by this Agreement where such
failure is material.
(e) Without duplication of the [*] period in Section 18.2, Seller fails
for [*] consecutive Days, after notification from Xxxxxxxx providing a
reasonable opportunity to cure, to correct or resolve a material violation of
any code, regulation and/or statute applicable to the construction,
installation, operation or maintenance of the Facility, the Interconnection
Facilities, Protective Gas Apparatus or any other electric equipment and
facilities required to be constructed and operated under this Agreement when
such violation impairs the continued ability of Seller to perform its
obligations under this Agreement.
(f) A receiver or liquidator or trustee of either Party or of any of
its property shall be appointed by a court of competent jurisdiction, and such
receiver, liquidator or trustee shall not have been discharged within [*] Days
or by decree of such a court a Party shall be adjudicated bankrupt or insolvent
or any substantial part of its property shall have been sequestered, and such
decree shall have continued undischarged and unstayed for a period of [*] Days
after the entry thereof, or a petition to declare bankruptcy or to reorganize a
Party pursuant to any of the provisions of the Federal Bankruptcy Code, as now
in effect or as it may hereafter be amended, or pursuant to any other similar
state statute as now or hereafter in effect, shall be filed against a Party and
shall not be dismissed within [*] Days after such filing.
(g) A Party shall file a voluntary petition in bankruptcy under any
provision of any federal or state bankruptcy law or shall consent to the filing
of any bankruptcy or reorganization petition against it under any similar law;
or, without limiting the generality of the foregoing, a Party shall file a
petition or answer or consent seeking relief or assisting in seeking relief in a
bankruptcy under any provision of any federal or state bankruptcy law or shall
consent to the filing of any bankruptcy or reorganization petition against it
under any similar law; or, without limiting the generality of the foregoing, a
Party shall file a petition or answer or consent seeking relief or assisting in
seeking relief in a proceeding under any of the provisions of the Federal
Bankruptcy Code, as now in effect or as it may hereafter be amended, or pursuant
to any other similar state statute as now or hereafter in effect, or an answer
admitting the material allegations of a petition filed against if in such a
proceeding; or a Party shall make an assignment for the benefit of its
creditors; or a Party shall submit in writing its inability to pay its debts
generally as they become
48
due; or a Party shall consent to the appointment of a receiver, trustee, or
liquidator of it or of all or any part of its property.
(h) Any modifications, alterations or other changes to the Facility by
or on behalf of Seller which prevent Seller from fulfilling, or materially
diminish Seller's ability to fulfill, its obligations, duties, rights and
responsibilities hereunder and which, after reasonable notice and opportunity to
cure, are not corrected.
(i) There shall be outstanding for more than [*] Days any unsatisfied
final, non-appealable judgment against Seller in an amount exceeding [*] unless
the existence of such unsatisfied judgment shall not materially affect Seller's
ability to perform its obligations under this Agreement.
(j) The AES Corporation shall cease to own, directly or indirectly,
beneficially and of record, at least fifty (50) percent of the equity interests
in Seller, or shall cease to possess the power to direct or cause the direction
of the management or policies of Seller, or any Person (other than The AES
Corporation or an Affiliate) authorized to act as a power marketer by FERC or
any Affiliate of such a Person shall own, directly or indirectly, beneficially
or of record, any of the equity interests in Seller.
SECTION 18.2
(a) Upon the occurrence of any event of default described in Section
18.1 (other than an event of default under Section 18.1(g) hereof for which no
notice shall be required or opportunity to cure permitted), the Party not in
default, to the extent such Party has actual knowledge of the occurrence of such
event of default, shall give prompt written notice of the default to the
defaulting Party. Such notice shall set forth, in reasonable detail, the nature
of the default and, where known and applicable, the steps necessary to cure such
default. The defaulting Party shall have [*] Business Days in the case of a
default under Section 18.1(a)(iii)) following receipt of such notice either to
(i) cure such default or commence in good faith all such steps as are necessary
and appropriate to cure such default in the event such default cannot be
completely cured within such [*] Day period.
(b) If the defaulting Party fails to cure such default or take such
steps as provided under subparagraph (a) above, and immediately upon the
occurrence of any event of default described in Section 18.1(g) hereof, this
Agreement may be terminated by the non-defaulting Party, without any liability
or responsibility whatsoever, by written notice to the Party in default hereof.
This Agreement shall thereupon terminate and the non-defaulting Party may
exercise all such rights and remedies as may be available to it to recover
damages caused by such default.
(c) Notwithstanding the foregoing, upon the occurrence of any such
event of default, the non-defaulting Party shall be entitled to (i) commence an
action to require the defaulting Party
49
to remedy such default and specifically perform its duties and obligations
hereunder in accordance with the terms and conditions hereof and (ii) exercise
such other rights and remedies as it may have in equity or at law subject,
however, to the limitation of liability provided in Article XIV hereof.
ARTICLE XIX
SECURITY
SECTION 19.1
Without limiting the general applicability of the provisions of Article
II, or this Article, if the Commercial Operation Date does not occur by the
Final CO Date, as such date may be extended pursuant to the provisions of
Section 2.1, Seller agrees to compensate Xxxxxxxx for any actual damages it
suffers or incurs as the result of Xxxxxxxx' reliance upon the delivery of
Facility Capacity, Ancillary Services and Fuel Conversion Services hereunder, to
the extent said damages cannot be mitigated fully. Seller further agrees that
the damages Xxxxxxxx may suffer under these circumstances will be any and all
reasonable costs incurred by Xxxxxxxx in excess of costs that would have been
incurred had the Commercial Operation Date occurred on or before June 30, 2001,
[*].
SECTION 19.2
(a) The Parties acknowledge and agree that Seller, at the time of
execution of this Agreement, does not possess the financial resources or credit
to be responsible for paying Xxxxxxxx' actual damages if the Facility does not
achieve the Commercial Operation Date by the date specified in Section 2.1, [*].
Therefore, in order to provide reasonable assurances to Xxxxxxxx that a Person
or entity on behalf of Seller shall fulfill Seller's potential liability under
this Article, Seller shall provide to Xxxxxxxx no later than five (5) Business
Days after the Execution Date, (i) a guaranty of Seller's performance and
payment obligations under this Agreement from The AES Corporation ("AES"), in
the form attached hereto as [*] and made a part hereof, in the amount of [*]
("Guaranty Amount"), which guaranty shall terminate on [*], or (ii) (x) in the
event that AES' senior unsecured debt is no longer rated Investment Grade by
Standard & Poor's or Xxxxx'x, or (y) at any time at Seller's option, such
financial security for the Guaranty Amount as specified in Section 19.2(b)
hereof. Upon the provision of the guaranty or other financial security referred
to in this Section 19.2(a), the guaranty provided by The AES Corporation
pursuant to the provisions of the Original PPA shall be cancelled and returned
to Seller.
50
(b) If Seller secures payment of the Guaranty Amount through financial
security other than the guaranty of AES, Seller shall provide to Xxxxxxxx,
within [*] Days after the occurrence of the event described in Section
19.2(a)(ii)(x) or at any time pursuant to Section 19.2(a)(ii)(y), security in
the form of a single letter of credit, satisfactory to Xxxxxxxx in form and
substance, upon which Xxxxxxxx may draw if the Facility does not achieve the
Commercial Operation Date by the date specified in Section 2.1, as such date may
be extended pursuant to such Section. In the event said security contains an
expiration date, either express or implied, Seller shall renew said security not
later than [*] prior to said expiration date and shall contemporaneously
therewith provide written notice of said renewal to Xxxxxxxx. In the event
Seller fails to renew said security as set forth above, Xxxxxxxx shall be
entitled to demand and receive payment thereunder on or after [*] Days after
written notice of such failure is provided to Seller and in such event the
amount so drawn shall be deposited in an interest bearing escrow account and
shall be returned to Seller at the Commercial Operation Date unless otherwise
drawn on by Xxxxxxxx in satisfaction of Seller's obligations under Section 19.1
of this Agreement. The requirement for said security shall terminate upon the
Commercial Operation Date.
(c) The letter of credit referred to in paragraph (b) above shall be
issued by a financial institution that meets and at all times during the term of
such letter of credit maintains the following criteria:
(i) A U.S. or foreign bank rated "C" or better by Xxxxxxxx
Bankwatch; or
(ii) A U.S. or foreign bank, surety company or financial
institution whose senior debt has the rating listed below by two (2) of
the three (3) rating agencies:
Standard & Poor's: "A-" or better
Xxxxx'x: "A3" or better
Duff & Xxxxxx: "A-" or better
If such bank, surety company or financial institution fails to maintain
such criteria, then upon [*] Days written notice from Xxxxxxxx, Seller
shall obtain equivalent security from another bank, surety company or
financial institution meeting the above stated criteria. The form and
substance of any such letter of credit shall be reasonably satisfactory
to Xxxxxxxx.
(d) Seller shall execute any and all documents reasonably necessary to
assure that Xxxxxxxx' claim to and interest in said security is perfected.
SECTION 19.3
No later than the closing on financing for the Facility, Xxxxxxxx shall
provide to Seller a guarantee of Xxxxxxxx' performance and payment obligations
under this Agreement in the form
51
attached hereto [*] and made a part hereof and issued by Xxxxxxxx Holdings of
Delaware, Inc. ("Holdings"), provided that Holdings is rated Investment Grade
or, if Holdings is not rated Investment Grade, issued by an Affiliate of
Xxxxxxxx that is Investment Grade [*].
ARTICLE XX
SEVERAL OBLIGATIONS
SECTION 20.1
Except where otherwise specifically stated in this Agreement, the
duties, obligations and liabilities of the Parties are intended to be several,
not joint or collective. Nothing contained in this Agreement shall ever be
construed to create an association, trust, partnership or joint venture or
impose a trust or partnership duty, obligation or liability on or with regard to
either Party. Each Party shall be individually and severally liable for its own
obligations under this Agreement.
ARTICLE XXI
WAIVER
SECTION 21.1
Any waiver at any time by either Party of its rights, duties, and/or
obligations with respect to any default under this Agreement, or with respect to
any other matter arising out of or in connection with this Agreement, shall not
be deemed a continuing waiver nor a waiver with respect to any subsequent
default or other matter.
52
ARTICLE XXII
ASSIGNMENT
SECTION 22.1
(a) Neither this Agreement nor any rights, duties, interests or
obligations hereunder may be assigned, transferred, pledged or otherwise
encumbered or disposed of, by operation of law or otherwise without the prior
written consent of the other Party; except that (i) Xxxxxxxx, at any time after
reasonable advance notice to Seller and without the consent of Seller, may
assign this Agreement and any of its rights, interests, duties or obligations
hereunder to any Affiliate of Xxxxxxxx or any other entity, provided that such
Affiliate of Xxxxxxxx or such other entity's long term unsecured debt at such
time is rated Investment Grade by Standard & Poor's and Xxxxx'x or that such
Affiliate of Xxxxxxxx or such other entity's obligations under this Agreement
are guaranteed by an Affiliate whose long term unsecured debt at such time is
rated Investment Grade by Standard & Poor's and Xxxxx'x and so long as any
assignee shall agree to be bound by all of the terms and conditions hereof to
the same extent as Xxxxxxxx; (ii) Seller, at any time, and from time to time,
after reasonable advance notice to Xxxxxxxx and without the consent of Xxxxxxxx,
may assign this Agreement and any of its rights, interests, duties or
obligations hereunder as collateral security to any Lender so long as the
assignee shall agree to be bound by all of the terms and conditions hereof to
the same extent as Seller in the event the Lender exercises its rights under
such assignment; and (iii) Seller shall have the right at any time without the
consent of Xxxxxxxx to assign this Agreement and its rights, interests, duties
and obligations hereunder to any Affiliate, provided that such Affiliate assumes
in writing all of the obligations and duties of Seller hereunder and the
guaranty/security required pursuant to Section 19.2 remains in effect. This
Agreement shall inure to the benefit of and bind the parties hereto, including
any permitted assignee or successor.
(b) Except as otherwise specified in this Article XXII, no assignment
or disposition of rights hereunder shall (i) relieve or in any way discharge
Seller or Xxxxxxxx from the performance of their respective obligations and
liabilities under this Agreement or (ii) alter, amend, diminish or otherwise
impair Xxxxxxxx' or Seller's rights under this Agreement.
SECTION 22.2
Seller hereby agrees that it shall not sell, transfer, assign, lease or
otherwise dispose of the Facility or any substantial portion thereof or interest
therein necessary to perform Seller's obligations hereunder to any Person that
is a FERC authorized power marketer or an Affiliate of such an entity without
the prior written consent of Xxxxxxxx, which consent shall not be unreasonably
withheld.
53
SECTION 22.3
Except as specifically provided for in this Article XXII, any
assignment or transfer of this Agreement or any rights, duties or interests
hereunder or any disposition of the Facility or any portion thereof or interest
therein by any Party without the written consent of the other Party as provided
herein shall be void and of no force or effect.
SECTION 22.4
Each Party shall reimburse the other for the reasonable costs and
expenses (including reasonable legal fees and expenses) incurred in connection
with a Party's agreement to review, execute and deliver any instruments,
agreements or documents that may be used in connection with any assignment
requested by a Party or otherwise permitted hereunder.
SECTION 22.5
Xxxxxxxx hereby acknowledges that AES Ironwood, Inc., a Delaware
corporation and a party to the Original PPA, has assigned all of its right,
title and interest in and to the Original PPA to Seller. Xxxxxxxx hereby
consents to that assignment and releases AES Ironwood, Inc. from any and all
obligations and liabilities with respect to the Original PPA and this Agreement.
ARTICLE XXIII
NOTICES
SECTION 23.1
All notices, demands, requests or other correspondence required or
permitted under this Agreement shall be in writing and shall be personally
delivered or sent by certified United States mail (postage prepaid, return
receipt requested), overnight express mail, courier service or facsimile
transmission (with the original transmitted by any of the other aforementioned
delivery methods) addressed as follows:
If to Seller to: AES Ironwood, L.L.C.
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Project Manager
(Facsimile): 000-000-0000
54
If to Xxxxxxxx to: Xxxxxxxx Energy Marketing & Trading Company
Xxx Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Contract Management
(Facsimile): 000-000-0000
or to such other Person at such other address as a Party shall designate by like
notice to the other Party.
SECTION 23.2
Unless otherwise provided herein, all notices hereunder shall be deemed
to be given when received or personally delivered.
ARTICLE XXIV
GRATUITIES
SECTION 24.1
Each Party shall prohibit their employees from using their official
position for personal financial gain or from accepting any personal advantage
from anyone under circumstances which might reasonably be interpreted as an
attempt to influence the recipients in the conduct of their official duties.
Neither Party, nor their employees or representatives shall, under circumstances
which might reasonably be interpreted as an attempt to influence the recipients
in the conduct of their duties, extend any gratuity or special favor to
employees of the other Party.
ARTICLE XXV
CAPTIONS
SECTION 25.1
All indices, titles, subject headings, section titles and similar items
in this Agreement are provided for the purpose of reference and convenience only
and are not intended to be inclusive, definitive or to affect the meaning of the
contents or scope of this Agreement.
55
ARTICLE XXVI
CHOICE OF LAWS
SECTION 26.1
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of New York, regardless of the conflicts
of laws provisions of such laws.
ARTICLE XXVII
MISCELLANEOUS PROVISIONS
SECTION 27.1
(a) During the Term of this Agreement hereof and consistent with this
Agreement, Seller shall provide, upon reasonable advance notice, Xxxxxxxx'
employees and/or agents reasonably acceptable to Seller continuing and
unrestricted access to the Facility, the Site, the Interconnection Facilities
(on terms consistent with Seller's interconnection agreement with the Host
Utility) and all other appurtenant electrical equipment at all times and for any
duration for the purpose of (i) verifying, reviewing, and/or monitoring the
operation of the Facility, the Interconnection Facilities and all other
appurtenant electrical equipment for the purpose of determining Seller's
compliance with this Agreement; and (ii) inspecting, examining and testing such
equipment and facilities as specifically authorized under this Agreement.
Xxxxxxxx' employees and/or agents shall be subject to all reasonable rules
applicable to the Facility and the Site with respect to such matters as safety,
operations and confidentiality provided that such rules are applied in a
nondiscriminatory manner. Xxxxxxxx' employees and/or agents shall conduct
themselves so as to not hamper or impede the Facility's operations.
(b) The Parties agree that all information relating to this Agreement
hereof, and the administration or performance hereof by the Parties, including,
but not limited to, any information and records provided to Xxxxxxxx by Seller
under this Section 27.1:
(i) shall not be used for any purposes other than as
contemplated by this Agreement and shall be kept confidential pursuant
to and in accordance with the Confidentiality Agreement attached hereto
as [*]; and
(ii) except as provided in the Confidentiality Agreement,
shall neither be removed from Seller's premises nor be duplicated,
electronically recorded, or recreated in any other manner without
Seller's prior written consent, which consent shall not be
56
unreasonably withheld or delayed, and shall not be released to any
third parties, other than Xxxxxxxx' Affiliates, without Seller's prior
written consent, which consent shall not be unreasonably withheld or
delayed.
SECTION 27.2
The provisions of Article XII, SECTION 14.2, Article XV, and SECTION
27.1 (including the Confidentiality Agreement attached hereto as Appendix 2),
including the rights and obligations of the Parties therein provided, shall
survive the termination or expiration of this Agreement and the performance by
the Parties of their obligations hereunder.
SECTION 27.3
Whether or not the transactions contemplated by this Agreement are
consummated, except as otherwise specifically provided for in this Agreement,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such
expenses.
SECTION 27.4
This Agreement is not intended to confer upon any Person other than the
Parties hereto any rights or remedies hereunder.
SECTION 27.5
Except as otherwise required by law or the rules of the New York Stock
Exchange, for so long as this Agreement is in effect, neither Seller nor
Xxxxxxxx shall, nor shall they permit any of their Affiliates to, issue or cause
the publication of any press release or other public announcement with respect
to any material aspect of the transactions contemplated by this Agreement the
disclosure of which could reasonably be expected to result in an adverse effect
on the competitive position of the other Party without the consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
SECTION 27.6
Xxxxxxxx shall use its commercially reasonable efforts to assist Seller
in achieving the closing of financing for the Facility by Seller, including the
execution of a consent in favor of the Lenders of Seller's collateral assignment
to such Lenders of this Agreement, such consent to be mutually agreed to by
Xxxxxxxx, Seller and the Lenders. Seller shall use its commercially reasonable
efforts to include in its financing documents a provision granting Xxxxxxxx the
initial right to purchase the Facility from the holders of Seller's debt for an
amount equal to the greater of (i) the Fair Market Value of the Facility and
(ii) all amounts then due and owing to such debt
57
holders under Seller's financing documents, in the event that such debt holders
declare an event of default and accelerate amounts due under Seller's financing
documents as a result of an event of default under such documents that is not
caused by a default by Xxxxxxxx under this Agreement.
ARTICLE XXVIII
SUCCESSORS AND ASSIGNS
SECTION 28.1
This Agreement shall inure to the benefit of and be binding upon
Xxxxxxxx and Seller and to the extent permitted hereunder, their respective
successors and assigns.
ARTICLE XXIX
COUNTERPARTS
SECTION 29.1
This Agreement may be executed in separate counterparts by the Parties
hereto, each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument.
ARTICLE XXX
ENTIRE AGREEMENT; SEVERABILITY; AMENDMENT
SECTION 30.1
This Agreement, including all Appendices hereto, constitutes the entire
agreement between the Parties hereto with respect to the matters contained
herein, and all prior agreements with respect to the matters covered herein,
including Amendment No. 1, the Letter Agreement and the Second Letter Agreement,
are superseded, and each Party confirms that it is not relying upon any
representations or warranties of the other Party, except as specifically set
forth herein or incorporated by reference hereto.
58
SECTION 30.2
Should any provision of this Agreement be held to be invalid or
unenforceable, such provision shall be invalid or unenforceable only to the
extent of such invalidity or unenforceability without invalidating or rendering
unenforceable any other provision hereof.
SECTION 30.3
This Agreement may not be amended or modified except by a written
instrument signed by each of the Parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
AES IRONWOOD, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
XXXXXXXX ENERGY MARKETING & TRADING
COMPANY
By:
-----------------------------
Name:
Title:
[AMENDED AND RESTATED POWER PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first set forth
above.
AES IRONWOOD, L.L.C.
By:
-----------------------------
Name:
Title:
XXXXXXXX ENERGY MARKETING & TRADING
COMPANY
By:/s/ Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxx
Title: President
[AMENDED AND RESTATED POWER PURCHASE AGREEMENT]
APPENDIX 1
[*]
1--1
APPENDIX 2
[*]
APPENDIX 3
[*]
3--1
APPENDIX 4.A
[*]
4.A--1
APPENDIX 4.B
[*]
4.B--1
APPENDIX 5
[*]
APPENDIX 6
[*]
APPENDIX 7
[*]
7--1
APPENDIX 8
[*]
8--1
An Asterisk ([*]) indicates that confidential information has been
omitted and filed separately with the Securities and Exchange Commission as part
of a Confidential Treatment Request.
AMENDMENT NO. 1 TO
AMENDED AND RESTATED
POWER PURCHASE AGREEMENT
AMENDMENT NO. 1 TO AMENDED AND RESTATED POWER PURCHASE AGREEMENT, dated
as of June 18, 1999 ("Amendment No. 1") by and among AES Ironwood, L.L.C., a
Delaware limited liability company ("Seller") and Xxxxxxxx Energy Marketing &
Trading Company, a Delaware company ("Xxxxxxxx") (Seller and Xxxxxxxx each
hereinafter referred to as "Party" and collectively as the "Parties").
RECITALS
WHEREAS, Seller and Xxxxxxxx have entered into that certain Amended and
Restated Power Purchase Agreement, dated as of February 5, 1999 (the "PPA")
pursuant to which Ironwood has agreed, subject to the terms and conditions set
forth in the PPA, to sell to Xxxxxxxx certain capacity and ancillary services
and to provide to Xxxxxxxx energy conversion services; and
WHEREAS, the Parties desire to amend the PPA as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and for
other consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto each hereby agrees as follows:
AGREEMENT
SECTION 1. Capitalized Terms. Capitalized terms used but not defined
herein shall have the meanings specified in the PPA.
SECTION 2. Amendments. The PPA is hereby amended as follows:
(a) Section 1.1 of the PPA is hereby amended by revising the term "Gas
Facilities" set forth therein in the definition of "Force Majeure"
to read: "Gas Interconnection Facilities."
(b) [*]
(c) [*]
(d) [*]
-1-
SECTION 3. Miscellaneous.
(1) Governing Law; Consent to Jurisdiction. This Amendment No. 1 shall
be governed by, and construed in accordance with, the law of the State of New
York.
(2) Headings. Headings in this Amendment No. 1 are included herein for
convenience of reference only and shall not constitute a part of this Amendment
No. 1 for any other purpose.
(3) Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, which when so executed and delivered shall constitute one and the
same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-2-
IN WITNESS WHEREOF, each party hereto has caused this Amendment No. 1
to be executed by its authorized representative as of the date first written
above.
AES IRONWOOD, L.L.C.
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
XXXXXXXX ENERGY MARKETING &
TRADING COMPANY
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
[AMENDMENT NO. 1 TO PPA]
