Common use of OBLIGATION TO SERVE Clause in Contracts

OBLIGATION TO SERVE. West Kootenay Power retains the obligation to serve every customer until that customer elects to leave the embedded cost power service of West Kootenay Power. In the event of partial supply customers, West Kootenay Power retains an obligation to serve the portion of a customer’s load that remains with the Utility (subject to the provisions set out below under the section entitled Partial Supply). West Kootenay Power retains the obligation to provide transmission and distribution service to all customers within its service territory. West Kootenay Power also retains the obligation to serve at embedded cost rates any new load entering its service territory, any additional load attributable to its existing customers, and returning Eligible Customers, under the Re-entry Provisions outlined below. West Kootenay Power will provide short term backup service on a reasonable-efforts basis to Eligible Customers within its service territory for the period required by those Eligible Customers for the unanticipated loss of firm supply. For this service, West Kootenay Power will charge the higher of the market buy price or the cost of the marginal unit in West Kootenay Power’s supply portfolio if West Kootenay Power supplies from its portfolio. The price charged will be determined retrospectively and will apply to the full period of service. In addition, West Kootenay Power may charge additional administrative costs reasonably incurred by the Utility to provide this power supply. It is acknowledged that existing contracts between the Utility and Eligible Customers will not be abrogated. However, it is recognized that West Kootenay Power has a need for notice before the departure of any Eligible Customer and, therefore, it will be desirable if contracts are renegotiated in a timely fashion. In this regard, the City of Kelowna and the City of ▇▇▇▇▇▇ will provide notice of intent to leave the Utility or to enter into a new contract for bundled service by April 1, 1999. All other Eligible Customers that have contracts with an expiry date beyond 1999 will provide notice of intent to leave or to enter into a new contract for bundled service at least two years prior to the expiration of their bundled service contracts. Failure to provide such notice of intent to leave will expose these Eligible Customers to any costs imposed on remaining customers, as defined in the Re-entry Provisions below. If after giving notice of intent to stay, the Eligible Customer and West Kootenay Power are unable to conclude a mutually satisfactory contract and one or both parties believes this to be the result of the conduct of the other party, the Commission may be asked to grant protection from any costs implied by other parts of this agreement. West Kootenay Power will enter into good faith negotiations with any Eligible Customer desiring to enter into a new contract at embedded cost rates. Any new contract will be subject to Commission approval. In any case, West Kootenay Power will include in all new contracts a condition that any Eligible Customer must provide at least two years’ notice of early termination, West Kootenay Power will use reasonable efforts to accommodate, in a manner that results in Fair Treatment, a departure such that no stranded cost payment is required. If such an accommodation cannot be found, Eligible Customers that leave West Kootenay Power during the notice period, taking with them 25% of their prior year’s load or less, will pay mitigated stranded costs, if any, for the lesser of the remaining term of the notice period or two years. If an Eligible Customer takes with it more than 25% of its prior year’s load, or if an Eligible Customer’s monthly load factor in any month decreases by more than 20% as a result of going to market, or if the combined departure of all Eligible Customers’ load exceeds 10% in any year of the Eligible Customers’ total aggregate load at the end of the previous year, the Eligible Customer will pay mitigated stranded costs, if any, for a period of five years less any part of the notice period during which the Eligible Customer remained with West Kootenay Power for its total load. Within 15 business days of a request, West Kootenay Power will calculate for both a two-year and a five-year period the payments required to ensure that the revenue requirement of remaining customers is not increased from that which is expected to have occurred if the Eligible Customer had not departed early. New Eligible Customers have the right to be served entirely through an alternate supplier without attracting any of the stranded cost provisions described above.