Common use of Third Phase Clause in Contracts

Third Phase. The “Third Phase” of a NCPA Project consists of all work performed after one or more NCPA Members has contracted with NCPA pursuant to a Third Phase Agreement to participate in the financing, construction, operation, and maintenance, and/or rights to the output, of the NCPA Project. Nothing herein prevents the combination of the Second and Third Phases, if NCPA and the participating NCPA Members so agree. Third Phase Agreements shall be written as “take-or-pay” (“hell-or-high-water”) agreements to the greatest extent possible, so as to insulate NCPA and all Members who are not Project Participants from liability arising from the NCPA Project. Third Phase Agreements shall obligate Project Participants to treat all Project Costs as operation and maintenance expenses of their respective Electric Systems, and shall pledge the Project Participant’s obligation to raise electric rates and/or increase Revenues upon demand of NCPA so as to pay such Project Costs.