EXHIBIT 10.73
Interconnection and Integration Facilities Agreement
Between Southern California Edison Company
and China Lake Joint Venture
Navy 2 Project - QFID No. 3029
1. Parties:
This Interconnection and Integration Facilities Agreement ("Agreement") is
entered into by China Lake Joint Venture ("Seller") and Southern California
Edison Company, a California corporation ("Edison"), individually "Party",
collectively "Parties".
2. Recitals:
This Agreement is made with reference to the following facts, among others:
2.1 China Lake Joint Venture executed the Power Purchase Contract between
Southern California Edison Company and China Lake Joint Venture on February 1,
1985 ("Navy 2 Contract") for a 75 MW nameplate project ("Navy 2 Project").
2.2 In accordance with Decision ▇▇-▇▇-▇▇▇ and Decision ▇▇-▇▇-▇▇▇ of the
California Public Utilities Commission ("CPUC") the effective date of the
Contract is June 28, 1985.
2.3 The Navy 2 Contract was executed subsequent to January 16, 1985 and,
therefore, is governed by the provisions of the Qualifying Facility Milestone
Procedure ("QFMP") which is attached hereto and made a part hereof as Attachment
C.
2.4 Edison's Rule 21, in effect at the time the Contract was signed, ordered
appended to the Contract by CPUC Decision ▇▇-▇▇-▇▇▇ and Rule 2, are attached
hereto and made a part hereof as Attachment B.
2.5 An Interconnection Facilities Agreement has not previously been executed for
the Project.
2.6 Edison has identified certain Interconnection an Integration Facilities,
consisting of substation, subtransmission, and transmission facilities, which it
believes are required to be constructed to permit Edison to accept and integrate
into its electric system the 75 MW of Nameplate Capacity represented by the
Project, along with 455 MW to be produced by six other qualifying facility
projects having equal transmission priority with Seller ("Other QF Projects").
Such other QF Projects are planned to be developed by Coso Energy Developers and
▇▇▇ Partnership Management ("Other QF Developers"). The Interconnection and
Integration Facilities are described in Attachment A which is attached hereto
and made a part hereof.
2.7 Edison has determined that the Interconnection and Integration Facilities
include the 220 kV transmission line from the project site to a point near
Edison's Inyokern Substation, the Inyokern-
▇▇▇▇▇▇ Circuit, facilities at ▇▇▇▇▇▇ Substation necessary to permit
interconnection and integration, Permanent 220 kV Facilities and Interim
Facilities. Edison has determined that the Interim Facilities are necessary to
provide for integration of the Project's 75 MW of Nameplate Capacity into the
Edison system until the Permanent 220 kV Facilities can be completed. Edison has
informed Seller that timely construction of the Interim Facilities is the only
viable method of accommodating Seller's generation schedule.
2.8 Seller has executed letters dated July 15, July 27, and August 10, 1988
indicating its agreement, under protest, to the provisions described in Sections
2.6 and 2.7.
2.9 The Interconnection and Integration Facilities identified in this Agreement
will permit the interconnection and integration of the Project with Edison's
electrical system.
2.10 The Interconnection and Integration Facilities for the Project shall be
installed and owned by Seller and Edison, respectively, as outlined in
Attachment A hereto.
2.11 Seller and Edison are in disagreement over several matters regarding the
method of interconnecting and integrating the Project with Edison's electric
system. Specifically, Seller and Edison are in disagreement on the following
points:
2.11.1 The allocation of cost between Seller and Edison for the Interim 115 kV
Facilities.
2.11.2 The allocation of cost between Seller and Edison for the Permanent 220 kV
Facilities.
2.11.3 The point at which Seller shall deliver its power to Edison.
2.11.4 The allocation of transmission line losses between Seller and Edison for
the Interim 115 kV Facilities.
2.12 As stated in Section 2.11.2 above, Seller and Edison disagree on the
allocation of costs between Seller and Edison for the Permanent 220 kV
Facilities. Seller believes that the full cost of the Permanent 220 kV
Facilities should be allocated to Edison's ratepayers in accordance with CPUC
rules and decisions, including Decisions ▇▇-▇▇-▇▇▇, ▇▇-▇▇-▇▇▇, and ▇▇-▇▇-▇▇▇.
Edison does not believe the CPUC intends that Edison's ratepayers should bear
the cost of facilities required to interconnect and integrate QF power into the
utility system.
3. Definitions:
The following terms, when used herein with initial capitalization, whether in
the singular or in the plural, shall have the following meanings:
3.1 Added Facilities: Those portions of the Edison owned Interconnection and
Integration Facilities which will be owned and financed by Edison for the
benefit of the Project and to be paid for by Seller in accordance with the
attached Application and Contract for Interconnection
and Integration Facilities plus Operation and Maintenance (Attachment A) and
Rule 2. The Interim 115 kV facilities are not Added Facilities.
3.2 Contract: The Navy 2 Contract.
3.3 CPUC Charges: Those expenses of the CPUC for performance of its
certification and environmental review activities for which Edison provides
reimbursement.
3.4 Generating Facilities: All of Seller's generators, together with all
protective and other associated equipment and improvements, necessary to produce
electrical power at the Project, excluding associated land, land rights, and
interests in land.
3.5 Interconnection and Integration Facilities: Those protection, metering,
electric line(s), and other facilities described in pages 8 through 10 of
Attachment A which Edison has determined to be necessary to permit the efficient
integration of power produced at Seller's Generating Facilities, along with that
power produced by the Other QF Projects into Edison's electric system.
3.6 Interim 115 kV Facilities: The removal, rebuild, and upgrade of Edison's
existing double-circuit ▇▇▇▇▇▇-▇▇▇▇▇▇ 115 kV transmission line and related
termination facilities. The Interim 115 kV Facilities are a part of the Interim
Interconnection Facilities.
3.7 Interim Interconnection Facilities: Those Interconnection and Integration
Facilities which Edison has determined to be necessary to accommodate Seller's
scheduled operation date and to permit operation of Seller's Generating
Facilities in parallel with the Edison electric system pending construction of
all of the Permanent 220 kV Facilities. These facilities include, but are not
limited to, the Inyokern-▇▇▇▇▇▇ Circuit, the Interim 115 kV Facilities, upgrades
at ▇▇▇▇▇▇, ▇▇▇▇▇▇, and ▇▇▇▇ Substations, and all protection necessary in
Edison's sole judgment to effect the interconnection and integration of Seller's
Project.
3.8 Inyokern-▇▇▇▇▇▇ Circuit: The 220 kV transmission circuit beginning near
Inyokern Substation and ending at ▇▇▇▇▇▇ Substation to be installed on the
vacant side of Edison's existing Inyokern-▇▇▇▇▇▇ 220 kV tower line.
3.9 Nameplate Capacity: That rating specified in Section 1.2 of the Contract.
3.10 Permanent 220 kV Facilities: Those Interconnection and Integration
Facilities to be owned and operated by Edison which Edison has determined are
required for the permanent interconnection and integration of the Generating
Facilities and the Other QF Projects. These facilities include, but are not
limited to, the Inyokern-▇▇▇▇▇▇ Circuit, the necessary substation upgrades at
▇▇▇▇▇▇, ▇▇▇▇▇▇, and ▇▇▇▇ Substations, a new double circuit 220 kV transmission
line from ▇▇▇▇▇▇ Substation to ▇▇▇▇▇▇ Substation and all protection necessary in
Edison's sole judgment to effect the interconnection.
3.11 Project: The Navy 2 Project.
4. Agreement:
In consideration of the premises and the mutual covenants and promises contained
herein, Edison and Seller agree that the Interconnection and Integration
Facilities shall be installed by Seller and Edison, respectively, as outlined in
Attachment A hereto for the purpose of interconnecting and integrating the
Generating Facilities to Edison's electrical system. The Parties further agree
as follows:
4.1 Interconnection and Integration Facilities:
4.1.1 Seller acknowledges that Seller has read Edison's Tariff Rule No. 21 and
the QFMP and understands Seller's obligations and the consequences to Seller, as
set forth in the QFMP, for failure to satisfy any of the milestones in the QFMP.
4.1.2 Seller, at its sole expense, shall design, purchase the required
equipment, construct, operate and maintain Seller-owned Interconnection and
Integration Facilities as outlined in page 8 of Attachment ▇. ▇▇▇▇▇▇ shall
review the design of these facilities as to the adequacy of the protective
apparatus provided. Any additions or modifications required by Edison shall be
incorporated by Seller.
4.1.3 Seller, at its own initial expense, shall procure equipment for and
construct, to Edison specifications, the Inyokern-▇▇▇▇▇▇ Circuit, as described
in Attachment A hereto. Within thirty days after completion of said facilities
and before said facilities are placed in service, Seller shall transfer
ownership of the Inyokern-▇▇▇▇▇▇ Circuit to Edison in a manner acceptable to
Edison. The facilities shall be free and clear of liens and encumbrances. To the
extent that the CPUC determines, pursuant to Section 4.1.6, that Seller is cost
responsible for all or a portion of the cost of the Inyokern-▇▇▇▇▇▇ Circuit,
Seller shall pay applicable Contribution in Aid of Construction ("CIAC") tax on
this transfer upon demand of Edison.
4.1.4 Edison shall design, purchase, construct, own, operate, and maintain the
Added Facilities and the Interim 115 kV Facilities. The cost of these facilities
shall be paid pursuant to the terms of this Agreement. Edison shall own,
operate, and maintain the Inyokern-▇▇▇▇▇▇ circuit. Edison shall use its best
efforts to obtain a Certificate of Public Convenience and Necessity ("CPCN")
from the CPUC for a new double circuit 220 kV transmission line from ▇▇▇▇▇▇
Substation to ▇▇▇▇▇▇ Substation and shall obtain other necessary permits for the
Edison installed Interconnection and Integration Facilities as outlined on pages
8 and 9 of Attachment A.
4.1.5 Seller has informed Edison that it is imperative that a decision be
reached on the issue recited in Sections 2.11.2 and 2.12 at the earliest
opportunity in order to ensure that Seller can meet its financing deadlines,
obtain certain tax credits and satisfy other obligations. The Parties shall use
their best efforts and cooperate fully with each other in an effort to file a
pleading presenting the issue of cost allocation set forth in Sections 2.11.2
and 2.12 to the CPUC by January 11, 1989 in order to obtain a CPUC decision on
or before April 3, 1989. After such pleading has been filed with the CPUC:
*If a CPUC decision is not obtained by that April 3, 1989, the Parties are
released from any further obligation to pursue the issue
*Should it become apparent that it will not be possible to obtain a decision by
April 3, 1989, Seller may elect to be released from any further obligation to
pursue the issue before the CPUC by (1) giving Edison 15 days written notice of
its intent to no longer pursue the issue before the CPUC and, (2) specifying in
such notice the reason(s) for providing such notice.
4.1.6 Cost Responsibility
4.1.6.1 Prior to the CPUC determination referenced in Section 4.1.5 above, cost
responsibility for the Permanent 220 kV Facilities shall be as follows:
a. All of Edison's costs related to the Inyokern-▇▇▇▇▇▇ Circuit including
engineering, design, and line terminations, shall be shared equally between
Edison and Seller.
b. All costs of the Permanent 220 kV Facilities installed by Edison, except
those referred to in (a.) above, shall be shared between Seller, Edison and
Other QF Developers.
c. Seller shall pay its portion of the cost of the Permanent 220 kV Facilities
specified in Sections 4.1.6.1 (a) and (b) on the Added Facilities basis pursuant
to Section 1 of Attachment A. Seller agrees to post Added Facilities security
for its share of the cost in accordance with page A-13, Attachment A. Seller, at
its option and risk, may post additional Added Facilities security and request
Edison to accelerate engineering and procurement for the Permanent 220 kV
Facilities. In the event a CPCN is not granted, Seller shall forfeit the amount
of Added Facilities security which covers Edison's costs.
d. Upon completion of the Inyokern-▇▇▇▇▇▇ Circuit and its transfer of ownership
pursuant to Section 4.1.3, the Inyokern-▇▇▇▇▇▇ Circuit shall be considered as
Added Facilities. However, in consideration of Seller having paid the cost of
installing the Inyokern-▇▇▇▇▇▇ Circuit, Edison will not require Seller to post
additional added facilities security for this facility. Additionally, Edison
shall not initially include the value of the Inyokern-▇▇▇▇▇▇ Circuit in the
added investment base for determining Added Facilities charges pursuant to
Section 1 of Attachment A. Rather, Edison shall subtract the equivalent of a
monthly Added Facilities charge for the Inyokern-▇▇▇▇▇▇ Circuit from the value
of the circuit, as determined by its installation cost, until the installation
cost balance is zero. At that time, the value of the Inyokern-▇▇▇▇▇▇ Circuit
shall be added to the added investment base and Seller shall begin payment of a
monthly added facilities charge for this circuit pursuant to Section 1 of
Appendix A.
e. If the Other QF Developers refuse to or fail to fund their share of the cost
of the Permanent 220 kV Facilities to be installed by Edison prior to the CPUC
determination referenced in Section 4.1.5, Edison will review the scope of the
Permanent 220 kV Facilities. In the absence of development by Other QF
Developers, the scope of the Edison-installed Interconnection and Integration
Facilities and estimated costs as specified in Attachment A herein may be
modified by mutual agreement of the Parties.
4.1.6.2 Following CPUC determination referenced in Section 4.1.5 above or the
decision of the California Supreme Court or the United States Supreme Court on
appeal, costs for the Permanent 220 kV Facilities which are so determined to be
Seller's responsibility shall be borne and paid for by Seller.
4.1.6.3 Following CPUC determination referenced in Section 4.1.5 above or the
decision of the California Supreme Court or the United States Supreme Court on
appeal, costs for the Permanent 220 kV Facilities which are so determined to be
Edison's responsibility shall be borne and paid for by Edison.
4.1.6.4 Adjustments in the amount of required Added Facilities security for the
Permanent 220 kV Facilities as a result of the CPUC determination referenced in
Section 4.1.5 shall be made in accordance with the provisions of Section 4 of
Attachment A.
4.1.7 Costs of the Interim 115 kV Facilities, which are being installed at the
request of Seller and Other QF Developers to avoid curtailment beyond that
provided for in the Contract, are intended to be shared between Seller and Other
QF Developers. Based on Seller's pro-rated share of transmission capacity on
these facilities, Seller shall be responsible for 24.2% of the cost of said
facilities. Seller shall pay applicable CIAC tax on this payment upon demand of
Edison.
4.1.8 Seller shall pay to Edison quarterly payments in the amount and according
to the schedule specified on page A-12 of Attachment A for Seller's share of the
estimated cost of the Interim 115 kV Facilities.
4.1.9 Upon issuance of a final order by the CPUC determining the cost
responsibility of the Parties and the exhaustion of any appeals of that
decision, Edison shall determine the final amount of Added Facilities security
required in accordance with Attachment ▇. ▇▇▇▇▇▇, as appropriate, shall invoice
Seller for any additional Added Facilities security required or release any
excess security. The additional Added Facilities security shall be provided
within sixty days following the date of said invoice. If Edison determines that
the amount of Added Facilities security required is less than the amount
previously posted by Seller, Seller may reduce the amount of Added Facilities
security accordingly.
4.1.9.1 Following determination of cost responsibility for the Permanent 220 kV
Facilities by the CPUC and the exhaustion of any appeals of that decision, if
Seller elects to amend this Agreement to provide for a capital contribution for
the facilities instead of continuing on an Added Facilities basis, Edison shall
determine the amount of capital contribution due and invoice Seller. Payment
shall be due 60 days following the date of said invoice. Seller may authorize
Edison to collect on the Added Facilities security and credit it as payment
toward the capital contribution. Any Added Facilities security which is not
applied toward said capital contribution shall be refunded by Edison within 60
days following Seller's payment of the entire capital contribution.
4.1.9.2 If Seller chooses to pay a capital contribution for the facilities for
which costs are allocated to Seller, rather than pay on the Added Facilities
basis, Seller shall pay applicable CIAC tax as determined by Edison on its
contribution.
4.1.10 In addition to the payments and security specified in Sections 4.1.6.1
(c), 4.1.8 and 4.1.9 above, Seller shall establish and provide to Edison
security which shall cover the period of time the existing ▇▇▇▇▇▇-▇▇▇▇▇▇ 115 kV
transmission line is being removed and engineering and construction are in
progress on the rebuild of the new ▇▇▇▇▇▇-▇▇▇▇▇▇ 115 kV transmission line. The
security shall be in a form acceptable to Edison and shall be of an amount
sufficient to cover 24.2% the total cost of rebuilding the existing ▇▇▇▇▇▇-
▇▇▇▇▇▇ 115 kV transmission line. The amount shall be determined by Edison.
Alternatively, Seller may elect to advance the quarterly payments specified in
the Payment Schedule (Interim 115 kV Facilities) in Attachment A-12 of
Attachment A to cover the cost of rebuilding the existing ▇▇▇▇▇▇-▇▇▇▇▇▇ 115 kV
transmission line before removal of the existing 115 kV facilities is begun.
4.1.11 Notwithstanding the provisions of Section 13 of the Contract, Seller,
having elected to own, operate, and maintain a portion of the Interconnection
and Integration Facilities, shall accept all liability and release Edison from
and indemnify Edison against any liability for faults or damage to the Seller-
owned Interconnection and Integration Facilities, the Edison electric system and
the public as a result of the operation of Seller's Generating Facilities or the
Seller-owned Interconnection and Integration Facilities.
4.1.12 operation and maintenance of the Permanent 220 kV Facilities shall be
paid pursuant to the Attachment A.
4.1.13 Edison shall review any changes in the design of the Seller-installed
Interconnection and Integration Facilities and may require modifications to the
design as it deems necessary for proper protection and safe operation of the
Generating Facilities when in parallel with the Edison electric system. -Seller
shall be notified of the results of such review by Edison, in writing, within 30
days of the receipt of all specifications related to the proposed design
changes. Any comments by Edison regarding the proposed design changes shall be
described in the written notice.
4.1.14 Upon completion of the Interim Interconnection Facilities, Seller may
interconnect 75 MW of Nameplate Capacity to Edison's electric system at the
connection point of the Seller-owned 220 kV transmission line and the Inyokern-
▇▇▇▇▇▇ Circuit near Inyokern Substation. During the period preceding the
completion of the Permanent 220 kV Facilities, Seller shall be responsible for
its share of transmission losses on the Interim Interconnection Facilities in
excess of normal Edison transmission losses. A loss compensation factor shall be
calculated by Edison, reviewed with Seller, and applied to Seller's meter
readings at ▇▇▇▇▇▇ Substation to cover losses to ▇▇▇▇▇▇ Substation.
4.1.15 Upon the completion of the Interconnection and Integration Facilities
covered by this Agreement, Seller shall be entitled to interconnect the 75 MW of
Nameplate Capacity specified
by the Contract to Edison's electrical system at the connection point of the
Seller-owned 220 kV transmission line and the Inyokern-▇▇▇▇▇▇ Circuit near
Inyokern Substation.
4.1.16 The capacity and associated energy purchased under the Contract and that
of one of the Other QF Projects (Coso Energy Developers' BLM Project) shall be
metered at 220 kV at ▇▇▇▇▇▇ Substation for all kWh's received and purchased by
Edison. The Project and the BLM Project shall also be individually metered at
their project sites. Payment for capacity and associated energy shall be based
upon the ▇▇▇▇▇▇ Substation meter and said payment shall be prorated to the
Contract and the contract of the BLM Project based upon the project site meters.
4.1.17 To the extent that ▇▇▇▇▇▇ ▇▇▇▇▇ it necessary to effect the arrangements
contemplated by this Agreement, Edison may, from time to time, design, install
operate, maintain, modify, replace, repair, or remove any or all of the
Interconnection and Integration Facilities. Any additions, modifications, or
replacement of equipment shall be treated as Interconnection and Integration
Facilities. If Edison modifies the Permanent 220 kV Facilities in accordance
with the foregoing prior to issuance of a final CPUC order on cost
responsibility or exhaustion of the rights of the Parties to appeal, the cost of
such change shall be shared by Edison, Seller, and the Other QF Projects and
shall be included in Seller's and Edison's joint application to the CPUC. If
Edison modifies the Permanent 220 kV Facilities following a final CPUC order on
cost responsibility or exhaustion of the rights of the Parties to appeal, such
costs will be paid by Seller consistent with said CPUC order or appeal. If
changes involve the Interim 115 kV Facilities prior to the completion of the
Permanent 220 kV Facilities, the cost of such additions, modifications, and
replacements shall be paid by Seller on a one-time basis and the material and
equipment costs added to this Agreement by amendment.
4.1.18 Equipment and/or protective apparatus which, in the opinion of Edison, is
no longer required shall be deleted from this Agreement and any Added Facilities
or operation and maintenance costs attributable to Seller shall be reduced
accordingly.
4.2 The Parties agree that nothing in this Agreement should be construed as a
waiver of Seller's rights to seek a CPUC or other judicial determination with
regard to the areas of disagreement stated in Sections 2.11.1, 2.11.3, 2.11. 4
or to appeal such determination to the appropriate appellate forum. If Seller
seeks such a determination and the determination differs from the arrangements
provided for in this Agreement, the Parties agree to amend this Agreement to
reflect such CPUC or judicial determination and make such payment and/or billing
adjustments as required. Should Seller choose to appeal a CPUC or judicial
determination, the Parties agree to amend this Agreement to reflect the results
of such appeal.
4.3 Upon its effective date, this Agreement shall become a part of the Contract.
Certain provisions of this Agreement are inconsistent with provisions of the
Contract. Where inconsistencies occur, the Parties agree that the provisions of
this Agreement shall control.
4.4 This Agreement contemplates that an Interconnection and Integration
Facilities Agreement will be entered into between Edison and the Other QF
Developers. In the event the Other QF Developers do not execute Agreements which
contain substantially the same agreement
regarding cost and payment responsibility for the Interim 115 kV Facilities and
Permanent 220 kV Facilities as contained in this Agreement prior to or within 15
days after the execution of this Agreement or Edison determines that one or more
of the Other QF Developers has failed to make a payment under its Agreement with
Edison, then, Edison and Seller shall amend this Agreement to: (1) grant Seller
and those other QF Projects that have signed Interconnection and Integration
Facilities Agreements and made required payments to Edison, the exclusive use,
other than use by Edison occurring incidentally when the line is not loaded with
Seller's power and power generated by those Other QF Projects, of the Interim
115 kV Facilities. Such grant of exclusive use shall be for the contractually
specified nameplate capacity and for the full term of this Agreement; (2)
increase Seller's share of the cost of the Interim 115 kV Facilities to 50% and
(3) revise the terms of this Agreement as necessary to reflect the change in
facilities and cost including possible elimination of the need for the Permanent
220 kV Facilities.
5. Effective Date:
This Agreement shall become effective when it has been duly executed by the
Parties.
6. Termination:
Seller may terminate this Agreement at any time by providing Edison with written
notice. Such notice shall be sufficient if delivered in person or sent by
certified mail, postage prepaid, return receipt requested, to Edison as follows:
Southern California Edison Company,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Secretary
In the event of such termination, Seller shall, pursuant to Sections 3 and 6 of
Attachment A, reimburse Edison for any expenses incurred.
7. Multiple Originals:
This Agreement is executed in two counterparts, each of which shall be deemed an
original.
8. Previous Communications
This Agreement contains the entire agreement and understanding between the
Parties, their agents, and employees as to the subject matter of this Agreement,
and merges and supersedes all prior agreements, commitments, representations,
and discussions between the Parties specifically
including, but not limited to, the letters from Seller to Edison dated July 15,
July 27 and August 10, 1988 referenced in Section 2.8 herein. No Party shall be
bound to any other obligations, conditions, or representations with respect to
the subject matter of this Agreement.
9. Nonwaiver
None of the provisions of the Agreement shall be considered waived by either
Party except when such waiver is given in writing. The failure of either Edison
or Seller to insist on any one or more instances upon strict performance of any
of the provision of the Agreement or to take advantage of any of its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights for the future, but the same shall continue to
remain in full force and effect.
10. Governing Law
This Agreement shall be interpreted, governed, and construed under the laws of
the State of California as if executed and to be performed wholly within the
State of California.
Signature
In witness whereof, the Parties hereto have executed this Agreement this 15th
day of December, 1988.
SOUTHERN CALIFORNIA EDISON COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
CHINA LAKE JOINT VENTURE
By CALIFORNIA ENERGY COMPANY, as
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
Attachment A - Application And Contract For Interconnection Facilities Plus
Operation And Maintenance Added Facilities Basis
("Application and Contract")
Seller hereby requests Edison to provide the Added Facilities described on pages
A-8 thru A-10 hereof. Added Facilities shall be provided in accordance with the
applicable Tariff Schedules of Edison. In consideration of Edison's acceptance
of this Application and Contract, Seller hereby agrees to the following:
1. Seller shall pay a monthly charge for the Added Facilities in the amount of
.9% of the added investment as determined by Edison and as entered by Edison on
page A-11. The monthly charge does not include an operation and maintenance
expense. The monthly charge shall be adjusted periodically in accordance with
future CPUC determination pursuant to Rule 2. The monthly charge shall commence
on the date the Added Facilities are available for u M and may be based upon
estimated costs of the Added Facilities. When the recorded book cost of the
Added Facilities has been determined by Edison, the charges shall be adjusted
retroactively-to the date when such facilities were first available for use.
Additional charges resulting from such adjustment shall, unless otherwise
mutually agreed, be payable within thirty (30) days from the date of
presentation of a ▇▇▇▇ therefor. Any credits resulting from such adjustment
shall, unless otherwise mutually agreed, be refunded within thirty (30) days
following demand of Seller.
2. If the decision of the CPUC or California Supreme Court or United States
Supreme Court on appeal regarding cost responsibility pursuant to Section 4.1.5
of the Agreement directs that Seller is responsible for operation and
maintenance costs of some or all of the Permanent 220 kV Facilities, Seller
shall pay a monthly charge for such facilities' operation and maintenance in the
amount of 0.8% of that portion of the added investment for which Seller has so
been determined to be cost-responsible. The monthly operation and maintenance
charge shall be adjusted periodically in accordance with the pro-rated operation
and maintenance charges for added facilities pursuant to Tariff Rule No. 2. The
monthly charge may be based upon estimated costs of the facilities as entered on
page A-11 herein and when the recorded book cost of such facilities has been
determined by Edison, the charges shall be adjusted retroactively to the date
when such facilities were first available for use. Additional charges resulting
from such adjustment shall, unless other terms are mutually agreed upon, be
payable within thirty (30) days from the date of presentation of a ▇▇▇▇
therefor. Any credits resulting from such adjustment shall, unless other terms
are mutually agreed upon, be refunded with thirty (30) days from presentation of
request by Seller.
3. In the event Seller abandons its plans for installation of the Project, for
any reason whatsoever, including failure to obtain any required permits, Seller
shall reimburse Edison upon receipt of supporting documentation for any and all
expenses incurred by Edison pursuant to this Application and Contract within
thirty (30) days after presentation of a ▇▇▇▇ therefor.
4. Whenever a change is made in the Added Facilities which results in changes in
the added investment, the monthly charges pursuant to Sections 1 and 2 and
security posted pursuant to
Section 7 of this Application and Contract shall be adjusted on the basis of the
revised added investment. The description of the Added Facilities shall be
amended by Edison to reflect any changes in equipment, installation and removal
cost, amount of added investment, and monthly charge resulting from any such
change in the Added Facilities or adjustment as aforesaid.
5. All monthly charges payable hereunder shall commence upon the date when said
Added Facilities are available for use and shall first be payable fifteen (15)
days after Edison submits the first ▇▇▇▇ therefor and shall continue until the
termination of the Contract or the abandonment of the Project.
6. If the Interconnection and Integration Facilities are abandoned by
termination of service or otherwise, prior to five (5) years from the date said
facilities are available for use, Seller shall pay to Edison the estimated cost
of equipment installation plus the cost of removing the Added Facilities less
the estimated salvage value, within thirty (30) days after presentation of a
▇▇▇▇ therefor. Alternatively, Seller may pay to Edison, as a single payment, the
sum of the monthly charges from Sections 1, 2, and 4 hereof for the period
beginning on the date on which said facilities are to be removed and ending on a
date five (5) years from the date on which monthly charges commenced pursuant to
provisions of Sections 1 and 2 hereof. Such alternative payment shall be made
within thirty (30) days of Seller's receipt of a ▇▇▇▇ from Edison. If the Added
Facilities have been only partially constructed prior to such abandonment,
Seller agrees to pay to Edison the amount expended by Edison (not exceeding the
estimated installation and removal cost) for installing and removing the
partially constructed Added Facilities within thirty (30) days after
presentation of a ▇▇▇▇ therefor. If the Added Facilities are abandoned solely by
Edison, as of the date of abandonment, Seller's obligation to pay monthly
charges, pursuant to Sections 1, 2 and 4 hereof, shall terminate and Seller
shall not have any obligation to pay the charges described in this Section 6.
Seller may apply the value of Seller's Added Facilities security pursuant to
Section 7 hereof, to the foregoing payments.
7. Seller shall provide evidence, to Edison's satisfaction, of Seller's ability
to perform its obligations pursuant to Section 6 above. Seller shall provide to
Edison said evidence by means of a performance bond, Letter of Credit, an escrow
account, or other evidence as agreed to by both Parties. Seller may post Added
Facilities security in quarterly increments identified on page A-13 of this
Attachment A. Seller shall post security in the amount indicated on page A-13 to
bring the payments current within fifteen (15) days following execution of this
Application and Contract.
8. Seller agrees to utilize the Added Facilities in accordance with good
operating practice and to reimburse Edison for damage to said facilities
occasioned or caused by the Seller or any of his agents, employees or licensees.
Failure so to exercise due diligence in the utilization of said Added Facilities
shall give Edison the right to terminate this Application and Contract, to
remove said facilities and to demand immediate reimbursement for the equipment
installation and removal costs, less the estimated salvage value if the
facilities are removed within five (5) years from the date of this Application
and Contract.
9. Edison's performance under this Application and Contract is subject to the
receipt of permits, including but not limited to a Certificate of Public
Convenience and Necessity for the Permanent
220 kV facilities, the availability of materials required to provide the
Interconnection and Integration Facilities provided for herein and to all
applicable Tariff Schedules of Edison.
10. The Parties also understand and agree that due to equipment acquisition lead
time and construction time requirements, Edison requires a minimum of 24 months
from the execution of this Application and Contract to construct the Interim
Facilities and place them in operation and a minimum of 54 months from the time
of authorization to construct the Permanent 220 kV facilities and place them in
operation. Edison shall have no obligation to Seller with regard to any target
date established by Seller which is less than these 24 and 54 months,
respectively, from the date this Application and Contract is executed. However,
Edison shall exercise its best effort to meet Seller's target operation dates.
Edison's preliminary evaluation of equipment procurement lead times indicates
that Edison will not be able to complete the Interim Facilities until September
30,' 1990, or the Permanent 220 kV Facilities until December 31 1992
11. This Application and Contract shall to the extent provided by law at all
times be subject to such changes or modifications by the Public Utilities
Commission of the State of California as said Commission may, from time to time,
direct in the exercise of its jurisdiction.
DATED: December 15, 1988
CHINA LAKE JOINT VENTURE
By CALIFORNIA ENERGY COMPANY, As General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
Approved and Accepted for
SOUTHERN CALIFORNIA EDISON COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
INTERCONNECTION AND INTEGRATION FACILITIES DESCRIPTION
PROJECT LOCATION: Navy 2 Project
China Lake Naval Weapons Center,
Ridgecrest, California
TARGET DATES APPLICANT DESIRES INTERCONNECTION AND INTEGRATION FACILITIES
AVAILABLE:
Interim Interconnection Facilities: 12/89
Permanent 220 kV Facilities: 12/91
DATE APPLICANT BEGAN CONSTRUCTION OF THE GENERATING FACILITIES:
Navy 2:
DESCRIPTION OF INTERCONNECTION AND INTEGRATION FACILITIES:
Seller-owned Interconnection and Integration Facilities:
* 220 kV H-frame wood pole transmission line from Navy 2 project site to
connection point with Inyokern-▇▇▇▇▇▇ Circuit near Inyokern Substation.
* Seller shall construct Seller-owned 220 kV transmission line to a point
designated by Edison near the southeast corner of Inyokern Substation.
* Seller shall provide proper voltage and VAR controlling equipment to maintain
unity power factor at ▇▇▇▇▇▇ Substation as determined by Edison.
*220 kV transformer at project site.
*Protection and relaying equipment.
Seller-installed Interconnection and Integration Facilities
(Inyokern-▇▇▇▇▇▇ Circuit) to be transferred to Edison:
* Procure and construct Inyokern-▇▇▇▇▇▇ Circuit,
including interconnection tower south of Inyokern
Edison-installed Interconnection and Integration Facilities:
Added Facilities
* Engineer Inyokern-▇▇▇▇▇▇ Circuit
*▇▇▇▇▇▇ Substation: engineer and construct 220 kV line position for Inyokern-
▇▇▇▇▇▇ Circuit including transmission termination facilities.
*Telecommunications, Telemetering, Metering: Install telecommunication,
telemetering, and TOU metering equipment at ▇▇▇▇▇▇ Substation and project site,
provide voice channel equipment,
*▇▇▇▇▇▇ Substation: engineer and construct 220 kV operating bus; remove and
relocate existing equipment.
*▇▇▇▇▇▇ and ▇▇▇▇▇▇ Substations: Install 220 kV and 115 kV capacitor banks.
*Protection schemes as necessary to protect the integrity of Edison's electric
system.
*Relocate existing 33 kV and 115 kV transmission facilities as required to
construct new facilities.
*▇▇▇▇ Substation: Engineer and construct capacity increase of "AA" transformers;
replace ten 220 kV circuit breakers.
*Conduct appropriate environmental reviews; provide appropriate mitigation.
*Acquire regulatory approvals, permits, licenses as necessary.
*▇▇▇▇▇▇ Substation: Engineer and construct two 220 kV line positions for new
double circuit 220 ▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇ line.
*Acquire right-of-way for new double circuit ▇▇▇▇▇▇-▇▇▇▇▇▇ 220 kV line.
*Engineer and construct approximately 38 miles of 220 kV double-circuit tower
line between ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Substations. (Line length based on CPUC approval
of Edison's preferred route.)
*▇▇▇▇▇▇ Substation: Engineer and construct 220 kV switchrack, line and bank
positions.'
*Electrical/mechanical equipment room construction at ▇▇▇▇▇▇ and ▇▇▇▇▇▇
Substations.
Edison-installed Interconnection and Integration Facilities (cont.):
Interim 115 kV Facilities
* Engineer, design, and construct the Interim 115 kV Facilities.
ESTIMATED COST OF EDISON-INSTALLED INTERCONNECTION FACILITIES*:
Added Investment: 12,642,500
Capital Contribution: 3,387,500 **
Total Cost: 16,030,000
Installation and Removal: 15,575,000 **
In addition, the tax contribution component based upon final costs paid by
Seller as a capital contribution to Edison will be based on 28% CIAC tax.
DATE SERVICE FIRST RENDERED BY MEANS OF THE INTERCONNECTION FACILITIES:
Interim Interconnection Facilities____________
Permanent 220 kV Facilities_______________
*Costs shown represent that portion of Edison's estimated expense to be
initially funded by Seller either by capital contribution or on an Added
Facilities basis.
**Costs stated are estimates only and are not binding. Final cost will be
adjusted based on actual cost.
PAYMENT SCHEDULE
(INTERIM 115 kV FACILITIES)
Payment Due Date Payment Due
11-01-88 $ 375,000
01-01-89 $ 850,000
04-01-89 $1,000,000
07-01-89 $1,000,000
10-01-89 $ 162,500
TOTAL $3,387,500
SECURITY POSTING SCHEDULE
(PERMANENT 220 kV FACILITIES)
Security Due Security Total
Date Increment Date Security Posted
11-01-88 $ 300,000 $ 300,000
01-01-89 $ 500,000 $ 800,000
04-01-89 $ 500,000 $1,300,000
07-01-89 $ 500,000 $1,800,000
10-01-89 $ 500,000 $2,300,000
01-01-90 $ 900,000 $3,200,000
04-01-90 $ 900,000 $4,100,000
07-01-90 $ 900,000 $5,000,000
10-01-90 $ 900,000 $5,900,000
01-01-91 $ 900,000 $6,800,000
Security shall remain in place in the amount of $6,800,000 until such time as
the Permanent 220 Facilities are placed in service. At that time, the amount of
security required shall be reduced quarterly by the amount of previous paid
monthly Added Facilities payments.
Map - See Image Pages 46-48