Exhibit 10.8(a)
---------------
PACIFIC GAS & ELECTRIC
ENERGY AND CAPACITY
POWER PURCHASE AGREEMENT
------------------------
PACIFIC GAS AND ELECTRIC COMPANY
STANDARD OFFER #4
POWER PURCHASE AGREEMENT
FOR
LONG-TERM ENERGY AND CAPACITY
Seller: WIND DEVELOPERS, INC., a California Corporation
------
Location: Altamont Pass, Alameda County
--------
Capacity: 20, 000 kW
--------
Energy Source: Wind
-------------
MAY 1984
1
STANDARD OFFER #4:
LONG-TERM ENERGY AND CAPACITY
POWER PURCHASE AGREEMENT
CONTENTS
Article Page
------- ----
1 QUALIFYING STATUS 3
2 COMMITMENT OF PARTIES 4
3 PURCHASE OF POWER 5
4 ENERGY PRICE 6
5 CAPACITY ELECTION AND CAPACITY PRICE 10
6 LOSS ADJUSTMENT FACTORS 11
7 CURTAILMENT 11
8 RETROACTIVE APPLICATION OF CPUC ORDERS 12
9 NOTICES 12
10 DESIGNATED SWITCHING CENTER 13
11 TERMS AND CONDITIONS 13
12 TERM OF AGREEMENT 14
Appendix A: GENERAL TERMS AND CONDITIONS
Appendix B: ENERGY PAYMENT OPTIONS
Appendix C: CURTAILMENT OPTIONS
Appendix D: AS-DELIVERED CAPACITY
Appendix E: FIRM CAPACITY
Appendix F: INTERCONNECTION
-2-
LONG-TERM ENERGY AND CAPACITY
POWER PURCHASE AGREEMENT
BETWEEN
WIND DEVELOPERS, INC.
AND
PACIFIC GAS AND ELECTRIC COMPANY
WIND DEVELOPERS, INC., a California corporation ("Seller"), and PACIFIC GAS
AND ELECTRIC COMPANY ("PGandE"),referred to collectively as "Parties" and
individually as "Party", agree as follows:
ARTICLE 1 QUALIFYING STATUS
Seller warrants that,at the date of first power deliveries from Seller's
Facility1 and during the term of agreement, its Facility shall meet the
-------- ---- -- ---------
qualifying facility requirements established as of the effective date of this
Agreement by the Federal Energy Regulatory Commission's rules (18 Code of
Federal Regulations 292) implementing the Public Utility Regulatory Policies Act
of 1978 (16 U.S.C.A. 796, et seq.).
---------------------
1 Underlining identifies those terms which are defined in Section A-1 of
Appendix A.
-3-
ARTICLE 2 COMMITMENT OF PARTIES
The prices to be paid Seller for energy and/or capacity delivered pursuant
to this Agreement have wholly or partly been fixed at the time of execution.
Actual avoided costs at the time of energy and/or capacity deliveries may be
substantially above or below the prices fixed in this Agreement. Therefore, the
Parties expressly commit to the prices fixed in this Agreement for the
applicable period of performance and shall not seek to or have a right to
renegotiate such prices for any reason. As part of its consideration for the
benefit of fixing part or all of the energy and/or capacity prices under this
Agreement, Seller waives any and all rights to judicial or other relief from its
obligations and/or prices setforth in Appendices B, D, and E, or modification of
any other term or provision for any reasons whatsoever.
This Agreement contains certain provisions which set forth methods of
calculating damages to be paid to PGandE in the event Seller fails to fulfill
certain performance obligations. The inclusion of such provisions is not
intended to create any express or implied right in Seller to terminate this
Agreement prior to the expiration of the term of agreement. Termination of this
---- -- ---------
Agreement by Seller prior to its expiration date shall constitute a breach of
-4-
this Agreement and the damages expressly set forth in this Agreement shall not
constitute PGandE's sole remedy for such breach.
ARTICLE 3 PURCHASE OF POWER
(a) Seller shall sell and deliver and PGandE shall purchase and accept
delivery of capacity and energy at the voltage level of 60 W.
------- -----
(b) Seller shall provide capacity and energy from its 20,000 kW Facility
--------
located at the Rooney Ranch, Sections 21 and 28, Township 2 South, Range 3 East,
Mount Diablo Base and Meridian, in the Altamont Pass area of Alameda County,
California.
(c) The scheduled operation date of the Facility is December 31, 1984. At
--------- --------- ---- --------
the end of each calendar quarter Seller shall give written notice to PGandE of
any change in the scheduled operation date.
--------- --------- ----
(d) To avoid exceeding the physical limitations of the interconnection
---------------
facilities, Seller shall limit the Facility's actual rate of delivery into the
---------- ----------
PGandE system to 1 kW.
------
---------------------
1 To be determined upon completion of the detailed interconnection study for
the Facility.
--------
-5-
(e) The primary energy source for the Facility is a small power production
--------
facility with wind as the primary energy source.
(f) If Seller does not begin construction of its Facility by December 15,
--------
1984, PGandE may reallocate the existing capacity on PGandE's transmission
and/or distribution system which would have been used to accommodate Seller's
power deliveries to other uses. In the event of such reallocation, Seller shall
pay PGandE for the cost of any upgrades or additions to PGandE's system
necessary to accommodate the output from the Facility. Such additional
--------
facilities shall be installed, owned and maintained in accordance with the
applicable PGandE tariff.
(g) The transformer loss adjustment factor is determined in Appendix A-19.
ARTICLE 4 ENERGY PRICE
PGandE shall pay Seller for its net energy output1 under the energy
--- ------ ------
payment option checked below2:
X Energy Payment Option 1 - Forecasted Energy Prices
----
---------------------
1 Insert either "net energy output" or "surplus energy output" to show the
--- ------ ------ ------- ------ ------
energy sale option selected by Seller.
2 Energy Payment option 2 is not available to oil or gas-fired cogenerators.
-6-
During the fixed price period, Seller shall be paid for energy delivered at
----- ----- ------
prices equal to l001, percent of the prices set forth in Table B-1, Appendix
B, plus 02 percent of PGandE's full short-run avoided operating costs.
---- --------- ------- --------- -----
For the remaining years of the term of agreement, Seller shall be paid for
---- -- ---------
energy delivered at prices equal to PGandE's full short-run avoided operating
---- --------- ------- ---------
costs.
-----
If Seller's Facility is not an oil or gas-fired cogeneration facility,
--------
Seller may convert from Energy Payment Option Ito Energy Payment Option 2 and be
subject to the conditions therein, provided that Seller shall not change the
percentage of energy prices to be based on PGandE's full short-run avoided
---- --------- -------
operating costs. Such conversion must be made at least 90 days prior to the date
--------- -----
of initial energy deliveries and must be made by written notice in accordance
with Section A-17, Appendix A.
Energy Payment Option 2 - Levelized Energy Prices
---------
---------------------
1 Insert either 0, 20, 40, 60, 80, or 100, at Seller's option. If Seller's
Facility is an oil or gas-fired cogeneration facility, either 0 or 20 must
--------
be inserted.
2 Insert the difference between 100 and the percentage selected under footnote
1 above.
-7-
During the fixed price period, Seller shall be paid for energy delivered at
----- ----- ------
prices equal to 1 percent of the levelized energy prices set forth in
--------
Table ▇-▇, ▇▇▇▇▇▇▇▇ ▇ for the year in which energy deliveries begin and term of
---- --
agreement, plus 2 percent of PGandE's full short-run avoided operating
--------- -------- ---- --------- ------- ---------
costs. During the fixed price period, Seller shall be subject to the conditions
----- ----- ----- ------
and terms set forth in Appendix B, Energy Payment Option 2.
For the remaining years of the term of agreement, Seller shall be paid for
---- -- ---------
energy delivered at prices equal to PGandE's full short-run avoided operating
---- --------- ------- ---------
costs.
-----
Seller may convert from Energy Payment Option 2 to Energy Payment Option 1,
provided that Seller shall not change the percentage of energy prices to be
based on PGandE's full short-run avoided operating costs. Such conversion must
---- --------- ------- --------- -----
be made at least 90 days prior to the date of initial energy deliveries and must
be made by written notice in accordance with Section A-17, Appendix A.
(1) Insert either 20, 40, 60, 80, or 100, at seller's option.
(2) Insert the difference between 100 and the percentage selected under footnote
I above.
-8-
Energy Payment Option 3 - Incremental Energy Rate
-------
Beginning with the date of initial energy deliveries and continuing until
1, Seller shall be paid monthly for energy delivered at prices equal
--------
to PGandE's full short-run avoided operating costs, provided that adjustments
---- --------- ------- --------- -----
shall be made annually to the extent set forth in Appendix B, Energy Payment
option 3.
The Incremental Energy Rate Band Widths specified by Seller in Table I
below shall be used in determining the annual adjustment, if any.
Table I
Year Incremental Energy Rate Band Widths
---- -----------------------------------
(must be multiples of 100 or zero)
1984
------------
1985
------------
1986
------------
1987
------------
1988
------------
1989
------------
1990
------------
1991
------------
1992
------------
1993
------------
1994
------------
1995
------------
1996
------------
1997
------------
1998
------------
---------------------
1 Specified by Seller. Must be December 31, 1998 or prior.
-9-
After , Seller shall be paid for energy delivered at prices
----------------
equal to PGandE's full short-run avoided operating costs.
---- --------- ------- --------- -----
ARTICLE 5 CAPACITY ELECTION AND CAPACITY PRICE
Seller may elect to deliver either firm capacity or as-delivered capacity,
---- -------- ------------ --------
and Seller's election is indicated below. PGandE's prices for firm capacity and
---- --------
as-delivered capacity are derived from PGandE's full avoided costs as approved
------------ --------
by the CPUC.
----
Firm capacity - kW for years from the firm capacity
----------- ---------- ---- ---- --------
availability date with payment determined in accordance with Appendix E. Except
------------ ----
for hydro-electric facilities, PGandE shall pay Seller for capacity delivered in
excess of firm capacity on an as-delivered capacity basis in accordance with
---- -------- ------------ --------
As-Delivered Capacity Payment Option set forth in Appendix D.
-----------
OR
X As-delivered capacity with payment determined in accordance with
-----
As-Delivered Capacity Payment option 2 set forth in Appendix D.
-10-
ARTICLE 6 LOSS ADJUSTMENT FACTORS
Capacity Loss Adjustment Factors shall be as shown in Appendix D and
Appendix E, dependent upon Seller's capacity selection set forth in Article 5 of
this Agreement.
Energy Loss Adjustment Factors shall be considered as unity for all energy
payments related to Energy Payment Options 1 and 2 set forth in Appendix B for
the entire fixed price period of this Agreement, except for the percentage of
----- ----- ------
payments that Seller elected in Article 4 to have calculated based on PGandE's
full short-run avoided operating costs. Energy Loss Adjustment Factors for all
---- --------- ------- --------- -----
payments related to PGandE's full short-run avoided operating costs are subject
---- --------- ------- --------- -----
to CPUC rulings for the entire term of agreement.
---- -- ---------
ARTICLE 7 CURTAILMENT
Seller has two options regarding possible curtailment by PGandE of Seller's
deliveries, and Seller's selection is indicated below:
X Curtailment Option A - Hydro Spill and Negative Avoided
-------- Cost
Curtailment Option B - Adjusted Price Period
--------
The two options are described in Appendix C.
-11-
ARTICLE 8 RETROACTIVE APPLICATION OF CPUC ORDERS
Pursuant to ordering Paragraph l(f) of CPUC Decision No. ▇▇-▇▇-▇▇▇
----
(September 7, 1983), after the effective date of the CPUC's Application 82-03-26
------
decision relating to line loss factors, Seller has the option to retain the
relevant terms of this Agreement or have the results of that decision
incorporated into this Agreement. To retain the terms herein, Seller shall
provide written notice to PGandE within the later of (a) 30 days after the
effective date of the relevant CPUC decision on Application 82-03-26, or (b) 30
----
days after receipt of the relevant CPUC decision from PGandE in Application
82-03-026. Failure to provide such notice will result in the amendment of this
Agreement to comply with that decision.
As soon as practicable following the issuance of a decision in Application
82-03-26, PGandE shall notify Seller of the effective date thereof and its
results.
ARTICLE 9 NOTICES
All written notices shall be directed as follows:
To PGandE: Pacific Gas and Electric Company
Attention: Vice President
Electric Operations
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-12-
To Seller: Wind Developers, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ARTICLE 10 DESIGNATED SWITCHING CENTER
The designated PGandE switching center shall be, unless changed by PGandE:
---------- ------ --------- ------
Newark Switching Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE 11 TERMS AND CONDITIONS
This Agreement includes the following appendices which are attached and
incorporated by reference:
Appendix A - GENERAL TERMS AND CONDITIONS
Appendix B - ENERGY PAYMENT OPTIONS
Appendix C - CURTAILMENT OPTIONS
Appendix D - AS-DELIVERED CAPACITY
Appendix E - FIRM CAPACITY
Appendix F - INTERCONNECTION
-13-
ARTICLE 12 TERM OF AGREEMENT
This Agreement shall be binding upon execution and remain in effect
thereafter for 20 years1 from the date of initial energy deliveries2;
provided, however, that it shall terminate if energy deliveries do not start
within five years of the execution date.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized representatives and it is effective as of
the last date set forth below.
WIND DEVELOPERS, INC. PACIFIC GAS AND ELECTRIC COMPANY
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- --------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President - Vice President -
TITLE: Finance TITLE: Planning and Research
DATE SIGNED: December 31, 1984 DATE SIGNED: January 17, 1985
----------------- ----------------
---------------------
1 The minimum contract term is 15 years and the maximum contract term is 30
years.
2 Insert "firm capacity availability date" if Seller has elected to deliver
---- -------- ------------ ----
firm capacity or "date of initial energy deliveries" if Seller has elected
---- --------
to deliver as-delivered capacity.
------------ --------
-14-
APPENDIX A
GENERAL TERMS AND CONDITIONS
CONTENTS
Section Page
------- ----
A-1 DEFINITIONS ▇-▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇-▇
▇-▇ OPERATION ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇ ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇ OF PAYMENTS ▇-▇▇
▇-▇ ▇▇▇▇▇▇ TO RECORDS AND PGandE DATA ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇ FORCE MAJEURE ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇; DEDICATION ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ ▇▇▇-▇▇▇▇▇▇ A-20
A-13 ASSIGNMENT ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇ OF LAWS ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ AND A-21
AUTHORIZATION
A-17 NOTICES ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇ LOSS ADJUSTMENT FOR A-24
LOW-SIDE METERING
A-1
APPENDIX A
GENERAL TERMS AND CONDITIONS
A-1 DEFINITIONS
Whenever used in this Agreement, appendices, and attachments hereto, the
following terms shall have the following meanings:
Adjusted firm capacity price - The $/kw-year purchase price for firm
-------- ---- -------- ----- ----
capacity from Table E-2, Appendix E for the period of Seller's actual
--------
performance.
As-delivered capacity - capacity delivered to PGandE in excess of firm
------------ -------- ----
capacity or in lieu of a firm capacity commitment.
-------- ---- --------
CPUC The Public Utilities Commission of the State of California.
---
Current firm capacity price - The $/kW-year capacity price from PGandE's
------- ---- -------- -----
firm capacity price schedule effective at the time PGandE derates the firm
---- -------- ----- -------- ----
capacity pursuant to Section E-4(b), Appendix E or Seller terminates performance
--------
A-2
under this Agreement, for a term equal to the period from the date of deration
or termination to the end of the term of agreement.
---- -- ---------
Designated PGandE switching center - That switching center or other PGandE
---------- ------ --------- ------
installation identified in Article 10.
Facility - That generation apparatus described in Article 3 and all
--------
associated equipment owned, maintained, and operated by Seller.
Firm capacity - That capacity, if any, identified as firm in Article 5
---- --------
except as otherwise changed as provided herein.
Firm capacity availability date - The day following the day during which
---- -------- ------------ ----
all features and equipment of the Facility are demonstrated to PGandE's
--------
satisfaction to be capable of operating simultaneously to deliver firm capacity
---- --------
continuously into PGandE's system as provided in this Agreement.
Firm capacity price - The price for firm capacity applicable for the firm
---- -------- ----- ---- -------- ----
capacity availability date and the number of years of firm capacity delivery
-------- ------------ ---- ---- --------
from the firm capacity price schedule, Table E-2, Appendix E.
---- -------- ----- --------
A-3
Firm capacity price schedule - The periodically published schedule of the
---- -------- ----- --------
$/kw-year prices that PGandE offers to pay for firm capacity. See Table E-2,
---- --------
Appendix E.
Fixed price period - The period during which forecasted or levelized energy
----- ----- ------
prices, and/or forecasted as-delivered capacity prices, are in effect; defined
------------ --------
as the first five years of the term of agreement if the term of agreement is 15
---- -- --------- ---- -- ---------
or 16 years; the first six years of the term of agreement if the term of
---- -- --------- ---- --
agreement is 17, 18, or 19 years; or the first ten years of the term of
--------- ---- --
agreement if the term of agreement is anywhere from 20 through 30 years.
--------- ---- -- ---------
Forced outage - Any outage resulting from a design defect, inadequate
------ ------
construction, operator error or a breakdown of the mechanical or electrical
equipment that fully or partially curtails the electrical output of the
Facility.
--------
Full short-run avoided operating costs - CPUC-approved costs which are the
---- --------- ------- --------- ----- ----
basis of PGandE's published energy prices. PGandE's current energy price
calculation is shown in Table B-5, Appendix B. PGandE's published off-peak
hours' prices shall be adjusted, as appropriate, if Seller has selected
Curtailment option B.
A-4
Interconnection facilities - All means required and apparatus installed to
--------------- ----------
interconnect and deliver power from the Facility to the PGandE system including,
--------
but not limited to, connection, transformation, switching metering,
communications, and safety equipment, such as equipment required to protect (1)
the PGandE system and its customers from faults occurring at the Facility, and
--------
(2) the Facility from faults occurring on the PGandE system or on the systems of
--------
others to which the PGandE system is directly or indirectly connected.
Interconnection facilities also include any necessary additions and
--------------- ----------
reinforcements by PGandE to the PGandE system required as a result of the
interconnection of the Facility to the PGandE system.
--------
Net energy output - The Facility's, gross output in kilowatt-hours less
--- ------ ------ ----------
station use and transformation and transmission losses to the point of delivery
------- ---
into the PGandE system. Where PGandE agrees that it is impractical to connect
the station use on the generator side of the power purchase meter, PGandE may,
------- ---
at its option, apply a station load adjustment.
Prudent electrical practices - Those practices, methods, and equipment, as
------- ---------- ---------
changed from time to time, that are commonly used in prudent electrical
A-5
engineering and operations to design and operate electric equipment lawfully and
with safety, dependability, efficiency, and economy.
Scheduled operation date - The day specified in Article 3(c) when the
--------- --------- ----
Facility is, by Seller's estimate, expected to produce energy that will be
--------
available for delivery to PGandE.
Special facilities - Those additions and reinforcements to the PGandE
------- ----------
system which are needed to accommodate the maximum delivery of energy and
capacity from the Facility as provided in this Agreement and those parts of the
--------
interconnection facilities which are owned and maintained by PGandE at Seller's
--------------- ----------
request, including metering and data processing equipment. All special
-------
facilities shall be owned, operated, and maintained pursuant to PGandE's
----------
electric Rule No. 21, which is attached hereto.
Station use - Energy used to operate the Facility's auxiliary equipment.
------- --- ----------
The auxiliary equipment includes, but is not limited to, forced and induced
draft fans, cooling towers, boiler feed pumps, lubricating oil systems, plant
lighting, fuel handling systems, control systems, and sump pumps.
Surplus energy output - The Facility's gross output, in kilowatt-hours,
------- ------ ------ ----------
less station use, and any other Seller, and transformation and transmission
------- ---
losses to the point of delivery into the PGandE system.
A-6
Term of agreement - The number of years this Agreement will remain in
---- -- ---------
effect as provided in Article 12.
Voltage level - The voltage at which the Facility interconnects with the
------- ----- --------
PGandE system, measured at the point of delivery.
A-2 CONSTRUCTION
A-2.1 Land Rights
Seller hereby grants to PGandE all necessary rights of way and easements,
including adequate and continuing access rights on property of Seller, to
install, operate, maintain, replace, and remove the special facilities. Seller
------- ----------
agrees to execute such other grants, deeds, or documents as PGandE may require
to enable it to record such rights of way and easements. If any part of
PGandE's equipment is to be installed on property owned by other than Seller,
Seller shall, at its own cost and expense, obtain from the owners thereof all
necessary rights of way and easements, in a form satisfactory to PGandE, for the
construction, operation, maintenance, and replacement of PGandE's equipment upon
such property. If Seller is unable to obtain such rights of way and easements,
Seller shall reimburse PGandE for all costs incurred by PGandE in obtaining
them. PGandE shall at all times have the right of ingress to and egress from the
Facility at all reasonable hours for any purposes reasonably connected with this
--------
Agreement or the exercise of any and all rights secured to PGandE by law or its
tariff schedules.
A-2.2 Design, Construction, Ownership, and Maintenance
(a) Seller shall design, construct, install, own, operate, and maintain
all interconnection facilities, except special facilities, to the point of
--------------- ---------- ------- ----------
interconnection with the PGandE system as required for PGandE to receive
capacity and energy from the Facility. The Facility and interconnection
-------- -------- ---------------
facilities shall meet all requirements of applicable codes and all standards of
----------
prudent electrical practices and shall be maintained in a safe and prudent
------- ---------- ---------
manner. A description of the interconnection facilities for which Seller is
--------------- ----------
solely responsible is set forth in Appendix F, or if the interconnection
requirements have not yet been determined at the time of the execution of this
Agreement, the description of such facilities will be appended to this Agreement
at the time such determination is made.
(b) Seller shall submit to PGandE the design and all specifications for
the interconnection facilities (except special facilities) and, at PGandE's
--------------- ---------- ------- ----------
option, the Facility, for review and written acceptance prior to their release
--------
for construction purposes. PGandE shall notify Seller in writing of the outcome
of PGandE's review of the design and specifications for Seller's interconnection
---------------
facilities (and the Facility, if requested) within 30 days of the receipt of the
---------- --------
design and all of the specifications for the interconnection facilities (and the
--------------- ----------
Facility, if requested). Any flaws perceived by PGandE in the design and
--------
specifications for the interconnection facilities (and the Facility, if
--------------- ---------- --------
requested) will be described in PGandE's written notification. PGandE's review
and acceptance of the design and specifications shall not be construed as
confirming or endorsing the design and specifications or as warranting their
safety, durability, or reliability. PGandE shall not, by reason of such review
or lack of review, be responsible for strength, details of design, adequacy, or
capacity of equipment built pursuant to such design and specifications, nor
shall PGandE's acceptance be deemed to be an endorsement of any of such
equipment. Seller shall change the interconnection facilities as may be
--------------- ----------
reasonably required by PGandE to meet changing requirements of the PGandE
system.
(c) In the event it is necessary for PGandE to install interconnection
---------------
facilities for the purposes of this Agreement, they shall be installed as
----------
special facilities.
------- ----------
A-9
(d) Upon the request of Seller, PGandE shall provide a binding estimate for
the installation of interconnection facilities by PGandE.
--------------------------
A-2.3 Meter Installation
(a) PGandE shall specify, provide, install, own, operate, and maintain as
special facilities all metering and data processing equipment for the
------------------
registration and recording of energy and other related parameters which are
required for the reporting of data to PGandE and for computing the payment due
Seller from PGandE.
(b) Seller shall provide, construct, install, own, and maintain at Seller's
expense all that is required to accommodate the metering and data processing
equipment, such as, but not limited to, metal-clad switchyear, switchboards,
cubicles, metering panels, enclosures, conduits, rack structures, and equipment
mounting pads.
(c) PGandE shall permit meters to be fixed on PGandE's side of the
transformer. If meters are placed on PGandE's side of the transformer, service
will be provided at the available primary voltage and no transformer loss
adjustment will be made. If Seller chooses to have meters placed on Seller's
side of the transformer, an estimated transformer loss adjustment factor of 2
percent, unless Parties agree otherwise, will be applied.
▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇
A-3.1 Inspection and Approval
Seller shall not operate the Facility in parallel with PGandE's system
--------
until an authorized PGandE representative has inspected the interconnection
---------------
facilities, and PGandEr has given written approval to begin parallel operation.
----------
Seller shall notify PGandE of the Facility's start-up date at least 45 days
----------
prior to such date. PGandE shall inspect the interconnection facilities within
--------------- ----------
30 days of the receipt of such notice. if parallel operation is not authorized
by PGandE, PGandE shall notify Seller in writing within five days after
inspection of the reason authorization for parallel operation was withheld.
A-3.2 Facility Operation and Maintenance
--------
Seller shall operate and maintain its Facility according to prudent electrical
-------- ------- ----------
practices, applicable laws, orders, rules, and tariffs and shall provide such
---------
reactive power support as may be reasonably required by PGandE to maintain
system voltage level and power factor. Seller shall operate the Facility at the
--------
power factors or voltage levels prescribed by PGandE's system dispatcher or
designated representative. If Seller fails to provide reactive power support,
PGandE may do so at Seller's expense.
A-11
A-3.3 Point of Delivery
Seller shall deliver the energy at the point where Seller's electrical
conductors (or those of Seller's agent) contact PGandE's system as it shall
exist whenever the deliveries are being made or at such other point or points as
the Parties may agree in writing. The initial point of delivery of Seller's
power to the PGandE system is set forth in Appendix F.
A-3.4 Operating Communications
(a) Seller shall maintain operating communications with the designated
----------
PGandE switching center. The operating communications shall include, but not be
------ --------- ------
limited to, system paralleling or separation, scheduled and unscheduled
shutdowns, equipment clearances, levels of operating voltage or power factors
and daily capacity and generation reports.
(b) Seller shall keep a daily operations log for each generating unit which
shall include information on unit availability, maintenance outages, circuit
breaker trip operations requiring a manual reset, and any significant events
related to the operation of the Facility.
--------
(c) If Seller makes deliveries greater than one megawatt, Seller shall
measure and register on a graphic recording device power in kW and voltage in kV
A-12
at a location within the Facility agreed to by both Parties.
--------
(d) If Seller makes deliveries greater than one and up to and including ten
megawatts, Seller shall report to the designated PGandE switching center,
---------- ------ --------- ------
twice a day at agreed upon times for the current day's operation, the hourly
readings in kW of capacity delivered and the energy in kWh delivered since the
last report.
(e) If Seller makes deliveries of greater than ten megawatts, Seller shall
telemeter the delivered capacity and energy information, including real power in
kW, reactive power in kVAR, and energy in kWh to a switching center selected by
PGandE. PGandE may also require Seller to telemeter transmission kW, kVAR, and
kV data depending on the number of generators and transmission configuration.
Seller shall provide and maintain the data circuits required for telemetering.
When telemetering is inoperative, Seller shall report daily the capacity
delivered each hour and the energy delivered each day to the designated
----------
PGandE switching center.
------ --------- ------
A-3.5 Meter Testing and Inspection
(a) All meters used to provide data for the computation of the payments due
Seller from PGandE shall be sealed, and the seals shall be broken only by PGandE
when the meters are to be inspected, tested, or adjusted.
A-13
(b) PGandE shall inspect and test all meters upon their installation and
annually thereafter. At Seller's request and expense, PGandE shall inspect or
test a meter more frequently. PGandE shall give reasonable notice to Seller of
the time when any inspection or test shall take place, and Seller may have
representatives present at the test or inspection. If a meter is found to be
inaccurate or defective, PGandE shall adjust, repair, or replace it at its
expense in order to provide accurate metering.
A-3.6 Adjustments to Meter Measurements
If a meter fails to register, or if the measurement made by a meter during
a test varies by more than two percent from the measurement made by the standard
meter used in the test, an adjustment shall be made correcting all measurements
made by the inaccurate meter for -- (1) the actual period during which
inaccurate measurements were made, if the period can be determined, or if not,
(2) the period immediately preceding the test of the meter equal to one-half the
time from the date of the last previous test of the meter, provided that the
period covered by the correction shall not exceed six months.
A-4 PAYMENT
PGandE shall mail to Seller not later than 30 days after the end of each
monthly billing period (1) a statement showing the energy and Capacity
A-14
delivered to PGandE during on-peak, partial-peak, and off-peak periods during
the monthly billing period, (2) PGandE's computation of the amount due Seller,
and (3) PGandE's check in payment of said amount. Except as provided in section
A-5, if within 30 days of receipt of the statement Seller does not make a report
in writing to PGandE of an error, Seller shall be deemed to have waived any
error in PGandE's statement, computation, and payment, and they shall be
considered correct and complete.
A-5 ADJUSTMENTS OF PAYMENTS
(a) In the event adjustments to payments are required as a result of
inaccurate meters, PGandE shall use the corrected measurements described in
Section A-3.6 to recompute the amount due from PGandE to Seller for the capacity
and energy delivered under this Agreement during the period of inaccuracy.
(b) The additional payment to Seller or refund to PG&ndE shall be made
within 30 days of notification of the owing Party of the amount due.
A-6 ACCESS TO RECORDS AND PGandE DATA
Each Party, after giving reasonable written notice to the other Party,
shall have the right of access to all metering and related records including
A-15
Operations logs of the Facility. Data filed by PGandE with the CPUC pursuant to
-------- ----
CPUC orders governing the purchase of power from qualifying facilities shall be
----
provided to Seller upon request; provided that Seller shall reimburse PGandE for
the costs it incurs to respond to such request.
A-7 INTERRUPTION OF DELIVERIES
PGandE shall not be obligated to accept or pay for and may require Seller
to interrupt or reduce deliveries of energy (1) when necessary in order to
construct, install, maintain, repair, replace, remove, investigate, or inspect
any of its equipment or any part of its system, or (2) if it determines that
interruption or reduction is necessary because of PGandE system emergencies,
forced outages, force majeure, or compliance with prudent electrical practices;
------- ---------- ---------
provided that PGandE shall not interrupt deliveries pursuant to this section in
order to take advantage, or make purchases, of less expensive energy elsewhere.
Whenever possible, PGandE shall give Seller reasonable notice of the possibility
that interruption or reduction of deliveries may be required.
A-8 FORCE MAJEURE
(a) The term force majeure as used herein means unforeseeable causes, other
than forced outages, beyond the reasonable control of and without the
------ -------
A-16
fault or negligence of the Party claiming force majeure including, but not
limited to, acts of God, labor disputes, sudden actions of the elements, actions
by federal, state, and municipal agencies, and actions of legislative, judicial,
or regulatory agencies which conflict with the terms of this Agreement.
(b) if either Party because of force majeure is rendered wholly or partly
unable to perform its obligations under this Agreement, that Party shall be
excused from whatever performance is affected by the force majeure to the extent
so affected provided that:
(1) the non-performing Party, within two weeks after the
occurrence of the force majeure, gives the other Party written notice
describing the particulars of the occurrence,
(2) the suspension of performance is of no greater scope and of
no longer duration than is required by the force majeure,
(3) the non-performing Party uses its best efforts to remedy its
inability to perform (this subsection shall not require the settlement
of 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 is understood and agreed that the
settlement of
A-17
strikes, walkouts, lockouts or other labor disputes shall be at the
sole discretion of the Party having the difficulty),
(4) when the non-performing Party is able to resume performance
of its obligations under this Agreement, that Party shall give the
other Party written notice to that effect, and
(5) capacity payments during such periods of force majeure on
seller's part shall be governed by Section E-2(c), Appendix E.
(c) In the event a Party is unable to perform due to legislative, judicial,
or regulatory agency action, this Agreement shall be renegotiated to comply with
the legal change which caused the non-performance.
A-9 INDEMNITY
Each Party as indemnitor shall save harmless and indemnify the other Party
and the directors, officers, and employees of such other Party against and from
any and all loss and liability for injuries to persons including employees of
either Party, and property damages including property of either Party resulting
from or arising out of (1) the engineering, design, construction, maintenance,
or operation of, or (2) the making of replacements, additions, or betterments
to, the indemnitor's facilities. This indemnity and save harmless provision
shall apply notwithstanding the active or passive negligence of the
A-18
indemnitee. Neither Party shall be indemnified hereunder for its liability or
loss resulting from its sole negligence or willful misconduct. The indemnitor
shall, on the other Party's request, defend any suit asserting a claim covered
by this indemnity and shall pay all costs, including reasonable attorney fees,
that may be incurred by the other Party in enforcing this indemnity.
A-10 LIABILITY; DEDICATION
(a) Nothing in this Agreement shall create any duty to, any standard of
care with reference to, or any liability to any person not a Party to it.
Neither Party shall be liable to the other Party for consequential damages.
(b) Each Party shall be responsible for protecting its facilities from
possible damage by reason of electrical disturbances or faults caused by the
operation, faulty operation, or nonoperation of the other Party's facilities,
and such other Party shall not be liable for any such damages so caused.
(c) No undertaking by one Party to the other under any provision of this
Agreement shall constitute the dedication of that Party's system or any portion
thereof to the other Party or to the public or affect the status of PGandE as
an independent public utility corporation or Seller as an independent
A-19
individual or entity and not a public utility.
A-11 SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise, the
duties, obligations, and liabilities of the Parties are intended to be several
and 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 liable individually and severally for its
own obligations under this Agreement.
A-12 NON-WAIVER
Failure to enforce any right or obligation by either Party with respect to
any matter arising in connection with this Agreement shall not constitute a
waiver as to that matter or any other matter.
A-13 ASSIGNMENT
Neither Party shall voluntarily assign its rights nor delegate its duties
under this Agreement, or any part of such rights or duties, without the written
consent of the other Party, except in connection with the sale or merger a
substantial portion of its properties. Any such assignment or delegation made
A-20
without such written consent shall be null and void. Consent for assignment
shall not be withheld unreasonably. Such assignment shall include, unless
otherwise specified therein, all of Seller's rights to any refunds which might
become due under this Agreement.
A-14 CAPTIONS
All indexes, titles, subject headings, section titles, and similar items
are provided for the purpose of reference and convenience and are not intended
to affect the meaning of the contents or scope of this Agreement.
A-15 CHOICE OF LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of California, excluding any choice of law rules which may direct the
application of the laws of another jurisdiction.
A-16 GOVERNMENTAL JURISDICTION AND AUTHORIZATION
Seller shall obtain any governmental authorizations and permits required
for the construction and operation of the Facility. Seller shall reimburse
--------
PGandE for any and all losses, damages, claims, penalties, or liability it
incurs as a result of seller's failure to obtain or maintain such authorizations
and permits.
▇-▇▇
▇-▇▇ NOTICES
Any notice, demand, or request required or permitted to be given by either
Party to the other, and any instrument required or permitted to be tendered or
delivered by either Party to the other, shall be in writing (except as provided
in Section E-3) and so given, tendered, or delivered, as the case may be, by
depositing the same in any United States Post 0ffice with postage prepaid for
transmission by certified mail, return receipt requested, addressed to the
Party, or personally delivered to the Party, at the address in Article 9 of this
Agreement. Changes in such designation may be made by notice similarly given.
A-18 INSURANCE
A-18.1 General Liability Coverage
(a) Seller shall maintain during the performance hereof, General Liability
Insurance 1/ of not less than $1,000,000 if the Facility is over 100 kw,
--------
$500,000 if the Facility is over 20 kW to 100 kW, and $100,000 if the
--------
Facility is 20 kW or below of combined single limit or equivalent for bodily
--------
injury, personal injury, and property damage as the result of any one
occurrence.
---------------------
1 Governmental agencies which have an established record of self-insurance
may provide the required coverage through self-insurance.
A-22
(b) General Liability Insurance shall include coverage for
Premises-Operations, Owners and Contractors Protective, Products/Completed
Operations Hazard, Explosion, Collapse, Underground, Contractual Liability, and
Broad Form Property Damage including Completed operations.
(c) Such insurance, by endorsement to the policy(ies), shall include PGandE
as an additional insured if the Facility is over 100 kW insofar as work
--------
performed by Seller for PGandE is concerned, shall contain a severability of
interest clause, shall provide that PGandE shall not by reason of its inclusion
as an additional insured incur liability to the insurance carrier for payment of
premium for such insurance, and shall provide for 30-days' written notice to
PGandE prior to cancellation, termination, alteration, or material change of
such insurance.
A-18.2 Additional Insurance Provisions
(a) Evidence of coverage described above in Section A-18.1 shall state that
coverage provided is primary and is not excess to or contributing with any
insurance or self-insurance maintained by PGandE.
(b) PGandE shall have the right to inspect or obtain a copy of the original
policy(ies) of insurance.
A-23
(c) Seller shall furnish the required certificates' and endorsements to
PG&ndE prior to commencing operation.
(d) All insurance certificates 1/, endorsements, cancellations,
terminations, alterations, and material changes of such insurance shall be
issued and submitted to the following:
PACIFIC GAS AND ELECTRIC COMPANY
Attention: Manager - Insurance Department
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
A-19 TRANSFORMER LOSS ADJUSTMENT FOR LOW-SIDE METERING
Because Seller's deliveries to PGandE will be metered on the low voltage
(21 kV) side of Seller's transformer, the transformer energy losses will not be
directly metered. Therefore, loss adjustments shall be made to correct all
measurements for transformer losses. No-load transformer losses will be
calculated by PGandE assuming the transformer is always connected to the PGandE
system and load losses will be calculated by PGandE on the basis of data
collected by an A2-h (ampere-squared-hour) meter.
--------------------------
1 A governmental agency qualifying to maintain self-insurance should provide
a statement of self-insurance.
A-24
APPENDIX B
ENERGY PAYMENT OPTIONS
Energy Payment Option 1 - Forecasted Energy Prices
Pursuant to Article 4, the energy payment calculation for Seller's energy
deliveries during each year of the fixed price period shall include the
----- ----- ------
appropriate prices for such year in Table B-1, multiplied by the percentage
Seller has specified in Article 4. If Seller has selected Curtailment Option B
in Article 7, the forecasted off-peak hours' energy prices listed in Table B-1
shall be adjusted upward by 7.7% for Period A and 9.6% for Period B.
B-1
TABLE B-1
Forecasted Energy Price Schedule
Year of
Energy Forecasted Energy Prices*, (cent)/kWh Weighted
------------------------------------------------------------
Deliv- Period A Period B Annual
----------------------------- -----------------------------
eries On-Peak Partial-Peak Off-Peak On-Peak Partial-Peak Off-Peak Average
------- ------- ------------ -------- ------- ------------ -------- -------
1983 5.36 5.12 4.94 5.44 5.31 5.19 5.18
1984 5.66 5.40 5.22 5.74 5.61 5.48 5.47
1985 5.75 5.48 5.30 5.83 5.69 5.56 5.55
1986 5.99 5.72 5.52 6.08 5.94 5.80 5.79
1987 6.38 6.08 5.88 6.47 6.32 6.17 6.16
1988 6.94 6.62 6.39 7.03 6.87 6.71 6.70
1989 7.60 7.25 7.00 7.70 7.53 7.35 7.34
1990 8.12 7.74 7.48 8.23 8.04 7.85 7.84
1991 8.64 8.24 7.96 8.75 8.56 8.35 8.34
1992 9.33 8.90 8.60 9.46 9.24 9.02 9.01
1993 10.10 9.63 9.30 10.23 10.00 9.76 9.75
1994 10.91 10.41 10.06 11.06 10.81 10.55 10.54
1995 11.79 11.25 10.87 11.96 11.68 11.40 11.39
1996 12.67 12.09 11.68 12.85 12.56 12.25 12.24
1997 13.61 12.98 12.54 13.79 13.48 13.15 13.14
--------------
* These prices are differentiated by the time periods as defined in Table B-4.
B-2
Energy Payment Option 2 - Levelized Energy Prices
Pursuant to Article 4, the energy payment calculation for Seller's energy
deliveries during the fixed Price period shall include the appropriate prices
----- ----- ------
set forth in Table B-2 for the year in which energy deliveries begin and term of
---- --
agreement, multiplied by the percentage Seller has specified in Article 4. If
---------
Seller has selected Curtailment Option B in Article 7, the levelized off-peak
hours' energy prices listed in Table B-2 shall be adjusted upward by 7.7% for
Period A and 9.6% for Period B. The discount specified in (c)(vi) below, if
applicable, will be applied to the energy payments during the fixed price
----- -----
period.
------
During the fixed price period, Seller shall be subject to the following
----- ----- ------
conditions and terms:
(a) Minimum Damages
The Parties agree that the levelized energy prices which PGandE pays Seller
for the energy which Seller delivers to PGandE is based on the agreed value
to PGandE of Seller's energy delivered during the entire fixed price
----- -----
period. In the event PGandE does not receive such full performance by
------
reason of a termination, Seller shall pay PGandE an amount based on the
difference between the net present values, at the
B-3
time of termination, of the payments Seller would receive at the forecasted
energy prices in Table B-1 and the payments Seller would receive at the
levelized energy prices, for the remaining years of the fixed price period.
----- ----- ------
This amount shall be calculated by assuming that Seller continued to
generate for the remaining years of the fixed price period, at a level
----- ----- ------
equal to the average annual energy generation during the period of
performance, and by applying the weighted annual average levelized price
applicable to Seller's Facility and the weighted annual average forecasted
--------
energy prices in Table B-1 for the remaining years of the fixed price
----- -----
period. The following formula shall be used to make this calculation:
------
Y (Fn)(A)(W) Y (L)(A)(W)
P = (sigma) ------------ - (sigma) ---------
n=1 (1.15)n n=1 (1.15)n
where:
P = amount due PGandE.
Y = number of years remaining in the fixed price period.
----- ----- ------
Fn = weighted annual average forecasted energy price in the nth year
--
after the breach, failure to perform, or expiration of security,
as shown in Table B-1 for the corresponding calendar year.
B-4
L = weighted annual average leverized energy price applicable to
Seller's Facility.
--------
A = average annual energy generation by Seller during the period of
performance.
n = summation index; refers to the nth year following termination.
--
w = percent of Seller's energy payments based on the levelized
energy prices, as specified in Article 4.
(b) Performance Requirements
Seller shall operate and maintain the Facility in accordance with prudent
-------- -------
electrical practices in order to maximize the likelihood that the
---------- ---------
Facility's output as delivered to PGandE during the part of the fixed
---------- -----
price period when the levelized price is below the forecasted price ("last
----- ------
part") shall equal or exceed 70% of the Facilities output during the part
of the fixed price period when the levelized price is above the forecasted
price ("first part"). In the event that the Facility's output during any
----------
year or series of years in the last part of the fixed price period is less
----- ----- ------
than 70% of the average annual production during the first part of the
fixed price period, PGandE may, at its discretion (taking into
----- ----- ------
consideration events occurring during such year or series of years such as
curtailment by PGandE, Seller's choice not to operate
B-5
during adjusted price periods, or scheduled maintenance including major
overhauls, and the probability that Seller's future performance will be
adequate), either request payment from Seller or immediately draw on the
security posted, up to the amount equal to
P x A-B, where:
---
A
P and A are as defined in Section (a) above.
B = Seller's average annual energy generation during the year or series of
years in which the 70% performance requirement was not met.
PGandE shall not request payment from Seller or draw on the security posted
if the Facility's output during the last part of the Fixed Price Period
---------- ----- ----- ------
falls below 70% of the average annual energy generation during the first
part of the fixed price period solely because of force majeure as defined
----- ----- ------
in Section A-B, Appendix A or a lack of or limited availability of the
primary energy resource of the Facility, if such energy resource is wind,
--------
water, or sunlight.
(c) Security
(1) As security for amounts which Seller may be obligated to pay PGandE
pursuant to Sections (a) and (b) above, Seller shall provide and
maintain one or more of the following in an amount as
B-6
described in section (c)(2) below.
(i) An irrevocable bank letter of credit delivered to and in favor of
PGandE with terms acceptable to PGandE.
(ii) A payment bond providing for payment to PGandE in the event of any
failure to meet the performance requirements set forth in Section (b)
above or breach of this Agreement by Seller. Such bond shall be issued
by a surety company acceptable to PGandE and shall have terms
acceptable to PGandE.
(iii) Fully paid up, noncancellable Project Failure Insurance made payable
to PGandE with terms of such policy(ies) acceptable to PGandE.
(iv) A performance bond providing for payment to PGandE in the event of any
failure to meet the performance requirements set forth in Section (b)
above or breach of this Agreement by Seller. Such bond shall be issued
by a surety company acceptable to PGandE and shall have terms
acceptable to PGandE.
(v) A corporate guarantee of payment to PGandE which PGandE deems, in its
sole discretion,
B-7
to provide at least the same quality of security as subsections (i)
through (iv) above.
(vi) Other forms of security which PGandE does not deem to be equivalent
security to those listed in subsections (i) through (v) above, and
which PGandE, in its sole discretion, deems adequate. Such other
forms of security may include, for example, a corporate guarantee or a
lien, mortgage or deed of trust on the Facility or land upon which it
--------
is located. A 1.5% discount will be applied against the levelized
energy price portion of PGandE's payments to Seller during the fixed
-----
price period if this type of security is provided.
----- ------
(2) (i) Commencing 90 days prior to the scheduled operation date and
--------- --------- ----
continuing until December 1 of the following calendar year, security
as described in Section (c)(1) above shall be in place in an amount
calculated in accordance with the formula set forth in section (a)
above, assuming Seller delivered energy through the end of the
following calendar year and then terminated this Agreement. For
purposes of determining the
B-8
S.O. #4
May 7, 1984
required amount of security, it shall be assumed that Seller's
deliveries through the end of the following calendar year would equal
R x C x H, where:
R = nameplate rating, in kW, of the Facility.
--------
C = estimated capacity factor of the Facility, which shall be
--------
established by mutual agreement of the Parties at the time
of execution of this Agreement.
H = number of hours from the scheduled operation date through
--------- --------- ----
the end of the following calendar year.
(ii) in the second calendar year of operation and each year thereafter
until the end of the fixed price period, from December 1 through
----- ----- ------
December 1 of the following year, security shall be in place in an
amount calculated by the formula set forth in section (a) above
assuming Seller continued to deliver energy in each month through the
end of the following calendar year, at a level equal to the average
monthly energy deliveries to date, and then terminated this Agreement.
B-9
(3) Security must be maintained throughout the fixed price period as specified
----- ----- ------
above. Any security with a fixed expiration date must be renewed by Seller
prior to that date. If such security is not renewed at least 30 days prior
to its expiration, PGandE may, at its discretion, either request payment
from Seller or immediately draw on the security posted, up to the amount
calculated in accordance with the formula set forth in Section (a) above.
(4) If, at any time during the fixed price period, PGandE believes Seller is in
----- ----- ------
material breach of this Agreement, PGandE shall so notify Seller in writing
and Seller must remedy such breach within a reasonable period of time. If
Seller does not so remedy, PGandE may, at its discretion, either request
payment from Seller or immediately draw upon the security posted, up to
the amount calculated in accordance with the formula set forth in Section
(a) above, provided that if during Seller's period to remedy, Seller
disputes PGandE's conclusion that Seller is in material breach, and PGandE
elects to draw upon the security, the amount drawn upon by PGandE shall be
deposited in an interest earning escrow account and held in such account
until the dispute is resolved in accordance with Section (c)(5) below.
B-10
(5) Upon the written request of either Party, any controversy or dispute
between the Parties concerning Section (c)(4) above shall be subject to
arbitration in accordance with the provisions of the California Arbitration
Act, Sections (1280-1294.2)of the California Code of Civil Procedure except
as provided otherwise in this section. Either Party may demand arbitration
by first giving written notice of the existence of a dispute and then
within 30 days of such notice giving a second written notice of the demand
for arbitration.
Within ten days after receipt of the demand for arbitration, each Party
shall appoint one person, who shall not be an employee of either Party, to
hear and determine the dispute. After both arbitrators have been appointed,
they shall within five (5) days select a third arbitrator.
The arbitration hearing shall take place in San Francisco, California,
within 30 days of the appointment of the arbitrators, at such time and
place as they select. The arbitrators shall give written notice of the time
of the hearing to both Parties at least ten days prior to the hearing. The
arbitrators shall not be authorized to alter, extend, or modify the terms
of this Agreement. At
B-11
the hearing, each Party shall submit a proposed written decision, and any
relevant evidence may be presented. The decision of the arbitrators must
consist of selection of one of the two proposed decisions, in its entirety.
The decision of any two arbitrators shall be binding and conclusive as to
disputes relating to Section (c)(4) only. Upon determining the matter, the
arbitrators shall promptly execute and acknowledge their decision and
deliver a copy to each Party. A judgment confirming the award may be
rendered by any superior court having jurisdiction. Each Party shall bear
its own arbitration costs and expenses, including the cost of the
arbitrator it selected, and the costs and expenses of the third arbitrator
shall be divided equally between both Parties, except as provided otherwise
elsewhere in this Agreement.
Pending resolution of any controversy or dispute hereunder, performance by
each Party shall continue so as to maintain the status quo prior to notice
of such controversy or dispute. Resolution of the controversy or dispute
shall include payment of any interest accrued in the escrow account.
B-12
TABLE B-2
Levelized Energy Price Schedule
For a term of agreement of 15-16 years:
---- -- ---------
Year in
Which
Energy
Deliv- Levelized Energy Prices*, (cent)/kWh Weighted
eries -------------------------------------------------------------
Period A Period B Annual
------------------------------- -----------------------------
Begin On-Peak Partial-Peak Off-Peak On-Peak Partial-Peak Off-Peak Average
------- ------- ------------ -------- ------- ------------ -------- --------
1983 5.76 5.50 5.31 5.85 5.71 5.58 5.57
1984 6.06 5.78 5.58 6.14 6.00 5.86 5.85
1985 6.41 6.11 5.91 6.50 6.35 6.20 6.19
1986 6.85 6.54 6.32 6.95 6.79 6.63 6.62
1987 7.37 7.03 6.79 7.47 7.30 7.13 7.12
1988 7.96 7.60 7.34 8.07 7.89 7.70 7.69
For a term of agreement of 17-19 years:
---- -- ---------
Year in
Which
Energy
Deliv- Levelized Energy Prices*, (cent)/kWh Weighted
eries -------------------------------------------------------------
Period A Period B Annual
------------------------------- -----------------------------
Begin On-Peak Partial-Peak Off-Peak On-Peak Partial-Peak Off-Peak Average
------- ------- ------------ -------- ------- ------------ -------- --------
1983 5.90 5.63 5.44 5.98 5.84 5.71 5.70
1984 6.23 5.95 5.74 6.32 6.18 6.03 6.02
1985 6.60 6.30 6.08 6.69 6.53 6.38 6.37
1986 7.06 6.73 6.51 7.16 7.00 6.83 6.82
1987 7.60 7.25 7.00 7.70 7.53 7.35 7.34
1988 8.21 7.83 7.57 8.32 8.13 7.94 7.93
For a term of agreement of 20-30 years:
---- -- ---------
Year in
Which
Energy
Deliv- Levelized Energy Prices*, (cent)/kWh Weighted
eries -------------------------------------------------------------
Period A Period B Annual
------------------------------- -----------------------------
Begin On-Peak Partial-Peak Off-Peak On-Peak Partial-Peak Off-Peak Average
------- ------- ------------ -------- ------- ------------ -------- --------
1983 6.49 6.20 5.98 6.58 6.43 6.28 6.27
1984 6.90 6.58 6.35 6.99 6.83 6.67 6.66
1985 7.34 7.00 6.76 7.44 7.27 7.10 7.09
1986 7.88 7.51 7.26 7.99 7.81 7.62 7.61
1987 8.49 8.10 7.82 8.61 8.41 8.21 8.20
1988 9.16 8.74 8.44 9.29 9.08 8.86 8.85
---------------
* These prices are differentiated by the time periods as defined in Table B-4.
B-13
Energy Payment Option 3 - Incremental Energy Rate
During the period specified in Article 4, annual adjustments to Seller's
energy payments shall be made as described below.
At the end of each calendar year, the Derived Incremental Energy Rate (with
units expressed in Btu/kWh) will be calculated as follows:
Derived Incremental Energy Rate (▇▇▇▇) = B
-----
A x C
where:
A = the total kWh delivered by seller during the calendar year,
excluding any kWh delivered when Seller was asked to curtail
deliveries under Curtailment Option A or when Seller was asked to
--
take adjusted prices under Curtailment Option S.
B = the total dollars paid for the energy described for A above.
C = the weighted average price paid during the calendar year by
PGandE's Electric Department for oil and natural gas for PGandE's
fossil steam plants, expressed in $/Btu on a gas Btu basis.
B-14
If the ▇▇▇▇ is between the upper and lower Incremental Energy Rate Bounds
specified for that year in Table B-3 for the curtailment option selected by
Seller, no additional payment is due either Party.
If the ▇▇▇▇ is below the lower Incremental Energy Rate Bound, PGandE shall
pay Seller an amount calculated as follows:
P = Lower Incremental
S (Energy Rate bound - ▇▇▇▇)(A)(C)
where:
P = additional payment due Seller.
S
▇▇▇▇ = Derived Incremental Energy Rate.
PGandE shall add this payment to the first payment made to Seller following the
calculation.
If the ▇▇▇▇ is above the upper Incremental Energy Rate Bound, Seller shall
pay PGandE an amount calculated as follows:
Upper Incremental
P = (▇▇▇▇ - Energy Rate Bound)(A)(C)
B
where:
P = Amount due PGandE
B
▇▇▇▇ = Derived Incremental Energy Rate.
B-15
This amount shall be deducted from the first payment made to Seller following
the calculation. If there is any remaining amount due PGandE, PGandE may, at its
option, invoice Seller with such payment due within 30 days or deduct this
amount from future payments due Seller.
B-16
TABLE B-3
Forecasted Incremental Energy Rates and
Incremental Energy Rate Bounds
Curtailment Option A:
Incremental
Forecasted Energy Upper Incremental Lower Incremental
Incremental Rate Band Energy Energy
Energy Width from Rate Bound, Rate Bound,
Rates, Article 4, Btu/kWh Btu/kWh
Btu/kWh Btu/kWh [column (a) [column (a)
Year (a) (b) plus column (b)] minus column(b)]
---- ----------- ----------- ----------------- -----------------
1984 9,000
--------- --------------- ---------------
1985 9,050
--------- --------------- ---------------
1986 8,840
--------- --------------- ---------------
1987 8,850
--------- --------------- ---------------
1988 8,960
--------- --------------- ---------------
1989 8,820
--------- --------------- ---------------
1990 8,540
--------- --------------- ---------------
1991 8,540
--------- --------------- ---------------
1992 8,540
--------- --------------- ---------------
1993 8,540
--------- --------------- ---------------
1994 8,540
--------- --------------- ---------------
1995 8,540
--------- --------------- ---------------
1996 8,540
--------- --------------- ---------------
1997 8,540
--------- --------------- ---------------
1998 8,540
--------- --------------- ---------------
B-17
TABLE B-3 (continued)
Curtailment Option B:
Incremental
Forecasted Energy Upper Incremental Lower Incremental
Incremental Rate Band Energy Energy
Energy Width from Rate Bound, Rate Bound,
Rates, Article 4, Btu/kWh Btu/kWh
Btu/kWh Btu/kWh [column (a) [column (a)
Year (a) (b) plus column (b)] minus column(b)]
---- ----------- ----------- ----------------- -----------------
1984 9,440
--------- --------------- ---------------
1985 9,500
--------- --------------- ---------------
1986 9,280
--------- --------------- ---------------
1987 9,290
--------- --------------- ---------------
1988 9,400
--------- --------------- ---------------
1989 9,270
--------- --------------- ---------------
1990 8,970
--------- --------------- ---------------
1991 8,970
--------- --------------- ---------------
1992 8,970
--------- --------------- ---------------
1993 8,970
--------- --------------- ---------------
1994 8,970
--------- --------------- ---------------
1995 8,970
--------- --------------- ---------------
1996 8,970
--------- --------------- ---------------
1997 8,970
--------- --------------- ---------------
1998 8,970
--------- --------------- ---------------
B-18
TABLE B-41
Time Periods
Monday Sundays
through and
Friday2 Saturdays2 Holidays
---------- ---------- ---------
Seasonal Period A
(May I through September 30)
On-Peak 12:30 p.m.
to
6:30 p.m.
Partial-Peak 8:30 a.m. 8:30 a.m.
to to
12:30 p.m. 10:30 p.m.
6:30 p.m.
to
10:30 p.m.
Off-Peak 10:30 p.m. 10:30 p.m. All Day
to to
8:30 a.m. 8:30 a.m.
Seasonal Period 3
(October I through April 30)
On-Peak 4:30 p.m.
to
8:30 p.m.
Partial-Peak 8:30 p.m. 8:30 a.m.
to to
10:30 p.m. 10:30 p.m.
8:30 a.m.
to
4:30 p.m.
Off-Peak 10:30 p.m. 10:30 p.m. All Day
to to
8:30 a.m. 8:30 a.m.
1 This table is subject to change to accord with the on-peak, partial-peak,
and off-peak periods as defined in PGandE's own rate schedules for the sale
of electricity to its large industrial customers.
2 Except the following holidays: New Year's Day, Washington's birthday,
Memorial Day, Independence Day, Labor Day, Veteran's Day, Thanksgiving Day,
and Christmas Day, as specified in Public Law 90-363 (5 U.S.C.A. Section
6103(a))
B-19
TABLE B-5
ENERGY PRICES
Energy Prices Effective November 1, 1984 - January 31, 1985
The energy purchase price calculations which will apply to energy deliveries determined from
meter readings taken during November, December, and January are as follows:
(a) (b) (c) (d)
Revenue Requirement Energy Purchase
Time Period Incremental for Cash Price4
--------------------- Energy Rate1 Cost of Energy2 Working Capital3 (d) = [(a) x (b)] + (c)
------------ --------------- ----------------- -----------------------
(Btu/kWh) ($/10 Btu) ($/kWh) ($/kWh)
November 1 - January 31
(Period B)
Time of
Delivery Basis:
On-Peak 16,320 5.4011 0.00053 0.08868
Partial-Peak 15,689 5.4011 0.00051 0.08525
Off-Peak 11,625 5.4011 0.00038 0.06317
Seasonal Average 13,692 5.4011 0.00045 0.07440
(Period B)
---------------------
1 Incremental energy rates (Btu/kWh) for Seasonal Period A and Seasonal
Period B are derived from the marginal energy costs (including variable
operating and maintenance expense) adopted by the CPUC in Decision No.
----
▇▇-▇▇-▇▇▇ (page 339). They are based upon natural gas as the incremental
fuel and weighted average hydroelectric power conditions.
2 Cost of natural gas under PGandE Gas Schedule No. G-55 effective October 1,
1984 per Advice No. 1285-G.
3 Revenue Requirement for Cash Working Capital as prescribed by the CPUC in
----
Decision No. ▇▇-▇▇-▇▇▇.
4 Energy Purchase Price = (Incremental Energy Rate x Cost of Energy) +
Revenue Requirement for Cash Working Capital. The energy purchase price
excludes the applicable energy line loss adjustment factors. However, as
ordered by Ordering Paragraph No. 12(j) of CPUC Decision No. ▇▇-▇▇-▇▇▇,
----
this figure is currently 1.0 for transmission and primary distribution loss
adjustments and is equal to marginal cost line loss adjustment factors for
the secondary distribution voltege level. These factors may be changed by
the CPUC in the future. The currently applicable energy lose adjustment
----
(actors are shown in Table B-6.
B-20
TABLE B-6
Energy Loss Adjustment Factors
Primary Secondary
Transmission Distribution Distribution
------------ ------------ ------------
Seasonal Period A
(May I through September 30)
On-Peak 1.0 1.0 1.0148
Partial-Peak 1.0 1.0 1.0131
Off-Peak 1.0 1.0 1.0093
Seasonal Period B
(October I through April 30)
On-Peak 1.0 1.0 1.0128
Partial-Peak 1.0 1.0 1.0119
Off-Peak 1.0 1.0 1.0087
1 The applicable energy loss adjustment factors may be revised pursuant to
orders of the CPUC.
----
B-21
APPENDIX C
CURTAILMENT OPTIONS
Seller has two options regarding curtailment of energy deliveries and
Seller has made its selection in Article 7. The two options are as follows:
CURTAILMENT OPTION OPTION A - HYDRO SPILL AND
NEGATIVE AVOIDED COST
(a) In anticipation of a period of hydro spill conditions, as defined by
the CPUC, PGandE may notify Seller that any purchases of energy from Seller
----
during such period shall be at hydro savings prices quoted by PGandE. if Seller
delivers energy to PGandE during any such period, Seller shall be paid hydro
savings prices for those deliveries in lieu of prices which would otherwise be
applicable. The hydro savings prices shall be calculated by PGandE using the
following formula:
AQF - S
---------- x PP (>0)
AQF =
where:
AQF = Energy in kWh, projected to be available during hydro spill
conditions from all qualifying facilities under agreements
containing hydro savings price provisions.
C-1
S = Potential energy, in kWh, from PGandE hydro facilities which
will be spilled if all AQF is delivered to PGandE:.
PP = Prices published by PGandE for purchases during other than
hydro spill conditions.
PGandE shall give Seller notice of general periods when hydro spill
conditions are anticipated, and shall give Seller as much advance notice as
practical of any specific hydro spill period and the hydro savings price which
will be applicable during such period.
(b) PGandE shall not be obligated to accept or pay for and may require
Seller with a Facility with a nameplate rating of one megawatt or greater to
--------
interrupt or reduce deliveries of energy during periods when PGandE would incur
negative avoided costs (as defined by the CPUC) due to continued acceptance of
----
energy deliveries under this Agreement. Whenever possible, PGandE shall give
Seller reasonable notice of the possibility that interruption or reduction of
deliveries way be required.
(c) Before interrupting or reducing deliveries under subsection (b), above,
and before invoking hydro savings prices under subsection (a), above, PGandE
shall take reasonable steps to make economy sales of the surplus energy giving
rise to the condition. If such economy sales are made, while the surplus energy
condition exists Seller shall
C-2
be paid at the economy sales price obtained by PGandE in lieu of the otherwise
applicable prices.
(d) If Seller is selling net energy output to PGandE and simultaneously
--- ------ ------
purchasing its electrical needs from PGandE and Seller elects not to sell energy
to PGandE at the hydro savings price pursuant to subsection (a) or when PGandE
curtails deliveries of energy pursuant to subsection(b), Seller shall not use
such energy to meet its electrical needs but shall continue to purchase all its
electrical needs from PGandE. If Seller is selling surplus energy output to
------- ------ ------
PGandE, subsections (a) or (b) shall only apply to the surplus energy output
------- ------ ------
being delivered to PGandE, and Seller can continue to internally use that
generation it has retained for its own use.
CURTAILMENT OPTION B - ADJUSTED PRICE PERIOD
(a) in each calendar year, the price which PGandE is obligated to pay
Seller for energy deliveries during 1,000 off-peak hours (as defined in Table
B-4, Appendix B) may be adjusted to a price equal to, but not in excess of,
PGandE's available alternative source. This adjusted price shall be effective
under any of the following conditions;
(i) when PGandE 's energy source at the margin is not a PGandE oil- or
gas-fueled plant, and PGandE
C-3
can replace Seller's energy with energy from this source at a cost less than the
price paid to Seller;
(ii) when PGandE would incur negative avoided costs (as defined by the
CPUC) due to continued acceptance of energy deliveries under this
----
Agreement; or
(iii) when PGandE is experiencing minimum system operations.
During any of the conditions described above the adjusted price may be
zero.
(b) Whenever possible, PGandE shall give Seller reasonable notice of any
price adjustment for energy deliveries and its probable duration.
(c) If seller is selling net energy output to PGandE and simultaneously
--- ------ ------
purchasing its electrical needs from PGandE and Seller elects not to sell energy
to PGandE at the adjusted price, Seller shall not use such energy to meet its
electrical needs but shall continue to purchase all its electrical needs from
PGandE.
(d) After Seller receives notice of f the probable duration of the period
during which the adjusted price will be paid, Seller may elect to perform
maintenance during such
C-4
period and so inform the PGandE employee in charge at the designated PGandE
---------- ------
switching center prior to the time when the adjusted price period is expected to
--------- ------
begin. If Seller makes such election, the number of off-peak hours of probable
duration quoted in PGandE notice to Seller shall be applied to the 1,000-hour
calendar year limitation set forth in this section. After an election to do
maintenance, if Seller makes any deliveries of energy during the quoted probable
duration period, Seller shall be paid the adjusted price quoted in its notice
from PGandE without regard to any subsequent changes on the PGandE system which
may alter the adjusted price or shorten the actual duration of the condition.
▇-▇
▇▇▇▇▇▇▇▇ ▇
▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇-▇ AS-DELIVERED CAPACITY PAYMENT OPTIONS
Seller has two options for as-delivered capacity payments and Seller has
------------ --------
made its selection in Article 5. The two options are as follows:
AS-DELIVERED CAPACITY PAYMENT OPTION 1
PGandE shall pay Seller for as-delivered capacity at prices authorized from
------------ --------
tine to time by the CPUC. The as-delivered capacity prices in effect on the date
---- ------------ --------
of execution are calculated as shown in Exhibit D-1.
AS-DELIVERED CAPACITY PAYMENT OPTION 2
During the fixed price period, the as-delivered capacity prices will be
------ ----- ----- ------------ --------
calculated in accordance with Exhibit D-1 and the forecasted shortage costs in
Table D-2.
For the remaining years of the term of agreement, PGandE shall pay Seller
---- -- ---------
for as-delivered capacity at the
------------ --------
D-1
higher of:
(i) prices authorized from time to time by the CPUC;
----
(ii) the as-delivered capacity prices that were paid Seller in the last
------------ --------
year of the fixed price period; or
----- ----- ------
(iii) the as-delivered capacity prices in effect in the first year
------------ --------
following the end of the fixed price period, provided that the
----- ----- ------
annualized shortage cost from which these prices are derived does not
exceed the annualized value of a gas turbine.
D-2 As-DELIVERED CAPACITY IN EXCESS OF FIRM CAPACITY
The amount of capacity delivered in excess of firm capacity will be
---- --------
considered as-delivered capacity. This as-delivered capacity is based on the
------------ -------- ------------ --------
total kilowatt-hours delivered each month during all on-peak, partial-peak and
off-peak hours excluding any energy associated with generation levels equal to
or less than the firm capacity.
---- --------
Seller has the two options listed in Section D-1 for payment for such
as-delivered capacity. Seller has made its selection in Article 5.
------------ --------
D-2
EXHIBIT D-1
The as-delivered capacity price (in cents per KW-hr) for power delivered by
------------ --------
the Facility is the product of three factors:
--------
(a) The shortage cost in each year the Facility is operating.
--------
Currently, this shortage cost is $156 per kW-year.
(b) A capacity loss adjustment factor which provides for the effect of
the deliveries on PGandE's transmission and distribution losses based on
the Seller's interconnection voltage level. The applicable capacity loss
adjustment factors for non-remote1 Facilities are presented in Table
D-1(a). Capacity loss adjustment factors for remote Facilities shall be
calculated individually.
(c) An allocation factor which accounts for the different values of
as-delivered capacity in different time periods and converts dollars per
------------ --------
kW-year to cents per kWh. The current allocation factors are presented in
Table D-l(b). The time periods to which they apply are shown in Table B-4,
Appendix B. The allocation factors are subject to change from time to time.
---------------
1 As defined by the CPUC.
---
D-3
TABLE D-1(a)
Capacity Loss Adjustment Factors
for Non-Remote1 Facilities
Voltage Level Loss Adjustment Factor
------------- ----------------------
Transmission .989
Primary Distribution .991
Secondary Distribution .991
If the Facility is remote, the capacity loss adjustment factor is
--------
---------------------------2.
TABLE D-1(b)
Allocation Factors
for As-Delivered Capacity3
On-Peak Partial-Peak Off-Peak
-------------- -------------- ---------------
(cent)-yr/$-hr) (cent)-yr/$-hr) (cent)-yr/$-hr)
Seasonal Period A .10835 .02055 .00002
Seasonal Period B .00896 .00109 .00001
---------------
1 As defined by the CPUC. The capacity loss adjustment factors for remote
----
Facilities are determined individually.
2 Determined individually.
3 The units for the allocation factor, (cent)-yr/$-hr, are derived from the
conversion of (cent)/kW-yr into (cent)/kWh as follows:
(cent)/KWh (cent)/kW-hr (cent)-yr
---------- = ------------ = ---------
$/kW-yr $/kW-yr $-hr
The allocation factors were prescribed by the CPUC in Decision No.
----
▇▇-▇▇-▇▇▇ and are subject to change from time to time.
D-4
TABLE D-2
Forecasted Shortage Cost Schedule
Forecast Shortage
Year Cost, $/kW-Yr
------------- ------------------
1983 70
1984 76
1985 81
1986 88
1987 95
1988 102
1989 110
1990 118
1991 126
1992 135
1993 144
1994 154
1995 164
1996 176
1997 188
D-5
APPENDIX E
FIRM CAPACITY
CONTENTS
Section Page
------- ----
E-1 GENERAL ▇-▇
▇-▇ PERFORMANCE REQUIREMENTS E-2
E-3 SCHEDULED MAINTENANCE E-4
E-4 ADJUSTMENTS TO FIRM CAPACITY E-5
E-5 FIRM CAPACITY PAYMENTS E-6
E-6 DETERMINATION OF NATURAL FLOW DATA E-12
E-7 THEORETICAL OPERATION STUDY E-13
E-8 DETERMINATION OF AVERAGE DRY E-15
YEAR CAPACITY RATINGS
E-9 INFORMATION REQUIREMENTS E-15
E-10 ILLUSTRATIVE EXAMPLE E-16
E-11 MINIMUM DAMAGES E-19
E-1
APPENDIX E
FIRM CAPACITY
E-1 GENERAL
This Appendix E establishes conditions and prices under which PGandE shall
pay for firm capacity.
---- --------
PGandE's obligation to pay for firm capacity shall begin on the firm
---- -------- ----
capacity availability date. The firm capacity price shall be subject to
-------- ------------ ---- --- --------- -----
adjustment as provided for in this Appendix E.
The firm capacity prices in Table E-2 are applicable for deliveries of firm
---- -------- ------ ----
capacity beginning after December 30, 1982.
--------
E-2 PERFORMANCE REQUIREMENTS
(a) To receive full capacity payments, the firm capacity shall be delivered
---- --------
for all of the on-peak hours1 in the peak months on the PGandE system, which are
presently the months of June, July, and August, subject to a 20 percent
allowance for forced outages in any month. Compliance with this provision shall
------ -------
be used on the Facility's total on-peak deliveries for each of the peak
----------
---------------
1 On-peak, partial-peak, and off-peak hours are defined in Table ▇-▇,
▇▇▇▇▇▇▇▇ ▇.
▇-▇
months and shall exclude any energy associated with generation greater than the
firm capacity.
---- --------
(b) If Seller is prevented from meeting the performance requirements
because of a forced outage on the PGandE system, a PGandE curtailment of
Seller's deliveries, or a condition set forth in Section A-7, Appendix A, PGandE
shall continue capacity payments. Firm capacity payments will be calculated in
---- --------
the same manner used for scheduled maintenance outages.
(c) It Seller is prevented from meeting the performance requirements
because of force majeure, PGandE shall continue capacity payments for ninety
days from the occurrence of the force majeure. Thereafter, Seller shall be
deemed to have failed to have met the performance requirements. Firm capacity
---- --------
payments will be calculated in the same manner used for scheduled maintenance
outages.
(d) If Seller is prevented from meeting the performance requirements
because of extreme dry year conditions, PGandE shall continue capacity payments.
Extreme dry year conditions are drier than those used to establish firm capacity
---- --------
pursuant to Section E-8. Seller shall warrant to PGandE that the Facility is a
--------
hydroelectric facility and that such conditions are the sole cause of Seller's
inability to meet its firm capacity obligations.
---- --------
E-3
(e) If Seller is prevented from meeting the performance requirements for
reasons other than those described above in Sections E-2(b), (c), or (d):
(1) Seller shall receive the reduced firm capacity payments as
---- --------
provided in Section E-5 for a probationary period not to exceed 15 months,
or as otherwise agreed to by the Parties.
(2) If, at the end of the probationary period Seller has not
demonstrated that the Facility can meet the performance requirements,
--------
PGandE may derate the firm capacity pursuant to Section E-4(b).
---- --------
E-3 SCHEDULED MAINTENANCE
Outage periods for scheduled maintenance shall not exceed 840 hours (35
days) in any 12-month period. This allowance may be used in increments of an
hour or longer on a consecutive or nonconsecutive basis. Seller may accumulate
unused maintenance hours from one 12-month period to another up to a maximum of
1,080 hours (45 days). This accrued time must be used consecutively and only for
major overhauls. Seller shall provide PGandE with the following advance notices:
24 hours for scheduled outages less than one day, one week for a scheduled
outage of one day or more (except for major overhauls), and six months for a
major overhaul. Seller shall not schedule major overhauls during the peak months
(presently June, July and August). Seller shall make reasonable efforts to
schedule Or reschedule
E-4
routine maintenance outside the peak months, and in no event shall outages for
scheduled maintenance exceed 30 peak hours during the peak months. Seller shall
confirm in writing to PGandE pursuant to Article 9, within 24 hours of the
original notice, all notices Seller gives personally or by telephone for
scheduled maintenance.
If Seller has selected Curtailment option B, off-peak hours of maintenance
performed pursuant to Section (d) of Curtailment Option B, Appendix C shall not
be deducted from Seller's scheduled maintenance allowances set forth above.
E-4 ADJUSTMENTS TO FIRM CAPACITY
(a) Seller may increase the firm capacity with the approval of PGandE and
---- --------
receive payment for the additional capacity thereafter in accordance with the
applicable capacity purchase price published by PGandE at the time the increase
is first delivered to PGandE.
(b) Seller may reduce the firm capacity at any time prior to the firm
---- -------- ----
capacity availability date by giving written notice thereof to PGandE. PGandE
------- ------------- ----
may derate the firm capacity in accordance with Section E-2(e) as a result of
---- --------
appropriate data showing Seller has failed to meet the performance requirements
of Section E-2.
E-5
E-5 FIRM CAPACITY PAYMENTS
The method for calculation of firm capacity payments is shown below. As
---- --------
used below in this section, month refers to a calendar month.
The monthly payment for firm capacity will be the product of the Period
---- --------
Price Factor (PPF), the Monthly Delivered Capacity (MDC), the appropriate
capacity loss adjustment factor from Table E-1 based on the Facility's
----------
interconnection voltage, and the appropriate performance bonus factor, if any,
from Table E-3, plus any allowable payment for outages due to scheduled
maintenance. The firm capacity price shall be applied to meter readings taken
---- -------- -----
during the separate times and periods as illustrated in Table B-4, Appendix B.
The PPF is determined by multiplying the firm capacity price by the
---- -------- -----
following Allocation Factors1
Firm PPF
x ---- =
Allocation Factor Capacity Price ($/kW-month)
-------- -----
Seasonal .18540 -------------- --------------
Period A
Seasonal .01043 -------------- --------------
Period B
---------------
1 These allocation factors were prescribed by the CPUC in Decision No.
----
▇▇-▇▇-▇▇▇. All allocation factors are subject to change by PGandE based on
PGandE's marginal capacity cost allocation, as determined in general rate
case proceedings before the CPUC. Seasonal Periods A and B are defined in
----
Table B-4. Appendix B.
E-6
The MDC is determined in the following manner:
(1) Determine the Performance Factor (P), which is defined as the lesser of
1.0 or the following quantity:
P = A
------------------ ($ 1.0)
C x (B-5) x (0.8*)
Where:
A = Total kilowatt-hours delivered during all on-peak and partial-peak hours
excluding any energy associated with generation levels greater than the
firm capacity.
---- --------
C = Firm capacity in kilowatts.
---- --------
B = Total on-peak and partial-peak hours during the month.
S = Total on-peak and partial-peak hours during the month Facility is out of
--------
service on scheduled maintenance.
(2) Determine the Monthly Capacity Factor (MCF), which is computed using
the following expression:
M
MCF = P x (1.0 - -
D)
Where:
M = The number of hours during the month Facility is out of service on
--------
scheduled maintenance.
D = The number of hours in the month.
---------------
* 0.8 reflects a 20% allowance for forced outage.
------ ------
E-7
(3) Determine the MDC by multiplying the MCF by
C: MDC (kilowatts) = MCF x C
The monthly payment for firm capacity is then determined by multiply the
---- --------
PPF by the MDC, by the appropriate capacity loss adjustment factor presented
from Table E-1, and by the appropriate performance bonus factor, if any, from
Table E-3.
monthly payment capacity loss performance
firm capacity = PPF x MDC x adjustment factor x bonus factor
Furthermore, the payment for a month in which there is an outage for
scheduled maintenance shall also include an amount equal to the product of the
average hourly firm capacity payment1 for the most recent month in the same type
---- --------
of Seasonal Period (i.e., Seasonal Period A or Seasonal Period B) during which
deliveries were made times the number of hours of outage for scheduled
maintenance in the current month. Firm capacity payments will continue during
---- --------
the outage periods for scheduled maintenance provided that the provisions of
Section E-3 are met.
During a probationary period Seller's monthly payment for firm capacity
---- --------
shall be determined by substituting for the firm capacity, the capacity at which
---- --------
---------------
1 Total monthly payment divided by the total number of hours in the monthly
billing period.
E-8
Seller would have met the performance requirements. In the event that during the
probationary period Seller does not meet the performance requirements at
whatever firm capacity was established for the previous month, Seller's monthly
---- --------
payment for firm capacity shall be determined by substituting the firm capacity
---- -------- ---- --------
at which Seller would have met the performance requirements. The performance
bonus factor shall not be applied during probationary periods.
TABLE E-1
If the Facility is non-remote1 the firm capacity loss adjustment factors are as
-------- ---- --------
follows:
Voltage Level Loss Adjustment Factor
------------- ----------------------
Transmission .989
Primary Distribution .991
Secondary Distribution .991
If the Facility is remote the firm capacity loss adjustment factor is 2
-------- ---- -------- --------.
---------------
1 As defined by the CPUC.
----
2 Determined individually
E-9
TABLE E-2
Firm Capacity Price Schedule
----------------------------
(Levelized $/kW-year)
Firm
----
Capacity
--------
Avail-
------
ability
-------
Date Number of Years of Firm Capacity Delivery
---- --------
----- --------------------------------------------------------------------------------------------------------------------------
(Year) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 20 25 30
------ -- -- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
1982 65 68 70 72 75 77 79 81 84 86 88 90 91 93 95 103 109 113
1983 70 73 75 78 80 83 85 88 90 92 94 96 98 100 102 110 117 122
1984 76 78 81 84 86 89 92 94 97 99 101 103 106 108 110 118 125 130
1985 81 84 87 90 93 96 99 101 104 106 109 111 113 115 118 127 134 140
1986 88 91 94 97 100 103 106 109 112 114 117 119 122 124 126 136 144 150
1987 95 98 101 105 108 111 114 117 120 123 125 128 130 133 135 146 154 160
E-10
TABLE E-3
Performance Bonus Factor
The following shall be the performance bonus factors applicable to the
calculation of the monthly payments for firm capacity delivered by the Facility
---- -------- --------
after it has demonstrated a firm capacity factor in excess of 85%.
---- --------
DEMONSTRATED
FIRM CAPACITY FACTOR PERFORMANCE
(%) BONUS FACTOR
-------------------- ------------
85 1.000
90 1.059
95 1.118
100 1.176
After the Facility has delivered power during the span of all of the peak
--------
months on the PGandE system (presently June, July, and August) in any year
(span),
(i) the firm capacity factor for each such month shall be calculated
---- --------
in the following manner:
F
--------- x 100
FIRM CAPACITY FACTOR (%) = (N-W) x Q
Where:
F = Total kilowatt-hours delivered by Seller in any peak month during all
on-peak hours excluding any energy associated with generation levels
greater than the firm capacity.
---- --------
E-11
N - Total on-peak hours during the month.
W = Total on-peak hours during the peak month that the Facility is out of
--------
service on scheduled maintenance.
Q = Firm capacity in kilowatts.
---- --------
(ii) the arithmetic average of the above firm capacity shall be
---- --------
determined for that span,
(iii) the average of the above arithmetic average firm capacity
---- --------
factors for the most recent span(s), not to exceed 5, shall be calculated
and shall become the Demonstrated Firm Capacity Factor.
To calculate the performance bonus factor for a Demonstrated Firm Capacity
Factor not shown in Table E-3 use the following formula:
Performance Bonus Factor = Demonstrated Firm Capacity Factor (%)
-------------------------------------
85%
SECTIONS E-6 THROUGH E-10 SHALL APPLY ONLY TO HYDROELECTRIC
-----------------------------------------------------------
PROJECTS
-------
E-6 DETERMINATION OF NATURAL FLOW DATA
Natural flow data shall be based on a period of record of at least 50 years
and which includes historic critically
E-12
dry periods. In the event Seller demonstrates that a natural flow data base of
at least 50 years would be unreasonably burdensome, PGandE shall accept a
shorter period of record with a corresponding reduction in the averaging basis
set forth in Section E-8. Seller shall determine the natural flow data by month
by using one of the following methods:
Method I
If stream flow records are available from a recognized gauging station on
the water course being developed in the general vicinity of the project, Seller
may use the data from them directly.
Method 2
If directly applicable flow records are not available, Seller may develop
theoretical natural flows based on correlation with available flow data for the
closest adjacent and similar area which has a recognized gauging station using
generally accepted hydrologic estimating methods.
E-7 THEORETICAL OPERATION STUDY
Based on the monthly natural flow data developed under Section E-6 a
theoretical operation study shall be prepared.
E-13
by Seller. Such a study shall identify the monthly capacity rating in kW and
the monthly energy production in kWh for each month of each year. The study
shall take into account all relevant operating constraints, limitations, and
requirements including but not limited to --
(1) Release requirements for support of fish life and any other operating
constraints imposed on the project;
(2) Operating characteristics of the proposed equipment of the Facility
--------
such as efficiencies, minimum and maximum operating levels, project control
procedures, etc.;
(3) The design characteristics of project facilities such as head losses in
penstocks, valves, tailwater elevation levels, etc.; and
(4) Release requirements for purposes other than power generation such as
irrigation, domestic writer supply, etc.
The theoretical operation study for each month shall assume an even
distribution of generation throughout the month unless Seller can demonstrate
that the Facility has water storage characteristics. For the study to show
--------
monthly capacity ratings, the Facility shall be capable of operating during all
--------
on-peak hours in the peak months on the PGandE system, which are presently the
months of June, July, and August. If the project does not have this capability
throughout each such month, the capacity rating in that month of that year shall
be set at zero for purposes of this theoretical operation study.
E-14
E-8 DETERMINATION OF AVERAGE DRY YEAR CAPACITY RATINGS
Based on the results of the theoretical operation study developed under
Section E-7, the average dry year capacity rating shall be established for each
month. The average dry year shall be based on the average of the five years of
the lowest annual generation as shown in the theoretical operation study. Once
such years of lowest annual generation are identified, the monthly capacity
rating Is determined for each month by averaging the capacity ratings from each
month of those years. The firm capacity shown in Article 5 shall not exceed the
---- --------
lowest average dry year monthly capacity ratings for the peak months on the
PGandE system, which are presently the months of June, July, and August.
E-9 INFORMATION REQUIREMENTS
Seller shall provide the following information to PGandE for its review:
(1) A summary of the average dry year capacity ratings based on the
theoretical operation study as provided in Table E-4;
(2) A topographic project map which shows the location of all aspects of
the Facility and locations of stream gauging stations used to determine natural
--------
flow data;
(3) A discussion of all major factors relevant to project operation;
E-15
(4) A discussion of the methods and procedures used to establish the
natural flow data. This discussion shall be in sufficient detail for PGandE to
determine that the methods are consistent with those outlined in Section E-6 and
are consistent with generally accepted engineering practices; and
(5) Upon specific written request by PGandE, Seller's theoretical operation
study.
E-10 ILLUSTRATIVE EXAMPLE
(1) Determine natural flows - These flows are developed based on historic
stream gauging records and are compiled by month, for a long-term period
(normally at least 50 years or more) which covers dry periods which historically
occurred in the 1920's and 30's and more recently in 1976 and 77. In all but
unusual situations this will require application of hydrological engineering
methods to records that are available, primarily from the USGS publication
"Water Resources Data for California".
(2) Perform theoretical operation study - Using the natural flow data
compiled under (l) above a theoretical operation study is prepared which
determines, for each month of each year, energy generation (kWh) and capacity
rating (kW). This study is performed based on the Facility's design, operating
----------
capabilities, constraints, etc., and should take into account all factors
relevant to project
E-16
operation. Generally such a study is done by Computer which routes the natural
flows through project features, considering additions and withdrawals from
storage, spill past the project, releases for support of fish life, etc., to
determine flow available for generation. Then the generation and capacity
amounts are computed based )n equipment performance, efficiencies, etc.
(3) Determine average dry year capacity ratings - After the theoretical
project operation study is complete the five years in which the annual
generation (kWh) would have been the lowest are identified. Then for each month,
the capacity rating (kW) is averaged for the five years to arrive at a monthly
average capacity rating. The firm capacity is then set by the Seller based on
---- --------
the monthly average dry year capacity ratings and the performance requirements
of this appendix. An example project is shown in the attached completed Table
E-4.
E-17
EXAMPLE
TABLE E-4
Summary of Theoretical Operation Study.
Project: New Creek 1
--------------------
Water Source: West Fork New Creek
-----------------------------------------------------------------
Mode of Operation; Run of the river
-----------------------------------------------------------------
Type of Turbine: ▇▇▇▇▇▇▇ Design Flow: 100 cfs Design Head: 150 feet
------ ------ --------
Operating Characteristics1:
Flow Head (feet) Output Efficiency (%)
------------- ----------------------
(cfs) Gross Net (kW) Turbine Generator
----- ------ ------ ------ ----------- ---------
Normal Operation 100 160 150 1,120 90 98
Maximum Operation 110 160 148 1,150 85 98
Minimum Operation 30 160 155 290 75 98
Average Dry Year Operation - Based on the average of the following lowest
generation years: 1930, 1932, 1934, 1949, 1977.
Energy Generation Capacity Output Percent of
Month (kWh) (kW) Total Hours Operated
-------- ----------------- --------------- --------------------
January 855,000 1.150 100
February 753,000 1,120 100
March 818,000 1,100 100
April 727,000 1,010 100
May 699,000 940 100
June 612,000 850 100
July 484,000 650 100
August 305,000 410 100
September 245,000 340 100
October 148,800 200 100
November 468,000 650 100
December 595,000 800 100
Maximum firm capacity: 410 kW
---- -------
1 If Facility has a variable head, operating curves should be provided.
--------
E-18
E-11 MINIMUM DAMAGES
(a) in the event the firm capacity is derated or Seller terminates this
---- --------
Agreement, the quantity by which the firm capacity is derated or the firm
---- -------- ----
capacity shall be used to calculate the payments due PGandE in accordance with
--------
Section (d).
(b) Seller shall be invoiced by PGandE for all amounts due under this
section. Payment shall be due within 30 days of the date of invoice.
(c) if Seller does not make payments pursuant to Section (b), PGandE shall
have the right to offset any amounts due it against any present or future
payments due Seller.
(d) Seller shall pay to PGandE:
(i) an amount equal to the difference between (a) the firm capacity
---- --------
payments already paid by PGandE, based on the original term of agreement
---- -- ---------
and (b) the total firm capacity payments which PGandE would have paid based
---- --------
on the period of Seller's actual performance using the adjusted firm
-------- ----
capacity price. Additionally, Seller shall pay interest, compounded monthly
-------- -----
from the date the excess capacity payment was made until the date
E-19
Seller repays PGandE, on all overpayments, at the published Federal Reserve
Board three months' Prime Commercial Paper rate; plus
(ii) a sum equal to the amount by which the firm capacity is being
---- --------
terminated or derated times the difference between the current firm
------- ----
capacity price on the date of termination or duration for a term equal to
-------- -----
the balance of the term of agreement and the firm capacity price,
---- -- --------- ---- -------- -----
multiplied by the appropriate factor shown in Table E-5 below. In the event
that the current firm capacity price is less than the firm capacity price,
------- ---- -------- ----- ---- -------- -----
no payment under this subsection (ii) shall be due either Party.
TABLE E-5
Amount of Firm Capacity
---- --------
Terminated or Derated Factor
------------------------- ------
1,000 kW or under 0.25
over 1,000 kW through 10,000 kW 0.75
over 10,000 kW through 25,000 kW 1.00
over 25,000 kW through 50,000 kW 3.00
over 50,000 kW through 100,000 kW 4.00
over 100,000 kW 5.00
E-20
APPENDIX F
INTERCONNECTION
CONTENTS
Section Page
------- ----
F-1 INTERCONNECTION TARIFFS ▇-▇
▇-▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ LOCATION SKETCH F-3
F-3 INTERCONNECTION FACILITIES FOR WHICH F-4
SELLER IS RESPONSIBLE
F-1
F-1 INTERCONNECTION TARIFFS
(The applicable tariffs in effect at the time of execution of this
Agreement shall be attached.)
F-2
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8616-E
------- ------
San Francisco, California Cancelling Original Cal. P.U.C. Sheet No. 7693-E
-------- ------
RULE NO. 21 - NONUTILITY-OWNED PARALLEL GENERATION (T)
This describes the minimum operation, metering and interconnection
requirements for any generating source or sources paralleled with the
Utility's electric system. Such source of sources may include, but are
not limited to, hydroelectric generators, wind-turbine generators, steam
or gas driven turbine generators and photovoltaic systems.
A. GENERAL
1. The type of interconnection and voltage available at any
location and the Utility's specific interconnection require-
ments shall be determined by inquiry at the Utility's local
office.
2. The Utility's distribution and transmission lines which are an (N)
integral part of its overall system are distinguished by the
voltages at which they are operated. Distribution lines are
operated at voltages below 60 kv and transmission lines are
operated at voltages 60 kv and higher. (N)
3. The Power Producer (Producer) shall ascertain and be respon-
sible for compliance with the requirements of all governmental
authorities having jurisdiction.
4. The Producer shall sign the Utility's written form of power
purchase agreement or parallel operation agreement before
connecting or operating a generating source in parallel with
the Utility's system.
5. The Producer shall be fully responsible for the costs of
designing, installing, owning, operating and maintaining all
interconnection facilities defined in Section B.1.
6. The Producer shall submit to the Utility, for the Utility's
review and written acceptance, equipment specifications and
detailed plans for the installation of all interconnection
facilities to be furnished by the Producer prior to their
purchase or installation. The Utility's review and written
acceptance of the Producer's equipment specifications and
detailed plans shall not be construed as confirming or en-
dorsing the Producer's design or as warranting the equip-
ment's safety, durability or reliability. The Utility shall
not, by reason of such review or lack of review, be respon-
sible for strength, details of design adequacy, or capacity
of equipment built pursuant to such specifications, nor
shall the Utility acceptance be deemed an endorsement of
any such equipment.
7. No generating source shall be operated in parallel with the
Utility's system until the interconnection facilities have
been inspected by the Utility and the Utility has provided
written approval to the Producer.
8. Only duly authorized employees of the Utility are allowed
to connect Producer-installed interconnection facilities
to, or disconnect the same from, the Utility's overhead
or underground lines.
B. INTERCONNECTION FACILITIES
1. GENERAL: Interconnection facilities are all means required,
and apparatus installed, to interconnect the Producer's
generation with the Utility's system. Where the Producer
desires to sell power to the Utility, interconnection facil-
ities are also all means required, and apparatus installed,
to enable the Utility to receive power deliveries from the
Producer. Interconnection facilities may include, but are
not limited to:
a. connection, transformation, switching, metering, commu-
nications, control, protective and safety equipment;
and
b. any necessary additions to and reinforcements of the
Utility's system by the Utility.
2. METERING
a. A Producer desiring to sell power to the Utility shall
provide, install, own and maintain all facilities necessary
to accommodate metering equipment specified by the Utility.
Such metering equipment may include meters, telemetering
(applicable where deliveries to the Utility exceed 10 MW)
and other recording and communications devices as may be
required for the reporting of power delivery data to the
Utility. Except as provided for in Section B.2.b following, (T)
Section B.2.b following, the Utility shall provide, install,
own and maintain all metering equipment as special facil-
ities in accordance with Section F. (Continued)
Advice Letter No. 1025-E Issued By Date Filed May 21 1984
------
Decision No. ▇▇-▇▇-▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇ Effective Jun 20 1984
---------- Vice-President Resolution No. ________
Rates and Economic Analysis
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8617-E
------- ------
San Francisco, California Cancelling Original Cal. P.U.C.Sheet No. 7694-E
-------- ------
RULE NO. 21 - NONUTILITY-OWNED PARALLEL GENERATION (Cont'd.) (T)
B. INTERCONNECTION FACILITIES (continued)
2. METERING
b. The Producer may at its option provide, install, own (N)
and maintain current and potential transformers rated
above 600 volts and a non-revenue type graphic recorder
where applicable. Such metering equipment, its instal-
lation and maintenance shall all be in conformance
with the Utility's specifications.
c. The Utility's meters shall be equipped with detents to
prevent reverse registration so that power deliveries
to and from the Producer's equipment can be separately
recorded.
3. CONTROL, PROTECTION AND SAFETY EQUIPMENT
a. GENERAL: The Utility has established functional require-
ments essential for safe and reliable parallel operation
of the Producer's generation. These requirements provide
for control, protective and safety equipment to: (1)
sense and properly react to failure and malfunction on
the Utility's system; (2) assist the Utility in maintain-
ing its system integrity and reliability; and (3) protect
the safety of the public and the Utility's personnel.
b. Listed below are the various devices and features
generally requied by the Utility as a prerequisite to
parallel operation of the Producer's generation:
--------------------------------------------------------------------------------------------------------------------------
CONTROL, PROTECTION AND SAFETY EQUIPMENT CENTRAL REQUIREMENTS 1
--------------------------------------------------------------------------------------------------------------------------
GENERATOR SIZE
-------------------------------------------------------------------------
10 kw or 11 kw to 41 kw to 101 kw to 401 kw to Over
Device or Feature Less 40 kw 100 kw 400 kw 1,000 kw 1,000 kw
------------------------------------------------ ------------ ------------- ----------- ------------ ------------ --------
Dedicated Transformer 2 - X X X X X
Interconnection Disconnect Device X X X X X X
Generator Circuit Breaker X X X X X X
Over-voltage Protection X X X X X X
Under-voltage Protection - - X X X X
Under/Over-frequency Protection X X X X X X
Ground Fault Protection - - X X X X
Over-current Relay w/Voltage Restraint - - - - X X
Synchronizing 3 Manual Manual Manual Manual Manual Automatic
Power Factor or Voltage Regulation X X X X (T)
c. DISCONNECT DEVICE: The Producer shall provide, install, own and
maintain the interconnection disconnect device required by
Section B.3.b at a location readily accessible to the Utility.
Such device shall normally be located near the Utility's meter or
meters for sole operation by the Utility. The interconnection
disconnect device and its precise location shall be specified by
the Utility. At the Producer's option and request, the Utility
will provide, install, own and maintain the disconnect device on
the Utility's system as special facilities in accordance with
Section F.
-----------------------
1 Detailed requirements are specified in the Utility's current operating,
metering and equipment protection publications, as revised from time to
time by the Utility and available to the Producer upon request. For a
particular generator application, the Utility will furnish its specific
control, protective and safety requirements to the Producer after the exact
location of the generator has been agreed upon and the interconnection
voltage level has been established.
2 This is a transformer interconnected with no other Producers and serving
no other Utility customers. Although the dedicated transformer is not a
requirement for generators rated 10 km or less, its installation is
recommended by the Utility.
3 This is a requirement for synchronous and other types of generators with (T)
stand-alone capability. For all such generators, the Utility will also
require the Installation of "reclose blocking" features on its system
to block certain operations of the Utility's automatic line restoration
equipment.
Advice Letter No. 1025-E Issued By Date Filed
------ ------------
Decision No. ▇▇-▇▇-▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇ Effective
---------- Vice-President -------------
Rates and Economic Analysis Resolution No. ________
Pacific Gas and Electric Company Original Cal. P.U.C. Sheet No. 8618-E
-------- ------
San Francisco, California Cancelling ________ Cal. P.U.C.Sheet No. ______
RULE NO. 21 - NONUTILITY-OWNED PARALLEL GENERATION (Cont'd) (T)
--------------------------------------------------
B. INTERCONNECTION FACILITIES (continued)
4 UTILITY SYSTEM ADDITIONS AND REINFORCEMENTS
a. Except as provided for in Section B.5, all additions (N)
to and reinforcements of the Utility's system necessary
to interconnect with and receive power deliveries from
the Producer's generation will be provided, installed,
owned and maintained by the Utility as special facil-
ities in accordance with Section F. Such additions and
reinforcements may include the installation of a Utility
distribution or transmission line extension or the
increase of capacity in the Utility's existing distri-
bution or transmission lines. The Utility shall deter-
mine whether any such additions or reinforcements shall
include an increment of additional capacity for the
Utility's use in furnishing service to its customers.
If so, then the costs of providing, installing, owning
and maintaining such additional capacity shall be borne
by the Utility and/or its customers in accordance with
the Utility's applicable tariffs on file with and
authorized by the California Public utilities
Commission (Commission).
b. The Producer shall advance to the Utility its estimated
costs of performing a preliminary or detailed engineering
study as may be reasonably required to identify any
Producer related Utility system additions and reinforce-
ments. Where such preliminary or detailed engineering
study involves analysis of the Utility's transmission
lines (60 kv and higher), the Utility shall complete
its study within twelve calendar months of receiving all
necessary plans and specifications from the Producer.
5. PRODUCER-INSTALLED UTILITY-OWNED LINE EXTENSIONS: The Producer
may at its option provide and install an extension of the
Utility's distribution or transmission lines where required
to complete the Producer's interconnection with the Utility.
Such extension shall be installed by contractors approved by
the Utility and in accordance with its design and specifica-
tions. The Producer shall pay the Utility its estimated costs
of design, administration and inspection as may be reasonably
required to assure such extension is installed in compliance
with the Utility's requirements. Upon final inspection and
acceptance by the Utility, the Producer shall transfer owner-
ship of the line extension to the Utility where thereafter
it shall be owned and maintained as special facilities in
accordance with Section F. This provision does not preclude
the Producer from installing, owning and maintaining a
distribution or transmission line extension as part of its
other Producer-owned interconnection facilities.
6. COSTS OF FUTURE UTILITY SYSTEM ALTERATIONS: The Producer
shall be responsible for the costs of only those future
Utility system alterations which are directly related to
the Producer's presence or necessary to maintain the
Producer's interconnection in accordance with the Utility's
applicable operating, metering and equipment publication in
effect when the Producer and the Utility entered into a
written form of power purchase agreement. Alterations made
at the Producer's expense shall specifically exclude
increases of existing line capacity necessary to accommodate
the other Producers or Utility customers. Such alterations
may, however, include relocation or undergrounding of the
Utility's distribution or transmission lines as may be
ordered by a governmental authority having jurisdiction.
7. ALLOCATION OF THE UTILITY'S EXISTING LINE CAPACITY: For two
or more Producers seeking to use an existing line, a first
come, first served approach shall be used. The first
Producer to request an interconnection shall have the right
to use the existing line and shall incur no obligation for
costs associated with future line upgrades needed to accom-
modate other Producers or customers. The Utility's power
purchase agreement shall specify the date by which the
Producer must begin construction. If that date passes and
construction has not commenced, the Producer shall be given
30 days to correct the deficiency after receiving a reminder
from the Utility that the construction start-up date has
passed. If construction has not commenced after the 30-day
corrective period, the Utility shall have the right to
withdraw its commitment to the first Producer and offer the
right to interconnect on the existing line to the next
Producer in order. If two Producers establish the right of
first-in-time simultaneously, the two Producers shall share
the costs of any additional line upgrade necessary to facil-
itate their cumulative capacity requirements. Costs shall be
shared based on the relative proportion of capacity each
Producer will add to the line.
Advice Letter No. 1025-E Issued By Date Filed
------ ------------
Decision No. ▇▇-▇▇-▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇ Effective
---------- Vice-President -------------
Rates and Economic Analysis Resolution No. ________
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8619-E
------- ------
San Francisco, California Cancelling Original Cal. P.U.C.Sheet No. 7695-E
-------- ------
RULE NO. 21 - NONUTILITY-OWNED PARALLEL GENERATION (Cont'd) (T)
--------------------------------------------------
C. ELECTRIC SERVICE FROM THE UTILITY: If the Producer requires (N)
regular, supplemental, interruptible or standby service from the
Utility, the Producer shall enter into separate contractual
arrangements with the Utility in accordance with the Utility's
applicable electric tariffs on file with and authorized by the
Commission.
D. OPERATION
1. PREPARALLEL INSPECTION: In accordance with Section A.7, the (N)
Utility will inspect the (N) Producer's interconnection facil-
ities prior to providing it with written authorization to
commence parallel operation. Such inspection shall determine
whether or not the Producer has installed certain control,
protective and safety equipment to the Utility's specifica-
tions. Where the Producer's generation has a rated output in
excess of 100 kw, the Producer shall pay the Utility its
estimated costs of performing the inspection.
2. JURISDICTION OF THE UTILITY'S SYSTEM DISPATCHER: The Producer's
generation while operating in parallel with the Utility's
system is at all times under the jurisdiction of the
Utility's system dispatcher. The system dispatcher shall
normally delegate such control to the Utility's designated
switching center.
3. COMMUNICATIONS: The Productr shall maintain telephone service
from the local telephone company to the location of the
Producer's generation. In the event such location is remote
or unattended, telephone service shall be provided to the
nearest building normally occupied by the Producer's
generator operator. The Utility and the Producer shall main-
tain operating communications through the Utility's desig-
nated switching center.
4. GENERATOR LOG: The Producer shall at all times keep and
maintain a detailed generator operations log. Such log shall
include, but not be limited to, information on unit avail-
ability, maintenance outages, circuit breaker trip operations
requiring manual reset and unusual events. The Utility shall
have the right to review the Producer's log.
5. REPORTING ABNORMAL CONDITIONS: The Utility shall advise the
Producer of abnormal conditions which the Utility has reason
to believe could affect the Utility's Operating conditions
or procedures. The Producer shall keep the Utility similar-
ly informed.
6. POWER FACTOR: The Producer shall furnish reactive power as (D)
may be reasonably required by the Utility.
a. The Utility reserves the right to specify that gener- (T)
ators with power factor control capability, including
synchronous generators, be capable of operating
continuously at any power factor between 95 percent
leading (absorbing vars) and 90 percent lagging
(producing vars) at any voltage level within +/- 5.0
percent of rated voltage. For other types of generators
with no inherent power factor control capability, the
Utility reserves the right to specify the installation
of capacitors by the Producer to correct generator
output to near 95 percent leading power factor. The
Utility may also require the installation of switched
capacitors on its system to produce reactive support
equivalent to that provided by operating a synchronous
generator of the same size between 95 percent leading
and 90 percent lagging power factor.
b. Where either the Producer or the Utility determines
that it is not practical for the Producer to furnish
the Utility's required level of reactive power or when
the Utility specifies switched capacitors in its system
pursuant to Section D.6.a, the Utility will provide,
install, own end maintain the necessary devices on its
system in accordance with Section F. (T)
E. INTERFERENCE WITH SERVICE AND COMMUNICATION FACILITIES
1. GENERAL: The Utility reserves the right to refuse to connect
to any new equipment or to remain connected to any existing
equipment of a size or character that may be detrimental to
the Utility's operations or service to its customers.
Advice Letter No. 1025-E Issued By Date Filed
------ ------------
Decision No. ▇▇-▇▇-▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇ Effective Jun 20 1984
---------- Vice-President Resolution No. ________
Rates and Economic Analysis
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8620-E
------- ------
San Francisco, California Cancelling Original Cal. P.U.C.Sheet No. 7696-E
-------- ------
RULE NO. 21 - NONUTILITY-OWNED PARALLEL GENERATION (Cont'd) (T)
--------------------------------------------------
E. INTERFERENCE WITH SERVICE AND COMMUNICATION FACILITIES (continued)
2. The Producer shall not operate equipment that superimposes
upon the Utility's system a voltage or current which causes
interference with the Utility's operations, service to the
Utility's customer or interference to communication facili-
ties. If the Producer causes service interference to others,
the Producer must diligently pursue and take corrective
action at the Producer's expense after being given notice
and reasonable time to do so by the Utility. If the Producer
does not take timely corrective action, or continues to
operate the equipment causing the interference without
restriction or limit, the Utility may without liability,
disconnect the Producer's equipment from the Utility's system
until a suitable permanent solution provided by the Producer
is operational at the Producer's expense.
F. SPECIAL FACILITIES
1. Where the Producer requests the Utility to furnish intercon-
nection facilities or where it is necessary to make additions
to or reinforcements of the Utility's system and the Utility
agrees to do so, such facilities shall be deemed to be special
facilities and the costs thereof shall be borne by the
Producer, including such continuing ownership costs as may
be applicable.
2. Special facilities are (a) those facilities installed at the
Producer's request which the Utility does not normally
furnish under its tariff schedules, or (b) a prorata portion
of existing facilities requested by the Producer, allocated
for the sole use of such Producer, which would not normally
be allocated for such sole use. Unless otherwise provided
by the Utility's filed tariff schedules, special facilities
will be installed, owned and maintained or allocated by the
Utility as an accommodation to the Producer only if accept-
able for operation by the Utility and the reliability of
service to the Utility's customers is not impaired.
3. Special Facilities will be furnished under the terms and (N)
conditions of the Utility's "Agreement for installation or
Allocation of Special Facilities for Parallel Operation of
Nonutility-owned Generation and/or Electrical Standby
Service" (Form 79-280, effective June 1984) and its
Appendix A, "Detail of Special Facilities Charges" (Form
79-702, effective June 1984). Prior to the Producer signing
such an agreement, the Utility shall provide the Producer
with a breakdown of special facilities costs in a form
having detail sufficient for the information to be reasonably
understood by the Producer. The special facilities agreement
will include, but is not limited to, a binding quotation of
charges to the Producer and the following general terms and
conditions: (N)
a. Where facilities are installed by the Utility for the (T)
Producer's use as special facilities, the Producer
shall advance to the Utility its estimated installed
cost of the special facilities. The amount advanced is
subject to the monthly ownership charge applicable to
customer-financed special facilities as set forth in
Section 1 of the Utility's Rule No. 2.
b. At the Producer's option, and where such Producer's
generation is a qualifying facility 4 and the Producer
has established credit worthiness to the Utility's
satisfaction, the Utility shall finance those special
facilities it deems to be removable and resuable
equipment. Such equipment shall include, but not be
limited to, transformation, disconnection and metering
equipment.
c. Existing facilities allocated for the Producer's use
as special facilities and removable and resuable
equipment financed by the Utility in accordance with
Section F.3.b are subject to the monthly ownership
charge applicable to Utility-financed special facili-
ties as set forth in Section 1 of Rule 2. (T)
-----------------------
4 A qualifying facility is one which meets the requirements established by the
Federal Energy Regulatory Commission's rules (18 Code of Federal Regulations
292) implementing the Public Utility Regulatory Policies Act of 1978 (16
U.S.C.A. 796, et seq.).
Advice Letter No. 1025-E Issued By Date Filed
------ ------------
Decision No. ▇▇-▇▇-▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇ Effective
---------- Vice-President -------------
Rates and Economic Analysis Resolution No. ________
Pacific Gas and Electric Company Original Cal. P.U.C. Sheet No. 8621-E
-------- ------
San Francisco, California Cancelling Cal. P.U.C.Sheet No.
-------- -------
-------
RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION (Cont'd) (T)
---------------------------------------------------
F. SPECIAL FACILITIES (continued)
d. Where the Producer elects to install and deed to the
Utility an extension of the Utility's distribution or
transmission lines for use as special facilities in
accordance with Section B.5, the Utility's estimate of
the installed cost of such extension shall be subject
to the monthly ownership charge applicable to
customer-financed special facilities as set forth in
Section 1 of the Rule No. 2.
4. Where payment or collection of continuing monthly ownership (T)
charges is not practicable, the Producer shall be required
to make an equivalent one-time payment in lieu of such
monthly charges.
5. Costs of special facilities borne by the Producer may be (N)
subject to downward adjustment (N) adjustment when such
special facilities are used to furnish permanent service
to a customer of the Utility. This adjustment will be
based upon the extension allowance or other such customer
allowance which the Utility would have utilized under its
then applicable tariffs if the special facilities did not
otherwise exist. In no event shall such adjustment exceed
the original installed cost of that portion of the special
facilities used to serve a new customer. An adjustment,
where applicable, will consist of a refund applied to the
Producer's initial payment for special facilities and/or a
corresponding reduction of the ownership charge.
G. EXCEPTIONAL CASES: Where the application of this rule appears
impractical or unjust, the Producer may refer the matter to the
Commission for special ruling or for the approval of special
conditions.
H. INCORPORATION INTO POWER PURCHASE AGREEMENTS: Pursuant to Deci-
sion No. ▇▇-▇▇-▇▇▇, if in accordance with Section A.4 the
Producer enters into a written form of power purchase agreement
with Utility, a copy of the Rule No. 21 in effect on the date of
execution will be appended to, and incorporated by reference
into, such power purchase agreement. The Rule appended to such
power purchase agreement shall then be applicable for the term
of the Producer's power purchase agreement with the Utility.
Subsequent revisions to this rule shall not be incorporated into
the rule appended to such power purchase agreement. (N)
Advice Letter No. 1025-E Issued By Date Filed May 21 1984
------ -----------
Decision No. ▇▇-▇▇-▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇▇ Effective Jun 20 1984
---------- Vice-President -----------
Rates and Economic Analysis Resolution No. ________
F-2 POINT OF DELIVERY LOCATION SKETCH/1
-------------------
1 To be determined upon completion of the detailed interconnection study for
the Facility.
--------
F-3
[ZOND LOGO]
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ THE ZOND GROUP
Senior Vice President and Zond Systems, Inc.
General Counsel Zond Construction Corporation
Zond Windsystems Operation Corporation
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Zond Windsystems Management Corporation
Administrative Assistant Zond Windsystem Partners I - XXIII
Zond Pan Aero Windsystem Partners I - II
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Zond Windsystem Energy Associates I - V
Legal Assistant
October 5, 1985
Wind Developers, Inc.
Santa ▇▇▇▇▇ Wind Leasing, Inc.
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Dear ▇▇▇▇:
As we discussed, after ▇▇▇ ▇▇▇▇▇ executed the various agreements, we jointly
noted several instances in which the selected language did not carry out the
intent of the parties. It is our desire to incorporate by this letter specific
changes to the Installation and Production Payment Agreement, the Lease
Acquisition Agreement and the Assignment of Power Purchase Agreement. The
parties agree that the following changes shall be made:
(1) With respect to the provision entitled Indemnification and Limitation
on Damages, the phrase "plus reasonable attorneys fees" should be added to the
end of 6.13.1 in the Assignment of Power Purchase Agreement (and Section 7.16.1
in the Lease Acquisition Agreement and Section 7.15.1 in the Installation and
Production Payment Agreement, the parallel sections). Secondly, the parties
agree that the clause beginning with "provided, further" and ending at the end
of the paragraph in 6.13.1 (and the parallel sections) shall not be interpreted
to limit the obligation or liability of Zond under the Installation and
Production Payment Agreement for the payments required by Sections 2 or 3
thereof. Lastly, after the word "Accordingly," in the second sentence of 6.13.2
(and Section 7.16.2 in the Lease Acquisition Agreement and Section 7.15.2 in the
Installation and Production Payment Agreement), add the phrase "except as set
forth in 6.13.1" (and Section 7.16.2 in the Lease Acquisition Agreement and
Section 7.15.2 in the Installation and Production Payment Agreement).
(2) In the Lease Acquisition Agreement, add at the end of Section 4, a new
clause as follows, "provided, further, that in the event Zond executes a new
lease or
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
Telefax (▇▇▇) ▇▇▇-▇▇▇▇
[Zond logo]
Wind Developers, Inc.
Santa ▇▇▇▇▇ Wind Leasing, Inc.
October 5, 1985
Page Two
another agreement with the City of Santa ▇▇▇▇▇ for the use of the Property for
wind energy development, at WDI's option, WDI may either (i) accept such payment
or (ii) notwithstanding anything in this Section to the contrary, elect to have
this Agreement apply to that new lease or other agreement."
(3) With respect to the Installation and Production Payment Agreement,
Records Audit, Section 2.2 is amended to add the following provision:
"Upon WDI's reasonable prior request, Zond also agrees to provide a
certificate, executed by an officer of Zond under penalty of perjury,
specifying the number of turbines installed on the Property and sold
by Zond during any particular fiscal year. In addition, WDI may
request Zond to have Zond's independent certified public accountants,
at the conclusion of an audit of Zond's books, prepare a statement,
certified by Zond's independent certified accountants, specifying the
number of turbines sold, the amount of revenue generated by the
turbines located on the Property and whether or not the turbines are
treated as Placed-in-Service in Zond's financial statements."
If these changes are acceptable, please execute this letter in the space
provided below.
Sincerely yours,
ZOND SYSTEMS, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Vice President -
General Counsel
CAA/1 hn
Ref. ZOND#63/SCWL1.1
ACCEPTED:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ October 5, 1985
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President
Wind Developers, Inc. and
Santa ▇▇▇▇▇ Wind Leasing, Inc.