EXHIBIT 10.1
POWER PUT AGREEMENT
This Power Put Agreement (this "Agreement") is entered into as of
September 19, 1986 and it replaces in its entirety that certain agreement,
between Project Orange Associates, L.P. ("Seller") and Niagara Mohawk Power
Corporation ("Buyer") (each a "Party", and collectively "the Parties"). The
Parties anticipate entering into one or more transactions that will be governed
by this Agreement.
W I T N E S S E T H:
WHEREAS, Seller and Buyer are parties to an agreement (the "Power Purchase
Agreement"), dated as of September 19, 1986 and amended April 7, 1989 and
August 20, 1996; and
WHEREAS, the Parties and several other independent power producers ("IPPs")
have entered into a Master Restructuring Agreement dated July 9, 1997 ("MRA")
pursuant to which the IPPs have agreed to amend, amend and restate or terminate
each of their existing power purchase agreements with Buyer pursuant to the
terms and conditions set forth in the MRA and in anticipation of the
introduction of competition in wholesale and retail electricity markets and the
restructuring of Buyer's electric operations; and
WHEREAS, the Parties wish to amend and restate their Power Purchase
Agreement so that, as of the Effective Date, as defined in the MRA, the Power
Purchase Agreement shall thereafter consist of this Agreement and the indexed
swap agreement (the "Indexed Swap") which the Parties will enter into, or have
entered into concurrently with this Agreement, pursuant to the MRA, and which
will become effective as of the Effective Date; and
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WHEREAS, Buyer owns certain interconnection facilities connected to
Seller's Plant which are operated and maintained in accordance with the
Interconnection Agreement between Buyer and Seller dated January 13, 1992; and
WHEREAS, Buyer and Seller desire to amend such Interconnection Agreement.
NOW, THEREFORE, in consideration of the mutual obligations and undertakings
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged the Parties hereto agree as
follows:
I. Amendment and Restatement, Effective Date and Term
1.1 As of the Effective Date, the Power Purchase Agreement shall be
amended and restated in its entirety so that such agreement shall consist, on
and after the Effective Date, of this Agreement and the Indexed Swap.
1.2 Notwithstanding the foregoing, except to the extent specifically
amended, waived or otherwise addressed herein, the rights and obligations of the
Parties which accrue and have accrued under the Power Purchase Agreement prior
to the Effective Date shall be enforceable and shall be performed in accordance
with the Power Purchase Agreement without regard to the amendment and
restatement thereof as set forth herein and in the Indexed Swap.
1.3 The Agreement shall take effect as the Effective Date. The
effectiveness of the provisions in respect of the put option in Section III
below shall expire at the end of the Proxy-Market Price Period, but in no event
later than at the end of ten (10) Contract Years. The effectiveness of all other
provisions of this Agreement shall expire at the end of ten (10) Contract Years,
unless otherwise provided below.
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II. Representations
Each Party represents to the other Party that (i) it is duly organized and
validly existing under the laws of the jurisdiction of its organization or
incorporation and, if relevant under such laws, in good standing; (ii) it has
the power to execute this Agreement and any other documentation relating to this
Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that is required by this Agreement, to
deliver and to perform its obligations under this Agreement and has taken all
necessary actions to authorize such execution, delivery and performance; (iii)
such execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or
judgment of any court or other agency or government applicable to it or any of
its assets or any contractual restriction binding on or affecting it or any of
it assets; (iv) all governmental and other consents that are required to have
been obtained by it with respect to this Agreement have been obtained and are in
full force and effect and all conditions of any such consents have been complied
with; and (v) its obligations under this Agreement constitute its legal, valid
and binding obligations, enforceable in accordance with their respective terms
(subject to applicable bankruptcy, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or law)).
III. Power Put Option
3.1 Power Put Quantity and Pricing. At the option of Seller, Seller shall
have the right to put (i) energy to Buyer up to the specified contract quantity
of electricity set forth in
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Attachment A (including energy subject to the Overgeneration Amount), and (ii)
capacity, which is subject to both seasonal variation and degradation associated
with the contract quantity of electricity, in each case, for each Interval
during the immediately succeeding Settlement Period, and Buyer shall be
obligated to take and pay for such energy and capacity from Seller at the Proxy-
Market Price or the Market Price and, if applicable, the Market Capacity Price,
as the case may be. Energy and associated capacity in excess of the Interval
Quantity shall not be subject to this Agreement and, at the option of Seller,
may be sold to third parties without an obligation to offer such energy and
capacity to Buyer.
3.2 Energy and Capacity Subject to Put Options. The right of Seller to put
energy and capacity to Buyer hereunder shall be limited to energy and associated
capacity of Seller's Plant, subject to Seller's rights to assign this Agreement
pursuant to the assignment provisions contained herein. Seller shall not object
to Buyer's inclusion of all capacity associated with the contract quantity of
electricity pursuant to the terms hereof as capacity available to Buyer for
regulatory purposes.
3.3 Notice of Put Exercise and Length of Exercise Period. Seller shall
have the right to put energy and capacity to Buyer for periods ranging for a
minimum period of time of one hour to a maximum period of one month. On or prior
to 12:00 p.m. noon of the business day two days prior to the first day of the
month, Seller shall provide to Buyer a dynamic schedule showing, on an hour-by-
hour basis, the projected deliveries of energy and capacity to Buyer for the
following calendar month. Seller shall have the right to update such dynamic
schedule on an hourly basis by providing notice of the change, in writing or
through electronic telecommunications, no less than thirty minutes prior to the
start of the hour in which the change
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to the schedule is to be effected.
3.4 Payment Notices and Payment Dates. After netting the amounts owing
pursuant to the payment provisions of this section, Seller shall provide Buyer
with a Notice of any payment due for energy and/or capacity put to Buyer during
each Settlement Period on or before the 5th business day of the following
calendar month, unless Seller and Buyer agree otherwise. Payments set forth in a
Notice shall be due on the associated Payment Date. The Buyer and Seller agree
that the Notice may at times include estimated electricity prices or quantities
as applicable to the Settlement Period. Buyer agrees to make payment to Seller
based upon these estimated amounts on the Payment Date. However as soon as
practicable, Seller will provide Buyer with a revised Notice that contains the
actual electricity prices and quantities for the applicable Settlement Period.
The Buyer or Seller, as the case may be, shall remit any payment or credit due
under the revised Notice on the next Payment Date. Interest shall not be applied
to such adjustments.
3.5 Payment Disputes. If either Party, in good faith, disputes any part of
any Notice of a payment obligation, that Party shall provide a written
explanation of the basis for such dispute and the undisputed portion of the net
payment obligations set forth in such Notice shall be paid by the party
obligated to pay such amounts no later than the applicable Payment Date. Any
adjustment under this Section shall bear interest at the prime rate for U.S.
currency as published from time to time under "Money Rates" in The Wall Street
Journal, from and including the Payment Date any such underpayment or
overpayment was originally due but excluding the date on which such underpayment
or overpayment is finally settled by the Parties hereto, or in the event the
Parties hereto are unable to settle such matter, such matter shall be
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settled by an independent nationally recognized public accounting firm mutually
selected by the Parties whose determination shall be final and binding on the
Parties hereto and whose fees and expenses shall be borne by the Party found to
be at substantial fault by such independent nationally recognized public
accounting firm. If the independent public accounting firm finds that there is
no substantial fault on the part of either Party, each Party shall be
responsible for it own fees and expenses. No Notice (or payment obligation
thereunder) shall be subject to this Section unless a notice of dispute is given
with respect thereto within one year of the Payment Date applicable to such
Notice.
3.6 Buyer's Right of First Refusal. If Seller determines not to
exercise its rights to put energy and capacity to Buyer, Seller may sell any
energy or capacity associated with the Interval Quantity or the contract
quantity of electricity set forth in Attachment A to third parties, provided
Seller has first offered to sell energy and capacity to Buyer at the Proxy
Market Price or Market Price, whichever is applicable, and the Market Capacity
Price, if applicable, and Buyer has declined the opportunity to purchase such
energy and capacity.
With respect each possible sale, Seller shall provide Buyer with notice of
Seller's intention to sell energy and/or capacity to one or more third parties.
Such notice shall specify the quantity of energy and/or capacity and the
delivery point on Buyer's transmission or distribution system, if applicable.
Such notice shall be given as far in advance of the time of the anticipated sale
as is reasonable in the circumstances.
After receiving Seller's notice, Buyer shall advise Seller as promptly as
is reasonable in the circumstances whether Buyer wishes to purchase such energy
and capacity.
Seller and Buyer acknowledge that their views of what notice is
"reasonable in the
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circumstances" may change from time to time. Also, notification for sale of
energy and/or capacity to a third party shall be completed within the FERC
approved notification period for market participants to submit day-ahead bids to
the New York Independent System Operator. Accordingly, each agrees to discuss
and make reasonable revisions to notice periods whenever requested by the other.
Until the parties agree otherwise, the following notice periods shall
apply to sales of the indicated durations:
(a) for energy and/or capacity sales for one hour up to and including one
week - Seller shall notify Buyer of such request, by 9:00 a.m. two
business days prior to the start of the energy and/or capacity sale
and Buyer shall respond no later than four hours from such request;
(b) for energy and/or capacity sales for more than one week up to and
including one month - Seller shall notify Buyer of such request, by
9:00 a.m. three business days prior to the start of the energy and/or
capacity sale and Buyer shall respond no later than one business day
from such request;
(c) for energy and/or capacity sales for more than one month up to and
including twelve months - Seller shall notify Buyer of such request,
by 9:00 a.m. five business days prior to the start of the energy
and/or capacity sale and Buyer shall respond no later than three
business days from such request; and
(d) for energy and/or capacity sales for more than twelve months -Seller
shall notify Buyer of such request, by 9:00 a.m. seven business days
prior to the start of the energy and/or capacity sale and Buyer shall
respond no later than five business
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days from such request.
All notifications by Seller and responses by Buyer described herein shall
be made during normal business hours (8:00 a.m. to 5:00 p.m.). In the event that
Buyer fails to respond to Seller's request within the specified time period,
Buyer shall be deemed to have waived its rights to such energy and/or capacity
and Seller shall have the right to proceed with the sale of such energy and/or
capacity to a third party.
IV. Required Payments for Changes in Costs
4.1 Required Netting Payments for Cost Changes. On each Payment Date,
Buyer shall be obligated to pay to Seller (to the extent that such number is
positive) and Seller shall be obligated to pay Buyer (to the extent that such
number is negative and in such case the absolute value of such number) (x) the
difference between (A) any increase as compared to the costs under Seller's
contractual arrangements with Buyer as of January 1, 1997 during the associated
Settlement Period in (i) Buyer's local distribution system gas transportation
and fixed and variable charges and retainages actually incurred by Seller, and
(ii) electrical interconnection, costs and costs associated with industry
reliability standards actually incurred by Seller (including any increase in
cost related to Seller's compliance with Niagara Mohawk's Electric System
Bulletin #756 dated December, 1997), and (B) any decreases as compared to the
costs under Seller's contractual arrangements with Buyer as of January 1, 1997
during the associated Settlement Period in those costs listed in (i) and (ii)
above, and (y) any increase as compared to the costs under Seller's contractual
arrangements with Buyer as of January 1, 1997 during the associated Settlement
Period in costs incurred by Seller caused by changes in federal, state or local
laws, rules or regulations; provided that this clause (y) shall only be
effective during the
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Proxy-Market Price Period and any periods thereafter during which like
adjustments in costs are also recovered by any entity that owns any of Buyer's
non-nuclear generating assets.
4.2 Certain Other Cost Additions. On each Payment Date, Buyer shall be
obligated to pay to Seller any increase as compared to the costs under Seller's
contractual arrangements with Buyer as of January 1, 1997 in electrical
transmission costs or access or other charges, which are actually incurred by
Seller during the preceding calendar month while physically delivering
electricity to (x) Buyer during the Proxy-Market Price Period or (y) an ISO/PE
following the Proxy-Market Price Period; provided that this clause (y) shall
only be effective during the periods when like increases in costs or charges are
then also incurred by any entity that owns any of Buyer's non-nuclear generating
assets.
4.3 Reactive Power, Voltage Support Services and Line-Loss Charges. Buyer
and Seller acknowledge that the contract prices under this Agreement do not
include charges for reactive power, voltage support services or line-losses. In
the event that Buyer's tariffs require Seller to pay Buyer for reactive power or
line-losses during periods when the Seller's generating facilities are
generating electricity, then Seller shall be entitled to reimbursement by Buyer
in an amount equal to all reactive power charges and/or line-loss charges or
costs actually incurred by Seller during the associated Settlement Period. In
addition, in the event (i) under any ISO tariff, Seller is required to provide
voltage support services, as defined by such ISO tariff, Buyer shall pay to
Seller on each Settlement Date any and all voltage support service payments made
by the ISO to Buyer in the associated Settlement Period which are attributable
to the voltage support services provided by Seller, and (ii) the ISO charges
Seller for any line-losses, then Seller shall be entitled to reimbursement by
Buyer in an amount equal to all such line-loss charges incurred
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by Seller during the associated Settlement Period.
4.4 Payment Notices and Payment Dates. After netting the amounts owing
pursuant to the payment provisions of this section, Seller shall provide Buyer
with a Notice of any payment due for energy and/or capacity put to Buyer during
each Settlement Period on or before the 5th business day of the following
calendar month, unless Seller and Buyer agree otherwise. Payments set forth in a
Notice shall be due on the associated Payment Date. The Buyer and Seller agree
that the Notice may at times include estimated electricity prices or quantities
as applicable to the Settlement Period. Buyer agrees to make payment to Seller
based upon these estimated amounts on the Payment Date. However as soon as
practicable, Seller will provide Buyer with a revised Notice that contains the
actual electricity prices and quantities for the applicable Settlement Period.
The Buyer or Seller, as the case may be, shall remit any payment or credit due
under the revised Notice on the next Payment Date. Interest shall not be applied
to such adjustments.
4.5 Payment Disputes. If either Party, in good faith, disputes any part of
any Notice of a payment obligation, that Party shall provide a written
explanation of the basis for such dispute and the undisputed portion of the net
payment obligations set forth in such Notice shall be paid by the Party
obligated to pay such amounts no later than the applicable Payment Date. Any
adjustment under this Section shall bear interest at the prime rate for U.S.
currency as published from time to time under "Money Rates" in The Wall Street
Journal, from and including the Payment Date any such underpayment or
overpayment was originally due but excluding the date on which such underpayment
or overpayment is finally settled by the Parties hereto, or in the event the
Parties hereto are unable to settle such matter, such matter shall be
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settled by an independent nationally recognized public accounting firm mutually
selected by the Parties whose determination shall be final and binding on the
Parties hereto and whose fees and expenses shall be borne by the Party found to
be at substantial fault by such independent public accounting firm. If the
independent public accounting firm finds that there is no substantial fault on
the part of either Party, each Party shall be responsible for it own fees and
expenses. No Notice (or payment obligation thereunder) shall be subject to this
Section unless a notice of dispute is given with respect thereto within one year
of the Payment Date applicable to such Notice.
V. Delivery of Electricity
Seller shall deliver the electricity to the system of Buyer at
approximately 115,000 volts, 60 Hertz and 3 Phase. The installation of the
electrical connections and the operation of the Plant must meet or exceed the
requirements of Niagara Mohawk's Electric System Bulletin #756 (including
Appendix C), dated December, 1997 including the exceptions and clarifications
included in Attachment B of this Agreement, or, if applicable, the standards of
the ISO/PE. A copy of Niagara Mohawk's Electric System Bulletin #756 (including
Appendix C), dated December, 1997 is incorporated herein by reference. Seller
shall deliver electricity to the Delivery Point.
Buyer's acceptance of and obligation to pay for electricity produced by
Seller may from time to time be suspended for any periods of time during which,
for reasons of necessary maintenance, repair, system emergency, safety or
similar actions, Buyer's transmission system is temporarily physically unable to
accept such electricity. Buyer shall give reasonable notice
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under the circumstances of the need for such disconnecting to Seller, upon
receipt of which Seller shall carry out the required action without delay.
During any such period of suspension, Buyer shall use its best efforts to
restore Buyer's capability to accept delivery of electricity as promptly as
possible. Buyer will use its best efforts to schedule any planned outages upon
consultation with Seller and commensurate with Seller's schedule for planned
maintenance or other outages. Buyer shall bear any costs incurred by it in
connection with any such disconnection or reconnection. All deliveries of power
which are subject to any such suspension may be rescheduled at the option of the
Seller. Seller shall have the right to shut down the operation of the Plant for
any reason and for any period whatsoever upon reasonable notice to Buyer.
VI. Coordinated Maintenance
Seller shall have the right to shut down the operation of the Plant or to
temporarily disconnect it from Buyer's system whenever and for such periods of
time as may be necessary for maintenance, safety, or emergency reasons. Seller
shall bear its own cost of disconnection and reconnection. Annually, Seller
shall provide Buyer with a five year schedule detailing the projected
maintenance requirements of Seller's Plant, including the number and duration of
planned outages. At least three (3) months before the end of the annual period
preceding the annual period to be scheduled, Seller shall provide Buyer with
Seller's planned maintenance schedule. Prior to the final week before the
planned maintenance, Seller may make changes to the planned maintenance schedule
for its Plant upon advance written notice to Buyer. Buyer shall have the right
to require seller to move the planned maintenance date for Seller's Plant to a
date not earlier than nor later than one (1) day from the scheduled date
provided (i) it is
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reasonably possible for Seller to arrange such rescheduling, (ii) Buyer
reimburses Seller for any costs (including any applicable penalties) of
rescheduling the planned maintenance date, (iii) such rescheduling will not
cause Seller to violate any applicable equipment warranties, and (iv) all
deliveries of electricity which are affected by such changes can be rescheduled
at the option, if Seller so requires. Notwithstanding the foregoing, Seller may
perform maintenance, whether planned or unplanned, at any time the Seller is not
putting electricity to Buyer under this Agreement.
VII. Metering
Electricity delivered by Seller hereunder shall be measured by electric
watthour meters of a type approved by the Commission. The meters shall be
located in Seller's Plant. These metering facilities will be installed, owned
and maintained by Buyer and shall be sealed by Buyer, with the seal broken only
upon occasion when the meters are to be inspected, tested or adjusted and
representatives of both Buyer and Seller are present. The meter and installation
costs shall be borne by Seller. The meters shall be maintained in accordance
with the rules set forth in 16 NYCRR Part 92. Buyer will guarantee the
installation of any meter and its accuracy for a period of one year from the
date that said meter is installed. Any repair or replacement required during the
initial year for any such meter will be at the expense of Buyer. In the event
that any meter is found to be inaccurate after the initial year, Buyer will
repair or replace the same as soon as possible at the expense of Seller. Each
Party shall have the right at all reasonable times; upon giving not less than
five (5) days notice to the other Party for the purpose of permitting the other
Party to be present at the inspection, to inspect, and test said meters and, if
found defective, Buyer shall adjust, repair or replace the same at the expense
of Seller. Any
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test or inspection requested by a Party shall be at the expense of that Party.
Seller shall have the right, but not the obligation, to read all meters
installed and maintained pursuant to this Section. Buyer agrees to make
available to Seller, at no additional cost, all information of the kind which is
available to the Buyer as of the Consummation Date and which is captured by the
Buyer's meter including, but not limited to, reactive power and voltage support
services. Upon written request, Buyer shall provide Seller's operating personnel
with appropriate written instructions and training to enable such personnel to
read the meters.
If a meter fails to register, or if the measurement made by a meter is
found to be inaccurate by more than the limits defined in 16 NYCRR Part 92, then
an adjustment shall be made correcting all measurements made by the inaccurate
or defective meter for (a) the actual period during which inaccurate
measurements were made, if that period can be determined to the satisfaction of
the Parties; or (b) if the actual period cannot be determined to the mutual
satisfaction of the Parties, one-half of the period from the date of the last
previous test of the meter. To the extent that the adjustment period covers a
period of deliveries for which payment has already been made by Buyer, a payment
corresponding to the adjustment for that period shall be made by the Party
against whom the adjustment runs, to the other Party, not later than the twenty-
fifth (25) day of the month following the month in which the paying Party
receives notice from the other Party that such a payment is due. Seller may
elect to install its own metering equipment in addition to Buyer's metering
equipment. Such metering equipment shall meet the requirements of 16 NYCRR Part
92. Should any metering equipment installed by Buyer fail to register during the
term of this Agreement, the Parties shall use Seller's metering equipment, if
installed, to determine the amount of electricity delivered to Buyer. On a day
or days on which
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neither Buyer's nor Seller's metering equipment is in service, the quantity of
electricity delivered shall be determined in such manner as the Parties shall
agree.
VIII. Maintenance of Interconnection
Seller shall install, own and maintain the portion of its interconnection
with Buyer's transmission system that includes the generator output leads, the
generator step-up transformer and the 115 kV tap, together with associated
equipment. The 115 kV tap line from the dead-end tower to Buyer's 115 kV
transmission system will be owned and maintained by Buyer. The Interconnection
Agreement between Buyer and Seller dated January 13, 1992 shall remain in full
force and affect except that it shall extend to, and terminate at the end of
this Agreement.
IX. Force Majeure
In the event either Party hereto is rendered unable, wholly or in part,
by Force Majeure to carry out its obligations under the Agreement, other than
the obligation to make payments of amounts due hereunder, it is agreed that upon
notice, with reasonably full particulars of such Force Majeure given by such
Party to the other Party in writing within a reasonable time frame after the
occurrence of the cause relied upon, then the obligation or obligations
hereunder of the party giving such notice, so far as they are affected by such
Force Majeure, shall be suspended during the continuance of an inability so
caused. Such cause shall, as far as possible, be remedied with all reasonable
dispatch. All deliveries of power which are subject to any such Force Majeure
event may be rescheduled by Seller, at Sellers option, upon a mutually agreeable
schedule.
X. Relocation of Power Lines
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10.1 In the event it becomes necessary for Buyer to relocate or
rearrange its transmission system to which Seller is connected, Buyer shall
advise Seller at least one year in advance in writing. If such relocation or
rearrangement is ordered or required by a Governmental Authority, Buyer shall
give prior written notice to Seller equal in time to the notice given to Buyer
by such Governmental Authority. Buyer shall consult with Seller on the new
facilities that Buyer shall propose to reestablish the connection. Such new
facilities shall be reasonably satisfactory to Seller and, at a minimum, shall
provide Seller with at least as much output capacity as with the prior
connection facilities. Buyer shall bear the full cost and expense of
reestablishing the connection to the Seller. Buyer shall use its best efforts to
minimize the duration of any disruption to Seller's service during the
relocation or rearrangement of Buyer's transmission facilities. Not withstanding
anything to the contrary contained herein, the provisions of this Section 10.1
shall not apply to the abandonment of power lines.
10.2 In the event that Buyer determines it is necessary to retire or
abandon its transmission system to which Seller's Plant is connected, Buyer
shall advise Seller, at least one year in advance, in writing, indicating
Buyer's annual cost of the transmission facilities dedicated exclusively to
accommodate the output of the Plant. Seller shall then have the option of paying
Buyer for these annual costs or of providing alternate interconnection to
Buyer's transmission system. Such alternate interconnection may be the purchase
by Seller of Buyer's existing 115 kV facilities at the depreciated book cost or
salvage value, whichever is lower, but not less than zero. In the event Seller
elects to pay Buyer the annual charges associated with these facilities, said
charges shall be recomputed as of January 1 of every year.
XI. Qualifying Facility Monitoring and Status
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11.1 Buyer shall have no contractual right and shall waive any other right
which it might have under state or federal law to demand information from
Seller, or any other person, including but not limited to any Governmental
Authority, with respect to such Seller's status as a qualifying facility ("QF
Status") under state and/or federal law.
11.2 Seller shall have the right, but not the obligation, in its sole
discretion to obtain and/or maintain its QF Status. Buyer's rights and
obligations, including without limitation its obligation to pay for electricity
produced by Seller as set forth hereunder, shall continue as a matter of
contractual right regardless of whether the Seller maintains its QF Status. Any
failure by Seller to comply with the requirements applicable to QF Status under
New York law (including compliance with NYPSL (S) 2(2-a)) shall have no adverse
impact on Seller under this Agreement. In the event Seller wishes to qualify or
perform as an Exempt Wholesale Generator under Section 32 of PUHCA and FERC's
regulations promulgated thereunder, as the same may be amended, modified or
restated from time to time, Buyer shall cooperate with (including, without
limitation, by providing consents and affidavits), and shall not take any action
to oppose, impede or subvert, Seller's efforts to obtain appropriate regulatory
exemptions and approvals, including market-based rate approval. Except to the
extent that the contract prices under this Agreement are or may be based
thereon, during the term of the Agreement, Seller (i) shall waive any statutory
right it may have under Section 66-c of NYPSL pursuant to which Seller may
demand a 6c per kWh minimum power purchase rate from Buyer, and (ii) shall
waive, for itself and for the successors and assigns of its Plant with respect
to such Plant, any statutory right it may have under PURPA or NYPSL to require
Buyer to enter into a power purchase contract or otherwise take the output of
Seller's Plant; provided, however, that until the end of the Proxy-
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Market Price Period Buyer agrees, at Seller's request, to act as agent for
Seller (or, if necessary to effectuate such sales to the New York Power Pool, by
purchase and resale of Seller's capacity and/or energy, at no cost to Buyer) for
the sale on up to a monthly basis, of the Seller's Plant capacity and energy to
the New York Power Pool or any third party, in each case on a nondiscriminatory
basis with respect to Buyer's or any third party's capacity and energy, at no
cost to the Seller. Buyer agrees to use its Reasonable Best Efforts to effect
such sales on the most favorable terms, including price, to the Seller giving
consideration to the quantity, term, and market conditions prevailing at the
time of sale. Nothing contained herein shall be construed to constitute a waiver
by the Seller of any other rights it may have under PURPA, NYPSL, or applicable
law, including rights with respect to back-up services, interconnection,
reactive power or other similar rights, whether or not a contract is required or
desirable.
XII. Indemnification
Each Party hereto respectively assumes full responsibility in connection
with the electricity supplied hereunder on its side of the Delivery Point and
for the wires, apparatus, devices and appurtenances used in connection
therewith. Each Party shall indemnify, save harmless and defend the other
against all claims, demands, cost or expense for loss, damage or injury to
person or persons or property in any manner directly or indirectly arising from,
connected with or growing out of the generation, transmission or use of energy
by it on its side of the Delivery Point or for the operation of switching
equipment in connection with said delivery; provided, however, that each Party
shall be liable for all claims of the Party's own employees arising out of any
provision of the Workers' Compensation Law. Each Party shall maintain or cause
to be maintained Workers' Compensation and Employees' Liability Insurance
covering
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their respective employees as required by law.
XIII. ASSIGNMENT
13.1 Assignment by Seller. Upon notice to Buyer, Seller may assign or
transfer the Agreement in whole or in part, without the consent of Buyer, (a) as
collateral security for purposes of securing indebtedness, or (b) to any
approved assigned or transferee (an "Approved Assignee"). An Approved Assignee
shall be (i) any person who (x) (A) acquires Seller's Plant, or (B) has a plant
with technical capability that is equal to or greater than the technical
capability of the Seller's plant, and (y) has (A) a long-term unsecured debt
credit rating of no less than investment grade issued by ▇▇▇▇▇'▇ or S&P or the
equivalent of such rating from another nationally recognized rating agency, or
(B) a net worth calculated in accordance with generally accepted accounting
principles ("Net Worth"), that is equal to or greater than the Net Worth of the
entity making such assignment or transfer on the date of such assignment or
transfer, provided that evidence of such qualifying Net Worth is reasonably
demonstrated to Buyer; or (ii) any Affiliate of Seller; provided (x) such
Affiliate has a long-term unsecured debt credit rating of no less than
investment grade issued by ▇▇▇▇▇'▇ or S&P or the equivalent of such rating from
another nationally recognized rating agency, (y) such Affiliate has a Net Worth
that is equal to or greater than the Net Worth of the entity making such
assignment or transfer on the date of such assignment or transfer, or (z) Seller
unconditionally guarantees, pursuant to a guarantee in form and substance
reasonably satisfactory to Buyer, the obligations of such Affiliate in
connection with such assignment or transfer. Seller may split and assign the
quantities of electricity and Intervals to Approved Assignees, each in respect
of a lesser quantity and/or Intervals that the full
Page -19-
amounts thereof hereunder, provided that (a) each such assignment is for 50,000
MWh of electricity per year or any integral multiples thereof and to the extent
that the remaining unassigned balance of the quantity of electricity hereunder
for any such year is less than 50,000 MWh, then for such remaining balance, (b)
each such assignment is for a period of at least one year, and (c) the sum of
all assigned and retained quantities of electricity and Intervals does not
exceed the total quantities of electricity and Intervals hereunder. At the
request of Seller during the individual negotiations and during the term of the
Agreement, Buyer and Seller shall use their Reasonable Best Efforts to mutually
agree upon reasonable alternatives to the assignment qualification contained in
the immediately preceding sentence. Except to the extent expressly provided in
any applicable guarantee, upon any such assignment or transfer, Seller shall be
released and have no further obligations to Buyer hereunder with respect to the
assigned or transferred quantities and/or Intervals.
13.2 Assignment by Buyer. Buyer shall not assign its rights and
obligations hereunder except as expressly authorized under this Section.
(a) Niagara Restructuring. In the event that Buyer restructures its
---------------------
corporate structure or assets, including by creating any new entities that hold
significant assets, whether in connection with the Niagara Restructuring or
otherwise, upon notice to Seller (or its assignee hereunder) the Agreement will
be assigned to and assumed by the entity or entities owning all or substantially
all of Buyer's electric transmission and distribution assets or, if separated
from Buyer's electric transmission assets pursuant to such a restructuring
Buyer's electric distribution assets, provided that, upon the effective date of
the restructuring (i) such assignee's performance under this Agreement is
unconditionally guaranteed, pursuant to a guarantee in form and
Page -20-
substance reasonably satisfactory to Seller (or its assignee hereunder), by each
of the other entities arising out of the restructuring, including any entity
spun-off to Buyer's shareholders or any Affiliate of Buyer holding significant
assets that were held by Buyer prior (or any subsidiary of Buyer) to the
restructuring, unless such assignee has a long-term unsecured debt credit rating
issued by Moody's, S&P or another nationally recognized rating agency that is at
least as favorable as Buyer's long-term unsecured debt credit rating immediately
prior to the effective date of the restructuring, and (ii) if such assignee is
not the entity which will collect from customers the Competitive Transaction
Charge approved by the Commission pursuant to the Commission Approval, such
assignee's performance under this Agreement is unconditionally guaranteed,
pursuant to a guarantee in form and substance reasonably satisfactory to Seller
(or its assignee hereunder), by each of the entities which will collect from
customers the Competitive Transaction Charge provided by the Commission pursuant
to the Commission Approval.
(b) Third Party Assignment. Upon notice to Seller (or its assignee
----------------------
hereunder), Buyer may assign its rights and obligations under this Agreement to
any third party ("Buyer Assignee") (except those parties referenced in Section
13.2(a) above) provided that the Buyer Assignee has (i) received a long-term
unsecured debt credit rating by ▇▇▇▇▇'▇ or S&P of at least investment grade or
the equivalent of such rating from another nationally recognized rating agency,
as of the date of consummation of the assignment; or (ii) furnished Seller with
such collateral security as may be reasonably acceptable to Seller in order to
limit Seller's credit risk in connection with such assignment.
Page -21-
XIV. Further Assurances
Subject to the terms and conditions contained herein, upon the request
from time to time of either Party hereto, the other Party shall promptly execute
and deliver or use its Reasonable Best Efforts to cause to be executed and
delivered, such consents, approvals and other instruments, including, without
limitation, assignments of the Agreement as collateral, estoppel certificates
and utility certificates, in form and substance reasonably satisfactory to both
Parties and their respective counsel to implement any financing or other
material business transaction undertaken by the requesting Party.
XV. Curtailment
Buyer agrees that its obligation to accept and pay for electricity as
provided herein shall in no event be subject to any curtailment of electricity
under the provisions of 18 C.F.R. (S) 292.304(f) (1997), or any subsequent or
similar rule or regulation adopted by the PSC or the FERC, or any rule or order
of the PSC, the FERC, or any other Governmental Authority interpreting or
applying those provisions or authorizing Buyer to reserve any rights under those
provisions.
XVI. Wheeling
Seller shall have the right to have Buyer wheel some or all of the output
of its Plant to third parties pursuant to applicable law, or Buyer's, or other
companies', duly filed transmission and distribution tariffs or schedules.
XVII. Certain Amendments
Page -22-
In the event that Buyer restructures its corporate structure or assets,
including by creating any new entities that hold significant assets, whether in
connection with the Niagara Restructuring or otherwise, Seller (or its assignee
hereunder) shall have the right to replace the Agreement, as applicable, with
power purchase and/or hedging contractual arrangements substantially equivalent
to those that are entered into between the entity(ies) holding the transmission
and/or distribution assets of Buyer or which will collect from customers the
Competitive Transition Charge approved by the Commission pursuant to the
Commission Approval and the entity(ies) holding the non-nuclear generating
assets of Buyer, whether or not such assets are spun-off to Buyer's shareholders
(a "Genco Contract"), provided that the term, price and quantity under the
Agreement shall not be altered thereby, unless any of such terms are materially
and expressly conditioned by certain provisions in the Genco Contract, in which
case appropriate and equitable adjustments in such terms shall be mutually
agreed upon by Buyer or its assignee, as the case may be, and Seller.
XVIII. Persons Bound and Benefited
This Agreement shall bind and benefit assigns and other successors of the
Parties.
XIX. Waivers
No failure on the part of a Party to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof. No waiver by
a Party of any right hereunder with respect to any matter or default arising in
connection with this Agreement shall be considered a waiver with respect to any
subsequent matter or default.
XX. Governing Law
This Agreement shall be governed by the substantive law of New York,
irrespective of
Page -23-
conflicts of law rules.
XXI. Execution in Counterparts.
This Agreement may be executed by the Parties in separate counterparts,
each of which shall be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
XXII. Headings.
Section headings in this Agreement are included herein for convenience of
references only and shall not constitute a part of this Agreement for any other
purpose.
XXIII. Notices.
All written notifications pursuant to this Agreement shall be in writing
and shall be personally delivered or mailed by certified or registered first
class mail, return receipt requested, as follows:
To Buyer: To Seller:
Niagara Mohawk Power Corporation Project Orange Associates, L.P.
Director Energy Transactions c/o GPU International, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ One ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ (phone) Attn: President
▇▇▇-▇▇▇-▇▇▇▇ (fax)
Either Party may change its address for notices by notice to the other in the
manner provided above.
XXIV. Entire Agreement
This Agreement constitutes the entire agreement between the Parties with
respect to the
Page -24-
subject matter hereof, and supersedes all prior agreements and understandings,
written or oral, between the Parties with respect thereto.
XXV. Definitions
As used in this Agreement:
"Affiliate" means, with respect to any Party to this Agreement, any person or
entity which controls, is controlled by, or is under the common control with,
such Party, wherein the term "control" shall mean the power to direct the
management and policies by or of such Party through the ownership of voting
securities, by contract or otherwise.
"Commission" means the New York State Public Service Commission.
"Commission Approval" means a final Commission order setting forth the findings,
authorizations and approvals set forth in Schedule 6.6C of the Master
Restructuring Agreement.
"Competitive Transition Charge" means a charge, however designated, for the
recovery of strandable costs.
"Consummation Date" has the meaning set forth in Section 10.2 of the Master
Restructuring Agreement.
"Contract Quantity" means the amount of electricity (expressed in megawatt
hours) as set forth in Attachment A under the heading Contract Quantity for the
applicable month and which may be adjusted in accordance with Section 3.1, and
shall be subject to the Interval Cap.
"Contract Year" means the period commencing at 11:59:59 p.m. on the Consummation
Date and ending at 11:59:59 p.m. on the first anniversary of the last day of the
month in which the Consummation Date occurs and each successive 12-month period
thereafter to the extent applicable.
Page -25-
"Delivery Point" means (a) with respect to electricity delivered from the Plant,
the receiving point as set forth in the Interconnection Agreement dated January
13, 1992; and (b) with respect to electricity delivered thereunder from any
other source, any other interconnection on Buyer's transmission system, subject
to Buyer's concurrence which shall not be unreasonably withheld.
"Effective Date" means 11:59:59 p.m. on the Consummation Date.
"FERC" means the Federal Energy Regulatory Commission.
"Force Majeure" as used herein means acts of God, strikes, lockouts, act of
public enemies, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, system emergencies, earthquakes, fires, storms, floods, washouts,
arrests, explosions, force majeure gas supplier interruptions, breakage or
accident to machinery, equipment or transmission or distribution lines or gas
pipelines; provided that the term Force Majeure does not mean or include any
cause which by the exercise of reasonable diligence of the party claiming
suspension could be overcome.
"Governmental Authority" means any federal, state, municipal or local
governmental authority, department, commission, board, agency, body or official,
whether executive, legislative, administrative, regulatory or judicial,
including but not limited to the FERC and the Commission.
"Interval" means 1 hour or such other period of time as Buyer and Seller shall
mutually agree upon, provided that such mutually agreed upon time period may
only be modified upon the prior written consent of Buyer and Seller.
"Interval Quantity" shall mean the amount of electricity scheduled for delivery
to Buyer during each Interval in accordance with Section 3.3 hereof and subject
to Attachment A.
"ISO/PE" means a New York Independent System Operator and Power Exchange.
Page -26-
"Market Capacity Price" Shall equal zero (i) prior to the ISO/PE Establishment
Date (as defined below) and (ii) thereafter at any time when no separate market
for capacity exists. Commencing on the first day of the month following the
calendar month in which the ISO/PE Establishment Date occurs and only if there
then exists a separate market for capacity, the Market Capacity Price shall mean
the market price paid to sellers for capacity, at the region in which the
Delivery Point is located, established by the ISO/PE capacity auction; provided,
however, that at such time the parties shall conduct good faith negotiations and
diligently endeavor to mutually determine whether to continue the pricing
referred to in clause (i) of the definition of Proxy-Market Price for a mutually
agreed upon additional period of time. Following the Proxy-Market Price Period
and only if there then exists a separate market for capacity, the parties shall
conduct good faith negotiations and diligently endeavor to adjust the applicable
capacity on a basis consistent with the structure of such separate market.
"Market Price" means commencing on the first day of the month following the
calendar month in which the ISO/PE is established, the day ahead locational
based market price (ALBMP") paid to sellers for energy, at the region in which
Delivery Point is located, specified and published by the ISO/PE; provided,
however, that at such time the Parties shall conduct good faith negotiations and
use their Reasonable Best Efforts to mutually determine whether to continue the
pricing referred to in clause (i) of the definition of Proxy-Market Price for a
mutually agreed upon additional period of time.
"Moodys" means ▇▇▇▇▇'▇ Investor Services.
"Notice" means a notice of payment due pursuant to Section 3.4 and/or Section
4.4 delivered by Seller to Buyer.
Page -27-
"Overgeneration Amount" means an amount of energy in excess of the Contract
Quantity of Electricity; provided such amount of excess energy shall not exceed
5% of the contract quantity of electricity for the applicable Interval. Seller
shall have the right to put the Overgeneration Amount to Buyer hereunder at the
Proxy-Market Price or the Market Price, as the case may be.
"Payment Date" means the day of the month which is the later of (i) the 25th day
of the calendar month in which a Notice is given by Seller to Buyer; or (ii) the
15th day after delivery by Seller to Buyer of a Notice. In the event that the
Payment Date is a Saturday, Sunday, or legal holiday, the corresponding payment
shall be due on or before the first business day following such Payment Date or
legal holiday, as the case may be .
"Plant" means Seller's generating facility located in Syracuse, New York.
"Proxy-Market Price" means (i) prior to the establishment of the ISO/PE, Buyer's
short-term avoided energy and capacity costs at the transmission voltage level
of Seller's Plant's bus bar and location (or region) of the Delivery Point, as
stated in its tariff approved by the Commission providing for the purchase of
power from PURPA qualifying facilities, which tariff is currently designated as
S.C.-6, as the same may be in effect from time to time, or any successor tariff
thereto or such other price as may be agreed upon by Buyer and Seller, and (ii)
on the first day of the month following the calendar month in which the ISO/PE
is established, the Market Price and, if applicable, the Market Capacity Price;
provided, however, that at such time the Parties shall conduct good faith
negotiations and use their Reasonable Best Efforts to mutually determine whether
to continue the pricing referenced in clause (i) above for a mutually agreed
upon additional period of time. The Proxy-Market Price shall not be reduced or
offset by any costs that Buyer may incur, including, without limitation, costs
for ancillary services,
Page -28-
transmission services or transition (or stranded) costs.
"Proxy-Market Price Period" means the period commencing on the date of this
Agreement and ending on the first day of the calendar month following the
calendar month in which the ISO/PE has been fully established and functioning,
provided the following conditions have been satisfied during each of the
previous six months:
(i) the volumes (in GWh) of energy sales and purchases transacted
through the ISO/PE in the day ahead market based upon the day
ahead pricing mechanism adopted by the FERC for the ISO/PE for
the Upstate Market shall be at least equal to those
corresponding with the months listed in the following table
(which GWh shall include the aggregate contract quantities of
energy during such period under all physical delivery Restated
Contracts with Gas IPPs and all physical delivery Contracts
between Buyer and any IPP party to the Master Restructuring
Agreement entered into in lieu of Fixed Price Swap Contracts,
regardless of whether the IPPs parties thereto actually effected
such sales, and all sales on up to a monthly basis of energy
(other than sales through the ISO/PE) by the IPPs parties to the
Master Restructuring Agreement which are effectuated by Buyer
acting as agent for any such IPP);
---------------------- ----------------
Month GWh
---------------------- ----------------
January 4,611
---------------------- ----------------
Page -29-
---------------------- ----------------
February 4,136
---------------------- ----------------
March 4,327
---------------------- ----------------
April 3,827
---------------------- ----------------
May 3,788
---------------------- ----------------
June 3,974
---------------------- ----------------
Month GWh
---------------------- ----------------
July 4,278
---------------------- ----------------
August 4,160
---------------------- ----------------
September 3,793
---------------------- ----------------
October 3,856
---------------------- ----------------
November 3,896
---------------------- ----------------
December 4,361
---------------------- ----------------
and
(ii) only if a separate market for capacity then exists, a minimum of
5,700 MW of the capacity sales and purchases within the Upstate
Market have been transacted through the ISO/PE capacity auction
(which MW shall include the aggregate capacity associated with the
aggregate contract quantities of energy during such
Page -30-
period under all physical delivery Restated Contracts with Gas IPPs
and all physical delivery Contracts between Buyer and any IPP party
to the Master Restructuring Agreement entered into in lieu of Fixed
Price Swap Contracts, regardless of whether the IPPs parties thereto
actually effected such sales, and all sales on up to a monthly basis
of capacity (other than sales through the ISO/PE) by the IPPs
parties to the Master Restructuring Agreement which are effectuated
by Buyer acting as agent for any such IPP).
Notwithstanding the foregoing, the Proxy-Market Price Period may be extended or
terminated upon the mutual agreement of the parties.
In the event the ISO/PE does not provide adequate information to confirm
the monthly sales within the Upstate Market transacted through the ISO/PE, the
parties agree to renegotiate the conditions based on the original intent of the
Master Restructuring Agreement (as defined by the "Proxy-Market Price Period",
page 28, Attachment A-8 of the "Terms of Amended Power Purchase Agreements,
Restated Contracts and Fixed Price Swap Contracts").
"PURPA" shall mean the Public Utility Regulatory Policies Act of 1978, as
amended.
"Reasonable Best Efforts" means, with respect to any Party, such Party's
diligent pursuance of the course of action or result stated as determined by
such Party itself in good faith, but shall not require such Party to pay any sum
or other consideration or incur or assume any liability or obligation that is
not otherwise expressly required to be paid, incurred or assumed pursuant to
this Agreement, excluding (i) normal and customary incidental out-of-pocket
costs and expenses and (ii) attorneys' fees (except, with respect to any IPP,
attorneys' fees required to be paid by Buyer pursuant to the IPPs' Special
Counsel Fee Letter or the IPPs' Local Regulatory Counsel
Page -31-
Fee Letter).
"Restated Contracts" has the meaning set forth in Exhibit A to the Master
Restructuring Agreement.
"Settlement Period' means each calendar month during the term of this Agreement.
AS&P" means Standard & Poor's Corporation.
"Upstate Market" means collectively (i) the service territory retail loads in
the regions currently served by Niagara Mohawk Power Corporation, New York State
Electric & Gas Corporation, Rochester Gas & Electric Corporation and Central
▇▇▇▇▇▇ Gas & Electric Corporation (each a "Utility", collectively the
"Utilities"), and (ii) wholesale sales transactions by any of the Utilities to
third parties outside the regions currently served by such Utility, excluding
any such sales which are effectuated pursuant to contracts having a term of at
least one year existing as of the date of the Master Restructuring Agreement to
the extent such contracts are in effect thereafter.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement as
of the date first above written.
PROJECT ORANGE ASSOCIATES NIAGARA MOHAWK POWER CORP.
LIMITED PARTNERSHIP
By: NCP Syracuse, Inc. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: General Partner ________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
By: NCP Energy, Inc.
Its: Attorney-In-Fact
By: /s/ ▇▇▇▇▇ ▇▇▇▇
___________________________
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President
Page -32-
Attachment A
------------- ----------- --------------------------------------------------------------------------------------------------------
Contract Quantity
------------- ----------- --------------------------------------------------------------------------------------------------------
Annual Period Period Period Period Period Period Period Period Period
Contract Contract Jan Feb Mar Apr May Jun Jul Aug Sep
Year Quantity (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) (MWh) (MWh)
(MWh)
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
1 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
2 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
3 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
4 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
5 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
6 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
7 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
8 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
9 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
10 663,000 57,884 52,160 57,884 55,976 50,774 54,928 56,072 55,988 49,590
------------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ---------- ----------- ---------
------------- ------------------------------------
------------- ------------------------------------
Period Period Period
Contract Oct Nov Dec
Year (MWh) (MWh) (MWh)
------------- ----------- ----------- -----------
1 57,884 55,976 57,884
------------- ----------- ----------- -----------
2 57,884 55,976 57,884
------------- ----------- ----------- -----------
3 57,884 55,976 57,884
------------- ----------- ----------- -----------
4 57,884 55,976 57,884
------------- ----------- ----------- -----------
5 57,884 55,976 57,884
------------- ------------ ----------- -----------
6 57,884 55,976 57,884
------------- ------------ ----------- -----------
7 57,884 55,976 57,884
------------- ------------ ----------- -----------
8 57,884 55,976 57,884
------------- ------------ ----------- -----------
9 57,884 55,976 57,884
------------- ------------ ----------- -----------
10 57,884 55,976 57,884
------------- ------------ ---------- -----------
The contract quantity of electricity for each Interval shall not exceed 80 MWh
+5% (the "Interval Cap"), provided however, the aggregate contract quantity of
electricity that Seller shall have the right to put to Buyer in each Contract
Year hereunder shall not exceed 663,000 MWh + 5%.
Page -33-
Attachment B
Exceptions/Clarifications to Electric System Bulletin 756 (Including Appendix C)
dated December 1997
1.) II. GENERAL, B. CONTRIBUTIONS, Page 4:
Replace: "The Company will advise the Generator-owner concerning any
charges and payment schedules required"
With: "The Company will provide the Generator-owner with an invoice
detailing all charges. The Generator-owner agrees to pay all
undisputed amounts within thirty days of the invoice date."
2.) III. PROJECT MANAGEMENT, C. COMPLIANCE, 4.0 Periodic, Page 10, Paragraph 1:
Add: The Company will seal or witness the installation of the
Generator-owner's seal on all protective devices.
3.) III. PROJECT MANAGEMENT, C. COMPLIANCE, 4.0 Periodic, Page 10, Paragraph 2:
Add: ,or by the Generator-owner
4.) III. PROJECT MANAGEMENT, C. COMPLIANCE, 4.0 Periodic, Page 10, Paragraph 3:
Add: In the event that the Generator-owner is notified by the Company
that is not in compliance with any provision contained in the
Electric Bulletin #756 dated December 1997, the Generator-owner
will be given a reasonable period of time to come into
compliance.
5.) Appendix C, IV. PLANT PERFORMANCE, A. Generator Criteria, Page C-6:
Replace: bullet (1)
With: In order to minimize the interference of the Generator-owner's
parallel generation with the Company's electric power system or
electric service operation, the following criteria shall be met:
A. Voltage - the Generator-owner's generating equipment shall not cause
-------
excessive voltage excursions in excess of +/- 5% of nominal. The
Generator-owner shall install any necessary voltage regulating
equipment. The Generator-owner shall provide relaying to disconnect
his generating equipment from the Company system if the voltage cannot
be maintained within acceptable tolerances.
Page -34-
Attachment B, Continued
Exceptions/Clarifications to Electric System Bulletin 756 (Including Appendix C)
dated December 1997
B. Flicker - The Generator-owner shall not cause voltage flicker on the
-------
electric power system.
C. Frequency - The operating frequency of the Generator-owner's
---------
generating equipment shall be maintained between 59.5 hertz and 60.5
hertz.
D. Harmonics - Starting surges or harmonics generated by Generator-owner
---------
equipment must not cause any reduction in the quality of service
provided to other utility Generator-owners nor interfere with the
Company's system. Total harmonic distortion shall be limited to 5% of
the fundamental 60 hertz voltage or current waveform. Any single
harmonic shall not exceed 3% of the fundamental. In certain cases a
more stringent limitation may apply.
E. Fault and Line Clearing - The Generator-owner shall be responsible for
-----------------------
removing his generation equipment from the electric power system for
phase faults, ground faults, or outages occurring on the electric
circuit serving him.
F. Power Factor - The Generator-owner shall maintain a nominal power
------------
factor of unity.
G. Interruptions - The Generator-owner's generating equipment shall not
-------------
cause repeated interruptions on the Company's electric power system.
6.) Appendix C, IV. PLANT PERFORMANCE, B. VAR Control, Bullet 1., Page C-7:
Replace: primary side (high side) voltage schedule as
With: a system unity power factor unless otherwise
7.) Appendix C, IV. PLANT PERFORMANCE, B. VAR Control, Bullet 2., Page C-7:
Delete in its entirety.
8.) Appendix C, V.A. Plant Protection Criteria, Page C-8:
Bullet 1: Delete the words "Return to automatic voltage control after
excitation event shall be automatic."
Bullet 6: Delete in its entirety.
Page -35-
Attachment B, Continued
Exceptions/Clarifications to Electric System Bulletin 756 (Including Appendix C)
dated December 1997
9.) Appendix C VI. OPERATING B, Disconnection by the Company, Bullet 1.1., Page
C-10:
Replace: Excess generation on the Company's system
With: Excess generation on the Company's system in accordance with
the steps stated in the New York Power Pool Operating Policy
17-0.
10.) Appendix C, VI. OPERATING, C. Generation Scheduling, Bullet 2.0, Page C-10:
Replace bullet in its entirety with: Scheduling notices shall be
adhered to as described in Section 3.1 of the Power Put Agreement.
Page -36-