Exhibit 10.26
EXECUTION COPY
PUBLIC RELEASE VERSION
POWER AND GAS SUPPLY AGREEMENT
Dated as of March 28, 2002
Among
SOUTHERN POWER COMPANY,
DYNEGY POWER MARKETING, INC.
and
DYNEGY MARKETING AND TRADE
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS...........................................................................................2
ARTICLE 2: TERM OF AGREEMENT....................................................................................12
2.1 Filing of Agreement..................................................................................12
2.2 Termination Date.....................................................................................12
2.3 Effect of Termination................................................................................12
2.4 Effective Date.......................................................................................12
ARTICLE 3: DETERMINATION OF CONTRACT CAPACITY; SALE AND PURCHASE OF CONTRACT CAPACITY AND ENERGY................12
3.1 Determination of Contract Capacity...................................................................12
3.2 Sale and Purchase of Contract Capacity...............................................................13
3.3 Sale and Purchase of Contract Energy.................................................................13
3.4 Source of Contract Energy............................................................................14
ARTICLE 4: THE FACILITY, SCHEDULED ENERGY AND COMMITTED CAPACITY................................................14
4.1 The Facility.........................................................................................14
4.2 Pre-Scheduled Excused Hours..........................................................................14
4.3 Permits; Compliance with Laws........................................................................16
4.4 Operating Procedures and Operating Committee.........................................................16
4.5 Provision of Contract Capacity and Contract Energy...................................................16
ARTICLE 5: PAYMENTS.............................................................................................20
5.1 Reservation Payment..................................................................................20
5.2 Energy Payment.......................................................................................20
5.3 Gas Payment, Fuel Purchase Payment, and Gas Reservation Payment......................................20
5.4 Initial Dispatch Payment.............................................................................20
5.5 Performance Bonus....................................................................................21
5.6 Additional Payments..................................................................................22
5.7 Regulatory...........................................................................................22
5.8 Wholesale Generation Rates..........................................................................236
ARTICLE 6: SCHEDULING, SOUTHERN'S AND DYPM'S RIGHTS TO THE FACILITY, TITLE AND RISK OF LOSS.....................23
6.1 Scheduling...........................................................................................23
6.2 Replacement Resources Gas............................................................................23
6.3 Southern's Rights to the Facility....................................................................25
6.4 Title and Risk of Loss...............................................................................25
6.5 Provision of Committed Capacity......................................................................26
ARTICLE 7: TRANSMISSION SERVICE.................................................................................26
7.1 DYPM Obligations and Assumption of Transmission Risk.................................................26
7.2 Southern Obligations.................................................................................26
7.3 Imbalances and Penalties.............................................................................27
7.4 Optional System Upgrades.............................................................................27
ARTICLE 8: GAS DELIVERY OBLIGATIONS AND GAS ARRANGEMENTS........................................................28
8.1 DMT Obligations......................................................................................28
8.2 Southern Obligations.................................................................................29
8.3 Transportation Obligations...........................................................................29
8.4 Pipeline Imbalance Charges...........................................................................29
8.5 Gas Nominations Responsibility.......................................................................29
8.6 Title ...............................................................................................29
8.7 Specifications.......................................................................................30
8.8 Gas Metering.........................................................................................30
8.9 Hourly Southern Gas Costs............................................................................31
8.10 Operating Procedures..............................................................................31
8.11 Obligations with Respect to Gas...................................................................31
8.12 Determination of Adjusted Gas Volume and Monthly Adjusted Gas Volume..............................31
8.13 Determination of Replacement Resources Gas Costs and Hourly Performance Payment Gas Cost..........32
8.14 Initial Performance Target........................................................................33
8.15 Degradation of Initial Heat Rate..................................................................33
8.16 Ramping Gas and Energy............................................................................34
ARTICLE 9: ELECTRIC METERING....................................................................................34
9.1 Metering.............................................................................................34
9.2 Industry Standards...................................................................................35
9.3 Access...............................................................................................35
9.4 Calibration..........................................................................................35
9.5 Records..............................................................................................35
9.6 Meter Errors.........................................................................................35
9.7 Subject to Interconnection Agreement.................................................................36
ARTICLE 10: BILLING AND PAYMENT.................................................................................36
10.1 Timing; Method of Payment.........................................................................36
10.2 Late Payment......................................................................................36
10.3 Disputed ▇▇▇▇▇▇▇▇.................................................................................36
10.4 Adjustments.......................................................................................36
10.5 Audit Rights......................................................................................36
ARTICLE 11: CHANGE IN LAW.......................................................................................37
11.1 Limitations.......................................................................................37
11.2 Determination.....................................................................................37
11.3 Initiation of Surcharge...........................................................................37
11.4 Timing............................................................................................37
11.5 Contest and Dialogue..............................................................................37
ARTICLE 12: LIABILITY ALLOCATION; LIMITATIONS ON LIABILITY......................................................37
12.1 Costs, Taxes and Charges..........................................................................37
12.2 Indemnification...................................................................................38
12.3 Limitation of Liability...........................................................................38
ARTICLE 13: FORCE MAJEURE EVENT.................................................................................39
13.1 Force Majeure Event Defined.......................................................................39
13.2 Applicability of Force Majeure Event..............................................................39
13.3 Effect of Force Majeure Event.....................................................................40
13.4 Other Effects of Force Majeure Events.............................................................40
ARTICLE 14: EVENT OF DEFAULT....................................................................................40
14.1 Event of Default..................................................................................40
14.2 Exclusive Remedies................................................................................41
ARTICLE 15: CREDITWORTHINESS AND SECURITY.......................................................................43
15.1 Guaranty in favor of Southern.....................................................................43
15.2 Negative Watch Credit Support in favor of Southern................................................43
15.3 Credit Support in favor of Southern for Junk Rating...............................................43
15.4 Post December 31, 2005 Provisions.................................................................44
15.5 Guaranty in favor of DYPM/DMT.....................................................................44
15.6 Negative Watch Credit Support in favor of DYPM/DMT................................................44
15.7 Credit Support in favor of DYPM/DMT for Junk Rating...............................................45
15.8 Post June 1, 2005 Provisions......................................................................45
ARTICLE 16: DELIVERY EXCUSE.....................................................................................45
16.1 Definition........................................................................................45
16.2 No Breach for Delivery Excuse.....................................................................46
ARTICLE 17: REPRESENTATIONS AND WARRANTIES......................................................................46
17.1 Execution.........................................................................................46
17.2 Permits...........................................................................................46
17.3 Binding Obligations...............................................................................46
17.4 Execution and Consummation........................................................................47
17.5 Actions and Proceedings...........................................................................47
17.6 Processor.........................................................................................47
ARTICLE 18: ASSIGNMENT..........................................................................................47
18.1 General Rule......................................................................................47
18.2 Consent Required..................................................................................47
ARTICLE 19: DISPUTE RESOLUTION..................................................................................47
19.1 Senior Officers...................................................................................48
19.2 Arbitration.......................................................................................48
19.3 Binding Nature of Proceedings.....................................................................49
ARTICLE 20: MISCELLANEOUS.......................................................................................49
20.1 Governing Law; Waiver of Jury Trial...............................................................49
20.2 Confidentiality...................................................................................49
20.3 Survivorship of Obligations.......................................................................50
20.4 Notice of Proceedings.............................................................................50
20.5 No Third Party Beneficiaries......................................................................50
20.6 Section Headings Not to Affect Meaning............................................................50
20.7 Computation of Time...............................................................................50
20.8 Interest..........................................................................................51
20.9 Entire Agreement..................................................................................51
20.10 Counterparts......................................................................................51
20.11 Amendments........................................................................................51
20.12 Guarantee of Performance..........................................................................51
20.13 Waivers...........................................................................................51
20.14 No Partnership Created............................................................................51
20.15 Character of Sale.................................................................................51
20.16 Notices...........................................................................................52
20.17 Survival..........................................................................................54
20.18 Construction......................................................................................54
20.19 Imaged Agreement..................................................................................54
20.20 GDP-IPD...........................................................................................54
20.21 Higher Heating Value..............................................................................54
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
APPENDIX F
APPENDIX G
APPENDIX H
POWER AND GAS SUPPLY AGREEMENT
AMONG
SOUTHERN POWER COMPANY,
DYNEGY POWER MARKETING, INC.
AND
DYNEGY MARKETING AND TRADE
This POWER AND GAS SUPPLY AGREEMENT is made and entered into as of this
28th day of March, 2002 (the "Execution Date"), by and among SOUTHERN POWER
COMPANY (hereafter referred to as "Southern" or "Seller"), a Delaware
corporation having its principal office and place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, DYNEGY POWER MARKETING, Inc., (hereinafter
referred to as "DYPM"), a corporation organized and existing under the laws of
the State of Texas having its principal office and place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and DYNEGY MARKETING AND TRADE
("DMT" or "Supplier"), a Colorado general partnership having its principal
office and place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇. Southern, DYPM, and DMT are hereafter referred to individually and
collectively as a "Party" or the "Parties," respectively.
RECITALS:
DYPM desires to purchase and Southern desires to sell, Contract
Capacity and Contract Energy in accordance with this Agreement for the period
from June 1, 2005 through May 31, 2030.
Subject to the terms and conditions of this Agreement, Southern will
deliver and sell to DYPM, and DYPM will accept and purchase from Southern,
Contract Capacity and Contract Energy from the Facility or from other resources
as provided in this Agreement.
As an integral part of the supply of Contract Capacity and Contract
Energy by Southern hereunder, DYPM's affiliate, DMT, has agreed to supply and
Southern has agreed to purchase, natural gas in accordance with this Agreement.
NOW THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
The following terms shall have the respective meanings set forth below.
"Actual Gas Volume" has the meaning set forth in Section 8.12.1.
"Adjusted Gas Volume" has the meaning set forth in Section 8.12.1.
"Affiliate" means, with respect to a corporation, partnership or other
entity, each such other corporation, partnership or other entity that directly
or indirectly (through one or more intermediaries) controls, is controlled by,
or is under common control with, such corporation, partnership, or other entity.
"Agreement" means this Power and Gas Supply Agreement, including, to
the extent applicable, any amendments and appendices hereto that the Parties may
execute now or at any time in the future.
"Alternate Delivery Point" means a point of delivery as agreed to by
the Parties for the delivery of Contract Capacity and Scheduled Energy.
"Alternate Gas Delivery Point(s)" means those alternate points to which
DMT is required to deliver Replacement Gas pursuant to Section 6.2.
"Annual ENDH" means [redacted] for each Contract Year.
"Banked Pre-Scheduled Excused Hours" has the meaning set forth in
Section 4.2.1(b).
"Billing Month" means each Month during the Term beginning with the
second Month of the first Contract Year and includes the Month immediately
following the expiration or early termination of this Agreement.
"BTU" means British Thermal Units.
"Business Day" means any Day on which Federal Reserve Member Banks in
New York, New York are open for business. A Business Day shall begin at 0800 CPT
and end at 1700 CPT.
"Carry Period" has the meaning set forth in Section 4.5.2(a).
"Central Prevailing Time" or "CPT" means the local time at any
point in Birmingham, Alabama.
"Change in Law" means a Law (including a new or changed interpretation
of an existing Law by a Government Agency, or an interpretation by a Government
Agency previously unknown to Southern) that becomes effective after the date of
the Agreement and generally affects the cost of electric generation [redacted].
Examples of a Change in Law include (but are not limited to): (i) Laws
pertaining to changes in environmental Laws that seek to decrease existing
limits (e.g., NOx) or to establish limits for currently uncontrolled substances
(e.g., CO2); and (ii) Laws pertaining to the imposition of energy taxes on
wholesale power sales. A Change in Law does not include changes in: (i) income
taxes; (ii) taxes assessed or imposed by a county or municipal authority (such
as ad valorem taxes); (iii) franchise and occupational taxes; or (iv) Laws that
have unique application to the Facility.
"Cold Start" means an Initial Dispatch when Scheduled Energy has not
been delivered from any resource for a period of greater than [redacted].
"Commercially Reasonable" or "Commercially Reasonable Efforts" means,
with respect to any purchase, sale, decision, or other action made, attempted or
taken by a Party, such efforts as a reasonably prudent business would undertake
for the protection of its own interest under the conditions affecting such
purchase, sale, decision, or other action, including without limitation,
electric system reliability and stability, the amount of notice of the need to
take such action, the duration and type of the purchase or sale or other action,
and the commercial environment in which such purchase, sale, decision, or other
action occurs.
"Committed Capacity" means that capacity that DYPM may receive pursuant
to Section 6.5.
"Committed Resource" has the meaning set forth in 6.5.3.
"Contest" means with respect to any Person, a contest of: (i) any
Governmental Approval, acts or omissions by any Government Agency or any related
matters; or (ii) the amount or validity of any claim pursued by such Person in
good faith and by appropriate legal, administrative or other proceedings
diligently conducted, so long as the contesting Party could not reasonably be
expected to be prevented from performing its material obligations under this
Agreement pending the outcome of such contest.
"Contract Capacity" has the meaning set forth in Section 3.1.
"Contract Energy" has the meaning set forth in Section 3.3.
"Contract Year" means: (i) for the first Contract Year, the Effective
Date of Service through May 31, 2006; and (ii) for each Contract Year
thereafter, each twelve (12) Month period thereafter beginning June 1 and ending
May 31.
"Day" means the twenty-four (24) hour period beginning and ending at
2400 CPT.
"Delivered Energy" means the amounts of energy, expressed in MWhs, that
are delivered by Southern from the Facility or Replacement Resources in
accordance with this Agreement.
"Delivery Excuse" has the meaning set forth in Section 16.1.
"Delivery Point" means the Interconnection Point(s) or such Alternate
Delivery Point(s) as may be mutually agreed upon by Southern and DYPM.
"Determination Period" has the meaning set forth in Section 4.5.1(b).
"DMT" has the meaning set forth in the introductory paragraph hereof.
"DYPM" has the meaning set forth in the introductory paragraph hereof.
"Effective Date of Service" means June 1, 2005.
"Electric Metering Equipment" means electric meters and associated
equipment, including metering transformers and meters for measuring kWh, amperes
and voltage, utilized in determining the Energy Output Level at the
Interconnection Point(s). The Electric Metering Equipment shall include meters
and any back-up meters utilized to measure deliveries of energy to the Southern
Company Transmission System, and the use of energy at the Facility.
"Eligible Guaranty" has the meaning set forth in Section 15.1.
"Eligible Guaranty Threshold" has the meaning set forth in
Section 15.1.
"Emergency Condition" means a condition or situation (not principally
caused by Southern) that presents an imminent physical threat of danger to life,
health or property, or a situation in which delivery of Scheduled Energy from
the Facility could reasonably be expected to cause a significant disruption on
the Southern Company Transmission System.
"ENDH" means an excused non-delivery hour (or portion of an hour) in
which an Unavailability has occurred for which Southern accumulates ENDH
pursuant to Section 4.5.2. ENDH for any hour shall equal the ratio of the amount
of Contract Capacity associated with the Scheduled Energy not provided to the
Contract Capacity for such hour.
"ENDH Accumulated" means the number of Equivalent ENDH as calculated
pursuant to Section 4.5.4.
"ENDH Available" means, for any point in time in any Month, the number
of ENDH (or partial ENDH) that are available for accumulation pursuant to
Southern's election under Section 4.5.2. The amount of ENDH Available in any
Month shall be equal to the difference between Annual ENDH for the Contract Year
in which such Month occurs and the sum of (i) ENDH Accumulated during such Month
(before the point of calculation) and (ii) ENDH Accumulated during all of the
Months elapsed during such Contract Year preceding the Month in which the
calculation is made.
"Energy Output Level" means the hourly quantity of energy (in MWh)
generated by the Facility to supply Scheduled Energy, plus energy simultaneously
generated by the Facility in connection with energy production from the Reserved
Capacity to the extent such production is made pursuant to the Other Southern
Agreement.
"Energy Payment" means the payment for Delivered Energy to be made by
DYPM to Southern as calculated in Section 5.2.
"Energy Price" means, [redacted]
"Equivalent ENDH" has the meaning set forth in Section 4.5.4.
"Event of Default" has the meaning set forth in Section 14.1.
"Execution Date" has the meaning set forth in the introductory
paragraph hereof.
"Extended Outage Period" has the meaning set forth in Section 4.5.1(b).
"Extended Unavailability" has the meaning set forth in Section 4.5.6.
"Facility" means the electric generating unit currently known as "Goat
Rock 3" with an anticipated initial capacity of approximately 625 MW (including
power augmentation), which Facility is part of that certain natural gas combined
cycle electric generating plant located in ▇▇▇ County, Alabama which directly
interconnects to the Southern Company Transmission System, or such other
generating facility mutually agreed by the Parties.
"Facility Actual Capacity" means, for each hour, the actual capacity
(taking into account the effect of any Unavailability) of the Facility (measured
in MW), as reasonably determined by Southern on such Day.
"Facility Metering Equipment" means Gas meters and associated equipment
located at the Facility.
"FERC" means the Federal Energy Regulatory Commission, or any successor
to its functions.
"Force Majeure Event" has the meaning set forth in Section 13.1.
"Force Majeure Hour" shall occur in any hour (or portion of an hour) in
which a Force Majeure Event occurs or is continuing. During a Force Majeure
Hour, if the energy available from the Facility (as measured in hourly amounts
and expressed in MWh) is greater than zero but less than the amount of Scheduled
Energy, then a partial Force Majeure Hour shall be determined equal to the ratio
of the amount of Contract Capacity not available from the Facility in such hour
due to the Force Majeure Event to the Contract Capacity for such hour.
"Fuel Purchase Payment" has the meaning set forth in Section 5.3.2.
"GDP-IPD" means the Gross Domestic Product Implicit Price Deflator
published in the National Income and Product Account by the U.S. Department of
Commerce.
"Gas" means natural gas.
"Gas Delivery Point" means the outlet flange of the Gas
Metering Equipment.
"Gas Index" means [redacted].
"Gas Metering Equipment" means Gas meters and associated equipment
located at the interconnection between the pipeline lateral serving the Facility
and the Transporter's pipeline.
"Gas Nomination" or "Gas Nominations" means communicating and
confirming that a particular amount of Gas is to be delivered or received at the
Gas Delivery Point and/or the Alternate Gas Delivery Point(s) and providing all
information that may be necessary to cause such delivery or receipt to occur.
"Gas Payment" has the meaning set forth in Section 5.3.
"Gas Requirements" means, for each hour, Actual Gas Volume
less Southern Gas Consumed.
"Gas Tariff" means the Gas transportation tariff of the
applicable Transporter as maintained and approved by FERC from time to time, as
the same may be amended or supplemented during the Term.
"Government Agency" means any federal, state, local, territorial or
municipal government and any department, commission, board, bureau, agency,
instrumentality, judicial or administrative body thereof.
"Governmental Approval" means any authorization, consent, approval,
license, ruling, permit, exemption, variance, order, judgment, decree,
declarations of or regulation of any Government Agency relating to the Facility
or to the execution, delivery or performance of this Agreement.
"Guarantor" has the meaning set forth in Section 14.1.2.
"Guaranty" means a Guaranty or other instrument guaranteeing a Party's
obligations under this Agreement as contemplated under Article 15.
"Heat Rate Test" means a heat rate test requested by either DYPM or
Southern which is conducted for the Facility in accordance with Prudent Industry
Practices as determined by Southern.
"Hot Start" means an Initial Dispatch of the Facility when Scheduled
Energy has not been delivered from any resource for a period of less than
[redacted].
"Hour Block" means any period within a Day that is comprised of either
a succession of Off Peak Hours or a succession of On Peak Hours.
"Hourly Performance Payment Gas Cost" has the meaning set forth in
Section 8.13.3.
"Hourly Replacement Resources Gas Cost" has the meaning set forth in
Section 8.13.1.
"Imaged Agreement" has the meaning set forth in Section 20.19.
"Increased Generation Costs" means [redacted].
"Initial Dispatch" means each time that DYPM goes from not having any
energy Scheduled to having some amount of energy Scheduled.
"Initial Dispatch Payment" has the meaning set forth in Section 5.4.
"Initial Heat Rate" means the heat rate, expressed in Higher Heating
Value, established by a Heat Rate Test of the Facility prior to the Effective
Date of Service.
"Initial Performance Target" has the following meaning:
The entire Facility shall have an Initial Performance Target
of [redacted]
"Interconnection Agreement" means the interconnection agreement between
the applicable transmission provider and Southern governing the interconnection
of the Facility to the Southern Company Transmission System, as the same may be
amended from time to time, or such successor interconnection agreement as may be
required pursuant to an assignment of transmission provider responsibilities to
a regional power exchange, regional transmission organization, independent
system operator or other transmission system operator.
"Interconnection Point" means the substation where the Facility is
physically interconnected to the Southern Company Transmission System.
"kW" means kilowatt(s).
"kWh" means kilowatt hour(s).
"Law" means any statute, law, requirement, rule or regulation
imposed by a Government Agency, whether in effect now or at any time in the
future.
"MMBTU" means one million BTU.
"MW" means megawatt(s).
"MWh" means megawatt hour(s).
"Maintenance Outage Hours" has the meaning set forth in
Section 4.2.1(c).
"Major Bank" means the Federal Reserve Bank of Atlanta, Georgia.
"Maximum Allowable Degradation" means the Initial Heat Rate multiplied
by [redacted].
"Minimum Schedule Capacity" shall have the meaning set forth in Section
6.1.3.
"Month" means a calendar month.
"Monthly DYPM Gas Costs" has the meaning set forth in Section
8.12.2.
"Monthly Replacement Resources Gas Costs" has the meaning set
forth in Section 8.13.2.
"Monthly Gas Reservation Payment" has the meaning set forth in
Section 5.3.3.
"Monthly Weighting Factor" means, for any Month, the weighting
factor for such Month in the table below:
Month Weighting Factor
January [redacted]
February [redacted]
March [redacted]
April [redacted]
May [redacted]
June [redacted]
July [redacted]
August [redacted]
September [redacted]
October [redacted]
November [redacted]
December [redacted]
"NERC" means the North American Electric Reliability Council, or any
successor to its functions.
"Non-Summer DPF" has the meaning set forth in Section 5.5.2.
"Non-Summer PAF" has the meaning set forth in Section 5.5.2.
"Non-Summer Performance Bonus" has the meaning set forth in Section
5.5.2.
"OATT" means the Open Access Transmission Tariff of Southern Companies
or a successor tariff governing transmission on the Southern Company
Transmission System that has been accepted by FERC, as the same may be changed
or amended from time to time.
"Off Peak Hour" means: (i) any hour from 2200 CPT to 0600 CPT, Monday
through and including Friday; (ii) any hour during any holiday recognized by
NERC; and (iii) any hour during Saturday and Sunday.
"On Peak Hour" means any hour from 0600 CPT to 2200 CPT, Monday through
and including Friday, excluding any hour of any holiday recognized by NERC.
"Operating Committee" has the meaning set forth in Section 4.4.2.
"Operating Procedures" has the meaning set forth in Section 4.4.1.
"Optional System Upgrades" means those transmission upgrades of the
Southern Company Transmission System that are in addition to those facilities
that Southern Company Transmission requires in order to interconnect the
Facility to the Southern Company Transmission System.
"Other Southern Agreement" means that certain capacity and energy
purchase agreement providing, among other things, at Southern's election, rights
with respect to the Reserved Capacity.
"Peak Period" means, for each Contract Year, the Months of June, July,
August, September, January and February.
"Performance Payment" means [redacted].
"Person" means any individual, corporation, limited liability
corporation, partnership, joint venture, trust, unincorporated organization,
Government Agency or other entity.
"Pre-Scheduled Excused Hours" means hours in which the Facility is
unavailable for Scheduling for reasons relating to the maintenance of the
Facility or as may otherwise be necessary to comply with Prudent Industry
Practices, as such hours are designated and scheduled in accordance with Section
4.2.
"Prime Rate" means, for any Day on which the calculation of an interest
amount begins under this Agreement, the "Prime Rate" specified for such Day (or,
if such Day is not a Business Day, on the first Business Day following such Day)
under the "Money Rate" table of the Wall Street Journal. In the event that the
Wall Street Journal ceases to report a Prime Rate, the Prime Rate for purposes
of this Agreement shall be the prime rate (or its functional equivalent) charged
by the Major Bank in the United States of America.
"Protective Apparatus" means such equipment and apparatus, including
protective relays, circuit breakers and the like, necessary or appropriate to
isolate the Facility from the Southern Company Transmission System consistent
with Prudent Industry Practices and any requirements of Southern Company
Transmission.
"Prudent Industry Practices" means any of the practices, methods,
standards and acts (including the practices, methods and acts engaged in or
approved by a significant portion of the electric power industry in the United
States) that, at a particular time, in the exercise of reasonable judgment in
light of the facts known or that should reasonably have been known at the time a
decision was made, could have been expected to accomplish the desired result
consistent with good business practices, reliability, economy, safety and
expedition, and which practices, methods, standards and acts generally conform
to operation and maintenance standards recommended by equipment suppliers and
manufacturers, applicable design limits and applicable Governmental Approvals
and Laws.
"Replacement Cost" means, [redacted].
"Replacement Gas Price" has the meaning set forth in Section 6.2.
"Replacement Resources" means all resources other than the Facility
(whether such other resources are owned, purchased or otherwise controlled by
Southern, or that are otherwise available to Southern) from which Southern may
elect to provide Contract Capacity and Scheduled Energy.
"Replacement Value" has the meaning set forth in Section 14.2.4.
"Reservation Payment" has the meaning set forth in Section 5.1.
"Reserved Capacity" means 400 MW, which represents the capacity from
the Facility that is not available to DYPM under this Agreement, but which, at
Southern's election, is subject to the Other Southern Agreement.
"Schedule" means the right of DYPM to schedule the delivery of
Scheduled Energy in accordance with this Agreement. Any form of the term
Schedule (e.g., "Scheduled" or "Scheduling") shall refer to the exercise of such
right by DYPM.
"Scheduled Energy" means the amounts of energy, expressed in MWh,
Scheduled by DYPM to be delivered by Southern in accordance with this Agreement.
"Scheduling Constraints" has the meaning set forth in Appendix B.
"Seller" has the meaning set forth in the introductory paragraph
hereof.
"Seller Election Period" has the meaning set forth in Section 4.5.1(b).
"Southern" has the meaning set forth in the introductory
paragraph.
"Southern Company" means The Southern Company, a publicly held
corporation organized and existing under the laws of the State of Delaware and
having its principal place of business in Atlanta, Georgia.
"Southern Company Transmission" means the functional transmission
division of Southern Company Services, Inc., or any successor transmission
provider.
"Southern Company Transmission System" means the integrated
transmission systems of the electric operating companies of Southern Company, as
such systems may be modified or expanded from time-to-time, as well as any
successor transmission system(s).
"Southern Gas Consumed" has the meaning set forth in Section 8.12.1.
"Summer DPF" has the meaning set forth in Section 5.5.1.
"Summer PAF" has the meaning set forth in Section 5.5.1.
"Summer Performance Bonus" has the meaning set forth in Section 5.5.1.
"Taxes" means any or all ad valorem, property, occupational, severance,
emissions, generation, first use, conservation, energy, transmission, utility,
gross receipts, privilege, sales, use, excise and other taxes, governmental
charges, licenses, fees, permits and assessments, and taxes based on net income
or net worth.
"Term" means the period from the Execution Date through May 31, 2030,
or such earlier date on which this Agreement is terminated in accordance with
its terms.
"Tested Heat Rate" has the meaning set forth in Section 8.15.
"Transporter" means any Person that transports Gas upstream and to the
Gas Delivery Point or the Alternate Gas Delivery Point(s).
"Unavailability" means any time in which the Facility (or any part
thereof) is physically incapable of providing all or a portion of Scheduled
Energy or Committed Capacity for reasons including an actual or threatened
unplanned component failure that requires the generating capability of the
Facility to be reduced (or derated); provided that for an Unavailability to
exist, the actual output of the Facility must have in fact been reduced.
Unavailability does not include those times that the Facility's capability is
reduced (in whole or in part) due to a Force Majeure Event, Delivery Excuse, or
maintenance activities during Pre-Scheduled Excused Hours or Maintenance Outage
Hours.
"Undelivered Energy" means that quantity of Scheduled Energy that
Southern fails to deliver to the Delivery Point in response to a Schedule for
which ENDH is not accumulated and which failure is not attributable to a Force
Majeure Event or Delivery Excuse.
"VOM Charge" means [redacted].
"Warm Start" means an Initial Dispatch when Scheduled Energy
has not been delivered from any resource for a period greater than or equal to
[redacted] and less than or equal to [redacted].
ARTICLE 2
TERM OF AGREEMENT
2.1 Filing of Agreement. This Agreement shall be filed with the FERC on
or before such date as may be required by law. To the extent practicable, any
such filing shall be made under a request for confidential treatment. This
Agreement shall not be contingent on such filing.
2.2 Termination Date. Unless earlier terminated in accordance with its
terms, this Agreement shall continue in effect from the Execution Date through
May 31, 2030. In addition, this Agreement shall terminate immediately upon the
termination of the Other Southern Agreement.
2.3 Effect of Termination. Subject to the exercise of a non-defaulting
Party's rights under Section 14.2, in the event that this Agreement is
terminated, the rights and obligations of the Parties hereunder shall continue
unaffected until the termination is effective in accordance with the terms and
conditions thereof. Any such termination shall not relieve DYPM of its
obligation to pay any unpaid invoices for any Contract Capacity made available
and Contract Energy supplied prior to the effective date of such termination, or
relieve Southern of its obligation to provide Contract Capacity and to deliver
Scheduled Energy (or pay a Performance Payment) prior to the effective date of
such termination.
2.4 Effective Date. This Agreement shall become effective on the
Execution Date without regard to the status of the construction of the Facility,
permits relating to the Facility, or with respect to any other condition that
could affect the construction, operation or existence of the Facility.
ARTICLE 3
DETERMINATION OF CONTRACT CAPACITY; SALE AND PURCHASE OF
CONTRACT CAPACITY AND ENERGY
3.1 Determination of Contract Capacity.
3.1.1 Quantity. The Contract Capacity shall equal the full
capability of the Facility (including power augmentation if appropriate) as the
Facility is designed and existing on the Effective Date of Service (as may be
adjusted pursuant to Section 3.1.2), consistent with Prudent Industry Practices
and excluding the effects of any Unavailability, Force Majeure Event or Delivery
Excuse, less the Reserved Capacity.
3.1.2 Adjustment. The Contract Capacity may be adjusted on a
Day to Day or an hourly basis based on the ambient temperature and relative
humidity levels at the Facility and normal capacity degradation.
3.1.3 Capability Projection. The Operating Committee shall
implement procedures in order to project the amount of the Contract Capacity for
each Day. Such procedures shall provide for a Day ahead projection of hourly
ambient temperatures at the Facility. Unless otherwise agreed by the Operating
Committee, the basis of such projected temperatures shall be the high and low
temperatures for each Day as forecasted by the office of the United States
National Weather Service that is nearest to the Facility. Such temperatures
shall be utilized in conjunction with the chart set forth in Figure 1 of
Appendix C in order to project Contract Capacity for each hour. This chart will
be modified by the Operating Committee from time to time in order to reflect
capacity degradation.
3.1.4 Uprates. After the Effective Date of Service, Southern
has the unilateral right to increase the capacity of (i.e., uprate) the
Facility. If and when an uprate of the Facility is completed and to the extent
that additional output above the Contract Capacity and the Reserved Capacity is
available from the Facility as a result, then following such uprate, Southern
shall offer DYPM the right to purchase any such additional output as an addition
to the Contract Capacity and related rights existing under this Agreement.
Southern shall make such offer by written notice to DYPM, which notice shall
include the pricing at which Southern is willing to make such additional output
available. Within twenty (20) Business Days following DYPM's receipt of such
offer from Southern, DYPM shall advise Southern of its decision to accept or
reject the offer. A failure to respond within such twenty (20) Business Day
period shall be deemed to be a rejection of the offer. If DYPM accepts the
offer, then Southern and DYPM shall amend this Agreement to provide DYPM the
additional output consistent with the terms and conditions of this Agreement. If
the additional output is not purchased by DYPM, then Southern has the right to
market the additional output provided that fuel additional to that supplied
hereunder is obtained by Southern for the incremental capacity and energy.
Southern's use of the capacity and energy associated with any such uprate not
purchased by DYPM shall be subordinate to DYPM's Schedule. In addition, no
uprate of the Facility shall be deemed to adversely affect any of the heat rate
characteristics or other performance characteristics set forth in this
Agreement. Southern shall indemnify and hold DYPM harmless from and against any
such negative effects associated with any such uprate in comparison to the
rights and benefits associated with the Facility prior to such uprate.
3.2 Sale and Purchase of Contract Capacity. Subject to the terms and
conditions of this Agreement, beginning on the Effective Date of Service and
until the end of the Term, Southern shall make available and sell to DYPM at the
Delivery Point, and DYPM shall accept and purchase, the Contract Capacity.
3.3 Sale and Purchase of Contract Energy. Subject to the terms and conditions of
this Agreement, beginning on the Effective Date of Service and until the end of
the Term, Southern shall deliver and sell to DYPM, and DYPM shall accept and
purchase from Southern, energy at the Delivery Point up to the Contract Capacity
("Contract Energy").
3.4 Source of Contract Energy. [redacted].
ARTICLE 4
THE FACILITY, SCHEDULED ENERGY AND COMMITTED CAPACITY
4.1 The Facility. Southern shall perform its obligations
hereunder relative to the Facility in accordance with Prudent Industry
Practices and the terms of this Agreement.
4.2 Pre-Scheduled Excused Hours.
4.2.1(a) Scheduling of Pre-Scheduled Excused Hours. On or
before April 1 prior to each Contract Year, DYPM shall provide to Southern a
non-binding proposed schedule of energy and Initial Dispatches for each Month of
such Contract Year. Within one hundred twenty (120) Days after receiving DYPM's
proposed schedule, Southern shall submit to DYPM a proposed schedule of
Pre-Scheduled Excused Hours for the applicable Contract Year. The proposed
schedule of Pre-Scheduled Excused Hours shall give due consideration to, and
shall take into account, the proposed schedule submitted by DYPM; provided,
however, that in no event shall Southern's proposed schedule provide for any
Pre-Scheduled Excused Hours during a Peak Period without the prior written
consent of DYPM. Within thirty (30) Days after receiving Southern's proposed
schedule of Pre-Scheduled Excused Hours, DYPM may request, in writing, that
Southern reschedule any such Pre-Scheduled Excused Hours. Following receipt of
such request of DYPM, Southern shall inform DYPM as to whether it can
accommodate DYPM's request and, if so, shall further advise DYPM of the good
faith estimated costs that will be incurred by Southern in connection with
accommodating the request of DYPM to re-schedule the Pre-Scheduled Excused
Hours. DYPM shall then within five (5) Days of the receipt of the estimated
costs provided by Southern determine whether Southern should reschedule the
Pre-Scheduled Excused Hours. Without regard to any prior estimate, DYPM shall
reimburse Southern for all Commercially Reasonable costs related to such change
in schedule. While Southern must use Commercially Reasonable Efforts to
accommodate a request of DYPM to re-schedule any Pre-Scheduled Excused Hours,
Southern may elect to decline rescheduling, if, in Southern's Commercially
Reasonable judgment, it would cause a failure on the part of Southern to observe
Prudent Industry Practices, or if the proposed re-schedule would cause Southern
to incur costs which DYPM is unwilling to reimburse. If Southern makes the
election not to accommodate a request of DYPM to reschedule Pre-Scheduled
Excused Hours, DYPM may propose an alternate schedule for Pre-Scheduled Excused
Hours, in which case Southern and DYPM shall continue to negotiate the
rescheduling of Pre-Scheduled Excused Hours as provided above, but in no event
shall such negotiation continue after September 30 of the Contract Year for
which such Pre-Scheduled Excused Hours are scheduled. In addition to the
foregoing, within thirty (30) Days after the beginning of each Contract Year,
Southern shall provide to DYPM a non-binding schedule of Pre-Scheduled Excused
Hours for the next three (3) Contract Years.
(b) Pre-Scheduled Excused Hours for any Contract Year shall not exceed
[redacted]. If, however, during any Contract Year, Southern does not utilize its
allocation of Pre-Scheduled Excused Hours for that Contract Year, then the
unused portion of Pre-Scheduled Excused Hours (the "Banked Pre-Scheduled Excused
Hours") may be carried forward to the next succeeding Contract Year and may be
utilized by Southern in addition to the regular allotment of Pre-Scheduled
Excused Hours. The total of all available Pre-Scheduled Excused Hours available
to Southern during any Contract Year, including the hours that comprise Banked
Pre-Scheduled Excused Hours may not exceed [redacted]. Unless otherwise agreed
by the Operating Committee, Banked Pre-Scheduled Excused Hours may only be
utilized by Southern during a Contract Year in which utilization of such Banked
Pre-Scheduled Excused Hours is necessary for Southern, in Southern's
Commercially Reasonable judgment to comply with Prudent Industry Practices.
(c) In addition to Pre-Scheduled Excused Hours, Southern may
at any time request Maintenance Outage Hours during any Month of any Contract
Year. Southern shall request Maintenance Outage Hours at least twenty-four (24)
hours in advance. Such request shall identify the purpose for such maintenance
and the equipment and Contract Capacity that will not be available for
Scheduling and the proposed start time and duration for the Maintenance Outage
Hours. DYPM shall respond to Southern's request as soon as reasonably
practicable. Southern shall not take Maintenance Outage Hours without DYPM's
prior written consent, and such consent shall not be unreasonably withheld,
conditioned or delayed; provided, however, that the Parties acknowledge that it
shall be reasonable for DYPM to deny any request for Maintenance Outage Hours if
DYPM reasonably believes that it may Schedule the Facility to a level that would
require the availability of the equipment that is proposed to be unavailable
during the Maintenance Outage Hours. DYPM shall have the right to revoke its
consent to Maintenance Outage Hours if changed conditions require Scheduling of
the Contract Capacity to be unavailable during such Maintenance Outage Hours;
provided, however, that DYPM may only revoke its consent if it provides Southern
with notice of revocation at least twelve (12) hours prior to the scheduled
start of the Maintenance Outage Hours. In addition, if DYPM reasonably requests
Southern to return all or part of that portion of the Facility that is affected
by the Maintenance Outage Hours to full availability status, Southern shall
comply as soon as reasonably practical.
4.2.2 Accumulation of Pre-Scheduled Excused Hours. DYPM and
Southern shall include procedures with respect to the logging and record keeping
of actual Pre-Scheduled Excused Hours elapsed during any Month in the Operating
Procedures agreed upon pursuant to Section 4.4.
4.2.3 No Scheduling during Pre-Scheduled Excused Hours, Banked
Pre-Scheduled Excused Hours, or Maintenance Outage Hours. DYPM shall not have
the right to submit a Schedule during any Pre-Scheduled Excused Hours, Banked
Pre-Scheduled Excused Hours, or Maintenance Outage Hour.
4.2.4 No Operation during Pre-Scheduled Excused Hours, Banked
Pre-Scheduled Excused Hours, and Maintenance Outage Hours. DYPM and Southern
agree that Pre-Scheduled Excused Hours, Banked Pre-Scheduled Excused Hours, and
Maintenance Outage Hours are intended to encompass periods during which the
Facility is unavailable for Scheduling or operation by any Party. Therefore,
except to the extent Southern determines that the Facility can be partially
operated in accordance with Prudent Industry Practices (but subject to DYPM's
right to Schedule any Contract Capacity made partially available), Southern
shall not be permitted to operate the Facility during Pre-Scheduled Excused
Hours, Banked Pre-Scheduled Excused Hours, or Maintenance Outage Hours other
than testing and operations associated with the basis for such Pre-Scheduled
Excused Hours, Banked Pre-Scheduled Excused Hours, and Maintenance Outage Hours.
4.3 Permits; Compliance with Laws.
4.3.1 Governmental Approvals. Subject to the right of Contest,
each Party shall, at its expense, acquire and maintain in effect all
Governmental Approvals necessary for it to perform its obligations under this
Agreement.
4.3.2 Compliance by Southern. Subject to the right of Contest,
Southern shall at all times comply with all Laws and Governmental Approvals
applicable to Southern and/or to the Facility necessary for Southern to perform
its obligations under this Agreement.
4.3.3 Compliance by DYPM and DMT. Subject to the right of
Contest, DYPM and DMT shall at all times comply with all Laws and Governmental
Approvals applicable to them necessary for DYPM and DMT to perform their
obligations under this Agreement.
4.4 Operating Procedures and Operating Committee.
4.4.1 Operating Procedures. DYPM, DMT, and Southern shall
develop written Operating Procedures no later than thirty (30) Days before the
Effective Date of Service. The Operating Procedures shall establish the protocol
under which the Parties shall perform their respective responsibilities under
this Agreement, including method of Day-to-Day communications, key personnel
lists, coordinating fuel arrangements and operating procedures for Gas supply,
logging and tracking of hours of Unavailability, Pre-Scheduled Excused Hours,
Force Majeure Hours, ENDH Accumulated, Maintenance Outage Hours, hours of
Delivery Excuse, and daily capacity level and energy reports. The Operating
Procedures must also include a process for determining the amount of Contract
Capacity pursuant to Section 3.1.
4.4.2 Operating Committee. The Parties shall form a committee
to act in matters relating to the performance of their respective obligations
under this Agreement ("Operating Committee"). Each Party shall appoint one
representative and one alternate representative to serve on the Operating
Committee. The Parties shall notify each other in writing of such appointments
and any changes thereto. The Operating Committee shall have no authority to
modify the terms or conditions of this Agreement. The Operating Committee shall
meet as frequently as it deems necessary, and all of its decisions must be the
unanimous decision of the representatives. The Operating Committee may consult
with representatives of Southern Company Transmission as appropriate in reaching
its decisions.
4.4.3 Southern shall disclose to the Operating Committee any
condition or defect in or with respect to the Facility of which it is actually
aware and that may reasonably be expected to cause the Facility to be unable to
provide Scheduled Energy; provided, however, that the foregoing shall not be
construed to require Southern to make inspections of the Facility.
4.5 Provision of Contract Capacity and Contract Energy.
4.5.1 Unavailability.
(a) Notification. Southern shall promptly notify DYPM
after discovering any circumstance that could reasonably be expected to
result in an Unavailability.
(b) Periods of Unavailability. In the event of an
Unavailability, the period after commencement of such Unavailability shall
be divided into two distinct, contiguous periods:
(i) The period beginning at the time of the occurrence of the
Unavailability until the earlier of the removal of the Unavailability or
2400 CPT of the Day in which such occurrence happens shall be referred to
as the "Determination Period"; and
(ii) The period from the end of the Determination Period until the
removal of the Unavailability shall be referred to as the "Extended Outage
Period".
The four hour period immediately following the occurrence of an Unavailability
(which may include a portion of the Determination Period and/or the Extended
Outage Period) shall be referred to as the "Seller Election Period"; provided,
however, that if the Unavailability is resolved, the Seller Election Period
shall end at such time.
(c) Circumstances of Unavailability. With regard to any
Unavailability that results in an Extended Outage Period, as soon as practicable
after the commencement of such Extended Outage Period, Southern shall notify
DYPM of:
(i) The cause (or if not known, Southern's best estimate of the cause)
of the Unavailability;
(ii) The proposed corrective action that can be taken by Southern to
resolve the Unavailability; and
(iii) Southern's best estimate of the expected duration of the
Extended Outage Period.
In addition, Southern shall advise DYPM of any material information relating to
the cause, duration and resolution of an Unavailability as soon as practicable
after such information becomes known to Southern whether before or after the
commencement of an Extended Outage Period. Southern shall have an ongoing
obligation to keep DYPM advised as to any significant changes with respect to
the information provided pursuant to this subsection (c). Southern's estimate of
the duration of an Unavailability shall be based on the best information then
available to Southern. Southern shall promptly notify DYPM of any expected
changes in the period of the Unavailability and shall continue its investigation
in a Commercially Reasonable manner for the duration of such Unavailability.
(d) Obligations of Southern. Consistent with Prudent Industry Practices,
Southern shall use Commercially Reasonable Efforts to avoid Unavailability and
to minimize the duration of any Unavailability.
4.5.2 Southern Elections during an Unavailability.
(a) Seller Election Period. Within [redacted] after the commencement
of the Seller Election Period, Southern shall provide telephonic (or
acceptable electronic) notice to DYPM of whether it will, to the extent of
the Unavailability, either: [redacted].
Notwithstanding the occurrence of an Unavailability, [redacted]. Such action by
Southern during the Carry Period shall not constitute an election for purposes
of the Seller Election Period. Once made, however, such election shall apply for
the remainder of the Seller Election Period, with appropriate recognition for
Southern's actions (if any) during the Carry Period.
(b) Determination Period. Within [redacted] after the commencement of
an Unavailability, Southern shall, for each Hour Block within the
Determination Period (but only for those hours not covered by an election
in the Seller Election Period) and subject to Section 4.5.2(d), provide
telephonic (or acceptable electronic) notice to DYPM (along with notice of
the election for the first Day of the Extended Outage Period as required by
Section 4.5.2(c)) of whether it will, to the extent of the Unavailability,
either: [redacted]
(c) Extended Outage Period. For each Day of an Extended Outage Period,
Southern shall, for each Hour Block within such Day (but only for those
hours not covered by an election in the Seller Election Period) and subject
to Section 4.5.2(d), provide telephonic (or acceptable electronic) notice
to DYPM of whether it will, to the extent of the Unavailability, either:
[redacted]
Notice under this subsection (c) shall be provided by Southern no later than:
(i) for the first Day of the Extended Outage Period, the time that notice is
provided under Section 4.5.2(b); and (ii) for all other Days of the Extended
Outage Period, thirty (30) minutes after receipt of DYPM's Schedule for such Day
under Section 6.1 (but no earlier than 0800 CPT). In addition, upon the
commencement of the Extended Outage Period, Southern shall provide DYPM a
non-binding projection of its anticipated elections under this subsection (c)
for each Day of the expected duration of the Extended Outage Period.
(d) Hour Block Elections. [redacted]
--------------------
(e) Failure to Make Elections. [redacted]
-------------------------
(f) Schedule Changes during an Unavailability. For any hour of any Day
during an Unavailability, if DYPM changes a Schedule provided pursuant to
Section 6.1 after 0900 CPT of the previous Day so that Scheduled Energy is
greater in such hour than contemplated at 0900 CPT of such previous Day
(such greater amount being referred to as "Increased Scheduled Energy"),
notwithstanding any other provision of this Section 4.5.2, Southern shall
have the right, by providing telephonic (or electronic) notice to DYPM
[redacted] after Southern receives DYPM's notice of such change, to either:
[redacted]. If Southern does not make an election under this subsection (f)
for any hour, Southern shall be deemed to have elected to cover Increased
Scheduled Energy for such hour in the same manner as its prior elections
under Section 4.5.2(a), (b) and (c). An election made by Southern (or
deemed to have been made) under this subsection (f) shall only apply to
Increased Scheduled Energy and shall not alter elections for Scheduled
Energy made under Section 4.5.2(a), (b) and (c).
(g) DYPM Right to Purchase Undelivered Energy. With respect to any
Unavailability, DYPM shall have the right to purchase Undelivered Energy
using Commercially Reasonable Efforts [redacted].
(h) Exclusive Remedy. Southern's sole and exclusive liability and
DYPM's sole and exclusive remedy for an Unavailability shall be determined
by the election(s) chosen (or deemed to have been chosen) by Southern in
accordance with this Section 4.5.2.
4.5.3 Performance in Accordance with Elections.
For any hour of an Unavailability, Southern shall be required
to [redacted], but only to the extent that DYPM has properly requested and is
entitled to receive Scheduled Energy for such hour in accordance with the terms
of this Agreement.
4.5.4 Calculation of Equivalent ENDH.
For any hour in which Southern [redacted].
4.5.5 Example Calculations.
To demonstrate the application of provisions related to
[redacted], example calculations are set forth in Appendix D.
4.5.6 Extended Unavailability.
[redacted].
4.5.7 Force Majeure Event.
(a) No Obligation to Deliver. For any hour in which a Force Majeure Event
affecting the Facility or the facilities up to and at the Interconnection
Point(s) is occurring or is continuing, to the extent that such event prevents
Southern from delivering Scheduled Energy, Southern shall not be obligated to
deliver, and DYPM shall not be entitled to receive, Scheduled Energy. In such
event, to the extent of such Force Majeure Event, Southern shall not be required
to make any of the elections under Section 4.5.2 [redacted].
(b) Adjustment of Reservation Payment. [redacted].
---------------------------------
4.5.8 Delivery Excuse.
(a) No Obligation to Deliver. For any hour in which a Delivery
Excuse is occurring or is continuing, to the extent of such Delivery Excuse,
Southern shall not be obligated to deliver, and DYPM shall not be entitled to
receive, Scheduled Energy. In such event, to the extent of the Delivery Excuse,
Southern shall not be required to make any of the elections under Section 4.5.2
and shall not be required to [redacted].
(b) Continuation of DYPM Obligations. DYPM shall not be
relieved of its performance obligations hereunder during a Delivery Excuse,
including its obligation to pay Southern the Reservation Payment, even if such
Delivery Excuse continues for the remainder of the Term.
4.5.9 Delivery from the Facility.
Under no circumstance shall Southern be permitted to
accumulate ENDH, claim an Unavailability, or claim a Force Majeure Event to the
extent Southern is able, in a manner that is consistent with Prudent Industry
Practices, to provide Scheduled Energy from the Facility as required hereunder.
ARTICLE 5
PAYMENTS
5.1 Reservation Payment. Commencing on the Effective Date of Service and
for each Month of the Term, DYPM shall pay to Southern a Reservation Payment for
the Contract Capacity. The Reservation Payments for each Month are set forth in
Appendix A.
5.2 Energy Payment. Commencing on the Effective Date of Service and for
each Month of the Term, DYPM shall pay to Southern an Energy Payment. The Energy
Payment for each Month shall be equal to the product of: [redacted].
5.3 Gas Payment, Fuel Purchase Payment, and Gas Reservation Payment.
5.3.1 Commencing on the Effective Date of Service and for each Month
of the Term, DYPM shall pay to Southern a Gas Payment equal to the sum of:
[redacted].
5.3.2 Commencing on the Effective Date of Service and for each Month
of the Term, Southern shall pay to DMT a Fuel Purchase Payment equal to the
sum of [redacted].
5.3.3 Commencing on the Effective Date of Service and for each Month
of the Term, Southern shall pay to DMT a Monthly Gas Reservation Payment
equal to [redacted].
5.4 Initial Dispatch Payment. Commencing on the Effective Date of
Service and for each Month of the Term, DYPM shall pay to Southern an
Initial Dispatch Payment equal to the sum of the Initial Dispatch Prices
during such Month. The Initial Dispatch Price shall equal [redacted].
5.5 Performance Bonus. For the Term of this Agreement, Southern shall
receive a Summer Performance Bonus and a Non-Summer Performance Bonus, if
applicable.
5.5.1 Summer Performance Bonus
The Summer Performance Bonus will be calculated based on the
Months of June through August of each Contract Year and shall be paid by DYPM to
Southern within thirty (30) Days after August 31 of each Contract Year. The
Summer Performance Bonus shall be calculated as follows:
Summer
Performance
Bonus [redacted]
where:
Summer PAF is the performance adjustment factor corresponding to the
calculated summer delivery performance factor ("Summer DPF") set forth
in the Table below:
------------------------------------------------ -------------------------
Summer DPF Summer PAF
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
Summer DPF is computed as follows:
Summer DPF = [redacted].
5.5.2 Non-Summer Performance Bonus
The Non-Summer Performance Bonus will be calculated based on
the Months of September through May of each Contract Year and shall be paid by
DYPM to Southern within thirty (30) Days after May 31 of each Contract Year. The
Non-Summer Performance Bonus shall be calculated as follows:
Non-Summer
Performance
Bonus [redacted]
where:
Non-Summer PAF is the performance adjustment factor corresponding to
the calculated non-summer delivery performance factor ("Non-Summer
DPF") set forth in the Table below:
Non-Summer DPF Non-Summer PAF
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
[redacted] [redacted]
--
Non-Summer DPF is computed as follows:
Non-Summer DPF = [redacted]
5.5.3 Notwithstanding the foregoing, the sum of the
Summer Performance Bonus and the Non-Summer Performance Bonus shall not
exceed [redacted] for any Contract Year.
5.6 Additional Payments. In addition to the payments
specified in this Section 5, the Parties shall pay all amounts due pursuant
to the other provisions of this Agreement.
5.7 Regulatory.
5.7.1 The Parties anticipate that this Agreement will be filed
with and accepted by FERC as a market based contract, and thus this Agreement
shall not be contingent on FERC acceptance. Having freely negotiated and agreed
upon the economic bargain among them as set forth hereunder and in the Other
Southern Agreement, Southern, DYPM, and DMT waive all rights under Sections 205
and 206 of the Federal Power Act to effect a change in the Agreement. Moreover,
it is the Parties' mutual intent that FERC be precluded, to the fullest extent
permitted by law, from altering this Agreement in any way. Notwithstanding the
foregoing, if at any time FERC takes some action that reduces the economic
benefit of this Agreement and the Other Southern Agreement to Southern as
contemplated on the Execution Date ("Original Economic Benefit"), Southern shall
be deemed to have retained rights under Section 205 to file for changes in the
Agreement, but only to the extent required to restore the Original Economic
Benefit.
5.7.2 Southern may exercise its Section 205 rights provided
under Section 5.7.1 if at any time it reasonably determines in its sole
discretion that the application of FERC's ratemaking practices and procedures
may support the restoration of some or all of the Original Economic Benefit.
Before exercising such rights, Southern shall negotiate with DYPM and/or DMT in
an effort to reach mutual agreement regarding amendments to this Agreement that
would restore some or all of the Original Economic Benefit. Southern shall file
any resulting amendments for acceptance by FERC, and DYPM and DMT shall actively
support such filing(s). If the Parties are unable to agree upon such
amendment(s), Southern shall be entitled to make unilateral filing(s) at FERC to
modify the Agreement in order to restore some or all of the Original Economic
Benefit. In this latter event, DYPM and DMT shall actively support Southern's
filing and its right to recover the Original Economic Benefit; however, DYPM and
DMT reserve the right to propose modifications based on a good faith belief that
such filing implements revisions that would exceed the Original Economic
Benefit.
5.7.3 Any amendment(s) or unilateral filing(s) contemplated
hereunder shall restore the Original Economic Benefit (or any allowed portion
thereof) for the remainder of the Term, including any portion of the Original
Economic Benefit associated with prior periods (with interest). Nothing in this
Agreement is intended to or shall restrict the number of times that Southern may
exercise the above-described Section 205 rights during the Term or within any
specific time frame.
5.8 Wholesale Generation Rates. All payments specified in this
Article 5 are the unbundled power sales rates for wholesale
generation. Transmission related services are addressed in Article 7.
ARTICLE 6
SCHEDULING, SOUTHERN'S AND DYPM'S RIGHTS TO THE FACILITY, TITLE AND RISK OF
LOSS
6.1 Scheduling.
6.1.1 Daily Schedule. On each Business Day, Southern shall
inform DYPM before [redacted] of the amount of Contract Energy expected to be
available from the Facility (with and without power augmentation) for each hour
of the following Day that is a Business Day, and any intervening Day. DYPM shall
provide Southern its Schedule for each hour of each Day(s) on or before
[redacted] of the previous Business Day. Such Schedule shall be consistent with
the Scheduling Constraints and the terms of this Agreement. [redacted]. DYPM
shall be responsible for complying with all transmission reservation, scheduling
and tagging requirements (whether under the OATT or other industry scheduling
requirements or standards) associated with the delivery of Scheduled Energy at
and after the Delivery Point. All costs and expenses (including penalties)
associated with a Schedule and Scheduled Energy at and beyond the Delivery Point
shall be the sole responsibility of DYPM unless caused by Southern.
6.1.2 Delivery of Scheduled Energy. Subject to Southern's
elections (if any) in Section 4.5.2, Southern shall deliver Scheduled Energy to
the Delivery Point in accordance with DYPM's Schedule.
6.1.3 Schedule Limitation. [redacted].
6.2 Replacement Resources Gas
6.2.1 Within [redacted] after receiving DYPM's Schedule for
the next Day under Section 6.1.1 (but no earlier than [redacted], Southern shall
notify DYPM (either telephonic or electronic) whether it will cover DYPM's
Schedule utilizing Replacement Resources. If Southern provides notice that it
will cover some portion (or all) of the Schedule with Replacement Resources,
within [redacted] after receiving such notice by Southern, DMT shall offer a
delivered price (in $/MMBTU) ("Replacement Gas Price") for the quantity of Gas
(in MMBTU) equal to: (A) the quantity of Gas (in MMBTU) that would be required
by the Facility to produce the sum of: (i) the Energy Output Level; (ii) energy
to be served by Replacement Resources which is the subject of the current
Southern election; and (iii) all previously established Replacement Energy
Blocks and Performance Energy Blocks still in effect for such hour(s); less (B)
the quantity of Gas (in MMBTU) required to produce (i) and (iii) (such
quantities to be determined utilizing Figure 2 of Appendix C with appropriate
recognition of ambient temperature and relative humidity levels at the
Facility). The difference calculated in the foregoing sentence shall be referred
to herein as Replacement Gas. Within [redacted] of receiving such price,
Southern shall then elect to: (i) treat the price offered by DMT as the
Replacement Gas Price (including for purposes of Section 5.3.1) and not require
DMT to deliver Replacement Gas; or (ii) treat the price offered by DMT as the
Replacement Gas Price (including for purposes of Section 5.3.1) and require DMT
to deliver Replacement Gas at alternate delivery points, provided that Southern
shall compensate DMT for the additional actual costs (if any) incurred to
deliver to such alternate points in lieu of delivery to the Facility. In the
case of (ii), Southern shall receive and purchase from DMT, and DMT shall supply
and sell to Southern, the Replacement Gas at the Replacement Gas Price, at such
alternate delivery point(s) specified by Southern (such transaction to be
performed pursuant to another contemporaneous agreement between the Parties).
DMT will use Commercially Reasonable Efforts to arrange for delivery to the
alternate delivery point(s); provided, however, that Southern bears the risk to
the extent the delivery arrangements associated with delivery to the Facility
are not adequate to arrange for deliveries to the alternate delivery point(s).
6.2.2 In the event that DYPM increases the amount of Scheduled
Energy (or submits a Schedule where none existed) (such increased amount being
referred to as the "Increased Scheduled Energy") for any hour after it has
submitted the Schedule for such hour pursuant to the second sentence of Section
6.1 (or after 0900 CPT if no Schedule was submitted), then Southern shall notify
DYPM (either telephonic or electronic) whether it will cover DYPM's Schedule
utilizing Replacement Resources. If Southern provides notice that it will cover
some portion (or all) of the Increased Scheduled Energy with Replacement
Resources, the Parties shall follow the procedures set forth in Section 6.2.1
with regard to establishing a Replacement Gas Price, determining quantity(ies)
of Replacement Gas and, if required by Southern, accomplishing the delivery of
Replacement Gas by DMT to alternate delivery point(s); provided, however, the
Operating Committee shall establish the pertinent time frames for communications
of the Parties in this regard.
6.2.3 In the event that DYPM decreases the amount of Scheduled
Energy for any hour in which Southern has previously notified DYPM that it will
provide some portion of Scheduled Energy from Replacement Resources, and to the
extent that Southern determines (consistent with Scheduling Constraints and the
terms of this Agreement) that the requested decrease will not be accommodated by
lowering the output of the Facility, Southern shall decrease the amount of
Scheduled Energy provided from Replacement Resources (the amount of such
decrease from Replacement Resources being referred to as the "Decreased
Replacement Energy"). Southern shall propose to DYPM a delivered price (in
$/MMBTU) ("Decreased Replacement Gas Price) for the amount of Gas (in MMBTU)
that would have been required for the Decreased Replacement Energy amount at the
Facility (such amount to be determined utilizing Figure 2 of Appendix C with
appropriate recognition of ambient temperature and relative humidity levels at
the Facility and being referred to herein as "Decreased Replacement Gas")
assuming the entire amount of Scheduled Energy and energy associated with the
Reserved Capacity scheduled under the Other Southern Agreement was to be
produced at the Facility (including the Decreased Replacement Energy). After
receiving such price, DYPM shall then elect to: (i) treat the price offered by
Southern as the Decreased Replacement Gas Price and not require Southern to
deliver Decreased Replacement Gas; or (ii) treat the price offered by Southern
as the Decreased Replacement Gas Price and require Southern to deliver Decreased
Replacement Gas at alternate delivery points, provided that DYPM shall
compensate Southern for the additional actual costs (if any) incurred to deliver
Decreased Replacement Gas to such alternate delivery points in lieu of delivery
to the Facility. In the case of (ii), DYPM shall receive and purchase from
Southern, and Southern shall supply and sell to DYPM, the Decreased Replacement
Gas at the Decreased Replacement Gas Price, at such alternate delivery point(s)
specified by DYPM (such transaction to be performed pursuant to another
contemporaneous agreement between the Parties). Southern will use Commercially
Reasonable Efforts to arrange for delivery to the alternate delivery point(s);
provided, however, that DYPM bears the risk to the extent the delivery
arrangements associated with delivery to the Facility are not adequate to
arrange for deliveries to the alternate delivery point(s). In addition, the
Parties shall calculate a Replacement Gas Adjustment. The Replacement Gas
Adjustment shall equal the product of: (i) the Replacement Gas Price less the
Decreased Replacement Gas Price; and (ii) the Decreased Replacement Gas. If the
Replacement Gas Adjustment is positive, then DYPM shall owe such amount to
Southern. If the Replacement Gas Adjustment is negative, then Southern shall owe
the absolute value of such amount to DYPM. In the event that there are multiple
Replacement Gas Prices applicable to multiple Replacement Gas quantities for any
hour (pursuant to Section 6.2.1 and 6.2.2), for the purposes of calculating the
Replacement Gas Adjustment, the Replacement Gas Price(s) shall be utilized in
the order they were established until the entire quantity of Decreased
Replacement Gas is satisfied with corresponding quantities of Replacement Gas.
The Operating Committee shall establish the pertinent time frames for
communications of the Parties under this Section 6.2.3.
6.2.4 In the event that Southern elects to pay Performance
Payments for any hour pursuant to Section 4.5.2, the Parties shall follow
procedures consistent with those set forth in Section 6.2.1 and/or Section 6.2.2
in order to establish a Replacement Gas Price for calculating the applicable
Hourly Performance Payment Gas Cost under Section 8.13.3 and, if required by
Southern, accomplishing the delivery of Replacement Gas by DMT to alternate
delivery point(s); provided, however, the Operating Committee shall establish
the pertinent time frames for communications of the Parties in this regard. Any
decreases in Scheduled Energy covered by Performance Payments shall be treated
consistent with Section 6.2.3.
6.3 Southern's Rights to the Facility. During any time for which DYPM
has not submitted (or is not permitted to submit) a Schedule or during any time
when Scheduled Energy is being provided from Replacement Resources, Southern
shall have the right to dispatch the Facility for its own purposes to the extent
not Scheduled (or permitted to be Scheduled) or Scheduled Energy is not provided
from the Facility, including for the purpose of supplying energy to third
parties. Any Schedule provided by DYPM in accordance with the terms of this
Agreement (including Section 6.1) shall have priority over Southern's dispatch.
6.4 Title and Risk of Loss. Southern shall be deemed to be in
exclusive control of the Scheduled Energy prior to the Delivery Point. DYPM
shall be deemed to be in exclusive control of the Scheduled Energy at and after
the Delivery Point. Custody, title and risk of loss of Contract Capacity and
Scheduled Energy shall transfer from Southern to DYPM at the Delivery Point.
6.5 Provision of Committed Capacity.
6.5.1 [redacted].
6.5.2 [redacted].
6.5.3 [redacted].
6.5.4 [redacted].
6.5.5 [redacted].
6.5.6 [redacted].
ARTICLE 7
TRANSMISSION SERVICE
7.1 DYPM Obligations and Assumption of Transmission Risk. DYPM, or its
designee, shall arrange, obtain, contract, and pay for any and all transmission
service and ancillary services required (including service under the OATT) to
deliver the Contract Capacity and Scheduled Energy (and any other energy
hereunder) from and beyond the Delivery Point. During transmission curtailments,
Southern will cooperate to assist DYPM in modifying deliveries of Scheduled
Energy with less restrictive notice provisions than those set forth in Article
6; provided, however, Southern shall have no liability or obligation to the
extent it does not allow DYPM to deviate from such notice requirements.
Notwithstanding anything set forth in Section 7.2, Section 7.4 or elsewhere to
the contrary, it is DYPM's sole and exclusive responsibility at all times to
arrange, obtain, contract and pay for any and all transmission and ancillary
services required to deliver any energy hereunder from and beyond the Delivery
Point. DYPM assumes all risk associated with the availability, adequacy and cost
of such transmission service and ancillary services.
7.2 Southern Obligations. Southern, or its designee, shall arrange,
obtain, contract, and pay for any transmission service required to deliver
Contract Capacity and Scheduled Energy (whether from the Facility or Replacement
Resources) to the Delivery Point. Southern will also be responsible for securing
and maintaining an Interconnection Agreement with the applicable transmission
provider that allows Southern to deliver Scheduled Energy to the Interconnection
Point up to the Energy Output Level. Southern shall not form or permit to be
formed, a "control area" or a similar arrangement with respect to the Facility,
without the prior written consent of DYPM, which consent shall not be
unreasonably withheld.
7.3 Imbalances and Penalties. Any penalties or imbalances resulting
from actions or inactions of DYPM or DMT (or any third party to which DYPM may
be supplying the capacity and energy provided hereunder) will be the
responsibility of DYPM and/or DMT. Any penalties or imbalances resulting from
actions or inactions of Southern will be the responsibility of Southern.
7.4 Optional System Upgrades.
7.4.1 As soon as practicable, Southern shall provide DYPM the
final System Impact Study (as defined in the OATT) performed by Southern Company
Transmission in connection with the interconnection of the Facility to the
Southern Company Transmission System. Within ten (10) Days after the System
Impact Study is provided to DYPM, DYPM shall notify Southern ("Study Notice")
whether it desires Southern Company Transmission to conduct a Facilities Study
(as defined in the OATT) in order to identify Optional System Upgrades and the
costs of such Optional System Upgrades. DYPM's Study Notice shall specifically
identify those transmission constraints which DYPM desires the Optional System
Upgrades to address. If DYPM does not provide the Study Notice within ten (10)
Days after the System Impact Study is provided, DYPM shall be deemed to have
decided not to pursue any Optional System Upgrades and the other provisions of
this Section 7.4 shall not apply. DYPM shall be responsible for all costs and
expenses charged to Southern by Southern Company Transmission in connection with
the study of Optional System Upgrades. DYPM shall reimburse Southern for such
costs and expenses (with interest) within ten (10) Days after receiving an
invoice from Southern for the same.
7.4.2 As soon as practicable, Southern shall provide DYPM all
portions of the final Facilities Study performed by Southern Company
Transmission that address Optional System Upgrades. Within fifteen (15) Days
after such Facilities Study is provided, DYPM shall notify Southern ("Facilities
Notice") of the Optional System Upgrades that it desires to have constructed. If
DYPM does not provide the Facilities Notice within such fifteen (15) Day period,
DYPM shall be deemed to have decided not to pursue any Optional System Upgrades
and the other provisions of this Section 7.4 shall not apply. If the Facilities
Notice indicates that DYPM desires to have Optional System Upgrades constructed,
Southern shall utilize Commercially Reasonable best efforts in order to include
the relevant Optional System Upgrades in the Interconnection Agreement or some
other agreement as determined by Southern; provided, however, Southern shall
have no liability or obligation to DYPM if Southern Company Transmission
determines that Optional System Upgrades cannot be included in the
Interconnection Agreement or another agreement.
7.4.3 During the course of Southern's negotiation of the Interconnection
Agreement (or other pertinent agreement), Southern shall consult with DYPM to
ensure that the scope of the Optional System Upgrades and estimated timing for
construction of upgrades included in such agreement is consistent with the
desires of DYPM relative to such upgrades. Southern shall also consult with DYPM
regarding DYPM's desired payment schedule for the costs of Optional System
Upgrades and will, to the extent possible, negotiate the Interconnection
Agreement (or other agreement) so that it reflects the desired payment schedule.
DYPM acknowledges, however, that the schedule of payments for and the timing for
construction and operation of Optional System Upgrades are outside the control
of Southern and will be determined solely by Southern Company Transmission.
Southern shall have no liability or obligation to DYPM with respect to the cost
of Optional System Upgrades (including any costs of such upgrades that exceed
projected costs under the Interconnection Agreement) or the timing for the
construction and operation of such upgrades (including any delays beyond any
dates set forth in the Interconnection Agreement for construction and operation
of such upgrades). DYPM expressly assumes all risk associated with delays and
cost overruns in connection with Optional System Upgrades.
7.4.4 Prior to executing an Interconnection Agreement that
includes provisions with respect to Optional System Upgrades desired by DYPM
under this Section 7.4, Southern shall first obtain DYPM's approval of those
provisions of the Interconnection Agreement relating to Optional System Upgrades
and related payment requirements. Southern shall, however, be entitled to
execute at any time an Interconnection Agreement that does not contain
provisions addressing Optional System Upgrades; provided, however, that Southern
shall provide DYPM fifteen (15) Days prior notice before it executes such an
Interconnection Agreement.
7.4.5 DYPM shall pay to Southern (for payment to Southern
Company Transmission, or reimburse Southern if Southern shall have paid) all
amounts required to be paid for Optional System Upgrades pursuant to the
Interconnection Agreement or other pertinent agreement (including any amounts in
excess of projected costs for such upgrades). DYPM shall pay Southern such
amounts at least ten (10) Business Days prior to the time that corresponding
payments are required to be made under the Interconnection Agreement (or other
agreement). To the extent that DYPM pays for Optional System Upgrades under the
Interconnection Agreement (or other agreement), Southern shall transfer to DYPM
any transmission credits that Southern receives with respect to such payments
(excluding any credits received with respect to other facilities under the
Interconnection Agreement). As currently contemplated by the OATT, such credits
would effectively represent a right on the part of the Southern to be reimbursed
for the costs of Optional System Upgrades as transmission service from the
Facility is reserved or taken. Such reimbursement may take the form of an offset
to payments otherwise owed to Southern Company Transmission by Southern.
Southern shall transfer such credits to DYPM as they are received from Southern
Company Transmission (including any interest that Southern may receive from
Southern Company Transmission in connection with such credits).
ARTICLE 8
GAS DELIVERY OBLIGATIONS AND GAS ARRANGEMENTS
8.1 DMT Obligations. DMT shall deliver the Gas Requirements to Southern
at the Gas Delivery Point. DMT shall deliver Replacement Gas pursuant to Section
6.2 at the Alternate Gas Delivery Point(s). DMT shall make any and all Gas
Nominations required for the delivery of the Gas hereunder to the Gas Delivery
Point and Alternate Gas Delivery Point(s). DMT shall not be obligated to deliver
Gas in excess of the Gas Requirements, except as may be required under Section
6.2. DMT's obligation to supply Gas hereunder shall commence upon the Effective
Date of Service and shall continue until the end of the Term.
8.2 Southern Obligations. Southern shall purchase and receive the
Gas Requirements from DMT at the Gas Delivery Point. Southern shall
purchase and receive Replacement Gas pursuant to Section 6.2 at the
Alternate Gas Delivery Point(s).
8.3 Transportation Obligations. DMT shall be solely responsible,
at its sole cost and expense, for procuring all transportation
capacity from the applicable Transporter(s) required to deliver: (i)
the Gas Requirements to the Gas Delivery Point; and (ii) Replacement
Gas under Section 6.2 to the Alternate Gas Delivery Point(s). DMT
shall bear all costs and expenses in connection with the delivery of
Gas hereunder prior to and at the Gas Delivery Point and/or the
Alternate Gas Delivery Point(s). Under no circumstance shall Southern
have any obligation to obtain or pay for transportation capacity in
order to deliver Gas hereunder to the Gas Delivery Point or the
Alternate Gas Delivery Point(s) (except for those costs Southern has
expressly agreed to bear under Section 6.2).
8.4 Pipeline Imbalance Charges.
8.4.1 The Parties acknowledge that due to normal operating
characteristics and efficiencies of the Facility, imbalances between the
quantities of Gas nominated by DMT hereunder and the Gas Requirements will occur
and cannot be avoided. Such imbalances will result from, among other things, the
variation of the Facility's heat rate on a Day to Day and an hourly basis.
8.4.2 Notwithstanding any other provision contained herein or
elsewhere, but subject to Section 8.4.3 below, [redacted].
8.4.3 [redacted].
8.4.4 Subject to Section 8.4.3, [redacted].
8.5 Gas Nominations Responsibility. DMT shall be responsible for making
all Gas Nominations with the applicable Transporters upstream of and to the Gas
Delivery Point and Alternate Gas Delivery Point(s). DMT shall provide Southern
any information that a Transporter may require from Southern. DMT shall nominate
quantities of Gas sufficient to produce the Energy Output Level. Variances
between the nominated quantities and quantities required to produce the Energy
Output Level as determined utilizing Figure 2 of Appendix C (with appropriate
recognition of ambient temperature and relative humidity levels at the Facility)
may be permitted so long as the variances are consistent with the Transporter's
then current application of the Gas Tariff. To the extent that Southern, as
delivery point operator at the Gas Delivery Point, is requested by the
Transporter to conform nominated quantities to actual deliveries at the Gas
Delivery Point during any given period, DMT and/or DYPM shall conform its
nominated quantities to the Gas Requirements for such period (which, if
necessary, shall include altering the Energy Output Level).
8.6 Title. Title to all Gas delivered by DMT under this Agreement shall
pass to Southern at the Gas Delivery Point and/or the Alternate Gas Delivery
Point(s). DMT shall be deemed to be in exclusive control and possession of the
Gas delivered hereunder prior to and at the Gas Delivery Point and/or the
Alternate Gas Delivery Point(s). Southern shall be deemed to be in exclusive
control and possession of Gas delivered hereunder after the Gas Delivery Point
and/or the Alternate Gas Delivery Point(s).
8.7 Specifications. Gas delivered by DMT shall meet or exceed the
minimum quality specifications of the applicable Transporter(s). Gas delivered
by DMT shall be delivered at pressures sufficient to cause such Gas to enter the
applicable facilities at the Gas Delivery Point and/or the Alternate Gas
Delivery Point(s), but not below the minimum allowable or above the maximum
allowable operating pressure specified by the Transporter(s). Gas provided by
DMT hereunder shall be free from contamination and shall conform to the Gas
Tariff specifications. If any Gas delivered by DMT shall fail to conform to the
requirements of this Section 8.7 ("Non-Conforming Gas"), Southern shall be
entitled, in its sole discretion, to refuse to accept the delivered quantities.
In such event, DMT will be deemed to have failed to perform its obligation to
deliver Gas hereunder. To the extent that Southern incurs damages, costs and/or
expenses as a result of its receipt of Non-Conforming Gas, notwithstanding the
reason for or any third party responsibility for such Non-Conforming Gas, DMT
shall reimburse Southern for such damages, costs and/or expenses within
[redacted] after receiving an invoice from Southern for the same. DMT shall be
solely responsible for making any claims against or seeking indemnification from
a Transporter for any such damages, costs and/or expenses it pays hereunder.
8.8 Gas Metering.
8.8.1 To the maximum extent possible and subject to the
capabilities of the Gas Metering Equipment, Gas delivered by DMT hereunder shall
be measured at the Gas Delivery Point on a continuous real-time basis. The Gas
Metering Equipment shall be used to determine the quantity of Gas delivered at
the Gas Delivery Point. Facility Metering Equipment may be installed at the
Facility to monitor consumption (on a continuous real time basis) of Gas at the
Facility.
8.8.2 Southern shall be responsible for performing, or causing
to be performed, and shall bear all costs and expenses of the installation,
maintenance, repair, testing and initial calibration of the Gas Metering
Equipment and the Facility Metering Equipment (to the extent not otherwise
installed, maintained, tested and calibrated by the Transporter or other third
party). DMT shall reimburse Southern for up to [redacted] in costs and expenses
incurred by Southern to install the Facility Metering Equipment within
[redacted] after receipt of an invoice from Southern for the same.
8.8.3. Southern will cooperate with DMT in order to permit
DMT, at DMT's sole cost and expense, to either install electronic access to Gas
Metering Equipment and Facility Metering Equipment, or to install DMT's own
real-time meters downstream of the Gas Metering Equipment.
8.8.4 The Operating Committee shall establish procedures to
ensure the accuracy of the Gas Metering Equipment and the Facility Metering
Equipment.
8.9 Hourly Southern Gas Costs. For each hour, Hourly Southern Gas
Costs shall be calculated. The Hourly Southern Gas Costs shall equal
[redacted].
8.10 Operating Procedures. The Operating Committee shall develop
any other Gas Nominations and operating procedures to apply under this
Agreement.
8.11 Obligations with Respect to Gas.
8.11.1 DMT is responsible for procuring and supplying all Gas
required to produce the Energy Output Level and as otherwise required by this
Agreement.
8.11.2 In the event of and for the duration of a Delivery
Excuse under Section 16.1, Southern shall have no obligation to procure any
portion of the Gas supply, or make any substitute arrangement, in order for the
Facility to produce any portion of the Energy Output Level, even if such
Delivery Excuse lasts for the duration of the Term. Southern may, however,
procure Gas in order to produce energy from the Facility for its own purposes,
including for sale to third parties.
8.12 Determination of DYPM Gas Costs.
8.12.1 For each hour the Facility produces energy or is
ramping up or down, the Hourly DYPM Gas Costs shall be calculated as follows:
Hourly DYPM Gas Costs = [redacted]
Where:
Adjusted Gas
Volume
(in MMBTU) = [redacted]
Actual Gas
Volume = [redacted]
Reserved Capacity
Gas = [redacted]
Reserved
Capacity Energy = [redacted]
Southern Gas
Consumed = [redacted]
Gas Index = [redacted].
8.12.2 [redacted].
8.13 Determination of Replacement Resources Gas Costs and Hourly
Performance Payment Gas Cost.
8.13.1 For each hour that Southern provides some portion of
Scheduled Energy and/or energy associated with Reserved Capacity [redacted]:
Hourly Replacement
Resources Gas Costs
($) = [redacted]
Where:
Replacement Energy
Block = [redacted]
Replacement Gas
Costs = [redacted]
Replacement Gas
Price = [redacted]
Replacement
Resources
Gas = [redacted]
8.13.2 [redacted].
8.13.3 For each hour that Southern elects to pay Performance
Payments pursuant to Section 4.5.2 and/or in connection with energy associated
with the Reserved Capacity, an Hourly Performance Payment Gas Cost shall be
calculated as follows:
Hourly Performance
Payment Gas Cost
($) = [redacted]
Where:
Performance Energy
Block = [redacted]
Performance Gas
Costs = [redacted].
Replacement Gas Price = [redacted].
Performance Gas = [redacted]
8.13.4 It is the intent of the Parties that all Gas volumes
calculated under this Section 8.13 associated with energy not delivered from the
Facility shall be determined as if such energy was produced by the Facility
incremental to (i.e., above) the Energy Output Level in the relevant period (as
determined pursuant to Figure 1 of Appendix C).
8.14 Initial Performance Target. Southern does not guarantee or
warrant that the Initial Heat Rate of the Facility will meet the
Initial Performance Target. Nevertheless, in the event the Initial
Performance Target is not met and [redacted]
8.15 Degradation of Initial Heat Rate. The Parties acknowledge that the
Facility may experience an increase in the Initial Heat Rate over time due to
normal operations. In the event DYPM believes the Initial Heat Rate of the
Facility has increased by more than the Maximum Allowable Degradation, DYPM may
require Southern to perform a Heat Rate Test. DYPM may request a Heat Rate Test
no more frequently than once every [redacted]. The cost of Heat Rate Tests will
be paid by DYPM if the results of the Heat Rate Test ("Tested Heat Rate") reveal
a Tested Heat Rate below the Initial Heat Rate plus the Maximum Allowable
Degradation and by Southern if the Tested Heat Rate exceeds the sum of the
Initial Heat Rate plus the Maximum Allowable Degradation. Upon completion of a
Heat Rate Test, if the Tested Heat Rate is greater than the Initial Heat Rate
plus the Maximum Allowable Degradation, DYPM shall be compensated in accordance
with the calculation set forth below for the increased heat rate degradation
based on the amount by which the Tested Heat Rate exceeds the sum of the Initial
Heat Rate plus the Maximum Allowable Degradation. The compensation shall begin
on the date that DYPM requested the Heat Rate Test revealing the excessive
degradation and shall continue until such time as Southern conducts a subsequent
Heat Rate Test and establishes a new Tested Heat Rate, which Heat Rate Test
shall be conducted at Southern's expense. If the new Tested Heat Rate is less
than the Initial Heat Rate plus the Maximum Allowable Degradation, Southern
shall no longer be required to compensate DYPM as described below. If the new
Tested Heat Rate is greater than the Initial Heat Rate plus the Maximum
Allowable Degradation, Southern shall continue to compensate DYPM in accordance
with the formula set forth below; provided, however, such compensation shall be
revised based on the new Tested Heat Rate. The Monthly Heat Rate Compensation
shall be calculated using the formulas below for each Billing Month:
MHRC = [redacted]
where:
MHRC = [redacted]
= [redacted].
MAGV = [redacted]
= [redacted].
Fuel Cost = [redacted].
If the period of calculation for the Monthly Heat Rate Compensation
includes a partial Billing Month, all values used in said calculations
will include only the Days of the Billing Month which are subject to
the Monthly Heat Rate Compensation.
8.16 Ramping Gas and Energy. Appendix C includes tables indicating the
amount of Gas required, expected duration, megawatt hours produced, and time
required for a Cold Start, Warm Start, Hot Start, and the termination of energy
deliveries pursuant to a Schedule. DMT shall be responsible for procuring and
supplying all Gas required to ramp the Facility up and down to produce the
Energy Output Level. DYPM shall receive and accept at the Interconnection Point
all energy produced by the Facility during ramping in connection with the Energy
Output Level. Ramp energy shall not be deemed to be Scheduled Energy under this
Agreement. Southern shall have no liability or obligation with respect to ramp
energy (or the failure to provide such energy). In addition, Southern shall not
be required to make any elections under Section 4.5.2 with respect to ramp
energy and shall not be required to deliver such energy from Replacement
Resources, accumulate ENDH or pay Performance Payments with respect to such
energy.
ARTICLE 9
ELECTRIC METERING
9.1 Metering.
9.1.1 To the maximum extent possible given the capabilities of
the Electric Metering Equipment, the Energy Output Levels shall be metered at
the Delivery Point on a continuous real-time basis (or elsewhere as corrected to
the Delivery Point based on agreed upon industry standard loss compensation
mechanisms to be determined by the Operating Committee). The Electric Metering
Equipment shall be used to determine conclusively, subject to Section 9.4, the
Energy Output Level at the Delivery Point.
9.1.2 Southern shall be responsible for performing, or causing
to be performed, and shall bear all costs and expenses of the installation,
maintenance, testing and initial calibration of the Electric Metering Equipment
and the maintenance and testing of the electrical facilities and Protective
Apparatus, including any transmission equipment and related facilities,
necessary to interconnect the Facility at the Interconnection Point. All
Electric Metering Equipment must conform to the requirements of Southern Company
Transmission.
9.1.3 Southern will work with DYPM to permit DYPM, at DYPM's
expense, either to install electronic access to the existing real-time electric
meters or to install DYPM's own real-time meters.
9.1.4 Energy delivered to an Alternate Delivery Point as
provided in this Agreement shall be measured in accordance with Prudent Industry
Practices.
9.2 Industry Standards. All Electric Metering Equipment, whether owned
by Southern or by a third party, shall be operated, maintained and tested by
and/or on behalf of Southern in accordance with Prudent Industry Practices.
9.3 Access. Each Party shall have the right to receive reasonable
advance notice with respect to, and to be present at the time of, any
installing, changing, repairing, inspecting, testing, calibrating or adjusting
of Electric Metering Equipment irrespective of whether such Electric Metering
Equipment is owned or operated by Southern or by a third party. Upon reasonable
advance notice, Southern shall make available to DYPM all data, records and
charts relating to the Electric Metering Equipment, together with measurements
and calculations therefrom, for inspection and verification.
9.4 Calibration. Southern at its sole cost and expense shall inspect
and calibrate, or cause to be inspected and calibrated, all Electric Metering
Equipment periodically, but not less frequently than as required by Southern
Company Transmission, or if not specified in the Interconnection Agreement, in
accordance with Prudent Industry Practices.
9.5 Records. The Parties shall maintain accurate and detailed records
relating to the hourly Energy Output Level for three years or for such longer
period as may be required by FERC or an applicable Government Agency. All
records shall be available for inspection by either Party upon reasonable
notice.
9.6 Meter Errors. If the Electric Metering Equipment fails to register,
or if the measurement made by a metering device is found upon testing to vary by
more than the variance permitted under the Interconnection Agreement from the
measurement made by the standard meter used in the test, an adjustment shall be
made correcting all measurements of energy made by the Electric Metering
Equipment during: (i) the actual period when inaccurate measurements were made,
if that period can be determined to the mutual satisfaction of the Parties; or
(ii) if such actual period cannot be determined to the mutual satisfaction of
the Parties, the latter half of the period from the date of the last test of the
Electric Metering Equipment to the data such failure is discovered or such test
is made (each being an "Adjustment Period"). If the Parties are unable to agree
on the amount of the adjustment to be applied to the Adjustment Period, the
amount of the adjustment shall be determined: (i) by correcting the error if the
percentage of error is ascertainable by calibration, tests or mathematical
calculation; or (ii) if not so ascertainable, by estimating on the basis of
deliveries under similar conditions during the period since the last test. If a
discrepancy is discovered for an Adjustment Period between the quantities of
Delivered Energy and the measured quantities of the Electric Metering Equipment,
then unless physical (and corresponding financial) discrepancies between such
quantities have been previously resolved through reconciliation provisions
imposed by the applicable transmission provider or through other controlling
true-up mechanisms separate from this Agreement governing the generation and
delivery of energy from the Facility, within thirty (30) Days after the
determination of the amount of any necessary adjustment under this Section 9.6,
DYPM shall pay Southern any additional amounts then due for deliveries of
Scheduled Energy during the Adjustment Period or DYPM shall be entitled to a
credit against any subsequent payments for Schedule Energy, as the case may be.
9.7 Subject to Interconnection Agreement. The application of the provision
in this Article 9 shall be subject to all of the pertinent requirements and
limitations of the Interconnection Agreement.
ARTICLE 10
BILLING AND PAYMENT
10.1 Timing; Method of Payment. The billing Party will submit to the
other Party, as promptly as practicable after the first of each Billing Month,
an invoice (by mail, facsimile or electronic means) for transactions and the
amounts due under the terms of this Agreement for the preceding Month. Bills for
each Billing Month shall be due and payable on the tenth (10th) Day after the
Day on which the billed Party receives the invoice, unless otherwise agreed.
Payment shall be made, on or before the due date, to the billing Party in
accordance with the invoice in immediately available funds through wire
transfer, or other mutually agreeable method.
10.2 Late Payment. Amounts that are owed by a Party shall, if not
remitted within the time period specified under Section 10.1, be subject to a
late payment charge equal to the interest calculated pursuant to Section 20.8,
accrued and payable on a monthly basis with respect to the unpaid amount. Such
late payment charge shall accrue from the due date of such amount until the date
on which it is paid.
10.3 Disputed ▇▇▇▇▇▇▇▇. [redacted]
10.4 Adjustments. If any overcharge or undercharge in any form
whatsoever shall at any time be found and the invoice therefor has been paid,
the Party that has been paid the overcharge shall refund the amount of the
overcharge to the other Party, and the Party that has been undercharged shall
pay the amount of the undercharge to the other Party, within thirty (30) Days
after final determination thereof; provided, however, that no retroactive
adjustment shall be made for any overcharge or undercharge unless written notice
of the same is provided to the other Party within a period of twenty-four (24)
Months from the date of the invoice in which such overcharge or undercharge was
first included. Any such adjustments shall be made with interest calculated in
accordance with Section 20.8 from the date that the undercharge or overcharge
actually occurred.
10.5 Audit Rights. The Parties shall keep complete and accurate
records, meter readings and memoranda of their operations under this Agreement
and shall maintain such data for a period of at least two (2) years after the
completion of each Billing Month hereunder; provided, however, records relating
to a disputed matter shall be retained until the dispute is resolved. Such
records shall be available for inspection and audit by the other Party upon
reasonable request and during a regular Business Day.
ARTICLE 11
CHANGE IN LAW
11.1 Limitations. The Parties acknowledge that during the Term of this
Agreement, Changes in Law that increase Southern's cost of providing capacity
and/or energy hereunder could occur. During the Term, Southern will be
responsible for up to a total of [redacted] of Increased Generation Costs ("Cost
Threshold"). Notwithstanding the foregoing, any Increased Generation Costs in
any Contract Year in excess of [redacted] will be paid by DYPM through an
additional payment or surcharge (the "Change in Law Surcharge"). Once Southern
has incurred Increased Generation Costs up to the Cost Threshold, DYPM shall pay
for all Increased Generation Costs through the Change in Law Surcharge, as
provided below. In lieu of the Change in Law Surcharge, the Parties may agree on
other payment mechanisms whereby DYPM shall pay for Increased Generation Costs.
Alternatively, the Parties may mutually agree on certain reductions in DYPM's
rights to purchase Contract Capacity and Scheduled Energy in lieu of payment of
Increased Generation Costs.
11.2 Determination. [redacted].
11.3 Initiation of Surcharge. In the event that total Increased
Generation Costs for any Contract Year will exceed [redacted], or if the Cost
Threshold will be exceeded, Southern shall provide DYPM with written notice of a
proposed Change in Law Surcharge. No earlier than [redacted] thereafter,
Southern may initiate the Change in Law Surcharge consistent with such notice.
For purposes of developing the Change in Law Surcharge, appropriate proration
shall be made to reflect any uprates under Section 3.1.4 that DYPM elected not
to purchase and to which Southern is entitled to utilize.
11.4 Timing. [redacted].
11.5 Contest and Dialogue. [redacted]. Whenever either Party anticipates
the possibility of a Change in Law, it may request meeting(s) to engage in open
dialogue with the other to exchange ideas regarding potential courses of action.
ARTICLE 12
LIABILITY ALLOCATION; LIMITATIONS ON LIABILITY
12.1 Costs, Taxes and Charges. Except as otherwise provided in this
Agreement, in addition to all other amounts due and payable under this
Agreement: (i) Southern shall be responsible for all costs, Taxes, and
charges of any kind relating to the delivery of energy, capacity,
transmission, and/or related services prior to the Delivery Point (by way of
clarification of the foregoing, Taxes prior to the Delivery Point include: ad
valorem taxes on the Facility; income taxes on Southern or its property; and
taxes on payments made to Southern under this Agreement); and (ii) DYPM shall
be responsible for all costs, Taxes, and charges of any kind relating to the
delivery of energy, capacity, transmission, and/or related services at and
after the Delivery Point (by way of clarification of the foregoing, Taxes at
and after the Delivery Point include: income taxes on DYPM or its property,
and any taxes incurred in connection with downstream sales of the Scheduled
Energy). Each Party shall provide the other Party upon written request a
certificate of exemption or other reasonably satisfactory evidence of
exemption if any exemption from or reduction of any Tax is applicable. Each
Party shall exercise Commercially Reasonable Efforts to obtain and to
cooperate in obtaining any exemption from or reduction of any Tax.
12.2 Indemnification.
12.2.1 Unless otherwise agreed in writing by the Parties,
Southern and DYPM shall each defend, indemnify and save harmless the other and
their respective officers, directors, servants, agents, employees and
representatives from and against any and all claims, demands, costs or expenses
(including reasonable attorneys' fees) for loss, damage or injury to any person,
property or interest arising out of or in any way related to this Agreement to
the extent such loss, damage or injury occurs on its own side of the Delivery
Point, irrespective of negligence, whether actual or claimed, of the other.
Nothing in this Agreement shall create a contractual relationship between one
Party and the customers of the other Party, nor shall it create a duty of any
kind to such customers.
12.2.2 Unless otherwise agreed in writing by the Parties,
Southern and DMT shall each defend, indemnify and save harmless the other and
their respective officers, directors, servants, agents, employees and
representatives from and against any and all claims, demands, costs or expenses
(including reasonable attorneys' fees) for loss, damage or injury to any person,
property or interest arising out of or in any way related to this Agreement to
the extent such loss, damage or injury occurs on its own side of the Gas
Delivery Point, irrespective of negligence, whether actual or claimed, of the
other. Nothing in this Agreement shall create a contractual relationship between
one Party and the customers of the other Party, nor shall it create a duty of
any kind to such customers.
12.3 Limitation of Liability.
12.3.1 there are no warranties under this agreement EXCEPT TO
THE EXTENT SPeciFICALLy set forth HEREIN. the parties hereby specifically
disclaim and exclude all implied warranties, including the implied warranties of
merchantability and of fitness for a particular purpose.
12.3.2 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES SUFFERED BY
THAT PARTY OR BY ANY CUSTOMER OF THAT PARTY, FOR lost profits or other business
interruption damages, WHETHER BY VIRTUE OF ANY STATUTE, IN TORT OR CONTRACT,
UNDER ANY PROVISION OF INDEMNITY OR OTHERWISE. THE PARTIES INTEND THAT THE
LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT
REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT LIMITATION,
THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR
CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID
HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT
OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE REMEDY IS
INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A REASONABLE
APPROXIMATION OF THE HARM OR LOSS.
12.3.3 In the event that any provision of this Section 12.3 is
held to be invalid or unenforceable, this Section shall be void and of no effect
solely to the extent of such invalidity or unenforceability, and no claim
arising out of such invalidity or lack of enforceability shall be made by one
Party against the other or its officers, agents, or employees. Notwithstanding
the foregoing, this Section 12.3 shall not limit or negate the right of either
Party to be fully indemnified as provided in Section 12.2 or limit the remedies
available for an Event of Default.
ARTICLE 13
FORCE MAJEURE event
13.1 Force Majeure Event Defined.
13.1.1 General Rule. As used herein, an Event of Force Majeure
means an unforeseeable cause(s) beyond the reasonable control of and without the
fault or negligence of the Party claiming Force Majeure, including but not
limited to acts of God, strike, flood, earthquake, storm, fire, lightning,
epidemic, war, riot, civil disturbance, sabotage, terrorism, change in law or
applicable regulation subsequent to the Execution Date and action or inaction by
any federal, state or local legislative, executive, administrative or judicial
agency or body which, by exercise of due foresight such Party could not
reasonably have expected and which, by the exercise of due diligence, it is
unable to overcome.
13.1.2 Exceptions. Notwithstanding anything contained in Section 13.1.1,
the term Force Majeure shall not include any of the following:
[redacted]
13.2 Applicability of Force Majeure Event.
Neither Party shall be in breach or liable for any delay or failure in
its performance under this Agreement (except for such Party's performance of its
payment obligations hereunder, which shall not be excused by any Force Majeure
Event) to the extent such performance is prevented or delayed due to a Force
Majeure Event, provided that:
13.2.1 The non-performing Party shall give the other Party
written notice within three (3) Business Days of the commencement of the Force
Majeure Event, with available details to be supplied within [redacted] after the
commencement of the Force Majeure Event further describing the particulars of
the occurrence of the Force Majeure Event;
13.2.2 The delay in performance shall be of no greater scope
and of no longer duration than is directly caused by the Force Majeure Event;
13.2.3 The Party whose performance is delayed or prevented
shall proceed with Commercially Reasonable Efforts to overcome the events or
circumstances preventing or delaying performance and shall, as requested (but
not more often than weekly), provide written progress reports to the other Party
during the period that performance is delayed or prevented describing actions
taken and to be taken to remedy the consequences of the Force Majeure Event, the
schedule for such actions and the expected date by which performance shall no
longer be affected by the Force Majeure Event; and
13.2.4 When the performance of the Party claiming the Force
Majeure Event is no longer being delayed or prevented, that Party shall give the
other Party written notice to that effect.
13.3 Effect of Force Majeure Event.
13.3.1 Except for the obligation of either Party to make any
required payments under this Agreement, the Parties shall be excused from
performing their respective obligations under this Agreement and shall not be
liable in damages or otherwise if and to the extent that they are unable to so
perform or are prevented from performing by a Force Majeure Event.
13.3.2 [redacted].
13.4 Other Effects of Force Majeure Events. If any Force Majeure Event
claimed by a Party shall continue for more than [redacted] from the date of
notice provided by such Party in Section 13.2.1, then the other Party may, at
any time following the end of such period, terminate this Agreement upon written
notice to the affected Party. Upon such termination, neither Party shall have
any further obligation to the other Party except as to payment of any costs and
liabilities incurred prior to the effective date of such termination. Any notice
of termination under this Section must be received during the period that
performance continues to be delayed or prevented by the Force Majeure Event.
ARTICLE 14
EVENT OF DEFAULT
14.1 Event of Default. The occurrence of any one of the following shall
constitute an "Event of Default":
14.1.1 The failure by a Party to make payment to the other
Party for amounts due under this Agreement after said amounts have become due
and payable and such failure is not cured within fifteen (15) Days after
receiving written notice from the Party to which such payments are due;
14.1.2 A Party or any Party guaranteeing such Party's
obligations hereunder (a "Guarantor") shall: (i) admit in writing its inability
to pay its debts as such debts become due; (ii) make a general assignment or an
arrangement or composition with or for the benefit of its creditors; (iii) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against such Party or such Guarantor under any bankruptcy or
similar law; (iv) take any action for the purpose of effectuating any of the
foregoing; or (v) fails to comply with the terms and conditions of its Guaranty;
14.1.3 A proceeding or case shall be commenced, without the
application or consent of the Party or its Guarantor, in any court of competent
jurisdiction, seeking: (i) its liquidation, reorganization of its debts,
dissolution or winding-up, or the composition or readjustment of its debts; (ii)
the appointment of a receiver, custodian, liquidator or the like of the Party or
its Guarantor or of all or any substantial part of its assets or the assets of
its Guarantor; or (iii) similar relief in respect of such Party or its Guarantor
under any law relating to bankruptcy, insolvency, reorganization of its debts,
winding-up, composition or adjustment of debt;
14.1.4 The failure of any Party to comply with the requirements of Article
15 regarding creditworthiness and/or security;
14.1.5 The failure of a Party to comply with the requirements of Article 18
regarding assignment;
14.1.6 Any representation or warranty made by a Party under
Article 17 proves to have been false or misleading in any material respect and
such representation or warranty is not made true within twenty (20) Days after
notice thereof to such Party; provided, however, that the cure must also remove
any adverse effect on the non-defaulting Party;
14.1.7 The occurrence of a default or event of default by such Party (or
its Affiliate) under the Other Southern Agreement;
14.1.8 A Party shall fail to pay when due (subject to any
applicable cure or grace period), whether by acceleration or otherwise, any
principal or interest on indebtedness aggregating in excess of [redacted] in
principal amount; or any indebtedness aggregating in excess of [redacted] shall
be declared due and payable or be required to be prepaid (other than by a
regularly scheduled payment) prior to the stated maturity of such indebtedness;
or
14.1.9 The material failure by a Party to comply with any
material provision of this Agreement (other than the events described above and
those for which a remedy is expressly provided) if such failure is not the
result of a Force Majeure Event, an Unavailability or is not otherwise excused
in accordance with this Agreement, and such failure continues uncured for
[redacted] after written notice thereof switch order from the other Party;
provided, however, if such failure is not capable of being cured within such
period of [redacted] with the exercise of reasonable diligence, then such cure
period shall be extended for an additional reasonable period of time (not to
exceed [redacted]), so long as the Party is exercising reasonable diligence to
cure such failure.
14.2 Exclusive Remedies.
14.2.1 Upon the occurrence of an Event of Default and at all
times during any applicable cure period, for so long as such Event of Default is
continuing (or as long as the defaulting Party is attempting to cure during such
cure period), the non-defaulting Party's sole and exclusive remedy shall be to
suspend its performance under this Agreement and/or declare an Early Termination
Date as provided below.
14.2.2 If an Event of Default has occurred, the non-defaulting
Party shall have the right, in its sole discretion, by no more than [redacted]
notice to the defaulting Party, to designate a Day no earlier than the Day such
notice is effective as the date on which the Agreement shall terminate ("Early
Termination Date"). Subject to Section 20.3, this Agreement shall terminate on
the Early Termination Date and neither Party shall have any further liability or
obligation to the other hereunder, except as provided in Sections 14.2.3 or
14.2.4 below, as applicable. The exercise by DYPM (as an Affiliate of DMT) of
its rights under this Section 14.2 shall be the sole and exclusive remedy of DMT
for an Event of Default by Southern.
14.2.3 With respect to an Event of Default by either DYPM or
DMT, Southern's notice under Section 14.2.2 shall be to DYPM and shall indicate
one of the following elections: (i) receive a [redacted]; or (ii) receive a
continuing damage payment. In the event Southern elects to receive the
[redacted], DYPM shall pay Southern such amount within three (3) Business Days
after the Early Termination Date as liquidated damages for all claims associated
with the Event of Default under this Agreement. In the event Southern elects to
receive the continuing damage payment, Southern shall calculate an amount equal
to: [redacted]. This process shall continue until the total of the monthly
Damage Differentials (treating the negative amounts as positive for this
purpose) equals a net present value [redacted] as of the Early Termination Date.
14.2.4 With respect to an Event of Default by Southern, within
fifteen (15) Days after DYPM/DMT's notice under Section 14.2.2, the Parties
shall each select an independent party to determine the [redacted] of the
Agreement. Within thirty (30) Days after such notice, the two independent
parties shall select a third independent party to determine the [redacted] of
the Agreement. Within sixty (60) Days after such notice, the three (3)
independent parties shall provide the Parties with their respective estimates of
the [redacted]. The actual [redacted] shall equal the arithmetic average of the
three estimates. If one Party disputes the actual [redacted], within five (5)
Business Days of notice of the actual [redacted] determined by the independent
parties, such Party may submit the dispute for resolution pursuant to the
arbitration procedures of Article 19. If the actual [redacted] ultimately used
is the value determined by the three independent parties, then such value cannot
exceed a net present value (using a discount rate of 8%) of [redacted] as of the
Early Termination Date. If the actual [redacted] ultimately used is the value
determined pursuant to arbitration, then such value cannot exceed a net present
value (using a discount rate of 8%) of [redacted] as of the date of the
arbitrators' decision. If the final determination of the [redacted] indicates
that a payment is owed to DYPM, then the actual [redacted] will be paid by
Southern to DYPM within three (3) Business Days of such determination. If the
final determination of the [redacted] indicates that a payment would be owed to
Southern absent the Event of Default by Southern, then although the [redacted]
to DYPM would be negative, neither Party shall be required to pay the other any
amount hereunder. As used herein, [redacted]
ARTICLE 15
CREDITWORTHINESS AND SECURITY
15.1 Guaranty in favor of Southern. Simultaneously with the execution
of this Agreement, DYPM and DMT shall cause Dynegy Holdings Inc., the parent
company of DYPM and DMT, to execute and deliver a Guaranty Agreement in the form
of that attached hereto as Appendix E (DYPM Guaranty). If at any time during the
Term, the long term senior unsecured indebtedness of Dynegy Holdings Inc. (or
the provider of an Eligible Guaranty) has or drops to a rating below either (i)
Baa3 by ▇▇▇▇▇'▇ Investors Service ("Moody's") (or future equivalent) or BBB- by
Standard & Poor's Ratings Group ("S&P") (or future equivalent), then DYPM and
DMT shall provide a substitute guaranty in form and substance substantially
similar to the DYPM Guaranty (the "Eligible Guaranty") issued by an entity with
a long term senior unsecured indebtedness rating of at or above both (i) Baa3 by
Moody's (or future equivalent) and (ii) BBB- by S&P (or future equivalent) (the
"Eligible Guaranty Threshold"). DYPM and DMT shall provide such Eligible
Guaranty within ten (10) Days of receipt of notice from Southern that DYPM and
DMT are required to provide an Eligible Guaranty due to the downgrade to a
rating below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by
S&P (or future equivalent). If DYPM and DMT are unable to provide an Eligible
Guaranty to Southern during such ten (10) Day period, then DYPM, DMT and Dynegy
Holdings Inc. must be and remain in compliance with and Southern must receive
the security and payments as required by the terms of Section 15.3 and 15.4
below.
15.2 Negative Watch Credit Support in favor of Southern. If at any time
during the period beginning on the date hereof through December 31, 2005, the
long term senior unsecured indebtedness of Dynegy Holdings Inc. (or the provider
of an Eligible Guaranty) has or drops to a rating of either (i) Baa3 by Moody's
(or future equivalent) and Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty), its credit rating or indebtedness is on watch for possible downgrade
by Moody's (or future equivalent) or (ii) BBB- by S&P (or future equivalent) and
Dynegy Holdings Inc. (or the provider of an Eligible Guaranty), its credit
rating or indebtedness is on negative CreditWatch by S&P (or future equivalent),
then DYPM, DMT or Dynegy Holdings Inc. (or the provider of an Eligible Guaranty)
shall within three (3) Business Days after such event provide to and maintain in
favor of Southern a letter of credit issued by an issuer reasonably acceptable
to Southern in the amount of [redacted] in substantially the form of Appendix F
hereto unless a [redacted] letter of credit has been properly issued and remains
in effect in accordance with the first sentence of Section 15.3 or 15.4 below.
15.3 Credit Support in favor of Southern for Junk Rating. If at any
time during the period beginning on the date hereof through December 31, 2005,
the long term senior unsecured indebtedness of Dynegy Holdings Inc. (or the
provider of an Eligible Guaranty) has or drops to a rating of below either (i)
Baa3 by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent), then DYPM, DMT or Dynegy Holdings Inc. (or the provider of an
Eligible Guaranty) shall within three (3) Business Days after such event provide
to and maintain in favor of Southern a letter of credit issued by an issuer
reasonably acceptable to Southern in the amount of [redacted] in substantially
the form of Appendix F hereto unless a [redacted] letter of credit has been
properly issued and remains in effect in accordance with the first sentence of
Section 15.2 above or Section 15.4 below.
15.4 Post December 31, 2005 Provisions. If at any time after December
31, 2005, the long term senior unsecured indebtedness of Dynegy Holdings Inc.
(or the provider of an Eligible Guaranty) has or drops to a rating below either
(i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent), then DYPM, DMT or Dynegy Holdings Inc. (or the provider of an
Eligible Guaranty) shall within three (3) Business Days after such event provide
to and maintain in favor of Southern a letter of credit issued by an issuer
reasonably acceptable to Southern in the amount of [redacted] in substantially
the form of Appendix F hereto, unless a [redacted] letter of credit has been
properly issued and remains in effect in accordance with the first sentence of
Section 15.2 or 15.3 above.
15.5 Guaranty in favor of DYPM/DMT. If hereafter Southern's net worth
(calculated by subtracting Southern's liabilities (net of intercompany loans)
from Southern's total assets (excluding goodwill) as such terms are determined
in accordance with GAAP) falls below [redacted], Southern shall provide to DYPM
and DMT a guaranty from an entity with a long term senior unsecured indebtedness
rating at or above (i) Baa3 by Moody's (or future equivalent) and (ii) BBB- by
S&P (or future equivalent) in substantially the form of Appendix G (Southern
Guaranty) in an amount equal to thirty percent (30%) of the amount by which
[redacted] exceeds Southern's net worth (the "Shortfall Amount") or, at
Southern's option, Southern shall deliver to DYPM a letter of credit in the
Shortfall Amount in substantially the form of Appendix H hereto. If at any time
during the Term, the long term senior unsecured indebtedness of the provider of
the Southern Guaranty has or drops to a rating below either (i) Baa3 by Moody's
(or future equivalent) or (ii) BBB- by S&P (or future equivalent), then Southern
shall provide a Southern Guaranty issued by an entity with a long term senior
unsecured indebtedness rating at or above the Guaranty Threshold. Southern shall
provide such Southern Guaranty within ten (10) Days of receipt of notice from
DYPM and DMT that Southern is required to provide a Southern Guaranty due to the
downgrade below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB-
by S&P (or future equivalent). If Southern is unable to provide a Southern
Guaranty during the applicable periods described above, then Southern shall
provide and maintain substitute collateral of a value equal to the Shortfall
Amount in form and substance reasonably satisfactory to DYPM and DMT which
security shall cover and secure Southern's obligations under this Agreement. The
foregoing substitute collateral shall be replenished so that at all times
substitute collateral of a value equal to the Shortfall Amount is securing
Southern's obligations to DYPM and DMT until such time as a Southern Guaranty is
provided. If at any time a Southern Guaranty becomes available, Southern may
elect to provide such Southern Guaranty in replacement of any security
previously provided. Once a Southern Guaranty is provided, any security
previously provided by Southern shall be immediately returned or cancelled as
the case may be, at which time the Southern Guaranty shall remain in place until
the latter of it is terminated in accordance with its terms or until such time
as collateral is again required and provided due to the downgrades of the
provider of the Southern Guaranty to a level below the Eligible Guaranty
Threshold.
15.6 Negative Watch Credit Support in favor of DYPM/DMT. If at any time
prior to June 1, 2005, the long term senior unsecured indebtedness of Southern
has or drops to a rating of either (i) Baa3 by Moody's (or future equivalent)
and Southern, its credit rating or indebtedness is on watch for possible
downgrade by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent) and Southern, its credit rating or indebtedness is on negative
CreditWatch by S&P (or future equivalent), then Southern shall within three (3)
Business Days after such event provide to and maintain in favor of DYPM and DMT
either (1) a letter of credit issued by an issuer reasonably acceptable to DYPM
and DMT in an amount of [redacted] in substantially the form of Appendix H
hereto or (2) a guaranty from an entity with a long term senior unsecured
indebtedness rating at or above (i) Baa3 by Moody's (or future equivalent) and
(ii) BBB- by S&P (or future equivalent) in the form of Appendix G (Southern
Guaranty), unless a letter of credit or guaranty has been properly issued and
remain in effect in accordance with Section 15.7 or 15.8 below.
15.7 Credit Support in favor of DYPM/DMT for Junk Rating. If at any
time prior to June 1, 2005, the long term senior unsecured indebtedness of
Southern has or drops to a rating of below either (i) Baa3 by Moody's (or future
equivalent) or (ii) BBB- by S&P (or future equivalent), then Southern shall
within three (3) Business Days after such event provide to and maintain in favor
of DYPM and DMT either (1) a letter of credit issued by an issuer reasonably
acceptable to DYPM and DMT in an amount of [redacted] in substantially the form
of Appendix H hereto or (2) a guaranty from an entity with a long term senior
unsecured indebtedness rating at or above (i) Baa3 by Moody's (or future
equivalent) and (ii) BBB- by S&P (or future equivalent) in the form of Appendix
G (Southern Guaranty), unless a letter of credit or guaranty has been properly
issued and remains in effect in accordance with Section 15.6 above or Section
15.8 below.
15.8 Post June 1, 2005 Provisions. If at any time on or after June 1,
2005, the long term senior unsecured indebtedness of Southern has or drops to a
rating below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by
S&P (or future equivalent), then Southern shall provide to and maintain in favor
of DYPM and DMT either (1) a letter of credit issued by an issuer reasonably
acceptable to DYPM and DMT in the amount of [redacted] in substantially the form
of Appendix H hereto or (2) a guaranty from an entity with a long term senior
unsecured indebtedness rating at or above (i) Baa3 by Moody's (or future
equivalent) and (ii) BBB- by S&P (or future equivalent) in the form of Appendix
G (Southern Guaranty), unless a letter of credit or guaranty has been properly
issued and remains in effect in accordance with Section 15.6 or Section 15.7
above.
ARTICLE 16
DELIVERY EXCUSE
16.1 Definition. As used in this Agreement, "Delivery Excuse" means:
(i) any Event of Default of DYPM or DMT under this Agreement or any event which,
with the giving of notice or lapse of time or both, would become an Event of
Default under this Agreement; (ii) DMT for any reason (other than a failure
resulting from a default or failure to perform by Southern or one of its
Affiliates) does not supply Gas required by the Facility (unless the Facility is
not constructed) or to an Alternate Gas Delivery Point(s) (as required by
Section 6.2); provided, however, that failures to supply to Alternate Gas
Delivery Point(s) for reasons beyond DMT's reasonable control shall not
constitute a Delivery Excuse; or (iii) the delivery of Gas to the Facility that
does not meet the specifications of applicable transportation pipelines serving
the Facility; (iv) any failure or inability of DYPM to acquire and maintain
adequate transmission service for the delivery of energy; and (v) any Emergency
Condition. Nothing contained in this Agreement or elsewhere shall require
Southern to replace, either in whole or in part, the Gas supply provided by DMT
hereunder with any other Gas supply arrangement.
16.2 No Breach for Delivery Excuse. Southern shall not be liable for or
deemed in breach of this Agreement to the extent a Delivery Excuse has occurred
or is continuing, even if the duration of such Delivery Excuse is for the
remainder of the Term of this Agreement; provided that the following shall apply
with regard to a condition that would result in a Delivery Excuse:
(i) Each Party shall promptly notify the other after
discovering any condition or circumstance that could
reasonably be expected to lead to a Delivery Excuse. Upon
either Party becoming aware of a condition that constitutes a
Delivery Excuse, that Party shall provide the other Party with
prompt written notice of such condition, with details further
describing the particulars of the condition to be supplied
within twelve (12) Days after commencement of such condition;
(ii) Any delay in performance shall be of no greater scope
and of no longer duration than is directly caused by the Delivery
Excuse; and
(iii) When a Party becomes aware that the condition
constituting a Delivery Excuse no longer exists, such Party
shall promptly notify the other when the condition of Delivery
Excuse is no longer preventing such Party's performance under
this Agreement.
ARTICLE 17
REPRESENTATIONS AND WARRANTIES
17.1. Execution. Each Party represents and warrants to the other Party
that: (i) it has all the necessary corporate and legal power and authority and
has been duly authorized by all necessary corporate action to enable it to
lawfully execute, deliver and perform under this Agreement; and (ii) it is a
valid legal entity duly organized and validly existing in good standing under
the laws of the state of its formation and is, to the extent required, qualified
to do business in the State of Alabama;
17.2. Permits. Each Party represents and warrants to the other Party that
it will hold all permits, licenses or approvals necessary to lawfully perform
its obligations contained herein in the manner prescribed by this Agreement.
17.3 Binding Obligations. Each Party represents and warrants to the
other Party that this Agreement is the valid and binding obligation of such
Party, enforceable against such Party in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency or other equitable
laws affecting creditor's rights.
17.4 Execution and Consummation. Each Party represents and warrants to
the other Party that the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment of and
compliance with the provisions of this Agreement do not and will not conflict
with any of the terms, conditions or provisions of any law or partnership
agreement, or other evidence of indebtedness or any other agreement or
instrument to which it is a party or by which it or any of its property is
bound, or result in a breach or default under any of the foregoing.
17.5 Actions and Proceedings. Each Party represents and warrants to the
other that there is no pending or, to the knowledge of such Party, threatened
action or proceeding affecting such Party before any Government Agency that
purports to adversely affect the validity or enforceability of this Agreement.
17.6 Processor. With respect to the purchase of Contract Capacity, DYPM
represents and warrants that it is a producer, processor, commercial user or
merchant handling energy, and it is entering into the transactions contemplated
by this Agreement for purposes related to its business as such.
ARTICLE 18
ASSIGNMENT
18.1. General Rule. This Agreement shall be binding upon and inure to
the benefit of the permitted successors and assigns of the Parties hereto.
Except as set forth in Section 18.2, no permitted sale, assignment, transfer or
other disposition shall release or discharge DYPM, DMT or Southern from its
obligations under this Agreement, but all such obligations shall also be assumed
by the successor or assign of the Party hereto.
18.2. Consent Required. Neither Party shall assign its interest in this
Agreement in whole or part without the prior written consent of the other Party,
such consent not to be unreasonably withheld or delayed; provided, however,
that, notwithstanding the foregoing, either Party may assign this Agreement to
its parent, or to any direct or indirect wholly-owned subsidiary of such parent
and, upon the approval of the creditworthiness and the ability to perform of
such assignee by the non-assigning Party (which approval shall not be
unreasonably withheld or delayed), the assignor shall be released and discharged
from its obligations under this Agreement. Either Party may collaterally assign
this Agreement to any lender or financial institution without the written
consent of the other Party. Each Party agrees to provide such consents to
collateral assignment as may be reasonably requested by the other Party;
provided that neither Party shall be obligated to provide a consent to
collateral assignment that would have the effect of materially altering the
obligations of such Party under this Agreement.
ARTICLE 19
DISPUTE RESOLUTION
19.1 Senior Officers.
19.1.1 Each of the Parties will designate in writing to the
other Parties a representative who will be authorized to resolve any dispute
arising under this Agreement in an equitable manner and, unless otherwise
expressly provided herein, to exercise the authority of such Party to make
decisions by mutual agreement.
19.1.2 If such designated representatives are unable to
resolve a dispute under this Agreement, such dispute will be referred by each
Party's representative, respectively, to a designated senior officer.
19.1.3 The Parties hereto agree: (i) to attempt to resolve all
disputes arising hereunder promptly, equitably and in a good faith manner; and
(ii) to provide each other with reasonable access during normal business hours
to any and all non-privileged and non-confidential records, information and data
pertaining to any such dispute. Non-confidential information shall be made
available to a Party pursuant to a confidentiality agreement acceptable to the
disclosing Parties.
19.2 Arbitration. All disputes arising under, out of, or in relation to
any provision of this Agreement that are not resolved pursuant to Section 19.1
within 30 Days after either Party's receipt of notice referring the dispute to
the senior officers of the Parties (and in any event within the time which legal
or equitable proceedings based on such claim, dispute, or controversy would not
be barred by the applicable statute of limitations) will be submitted upon
written request of any Party to binding arbitration. Each Party will have the
right to designate an arbitrator of its choice, who need not be from the
American Arbitration Association ("AAA") panel of arbitrators but who (a) will
be an expert in the independent power electric generation field and (b) will not
be and will not have been previously an employee or agent of or consultant or
counsel to either Party and will not have a direct or indirect interest in
either Party or the subject matter of the arbitration. Such designation will be
made by notice to the other Party and to the AAA within ten (10) Days or, in the
case of payment disputes, five (5) Days after the date of the giving of notice
of the demand for arbitration. The arbitrators designated by the Parties will
designate a third arbitrator, who will have a background in legal and judicial
matters (and who will act as chairman), within ten (10) Days or, in the case of
payment disputes, five (5) Days after the date of the designation of the last of
the arbitrators to be designated by the Parties, and the arbitration will be
decided by the three arbitrators. If the two arbitrators cannot or do not select
a third independent arbitrator within such period, either Party may apply to the
AAA for the purpose of appointing any person listed with the AAA as the third
independent arbitrator under the expedited rules of the AAA. Such arbitration
will be held in alternating locations of the home offices of the Parties,
commencing with DYPM's home office, or in any other mutually agreed upon
location. The rules of the AAA will apply to the extent not inconsistent with
the rules herein specified. Each Party will bear its own expenses (including
attorneys' fees) with respect to the arbitration, unless the arbitrator decides
on a different allocation of expenses. The arbitrators will designate the Party
to bear the expenses of the arbitrators or the respective amounts of such
expense to be borne by each Party.
19.3 Binding Nature of Proceedings. Each Party understands that this
Agreement contains an agreement to arbitrate with respect to specified disputes.
After signing this Agreement, each Party understands that it will not be able to
bring a lawsuit concerning any dispute that may arise that is covered by this
arbitration provision. Instead, each Party agrees to submit any such dispute to
arbitration pursuant to Section 19.2. Any award of the arbitrator may be
enforced by the Party in whose favor such award is made in any court of
competent jurisdiction.
ARTICLE 20
MISCELLANEOUS
20.1 Governing Law; Waiver of Jury Trial.
20.1.1 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ALABAMA, EXCLUSIVE OF ITS CONFLICTS OF
LAW PROVISIONS, AND, TO THE EXTENT APPLICABLE, BY THE FEDERAL LAW OF THE UNITED
STATES OF AMERICA. BY CHOOSING TO HAVE THIS AGREEMENT GOVERNED BY AND CONSTRUED
UNDER THE LAW OF THE STATE OF ALABAMA, THE PARTIES ARE IN NO WAY SUBMITTING TO
OR INCORPORATING INTO THIS AGREEMENT ANY ALABAMA STATUTE, REGULATION, OR ORDER,
OR ANY OF THE SAME INVOLVING THE GENERATION, SALE, PURCHASE OR TRANSMISSION OF
ELECTRIC CAPACITY OR ELECTRIC ENERGY IN, OR FOR CONSUMPTION IN, THE STATE OF
ALABAMA.
20.1.2 EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
20.2 Confidentiality.
20.2.1 Until such time as the terms of the Agreement are
readily accessible by the public (other than due to the fault of a Party),
neither Party shall disclose the terms of this Agreement to any third party
(other than such Party's (or its Affiliates') employees, lenders, legal counsel,
accountants, or other advisors), except in order to comply with any applicable
law, order, regulatory or exchange rule. Each Party shall notify the other Party
of any proceeding of which it is aware that may result in disclosure and shall
use reasonable efforts to prevent or limit such disclosure. Notwithstanding the
foregoing, either Party may disclose the terms and conditions of this Agreement
to any third party providing permanent or construction financing with respect to
the Facility (in the case of Southern) or with respect to other financing
obtained by a Party. In connection with a disclosure to any third party
financiers, the disclosing Party shall take such steps as may be reasonably
required to limit the scope of such disclosure and to ensure that disclosure is
not subsequently made by any such financier.
20.2.2 Anything in this Section 20.2 to the contrary
notwithstanding, the Parties agree and acknowledge that, in the course of
performance under this Agreement, the Parties may exchange confidential and
proprietary information (including financial information related to the
Agreement). Each Party agrees and covenants that any and all information it
receives in connection with its performance under this Agreement that the
disclosing Party has designated as confidential will be kept confidential and
shall not be disclosed by the receiving Party to any third party without the
express written consent of the disclosing Party, except in order to comply with
any applicable law, order, regulatory or exchange rule. Any filing by a Party
pursuant to any of the foregoing in compliance with applicable law, order,
regulatory or exchange rule, shall be made under a request for confidential
treatment (unless the filing Party reasonably believes such a request would be
futile) and the other Party shall have the opportunity to review such filing
prior to its dissemination. Neither Party shall issue a press release or similar
disclosure with respect to the existence of this Agreement or its contents
without first obtaining the written consent of the other Party, which consent
shall not be unreasonably withheld.
20.3 Survivorship of Obligations. The termination or cancellation of
this Agreement shall not discharge any Party from any obligation it owes the
other Party under this Agreement by reason of any transaction, loss, cost,
damage, expense or liability occurring, accruing or arising prior to such
termination. It is the intent of the Parties that any such obligation owed
(whether the same shall be known or unknown as of the termination or
cancellation of this Agreement) will survive the termination or cancellation of
this Agreement in favor of the Party to which such obligation is owed. The
Parties also intend that the indemnification and limitation of liability
provisions contained in Section 12 shall remain operative and in full force and
effect.
20.4 Notice of Proceedings. Each Party, to the extent it has pertinent
knowledge, shall promptly notify the other Party of any pending or anticipated
federal or state regulatory, judicial or administrative actions, including but
not limited to notice of violations, arising directly out of, caused by, or
related to the Facility, including any generation equipment comprising the
Facility, that could materially and adversely affect either Party's ability to
carry out its obligations under this Agreement.
20.5 No Third Party Beneficiaries. This Agreement is not intended to,
and shall not, create rights, remedies or benefits of any character whatsoever
in favor of any Persons, corporations, associations, or entities other than the
Parties, and the rights and obligations of each of the Parties under this
Agreement are solely for the use and benefit of, and may be enforced solely by
the Parties, their successors in interest or permitted assigns.
20.6 Section Headings Not to Affect Meaning. The descriptive headings
of the various Articles and Sections of this Agreement have been inserted for
convenience of reference only and shall in no way modify or restrict any of the
terms and provisions thereof.
20.7 Computation of Time. In computing any period of time prescribed or
allowed by this Agreement, the designated period of time shall begin to run on
the Day immediately following the Day of the act, event or default that
precipitated the running of the designated period of time. The designated period
shall expire on the last Day of the period so computed unless that Day is not a
Business Day, in which event the period shall run until the end of the next
Business Day.
20.8 Interest. Whenever the provisions of this Agreement require the
calculation of an interest rate, such rate shall be computed at an annual rate
equal to the Prime Rate as of the date on which the calculation begins, but not
to exceed the maximum rate which may be lawfully charged. Interest on
obligations arising under this Agreement shall be compounded quarterly based on
a calendar quarter.
20.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter hereof and supersedes any
other agreements, written or oral, between the Parties concerning such subject
matter.
20.10 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
20.11 Amendments. This Agreement may only be amended by written agreement
signed by duly authorized representatives of the Parties.
20.12 Guarantee of Performance. It is the intent of the Parties that
with respect to the contract provisions referenced below, the rights, duties and
obligations of DYPM and DTM shall be joint and several: Section 3.2, Section
3.3, Article 8, Article 11, Section 12.2 and Article 14. DYPM and DMT guarantee
to Southern the performance of DYPM and DMT's respective obligations under those
provisions. For all other provisions, the respective rights, duties and
obligations of these Parties shall be established on the basis of the specific
language and context of the provision in questions.
20.13 Waivers. Waivers of the provisions of this Agreement or excuses
of any violations of the Agreement shall be valid only if in writing and signed
by an authorized officer of the Party issuing the waiver or excuse. A waiver or
excuse issued under one set of circumstances shall not extend to other
occurrences under similar circumstances.
20.14 No Partnership Created. Any provision of this Agreement to the
contrary notwithstanding, the Parties do not intend to create hereby any joint
venture, partnership, association taxable as a corporation, or other entity for
the conduct of any business for profit. If it should appear that one or more
changes to this Agreement would be required in order not to create an entity
referenced in the preceding sentence, the Parties agree to negotiate promptly
and in good faith with respect to such changes.
20.15 Character of Sale. The sale of Contract Capacity and Contract
Energy hereunder shall not constitute a sale, lease, transfer or conveyance to
DYPM or any other party of any contractual rights or ownership interests in any
generating unit or other equipment comprising the Facility, nor does the sale of
Contract Capacity and Contract Energy hereunder constitute a dedication of
ownership of any generating unit or other equipment comprising the Facility.
20.16 Notices. Any notice, demand, request, payment, statement, or
correspondence provided for in this Agreement, or any notice which a Party may
desire to give to the other, shall be in writing (unless otherwise expressly
provided by this Agreement) and shall be considered duly delivered when received
by hand delivery, first-class mail, facsimile, or by overnight delivery, at the
addresses listed below; provided, however, if actual delivery occurs at a time
other than between the hours of 0800 and 1700 CPT on a Business Day (each a
"Business Hour"), delivery shall be deemed to have occurred in the next Business
Hour after actual delivery.
(i) To Southern:
Southern Power Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Southern Company Generation and Energy Marketing
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Payment by Wire: Bank of America
ABA ▇▇▇▇▇▇▇▇▇
Account #: 3751237789
(ii) To DYPM
Dynegy Power Marketing, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Dynegy Power Marketing, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
And
Dynegy Power Marketing, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payment by Wire:
For the Acct. of Dynegy Power Marketing
The First National Bank of Chicago
ABA # 071 000 013
Account # 552 7651
Invoices:
Dynegy Power Marketing, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Accounts Payable-Electric
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(iii) To DMT
Dynegy Marketing and Trade
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Payment by Wire:
For the Acct. of Dynegy Power Marketing
The First National Bank of Chicago
ABA # ▇▇▇-▇▇▇-▇▇▇ Account No. 55-53911
Each Party shall provide the other Party with all names, addresses,
telephone and facsimile numbers necessary for its performance under this
Agreement; and either Party may change the information set forth in Section this
20.16 by giving written notice to the other Party in the manner prescribed by
such section.
20.17 Survival. Any provision(s) of this Agreement that expressly comes
into or remains in force following the termination or expiration of this
Agreement shall survive the termination or expiration of this Agreement.
20.18 Construction. The language used in this Agreement is the product
of both Parties' efforts. Accordingly, each Party irrevocably waives the benefit
of any rule of contract construction that disfavors the drafter of a contract or
the drafter of specific language in a contract.
20.19 Imaged Agreement. Any original executed Agreement, schedule
confirmation or other related document may be photocopied and stored on computer
tapes and disks (the "Imaged Agreement"). The Imaged Agreement, if introduced as
evidence on paper, the schedule confirmation, if introduced as evidence in
automated facsimile form, the transaction tape, if introduced as evidence in its
original form and as transcribed onto paper, and all computer records of the
foregoing, if introduced as evidence in printed format, in any judicial,
arbitration, mediation or administrative proceedings, will be admissible as
between the Parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form. Neither Party
shall object to the admissibility of the transaction tape, the schedule
confirmation or the Imaged Agreement (or photocopies of the transcription of the
transaction tape, the schedule confirmation or the Imaged Agreement) on the
basis that such were not originated or maintained in documentary form under
either the hearsay rule, the best evidence rule or other rule of evidence.
20.20 GDP-IPD. In connection with the calculations under this Agreement
that are referenced to increases based on the values of GDP-IPD, the base value
for all GDP-IPD inflation calculations will be the Implicit Price Deflator
published quarterly by the U.S. Department of Commerce in Table 5 (Quantity and
Price Indexes for Gross Domestic Product) in the Bureau of Economic Analysis
(BEA) National Income and Product Accounts Tables for the first quarter of 2005,
as revised by the BEA. The escalation adjustments will be made by dividing the
GDP-IPD for the first calendar quarter preceding the beginning of a new Contract
Year (as revised by the BEA and reported prior to May 31 for the upcoming
Contract Year) by the base GDP-IPD (as revised) from the first calendar quarter
of 2005.
20.21 Higher Heating Value. All Gas quantities referenced herein shall be
in terms of the higher heating value of natural gas.
[The Next Page is the Signature Page.]
IN WITNESS WHEREOF, Southern, DYPM, and DMT have caused this Agreement to be
executed in duplicate by their respective duly authorized officers as of the
Execution Date.
SOUTHERN POWER COMPANY
By: ___________________________________
NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
........
DYNEGY POWER MARKETING, INC.
By: ___________________________________
NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
DYNEGY MARKETING AND TRADE
BY: _____________________________________
NAME: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
TITLE: President
APPENDIX A
Reservation Payments
[redacted]
APPENDIX B
Scheduling Constraints
[redacted]
APPENDIX C
Unit Performance Characteristics
[redacted]
APPENDIX D
ENDH and Performance Payment Sample Calculations
[redacted]
APPENDIX E
Guaranty Agreement
[redacted]
APPENDIX F
Proposed Form of Letter of Credit
[redacted]
APPENDIX G
Guaranty Agreement
[redacted]
APPENDIX H
Proposed Form of Letter of Credit
[redacted]