Exhibit 10.88
[PEAKING UNITS]
POWER PURCHASE AGREEMENT
Dated as of December 15, 1999
Between
Commonwealth Edison Company
and
Midwest Generation, LLC
Crawford, Fisk, Waukegan, Calumet, Joliet,
Bloom, Electric Junction, Sabrooke and Lombard Peaking Units
TABLE OF CONTENTS
PAGE
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1. Definitions and Interpretation.............................................................1
(a) Definitions.......................................................................1
(b) Interpretation....................................................................9
(c) Legal Representation of Parties..................................................10
(d) Titles and Headings..............................................................10
2. Term......................................................................................10
3. Generating Capacity.......................................................................11
4. Electric Energy Supply....................................................................11
(a) Character........................................................................11
(b) Supply...........................................................................11
(c) Dispatch.........................................................................11
(d) Energy Imbalance.................................................................11
5. Metering; Billing; Payment................................................................12
(a) Metering.........................................................................12
(b) Meter Inaccuracies...............................................................12
(c) Billing..........................................................................12
(d) Billing Disputes.................................................................13
6. Operation of Reserved Units...............................................................13
(a) Standard of Operation............................................................13
(b) Electric Energy Generation.......................................................14
(c) Outages..........................................................................15
(d) Operating Characteristics........................................................17
(e) Fuel Source and Emissions Reports................................................17
(f) Records..........................................................................17
7. Compensation..............................................................................17
(a) Monthly Charges..................................................................17
(b) Minimum Take True-Up.............................................................19
8. Testing...................................................................................19
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9. Ancillary Services........................................................................20
10. Limitation of Liability...................................................................20
11. Disagreements.............................................................................22
(a) Administrative Committee Procedure...............................................22
(b) Arbitration......................................................................22
(c) Obligations to Pay Charges and Perform...........................................24
(d) Preliminary Injunctive Relief....................................................24
(e) Settlement Discussions...........................................................24
12. Assignment; Transfer of Reserved Units....................................................25
(a) Assignment.......................................................................25
(b) Collateral Assignment............................................................25
(c) Transfer of Reserved Units during the Term.......................................26
13. Termination by ComEd with respect to Certain Generating Units.............................26
14. Default; Termination and Remedies.........................................................27
(a) Seller's Default.................................................................27
(b) ComEd Default....................................................................27
(c) Remedies and Remedies Cumulative.................................................28
(d) Extended Outage..................................................................28
(e) Terminations Under Section 13....................................................29
15. Force Majeure.............................................................................29
(a) Force Majeure Event..............................................................29
(b) Obligations Under Force Majeure..................................................29
(c) Continued Payment Obligation.....................................................30
(d) Availability.....................................................................30
16. Representations and Warranties............................................................30
(a) Representations and Warranties of Seller.........................................30
(b) Representations and Warranties of ComEd..........................................31
17. Indemnification...........................................................................32
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18. Notices...................................................................................33
19. Confidentiality...........................................................................35
20. Governing Law.............................................................................35
21. Partial Invalidity........................................................................35
22. Waivers...................................................................................36
23. Competitive Transition Charge.............................................................36
24. Entire Agreement and Amendments...........................................................36
APPENDICES
Appendix A........Design Limits
Appendix B........MAIN Guide Number 3A
Appendix C........EO Communications and Guidelines
Appendix D........Reporting Forms
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POWER PURCHASE AGREEMENT
THIS POWER PURCHASE AGREEMENT (including Appendices, this
"AGREEMENT") dated as of December 15, 1999, between COMMONWEALTH EDISON
COMPANY, an Illinois corporation ("COMED"), and MIDWEST GENERATION, LLC, a
Delaware limited liability company ("SELLER"; ComEd and Seller are sometimes
referred to herein individually as a "PARTY" and collectively as the
"PARTIES");
W I T N E S S E T H:
WHEREAS, ComEd owns electric facilities and is engaged in the
generation, purchase, transmission, distribution and sale of electric energy;
and
WHEREAS, Seller intends to purchase and thereafter operate ComEd's
combustion turbine generation units located at the Crawford, Fisk, Waukegan,
Calumet, Joliet, Bloom, Electric Junction, Sabrooke and Lombard sites; and
WHEREAS, ComEd desires to receive and purchase, and Seller desires
to deliver and sell, electric capacity, energy and other generation-related
services; and
WHEREAS, ComEd desires to determine the dispatching of such
combustion turbine units as provided in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein set forth, the Parties hereto agree as follows:
1. DEFINITIONS AND INTERPRETATION
(a) DEFINITIONS. As used in this Agreement, (i) the terms set
forth below in this Section 1(a) shall have the respective meanings so set
forth, and (ii) the terms defined elsewhere in this Agreement shall have the
meanings therein so specified.
"AFFECTED PARTY" has the meaning specified in Section 15(a).
"ANCILLARY SERVICES" has the meaning set forth in Section 9.
"ASSET SALE AGREEMENT" means the Asset Sale Agreement dated
as of March 22, 1999, between ComEd and Seller, governing, among other
things, the transfer of the Units from ComEd to Seller.
"AVAILABLE" means a state in which a Unit is capable of
providing service, whether or not it is actually in service, regardless
of the capacity level that can be provided.
"BANKRUPTCY" means any case, action or proceeding under any
bankruptcy, reorganization, debt arrangement, insolvency or
receivership law or any dissolution or liquidation proceeding commenced
by or against a Person and, if such case, action or proceeding is not
commenced by such Person, such case or proceeding shall be consented to
or acquiesced in by such Person or shall result in an order for relief
or shall remain undismissed for 90 days.
"BUSINESS DAY" means each weekday (Monday through Friday)
except the days on which the following holidays are observed: New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day.
"CAPACITY ADJUSTMENT FACTOR" means, with respect to a month,
the factor (rounded to four decimal places) obtained from the following
calculation:
(1-[Average Unavailable Capacity/Reserved Capacity]) x 100%
For purposes of the foregoing, "AVERAGE UNAVAILABLE CAPACITY" means,
with respect to such month, the average of the Unavailable Capacity
following each dispatch request from the EO Generation Dispatcher to
deliver Electric Energy from the Reserved Units; and "UNAVAILABLE
CAPACITY" means the capacity (measured in megawatts) which Seller is
unable to deliver within the time frames (as measured from the point
when the dispatch request is sent to Seller until the time that the
Reserved Units are synchronized and achieve the load that the EO
Generation Dispatcher requested in the dispatch order for delivery to
the ComEd System) specified in the dispatch request for the Reserved
Units; PROVIDED that such time frames are not less than the Start Times
specified in Appendix A for the aggregate capacity so requested;
PROVIDED FURTHER, that Seller may use a Substitute Unit to replace any
unavailable Reserved Unit, in which case the capacity provided by such
Substitute Unit may be used to offset the unavailable capacity of the
Reserved Unit; and PROVIDED FURTHER a Reserved Unit
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with a ten minute start time may not be used to respond to twenty
minute start request. As an example, if Seller is able to deliver only
40 megawatts from a 50 megawatt unit within the specified time frame,
10 megawatts shall be considered Unavailable Capacity.
"CHANGE OF LAW" means the adoption, promulgation, modification
or reinterpretation of any law, rule, regulation, ordinance, order or
other Requirement of Law of any federal, state, county or local
government, governmental agency, court, commission, department or other
such entity which occurs subsequent to the date of execution of this
Agreement but excluding any change in law relating to (i) taxation of
net income or (ii) any requirement regarding reduction or control of
nitrogen oxide (NOx), carbon dioxide or volatile organic materials
under any Requirement of Law.
"COMED EVENT OF DEFAULT" has the meaning specified in Section
14(b).
"COMED SYSTEM" means the electric transmission and
distribution system owned by ComEd and its affiliates.
"CONFIDENTIAL INFORMATION" has the meaning specified in
Section 19.
"CONTRACT YEAR" means, in the case of the First Contract Year,
the period beginning on the Effective Date and ending on the day prior
to the first anniversary of such beginning date, if the Effective Date
is the first day of a calendar month, or ending on the day prior to the
first anniversary of the beginning of the month immediately following
the Effective Date, if the Effective Date is not the first day of a
month; and, in the case of subsequent Contract Years, means the period
beginning on the day immediately following the end of the preceding
Contract Year and ending on the day prior to the first anniversary of
such beginning day. First Contract Year refers to the first such period
commencing on the Effective Date; Second Contract Year refers to the
second such period; and so on.
"DEFAULT RATE" means (i) the "Prime Rate" as published from
time to time in the "Money Rates" section of THE WALL STREET JOURNAL,
plus (ii) 2.5% (250 basis points) per annum.
"DESIGN LIMITS" means, with respect to a Reserved Unit, the
items listed in Appendix A with respect to such Reserved Unit.
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"EFFECTIVE DATE" means the date of this Agreement.
"ELECTRIC ENERGY" has the meaning specified in Section 4(a).
"EMERGENCY CONDITION" means a condition or situation which (i)
in the sole judgment of ComEd (or any ISO) presents an imminent
physical threat of danger to life, or significant threat to health or
property, (ii) in the sole judgment of ComEd (or any ISO) could cause a
significant disruption on or significant damage to the ComEd System (or
any material portion thereof) or the transmission system of a third
party (or any material portion thereof), (iii) in the sole judgment of
Seller could cause significant damage to a Reserved Unit (or any
material portion thereof) or (iv) in the sole judgment of ComEd could
cause significant damage to the equipment located in the switchyard
associated with a Reserved Unit (or any material portion of such
switchyard).
"ENERGY AVAILABILITY ADJUSTMENT FACTOR" means, for a Contract
Year, one minus the sum of (i) the number of Summer Months in such
Contract Year that the Capacity Adjustment Factor was less than 90%,
multiplied by 0.15, plus (ii) the number of Winter Months in such
Contract Year that the Capacity Adjustment Factor was less than 85%,
multiplied by 0.08, plus (iii) the number of Off-Season Months in such
Contract Year that the Capacity Adjustment Factor was less than 80%,
multiplied by 0.04.
All outage hours and derating attributable to ComEd transmission system
problems, outages or stability load restrictions shall be deemed
Available Hours.
"ENERGY CHARGE" means an amount determined under Section
7(a)(ii) in respect of a month.
"EO" means ComEd's Electric Operations Department.
"EO GENERATION DISPATCHER" means the Person so designated from
time to time by ComEd as contemplated in Appendix C. Notice provisions
for the EO Generation Dispatcher are contained in Appendix C.
"FERC" means the Federal Energy Regulatory Commission.
"FORCE MAJEURE EVENT" has the meaning specified in Section
15(a).
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"FORCED OUTAGE" means an unplanned component failure
(immediate, delayed, postponed, startup failure) or other condition
that requires the Unit be removed from service immediately or before
the end of the next weekend.
"GAS-FIRED RESERVED CAPACITY" means, with respect to a
Contract Year, an amount (in megawatts) equal to (i) 643.9 minus (ii)
the aggregate peak capacity (as set forth in Appendix A) of all Units
identified as gas-fired in Appendix A with respect to which this
Agreement has been terminated in accordance with Section 13.
"GOVERNMENTAL ACTION" has the meaning specified in Section
15(a).
"INTERCONNECTION AGREEMENT" means the Facilities,
Interconnection and Easement Agreement dated as of the Effective Date
between ComEd and Seller with respect to the Site at which a Reserved
Unit is located.
"ISO" means any Person that becomes responsible under
applicable FERC guidelines for the transmission system to which the
Units are connected.
"LENDERS" means (i) any person or entity that, from time to
time, has made loans to Seller, its permitted successors or permitted
assigns for the financing or refinancing of the Reserved Units or which
are secured by the Reserved Units, (ii) any holder of such
indebtedness, (iii) any trustee on behalf of any such holders or (iv)
any Person who purchases a Reserved Unit in connection with a
sale-leaseback or other lease arrangement in which the Seller is the
lessee of such Reserved Unit pursuant to a net lease.
"MAIN" means the Mid-America Interconnected Network.
"MAINTENANCE OUTAGE" means the removal of a Unit from service
to perform work on specific components that can be deferred beyond the
end of the next weekend, but requires the Unit be removed from service
before the next Planned Outage. Typically, Maintenance Outages may
occur any time during the year, have flexible start dates, and may or
may not have predetermined durations.
"MINIMUM ENERGY AMOUNT" means, with respect to a Contract
Year, the product of (i) 82,607 megawatt hours, multiplied by (ii) a
fraction, the numerator
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of which is the Gas-Fired Reserved Capacity for such Contract Year and
the denominator of which is the Peak Capacity.
"MINIMUM LOAD" means the "Minimum Operating Level" for a
Reserved Unit (below which it cannot operate in a stable manner) as set
forth in Appendix A. Minimum Load for a Reserved Unit shall be measured
in net megawatts.
"MINIMUM TAKE TRUE-UP" means (i) the product of the Minimum
Energy Amount for a Contract Year, multiplied by the Energy
Availability Adjustment Factor for such Contract Year, multiplied by
the megawatt hour charge for gas-fired energy for such Contract Year,
as determined from the table in Section 7(a)(ii), less (ii) the
aggregate amounts paid or payable by ComEd to Seller under Section
7(a)(ii) in respect of the months (including, in the case of the First
Contract Year, any partial month) constituting such Contract Year.
"MONTHLY CAPACITY CHARGE" means an amount determined under
Section 7(a)(i) in respect of a month.
"NERC" means the North American Electric Reliability Council.
"NON-SUMMER CAPACITY CHARGE" means (i) $1,200 per
megawatt-month during the First through Third Contract Years and (ii)
$1,500 per megawatt-month during the Fourth and Fifth Contract Years.
"NON-SUMMER CAPACITY PAYMENT" means, for a Non-Summer Month,
the sum of the following calculations for each Reserved Unit during
such month: the product of (i) the Net Dependable Capacity of such
Reserved Unit as set forth in Appendix B, multiplied by (ii) the
quotient of (a) the Capacity Adjustment Factor for such month, divided
by (b) 100, multiplied by (iii) the Non-Summer Capacity Charge for such
month.
"NON-SUMMER MONTH" means any month other than a Summer Month.
"PEAK CAPACITY" means 1,117.3 megawatts.
"OFF-SEASON MONTH" means each month which is neither a Summer
Month nor a Winter Month.
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"PEAK CAPACITY CHARGE" means (i) $16,500 per megawatt-month
during the First through Third Contract Years and (ii) $28,500 per
megawatt-month during the Fourth and Fifth Contract Years.
"PEAK OPERATION BONUS" means, with respect to a Reserved Unit
during a month, the value obtained from the following:
PEAKER OPERATION BONUS
----------------------
If such Reserved Unit operated
at peak following a dispatch
to peak by ComEd (RUPR-RUBC) x Peak Capacity Charge
If such Reserved Unit is not
dispatched to peak Zero
For purposes of the foregoing, "RUPR" means such Reserved Unit's peak
rating during such month; and "RUBC" means such Reserved Unit's Net
Dependable Capacity as set forth in Appendix A.
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company,
trust, unincorporated organization, entity, government or other
political subdivision.
"PLANNED OUTAGE" means the removal of a Unit from service to
perform work on specific components that is scheduled well in advance
and has a predetermined start date and duration (e.g., annual overhaul,
inspections or testing).
"POINT OF DELIVERY" means the point of Electric Energy
delivery from the Site on which the Reserved Unit is located to the
ComEd System specified in the Interconnection Agreement.
"PRUDENT UTILITY PRACTICE" means any of the practices, methods
and acts required or approved by any ISO or engaged in or approved by a
significant portion of the electric utility industry in the United
States of America during the relevant time period, or any of the
practices, methods and acts which, in the
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exercise of reasonable judgment in light of the facts known at the time
the decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. "Prudent Utility
Practice" is not intended to be limited to the optimum practice, method
or act to the exclusion of all others, but rather to be acceptable
practices, methods or acts generally accepted in the United States of
America.
"REQUIREMENT OF LAW" means any foreign, federal, state and
local laws, statutes, regulations, rules, codes or ordinances enacted,
adopted, issued or promulgated by any federal, state, local or other
governmental authority or regulatory body (including those pertaining
to electrical, building, zoning, environmental and occupational safety
and health requirements) or a tariff filed with any federal, state,
local or other governmental authority or regulatory body.
"RESERVED CAPACITY" means, with respect to a Contract Year, an
amount (in megawatts) equal to (i) 943.6 megawatts minus (ii) the
aggregate Net Dependable Capacity (as set forth in Appendix A) of all
Units with respect to which this Agreement has been terminated in
accordance with Section 13.
"RESERVED UNIT" means each, and "RESERVED UNITS" means all,
Units except those Units with respect to which this Agreement has been
terminated in accordance with Section 13.
"SELLER'S EVENT OF DEFAULT" has the meaning specified in
Section 14(a).
"SITE" means, with respect to a Reserved Unit, the real
property on which such Reserved Unit is located.
"SUBSTITUTE UNIT" means a combustion turbine generating unit
which is located at the same Site as the Reserved Unit which such unit
is proposed to replace and is not a Reserved Unit under this Agreement
at the time in question.
"SUMMER CAPACITY CHARGE" means (i) $7,600 per megawatt-month
during the First through Third Contract Years and (ii) $9,500 per
megawatt-month during the Fourth and Fifth Contract Years.
"SUMMER CAPACITY PAYMENT" means, for a Summer Month, the sum
of the following calculations for each Reserved Unit during such month:
the
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product of (i) the Net Dependable Capacity of such Reserved Unit as
set forth in Appendix A, multiplied by (ii) the quotient of (a) the
Capacity Adjustment Factor for such month plus ten, divided by (b) 100,
multiplied by (iii) the Summer Capacity Charge for such month.
"SUMMER MONTH" means each of June, July, August and September.
"SUMMER PERIOD" means the period from May 15 through September
15.
"TERM" has the meaning specified in Section 2.
"TERMINATION DATE" means the earlier of (i) the day
immediately preceding the fifth anniversary of the Effective Date if
the Effective Date is the first day of a month and otherwise the day
immediately preceding the fifth anniversary of the first day of the
month immediately following the Effective Date and (ii) the date on
which this Agreement is terminated by a Party pursuant to its terms.
"UNIT" means a combustion turbine generating unit listed on
Appendix A.
"WINTER MONTH" means each of January and February.
(b) INTERPRETATION. In this Agreement, unless a clear
contrary intention appears:
(i) the singular includes the plural and vice versa;
(ii) reference to any Person includes such Person's
successors and assigns but, in the case of a Party, only if such
successors and assigns are permitted by this Agreement, and
reference to a Person in a particular capacity excludes such Person in
any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including this Agreement),
document, instrument or tariff means such agreement, document,
instrument or tariff as amended or modified and in effect from time to
time in accordance with the terms thereof and, if applicable, the terms
hereof;
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(v) reference to any Requirement of Law means such
Requirement of Law as amended, modified, codified or reenacted, in
whole or in part, and in effect from time to time, including, if
applicable, rules and regulations promulgated thereunder;
(vi) reference to any Section or Appendix means such Section
of this Agreement or such Appendix to this Agreement, as the case may
be, and references in any Section or definition to any clause means
such clause of such Section or definition;
(vii) "hereunder", "hereof", "hereto" and words of similar
import shall be deemed references to this Agreement as a whole and not
to any particular Section or other provision hereof or thereof,
(viii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term; and
(ix) relative to the determination of any period of time,
"from" means "from and including", "to" means "to but excluding" and
"through" means "through and including".
(c) LEGAL REPRESENTATION OF PARTIES. This Agreement was
negotiated by the Parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring this Agreement to be
construed or interpreted against any Party shall not apply to any construction
or interpretation hereof or thereof.
(d) TITLES AND HEADINGS. Section and Appendix titles and
headings in this Agreement are inserted for convenience of reference only and
are not intended to be a part of, or to affect the meaning or interpretation of,
this Agreement.
2. TERM
This Agreement shall have a term (the "TERM") commencing on
the Effective Date and ending on the Termination Date. The provisions of
Sections 6(e) (Fuel Source and Emissions Reports), 6(f) (Records), 10
(Limitation of Liability), 11 (Disagreements), 14 (Default, Termination and
Remedies), and 16 (Indemnification) shall survive the termination of this
Agreement.
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3. GENERATING CAPACITY
Subject to the terms and conditions of this Agreement, Seller
shall, consistent with Prudent Utility Practice, cause the aggregate peak
capacity of the Reserved Units during a Contract Year to be not less than the
Reserved Capacity for such Contract Year.
4. ELECTRIC ENERGY SUPPLY
(a) CHARACTER. All electric energy which Seller shall
sell and deliver to ComEd from a Reserved Unit (or a Substitute Unit) hereunder
(such electric energy being referred to herein as the "ELECTRIC ENERGY") shall
be consistent with the requirements of Section 5.7 of the Interconnection
Agreement.
(b) SUPPLY. Subject to the terms and conditions of this
Agreement, Seller shall make available at the Point of Delivery to ComEd for
delivery and sale, and ComEd may receive and purchase from Seller, Electric
Energy. If a Reserved Unit is not Available, Seller may use a Substitute Unit
to fulfil such obligation. ComEd shall not be obligated to receive or purchase
any Electric Energy from Seller except such Electric Energy as is dispatched by
ComEd pursuant to Section 4(c).
(c) DISPATCH. ComEd may dispatch the delivery of
Electric Energy from each Reserved Unit (or Substitute Unit) in accordance with
the provisions set forth in Appendix C at a rate up to the Net Dependable
Capacity indicated in Appendix A for such Reserved Unit or the Net Dependable
Capacity of such Substitute Unit, as the case may be (or such greater or lesser
rate as Seller may from time to time declare to be Available in accordance with
Section 3 of Appendix C), at any time when such Net Dependable Capacity is so
declared by Seller to be Available; although ComEd reserves the right to
dispatch such Reserved Unit at a rate up to its peak capacity as set forth in
Appendix A.
(d) ENERGY IMBALANCE. ComEd shall hold Seller harmless
from any energy imbalance charges that result from ComEd's dispatch orders under
this Agreement.
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5. METERING; BILLING; PAYMENT
(a) METERING. All Electric Energy delivered by Seller to
ComEd from the Reserved Units under this Agreement shall be metered at billing
meter installations provided, installed, owned, maintained and tested as
provided in Section 5.18 of the Interconnection Agreement. At Sellers option
and expense, back-up meters and associated metering equipment independent of
the Metering Equipment may be installed at the Sites; and such back-up meters
and metering equipment shall be used in accordance with the practices and
procedures established by the Parties for billing adjustments of discovered
billing meter inaccuracies. Any such back-up meters may be tested by ComEd at
Seller's expense, and any inaccuracies shall be handled as provided in Section
5.18 of the Interconnection Agreement. In the event that ComEd's billing meters
are not in service, ComEd will use meter information from the meters it uses
for dispatch for the period that the billing meters are unavailable and provide
the information to Seller. As soon as practicable but in any event no later
than five Business Days after the end of each calendar month, ComEd shall
provide Seller with information from the billing meter installations for
Seller's use in preparing billing statements and Seller shall have the right to
witness such meter readings and testing.
(b) METER INACCURACIES. ComEd shall provide to Seller
copies of all routine meter calibration test results. If any test of the
billing meters by ComEd or Seller discloses an inaccuracy of more than 0.5%
fast or 0.5% slow, then a billing adjustment shall be made to correct for the
inaccuracy. For purpose of the billing adjustment, if the inaccuracy is
traceable to a specific event or occurrence at a reasonably ascertainable time,
then the adjustment shall extend back to that time; otherwise, it shall be
assumed that the error has existed for a period equal to one-half of the time
elapsed since the meter was installed or one-half of the time since the last
meter test, whichever is later. At any metering location, should the billing
meter at any time fail to register, the delivered Electric Energy shall be
determined by ComEd from the best available data, unless Seller objects within
30 days. Such disagreements shall be resolved pursuant to Section 11.
(c) BILLING. As soon as practicable after the end of
each calendar month during the Term and after the Termination Date, Seller
shall render a statement to ComEd for the amounts due in respect of such month
under Section 7, which statement shall contain reasonable detail showing the
manner in which the Monthly Capacity Charge, Energy Charge, Peak Operation
Bonus and any Minimum Take True-Up were determined.
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▇▇▇▇▇▇▇▇ for Electric Energy shall be based on ComEd revenue
quality meter information or, if such meters are not yet in service, on
information from the meters that ComEd uses for dispatch. The amount due to
Seller as shown on any such monthly statement rendered by Seller shall be paid
by ComEd within fifteen Business Days after the date such statement is rendered
to ComEd by electronic means to an account specified by Seller. Any amount not
paid when due shall bear interest from the due date until paid at the Default
Rate.
(d) BILLING DISPUTES.
(i) If ComEd questions or contests the amount of any
amount claimed by Seller to be due under Section 7 of this Agreement,
ComEd shall make such payment under protest and thereafter shall be
reimbursed by Seller for any amount in error after resolution of the
dispute in accordance with Section 5(d)(ii).
(ii) In the event that ComEd, by timely notice to Seller,
questions or contests the correctness of any charge or payment claimed
to be due by Seller, Seller shall promptly review the questioned charge
or payment and shall notify ComEd, within fifteen Business Days
following receipt by Seller of such notice from ComEd, of the amount of
any error and the amount of any reimbursement that ComEd is entitled to
receive in respect of such alleged error. Any disputes not resolved
within fifteen Business Days after Seller's receipt of notice from
ComEd shall be resolved in accordance with Section 11. Upon
determination of the correct amount of any reimbursement, such amount
shall be promptly paid by Seller.
(iii) Reimbursements made by Seller to ComEd under this
Section 5(d) shall include interest from the date the original payment
was made until the date such reimbursement together with interest is
made, which interest shall accrue at the Default Rate.
6. OPERATION OF RESERVED UNITS
(a) STANDARD OF OPERATION. Consistent with Prudent
Utility Practice, Seller shall operate each Reserved Unit in accordance with
(i) the applicable practices, methods, acts, guidelines, standards and criteria
of MAIN, NERC, any ISO and any successors to the functions thereof; (ii) the
requirements of the Interconnection Agreement; and (iii) all applicable
Requirements of Law. Seller will maintain all
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certifications, permits, licenses and approvals necessary to operate and
maintain each Reserved Unit and to perform its obligations under this Agreement
during the Term.
(b) ELECTRIC ENERGY GENERATION.
(i) During a Contract Year, ComEd shall have the right
to receive and purchase Electric Energy represented by the Reserved
Capacity of each Reserved Unit for such Contract Year. To the extent
that ComEd has not dispatched the full Reserved Capacity of the
Reserved Units and the EO Generation Dispatcher has released such
capacity, Seller may sell the electric energy represented by such
undispatched Reserved Capacity to third parties; PROVIDED, HOWEVER,
that any such sales to third parties shall be cancelable by Seller upon
not more than ten minutes notice; PROVIDED FURTHER that Seller shall be
responsible for arranging transmission service for any deliveries of
electric energy contemplated by any such sales to third parties (it
being understood that this Agreement does not grant any rights of
access to, or use of, any transmission service); and PROVIDED FURTHER
that the delivery of electric energy contemplated by any such sales to
third parties shall be in accordance with the provisions of the
Interconnection Agreement. Seller shall schedule the sale of any energy
so released through EO and shall respond to any recall of such energy
by EO within the applicable time period specified in this Section
6(b)(i). No sales of electric energy shall be made to any Person from a
Reserved Unit (or any portion thereof) declared by Seller to be not
Available.
(ii) In the event that a Reserved Unit shall have electric
generation capacity in excess of its Net Dependable Capacity set forth
in Appendix A, Seller may offer and sell such capacity and associated
electric energy to third parties on such terms as Seller shall
determine in its sole discretion. Seller shall be responsible for
arranging transmission service for any deliveries of electric energy
contemplated by any such sales to third parties (it being understood
that this Agreement does not grant any rights of access to, or use of,
any transmission service); and the delivery of electric energy
contemplated by any such sales to third parties shall be in accordance
with the provisions of the Interconnection Agreement; and Seller shall
schedule the sale of any energy so released through EO and shall
respond to any recall of such energy by EO within the applicable time
period specified in Section 6(b)(i). It is further understood that, in
the event that any such sales to third parties shall be made and there
shall be a derating in the associated Reserved Unit, such sales shall
be curtailed in full before any
14
curtailment of Electric Energy dispatched by ComEd from such Reserved
Unit as a result of such derating.
(iii) Seller may not sell Ancillary Services with respect
to any undispatched Reserved Capacity referred to in Section 6(b)(i) or
with respect to any excess capacity referred to in Section 6(b)(ii).
(c) OUTAGES
(i) PLANNED OUTAGES. On or prior to the Effective Date,
Seller shall submit to ComEd a proposed schedule of Planned Outages
(including Planned Deratings) scheduled by Seller for the following
three Contract Years for the Reserved Units, which schedule shall be
supplemented by Seller every six months following the Effective Date
by notice to the EO Generation Dispatcher to extend the period covered
by such schedule by six months; PROVIDED, HOWEVER, that no Planned
Outage may be scheduled to cover any portion of a Summer Period. Such
schedule, and each supplement thereto, shall indicate the planned
start and completion dates for each Planned Outage shown during the
period covered thereby and the amount of generating capacity that will
be affected. Within sixty days of receipt of such schedule or any
supplement thereto, ComEd may request reasonable modifications
therein. Seller and ComEd shall work together to schedule Planned
Outages to meet their mutual requirements; however, it is understood
that in the event of a disagreement on such scheduling, ComEd will
have the right to resolve such disagreements as it reasonably
determines to be appropriate in accordance with Prudent Utility
Practice. In addition, ComEd may at any time request, and Seller shall
make, changes to such schedule or any such supplement if ComEd deems
such changes to be necessary, PROVIDED THAT, Seller shall not be
required in connection with any such changes to split a single Planned
Outage into more than one outage or to reduce the duration of a
Planned Outage; PROVIDED FURTHER that, except for changes requested
during the first six months of the Term, such changes do not affect
any Planned Outages during the six months immediately following
Seller's receipt of such request; and PROVIDED FURTHER, that if Seller
reasonably incurs increased costs as a result of ComEd's request to
reschedule a Planned Outage, ComEd shall reimburse Seller for the
actual, documented increased out-of-pocket costs. At least one week
prior to any Planned Outage, Seller shall orally notify the EO
Generation Dispatcher of the expected start date of such Planned
Outage, the amount of generating capacity at the Reserved Units which
will not be available to ComEd during such Planned Outage, and the
expected
15
completion date of such Planned Outage. Seller shall orally notify the
EO Generation Dispatcher promptly of any subsequent changes in such
generating capacity not available or any subsequent changes in the
Planned Outage completion date. As soon as practicable, all such oral
notifications shall be confirmed in writing.
(ii) MAINTENANCE OUTAGES. To the extent that during any
Contract Year Seller needs to schedule a Maintenance Outage, Seller
shall notify the EO Generation Dispatcher of such outage and shall plan
such outage of generating capacity and use reasonable efforts to
accommodate the requirements and service obligations of ComEd. Notice
of a proposed Maintenance Outage shall include the expected start date
of the outage, the amount of unavailable generating capacity of the
Reserved Units and the expected completion date of the outage, and
shall be given to ComEd at the time the need for the outage is
determined by Seller. ComEd shall promptly respond to such notice and
may request reasonable modifications in the schedule for the outage to
accommodate the requirements and service obligations of ComEd. Seller
shall use reasonable efforts to comply with such requested
modifications; and shall, if requested by ComEd, reschedule its
Maintenance Outages, PROVIDED THAT it may do so in accordance with
Prudent Utility Practice. Seller shall notify the EO Generation
Dispatcher promptly of any subsequent changes in such generating
capacity not available to ComEd or any subsequent changes in such
outage completion date. As soon as practicable, any such notifications
given orally shall be confirmed in writing.
(iii) FORCED OUTAGES. Seller shall provide to the EO
Generation Dispatcher immediately an oral report of any Forced Outage
(including Forced Deratings) of the Reserved Units, which report shall
include the amount of generating capacity at the Reserved Units
unavailable because of such Forced Outage and the expected return date
of such generating capacity, and shall update such report by notice to
the EO Generation Dispatcher promptly as necessary to advise ComEd of
changed circumstances. As soon as practicable, all such oral reports
shall be confirmed in writing.
(iv) INFORMATION RELATED TO OUTAGES. In addition to the
foregoing, Seller shall provide to ComEd information relating to
outages of generating capacity at the Reserved Units which would affect
Seller's ability to deliver Electric Energy from such Units.
16
(d) OPERATING CHARACTERISTICS. The operating
characteristics of each Reserved Unit shall be consistent with the Design
Limits for such Reserved Unit set forth in Appendix A unless otherwise mutually
agreed by the Parties. Any changes to such operating characteristics which may
affect the delivery of Electric Energy pursuant to this Agreement must be
agreed by the Parties. Seller shall reduce, curtail or interrupt electrical
generation at the Reserved Units in accordance with Prudent Utility Practice or
take other appropriate action in accordance with the applicable provisions of
the Interconnection Agreement which in the reasonable judgment of ComEd may be
necessary to operate, maintain and protect the ComEd System or the transmission
system of another utility during an Emergency Condition or in the reasonable
judgment of Seller may be necessary to operate, maintain and protect the
Reserved Units during an Emergency Condition.
(e) FUEL SOURCE AND EMISSIONS REPORTS. Seller shall
provide ComEd with information concerning Seller's fuel sources and emissions
(including carbon dioxide, nitrous oxides and sulfur dioxide emissions) as
reasonably requested by ComEd in order to allow ComEd to meet its statutory
reporting obligations (including those reporting obligations imposed by Section
16-127 of the Illinois Public Utilities Act and associated rules of the Illinois
Commerce Commission) in respect of such information to governmental bodies,
customers or other Persons.
(f) RECORDS. Each Party shall keep and maintain all
records as may be necessary or useful in performing or verifying any
calculations or charges made pursuant to this Agreement, or in verifying such
Party's performance hereunder. All such records shall be retained by each Party
for at least three calendar years following the calendar year in which such
records were created. Each Party shall make such records available to the other
Party for inspection and copying at the other Party's expense, upon reasonable
notice during such Party's regular business hours. Each Party and its agents,
including auditors, shall have the right, upon thirty days written notice prior
to the end of an applicable three calendar year period to request copies of
such records. Each Party shall provide such copies, at the other Party's
expense, within thirty days of receipt of such notice or shall make such
records available to the other Party and its agents, including auditors, in
accordance with the foregoing provisions of this Section.
7. COMPENSATION
(a) MONTHLY CHARGES. ComEd shall pay to Seller, in
respect of each calendar month during the Term, the following amounts:
17
(i) MONTHLY CAPACITY CHARGE. A Monthly Capacity Charge
equal to the Summer Capacity Payment, if such month is a Summer Month,
or the Non-Summer Capacity Payment, if such month is a Non-Summer
Month; PROVIDED, HOWEVER, if the first month of the First Contract
Year is a partial month (as a result of the Effective Date occurring
during a month), the amount payable under this Section 7(a)(i) in
respect of such partial month shall be prorated by multiplying it by a
fraction, the numerator of which is the number of days from the
Effective Date through the last day of such month and the denominator
of which is the total number of days in such month.
(ii) ENERGY CHARGE. An amount equal to the product of (x)
the Electric Energy (expressed in megawatt hours) sold to ComEd under
this Agreement during such month multiplied by (y) the megawatt hour
charge applicable to such Electric Energy as determined from the
following table:
OIL-FIRED ENERGY GAS-FIRED ENERGY
CONTRACT MEGAWATT HOUR MEGAWATT HOUR
YEAR CHARGE ($/MEGAWATT CHARGE ($/MEGAWATT
HOUR)(1) HOUR)(2)
============================================================================
1 $75 $40
2 80 45
3 85 50
4 90 55
5 95 60
----------
(1) Applicable to ▇▇▇▇, Waukegan and Bloom.
(2) Applicable to ▇▇▇▇▇▇▇▇, Calumet, Joliet, Electric Junction,
Lombard and Sabrooke.
(iii) An amount equal to the sum of the following
calculations for each Reserved Unit during a given month: the product
of (1) the number of megawatt hours during such month that such
Reserved Unit is operated at the request of ComEd within the range set
forth opposite generating units of the same type as such Reserved Unit
(I.E., gas-fired or oil-fired) in the following
18
table, multiplied by (2) the Low Load Charge set forth opposite such
unit in the following table; PROVIDED, HOWEVER, that no Low Load
Charge shall be due if, due to derating (not directed by ComEd), the
Reserved Unit is unable to operate above the Low Load Range specified
in the table below.
=================================================================================
Peaking Unit Load Range Low Load Charge
(Net MWs) ($ per Megawatt-hour)
=================================================================================
Gas-Fired(1) 0 - (2 x Minimum Load) $26
Gas-Fired(1) (2 x Minimum Load) - 12
(3.5 x Minimum Load)
Oil-Fired(2) 0 - Minimum Load 48
Oil-Fired(2) Minimum Load - 22
(2 x Minimum Load)
---------------------------------------------------------------------------------
(1) Applicable to ▇▇▇▇▇▇▇▇, Calumet, Joliet, Electric Junction,
Lombard and Sabrooke.
(2) Applicable to ▇▇▇▇, Waukegan and Bloom.
(iv) PEAK OPERATION BONUS. An amount equal to the Peak
Operation Bonus, if any, in respect of the Reserved Units.
(v) ANCILLARY SERVICES. There shall not be any
additional charges payable by ComEd or otherwise in respect of the
Ancillary Services described in Section 9.
(b) MINIMUM TAKE TRUE-UP. The amount otherwise payable
under Section 7(a)(ii) in respect of the last month of a Contract Year shall be
subject to upward adjustment to reflect the Minimum Take True-Up, if any.
8. TESTING
Capability evaluations of the Reserved Units may be conducted
by ComEd at reasonable intervals. Such evaluations shall consist of a period of
one hour during which ComEd may request the Net Dependable Capacity of a
Reserved Unit (as set forth in Appendix A) to generate Electric Energy for
delivery to the ComEd System. Once a test period has been initiated, it must
last one hour unless ComEd and the
19
general manager for the Reserved Units mutually agree to a shorter duration. In
addition, ComEd may request not more than once per Contract Year that a
Reserved Unit undergo a generating test as specified in Guide No. 3A of MAIN (a
copy of which is attached as Appendix B). No tests will be conducted or
continued which, in the opinion of Seller, should not be conducted or continued
in accordance with Prudent Utility Practice. If Seller prevents or discontinues
a test in accordance with Prudent Utility Practice, ComEd shall have the right
to retest the affected Reserved Unit upon prior notice to Seller. Seller shall
have the right to retest any Reserved Unit after the failure of any test
performed at the request of ComEd pursuant to this Section 8.
9. ANCILLARY SERVICES
As directed by ComEd, Seller shall provide the following
additional services (the "ANCILLARY SERVICES") with respect to the Reserved
Capacity:
(a) Reactive supply and voltage control from generation
sources
(b) Regulation and frequency response
(c) Operating reserve - spinning
(d) Operating reserve - supplemental
The requirements of these services shall be as stated in ComEd's Open Access
Transmission Tariff as filed with FERC, and any requirements of MAIN, NERC, any
ISO and any successors to the functions thereof.
10. LIMITATION OF LIABILITY
In no event or under any circumstances shall either Party
(including such Party's affiliates and such Party's and such affiliates'
respective directors, officers, employees and agents) be liable to the other
Party (including such Party's affiliates and such Party's and such affiliate's
respective directors, officers, employees and agents) for any special,
incidental, exemplary, indirect, punitive or consequential damages or damages
in the nature of lost profits, whether such loss is based on contract, warranty
or tort (including intentional acts, errors or omissions, negligence,
indemnity, strict liability or otherwise). A Party's liability under this
Agreement shall be limited to direct, actual damages, and all other damages at
law or in equity are waived.
Notwithstanding the foregoing provisions of this Section or
any other Section hereof, if
20
(i) ComEd dispatches the delivery of Electric Energy
from a Reserved Unit in accordance with the provisions hereof (other
than during a ComEd Event of Default under Section 14(b)(i)) and
Seller fails to provide the Electric Energy so dispatched by ComEd, or
(ii) if Seller falls to declare a Reserved Unit Available
at its Net Dependable Capacity (as set forth in Appendix A),
and, during such failure, Seller sells or provides electric energy from the
Reserved Unit to any Person other than ComEd (including Seller but excluding
provision or use of electric energy by Seller solely for use at the Site), ComEd
shall, in addition to any rights it has to an adjustment of payments otherwise
due hereunder or to terminate this Agreement, be entitled to reimbursement by
Seller for all of ComEd's out-of-pocket costs related to or resulting from such
failure by Seller, including:
(w) the costs to purchase and transmit electric energy in
substitution for the subject Electric Energy to the extent such costs exceed the
costs that would have been due hereunder had, in the case of a failure under
clause (i) above, Seller provided the Electric Energy dispatched by ComEd, or
the costs to purchase and transmit electric energy in substitution for the Net
Dependable Capacity (as set forth in Appendix A) from the subject Reserved Unit
to the extent such costs exceed the costs that would have been due hereunder
had, in the case of a failure under clause (ii) above, Seller declared such
Reserved Unit Available and ComEd had dispatched Electric Energy from such
Reserved Unit in each case in an amount inclusive of the electric energy sold to
such Person;
(x) any and all amounts paid (whether in the form of cash
payments, ▇▇▇▇ credits, tariff adjustments or otherwise) by ComEd to its
customers pursuant to statute, tariff or order of a tribunal of competent
jurisdiction or other Requirement of Law because ComEd was unable to provide
electric energy to any of its customers to the extent that all or any part of
such inability could reasonably have been expected to have been avoided absent
such failure by Seller;
(y) attorneys', consultants' and witnesses' fees incurred
by ComEd in connection with a regulatory or judicial investigation or proceeding
of any kind related to or resulting from an inability of ComEd to provide
electric energy to any of its customers to the extent that all or any part of
such inability could reasonably have been expected to have been avoided absent
such failure by Seller; and
21
(z) any other amounts owed to third parties because of
ComEd's inability to deliver electric energy if all or any part of such
inability could reasonably have been expected to have been avoided absent such
failure by Seller.
In addition, if ComEd is unable to provide electric energy to any customer or
third party and all or part of such inability could reasonably have been
expected to have been avoided absent such failure by Seller, ComEd will suffer
significant damages in addition to its out-of-pocket costs, the quantification
of which is difficult to ascertain. Accordingly, if ComEd is unable to provide
electric energy to any customer or third party and all or any part of such
inability could reasonably have been expected to have been avoided absent such
failure by Seller, and, during such failure by Seller, Seller sells or provides
electric energy from the subject Reserved Unit to any person other than ComEd
(including Seller but excluding provision or use of electric energy by Seller
solely for use at the Site), Seller shall pay for each occurrence, in addition
to the out-of-pocket costs described above, liquidated damages to ComEd in the
amount of $25,000 for each megawatt of Net Dependable Capacity (as set forth in
Appendix A) for the relevant Reserved Unit.
11. DISAGREEMENTS.
(a) ADMINISTRATIVE COMMITTEE PROCEDURE. Except to the
extent otherwise provided in Section 5(d), if any disagreement arises on matters
concerning this Agreement, the disagreement shall be referred to one
representative of each Party, who shall attempt to timely resolve the
disagreement. If such representatives can resolve the disagreement, such
resolution shall be reported in writing to and shall be binding upon the
Parties. If such representatives cannot resolve the disagreement within a
reasonable time, or a Party fails to appoint a representative within 10 days of
written notice of the existence of a disagreement, then the matter shall proceed
to arbitration as provided in Section 11(b).
(b) ARBITRATION. If pursuant to Section 11(a), the
Parties are unable to resolve a disagreement arising on a matter pertaining to
this Agreement, such disagreement shall be settled by arbitration in Chicago,
Illinois. The arbitration shall be governed by the United States Arbitration
Act (9 U.S.C. Section 1 ET SEQ.), and any award issued pursuant to such
arbitration may be enforced in any court of competent jurisdiction. This
agreement to arbitrate and any other agreement or consent to arbitrate entered
into in accordance herewith will be specifically enforceable under the
prevailing arbitration law of any court having jurisdiction. Notice of demand
for arbitration must
22
be filed in writing with the other Party to this Agreement. Arbitration shall
be conducted as follows:
(i) Either Party may give the other Party written notice
in sufficient detail of the disagreement and the specific provision of
this Agreement under which the disagreement arose. The demand for
arbitration must be made within a reasonable time after the
disagreement has arisen. In no event may the demand for arbitration be
made if the institution of legal or equitable proceedings based on such
disagreement is barred by the applicable statute of limitations. Any
arbitration related to this Agreement may be consolidated with any
other arbitration proceedings related to this Agreement.
(ii) The Parties shall attempt to agree on a person with
special knowledge and expertise with respect to the matter at issue to
serve as arbitrator. If the Parties cannot agree on an arbitrator
within ten days, each shall then appoint one person to serve as an
arbitrator and the two thus appointed shall select a third arbitrator
with such special knowledge and expertise to serve as Chairman of the
panel of arbitrators; and such three arbitrators shall determine all
matters by majority vote; PROVIDED HOWEVER, if the two arbitrators
appointed by the Parties are unable to agree upon the appointment of
the third arbitrator within five days after their appointment, both
shall give written notice of such failure to agree to the Parties, and,
if the Parties fail to agree upon the selection of such third
arbitrator within five days thereafter, then either of the Parties upon
written notice to the other may require appointment from, and pursuant
to the rules of, the Chicago office of the American Arbitration
Association for commercial arbitration. Prior to appointment, each
arbitrator shall agree to conduct such arbitration in accordance with
the terms of this Agreement.
(iii) The Parties shall have sixty days from the
appointment of the arbitrator(s) to perform discovery and present
evidence and argument to the arbitrator(s). During that period, the
arbitrator(s) shall be available to receive and consider all such
evidence as is relevant and, within reasonable limits due to the
restricted time period, to hear as much argument as is feasible,
giving a fair allocation of time to each Party to the arbitration.
The arbitrator(s) shall use all reasonable means to expedite
discovery and to sanction noncompliance with reasonable discovery
requests or any discovery order. The arbitrator(s) shall not consider
any evidence or argument not presented during such period and shall not
extend such period except by the written consent of both Parties. At
the conclusion of such period, the arbitrator(s) shall have forty-five
calendar days
23
to reach a determination. To the extent not in conflict with the
procedures set forth herein, which shall govern, such arbitration shall
be held in accordance with the prevailing rules of the Chicago office
of the American Arbitration Association for commercial arbitration.
(iv) The arbitrator(s) shall have the right only to
interpret and apply the terms and conditions of this Agreement and to
order any remedy allowed by this Agreement, but may not change any term
or condition of this Agreement, deprive either Party or any right or
remedy expressly PROVIDED HEREUNDER, or provide any right or remedy
that has been expressly excluded hereunder.
(v) The arbitrator(s) shall give a written decision to
the Parties stating their findings of fact and conclusions of law, and
shall furnish to each Party a copy thereof signed by him (them) within
five calendar days from the date of their determination. The
arbitrator's(s') decision shall be final and binding upon the Parties.
(vi) Each Party shall pay the cost of the arbitrator(s)
with respect to those issues as to which they do not prevail, as
determined by the arbitrator(s).
(c) OBLIGATIONS TO PAY CHARGES AND PERFORM. If a
disagreement should arise on any matter which is not resolved as provided in
Section 11(a), then, pending the resolution of the disagreement by arbitration
as provided in Section 11(b), Seller shall continue to operate the Reserved
Units in a manner consistent with the applicable provisions of this Agreement
and ComEd shall continue to pay all charges and perform all other obligations
required in accordance with the applicable provisions of this Agreement.
(d) PRELIMINARY INJUNCTIVE RELIEF. Nothing in this
Section 11 shall preclude, or be construed to preclude, the resort by either
Party to a court of competent jurisdiction solely for the purposes of securing a
temporary or preliminary injunction to preserve the status quo or avoid
irreparable harm pending arbitration pursuant to this Section 11.
(e) SETTLEMENT DISCUSSIONS. The Parties agree that no
statements of position or offers of settlement made in the course of the dispute
process described in this Section 11 will be offered into evidence for any
purpose in any litigation or arbitration between the Parties, nor will any such
statements or offers of settlement be used in any manner against either Party in
any such litigation or arbitration. Further, no
24
such statements or offers of settlement shall constitute an admission or
waiver of rights by either Party in connection with any such litigation or
arbitration. At the request of either Party, any such written statements and
offers of settlement, and all copies thereof, shall be promptly returned to
the Party providing the same.
12. ASSIGNMENT; TRANSFER OF RESERVED UNITS
(a) ASSIGNMENT. Neither Party may assign its rights or
obligations under this Agreement without the prior written consent of the other
Party, which shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, ComEd shall have the right to assign its rights and obligations
hereunder without the consent of Seller to (i) any entity that has a net worth
of at least $500 million and credit ratings for long-term secured debt from
Standard & Poor's Ratings Group of BBB- or higher and from ▇▇▇▇▇'▇ Investors
Service, Inc. of Baa3 or higher or (ii) any affiliate of ComEd. For the purposes
of this Section 12(a), any direct transfer or series of direct transfers
(whether voluntary or by operation of law) of a majority of the outstanding
voting equity interests of Seller (or any entity or entities directly or
indirectly holding a majority of the outstanding voting equity interests of
Seller) to any party other than an affiliate controlled by, or under common
control with, Seller shall be deemed an assignment of this Agreement.
(b) COLLATERAL ASSIGNMENT. Notwithstanding the above,
ComEd hereby consents to the assignment by Seller of a security interest in this
Agreement to any Lenders; PROVIDED that Owner shall have provided notice of any
such assignment to ComEd. ComEd further agrees to execute documentation to
evidence such consent, PROVIDED it shall have no obligation to waive any of its
rights under this Agreement. ComEd recognizes that such consent may grant
certain rights to such Lenders, which shall be fully developed and described in
the consent documents, including (i) this Agreement shall not be amended in any
material respect or terminated (except for termination pursuant to the terms of
this Agreement) without the consent of Lenders, which consent as to amendments
shall not be unreasonably withheld or delayed, (ii) Lenders shall be given
notice of, and a reasonable time period (but in no event more than the time
period provided to Seller) to cure, any Seller breach or default of this
Agreement, (iii) if a Lender forecloses, takes a deed in lieu or otherwise
exercises its remedies pursuant to any security documents, that ComEd shall, at
Lender's request, continue to perform all of its obligations hereunder, and
Lender or its nominee may perform in the place of Seller, and may assign this
Agreement to another party in place of Seller (PROVIDED either (i) such proposed
assignee is creditworthy and possesses experience and skill in the operation of
electric generation plants or (ii) ComEd consents
25
to the assignment to such proposed assignee, which consent shall not be
unreasonably withheld (it being understood that ComEd may, in deciding
whether to grant such consent, take into account the creditworthiness and the
electric generation plant experience and skill of the proposed assignee)),
and enforce all of Seller's rights hereunder, (iv) that Lender(s) shall have
no liability under this Agreement except during the period of such Lender(s)'
ownership and/or operation of a Reserved Unit(s), (v) that ComEd shall accept
performance in accordance with this Agreement by Lender(s) or its (their)
nominee, (vi) that ComEd shall make all payments to an account designated by
Lender(s), and (vii) that ComEd shall make representations and warranties to
Lender(s) as Lender(s) may reasonably request with regard to (A) ComEd's
corporate existence, (B) ComEd's corporate authority to execute, deliver, and
perform this Agreement, (C) the binding nature of this Agreement on ComEd,
(D) receipt of regulatory approvals by ComEd with respect to its performance
under this Agreement, and (E) whether any defaults by Owner are known by
ComEd then to exist under this Agreement.
(c) TRANSFER OF RESERVED UNITS DURING THE TERM. Prior to
the Termination Date, Seller shall not sell or otherwise transfer any interest
in the Reserved Units to any Person without first obtaining ComEd's written
consent, which consent shall not be unreasonably withheld or delayed and may be
conditioned upon the transferee's assumption of the obligations of Seller under
this Agreement in respect of the Reserved Units. No such assignment shall
relieve Seller from its obligations hereunder, unless otherwise agreed to by
ComEd in writing. Any such sale or transfer without consent under this Section
12 shall be null and void.
13. TERMINATION BY COMED WITH RESPECT TO CERTAIN GENERATING UNITS
Subject to the notice and other requirements contained in this
Section 13, ComEd shall have the right, in its sole discretion, with respect to
each of the Third Contract Year, the Fourth Contract Year and the Fifth Contract
Year to terminate this Agreement with respect to any of the Units (such rights
to terminate being referred to herein collectively as "TERMINATION OPTIONS" and
individually as a "TERMINATION OPTION"). ComEd may exercise a Termination Option
with respect to the Third, Fourth and/or Fifth Contract Years by providing
written notice of such exercise to Seller by no later than 90 days before the
first day of the applicable Contract Year. Such notice shall contain (i) a
statement that ComEd is exercising a Termination Option or Termination Options
and (ii) the Contract Year or Contract Years with respect to which the
Termination Option or Termination Options being exercised relate. Such
termination(s) shall become effective as of the first day of the earliest
Contract Year with respect to which such termination(s) relate, and at such time
this Agreement shall terminate and
26
be of no further force or effect with respect to the Units so terminated,
PROVIDED THAT, the provisions of Sections 6(e) (Fuel Source and Emissions),
6(f) (Records), 10 (Limitation of Liability), 11 (Disagreements), 14
(Default, Termination and Remedies), and 16 (Indemnification) shall survive
such termination(s), and PROVIDED FURTHER, that any such termination(s) shall
have no effect on this Agreement as it relates to the Units that are not
terminated in accordance with this Section 13.
14. DEFAULT; TERMINATION AND REMEDIES.
(a) SELLER'S DEFAULT. The occurrence and continuation of
any of the following events or circumstances at any time during the Term, except
to the extent caused by, or resulting from, an act or omission of ComEd in
breach of this Agreement, shall constitute an event of default by Seller
("SELLER'S EVENT OF DEFAULT"):
(i) Seller fails to pay any sum due from it hereunder on
the due date thereof and such failure is not remedied within ten
Business Days after receipt of written notice thereof;
(ii) Seller shall without reasonable cause abandon or
wilfully desert for a period in excess of 24 hours whatever control
center is responsible for receiving dispatch orders from ComEd with
respect to the Reserved Units;
(iii) Seller's Bankruptcy; or
(iv) Seller fails in any material respect to perform or
comply with any other obligation in this Agreement on its part to be
observed or performed which failure materially and adversely affects
ComEd, and if reasonably capable of remedy, is not remedied within 60
days after ComEd has given written notice to Seller of such failure and
requiring its remedy; PROVIDED, HOWEVER, that if such remedy cannot
reasonably be cured within such period of 60 days, such failure shall
not constitute a Seller's Event of Default if Seller has promptly
commenced and is diligently proceeding to cure such default.
(b) COMED DEFAULT. The occurrence and continuation of any
of the following events or circumstances at any time during the Term, except to
the extent caused by, or resulting from, an act or omission of Seller in breach
of this Agreement, shall constitute an event of default by ComEd ("COMED EVENT
OF DEFAULT"):
27
(i) ComEd fails to pay any amount due from it pursuant to
Section 7 hereof on the due date thereof and such failure is not
remedied within ten Business Days after receipt of written notice
thereof;
(ii) ComEd fails to pay any sum (other than one set forth
in subsection (i) above) due from it hereunder on the due date thereof
and such failure is not remedied within fifteen days after Seller has
given written notice to ComEd of such failure and requiring its remedy;
(iii) ComEd's Bankruptcy; or
(iv) ComEd fails in any material respect to perform or
comply with any other obligation in this Agreement on its part to be
observed or performed which failure materially and adversely affects
Seller, and if reasonably capable of remedy, is not remedied within 60
days after Seller has given written notice to ComEd of such failure and
requiring its remedy; PROVIDED, HOWEVER, that if such remedy cannot
reasonably be cured within such period of 60 days, such failure shall
not constitute a ComEd Event of Default if ComEd has promptly commenced
and is diligently proceeding to cure such default.
(c) REMEDIES AND REMEDIES CUMULATIVE.
(i) Upon the occurrence and during the continuance of a
ComEd Event of Default or a Seller's Event of Default, the non-
defaulting party may at its discretion (A) terminate this Agreement
upon 30 days prior written notice to the Party in default and (B)
exercise any other rights and remedies available at law or in equity.
(ii) If a ComEd Event of Default under Section 14(b)(i)
has occurred and is continuing, Seller shall have the right to sell
the electric energy represented by the Reserved Capacity on a daily
basis during the continuance of such ComEd Event of Default to third
parties.
(d) EXTENDED OUTAGE. ComEd may terminate this Agreement
upon thirty days prior written notice to Seller if an outage (including an
outage caused by, or resulting from, a Force Majeure Event) at the Reserved
Units prevents Seller from substantially performing its obligations hereunder
for a consecutive period of 120 days, PROVIDED THAT if Seller demonstrates that
it has taken significant steps toward remediating the circumstances which led to
such outage and certifies in writing to
28
ComEd that such outage will end within 300 days of its commencement (and such
outage in fact ends within such 300 days), then ComEd may not so terminate
this Agreement.
(e) TERMINATIONS UNDER SECTION 13. This Agreement shall
terminate at such time as all of the Units are terminated by ComEd in accordance
with Section 13.
5. FORCE MAJEURE
(a) FORCE MAJEURE EVENT. For the purposes of this
Agreement, "FORCE MAJEURE EVENT" means any unforeseeable event, condition or
circumstance beyond the reasonable control of the Party affected (the "AFFECTED
PARTY") which, despite all reasonable efforts of the Affected Party to prevent
it or mitigate its effects, prevents the performance by such Affected Party of
its obligations hereunder. Subject to the foregoing, "Force Majeure Event" shall
include:
(i) explosion and fire (in either case to the extent not
attributable to the negligence of the Affected Party);
(ii) flood, earthquake, storm, or other natural calamity
or act of God;
(iii) strike or other labor dispute;
(iv) war, insurrection or riot;
(v) acts of, or failure to act by, legislative, judicial
or regulatory agencies or officials (collectively, "GOVERNMENTAL
ACTION"); and
(vi) Change of Law.
(b) OBLIGATIONS UNDER FORCE MAJEURE.
(i) If the Affected Party is rendered unable, wholly or
in part, by a Force Majeure Event, to carry out some or all of its
obligations under this Agreement, then, during the continuance of such
inability, the obligation of such Party to perform the obligations so
affected shall be suspended.
(ii) The Affected Party shall give written notice of such
Force Majeure Event to the other Party as soon as practicable after
such event occurs,
29
which notice shall include information with respect to the nature,
cause and date of commencement of the occurrence(s), and the
anticipated scope and duration of the delay. Upon the conclusion of
the Force Majeure Event, the Affected Party shall, with all reasonable
dispatch, take all steps reasonably necessary to resume the
obligation(s) previously suspended.
(iii) Notwithstanding the foregoing, an Affected Party
shall not be excused under this Section 15(b) for (x) any non-
performance of its obligations under this Agreement having a greater
scope or longer period than is justified by the Force Majeure Event or
(y) the performance of obligations that arose prior to the Force
Majeure Event. Nothing contained herein shall be construed as requiring
an Affected Party to settle any strike, lockout or other labor dispute
in which it may be involved.
(c) CONTINUED PAYMENT OBLIGATION. A Party's obligation to
make payments already owing pursuant to this Agreement shall not be suspended by
a Force Majeure Event.
(d) AVAILABILITY. Notwithstanding this Section 15,
outages or deratings of Reserved Units caused by, or attributable to, Force
Majeure Events shall be considered periods that the affected capacity is
Unavailable unless such Force Majeure Event is an event described in clause (ii)
or (iv) of Section 15(a) (in which case, such affected capacity shall be
considered Available at a Capacity Adjustment Factor of 90 for the Summer Months
and 100 for the Non-Summer Months).
6. REPRESENTATIONS AND WARRANTIES
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. Seller
hereby makes the following representations and warranties to ComEd:
(i) Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of
Delaware, is qualified to do business in the State of Illinois and has
the legal power and authority to own its properties, to carry on its
business as now being conducted and to enter into this Agreement and
carry out the transactions contemplated hereby and perform and carry
out all covenants and obligations on its part to be performed under and
pursuant to this Agreement.
30
(ii) The execution, delivery and performance by Seller of this
Agreement have been duly authorized by all necessary corporate action,
and do not and will not require any consent or approval of Seller's
Board of Directors or equity holders other than that which has been
obtained (evidence of which shall be, if it has not heretofore been,
delivered to ComEd).
(iii) 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 or constitute a breach of or a default
under, any of the terms, conditions or provisions of any legal
requirements, or any organizational documents, agreement, deed of
trust, mortgage, loan agreement, other evidence of indebtedness or any
other agreement or instrument to which Seller is a party or by which it
or any of its property is bound, or result in a breach of or a default
under any of the foregoing.
(iv) This Agreement constitutes the legal, valid and binding
obligation of Seller enforceable in accordance with its terms, except
as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement
of creditors' rights generally or by general equitable principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(v) There is no pending, or to the knowledge of Seller,
threatened action or proceeding affecting Seller before any
governmental authority which purports to affect the legality, validity
or enforceability of this Agreement.
(vi) Seller has all governmental approvals necessary for it to
perform its obligations under this Agreement.
(b) REPRESENTATIONS AND WARRANTIES OF COMED. ComEd hereby
makes the following representations and warranties to Seller:
(i) ComEd is a corporation duly organized, validly existing
and in good standing under the laws of the State of Illinois, is
qualified to do business in the State of Illinois and has the legal
power and authority to own its properties, to carry on its business as
now being conducted and to enter into this Agreement and carry out the
transactions contemplated hereby and perform and carry out all
covenants and obligations on its part to be performed under and
pursuant to this Agreement.
31
(ii) The execution, delivery and performance by ComEd of this
Agreement have been duly authorized by all necessary corporate action,
and do not and will not require any consent or approval of ComEd's
Board of Directors or shareholders other than that which has been
obtained (evidence of which shall be, if it has not heretofore been,
delivered to Seller).
(iii) 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 or constitute a breach of or a default
under, any of the terms, conditions or provisions of any legal
requirements, or its articles of incorporation or bylaws, or any deed
of trust, mortgage, loan agreement, other evidence of indebtedness or
any other agreement or instrument to which ComEd is a party or by which
it or any of its property is bound, or result in a breach of or a
default under any of the foregoing.
(iv) This Agreement constitutes the legal, valid and binding
obligation of ComEd enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement
of creditors' rights generally or by general equitable principles,
regardless of whether such enforceability is considered in a proceeding
in equity or at law.
(v) There is no pending, or to the knowledge of ComEd,
threatened action or proceeding affecting ComEd before any governmental
authority which purports to affect the legality, validity or
enforceability of this Agreement.
(vi) ComEd has all governmental approvals necessary for it to
perform its obligations under this Agreement.
7. INDEMNIFICATION
Each Party shall indemnify and hold harmless the other
Party, and its officers, directors, agents and employees from and against any
and all claims, demands, actions, losses, liabilities, expenses (including
reasonable legal fees and expenses), suits and proceedings of any nature
whatsoever for personal injury, death or property damage to each other's
property or facilities or personal injury, death or property damage to third
parties caused by the gross negligence or wilful misconduct of the
indemnifying Party that arise out of or are in any manner connected with the
performance of this Agreement,
32
except to the extent such injury or damage is attributable to the gross
negligence or wilful misconduct of, or breach of this Agreement by, the Party
seeking indemnification hereunder. Title, and all risk relating to, all
Electric Energy purchased by ComEd under this Agreement from a Reserved Unit
shall pass to ComEd at the Point of Delivery for such Reserved Unit. ComEd
shall indemnify Seller for liability from Electric Energy once sold and
delivered at such Point of Delivery; and Seller shall indemnify ComEd for
liability from Electric Energy prior to its delivery at such Point of
Delivery.
8. NOTICES
Unless otherwise provided in this Agreement, any notice,
consent or other communication required to be made under this Agreement shall
be in writing and shall be delivered to the address set forth below or such
other address as the receiving Party may from time to time designate by
written notice:
If to ComEd, to:
Commonwealth Edison Company
One First National Plaza, 37th Floor
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Senior Vice President-Transmission
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Commonwealth Edison Company
Law Department
Room 1535
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Associate General Counsel-
Corporate and Commercial
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
33
If to Seller, to:
Midwest Generation, LLC
One Financial ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Edison Mission Marketing & Trading Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bulk Power Operations
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Edison Mission Energy
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Edison Mission Energy
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Assistant General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
All notices shall be effective when received.
34
9. CONFIDENTIALITY
Each Party agrees that it will treat in confidence all
documents, materials and other information marked "Confidential,"
"Proprietary" or with a similar designation by the disclosing Party
("CONFIDENTIAL INFORMATION") which it shall have obtained during the course
of the negotiations leading to, and its performance of, this Agreement
(whether obtained before or after the date of this Agreement). Confidential
Information shall not be communicated to any third party (other than, in the
case of Seller, to its affiliates, to its counsel, accountants, financial or
tax advisors, or insurance consultants, to prospective partners and other
investors in Seller and their counsel, accountants, or financial or tax
advisors, or in connection with any financing or refinancing, or its
permitted assignees or transferees; and in the case of ComEd, to its
affiliates, or to its counsel, accountants, financial advisors, tax advisors
or insurance consultants, or its permitted assignees or transferees). As used
herein, the term "Confidential Information" shall not include any information
which (i) is or becomes available to a Party from a source other than the
other Party, (ii) is or becomes available to the public other than as a
result of disclosure by the receiving Party or its agents or (iii) is
required to be disclosed under applicable law or judicial, administrative or
regulatory process, but only to the extent it must be disclosed.
10. GOVERNING LAW
Except as provided in Section 11, this Agreement shall be
deemed to be an Illinois contract and shall be construed in accordance with
and governed by the laws of Illinois without regard to its conflicts of laws
provisions.
11. PARTIAL INVALIDITY
Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder
of such invalid, illegal or unenforceable provision or provisions or any
other provisions hereof, unless such a construction would be unreasonable. In
the event that such a construction would be unreasonable or would deprive a
Party of a material benefit under this Agreement, the Parties shall seek to
amend this Agreement to remove the invalid provision and otherwise provide
the benefit unless prohibited by any Requirements of Law.
35
12. WAIVERS
The failure of either Party hereto to enforce at any time
any provision of this Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this Agreement or any
part hereof or the right of a Party thereafter to enforce each and every such
provision. A waiver under this Agreement must be in writing and state that it
is a waiver. No waiver of any breach of this Agreement shall be held to
constitute a waiver of any other or subsequent breach.
13. COMPETITIVE TRANSITION CHARGE.
The Parties acknowledge that Seller has satisfied its
Competitive Transition Charge (as defined in the Illinois Public Utilities
Act) obligations with respect to the Sites by prepayment, which was included
in the Purchase Price paid under the Asset Sale Agreement.
14. ENTIRE AGREEMENT AND AMENDMENTS
Except as provided in the Asset Sale Agreement and the
Interconnection Agreement, this Agreement supersedes all previous
representations, understandings, negotiations and agreements either written
or oral between the Parties hereto or their representatives with respect to
the subject matter hereof and constitutes the entire agreement of the Parties
with respect to the subject matter hereof. No amendments or changes to this
Agreement shall be binding unless made in writing and duly executed by both
Parties.
36
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement as of the date set forth at the beginning of this Agreement.
COMMONWEALTH EDISON COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
MIDWEST GENERATION, LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
37
Peaking Units Power Purchase Agreement Appendices
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APPENDIX A
DESIGN LIMITS
The Design Limits listed below shall be applicable to any
dispatch of the combustion turbine units by ComEd:
==================================================================================================================
Minimum
Fuel Peak Net Minimum Time Ramp
Peaker Type Capacity Dependable Operating Start Time Between Rate
(MW) Capacity Level (minutes) Dispatched (MW/
(MW)(1) (NetMW) Starts (Hours)(2) minute)
==================================================================================================================
ASSET GROUP A:
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 31 Gas/Oil 55.9 42 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 32 Gas/Oil 57.5 39.8 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ 33 Gas/Oil 56 39.1 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
▇▇▇▇ 31 Oil 49.1 41.8 15 10 1 26
------------------------------------------------------------------------------------------------------------------
▇▇▇▇ 32 Oil 50.8 43.2 15 10 1 26
------------------------------------------------------------------------------------------------------------------
▇▇▇▇ 33 Oil 49.1 39.4 15 10 1 26
------------------------------------------------------------------------------------------------------------------
▇▇▇▇ 34 Oil 48.2 38.6 15 10 1 26
------------------------------------------------------------------------------------------------------------------
Waukegan 3l Oil 53.1 45.1 15 10 1 26
------------------------------------------------------------------------------------------------------------------
Waukegan 32 Oil 55.2 46.9 15 10 1 26
------------------------------------------------------------------------------------------------------------------
Calumet 3l Gas/Oil 55.9 48.5 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
Calumet 33 Gas/Oil 41.7 37.7 8 20 2 9.6
------------------------------------------------------------------------------------------------------------------
Calumet 34 Gas/Oil 50.9 42.9 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
ASSET GROUP B:
------------------------------------------------------------------------------------------------------------------
Joliet 31 Gas/Oil 58.9 51.2 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
Joliet 32 Gas/Oil 56.8 49.9 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
A-1
Peaking Units Power Purchase Agreement Appendices
-----------------------------------------------------------------------
==================================================================================================================
Minimum
Fuel Peak Net Minimum Time Ramp
Peaker Type Capacity Dependable Operating Start Time Between Rate
(MW) Capacity Level (minutes) Dispatched (MW/
(MW)(1) (NetMW) Starts (Hours)(2) minute)
==================================================================================================================
OFF-SITE:
------------------------------------------------------------------------------------------------------------------
Bloom 33 Oil 24.1 21.9 Base 20 2 N/A
------------------------------------------------------------------------------------------------------------------
Bloom 34 Oil 26 22.8 Base 20 2 N/A
------------------------------------------------------------------------------------------------------------------
Electric Junction 31 Gas/Oil 59.4 53 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
E1ectric Junction 32 Gas/Oil 59.2 52.8 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
Electric Junction 33 Gas/Oil 59.2 52.8 8 20 2 12.8
------------------------------------------------------------------------------------------------------------------
Sabrooke 31 Gas/Oil 25.2 22.2 Base 20 2 N/A
------------------------------------------------------------------------------------------------------------------
Sabrooke 32 Gas/Oil 24.9 17.7 Base 20 2 N/A
------------------------------------------------------------------------------------------------------------------
Sabrooke 33 Gas/Oil 23.8 19.9 Base 20 2 N/A
------------------------------------------------------------------------------------------------------------------
Sabrooke 34 Gas/Oil 12.5 10.5 Base 20 2 N/A
------------------------------------------------------------------------------------------------------------------
Lombard 32 Gas/Oil 31.5 31.5 4 10 1 13
------------------------------------------------------------------------------------------------------------------
Lombard 33 Gas/Oil 32.4 32.4 4 10 1 13
==================================================================================================================
(1) Summer net megawatts.
(2) Except during an Emergency Condition affecting the ComEd System and for
instances where ComEd and Seller agree on a price to induce Seller to
cycle a unit under the indicated time.
A-2
Peaking Units Power Purchase Agreement Appendices
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APPENDIX B
MAIN GUIDE NUMBER 3A
MAIN GUIDE NO. 3A
(Formerly Guide No. 3)
(Revision No. 3)
June 8, 1995
APPROVED NOVEMBER 9, 1995
PROCEDURE FOR THE UNIFORM RATING
OF GENERATING EQUIPMENT
The Mid-America Interconnected Network, Inc. bylaws provide
for the coordination of planning, construction and utilization of generation
and transmission facilities on a regional basis for reliability of electric
bulk power supply. This MAIN Guide presents the criteria for uniform rating
of generating equipment on the systems of MAIN members.
1. General
Generating capability to meet the system load and provide
the required amount of reserves is necessary to assure the maximum degree of
service reliability. This generating capability must be accounted for in a
uniform manner which assures the use of consistently attainable values for
planning and operating the system.
Procedures are herein established for rating generating
units in service or which will be brought into service in the future. These
procedures define the framework under which the ratings are to be established
while recognizing the necessity of exercising judgement in their
determination. The tests required are functional and do not require special
instrumentation. They are designed to demonstrate that the ratings can be
obtained for the time periods required under normal operating conditions for
the equipment being tested.
It is intended that the terms defined and the ratings
established pursuant to this MAIN Guide shall be used for all MAIN purposes,
including determining generation reserves for both planning and operating
purposes, scheduling maintenance, and preparation
B-1
Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------
of reports or other information for industry organizations, news media, and
governmental agencies.
2. Uniform Ratings
Each MAIN member shall establish Monthly Net Capability
ratings for each generating unit and station on the member's system. The
Monthly Net Capability is the net power output which can be obtained for the
period specified on a monthly adjusted basis with all equipment in service
under average conditions of operation and with equipment in an average state
of maintenance. The Monthly Net Capability should include generating
capability which is temporarily out of service for maintenance or repair.
The monthly adjustments required to develop Monthly Net
Capability are intended to include such seasonal variations as ambient
temperature, condensing water temperature and availability, fuels, steam
heating loads, reservoir levels, and scheduled reservoir discharge.
Generating capability shall be tested annually to
demonstrate and verify that the Monthly Net Capability can be achieved in the
month of the test. It is intended that frequent changes in Monthly Net
Capability be avoided. The reported capability is, therefore, a figure which
should not be altered until the accumulated evidence of tests and analyses or
operating experience indicate that a long-term change has taken place. The
Monthly Net Capability shall be confirmed annually and revised at other times
when necessary. Confirmations and revisions will be submitted to the MAIN
Coordination Center.
3. General Guides for Establishing Capability Ratings
The following general guides shall be applied in
establishing Monthly Net Capability:
(a) The total Monthly Net Capability rating shall be that
available regularly to satisfy the daily load patterns of the member and
shall be available for four continuous hours or more. The rating established
must not require a period of operation at a reduced level during a system's
remainder of the peak period to recover the Monthly Net Capability.
B-2
Peaking Units Power Purchase Agreement Appendices
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(b) The Monthly Net Capability will be determined
separately for each generating unit in a power plant where the input to the
prime mover of the unit is independent of the others. The Monthly Net
Capability will be determined as a group for commonheader steam plants or
multiple-unit hydro plants and each unit assigned a rating by apportioning
the combined capability among the units.
(c) Monthly Net Capability, as reported, will not be
reduced to provide regulating margin or spinning reserve. It will reflect
operation at the power factor level at which the generating equipment is
normally expected to be operated over the daily peak load period. It will
exclude the temporary higher output attainable immediately after a new unit
goes into service or immediately after an overhaul.
(d) Extended capability of a unit or plant obtained through
bypassing of feedwater heaters, by utilizing other than normal steam
conditions, or by abnormal operation of auxiliaries in steam plants; or by
abnormal utilization of reservoir storage in hydro plants; or by abnormal
operation of combustion turbines or diesel units; may be included in the
Monthly Net Capability if the following conditions are met:
(i) The extended capability based on such conditions will be
available for a period of not less than four continuous hours when
needed and meets the restrictions of Section III-A.
(ii) Normal procedures have been established so that this
capability will be made available promptly when requested by the
dispatcher.
(e) The Monthly Net Capability established for nuclear
units will be determined taking into consideration the fuel management
program and any restrictions imposed by governmental agencies.
(f) The Monthly Net Capability established for
hydro-electric plants, including pumped-hydro, will be determined taking into
consideration the reservoir storage program and any restrictions imposed by
governmental agencies and will be based on median hydro conditions.
B-3
Peaking Units Power Purchase Agreement Appendices
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4. Testing Procedures to Demonstrate Capability
(a) General Procedure for Testing
(i) Ratings will be confirmed annually or more frequently if
appropriate to demonstrate the Monthly Net Capability. IF ADEQUATE DATA
ARE AVAILABLE TO DEMONSTRATE THE CAPABILITY DURING NORMAL PEAK LOAD
PERIOD OPERATION, NO SPECIAL TEST IS REQUIRED. Peaking units and cold
reserve units which are not operated frequently shall be tested at such
intervals as necessary to assure that capability is available to meet
operating reserve requirements.
(ii) If the total capability of a plant is materially
affected by the interaction of its parts, a test of the entire plant
will be performed to demonstrate Monthly Net Capability.
(iii) All equipment when tested will be in normal operating
condition with all auxiliary equipment needed for normal operation in
service and with provision for extended capability if this capability
is to be included in Monthly Net Capability. Energy consumption by
auxiliary facilities common to the entire plant (for example,
coal-handling or lighting) will be distributed over the appropriate
units in the plant, and will represent the consumption normally
experienced during the high-load period of the day.
(iv) It is intended that the test loadings should be
maintained at a constant level. The reported test results will be no
greater than the MWh/hr integrated output for the test period.
(b) Steam Turbo-Generation Unit Tests, Excluding Steam
Turbines with Gas or Oil Fired Boilers
(i) The test period for steam turbo-generator units,
including both fossil fuel and nuclear reactor steam generators, will
be not less than four continuous hours.
(ii) Generating unit net capability as affected by the turbine
exhaust pressure will be corrected to the average for the past five
years of the monthly averages of the daily maximum circulating water
temperatures for the month of the test. Steam conditions will
correspond to the operating standard established by the
B-4
Peaking Units Power Purchase Agreement Appendices
--------------------------------------------------------------------------------
member for the unit or plant. The steam generator will be operated with
the regularly available type and quality of fuel.
(c) Tests of Combustion Turbine and Diesel Units and Steam
Turbines with Gas or Oil Fired Boilers
(i) The test period for combustion turbine and diesel units
and steam turbines with gas or oil fired boilers will be of sufficient
duration to permit stabilized operating conditions to be attained.
(ii) Ambient temperature conditions will be corrected to the
average for the past five years of the monthly maximum temperatures for
the month of the test. Where evaporative coolers are used, the
temperature at the discharge of the evaporative coolers shall be the
basis for ambient temperature corrections.
(iii) Generating unit net capability as affected by the
turbine exhaust pressure will be corrected to the average for the past
five years of the monthly averages of the daily maximum circulating
water temperatures for the month of the test. Steam conditions will
correspond to the operating standard established by the member for the
unit or plant. The steam generator will be operated with the regularly
available type and quality of fuel.
(d) Hydro-Electric Unit Tests
(i) The test period for hydro-electric units, including
pumped-hydro units, will be not less than one hour.
(ii) Water conditions will be corrected to the median
conditions for the month of the test.
(e) Reactivated Unit Tests
Deactivated generating equipment which is not being
reported and is being returned to active status shall be tested within
thirty days to demonstrate its Monthly Net Capability.
B-5
Peaking Units Power Purchase Agreement Appendices
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5. Reporting Procedures
Each member shall submit the required data on the included
Uniform Rating Forms to the MAIN Coordination Center annually on or before
November 1 for the following calendar year. Each annual report shall cover
all existing units, planned start-up of new units, and planned retirements of
units and shall consist of the following:
(i) A letter identifying those units whose rating has not
changed, showing the dates of latest tests confirming capabilities.
(ii) Completely revised forms (Form A and ▇-▇, ▇-▇, or B-3)
for units on which a change has occurred.
(iii) Completely revised form (Form A) showing planned
additions or retirements beginning with the month of commercial
operation or month of retirement.
Between annual reporting, revised forms shall be submitted as necessary for
new units placed in commercial operation, units retired, and for units where
tests show the rating has changed. Any change in additions, retirements, or
ratings shall be submitted within 30 days of the addition, retirement, or
test. In this manner, by each November 1, all test data should be current.
However, the letter should be submitted confirming the dates of tests.
The MAIN Coordination Center will analyze and review the
annual reporting for completeness and correctness and report the need for
clarification to the member concerned. The MAIN Coordination Center will
maintain the updated set of reports, including current changes as they occur,
from the MAIN members, and will provide complete reports and/or revisions to
the members requesting them.
(a) Uniform Rating Form A
This form is used to report the Monthly Net
Capability of each unit in each station. Where required by the number of
units in a station, additional sheets should be used.
(b) Uniform Rating Forms ▇-▇, ▇-▇, and B-3
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These forms are used to report test results, certain
actual and five year average variables where pertinent, and to show
relationship of actual net generation to stated capability during the month
of the test. It is the intent that test data equal or exceed stated Monthly
Net Capability to demonstrate that this level of generation can be achieved.
Where simultaneous tests of several units are conducted, as in common steam
header plants, data should be reported for each unit and total of the group.
Test results should be reported as follows:
Form B-1 --steam turbo-generator units
Form B-2 --hydro electric units
Form B-3 --Combustion turbine units and diesel units
NOTE: IN SUBMITTING REVISED FORMS, EACH FORM SHALL BE SUBMITTED IN SUCH A
MANNER THAT IT COMPLETELY REPLACES THE SHEET ON WHICH DATA ARE BEING REVISED.
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APPENDIX C
EO COMMUNICATIONS AND GUIDELINES
1. PURPOSES. The purposes of this Appendix are (i) to
describe the nature of the communications link that will be maintained
between Seller and ComEd, (ii) to establish the nature and content of
communications relating to availability of the Reserved Units and their
dispatch, and (iii) to establish certain operating procedures. The Parties
recognize that it is important that such communication channels be
established so that only responsible and authorized personnel can issue
requests and/or orders that may impact unit reliability and availability as
well as transmission system security and stability.
2. COMMUNICATIONS LINK. The Parties shall establish
and maintain dedicated telephone lines for the dispatch of the Reserved
Units. Seller will notify EO as soon as possible of any disruption or
unavailability of the dedicated telephone lines or standard telephone lines.
ComEd shall also establish and maintain a radio system for communications,
which radio system shall be used in the event that the aforementioned
communications methods are unavailable. Seller shall cooperate in performing
periodic tests of the radio system as from time to time directed by the EO
Dispatcher. Seller shall notify EO promptly of any problems with said radio
system.
(a) Telephone numbers are set forth below for the
indicated persons:
EO Generation Dispatcher (▇▇▇) ▇▇▇-▇▇▇▇
EO Transmission Dispatcher (▇▇▇) ▇▇▇-▇▇▇▇
EO Operation Supervisor (▇▇▇) ▇▇▇-▇▇▇▇
EO Generation Dispatch Supervisor (▇▇▇) ▇▇▇-▇▇▇▇
EO facsimile transmission number (▇▇▇) ▇▇▇-▇▇▇▇
The alternate office for EO will be used as a backup in the event that the
normal office of EO is not operational. The telephone numbers of the alternate
office are (▇▇▇) ▇▇▇-▇▇▇▇, 5903, and the facsimile transmission number is (815)
727-5745.
3. CONTENT OF COMMUNICATIONS. To the extent that events
are known or anticipated, Seller shall provide to the EO Generation Dispatcher
information regarding the availability of the Reserved Units, including
information regarding the following matters:
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(i) conditions, issues or events which may affect the
output or reliability of the Reserved Units;
(ii) time of day (based on a twenty-four hour clock) when
a Reserved Unit is placed on the line and taken off the line;
(iii) changes of rated capacity of a Reserved Unit, when it
is known that such changes have taken place or will take place;
(iv) Reserved Unit de-ratings, including the amount of any
derate, the estimated or known start time and date of the derate, the
estimated or known ending time and date of the derate, and the cause of
the derate;
(v) the availability, or lack of availability, of remote
controls on a Reserved Unit and the times in which such controls will,
or will not, be available and the reason for such limitations;
(vi) conditions at the Site or of a Reserved Unit that
could affect the present or anticipated capability of a Reserved Unit,
including problems related to fuel, fires, loss of essential equipment
and opacity excedences;
(vii) when required testing or other operational work could
limit the availability or maneuverability of a Reserved Unit;
(viii) Seller's desire to declare a Substitute Unit to
replace Unavailable Capacity, including the capacity and schedule of
energy and ramping ability; and
(ix) Seller's desire to request the release of energy from
undispatched on-line capacity of a Reserved Unit or an off-line
Reserved Unit under the circumstances provided in Section 6(b)(i) of
this Agreement.
As it becomes available or anticipated, such information shall be made available
to the EO Generation Dispatcher. To the extent that such information reflects
anticipated events over which Seller has some control, Seller shall undertake to
coordinate the occurrence of such event with the EO Generation Dispatch
Supervisor.
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(a) Seller shall use the forms attached as Appendix D
for the purpose of reporting Reserved Unit capability, ramp rates, oil
storage inventory, outages and deratings. Such forms consist of the following
elements and shall be completed and transmitted by facsimile transmission to
the EO Generation Dispatcher:
(i) Form "Page 1," "[Location] Generation Offer Sheet,"
is the cover sheet to be used for all facsimile transmissions; and
(ii) Form "Page 2," "Generation Capability," is the sheet
to be used to report with respect to each Reserved Unit (1) its net
generating capability for the twenty-four period beginning 12:00 a.m.,
Midnight (0000 hours) (Chicago time) the following day and (2) derating
and outage information, which sheet shall be completed and transmitted
daily by 11:00 p.m. (2300 hours) (Chicago time).
ComEd shall acknowledge receipt of any such facsimile transmissions by signing
the "Page 1" cover sheet and transmitting such signed page by facsimile
transmission to Seller at the return facsimile transmission number indicated
thereon. Copies of the transmissions described in this Section 3(b) shall be
retained by Seller and ComEd for at least 36 months, after which they may be
destroyed.
(b) Seller shall provide information regarding Reserved
Unit availability by telephone on a daily basis to ComEd's Wholesale Energy
Trading Organization.
4. DISPATCH: OPERATIONS. The EO Generation Dispatcher
shall issue dispatch orders on behalf of ComEd, which orders shall be given by
the EO Generation Dispatcher to Seller. Following receipt by Seller of any such
order, Seller shall repeat back the content of such order to the EO Generation
Dispatcher to confirm receipt and understanding of such order.
(a) Seller shall perform the following tasks in order
to assist in meeting the dispatch needs of the ComEd System:
(i) maintain generating control systems and subsystems
enabling the Reserved Units to synchronize and ramp to the generation
levels as ordered by the EO Generation Dispatcher in the time durations
and at the rates as set forth in Appendix A;
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(ii) to the extent that the remote control capability
identified in Section 3(a)(v) is unavailable, Seller shall arrange to
man each such affected site, as requested by the EO Generation
Dispatcher, with operating personnel to operate the site;
(iii) operate the Reserved Units at generation levels as
requested by the EO Generation Dispatcher, and Seller shall promptly
notify the EO Generation Dispatcher if the Reserved Units are unable
for any reason to achieve such generation levels; and
(iv) bring the Reserved Units to their peak capacity
levels as set forth in Appendix A as requested by the EO Generation
Dispatcher, and Seller shall promptly notify the EO Generation
Dispatcher if the Reserved Units are unable for any reason to achieve
such levels.
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APPENDIX D
Page 1: REPORTING FORMS
_______________ GENERATION OFFER SHEET
DATA APPLICABLE FOR AVAILABILITY DECLARATION
FOR THE PERIOD OF: 00:00____________ to 23:59_____________
TO: COMED EO FAX NO: (▇▇▇) ▇▇▇-▇▇▇▇
TELEPHONE NO: (▇▇▇) ▇▇▇-▇▇▇▇ GENERATION DISP. SUPERVISOR
(▇▇▇) ▇▇▇-▇▇▇▇ OPERATIONS SUPERVISOR
--------------------------------------------------------------------------------
THIS FAX IS A SUBMISSION OF
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
GENERATION OFFER DATA
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A REVISION TO THE PREVIOUSLY SUBMITTED OFFER OF:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
THIS DOCUMENT IS A HARDCOPY BACK-UP TO THE OFFER OF:
--------------------------------------------------------------------------------
FULL SUBMISSION: _______ NUMBER OF PAGES INCLUDING COVER PAGE: _____
PARTIAL SUBMISSION: _______
SUBMITTED BY:
-------------------------------------------------------
DATE:
----------------------------------------------------------------
IF YOU DO NOT RECEIVE ALL THE PAGES OR IF CLARIFICATION OR RETRANSMISSION IS
REQUIRED
CALL: (___) ___-____ EXT. ____
RETURN ACKNOWLEDGMENT FAX TO THE ATTENTION OF:_______________________
FAX NUMBER (___) ___-____
ACKNOWLEDGMENT BY COMED: (SIGNATURE)
-------------------------------------------
(TITLE) -------------------------------------------
ACKNOWLEDGMENT DATE AND TIME:
-----------------------------------------
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Page 2: ______________ GENERATION OFFER DATA
AVAILABILITY DECLARATION PERIOD COMMENCING 00:00 __________ TO: 23:59 __________
Capabilities based on the forecasted
peak hour temperature of __________.
GENERATION CAPABILITY
RESERVED UNIT #__________
PEAK LOAD CAPABILITY: _________ MW
BASE LOAD CAPABILITY: _________ MW
MINIMUM LOAD CAPABILITY: _________ MW
MAXIMUM MVARS: _________
MINIMUM MVARS: _________
HOURS OF OIL AVAILABLE AT BASE LOAD: _________
DERATINGS:
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
CAUSE CODE:______MW______START TIME______DATE______STOP TIME______DATE_____
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