EXHIBIT 10.23
Power Sales Agreement
UGIDC Sales to UGI Utilities, Inc.
Market-Based Rates
This POWER SALES AGREEMENT ("Agreement"), is made and entered into as
of November 30, 2001, by and between UGI Utilities, Inc., a Pennsylvania
corporation having offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, hereinafter referred to as "UGI" or "Buyer", and UGI Development
Company, a Pennsylvania Company having its principal business at ▇▇▇ ▇▇▇▇▇ ▇▇,
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, hereinafter referred to as "UGIDC"
or "Seller", (individually, the "Party" and collectively, the "Parties". The
definitions set forth in the Definitional Annex apply to this Agreement).
WHEREAS, the Parties entered into a Power Sales Agreement dated July 1,
2001, which based market prices for capacity credits on a market indicator that
subsequently ceased to operate; and
WHEREAS, the Parties now wish to provide for alternative pricing
mechanisms for capacity credits and to supercede the Agreement of July 1, 2001.
NOW, THEREFORE, in consideration of the premises, terms and conditions
contained herein, and intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE 1
SALE OF CAPACITY CREDITS AND ENERGY
1.1 Purchase and Sale. Beginning on the Effective Date, UGIDC hereby agrees
to sell to UGI, and UGI agrees to purchase from UGIDC, an amount of Net
Electric Energy and Capacity equal to the sum total of UGIDC's
entitlement to Net Electric Energy and Capacity available from the
Facilities (and UGIDC's 1.11% ownership of the Conemaugh generator.)
1.2 Release From Other Obligations. Other than the purchase and sales set
forth in this Article 1 of this Agreement, UGI is not obligated to
purchase from UGIDC nor is UGIDC required to sell to UGI any other
quantity of Power at any time.
ARTICLE 2
PRICES
2.1 Capacity Credits. For each Unforced Capacity Credit purchased from
UGIDC's entitlement, UGI shall pay UGIDC market rates based on the
average monthly clearing price in the PJM capacity market or an
equivalent indicator of monthly capacity prices in the event that the
PJM market ceases to reflect general market conditions.
2.2 Energy. UGI shall pay UGIDC the product of the PJM Day Ahead (D/A)
scheduled energy times the market rate for 7 day/24 hour energy
forecasted for a twelve month period for base loaded units and hourly
energy output from the CT at the associated PJM hourly LMP.
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UGIDC Sales to UGI Utilities, Inc.
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ARTICLE 3
DELIVERY POINTS AND RELIABILITY GUIDELINES
3.1 Delivery Points. UGIDC shall deliver the Power to the UGI points of
interconnection with UGIDC which are the station transformers for each
generator. UGI shall be responsible for network transmission under the
PJM Open Access Transmission Tariff and related agreements.
3.2 Reliability Guidelines. Each Party agrees to adhere to accepted Good
Utility Operating Practice and specifically adhere to the applicable
operating police is, criteria and/or guidelines of the North America
Electric Reliability Council ("NERC") and any regional or subregional
requirements.
3.3 Scheduling. The delivery of Power under this Agreement shall be
Scheduled by UGI in accordance with the guidelines established by the
PJM Office of Interconnection.
3.4 Title Transfer. Title to, possession of, and risk of loss of Power
Scheduled and received hereunder shall transfer from UGIDC to UGI at
the Delivery Points. UGIDC warrants that at the time of delivery UGIDC
shall have good title to the Power sold and delivered hereunder and the
right to sell such Power to UGI.
ARTICLE 4
TERM OF AGREEMENT
4.1 Commencement. This Agreement shall commence on December 1, 2001 ("The
Effective Date").
4.2 Termination. This Agreement shall terminate on the earlier of the date
when UGIDC is no longer entitled to Net Electric Energy and Capacity
from the facilities, the mutual agreement of the Parties to terminate,
or December 31, 2011. UGIDC shall have no obligation to UGI to continue
to provide any service hereunder following that date. Following
expiration of this Agreement UGI shall not be obligated to continue
purchases from UGIDC under this Agreement or to continue to compensate
UGIDC in any manner other than for amounts owed for sales and services
rendered under this Agreement.
ARTICLE 5
BILLING AND PAYMENT
5.1 Statements. UGI shall render to UGIDC for each calendar month during
the term of this Agreement a statement or statements setting forth the
total quantity of Power purchased
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under this Agreement during the preceding month and the amounts due to
UGIDC from UGI under this Agreement.
5.2 Billing and Payments. UGI shall submit Statements monthly with payment
within ten (10) days following the last day of the month in which sales
under this Agreement were made. Payments shall be made by crediting
UGIDC revenue accounts. Payments shall be deemed to have been made on
the date that UGIDC's revenue account is credited. Except as provided
in Section 5.3, if UGI fails to submit a statement and pay all of the
amount of any statement when that amount is due, UGI shall pay UGIDC a
late charge on the unpaid balance that shall accrue on each calendar
day from the date at the Interest Rate. Disputed bills shall be handled
as stated below.
5.3 Billing Disputes. In the event that UGIDC disputes any portion of any
▇▇▇▇ or payment, UGIDC shall submit a detailed written explanation of
the basis for the dispute to UGI. The Parties shall use their best
efforts to attempt to resolve such disputes on a timely basis. Upon
determination of the correct billing amount the adjusted ▇▇▇▇ shall be
paid promptly after such determination with interest at the Interest
Rate accrued in accordance with Section 5.2 and computed from the date
payment is received to the date adjustment is made. If the Parties are
unable to resolve the dispute, either Party may exercise its available
administrative or legal remedies, including those set forth in Section
5.6 below.
5.4 Audit. Each Party or any third Party representative of a Party has the
right at its sole expense and during normal working hours, to examine
the records of the other Party to the extent reasonably necessary to
verify the accuracy of any statement, charge or computation made
pursuant to the provisions of this Agreement. If any such examination
reveals any inaccuracy in any statement, the necessary adjustments in
such statement and the payments thereof shall be made prior to the
lapse of two years from the rendition of such statement, and provided
further that the rights set forth in the first sentence of Section 5.4
will serve until two years after termination of this Agreement.
5.5 Records. Each Party shall keep such records as may be necessary to
Afford the other a clear history of all deliveries of capacity credits
and energy under this Agreement. Records shall be maintained for a
period necessary to comply with Section 5.4 and shall be made available
as necessary to verify the accuracy of statements submitted under this
Agreement.
5.6 Dispute Resolution. (a) In the event of a dispute between the Parties
arising under this Agreement, the Parties will work together in good
faith to resolve the dispute. If the Parties are unable to resolve such
dispute between themselves within five days after written notification
by one Party to the other of the existence of such dispute, they shall
immediately refer such matter to their internal upper management for
resolution. If the management of the Parties is unable to resolve the
dispute within ten (10) days after the matter is brought to their level
for review, either Party may bring a claim or suit in accordance with
the provisions of Section 12.4. Each Party shall pay its own attorney's
fees and expense, except that if the prevailing Party is required to
initiate proceedings to
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enforce the award or confirm judgment, the prevailing Party shall be
entitled to recover its costs and attorneys' fees associated with such
action.
(b) Notwithstanding the dispute procedure provided in Section 5.6, the
Parties have no obligation to use such dispute resolution process where
the dispute involves confidentiality or the infringement of
intellectual property rights. In the event of a breach of
confidentiality or a claim if infringement under this Agreement, the
Party seeking redress shall have the right to bring a claim or suit in
accordance with Section 12.6 immediately.
ARTICLE 6
LIQUIDATED DAMAGES
6.1 Scheduling. Scheduling of Power under this Agreement shall be subject
to Section 3.3. Unless otherwise agreed to, UGIDC and UGI shall be
responsible for any transmission and ancillary services relating to the
transmission of Power, in the case of UGIDC, to the Delivery Points,
and in the case of UGI, at and from the Delivery Points.
6.2 In the event UGIDC fails to deliver the Power, where such failure was
not excused by Force Majeure or by UGI's failure to perform, UGIDC
shall pay UGI (on the date payment would otherwise be due under this
Agreement) an amount for each MWhr of such deficiency equal to the
positive difference, if any between: (i) the price at which UGI is able
to purchase or otherwise receive such deficiency quantity of Power
acting in a commercially responsible manner (adjusted to reflect
differences in transmission costs, if any) and (ii) the Contract Price;
provided, however, in no event shall such amounts include any
penalties, ratcheted demand or similar charges.
6.3 In the event UGI fails to Schedule and to receive the Power, where such
failure was not excused by Forced Majeure or by UGIDC's failure to
perform, UGI shall pay UGIDC (on the date payment would otherwise have
be due under this Agreement) an amount for each MWhr of such deficiency
equal to the positive difference, if any, between: (i) the Contract
Price and (ii) the price at which UGIDC is able to sell or otherwise
dispose of such deficiency quantity of power acting in a commercially
reasonable manner (adjusted to reflect differences in transmission
cost, if any); provided, however, in no event shall such amounts
include penalties, ratcheted demand so similar charges.
6.4 Both Parties hereby stipulate that the payment obligations set forth
above are reasonable in light of the anticipated harm and the
difficulty of estimation or calculation of actual damages and each
Party hereby waives the right to contest such payments as an
unreasonable penalty. In the event either Party fails to pay such
amounts in accordance with this Article when due, the aggrieved Party
shall have the right to: (i) suspend performance until such amounts
plus interest at the Interest Rate have been paid, and/or (ii) exercise
any remedy available at law or in equity to enforce payments of such
amount plus interest at the Interest Rate. The remedy set forth herein
shall be the sole and
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exclusive remedy of the aggrieved Party for the failure of the other
Party to sell or purchase Power hereunder and all other damages and
remedies are hereby waived.
6.5 As an alternative to the foregoing damages provisions, if the Parties
mutually agree in writing, the non performing Party may Schedule
deliveries and receipts, as the case may be, pursuant to such terms as
the Parties agree in order to discharge some or all of the obligation
to pay damages. In the absence of such agreement, the damages
provisions of this Article apply.
ARTICLE 7
INDEMNIFICATION
7.1 UGIDC's Indemnification of UGI. UGIDC hereby agrees to indemnify,
defend and hold harmless UGI, its agents, servants and Affiliates and
the respective officers, directors, employees and representatives
(collectively, "UGI's Indemnities") of each, from and against any and
all losses, claims, damages or liabilities (including reasonable
attorneys' fees actually incurred including, without limitation,
penalties or fines imposed by government authorities) arising out of
the fraud, negligence, or willful misconduct of UGIDC relating to Power
delivered under this Agreement until such Power has been delivered to
UGI at the Delivery Points including, without limitation, the loss
of/or claims for loss or damage to property, except to the extent
caused by the fraud, negligence or the willful misconduct of UGI's
Indemnities and provided that UGIDC shall be promptly notified in
writing of any such claim or suit brought against any such UGI
Indemnity. The foregoing notwithstanding, UGI's obligations under this
Agreement towards any UGI Indemnity are conditioned upon such UGI
Indemnity providing such cooperation as UGI may reasonably request in
connection with its defense or settlement of the claim or suit against
such UGI Indemnity.
7.2 UGI's Indemnification of UGIDC. UGI hereby agrees to indemnify, defend
and hold harmless UGIDC, its agents, servants and Affiliates and the
respective officers, directors and employees and representatives
(collectively, "UGI's Indemnities") of each, from and against any and
all losses, claims, damages or liabilities to third parties (including
reasonable attorneys' fees actually incurred including, without
limitation, penalties or fines imposed by government authorities)
arising out of the fraud, negligence, or willful misconduct of UGI
relating to Power delivered under this Agreement after such Power has
been delivered to UGI at and from the Delivery Points including,
without limitation, the loss of/or claims for loss or damage to
property, except to the extent caused by the fraud, negligence or the
willful misconduct of UGIDC's Indemnities and provided that UGI shall
be promptly notified in writing of any such claim or suit brought
against any such UGIDC Indemnity. The foregoing notwithstanding, UGI's
obligations under this Agreement towards any UGIDC Indemnity are
conditioned upon such UGIDC Indemnity providing such cooperation as UGI
may reasonably request in connection with its defense or settlement of
the claim or suit against such UGIDC Indemnity.
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ARTICLE 8
ASSIGNMENT AND SUCCESSION
8.1 Assignment and Succession. Neither Party shall assign the Agreement or
its rights hereunder without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or delayed.
Upon any assignment made in compliance with this Section, this
Agreement shall inure to and be binding upon the successors and
permitted assigns of the assigning Party. Notwithstanding the
foregoing, either Party may, without the need for consent from the
other Party (and as long as such Party remains fully liable hereunder),
(a) transfer, pledge, or assign this Agreement as security for any
financing with financial institutions; or (b) transfer or assign this
Agreement to an Affiliate of such Party. Nothing in this Section shall
preclude any party from transferring or assigning this Agreement to any
person or entity succeeding to all or substantially all of the assets
of such Party; provided, however, that any such assignee shall agree to
be bound by the terms and conditions hereof pursuant to an agreement
satisfactory to the non-assigning Party and that all the persons
obligated to fulfill the assigning Party's obligations under the
Agreement after the assignment shall have substantially equivalent
financial capability to that of all other persons obligated to fulfill
the assigning Party's obligations under the Agreement before the
assignment. References to any Party named herein shall include such
Party's successors and permitted assigns.
ARTICLE 9
LIMITATION OF LIABILITY AND FORCE MAJEURE
9.1 Force Majeure. In the event either Party is rendered unable, by an
event of Force Majeure, to carry out wholly or in part its obligations
under this Agreement and such Party gives notice and full particulars
of such event of Force Majeure to the other Party as soon as
practicable after the occurrence of the event of Force Majeure pursuant
to this Agreement, other than obligation to make payments then due or
becoming due hereunder, shall be suspended from the inception and
throughout the period of continuance of any such inability so caused,
but for no longer period, and such event of Force Majeure shall, so far
as and as soon as practicable, be remedied by application of Good
Utility Operating Practice; provided however, that no provision of this
Agreement shall be interpreted to require UGIDC to deliver, or UGI to
receive, Power at points other than the Delivery Point(s) or to require
UGI to accept or UGIDC to make delivery of any remaining amount of
Power under this Agreement following resolution of the Force Majeure
9.2 Limitation of Liability. FOR BREACH OF ANY PROVISION FOR WHICH AN
EXPRESS REMEDY OR, EASURE OF DAMAGES IS PROVIDED IN THIS
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UGIDC Sales to UGI Utilities, Inc.
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AGREEMENT, THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED AS
SET FORTH IN SUCH PROVISION, AND ALL OTHER DAMAGES OR REMEDIES HEREBY
ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED,
THE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMITED TO DIRECT
DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE WAIVED. IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES IN TORT, FOR
CONTRACT OR OTHERWISE.
ARTICLE 10
TAXES
10.1 Allocation of and Indemnify for Taxes. The Contract Price paid
hereunder includes full reimbursement for taxes and UGIDC is liable for
and shall pay or cause to be paid, or reimburse UGI if UGI shall have
paid, all Taxes applicable to the Power sold hereunder prior to the
Delivery Point(s) ("UGIDC's Taxes"). In the event UGI is required to
remit any of UGIDC's Taxes, the amount thereof shall be deducted from
any sums becoming due to UGIDC hereunder. UGIDC shall indemnify, defend
and hold UGI harmless from any liability for all UGIDC's Taxes. The
Contract Price does not include reimbursement for and UGI is liable for
and shall pay, cause to be paid or reimburse UGIDC if UGIDC shall have
paid, all Taxes applicable for the Power sold hereunder at and after
the Delivery Point(s) ("UGI's Taxes). UGI shall indemnify, defend and
hold UGIDC harmless from and liability for all UGI's Taxes.
10.2 Automatic Tax Adjustment. Only if agreed to by the Parties, and
adjustment for tax changes shall apply, as appropriate, to the Contract
Prices as billed under this Agreement. In such case, the Contract
Prices will be adjusted, as required, by including an automatic
pass-through of increases in federal, state, or local taxes, including
new environmental taxes, or tax rates applicable to the Power, based on
actual tax expense incurred by UGIDC.
10.3 Cooperation. Both Parties shall use reasonable efforts to administer
this Agreement and implement the provisions in accordance with their
intent to minimize Taxes.
ARTICLE 11
DEFAULT, SECURITY AND RESPONSIBILITY
11.1 Default, Security and Responsibility Events. Except as otherwise
provided in Article 7, in the event either Party ("Defaulting Party")
(i) makes and assignment or any general arrangement for the benefit of
creditors; (ii) defaults in payment or performance of any obligation to
the other Party under this Agreement provided that such default in
payment or performance shall be deemed a default under this Article of
not cured within five (5)
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Business Days following written notice by the non-defaulting Party of
such default in payment or performance; (iii) files a petition or
otherwise commences, authorizes, or acquiesces in commencement of a
proceeding or cause under bankruptcy or similar law for the protection
of creditors or have such petition filed or proceedings commenced
against it; (iv) otherwise becomes bankrupt or insolvent (however
evidenced); or (v) fails to give adequate security for or assurance of
its ability to perform its further obligation under this Agreement
within seventy-two (72) hours of a reasonable request by the other
Party, then the non-defaulting Party upon written notice has the right
to withhold or suspend deliveries or receipts or terminate this
Agreement pursuant to Section 11.2. Subsections (i) - (v) above shall
each be considered an "Event of Default."
11.2 Early Termination
(a) If an Event of Default occurs with respect to a Party at any time
during the term of this Agreement, the other Party (the "Notifying
Party") may (i) upon written notice to the other Party, which notice
shall be given no later that sixty (60) days after the discovery of the
occurrence of the Event of Default, terminate this Agreement as of a
date determined by the Notifying Party ("Early Termination Date"); (ii)
withhold any payment due under this Agreement; and/or (iii) suspend
performance under this Agreement; provided, however, upon the
occurrence of any Event of Default listed in clause (i), (iii), or (iv)
of Section 11.1, this Agreement shall automatically terminate, without
notice, and without any other action by either Party as if an Early
Termination Date had been declared immediately prior to such event. If
an Early Termination Date has been designated or deemed to occur, the
Notifying Party shall in good faith calculate its damages resulting
from the termination of this Agreement (the "Termination Payment") as
set forth below.
(b) When the Notifying Party is UGIDC, the Termination Payment will be
the positive difference, if any, between (i) the payments (discounted
to the Early Termination Date at a rate per annum equal to the average
yield to maturity of United States treasury obligations having
comparable maturity dates) that UGIDC would have received under this
Agreement at the agreed to quantity (ies) and price(s) had the
Agreement not been terminate; and (ii) the payments (discounted in the
same manner as set forth above), for the remaining term, as either
quoted by a bona fide third party offer or which are reasonably
expected to be available in the market under replacement contract for
this Agreement.
(c) When the Notifying Party is UGI, the termination Payment will be
the positive difference, if any, between (i) the payments (discounted
to the Early Termination Date at a rate per annum equal to the average
yield to maturity of United States treasury obligations having
comparable maturity dates) that UGI would make under replacement
contract (with the same quantities and substantially similar terms and
conditions) for the remaining term of this Agreement, as either quoted
by a bona fide third party offer or which are reasonably expected to be
available in the market; and (ii) the payments (discounted in the same
manner as set forth above) that UGI would pay under the
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Agreement for its remaining term at the agreed to quantity(ies) and
price(s) had the Agreement not been terminated.
(d) To ascertain the market prices of a replacement contract, the
Notifying Party may consider, among other valuations, quotation from
leading dealers in electric purchase and sale contracts for Power and
other bona fide third party offers, all adjusted for the length of the
remaining term and differences in transmission costs, if any.
(e) The Notifying Party shall give the Defaulting Party written notice
of the amount of the Termination Payment, along with a statement
detailing the calculation of such amount. The defaulting Party shall
pay the Termination Payment to the Notifying Party immediately upon
receipt of such notice. At the time for payment of any amount due under
this Section, each Party shall pay to the other Party all additional
amounts payable by it pursuant to this Agreement, but all such amount
shall be netted and aggregated with any Termination Payment payable
hereunder. Any Party failing to make payment when due hereunder shall
pay interest in the overdue balance from the due date at the Interest
Rate.
ARTICLE 12
MISCELLANEOUS
12.1 Regulatory. It is understood by he Parties that this Agreement and
performance hereunder is subject to all present and future valid and
applicable laws, orders, statutes, and regulations of courts or
regulatory bodies (state or federal) having jurisdiction over UGI,
UGIDC, or this Agreement.
12.2 Authorizations. The Parties hereto represent that they have (or will
have upon the Effective Date of this Agreement) all appropriate
authorizations necessary or proper to consummate and carry out their
obligations under this Agreement.
12.3 Notices. Any notice, request, demand, statement, or payment provided
for in this Agreement shall be confirmed in writing, unless otherwise
noted, and shall be made as specified below; provided, however, that
notices of interruption and communications to Transmitting Utility
(ies) may be provided verbally effective immediately and, upon request,
confirmed in writing. A notice sent by facsimile transmission shall be
deemed received by the close of the Business Day on which such notice
was transmitted or such earlier time as confirmed by the receiving
Party and notice by overnight mail or courier shall be deemed to have
been received two (2) Business Days after it was sent or such earlier
time as is confirmed by the receiving Party unless it confirms a prior
verbal communication in which case any such notice shall be deemed
received on the day sent. Notices shall be addressed tot he Parties as
follows or to such other address as UGI or UGIDC shall from time to
time designate by letter properly addressed:
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UGI Utilities, Inc.:
NOTICES & CORRESPONDENCE INVOICES
UGI Utilities, Inc. - Electric Division UGI Utilities, Inc. - Electric Division
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Manager - Power Supply Attn: Controller - Electric Division
FAX: (▇▇▇) ▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇
UGI Development Company
NOTICES & CORRESPONDENCE PAYMENTS
UGI Development Company UGI Development Company
▇▇▇ ▇▇▇▇▇ ▇▇ 390 Route 11
▇▇ ▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Manager of Power Attn: Accounting
12.4 Entirety. This Agreement and any Exhibits hereto constitute the entire
agreement between the Parties and supersedes any and all prior or
contemporaneous agreements (including, without limitation, the Power
Sales Agreement dated July 1, 2001) and understandings between the
Parties related to the subject matter hereof and may not be modified,
amended, or terminated except in writing signed by each of the Parties
hereto. In addition, there are no other prior or contemporaneous
agreements or representations affecting the same subject matter other
than those herein expressed. Except for those matters which, in
accordance with this Agreement, may be resolved by the Parties and
documented electronically, it is further agreed that no amendment,
modification or change herein shall be enforceable, except as
specifically provided for in this Agreement, unless produced in writing
and executed by both Parties.
12.5 Governing Law and Venue. If any proceeding or action on or respecting
this Agreement is brought by one of the Parties against the other Party
including any counterclaims and cross claims asserted in any such
proceeding or action, this Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to Conflict of Law principles. Venue shall be either at
the FERC or the courts of the Commonwealth of Pennsylvania. Any such
proceeding shall be brought in the Courts of the Commonwealth of
Pennsylvania, except to the extent that the FERC has exclusive
jurisdiction over the subject matter of the proceeding.
12.6 Confidentiality. Neither Party shall disclose the terms of this
Agreement to any third party absent the express written permission of
the other Party except where (1) necessary
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to comply with any applicable law, order, regulation or exchange rule;
provided, however, that each Party shall notify the other party
promptly upon receipt of any request to it in any proceeding that could
result in an order requiring such disclosure and the Party subject to
such request shall use reasonable efforts to prevent or limit the
disclosure; or (2) necessary to effectuate transmission of electricity
subject to this Agreement. However, nothing herein shall prevent either
Party from disclosing simple price and volume terms to a third party
solely for the purpose of it being used in conjunction with other
similar information for establishing electric price indices by a
qualified independent entity provided that such information cannot be
used to identify the Parties to this Agreement. The Parties shall be
entitled to all remedies available at law or in equity to enforce, or
seek relief in connection with, these confidentiality obligations;
provided, however, that all monetary damages shall be limited to actual
direct damages and a breach of this section shall not give rise to the
right to suspend or terminate this Agreement.
12.7 Non-Waiver. No waiver by either Party hereto of any one or more
defaults by the other in the performance of any of the provisions of
this Agreement shall be construed as a waiver of any other defaults
whether of a like or different nature.
12.8 Severability. Except as otherwise stated herein, any provision, article
or section of this Agreement that is declared or rendered unlawful by a
court of law or regulatory agency with jurisdiction over the Parties,
or deemed unlawful because of statutory change, will not otherwise
affect the lawfulness, enforceability and applicability of the
remaining provisions, articles or sections of this Agreement, nor shall
it affect the obligations that arise under this Agreement.
12.9 Headings. The heading used for the Articles herein are for convenience
and reference purposes only and shall in no way affect the meaning or
interpretation of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement in duplicate originals to be effective as of the day and year first
written above.
UGI Utilities, Inc. UGI Development Company
By: By:
Name: Name:
Title: Title:
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DEFINITIONAL ANNEX
All references to Articles, Sections, Exhibits and Annexes are to those
set forth in or appended to this Agreement. Reference to any document means such
document as amended from time to time and reference to any party includes any
permitted successor or assignee thereof. The following definitions and any terms
defined internally in this Agreement shall apply to this Agreement and all
notices and communications made pursuant to this Agreement.
In addition to terms defined elsewhere in this Agreement, the following
definitions shall apply hereunder:
"Affiliate" means with respect to any person, any other person (other
than an individual) that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such person. For purposes of the foregoing definition, "control" means the
direct or indirect ownership of more than five percent (5%) of the outstanding
capital stock or other equity interests having ordinary voting power.
"Capacity Credits" shall have the same meaning as set forth in Section
2.1 of Schedule 11 to the Operating Agreement of the PJM Interconnection, L.L.C.
"Capacity Resource" shall have the same meaning as under the
Reliability Assurance Agreement.
"Contract Price" means the agreed price for the purchase and sale of
Power under this Agreement.
"Control Area" means an electric system or combination or electric
systems to which a common automatic generation control scheme is applied in
accordance with Good Utility operating Practices to:
(1) match, at all times, the power output of the generators within the
electric system(s) and Power purchased from entities outside the
electric system(s), with the load within the electric system(s);
(2) maintain scheduled interchange with other Control Areas;
(3) maintain the frequency of the electric system(s) within reasonable
limits; and
(4) provide sufficient generating capacity to maintain spinning and
operating reserves.
"Facilities" means a 44 MW General Electric LM - 6000 combustion
turbine electric generation facility ("Hunlock"), a 48 MW coal fired steam
electric generation facility ("Hunlock 3") and a coal fired steam electric
generation facility located in Indiana, Pennsylvania ("Conemaugh").
"FERC" means the Federal Energy Regulatory Commission or any successor
agency.
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Power Sales Agreement
UGIDC Sales to UGI Utilities, Inc.
Market-Based Rates
"Force Majeure" means any cause which the Party claiming Force Majeure
(the "Claiming Party"), was unable, in the exercise of due diligence and Good
Utility Operating Practice, to avoid, did not intend, and which is beyond the
control, and without fault or negligence, of the Claiming Party or the Claiming
Party's Power Resources, and which renders the Claiming Party or Claiming
Party's Power Resources unable to carry out wholly or in part its obligation
under this Agreement. Force Majeure includes, but is not restricted to: flood;
earthquake; geohydrolic subsidence; tornado; storm; fire; civil disturbance or
disobedience; labor dispute; labor or material shortage; sabotage; action or
restraint by court order or public or governmental authority (so long as the
Claiming Party has not applied for or assisted in the application for, and has
opposed where and tot he extent reasonable, such government action); and
reductions or interruptions in services which, in a Claiming Party's reasonable
judgment, or in the reasonable judgment of Claiming Party's Power Resources, are
necessary to protect generating or transmission facilities or the reliability of
transmission facilities; including the integrity, safety, reliability or
operation of any interconnected electric grid system; and government action that
results in the price at which Power may be made available under this Agreement
being fixed or established by any government authority at a level that results
in a price that may be charged under this Agreement that (i) in the case of
UGIDC, is lower that the Contract Price and (ii) in the case of UGI, is higher
than the Contract Price; provided, however, that such government action does not
include the imposition of any Taxes. Nothing contained herein shall be
constructed to require a Claiming Party to settle any strike or labor dispute.
"Good Utility Operating Practice" means the practices, methods and acts
engaged in or approved by a significant portion of the electric power industry
during the relevant time period, or the practices, methods and acts which, in
the 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
consistent with reliability, safety, expedition, the requirements of
governmental agencies having jurisdiction and, if appropriate or relevant under
the Transaction in question, at the lowest reasonable cost; such term is not
intended to be limited to the optimum practice, method or act to the exclusion
of all others, but rather to constitute a spectrum of acceptable practices,
methods or acts.
"Interest Rate" means the prime rate of interest published by Mellon
Bank of Philadelphia or any successor thereto plus two hundred basis points as
in effect from time to time; provided, however, that the Interest Rate shall not
exceed the maximum rate permitted by applicable law.
"Power" means electric capacity credits or energy or any combination
thereof. Energy delivered as a component of power shall be of the type commonly
know as three-phase sixty-cycle alternating current. Use of either a reservation
charge and associated energy charge or an as-delivered energy charge is for
economic and operational convenience, and does not change the nature of the
Power sold under this Agreement.
"Power Resources" means the sources of Power with which UGIDC has made
arrangements in order to provide Power under this Agreement.
13
Power Sales Agreement
UGIDC Sales to UGI Utilities, Inc.
Market-Based Rates
"PJM" means the Pennsylvania-New Jersey-Maryland Interconnection,
L.L.C..
"Quantity" means the amount of Power to be contracted for under this
Agreement.
"Regulatory Approvals" means, for any Transaction, all applicable state
and federal regulatory authorizations, consents, or approvals required under
this Agreement.
"Reliability Assurance Agreement" means the Reliability Assurance
Agreement Among Load Serving Entities in the PJM Control Area as amended and
revised from time-to-time.
"Schedule" or "Scheduling" means communicating with and confirming with
all Transmitting Utilities as well as between UGI and UGIDC that a particular
amount of Power is to be delivered or received and providing all such
information and satisfying all such requirements as may be necessary to cause
such Parties to recognize and confirm the delivery or receipt of the Power. All
scheduling of services with Transmitting Utility(ies) and Control Area(s) shall
be accomplished in compliance with the scheduling rules of those Transmitting
Utility(ies) and Control Area(s) . Between UGIDC and UGI, scheduling shall be
accomplished no later than sixty (60) minutes before the start of the intended
power flow or as per other rules as UGI and UGIDC may jointly agree from time to
time.
"Taxes" means all ad valorem, property, occupation, utility, gross
receipts, sales use, excise, and other taxes or governmental charges, licenses,
permits, and assessments, other than taxes based on net income or net worth.
"Transmitting Utility" means the utility or utilities and their
respective Control Areas transmitting Power from Power Resources to the Delivery
Point(s) as part of this Agreement.
"UGIDC Zone" shall mean UGI Development Company transmission zone as
described in and established by the PJM Open Access Agreement.
"1935 Interconnection Agreement" shall mean the interconnection
agreement as supplemented and amended from time to time which covered the
interconnection and the coordinated operations of the electric systems of UGIDC
and UGI within the PJM.
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