EXHIBIT 10.18
LETTER OF UNDERSTANDING
This Letter of Understanding (Letter) is entered into by and between ARIZONA
ELECTRIC POWER COOPERATIVE, INC., an incorporated cooperative association
organized and existing under the laws of the State of Arizona; ARIZONA PUBLIC
SERVICE COMPANY, an Arizona corporation; CITY OF FARMINGTON, an incorporated
municipality existing as a political subdivision under the laws of the State of
New Mexico; EL PASO ELECTRIC COMPANY, a Texas corporation; INCORPORATED, COUNTY
OF LOS ALAMOS, a political subdivision of the State of New Mexico; NEVADA POWER
COMPANY, a Nevada corporation; PLAINS ELECTRIC GENERATION AND TRANSMISSION
COOPERATIVE, INC., an incorporated cooperative association organized and
existing under the laws of the State of New Mexico; PUBLIC SERVICE COMPANY OF
NEW MEXICO, a New Mexico corporation; SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT, an agricultural improvement district organized
and existing under the laws of the State of Arizona; TUCSON ELECTRIC POWER
COMPANY, an Arizona corporation; and THE UNITED STATES OF AMERICA, WESTERN AREA
POWER ADMINISTRATION, DESERT SOUTHWEST REGION represented by the officer
executing this Agreement, a duly appointed successor or a duly authorized
representative, pursuant to the Acts of Congress dated June 17, 1902 (32 Stat.
388), and August 4, 1977 (91 Stat. 565), and acts amendatory thereof or
supplementary thereto. The entities listed above are hereinafter referred to
collectively as "Parties" and individually as "Party."
IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES HEREIN SET FORTH, THE
PARTIES AGREE AS FOLLOWS:
In accordance with Section 5.1 of the Southwest Reserve Sharing Group
(SRSG) Participation Agreement, the Parties agree to shorten the notice period
required to withdraw from the SRSG Participation Agreement from one (1) year to
thirty (30) days advance written
Southwest Reserve Sharing Group
Letter of Understanding
Page 2
notice. This interim notice requirement shall apply to the period of January 1,
1998 through June 30, 1998.
The Parties agree to direct the Operating Committee to create an
Operating Procedure to address penalties associated with non-compliance of the
SRSG Participation Agreement by April 1, 1998. In the event the Operating
Committee is unsuccessful in creating such Operating Procedure by April 1, 1998,
the Operating Committee shall recommend to the Executive Committee a list of
options. The Executive Committee shall make a final determination relating to
penalties prior to May 1, 1998. The final determination of the Operating or
Executive Committee shall be binding on all Parties. In any event, any and all
penalty assessments shall be waived for the period of January 1, 1998 through
June 30, 1998.
Upon the execution of this Letter, the Parties agree that the following
Operating Procedures, issued November 3, 1997, shall become effective January 1,
1998:
* Resource Reserve Qualification
* Data Submittals
* After the Fact Hourly Reserve Calculations
* Activation of Reserves for Emergency Assistance
* Emergency Communication Procedure
* Suspension or Termination of Membership
The terms and conditions of this Letter of Understanding shall terminate
on July 1, 1998.
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Southwest Reserve Sharing Group
Letter of Understanding
Page 3
Each Party hereto represents and warrants that the person executing this
Letter has been duly authorized to act on its behalf.
ARIZONA ELECTRIC POWER COOPERATIVE, INC.
By: /s/ MILES ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
TITLE: Board Vice President
---------------------------------
DATE: November 11, 1997
---------------------------------
ARIZONA PUBLIC SERVICE COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------
TITLE: Executive V.P. Commercial
---------------------------------
Operations
---------------------------------
DATE: November 7, 1997
---------------------------------
CITY OF FARMINGTON
ATTEST: By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
TITLE: Electric Utility Director
---------------------------------
---------------------------------- DATE: November 14, 1997
---------------------------------
EL PASO ELECTRIC COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
TITLE: Assistant VP-System Operations
---------------------------------
DATE: November 24, 1997
---------------------------------
Southwest Reserve Sharing Group
Letter of Understanding
Page 4
INCORPORATED COUNTY OF LOS ALAMOS
By: /s/ D. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
TITLE: Utilities Manager
---------------------------------
DATE: November 13, 1997
---------------------------------
NEVADA POWER COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
TITLE: Division Director, System
---------------------------------
Planning & Operations
---------------------------------
DATE: November 6, 1997
---------------------------------
PLAINS ELECTRIC GENERATION AND
TRANSMISSION COOPERATIVE, INC.
ATTEST: By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
TITLE: Executive VP/General Manager
---------------------------------
---------------------------------- DATE: November 10, 1997
Assistant Secretary ---------------------------------
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: /s/ ▇. ▇▇▇▇▇
------------------------------------
TITLE: Sr. Vice President, Electric
---------------------------------
Services
---------------------------------
DATE: November 10, 1997
---------------------------------
Southwest Reserve Sharing Group
Letter of Understanding
Page 5
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
TITLE: Associate General Manager
---------------------------------
Marketing, Customer Service,
---------------------------------
Finance and Planning
---------------------------------
DATE: November 13, 1997
---------------------------------
TUCSON ELECTRIC POWER COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
------------------------------------
TITLE: Vice President
---------------------------------
DATE: November 12, 1997
---------------------------------
WESTERN AREA POWER ADMINISTRATION
DESERT SOUTHWEST REGION
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
------------------------------------
TITLE: Regional Manager
---------------------------------
DATE: November 17, 1997
---------------------------------
SOUTHWEST RESERVE SHARING GROUP
PARTICIPATION AGREEMENT
Execution Copy
SOUTHWEST RESERVE SHARING GROUP
-------------------------------
PARTICIPATION AGREEMENT
-----------------------
TABLE OF CONTENTS
-----------------
SECTION TITLE PAGE
------- ----- ----
1. PARTIES........................................................ 1
2. RECITALS....................................................... 2
3. AGREEMENT...................................................... 3
4. DEFINITIONS.................................................... 3
4.1 Administrative Costs..................................... 3
4.2 Administrator Site System................................ 3
4.3 Agreement................................................ 3
4.4 Agreement Developmental Fee.............................. 3
4.5 Area Control Error (ACE)................................. 3
4.6 Capacity................................................. 3
4.7 Capital Expenditures..................................... 4
4.8 Contingency Reserve...................................... 4
4.9 Control Area............................................. 4
4.10 Developmental Costs...................................... 4
4.11 Disturbance.............................................. 4
4.12 Emergency................................................ 4
4.13 Emergency Assistance..................................... 5
4.14 Energy................................................... 5
4.15 Executive Committee...................................... 5
4.16 Exhibits................................................. 5
4.17 Firm Commitment.......................................... 5
4.18 Firm Load................................................ 5
4.19 Funding Agreement No. 2.................................. 5
4.20 Interim Funding Agreement No. 1.......................... 5
4.21 Load..................................................... 5
4.22 Most Severe Single Contingency........................... 5
4.23 NERC Disturbance Control Standard (DCS).................. 6
4.24 Non-Spinning Reserve..................................... 6
4.25 Operating Committee...................................... 6
4.26 Operating Procedure...................................... 6
4.27 Operating Reserve........................................ 6
4.28 Peak Commitment.......................................... 6
4.29 Service Schedule......................................... 6
4.30 Single Contingency....................................... 6
4.31 Spinning Reserve......................................... 7
4.32 SRSG..................................................... 7
4.33 SRSG Administrator....................................... 7
4.34 SRSG Emergency Assistance Matrices....................... 7
4.35 SRSG Firm Deliveries..................................... 7
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4.36 SRSG Firm Receipts....................................... 7
4.37 System................................................... 7
4.38 WSCC Minimum Operating Reliability Criteria.............. 7
5. EFFECTIVE DATE AND TERM........................................ 7
6. RESOLUTION OF CONFLICTS........................................ 8
7. PARTY OBLIGATIONS.............................................. 8
8. ORGANIZATION AND ADMINISTRATION................................ 10
8.1 SRSG Administrator........................................ 10
8.2 Executive Committee....................................... 12
8.3 Operating Committee....................................... 14
8.4 General................................................... 15
9. MEMBERSHIP ELIGIBILITY AND CERTIFICATION....................... 16
10. COST RESPONSIBILITIES.......................................... 18
11. DISBURSEMENT OF FUNDS.......................................... 19
11.1 Application Fees......................................... 19
11.2 Entrance Fees............................................ 19
11.3 Penalty Funds............................................ 19
11.4 Administrative Costs..................................... 19
12. VOTING AND APPROVALS........................................... 19
12.1 Amendments............................................... 20
12.2 Operating Procedures..................................... 20
12.3 Committee Voting......................................... 20
13. BILLING AND PAYMENTS........................................... 21
14. AUDITS......................................................... 23
15. DISPUTE RESOLUTION............................................. 24
16. UNCONTROLLABLE FORCES.......................................... 26
17. WAIVERS........................................................ 27
18. NOTICES........................................................ 27
19. APPROVALS...................................................... 28
20. TRANSFER OF INTEREST IN AGREEMENT.............................. 29
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21. SEVERABILITY................................................... 30
22. RELATIONSHIPS OF PARTIES....................................... 30
23. NO DEDICATION OF FACILITIES.................................... 30
24. THIRD PARTY BENEFICIARIES...................................... 30
25. LIABILITY...................................................... 31
26. DEFAULTS....................................................... 31
27. OTHER AGREEMENTS............................................... 33
28. PROPRIETARY INFORMATION........................................ 33
29. PARTICIPATION BY THE UNITED STATES............................. 33
30. CONTINGENT UPON APPROPRIATIONS................................. 34
31. OFFICIALS NOT TO BENEFIT....................................... 34
32. EXECUTION BY COUNTERPART....................................... 34
33. SIGNATURE CLAUSE............................................... 35
EXHIBITS
--------
A. Official Mailing Titles and Addresses of the Parties..........Ex A-1
B. Official Billing Addresses................................... Ex B-1
C Agreement Developmental Fee.................................. Ex C-1
SERVICE SCHEDULES
-----------------
A. RESERVE OBLIGATIONS............................................ A-1
B. ACTIVATION OF RESERVES FOR EMERGENCY ASSISTANCE................ B-1
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SOUTHWEST RESERVE SHARING GROUP
PARTICIPATION AGREEMENT
1. PARTIES:
The Parties to this SOUTHWEST RESERVE SHARING GROUP PARTICIPATION AGREEMENT
are: ARIZONA ELECTRIC POWER COOPERATIVE, INC., an incorporated cooperative
association organized and existing under the laws of the State of Arizona
(hereinafter called "AEPC"); ARIZONA PUBLIC SERVICE COMPANY, an Arizona
corporation (hereinafter called "APS"); CITY OF FARMINGTON, an incorporated
municipality existing as a political subdivision under the laws of the
State of New Mexico (hereinafter called "FARM"); EL PASO ELECTRIC COMPANY,
a Texas corporation (hereinafter called "EPE"); INCORPORATED COUNTY OF LOS
ALAMOS, a political subdivision of the State of New Mexico (hereinafter
called "LAC"); NEVADA POWER COMPANY, a Nevada corporation (hereinafter
called "NEVP"); PLAINS ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE,
INC., an incorporated cooperative association organized and existing under
the laws of the State of New Mexico (hereinafter called "PEGT"); PUBLIC
SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (hereinafter called
"PNM"); SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, an
agricultural improvement district organized and existing under the laws of
the State of Arizona (hereinafter called "SRP"); TUCSON ELECTRIC POWER
COMPANY, an Arizona corporation (hereinafter called "TEP"); and THE UNITED
STATES OF AMERICA, WESTERN AREA POWER ADMINISTRATION, DESERT SOUTHWEST
REGION represented by the officer executing this Agreement, a duly
appointed successor or a duly authorized representative, pursuant to the
Acts of Congress dated June 17, 1902 (32 Stat. 388), and August 4, 1977 (91
Stat. 565), and acts amendatory thereof or supplementary
1
thereto (hereinafter called "WALC"). The entities listed above are
hereinafter referred to collectively as "Parties" and individually as
"Party."
2. RECITALS:
2.1 Parties from Arizona, Nevada, New Mexico, and West Texas have
developed a conceptual framework for a regional reserve sharing group
that for some Parties will replace their Inland Power Pool membership
when the Amended and Restated Inland Power Pool Agreement expires on
December 31, 1997.
2.2 The Southwest Reserve Sharing Group (SRSG) will allow for sharing of
Contingency Reserves among the Parties in order to realize a more
efficient and economic power system operation while maintaining the
reliability of the interconnected system. Any other reserve
obligation necessary to meet North American Electric Reliability
Council (NERC) and Western Systems Coordinating Council (WSCC)
criteria will continue to be the responsibility of each Party.
2.3 It is the intent of the Parties to meet or exceed all WSCC and NERC
reliability criteria, as such criteria may be amended, modified, or
revised.
2.4 The Parties believe that this Agreement will yield important benefits
to their respective customers or members. Such benefits include the
following:
2.4.1 The combined Loads of the Parties can be supplied and protected
with less aggregate Contingency Reserve resulting in a net
savings in operating expenses.
2.4.2 Emergency conditions can be met with less likelihood of
curtailment or impairment of electric service to customers or
members of the Parties.
2.4.3 The Parties can promote, facilitate, and coordinate the
operation of the respective Systems of the Parties, to the
benefit of the interconnected system.
2
2.5 Each Party is willing to utilize its respective electric generation
and transmission systems to the extent of its respective obligations
which are set forth in this Agreement.
3. AGREEMENT:
IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES HEREIN SET FORTH, THE
PARTIES AGREE AS FOLLOWS:
4. DEFINITIONS:
The following terms, whether in the singular or in the plural, when
initially capitalized in this Agreement, shall have the meanings specified:
4.1 Administrative Costs - Costs incurred by the SRSG Administrator in
--------------------
performing ongoing administrative functions assigned pursuant to
Section 8.1 herein.
4.2 Administrator Site System - A computer application system, operated
-------------------------
and maintained by the SRSG Administrator, that (i) contains the data
provided by each Party, (ii) provides tools for the maintenance of
such data, and (iii) provides a means to determine and allocate
reserve quotas, Emergency Assistance, reserve penalties and
settlements to each Party.
4.3 Agreement - This Southwest Reserve Sharing Group Participation
---------
Agreement, together with the Service Schedules, attachments thereto,
and Exhibits.
4.4 Agreement Developmental Fee - A fee charged to new members which
---------------------------
reflects costs incurred by the Parties in the formation of the SRSG.
Such fee shall be determined in accordance with Exhibit C attached
hereto.
4.5 Area Control Error (ACE) - The instantaneous difference between
------------------------
actual and scheduled interchange, taking into account the effects of
frequency bias (and time error or unilateral inadvertent interchange
if automatic correction for either is part of the system's automatic
generation control).
4.6 Capacity - The rated continuous load-carrying ability, expressed in
--------
megawatts.
3
(MW) or megavoltamperes (MVA) of generation, transmission, or other
electrical equipment.
4.7 Capital Expenditures - All capital costs incurred by the SRSG in
--------------------
association with making enhancements to, or the replacement of, the
initial hardware and software system of the SRSG.
4.8 Contingency Reserve - A portion of Operating Reserve, sufficient to
-------------------
reduce ACE to meet the NERC Disturbance Control Standard following the
Most Severe Single Contingency. Contingency Reserve consists of both
Spinning Reserve and Non-Spinning Reserve; however, at least fifty
percent (50%) of this Contingency Reserve shall be Spinning Reserve.
Any Spinning Reserve in excess of a Party's Spinning Reserve quota may
count towards its remaining Contingency Reserve quota.
4.9 Control Area - An area comprised of an electrical system or systems,
------------
bound by interconnection metering and telemetry, capable of
controlling generation to maintain its interchange schedule with other
Control Areas and contributing to frequency regulation of the
interconnection.
4.10 Developmental Costs - All costs incurred in the initial development
-------------------
of the hardware and software systems associated with the Administrator
Site System.
4.11 Disturbance - The sudden loss of a Party's transmission or generation
-----------
Capacity that causes an ACE of a magnitude that requires immediate
action to meet NERC performance criteria.
4.12 Emergency - An abnormal system condition which requires immediate
---------
manual or automatic action to prevent loss of Firm Load, equipment
damage, or to prevent tripping of system elements that could adversely
affect the reliability of the electric system.
4
4.13 Emergency Assistance - Energy furnished to a Party under Emergency
--------------------
conditions when power supply to the Party's Firm Commitments is
threatened or curtailed.
4.14 Energy - The accumulated amount of power delivered over a stated time
------
interval; usually expressed in megawatt hours (MWh).
4.15 Executive Committee - That committee established pursuant to Section 8
-------------------
herein.
4.16 Exhibits - Exhibits A, B, and C attached hereto, as they may be
--------
amended, modified, or revised.
4.17 Firm Commitment - The Load associated with wholesale and retail power
---------------
customers on whose behalf the Party, by statute, franchise, regulatory
requirement, or contract, has undertaken an obligation to operate the
Party's system to meet the reliable electric needs of such customers.
For SRSG purposes, Firm Commitment shall be calculated as the sum of
Firm Load, plus SRSG Firm Deliveries, less SRSG Firm Receipts.
4.18 Firm Load - Power and Energy requirements (including system losses) of
---------
customers which a Party is obligated to supply at all times.
4.19 Funding Agreement No. 2 - The Southwest Reserve Sharing Group Funding
-----------------------
Agreement No. 2 executed by the Parties on July 2, 1997.
4.20 Interim Funding Agreement No. 1 - The Southwest Reserve Sharing Group
-------------------------------
Interim Funding Agreement No. 1 executed by the Parties on February
28, 1997.
4.21 Load - An end-use device or customer that receives power from the
----
electric system.
4.22 Most Severe Single Contingency - That Single Contingency which
------------------------------
results in the most adverse system performance under any operating
condition or
5
anticipated mode of operation.
4.23 NERC Disturbance Control Standard (DCS) - The NERC Disturbance Control
---------------------------------------
Standard established in accordance with NERC Policy 1, as it may be
amended, modified, or revised.
4.24 Non-Spinning Reserve - That portion of Operating Reserve not
--------------------
connected to the system but capable of serving demand within ten (10)
minutes, or interruptible Load that can be removed from the system
within ten (10) minutes.
4.25 Operating Committee - That committee established pursuant to Section 8
-------------------
herein.
4.26 Operating Procedure - Written procedures, developed and approved by
-------------------
the Operating Committee pursuant to Section 8 herein, to implement
specific provisions of this Agreement.
4.27 Operating Reserve - That capability above firm system demand required
-----------------
to provide for regulation, Load forecasting error, forced and
scheduled outages, and local area protection. Operating Reserve
consists of Spinning Reserve and Non-Spinning Reserve.
4.28 Peak Commitment - The highest hourly Firm Commitment during a
---------------
designated time period.
4.29 Service Schedule - A specific written agreement among the Parties for
----------------
the purposes of dictating or specifying methods of coordination,
operation, maintenance, or planning of the respective Systems, for
improving the reliability of power supply and achieving economics for
the customers or members served by the Parties.
4.30 Single Contingency - The loss of a single system element under any
------------------
operating condition or anticipated mode of operation.
6
4.31 Spinning Reserve - Unloaded generation which is synchronized and
----------------
ready to serve additional demand.
4.32 SRSG - The Southwest Reserve Sharing Group.
----
4.33 SRSG Administrator - That Party or entity designated to perform
------------------
duties as provided for in Section 8 herein.
4.34 SRSG Emergency Assistance Matrices - Those matrices depicting the
----------------------------------
allocation of Emergency Assistance among the Parties.
4.35 SRSG Firm Deliveries - Deliveries which are not recallable in less
--------------------
than ten (10) minutes.
4.36 SRSG Firm Receipts - Receipts which are not recallable in less than
------------------
sixty (60) minutes.
4.37 System - The integrated electrical facilities, which may include
------
generation, transmission and distribution facilities, that are
controlled by one organization.
4.38 WSCC Minimum Operating Reliability Criteria - WSCC Minimum Operating
-------------------------------------------
Reliability Criteria dated March 11, 1997, as such criteria may be
amended, modified, or revised.
5. EFFECTIVE DATE AND TERM:
5.1 This Agreement shall become effective on the later of: (i) when duly
executed by all Parties, (ii) when filed with the Federal Energy
Regulatory Commission for acceptance, or (iii) January 1, 1998. This
Agreement shall continue in effect for a period of ten (10) years from
said effective date and thereafter on a year to year basis until
terminated by the Parties; provided, however, that any Party may
withdraw its participation at any time after the effective date of
this Agreement by providing written notice to the Executive Committee
at least one (1) year in advance of its effective date of withdrawal,
unless a shorter period of time is agreed to by all Parties.
7
5.2 As of the effective date of withdrawal, the withdrawing Party shall
have no further rights or obligations under this Agreement, except
payment of amounts then or previously due. Such amounts shall include
any financial obligation incurred hereunder prior to the effective
date of withdrawal and any amounts incurred by the SRSG Administrator
in processing the withdrawal of such Party.
5.3 Neither expiration, termination nor voiding of this Agreement shall
relieve a Party of its obligation to make payment of amounts due
hereunder.
5.4 No Party shall oppose before any regulatory agencies having
jurisdiction, a Party's withdrawal from this Agreement, so long as the
provisions of Sections 5.1 and 5.2 herein have been met.
6. RESOLUTION OF CONFLICTS:
In the event of a conflict between the terms and conditions of this
Agreement and a Service Schedule, the terms and conditions of the Service
Schedule shall prevail.
7. PARTY OBLIGATIONS:
7.1 It is the intent of the Parties to meet or exceed the WSCC Minimum
Operating Reliability Criteria and the NERC Control Performance And
Disturbance Control Standards, as they may be adopted, modified, or
revised.
7.2 The SRSG has been formed for the purpose of sharing Contingency
Reserves. Each Party shall maintain, or cause to be maintained, an
amount of Contingency Reserve equal to or greater than its Contingency
Reserve requirement, as such requirement shall be determined in
accordance with Service Schedules A and B attached hereto.
7.3 Each Party shall activate and provide its Contingency Reserves to
other Parties, as requested, in accordance with Service Schedule B
attached hereto.
8
7.4 Each Party shall operate its System continuously in parallel;
provided, however, that each Party shall have the right to temporarily
separate the facilities of its System from the System of any other
Party when, in the judgment of the separating Party, abnormal
operating conditions exist which require such separation to prevent
damage to its facilities, injuries to personnel or impairment of
service to its customers or members; and for necessary inspection,
maintenance, repair or replacement of its facilities, or additional
construction.
7.5 Each Party shall exercise reasonable efforts to construct, operate and
maintain its System to avoid the likelihood of a Disturbance
originating within its System causing an impairment of service in the
Systems of other Parties and to minimize the exposure to damage
resulting from Disturbances on the System of other Parties.
7.6 The Parties shall comply with all SRSG Operating Procedures.
7.7 Any Party within a Control Area may make arrangements with the host
Control Area to provide or share reserve responsibilities between
themselves or third parties, to include ▇▇▇▇▇▇▇▇ for reserve
deficiency, or any other services rendered, so long as the total
reserve responsibility is accommodated.
7.8 Each Party shall be responsible to provide and maintain hardware and
software which is compatible with the Administrator Site System for
complying with the reporting requirements of this Agreement.
7.9 Each Party is responsible for any financial obligation derived from
its membership herein.
7.10 Each Party shall be responsible for its share of costs and expenses
attributable to the SRSG Administrator performing its functions
pursuant to this Agreement.
9
7.11 Each Party shall cooperate with the SRSG Administrator and provide the
SRSG Administrator information necessary for the performance of its
duties herein.
8. ORGANIZATION AND ADMINISTRATION:
As a means of securing effective and timely cooperation within the
activities of the SRSG and a means of facilitating the administration,
coordination, operations and problem solving, the Parties hereby establish
(i) the role of a SRSG Administrator, (ii) an Executive Committee, and
(iii) an Operating Committee.
8.1 SRSG Administrator
------------------
8.1.1 The SRSG Administrator shall be designated by the Operating
Committee from among the Parties of the SRSG; provided,
however, that the Operating Committee, with the approval of the
Executive Committee, may designate an entity other than a Party
to serve as SRSG Administrator.
8.1.2 The SRSG Administrator may resign by providing written notice
to both the Executive Committee and the Operating Committee at
least one (1) year in advance of the effective date of its
resignation, unless a shorter period of time is agreed to by
all Parties.
8.1.3 The SRSG Administrator may be removed at any time by the
Executive Committee, with or without cause.
8.1.4 Upon resignation or removal of the SRSG Administrator pursuant
to Section 8.1.2 or Section 8.1.3 herein, the outgoing SRSG
Administrator shall:
8.1.4.1 Transfer and provide technical training regarding all
hardware, software, and all other material owned by
the SRSG or owned on behalf of the SRSG to the new
SRSG Administrator; and
10
8.1.4.2 Settle all outstanding financial obligations
corresponding with its term as SRSG Administrator and
transfer any remaining SRSG funds to the new SRSG
Administrator.
8.1.5 The SRSG Administrator shall be responsible for performing its
assigned duties in accordance with Operating Procedures
established by the Operating Committee. Such duties shall
include, but not be limited to the following:
8.1.5.1 Data - Data collection, data monitoring, and data
----
processing.
8.1.5.2 Preparation and Consolidation of Reports
----------------------------------------
8.1.5.2.1 Maintenance and preservation of all records
(including both the Executive Committee and
Operating Committee meeting minutes and
Operating Procedures) reasonably necessary
for the performance of the duties
hereunder.
8.1.5.2.2 Submission of an annual budget to the
Operating Committee and the tracking of
SRSG related expenses.
8.1.5.2.3 Preparation and distribution of SRSG
reports required by NERC, WSCC, and the
Operating Committee.
8.1.5.3 Administrator Site System - The SRSG Administrator
-------------------------
shall be responsible for the procurement, operation,
maintenance, and the coordination of the Administrator
Site System.
8.1.5.4 Payments - The SRSG Administrator shall be
--------
responsible for the payment of invoices and the
distribution of funds in accordance with this
Agreement.
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8.1.5.5 Other Duties as Assigned - Such other duties shall
------------------------
include but not be limited to the following:
8.1.5.5.1 Training and consulting for the Parties in
association with questions or problems
relating to SRSG reserves and SRSG data
reporting;
8.1.5.5.2 Certify that an applicant has met all
membership eligibility criteria as set
forth in Section 9 herein;
8.1.5.5.3 Notify the Executive Committee and all
Parties that an applicant has met all
membership criteria and is now a Party to
the SRSG;
8.1.5.5.4 Notify all Parties when an existing
Party(ies) is not in compliance with this
Agreement.
8.1.5.5.5 ▇▇▇▇ each Party for its share of expenses
incurred pursuant to Section 13 herein.
8.1.5.5.6 Cooperate with an audit request of the
Operating Committee pursuant to Section 14
herein.
8.1.5.5.7 Make available during its normal business
hours all the records and accounts
maintained by the SRSG Administrator
pertaining to the requesting Party(ies) and
pursuant to activities and responsibilities
hereunder. Such records shall be made
available in a timely manner and at the
requesting Party's expense.
8.2 Executive Committee
-------------------
The Executive Committee shall consist of one representative from each
Party designated pursuant to Section 8.4 herein. The responsibilities
of the
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Executive Committee are as follows:
8.2.1 To establish additional subcommittees as it may from time to
time deem necessary;
8.2.2 To review at least annually the activities of all committees to
ensure their activities are coordinated and consistent with the
spirit and intent of this Agreement;
8.2.3 To review unresolved disputes which may arise within the SRSG
and resolve the disputes pursuant to Section 15 herein;
8.2.4 To review and approve the annual budget of the SRSG;
8.2.5 To review and recommend to the Parties for approval additions
or amendments to this Agreement;
8.2.6 To receive, review, and process an applicant's written request
to become a Party, in accordance with Section 9 herein and
where applicable, notify entities of their SRSG eligibility in
accordance with Section 10.2 herein;
8.2.7 To establish, review, approve, and maintain procedures for the
determination and recertification of creditworthiness for new
applicants and existing members respectively;
8.2.8 To establish procedures for the allocation to and payment by
any new Party to the existing Parties for the past, current and
future cost of facilities, equipment, services, or other costs
such as software that are of benefit to all Parties;
8.2.9 To review and process, in accordance with Section 5 herein, the
notice by a Party to withdraw as a Party to this Agreement;
8.2.10 To review and process the termination of a Party's rights and
obligations under this Agreement;
13
8.2.11 To provide minutes for all Executive Committee meetings and
distribute copies of such minutes to all committee members and
to the SRSG Administrator; and
8.2.12 To do such other things and carry out such duties as
specifically required or authorized by this Agreement.
8.3 Operating Committee
-------------------
The Operating Committee shall consist of one representative from each
Party designated pursuant to Section 8.4 herein. The responsibilities
of the Operating Committee are as follows:
8.3.1 To establish Operating Procedures for the sharing of
Contingency Reserves such that the SRSG will meet or exceed the
WSCC Minimum Operating Reliability Criteria and NERC's
Disturbance Control Standards relative to Contingency Reserves,
as they may be amended, modified, or revised;
8.3.2 To establish, review, approve, and modify Operating Procedures,
consistent with the provisions herein, for the guidance of
operating employees in the Parties' Systems as to matters
affecting the ability to maintain Contingency Reserves, the
delivery and receipt of Emergency Assistance, and other similar
operating matters;
8.3.3 To establish, review, approve, and modify Operating Procedures
for determining the ratings of the generating facilities of the
Parties;
8.3.4 To establish, review, approve and modify Operating Procedures
for calculating Contingency Reserves within the SRSG;
8.3.5 To establish, review, approve, and modify Operating Procedures
relating to Contingency Reserve deficiencies;
8.3.6 To establish, review, approve, and modify Operating Procedures
14
relating to suspension or termination of a Party from this
Agreement;
8.3.7 To establish a "Disturbance Review" task force to review all
SRSG Disturbances to ensure that all SRSG and individual Party
reliability obligations are being met;
8.3.8 To ensure the proper level and location of reserves;
8.3.9 To designate a SRSG Administrator to function under the
direction of the Operating Committee;
8.3.10 To review and recommend, as necessary, the types and
arrangement of equipment and associated communication
facilities needed for SRSG operations;
8.3.11 To review and recommend approval of the annual budget, prepared
by the SRSG Administrator, to the Executive Committee;
8.3.12 To develop, review, approve, and recommend changes to the SRSG
Emergency Assistance Matrices;
8.3.13 To review and process the suspension of all benefits of reserve
sharing and applicable reserve sharing obligations of a Party;
8.3.14 To recommend the termination of a Party from the Agreement to
the Executive Committee;
8.3.15 To provide minutes for all Operating Committee meetings and
distribute copies of such minutes to all committee members and
to the SRSG Administrator; and
8.3.16 To do such other things and carry out such duties as
specifically required or authorized by this Agreement.
8.4 General
-------
8.4.1 Each Party shall designate, in accordance with Section 18
herein, its representative and alternate representative (to act
in the absence of
15
the designated representative) on each committee within thirty
(30) days after the execution of this Agreement. Notice of any
change of representation shall be given by written notice to
the other Parties and the SRSG Administrator. Each Party's
designated representatives or alternate representatives will be
authorized to act on its behalf with respect to those committee
responsibilities provided herein.
8.4.2 Each committee shall meet at least annually.
8.4.3 Each committee will elect a chairperson and establish a meeting
protocol at its first meeting.
8.4.4 Each committee shall elect a new chairperson at least every two
(2) years thereafter, provided, that a succeeding chairperson
may not be from the same Party.
8.4.5 No committee shall have the authority to amend this Agreement.
9. MEMBERSHIP ELIGIBILITY AND CERTIFICATION:
An entity may apply and become a Party to this Agreement by submitting to
the Executive Committee a written request for membership to the SRSG,
accompanied by a non-refundable application fee of five thousand dollars
($5,000), and by demonstrating to the satisfaction of the Executive
Committee that the entity can continuously meet the criteria and
certification requirements set forth below:
9.1 It is eligible to file a request for transmission service pursuant to
Section 211 of the Federal Power Act.
9.2 It can maintain, provide and receive reserves, by contractual
arrangement or otherwise, as required pursuant to this Agreement, and
is able to deliver and receive Energy associated with these reserves
at one or more of the following high voltage switchyards:
(a) Four Corners 230 kV or 345 kV Switchyards;
16
(b) Navajo 500 kV Switchyard;
(c) Palo Verde 500 kV Switchyard;
(d) San ▇▇▇▇ 345 kV Switchyard;
(e) Westwing 500 kV Switchyard;
(f) Shiprock 345 kV Switchyard;
(g) ▇▇▇▇ 230 kV, 345 kV, or 500 kV Switchyards;
(h) ▇▇▇▇▇▇▇▇ 345kV Switchyard;
(i) West Mesa 345kV, Switchyard;
(j) Other switchyards as may be determined by the Operating
Committee.
9.3 It has established appropriate creditworthiness consistent with the
criteria established in accordance with Section 8.2.7 herein.
9.4 It has the ability to provide documentation of an ACE or ACE equivalent
measurement. The SRSG will operate using all individual Party's ACE data
for Disturbance evaluation.
9.5 It has the ability to comply with all applicable terms and conditions
established pursuant to Service Schedules A and B hereto.
9.6 Upon demonstrating to the satisfaction of the Executive Committee that such
entity meets the criteria set forth in Sections 9.1 through 9.5 herein, the
entity shall be deemed eligible to become a Party.
9.7 Once the entity has been deemed eligible to become a Party, the Executive
Committee shall direct the SRSG Administrator to begin the certification
process.
9.8 The certification process shall consist of the following: (i) execution of
this Agreement or a counterpart hereof; (ii) verification from the SRSG
Administrator that such entity is current with all its payment obligations
relative
17
to the SRSG, and (iii) verification from the SRSG Administrator that such
entity has provided the required data to the SRSG Administrator and has in
place the required facilities to effectively transmit and receive data with
the Administrator Site System.
9.9 Upon successful completion of the certification process, the entity shall
be deemed a Party and the SRSG Administrator shall provide notification to
the Executive Committee and all Parties.
10. COST RESPONSIBILITIES:
10.1 The costs of the SRSG shall be allocated as follows:
10.1.1 All Developmental Costs and Capital Expenditures, approved by
the Executive Committee, will be allocated equally among all
Parties. Payments made by a Party pursuant to the Interim
Funding Agreement No. 1 and the Funding Agreement No. 2 shall
be credited towards such Party's share of Developmental Costs.
10.1.2 Annual Administrative Costs, as set forth in the annual
operating budget, will be allocated to the Parties as follows:
10.1.2.1 One-half (1/2) of the on-going Administrative Costs
incurred shall be allocated equally among all
Parties;
10.1.2.2 One-half (1/2) of the on-going Administrative Costs
incurred shall be allocated to each Party in
accordance with the ratio of its Firm Commitments to
the total Firm Commitments of the SRSG at the time
of the SRSG annual coincident Peak Commitment for
the previous calendar year.
10.2 Each entity eligible to become a Party shall be notified by the
Executive Committee and shall, as a condition of the certification
process, pay, within thirty (30) calendar days following such
notification, an entrance fee equal to
18
the sum of:
10.2.1 Its share of Developmental Costs and Capital Expenditures in
accordance with Section 10.1.1 herein; plus
10.2.2 An Agreement Developmental Fee determined in accordance with
Exhibit C attached hereto; plus
10.2.3 Administrative Costs for incorporating the entity into the
SRSG.
10.3 A new Party shall begin incurring its share of ongoing Administrative
Costs upon completion of the certification process set forth in
Section 9.8 herein.
11. DISBURSEMENT OF FUNDS:
11.1 Application Fees - Application fees received from applicants pursuant
----------------
to Section 9 herein, shall be utilized to offset the SRSG
Administrator's expenses incurred in processing the application.
11.2 Entrance Fees - Entrance fees received pursuant to Section 10.2
-------------
herein, shall be allocated equally to all Parties with the exception
that the new Party shall not participate in the allocated
disbursement.
11.3 Penalty Funds - Penalty funds assessed by the SRSG Administrator
-------------
shall be allocated among the Parties using the same methodology
utilized to allocate Administrative Costs, with the exception that the
penalized Party or Parties shall not participate in the allocated
disbursement of such penalty funds.
11.4 Administrative Costs - The initial payment of Administrative Costs
--------------------
received from a new Party pursuant to Section 10.3 herein, shall be
allocated among the existing Parties using the same methodology
utilized to allocate Administrative Costs.
12. VOTING AND APPROVALS:
All matters requiring approval as provided in this Agreement, shall be
approved through the following procedures:
19
12.1 Amendments - Any amendments to this Agreement shall be approved by
----------
unanimous vote of the Parties. Unless otherwise specified, amendments
to this Agreement shall become effective when all Party signatures
have been received subject to the provisions of Section 19 herein.
The Executive Committee chairperson shall be responsible for
circulating the appropriate signature pages to each Party, receiving
executed counterparts, notifying the Parties when all signatures have
been received, distributing executed originals to all Parties and the
SRSG Administrator, and ensuring that appropriate regulatory filings
are made.
12.2 Operating Procedures - Modification of an Operating Procedure
--------------------
developed under this Agreement, which has been expressly granted to a
committee shall become effective and apply to all Parties when the
necessary affirmative votes have been received.
12.3 Committee Voting - Unless otherwise stated in this Agreement, all
----------------
matters requiring committee approval shall be approved by a three-
quarters (75%) majority vote of committee representatives present at a
meeting of the appropriate committee; provided, that a quorum of at
least seventy percent (70%) of the respective representatives or their
alternates are in attendance, in person or represented by proxy.
Provided further, that written notice be given by the committee
chairperson to each Party's designated committee representative(s) at
least two (2) weeks in advance of the meeting unless otherwise agreed.
Such notice shall include an agenda of the meeting.
12.3.1 A Party casting an abstention vote shall be deemed in
attendance for purposes of determining whether a quorum
exists; provided, however, that determination of whether a
three-quarter (75%) majority agreement of the Parties exists
with respect to any issue shall be made
20
by counting the votes of only the non-abstaining Parties.
12.3.2 If a vote is taken by telephone or other direct communication
at the direction of the committee chairperson, all committee
representatives or alternate(s) shall be contacted and given
an opportunity to vote. A three-quarters (75%) majority vote
shall be required for approval and the results documented in
writing by the committee chairperson. A record of all such
votes shall be distributed to all designated committee
representative(s) and the SRSG Administrator.
13. BILLING AND PAYMENTS:
All billing and payments associated with this Agreement, shall be in
accordance with this Section 13, and as set forth in the applicable
Operating Procedure(s).
13.1 The accounting and billing period associated with all charges shall be
for one (1) calendar month, unless otherwise specified herein, or
agreed to by the Parties in writing. Each ▇▇▇▇ shall include an
itemized list of expenses. Bills sent to any Party shall be sent to
the official billing address specified in Exhibit B.
13.2 Charges associated with this Agreement are listed below, but are not
limited to:
13.2.1 Administrative Costs - Administrative Costs shall be billed
--------------------
on an annual basis to each Party by the SRSG Administrator.
13.2.2 Capital Expenditures - Capital Expenditures shall be billed
--------------------
monthly to the Parties by the SRSG Administrator, or as
otherwise agreed to by the Operating Committee.
13.2.3 Emergency Assistance - Emergency Assistance shall be billed
--------------------
between the Parties on a monthly basis, or as otherwise agreed
to among the Parties in writing.
21
13.3 Bills issued by any Party, or the SRSG Administrator, shall be issued
within the first ten (10) days of the month following the month(s) in
which services were furnished. Payments for amounts billed shall be
due and payable on or before the close of business on the twentieth
(20) calendar day after the date of receipt of the ▇▇▇▇.
13.4 Payments shall be made by electronic transfer to a bank designated by
the Party to which payment is due, or any other method which provides
immediately available funds on the date payment is due. Payments shall
be considered paid when payment is received by the billing Party.
13.5 Bills not paid in full on or before the due date shall thereafter
accrue an interest charge equal to the prime rate of interest plus two
percent (2%) per annum, or the maximum interest rate permitted by law,
if any, whichever is less, prorated daily from the date due to the
date the amount due is paid in full. The prime rate shall be as
established by the Bank of America, or any other institution mutually
agreed to by the Parties in writing, on the last business day of the
month for which the ▇▇▇▇ was submitted.
13.6 In case any portion of any ▇▇▇▇ is in dispute, the entire ▇▇▇▇ shall
be paid in full when due. Any excess amount, which as a result of a
dispute may have been overpaid, shall be returned by the owing Party
upon determination of the correct amount, with interest accrued at the
rate specified in Section 13.5 herein, prorated by the number of days
from the date of overpayment to the date of refund.
13.7 There shall be no interest accrued on overpayments resulting from
inadvertent errors in payment. Refunds on overpayments shall be
limited to a period of time not to exceed two (2) years from the date
payment is received by the billing Party.
22
14. AUDITS:
14.1 Each Party, at reasonable times and at its normal places of business,
shall at no charge make available its records and supporting
documentation of any cost, payment, settlement, or data submittal, not
subject to a confidentiality agreement with a third party, pertaining
to any ▇▇▇▇ rendered to a Party hereunder for the inspection of that
Party for a period of time not to exceed two (2) years from the date
such bills were rendered, unless such data is the subject of an
ongoing audit.
14.1.1 A Party requesting to review another Party's records will give
such Party sufficient notice of its intent, but in no event
less than thirty (30) days prior to the date of the review.
14.1.2 The requesting Party, using personnel from its own staff or
its agent, may perform this review.
14.1.3 All costs incurred in performing this review will be at the
requesting Party's expense.
14.1.4 The Party performing the review shall not release the other
Party's records or disclose any information contained therein
to any other Party or third party without written consent of
the Party whose records were reviewed, unless otherwise
required by law.
14.2 The Operating Committee, at reasonable times and at its normal places
of business, may audit a Party's records and supporting documentation
of any information submitted to the Administrator Site System, and
Disturbance data when applicable. Unless such data is subject to an
ongoing audit, no Party shall be required to maintain its records and
supporting documentation for any data submitted hereunder for a period
of time in excess of two (2) years from the date such data was
submitted. Audits shall be limited to a period of time
23
not to exceed two (2) years from the date of the audit request.
15. DISPUTE RESOLUTION:
15.1 Any controversy, dispute or claim arising out of, in connection with,
or relating to the interpretation of this Agreement, or the alleged
breach hereof, shall:
15.1.1 First be submitted to the Operating Committee for resolution.
If the Operating Committee representatives are unable to reach
resolution within three (3) calendar months or if the
aggrieved Party is not satisfied with the resolution of the
Operating Committee, such dispute, controversy or claim shall
be forwarded to the Executive Committee.
15.1.2 Upon receipt of a dispute, controversy or claim forwarded in
accordance with Section 15.1.1 herein, the Executive Committee
shall meet or confer within thirty (30) days (or such other
period of time as mutually agreed upon by the representatives
of the Executive Committee) to discuss and attempt to reach a
resolution of the dispute controversy or claim. If the
Executive Committee cannot resolve the dispute, controversy or
claim within thirty (30) days after its initial meeting or
conference (or within such other period of time mutually
agreed upon by the representatives of the Executive Committee)
or if the aggrieved Party is not satisfied with the resolution
of the Executive Committee, the aggrieved Party may request
and file a petition for arbitration within thirty (30) days.
15.2 If all Parties to the controversy, dispute or claim consent to
arbitration, such arbitration shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association. Judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The Parties agree to
cooperate and use best efforts to arbitrate in a
24
timely manner. The arbitration is subject to the following:
15.2.1 The arbitration shall be heard by one arbitrator. Such
arbitrator shall have experience in the electric utility
industry, shall not be a customer of any Party involved in the
dispute, and shall not have any current or past substantial
business or financial relationships with any Party involved in
the dispute.
15.2.2 The arbitrator shall have the discretion to order a pre-
hearing exchange of information by the Parties involved in the
dispute, including, without limitation, production of
requested documents, exchange of summaries of testimony of
proposed witnesses, and examination by deposition of Parties
involved in the dispute.
15.2.3 The arbitration shall be conducted in accordance with the
American Arbitration Association's Commercial Arbitration
Rules ("Rules") in effect at the time of the arbitration.
15.2.4 The arbitrator shall have the authority to award any remedy or
relief that a state or federal court which would have
jurisdiction over the dispute could grant.
15.2.5 The arbitration award shall be in writing and shall specify
the factual and legal basis for the award. The award shall be
final and binding upon the Parties involved in the dispute
except with respect to issues over which FERC, RUS, or other
entities having jurisdictional authority have retained
ultimate authority to resolve, in which case, an aggrieved
Party may appeal the decision of the arbitrator to that entity
having jurisdiction for review.
15.2.6 No Party nor the arbitrator may disclose the existence,
content, or results of any arbitration hereunder without the
prior written consent of
25
all Parties involved in the dispute, unless otherwise required
by law.
15.2.7 Each Party involved in the dispute shall pay for an equal
share of the arbitrator's fee including travel and lodging.
15.2.8 The arbitration shall be governed by the Federal Arbitration
Act ("FAA"). If terms and conditions of this Section 15
conflict with the FAA, then the FAA shall prevail.
15.2.9 The prevailing Party in an arbitration proceeding shall be
entitled to reasonable attorneys' fees, expert witness fees,
and other incidental costs incurred in the proceeding, as
determined by the arbitrator.
15.3 In the event that all such Parties do not consent to arbitration, any
one or more of such Parties shall be free to seek resolution of the
controversy, dispute or claim in such manner as may be provided by
law, or in equity.
15.4 To the extent a dispute, controversy or claim involves the SRSG
Administrator, this Agreement, and the rights and obligations
hereunder shall be construed in accordance with the applicable federal
laws and laws of the state in which the SRSG Administrator's principal
headquarters is located.
16. UNCONTROLLABLE FORCES:
No Party shall be considered to be in default in performance of any of its
obligations under this Agreement, except to pay amounts due under this
Agreement, when a failure of performance is due to an uncontrollable force.
The term "uncontrollable force" means any cause beyond the control of the
Party affected, including but not restricted to flood, drought, earthquake,
storm, fire, lightning, epidemic, war, riot, civil disturbance or
disobedience, labor dispute, sabotage, changes in law or regulation,
restraint by court order or public authority and action or non-action by or
failure to obtain the necessary authorizations or approvals from any
governmental agency or authority which by exercise of due diligence such
Party could not reasonably have
26
been expected to avoid and which by exercise of due diligence it has been
unable to overcome. No Party shall, however, be relieved of liability for
failure of performance if such failure is due to causes arising out of its
own gross negligence or willful misconduct or due to removable or
remediable causes which it fails to remove or remedy within a reasonable
time period. Nothing contained herein shall be construed to require a Party
to settle any strike or labor dispute in which it may be involved. A Party
rendered unable to fulfill its obligations under this Agreement by reason
of an uncontrollable force shall give prompt written notice of such fact to
the other Parties and shall exercise due diligence to remove such inability
within a reasonable time period. Nothing contained herein shall excuse a
Party from all or any portion of its obligations to maintain Contingency
Reserve hereunder, so long as such Party is serving Load.
17. WAIVERS:
A Party's waiver of its rights with respect to a default hereunder, or any
other matter hereunder, shall not be deemed a waiver with respect to any
subsequent default of the same or any other matter.
18. NOTICES:
18.1 A formal notice, demand or request provided for in this Agreement,
shall be in writing and shall be properly served, given or made if
delivered in person, or sent by either registered or certified mail,
postage prepaid, or prepaid telegram or facsimile or E-mail followed
by a written original, to the persons specified in Exhibit A attached
hereto and hereby made a part of this Agreement.
18.2 The designation of any person specified in either Exhibit A or Exhibit
B, or the address of any such person, may be changed at any time with
ten (10) days prior written notice to the other Parties and to the
SRSG Administrator given in the same manner as provided in Section
18.1 herein, for other notices.
27
18.3 Notices and requests of a routine nature in connection with delivery
or receipt of power or Energy or in connection with operation of
facilities shall be given in such manner as the committees from time
to time shall prescribe.
19. APPROVALS:
19.1 This Agreement is subject to valid laws, orders, rules and regulations
of duly constituted authorities having jurisdiction. Nothing contained
in this Agreement shall be construed as a grant of jurisdiction over
any Party by a state, federal, or regulatory agency not otherwise
having jurisdiction by law.
19.2 This Agreement requires execution by the Parties, acceptance for
filing by the Federal Energy Regulatory Commission (FERC), or other
regulatory bodies having jurisdiction thereof, and with respect to any
Party subject to the jurisdiction of the Rural Utility Services (RUS),
is subject to the approval of the RUS. If a regulatory body having
jurisdiction, grants or orders a hearing or orders changes or
modifications to this Agreement, then the Parties shall negotiate in
good faith to change or modify the Agreement, so as to be acceptable
to the Parties, the FERC, the RUS, or other regulatory bodies having
jurisdiction.
19.3 An amendment or change in rates established pursuant to this Agreement
and which is subject to the FERC, the RUS, or other regulatory bodies
having jurisdiction with regard to any Party, shall become effective
hereunder upon execution by the Parties. If a regulatory body having
jurisdiction, grants or orders a hearing or orders changes or
modifications to such amendment or change in rates, then the Parties
shall negotiate in good faith to change or modify such amendment, so
as to be acceptable to the Parties, the FERC, the RUS, or other
regulatory bodies having jurisdiction.
19.4 Nothing contained herein shall be construed as affecting in any way
the right
28
of the Parties furnishing service under this Agreement, to
unilaterally make application to the FERC for a change in rates,
charges, classifications, or service, or in any rule, regulation,
contract, or provision of any appendix relating thereto under Section
205 of the Federal Power Act and pursuant to the FERC's rules and
regulations promulgated thereunder. Provided, however, that the Party
making application to the FERC shall give the other Parties to the
Agreement at least sixty (60) days advance written notice of its
intent to initiate such filing so that the Parties can, if possible,
reach a mutually acceptable change to the Agreement through the
negotiation of the Parties.
20. TRANSFER OF INTEREST IN AGREEMENT:
No voluntary transfer of interest, rights, or obligations of any Party
under this Agreement, shall be made without the written consent and
approval of all other Parties except to a successor in operation of the
System, or any component thereof. Written approval when required shall not
be unreasonably withheld. Any successor or assignee of the rights of any
Party, whether by voluntary transfer, judicial or foreclosure sale or
otherwise, shall be subject to all the provisions and conditions of this
Agreement, to the same extent as though such successor or assignee were the
original Party hereunder, and no assignment or transfer of any rights
hereunder shall be effective unless and until the assignee or transferee
agrees in writing to assume all of the obligations of the assignor or
transferor and to be bound by all of the provisions and conditions of this
Agreement; provided, that the execution of a mortgage or trust deed or a
judicial or foreclosure sale made thereunder, or if through the disposition
by the Administrator of the RUS, shall not be deemed a voluntary transfer
within the meaning of this Section 20. If, due to reorganization,
sale/purchase, or other means, a Party changes its relationship to the
SRSG, its membership(s) will be evaluated by the Executive Committee and
any appropriate change in representation will be
29
subject to approval of the Executive Committee.
21. SEVERABILITY:
In the event that any of the terms, covenants or conditions of this
Agreement, or the application of any such term, covenant, or condition,
shall be held invalid as to any person or circumstance by any court having
jurisdiction, all other terms, covenants, or conditions of this Agreement,
and their application shall not be affected thereby, but shall remain in
force and effect unless a court holds that the provisions are not separable
from all other provisions of this Agreement.
22. RELATIONSHIP OF PARTIES:
22.1 Nothing contained herein shall be construed to create an association,
joint venture, trust, or partnership, or impose a trust, partnership,
covenant, obligation, or liability on or with regard to any one or
more of the Parties. Each Party shall be individually responsible for
its own covenants, obligations, and liabilities under this Agreement.
22.2 All rights of the Parties are several, not joint. No Party shall be
under the control of or shall be deemed to control another Party.
Except as expressly provided in this Agreement, no Party shall have a
right or power to bind another Party without its express written
consent.
23. NO DEDICATION OF FACILITIES:
Any undertaking by one Party to another Party under any provision of this
Agreement, shall not constitute the dedication of the System or any portion
thereof of the undertaking Party to the public or to the other Party, and
it is understood and agreed that any such undertaking, by a Party shall
cease upon the termination of such Party's obligations under this
Agreement.
24. THIRD PARTY BENEFICIARIES:
This Agreement shall not be construed to create rights in, or to grant
remedies to, any
30
third party as a beneficiary of this Agreement, or of any duty, obligation
or undertaking established herein.
25. LIABILITY:
25.1 Subject to any applicable state and federal law which specifically
prevents a Party from complying with the provisions hereof, and except
for the obligation to pay amounts due in accordance with Section 13
herein, no Party, its directors, members of its governing bodies,
officers or employees, shall be liable to any other Party or Parties
for loss or damage to property, loss of earnings or revenues, personal
injury, or any other direct, indirect, or consequential damages or
injury which may occur or result from the performance or non-
performance of this Agreement, including any negligence arising
hereunder, unless actions or claims and resulting liability, judgments
and costs were caused by or resulted from action taken or not taken by
a Party or Parties at the direction of its or their directors, members
of its governing bodies, officers or employees with management or
administrative responsibility affecting its or their performance under
this Agreement, which is knowingly or intentionally taken or not taken
with conscious indifference to the consequences thereof or with the
intent that injury or damage would result or would probably result
therefrom. For the purposes of this Section 25 herein, a "Party" shall
include the SRSG Administrator; if the SRSG Administrator is a Party
to this Agreement.
25.2 The benefits of Section 25.1 herein, shall not extend to a Party
prevented by state or federal law from complying with the provisions
thereof.
26. DEFAULTS:
26.1 A Party shall be in default in payment when payment is not received
within ten (10) days after its final due date. A default by any Party
in its payment
31
obligations under this Agreement, shall be cured by payment of all
overdue amounts together with interest accrued at the rate set forth
in Section 13.5 herein, prorated daily from the due date to the date
the payment curing the default is made.
26.2 Notwithstanding Section 25 herein, a defaulting Party shall be liable
to the non-defaulting Parties for all costs, including costs of
collection and reasonable attorney fees incurred by such non-
defaulting Parties, plus interest as provided in Section 26.1 hereof.
The proceeds paid by a defaulting Party to remedy any such default
shall be distributed to the non-defaulting Parties in proportion to
the additional costs and expenses actually paid by the non-defaulting
Parties as a result of the default.
26.3 The rights of a Party who is in default of any of its payment or other
material obligations herein, may be suspended by a vote of the non-
defaulting Parties' representatives on the Operating Committee or
terminated by a vote of the non-defaulting Parties' representatives on
the Executive Committee. This provision allowing the non-defaulting
Parties to suspend or terminate such rights is in addition to any
other remedies provided in this Agreement, at law, or in equity, and
shall in no way limit the non-defaulting Parties' ability to seek
judicial enforcement of the defaulting Party's obligations under this
Agreement. Upon the effective date of such suspension or termination
of rights, all rights of the defaulting Party and all obligations of
non-defaulting Parties to the defaulting Party imposed by this
Agreement, except payment obligations, shall immediately be suspended
or terminated.
26.4 Upon suspension or termination of the rights of a defaulting Party
under this Agreement, the Operating Committee shall review reserve
responsibility and cost allocations of the non-defaulting Parties and
make adjustments thereto as
32
it deems necessary.
27. OTHER AGREEMENTS:
No provision of this Agreement, shall preclude a Party from entering into
other agreements or conducting transactions under existing agreements with
other Parties or third parties. This Agreement, shall not be deemed to
modify or change any rights or obligations under any prior contracts or
agreements between or among any of the Parties.
28. PROPRIETARY INFORMATION:
All material of any nature originated or developed hereunder by the
committees, SRSG Administrator, or any Party including, but not limited to,
reports and computer printouts, shall remain the sole property of the
Parties despite distribution, if any, to participating Parties or third
parties. It is hereby agreed that such material shall be deemed to contain
confidential or proprietary information and shall not be released by any
Party to any other Party or third party without the originating Party's
consent, unless required by law, or such material has subsequently been
made available to the public by the Party owning such material. Prior to
releasing such records, to the extent applicable law allows, at least ten
(10) working days notice shall be given to the Party whose records are
being released.
29. PARTICIPATION BY THE UNITED STATES:
The participation by the United States in this Agreement is subject in all
respects to acts of Congress and to lawful and valid regulations
established thereunder and rate schedules promulgated by the delegates of
the Secretary of Energy thereunder. Reference to any Federal statute,
regulation or executive order in this Agreement, shall be for the purpose
of identification only and all Parties agree that performance by the
United States will require compliance with all current laws, regulations,
or executive orders. Updates, revisions, reissuances, or a new enactment
of law, regulation, or executive order may also be applicable by the terms
of such law,
33
regulation, or executive order to performance by the United States
hereunder.
30. CONTINGENT UPON APPROPRIATIONS:
The United States shall make every effort to obtain appropriations as
necessary for continued participation in this Agreement; however, it is
understood that the participation of the United States is contingent upon
obtaining the necessary appropriations and, if such necessary
appropriations are not obtained from Congress, then the other Parties
hereby agree to release and discharge the United States from any financial
liability or responsibility in connection with the continued participation
and associated rights in this Agreement; provided, that if the United
States is unable to continue participation as a result of non-
appropriation of funds, the United States will, at the time sufficient
funds are appropriated, make payment to the appropriate Party or Parties
equal to the amount plus interest calculated pursuant to Section 13.5
herein, which become due under this Agreement, if funds had been timely
appropriated. Payment by the United States shall constitute performance by
the United States as if funds had been appropriated and payment made as
scheduled. Full reinstatement of the United States under the terms of this
Agreement shall be granted only if funds are appropriated in amounts to
cover any obligations which might arise by virtue of the application of
Section 26 herein.
31. OFFICIALS NOT TO BENEFIT:
No Member of or Delegate to Congress or Resident Commissioner shall be
admitted to any share or part of this Agreement, or to any benefit that may
arise herefrom, but this restriction shall not be construed to extend to
this Agreement if made with a corporation or company for its general
benefit.
32. EXECUTION BY COUNTERPART:
This Agreement may be executed in any number of counterparts, and upon
execution
34
of this Agreement by all Parties, each executed counterpart shall be
binding, and all executed counterparts shall together have the same force
and effect as an original instrument as if all Parties had signed the same
instrument. Any signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal effect of any
signature thereon, and may be attached to another counterpart of this
Agreement identical in form hereto but having attached to it one or more
signature pages.
33. SIGNATURE CLAUSE:
Each Party hereto represents and warrants that the person executing this
Agreement has been duly authorized to act on its behalf.
ARIZONA ELECTRIC POWER COOPERATIVE, INC.
BY: /s/ MILES ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
TITLE: Board Vice President
----------------------------------------
DATE: November 11, 1997
-----------------------------------------
ARIZONA PUBLIC SERVICE COMPANY
BY: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
TITLE: Executive V.P. Commercial Operations
-----------------------------------------
DATE: November 7, 1997
------------------------------------------
35
CITY OF FARMINGTON
ATTEST:
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
TITLE: Electric Utility Director
------------------------ --------------------------------------------
DATE: November 14, 1997
--------------------------------------------
EL PASO ELECTRIC COMPANY
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
TITLE: Assistant VP-System Operations
-----------------------------------------
DATE: November 24, 1997
------------------------------------------
INCORPORATED COUNTY OF LOS ALAMOS
ATTEST:
BY: /s/ D. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
TITLE: Utilities Manager
------------------------ -----------------------------------------
DATE: November 13, 1997
------------------------------------------
NEVADA POWER COMPANY
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
TITLE: Division Director, System Planning &
Operations
-----------------------------------------
DATE: November 6, 1997
------------------------------------------
36
PLAINS ELECTRIC GENERATION AND
TRANSMISSION COOPERATIVE, INC.
ATTEST:
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
TITLE: Executive VP/General Manager
------------------------ -----------------------------------------
Assistant Secretary DATE: November 10, 1997
------------------------------------------
PUBLIC SERVICE COMPANY OF NEW MEXICO
BY: /s/ ▇. ▇▇▇▇▇
--------------------------------------------
TITLE: Sr. Vice President, Electric Services
-----------------------------------------
DATE: November 10, 1997
------------------------------------------
SALT RIVER PROJECT AGRICULTURAL
IMPROVEMENT AND POWER DISTRICT
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
TITLE: Associated General Manager
-----------------------------------------
Marketing, Customer Service, Finance
-----------------------------------------
and Planning
-----------------------------------------
DATE: November 13, 1997
------------------------------------------
TUCSON ELECTRIC POWER COMPANY
BY: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
TITLE: Vice President
-----------------------------------------
DATE: November 12, 1997
------------------------------------------
37
WESTERN AREA POWER ADMINISTRATION
DESERT SOUTHWEST REGION
BY: /s/ ▇. ▇. ▇▇▇▇▇▇▇
--------------------------------------------
TITLE: Regional Manager
-----------------------------------------
DATE: November 17, 1997
------------------------------------------
38
SOUTHWEST RESERVE SHARING GROUP
-------------------------------
PARTICIPATION AGREEMENT
-----------------------
EXHIBIT A
---------
Official Mailing Titles and Addresses
-------------------------------------
of the Parties
--------------
Arizona Electric Power Cooperative
----------------------------------
c/o Executive Vice President and General Manager
P. O. Box 670
Benson, AZ 85602
Arizona Public Service Company
------------------------------
c/o Secretary of the Company
Arizona Public Service Company
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
City of Farmington
------------------
c/o Electric Utility Director
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
El Paso Electric Company
------------------------
c/o Secretary
P. O. Box 982
El Paso, TX 79960
Incorporated County of Los Alamos
---------------------------------
c/o Manager, Department of Public Utilities
P. O. Drawer 1030
Los Alamos, NM 87544
Nevada Power Company
--------------------
c/o Division Director, System Planning and Operations
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (89102)
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Plains Electric Generation and Transmission Cooperative, Inc.
-------------------------------------------------------------
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Public Service Company of New Mexico
------------------------------------
c/o Secretary
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ex A-1
Salt River Project Agricultural Improvement and Power District
--------------------------------------------------------------
▇/▇ ▇▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ 85072-2025
SRSG Administrator
------------------
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇: POB013
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tucson Electric Power Company
-----------------------------
▇/▇ ▇▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Western Area Power Administration - Desert Southwest Region
-----------------------------------------------------------
c/o Regional Manager
Western Area Power Administration
P. O. Box 6457 (615 S. 43/rd/ Avenue)
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Ex A-2
SOUTHWEST RESERVE SHARING GROUP
-------------------------------
PARTICIPATION AGREEMENT
-----------------------
EXHIBIT B
---------
Official Billing Addresses
--------------------------
Arizona Electric Power Cooperative
----------------------------------
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Arizona Public Service Company
------------------------------
Attn: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 53999, ms 2208
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
City of Farmington
------------------
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
El Paso Electric Company
------------------------
Attn: AVP - System Operations, m/s 751
▇.▇. ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Incorporated County of Los Alamos
---------------------------------
Department of Public Utilities
Attn: ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Nevada Power Company
--------------------
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M/S 20
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (89102)
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Ex B-1
Plains Electric Generation and Transmission
-------------------------------------------
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Public Service Company of New Mexico
------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇
ATTN: Supervisor, Energy Analysis, MS-EP11
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Salt River Project Agricultural Improvement and Power District
--------------------------------------------------------------
Attn: Manager of Power Generation - Mail Sta. POB004
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Tucson Electric Power Company
-----------------------------
Energy Accounting - SC209
Tucson Electric Power
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Western Area Power Administration - Desert Southwest Region
-----------------------------------------------------------
Manager, Billing and Scheduling
▇▇▇ ▇. ▇▇/▇▇/ ▇▇▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Ex B-2
SOUTHWEST RESERVE SHARING GROUP
-------------------------------
PARTICIPATION AGREEMENT
-----------------------
EXHIBIT C
---------
Agreement Developmental Fee
---------------------------
The Agreement Developmental Fee allocated to new members shall be determined as
follows:
(Agreement Development Costs)
-----------------------------
(Number of Parties) = Agreement Developmental Fee
Where:
-----
Agreement Development Cost = [Labor Cost + Travel Cost] X [(Number of Meetings)
X (Number of attendees) X (8-hours/day)]
Number of Meetings = Total number of meetings held in regards to the initial
formation and development of the SRSG.
Labor Cost = Average labor cost per man-hour ($50/man-hour), this average
includes labor and overheads
Travel Cost = Average cost per man-hour ($25/man-hour), this is based on an
average of $200 per person per day for travel, room, and meals.
From July, 1996 through October 23, 1997, the Agreement Developmental Fee
is:
($405,600)
----------
(11) = $36,873
Ex C-1
SERVICE SCHEDULE A
RESERVE OBLIGATIONS
SERVICE SCHEDULE A
------------------
RESERVE OBLIGATIONS
-------------------
A-1. PARTIES:
This Service Schedule A is agreed upon as part of the Agreement.
A-2. GENERAL:
A-2.1 The purpose of this Service Schedule A is to define the aggregate
reserve requirements of the SRSG and to specify the apportionment
thereof among the Parties. Specific reserve requirements of the
individual Parties are described and settlement provisions for
reserve deficiencies are also established herein.
A-2.2 All reserve requirement calculations derived herein shall be rounded
up to the nearest whole Megawatt.
A-2.3 It is the intent of the Parties to meet or exceed the WSCC Minimum
Operating Reliability Criteria, and the NERC control performance and
disturbance control standards, as they may be adopted, modified, or
revised.
A-2.4 The SRSG has been formed for the purpose of sharing Contingency
Reserves only. Any reserve obligation necessary to meet NERC and
WSCC criteria for regulation, interruptible imports, and on-demand
contracts will continue to be the responsibility of each Party.
A.3. TERM:
This Service Schedule A shall continue in effect concurrently with the
Agreement unless and until terminated by the Parties in accordance with the
provisions of Section 5 of the Agreement.
A-4. SRSG CONTINGENCY RESERVE REQUIREMENT:
A-4.1 Consistent with this Agreement, the Parties shall ensure the proper
level and location of the Contingency Reserves. The scheduling of
these Contingency
A-1
Reserves shall be in accordance with Operating Procedures
established by the Operating Committee.
A-4.2 The amount of Contingency Reserve to be maintained jointly for the
SRSG shall be the greater of either:
A-4.2.1 The loss of generating Capacity due to forced outage of
generation or transmission equipment that would result from
the Most Severe Single Contingency of the SRSG (at least
half of which must be Spinning Reserve); or
A-4.2.2 The sum of five percent (5%) of the aggregate Firm
Commitment responsibility served by the Parties with hydro
generation, plus seven percent (7%) of the aggregate Firm
Commitment responsibility served by the Parties with thermal
generation (at least half of which must be Spinning
Reserve).
A graphic representation of the SRSG Contingency Reserve calculation is
depicted in Attachment 1 to this Service Schedule A.
A-5. SRSG SPINNING RESERVE REQUIREMENT:
The amount of Spinning Reserve to be maintained jointly for the SRSG shall
be equal to fifty percent (50%) of the SRSG Contingency Reserve requirement
determined in accordance with Section A-4.2 herein. All SRSG Spinning
Reserve shall be responsive to WSCC frequency deviations.
A-6. RESERVE RESPONSIBILITY VALUE/RESERVE RESPONSIBILITY RATIO:
A-6.1 Reserve Responsibility Value (RRV)
----------------------------------
A Party's RRV is equal to twenty-five percent (25%) of its Firm
Commitment, plus one-hundred percent (100%) of the number of
megawatts associated with its Most Severe Single Contingency.
\\\
A-2
A-6.2 Reserve Responsibility Ratio (RRR)
----------------------------------
A Party's RRR is equal to its RRV divided by the sum of the RRV's
for each Party.
Graphic representations of the Reserve Responsibility Value and Reserve
Responsibility Ratio calculations are depicted in Attachment 2 to this
Service Schedule A.
A-7. PARTY RESERVE QUOTAS:
Each Party is responsible for supplying its quota for Contingency Reserve,
which is made up of Spinning Reserve and Non-Spinning Reserve, for all
hours based on the following reserve quotas. Contingency Reserves
activated due to the occurrence of any event shall be restored by the
affected Party or Parties in as short a period of time as possible, but
not longer than sixty (60) minutes from the start of the event, unless and
until the Operating Committee shall establish a different time period.
A-7.1 Contingency Reserve -The hourly Contingency Reserve quota for a
-------------------
Party shall be equal to the product of the SRSG Contingency Reserve
requirement for that hour, as determined in accordance with Section
A-4.2 herein, multiplied by its RRR, as determined in accordance
with Section A-6.2 herein; provided, however, each Party shall
maintain at least 5 MW of Contingency Reserve at all times.
A-7.2 Spinning Reserve - The hourly Spinning Reserve quota for a Party
----------------
shall be equal to fifty percent (50%) of its hourly Contingency
Reserve quota, as determined in accordance with Section A-7.1
herein; provided, however, each Party shall maintain at least 3 MW
of Spinning Reserve at all times.
Graphic representations of the Party's Contingency Reserve and Spinning
Reserve calculations are depicted in Attachment 3 to this Service Schedule
A.
A-8. PENALTIES:
A-8.1 At the end of each hour, the SRSG Administrator shall compare the
actual
A-3
amount of Contingency Reserve and Spinning Reserve carried by each
Party to that Party's respective reserve quotas. A Party shall be
deficient in Contingency Reserve if the actual amount of reserve
carried by the Party is less than that Party's respective reserve
quotas. If a Party is deficient in the amount of Contingency
Reserve, the deficient Party shall be assessed a penalty as set
forth in the applicable Operating Procedure(s).
A-8.2 Penalties imposed by NERC or WSCC on the SRSG for failure to carry
required Contingency Reserves shall be applied only to the
Party(ies) that caused the Contingency Reserve deficiency in
proportion to which such Party(ies) contributed to the Contingency
Reserve deficiency.
A-9. BILLING AND PAYMENT
All ▇▇▇▇▇▇▇▇ and payments associated with this Service Schedule A shall be
made in accordance with Section 13 of the Agreement.
A-4
ATTACHMENT 1 TO SERVICE SCHEDULE A
----------------------------------
CALCULATION OF
--------------
SRSG CONTINGENCY RESERVE REQUIREMENTS
-------------------------------------
------------------------------------
7% of aggregate Firm Commitment
served by thermal generation
Plus
5% of aggregate Firm Commitment
served by hydro generation
------------------------------------
----------------------------
SRSG Contingency Reserve Greater of
Requirement
----------------------------
------------------------------------
SRSG's
Most Severe Single Contingency
(Largest Hazard)
------------------------------------
Where:
----------------------------
SRSG Contingency Reserve
Requirement
----------------------------
---------------------------- ----------------------------
SRSG Spinning Reserve SRSG Non-Spinning Reserve
---------------------------- ----------------------------
----------------------------
---------------------------- SRSG Contingency Reserve
50% of
SRSG Contingency Reserve Less
Requirement
---------------------------- SRSG Spinning Reserve
-----------------------------
A-5
ATTACHMENT 2 TO SERVICE SCHEDULE A
----------------------------------
CALCULATION OF
--------------
RESERVE RESPONSIBILITY RATIO (RRR)
----------------------------------
AND
---
RESERVE RESPONSIBILITY VALUE (RRV)
----------------------------------
--------------------------------
Party's RRV
-------------
Party's RRR Divided By
-------------
Sum of RRV for All Parties
--------------------------------
Where:
------------------------------------------
25% Hourly Integrated Firm Commitment
Plus
100% Largest Thermal Hazard
------------------------------------------
------------------------------------------
25% Hourly Integrated Firm Commitment
-------------
Party's RRV Greater of Plus
-------------
100% Largest Hydro Hazard
------------------------------------------
------------------------------------------
25% Hourly Integrated Firm Commitment
Plus
100% Largest Transmission Hazard
------------------------------------------
A-6
ATTACHMENT 3 TO SERVICE SCHEDULE A
----------------------------------
CALCULATION OF
--------------
PARTY'S CONTINGENCY AND SPINNING RESERVE REQUIREMENTS
-----------------------------------------------------
-----------------------------
SRSG Contingency Reserve
Requirement
Multiplied by
Party's RRR
-----------------------------
----------------------
Party's Contingency Greater of
Reserve Requirement
----------------------
-------------
5 MW
--------------
-----------------------------
50% of
Party's Contingency
Reserve Requirement
-----------------------------
----------------------
Party's Spinning Greater of
Reserve Requirement
----------------------
-------------
3 MW
-------------
A-7
SERVICE SCHEDULE B
ACTIVATION OF RESERVES
FOR
EMERGENCY ASSISTANCE
SERVICE SCHEDULE B
------------------
ACTIVATION OF RESERVES FOR EMERGENCY ASSISTANCE
-----------------------------------------------
B-1. PARTIES:
This Service Schedule B is agreed upon as part of the Agreement.
B-2. GENERAL:
The purpose of this Service Schedule B is to define the terms and
conditions under which a Party is obligated to activate its reserves for
another Party requesting Emergency Assistance.
B-3. TERM:
This Service Schedule B shall continue in effect concurrently with the
Agreement unless and until terminated by the Parties in accordance with
provisions of Section 5 of the Agreement.
B-4. PARTY OBLIGATIONS:
Each Party is responsible for the activation of reserves as follows:
B-4.1 Party Experiencing a Disturbance
--------------------------------
The Party experiencing a Disturbance shall immediately activate its
own Contingency Reserves and initiate a system disturbance message
(which shall include a request for Emergency Assistance if
required), in accordance with Operating Procedures established by
the Operating Committee.
B-4.2 Party Supplying Emergency Assistance
------------------------------------
A Party supplying Emergency Assistance shall activate its reserves
in accordance with Operating Procedures established by the Operating
Committee.
B-4.3 All Parties
-----------
B-4.3.1 Each Party shall be required to complete the activation of
its reserves within ten (10) minutes from the time of the
Disturbance.
B-1
B-4.3.2 When supplying Emergency Assistance a Party has no
obligation to supply more than its Contingency Reserve
quota.
B-4.3.3 A Party has no obligation to supply Emergency Assistance
to another Party beyond a period of sixty (60) minutes
from the time of the Disturbance.
B-4.4 Pursuant to WSCC and NERC criteria, each Party shall maintain
sufficient transmission to support the activation of its own
Contingency Reserves and its Emergency Assistance obligations in
accordance with the Agreement.
B-4.4.1 The amount of non-recallable transmission required to
predetermined points of delivery shall be determined using
matrices for all major contingencies specifying the
transmission paths necessary to deliver SRSG reserves in
accordance with the applicable Operating Procedures as
established by the Operating Committee.
B-5. SETTLEMENT FOR EMERGENCY ASSISTANCE:
B-5.1 Transmission - Charges associated with the transmission utilized in
------------
accordance with Section B-4.4 herein, shall be the responsibility of
the Party reserving such transmission.
B-5.2 Capacity - There shall be no Capacity (demand) charge associated
--------
with the supply or receipt of Emergency Assistance.
B-5.3 Energy - The Party receiving Emergency Assistance shall pay the
------
supplying Party or Parties for the Energy received at a rate of one-
hundred percent (100%) of the supplying Party's cost incurred. For
the purpose of this Agreement, the term "cost incurred" shall mean
the expense incurred by the supplying Party in supplying Emergency
Assistance, as such cost is determined in accordance with the
applicable Operating Procedures as established by the Operating
Committee. Such costs shall include, but not be
B-2
limited to, the following:
B-5.3.1 The cost of fuel which was consumed in generating Energy
for Emergency Assistance; plus
B-5.3.2 Startup and incremental cost of unit operation and
maintenance.
B-6. PENALTIES:
Penalties imposed by NERC or WSCC on the SRSG for failure to recover from a
Disturbance shall be applied only to the Party(ies) that caused such
failure.
B-7. BILLING AND PAYMENT
All ▇▇▇▇▇▇▇▇ and payments associated with this Service Schedule B shall be
made in accordance with Section 13 of the Agreement.
B-3