POWER SALES CONTRACT Executed by PUBLIC UTILITY DISTRICT NO. 1 OF DOUGLAS COUNTY, WASHINGTON and PUGET SOUND POWER & LIGHT COMPANY
Exhibit
10.9
Executed
by
PUBLIC
UTILITY DISTRICT NO. 1 OF
▇▇▇▇▇▇▇
COUNTY, WASHINGTON
and
PUGET
SOUND POWER & LIGHT COMPANY
THIS AGREEMENT made and
entered into as of the 18th day of September, 1963, between Public
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (hereinafter
called “▇▇▇▇▇▇▇”) a municipal corporation of the State of Washington, and Puget
Sound Power & Light Company (hereinafter called the “Purchaser”)
a corporation organized and existing under the laws of the State of
Washington:
W
i t n e s s e t h :
Whereas,
▇▇▇▇▇▇▇ is a municipal corporation organized under the laws of the State of
Washington and authorized to construct and operate electric generating plants
and transmission lines and to supply electric energy to other electric utilities
and to develop the ▇▇▇▇▇ Hydroelectric Project on the Columbia River;
and
Whereas,
▇▇▇▇▇▇▇ has heretofore obtained a license, issued July 12, 1962, from the
Federal Power Commission (FPC) for Project No. 2149 (▇▇▇▇▇ Project), a
hydroelectric generating station to be constructed on the Columbia River between
▇▇▇▇▇▇▇ and Chelan Counties, with the structures, fixtures, equipment and
facilities used or useful in the maintenance and operation of said Project;
and
Whereas,
▇▇▇▇▇▇▇ has heretofore granted an option to the Purchaser to purchase 31.3% of
the power and energy produced by the ▇▇▇▇▇ Project and the Purchaser desires to
exercise said option on the terms and conditions hereinafter provided;
and
Whereas,
in order to provide funds for the completion of the construction of the ▇▇▇▇▇
Project, ▇▇▇▇▇▇▇ desires to enter into contracts for the sale of the power and
energy to be produced by the ▇▇▇▇▇ Project in excess of the amounts required to
provide for the actual and prospective needs of ▇▇▇▇▇▇▇ and the Purchaser
desires to purchase such power and energy; and
Whereas,
▇▇▇▇▇▇▇ has the responsibility and authority for the financing, construction and
operation of the ▇▇▇▇▇ Project;
Now,
Therefore, for and in Consideration of the Mutual Covenants and
Agreements Herein Contained, it is Agreed by and Between the Parties Hereto as
Follows:
Section 1. Term of
Contract. This contract shall be in full force and effect
until midnight of August 31, 2018, or until the 1963 Bonds and Completion
Bonds as defined in the First Bond Resolution are paid or provision is made for
the retirement thereof, whichever is later.
Section 2. Definitions and Explanations of
Terms (as Used Herein).
(a) “Contract
Year” is a term used herein to define fiscal periods under this contract and
shall mean a twelve-month period commencing at 12:01 A.M., on
September 1 of each year, except, however, that the first Contract Year
hereunder shall commence on January 1, 1969 or the Commencement of Normal
Routine Operation, whichever is later, and shall end at 12:01 A.M. on the
following September 1.
(b) “License”
shall mean the Federal Power Commission License for Project No. 2149 (▇▇▇▇▇
Project), issued July 12, 1962, as from time to time amended.
(c) “▇▇▇▇▇
Project” shall mean the “Project” as such term is defined in Section 1.1.E
of the First Bond Resolution and shall include, among other things, an electric
generating plant and associated facilities on the Columbia River at
approximately river mile 516 from the mouth of said river at the ▇▇▇▇▇ site in
▇▇▇▇▇▇▇ and Chelan Counties, Washington, as authorized by the License; said
generating plant to have an installed nameplate rating of approximately 494,200
kilowatts, and said generating plant and associated facilities to include, but
not be limited to, an earth embankment damming the present Columbia River
channel; a single concrete structure constituting a power house, spillway,
switchyard and fish facilities, including the initial installation of
7 generating units with provision for a total of 10 generating units, and
11 spillway openings; another earth embankment extending from the central
concrete structure to an abutment on the west side of the Columbia River; a
reservoir, waterways, fish ladders and other fish protective devices; associated
transmission, transformation and switching facilities including two 230 kv
transmission lines to or in the vicinity of the Rocky Reach switchyard in
▇▇▇▇▇▇▇ County; railroad siding, shops, warehouses, construction camp, offices,
and dwellings; and all other structures, fixtures, equipment or facilities used
or useful in the construction, maintenance and operation of the ▇▇▇▇▇
Hydroelectric Project; and all necessary water rights, development rights,
permits and licenses, easements, rights-of-way, flowage rights and rights
permitting the storage of water, riparian rights and shore rights.
(d) “▇▇▇▇▇
Project Output” shall mean the amount of power and energy produced by, or
received for the account of the ▇▇▇▇▇ Project during the term of this contract
under the operating conditions which exist during said term, including periods
when the ▇▇▇▇▇ Project may not be operable or operating, after corrections for
station and project use, depletions for encroachments, and any adjustments
resulting from the requirements of the License or from orders of governmental
agencies having power to make and enforce such orders.
(e) “Month”
shall mean a calendar month.
(f) “Purchaser’s
Power Allocation” shall mean the percentage of ▇▇▇▇▇ Project Output purchased
and sold under this contract as set forth in Section 3 hereof and as
adjusted in accordance with Section 21 hereof.
(g) “Debt
Service” shall mean, with respect to any period, the aggregate of the amounts
required by the Bond Resolution to be paid or accrued during said period into
the special fund or funds created by the Bond Resolution for the sole purpose of
paying the principal of and premium, if any, and interest on all the Revenue
Bonds from time to time outstanding as the same shall become due and of retiring
said Bonds prior to maturity in the manner provided in the Bond
Resolution.
(h) “Uncontrollable
Forces” shall mean any cause beyond the control of ▇▇▇▇▇▇▇, and which by the
exercise of due diligence ▇▇▇▇▇▇▇ is unable to prevent or overcome, including
but not limited to an act of God, fire, flood, explosion, strike, sabotage, an
act of the public enemy, civil or military authority, including court orders,
injunctions, and orders of governmental agencies with proper jurisdiction,
insurrection or riot, an act of the elements, failure of equipment, or inability
to obtain or ship materials or equipment because of the effect of similar causes
on suppliers or carriers.
(i) “Purchasers”
shall mean the Purchaser and other companies which enter into contracts with
▇▇▇▇▇▇▇ to buy a percentage share of ▇▇▇▇▇ Project Output, all as listed under
the heading “Purchasers” in Exhibit “A”, entitled “Distribution of ▇▇▇▇▇
Project Output”, attached hereto and made a part hereof.
(j) “Revenue
Bonds” shall mean the bonds issued by ▇▇▇▇▇▇▇ under the First Bond Resolution
for the purpose of paying the Cost of Acquisition and Construction and any bonds
(including bonds referred to in Section 5(c) hereof) which, by the terms of
the First Bond Resolution, are permitted to be issued payable from the revenues
of the ▇▇▇▇▇ Project on a parity with the bonds issued and sold pursuant to the
First Bond Resolution and secured by an equal charge and lien on such revenues;
except that, unless otherwise agreed to in writing by the Purchasers,
Revenue Bonds shall not include bonds issued pursuant to Section 9.1.F2(d)
of the First Bond Resolution or bonds issued to refund bonds so
issued.
(k) “Cost
of Acquisition and Construction” shall mean all costs of acquisition,
construction, installation and financing of the ▇▇▇▇▇ Project, heretofore or
hereafter paid or accrued, including but not limited to:
(1) Working
capital in the amount of One Million Five Hundred Thousand Dollars ($1,500,000);
provided, that if it shall at any time appear that the amount of working capital
on hand is in excess of that which is necessary or in excess of anticipated
requirements in the future, such amount may be reduced as referred to in
subsection 6(g) hereof;
(2) Establishing
a Reserve Account in the Bond Fund pursuant to the First Bond Resolution to the
extent of one (1) year’s interest on the Revenue Bonds;
(3) Establishing
a Reserve and Contingency Fund in the amount of $5,000,000 pursuant to the First
Bond Resolution;
(4) Interest
accruing on Revenue Bonds until Commencement of Normal Routine Operation or
until January 1, 1969, whichever is later, except for such interest as is
payable by the Purchasers as part of Annual Power Costs for the Interim Delivery
Period; and
(5) All
other items relating to payment of costs in connection with the acquisition,
construction, installation and financing of the ▇▇▇▇▇ Project to the extent such
items constitute “Cost of Construction” as defined in Section 6.9 of the
First Bond Resolution.
(1) “Uniform
System of Accounts” shall mean the Uniform System of Accounts prescribed by the
Federal Power Commission for Electric Utilities and Licensees in effect at the
time this contract is executed.
(m) “Bond
Resolution” shall mean collectively the First Bond Resolution and all other
resolutions adopted by ▇▇▇▇▇▇▇ authorizing the issue of Revenue
Bonds. The term “First Bond Resolution” shall mean Resolution
No. 688 adopted by the District on October 4, 1963, a certified copy
of which has been delivered to the Purchaser.
(n) “Initial
Date of Delivery” shall mean 12:01 A.M. of the day the ▇▇▇▇▇ Project is
capable of delivering power and energy hereunder from one or more generating
units which shall have been installed, successfully tested as required by the
specifications, except for the index tests, and, in the opinion of ▇▇▇▇▇▇▇, the
one or more generating units are ready and available for normal continuous
operation.
(o) “Commencement
of Normal Routine Operation” shall mean 12:01 A.M. of the day the ▇▇▇▇▇
Project is capable of delivering power and energy hereunder from all of the
initial seven generating units which shall have been installed, successfully
tested as required by the specifications, except for the index tests, and, in
the opinion of ▇▇▇▇▇▇▇, the ▇▇▇▇▇ Project with such seven generating units is
ready and available for normal continuous operation.
(p) “Initial
Delivery Period” shall mean the period of time commencing on the Initial Date of
Delivery and ending at 12:01 A.M. on January 1, 1969.
(q) “Interim
Delivery Period” shall mean the period of time commencing at 12:01 A.M. on
January 1, 1969 or the Initial Date of Delivery, whichever is later, and
ending with the Commencement of Normal Routine Operation.
(r) “Okanogan”
shall mean Public Utility District No. 1 of Okanogan County, Washington,
and its successors in interest.
Section 3. Amount of ▇▇▇▇▇ Project Output
Sold.
(a) ▇▇▇▇▇▇▇
agrees to sell to the Purchaser and the Purchaser agrees to purchase
31.3 per cent (31.3%) of ▇▇▇▇▇ Project Output during the term of this
contract subject to adjustment as provided in Section 21
hereof.
(b) After
the expiration of the term of this contract, the Purchaser shall have the right
of first refusal to purchase that proportion of the part of the output of the
▇▇▇▇▇ Project which is then, as determined by ▇▇▇▇▇▇▇, in excess of the actual
and prospective needs of ▇▇▇▇▇▇▇ for service to customers for use within the
service area of ▇▇▇▇▇▇▇, and for delivery to Okanogan for use within the service
area of Okanogan under the terms of its agreement with Okanogan, which the
Purchaser’s Power Allocation immediately prior to such expiration shall bear to
the then total power allocations of all the Purchasers. In the event
this subsection 3(b), or any sentence, clause or phrase thereof shall be
adjudicated by a court of last resort and of competent jurisdiction to be
invalid or illegal, the remainder of this contract shall be unaffected by such
adjudication, and all other provisions of this contract shall remain in full
force and effect as though this subsection or such part thereof so adjudicated
to be invalid had not been included herein.
Section 4. Amount of Energy and Power
Reserved. ▇▇▇▇▇▇▇ hereby reserves thirty-eight per cent (38%)
of ▇▇▇▇▇ Project Output, and shall be entitled to the power and energy thus
reserved and to the rights and privileges associated therewith and subject to
the same obligations, including those provided in Section 21 hereof but
excepting those recited in Section 14 hereof, as it would have if ▇▇▇▇▇▇▇
were one of the Purchasers and had the same rights, privileges and obligations
as the Purchasers. ▇▇▇▇▇▇▇ covenants and agrees that it will
establish, maintain and collect rates or charges for power and energy and other
services, facilities and commodities sold, furnished or supplied by it through
any of its electric properties, which shall be fair and non-discriminatory and
adequate to provide revenues sufficient to enable ▇▇▇▇▇▇▇ to pay its pro rata
share of the Annual Power Costs and all other charges and obligations payable
from such revenues. All moneys received by ▇▇▇▇▇▇▇ from the sale of
▇▇▇▇▇ Project Output to the Purchasers, together with payments by ▇▇▇▇▇▇▇ for
power and energy reserved by it from the ▇▇▇▇▇ Project, and all other moneys
received by ▇▇▇▇▇▇▇ from the sale of ▇▇▇▇▇ Project Output, and from sources
connected with the ▇▇▇▇▇ Project other than from the sale of power, shall be
segregated, deposited and held separate and apart from all other revenues of
▇▇▇▇▇▇▇ and shall be held in trust by ▇▇▇▇▇▇▇ for the uses and purposes
specified in the Bond Resolution.
Section 5. Annual Power
Costs.
(a) “Annual
Power Costs”, as used in this contract, shall be deemed to mean all costs and
expenses of ▇▇▇▇▇▇▇ in connection with the ▇▇▇▇▇ Project (excluding depreciation
and items properly chargeable to Cost of Acquisition and Construction), whether
or not the ▇▇▇▇▇ Project is inoperable or the operation thereof is interrupted,
suspended, or interfered with, in whole or in part, during the term of this
contract or any portion of said term, including, but not limited to, the items
of cost and expense of ▇▇▇▇▇▇▇ during each Contract Year in connection with the
▇▇▇▇▇ Project hereinafter mentioned in this Section 5, to wit:
(1) amounts
which must be set aside by ▇▇▇▇▇▇▇ for the payment of Debt Service as required
by the Bond Resolution;
(2) an
amount equal to ten percent (10%) of the total Debt Service during the
applicable Contract Year (being equivalent to the amount which ▇▇▇▇▇▇▇ will
agree in the First Bond Resolution to pay out of the Revenue Fund therein
provided for into the Reserve and Contingency Fund as provided for in the First
Bond Resolution, and to be used only for the purposes therein
provided);
(3) amounts
which ▇▇▇▇▇▇▇ is required to pay for extraordinary operation and maintenance
costs of the ▇▇▇▇▇ Project, including the prevention or correction of any
unusual loss or damage (including major repairs) thereto, in order to keep the
▇▇▇▇▇ Project in good operating condition, and for renewals, replacements,
additions, betterments and improvements to the ▇▇▇▇▇ Project and extensions
thereof, to the extent that such amounts exceed the amount in said Reserve and
Contingency Fund available to make or provide for such payments, including any
insurance proceeds payable in respect of such unusual loss or damage or of loss
or damage to the property being repaired, renewed or replaced and available to
make or provide for such payments; and
(4) all
costs of producing and delivering power and energy from the ▇▇▇▇▇ Project
(including but not limited to ordinary operation and maintenance costs but
excluding depreciation) not accounted for by the payments out of funds and
reserves specified in the foregoing clauses of this Section 5(a) and
properly chargeable to the ▇▇▇▇▇ Project in accordance with the Uniform System
of Accounts.
(b) Notwithstanding
the provisions of the foregoing subsection 5(a), the term “Annual Power
Costs”, as used in this contract, shall mean:
(1) for
the Initial Delivery Period, all costs and expenses (not including depreciation,
Debt Service and items properly chargeable to Cost of Acquisition and
Construction) of ▇▇▇▇▇▇▇ in connection with the ownership, operation and
maintenance of the ▇▇▇▇▇ Project during the Initial Delivery Period;
and
(2) for
the Interim Delivery Period, (i) all costs and expenses (not including
depreciation, Debt Service and items properly chargeable to Cost of Acquisition
and Construction) of ▇▇▇▇▇▇▇ in connection with the ownership, operation and
maintenance of the ▇▇▇▇▇ Project during the Interim Delivery Period;
(ii) that proportion (not exceeding 100%) of the interest and principal
payments accruing during the Interim Delivery Period on all outstanding Revenue
Bonds which the number of generating units installed, successfully tested as
required by the specifications, except for the index tests, and made ready and
available for normal continuous operation bears to the number seven (7),
provided that the seventh unit shall not be deemed to be so ready until the
Commencement of Normal Routine Operation. For the purpose of this
clause (ii), during the Interim Delivery Period interest payments shall be
deemed to have accrued on a daily basis, and principal payments shall be deemed
to have accrued on a daily basis during the 12-month period prior to their due
date; and the applicable proportion shall be determined from time to time as
additional generating units are so installed, tested, except for the index
tests, and made ready and available; and (iii) 10% of the aggregate amount
payable pursuant to the foregoing clause (ii).
(c) If
the amounts described in Section 5(a)(3) hereof exceed the amount in said
Reserve and Contingency Fund, including the insurance proceeds referred to in
Section 5(a)(3), plus One Million Dollars ($1,000,000), ▇▇▇▇▇▇▇ agrees that
it will, at the request of the Purchasers, fund the full sum by which such
amounts exceed such insurance proceeds, if any, by the issuance and sale of
equal lien (pari passu) bonds payable from the revenues of the ▇▇▇▇▇ Project;
provided that such bonds can then be legally issued and can be sold; and
provided further that unless all the Purchasers otherwise agree in writing, such
bonds shall mature no earlier than the expiration of the service life of the
facilities financed from the proceeds of such bonds, as determined by the
Consulting Engineer (acting under the First Bond Resolution) at the time of
issuance.
(d) Any
payment or compensation received by ▇▇▇▇▇▇▇ as a result of the taking or
depletion of any portion of ▇▇▇▇▇ Project Output by any state or federal
government agency shall be allocated to the payment of Annual Power Costs over
the term of such taking, or the remaining term of this contract if the period of
taking is for the remaining term of this contract. In the event such
taking or depletion is of the whole of ▇▇▇▇▇ Project Output for the remaining
term of this contract, any payment or compensation to ▇▇▇▇▇▇▇ received by
▇▇▇▇▇▇▇ shall be applied in the manner and to the extent required in the First
Bond Resolution as though such payment was received for the sale or other
disposition of the ▇▇▇▇▇ Project.
(e) Should
any amount remain in any of the funds established in connection with the ▇▇▇▇▇
Project, including working capital and all reserves in excess of outstanding
obligations against such funds at the expiration of the term of this contract,
there shall be refunded to the Purchaser, as excess payment for its share of
▇▇▇▇▇ Project Output theretofore purchased, a share of such remainders
determined by multiplying the total thereof by the percentage of ▇▇▇▇▇ Project
Output to which the Purchaser is entitled immediately prior to such
expiration.
Section 6. Payment for Well Project Output
Sold.
(a) Not
less than thirty (30) nor more than sixty (60) days prior to the estimated
date of commencement of the Interim Delivery Period, and on or before one
hundred twenty (120) days prior to January 1, 1969, or the estimated
date of Commencement of Normal Routine Operation, whichever is later, and on or
before one hundred twenty (120) days prior to the beginning of each
Contract Year thereafter, ▇▇▇▇▇▇▇ shall prepare and mail to the Purchaser a pro
forma statement showing:
(1) The
estimated date of Commencement of Normal Routine Operation. This need
not be shown after the first statement; provided, that ▇▇▇▇▇▇▇ shall keep the
Purchaser advised at all times of changes in such estimated date, as well as of
the actual date of Commencement of Normal Routine Operation when this
occurs;
(2) A
detailed estimate of the Annual Power Costs of the ▇▇▇▇▇ Project for the Interim
Delivery Period or for the following Contract Year, as the case may be,
accompanied by a copy of the operating and capital budgets upon which such
estimate is based;
(3) An
amount obtained by multiplying the estimated Annual Power Costs by the
Purchaser’s Power Allocation. This amount (expressed in dollars) is
hereinafter referred to as the “Purchaser’s Estimated Cost”; and
(4) The
amount of the equal monthly payments to be made by the Purchaser to pay the
Purchaser’s Estimated Cost during the estimated length of the Interim Delivery
Period or during the following Contract Year, as the case may
be. Said statement shall be in lieu of the issuance of monthly bills
to the Purchaser by ▇▇▇▇▇▇▇.
(b) In
the event of extraordinary receipts or payments of unusual costs or other
circumstances (including in the case of the Interim Delivery Period changes in
the estimated date of Commencement of Normal Routine Operation or the dates or
estimated dates when generating units are or are to be made ready for normal
continuous operation) which substantially affect the Annual Power Costs during
the Interim Delivery Period or any Contract Year, ▇▇▇▇▇▇▇ shall prepare and mail
to the Purchaser a revised estimate of Annual Power Costs for the estimated
balance of the Interim Delivery Period or the balance of such Contract Year
which shall supersede the previous estimate of Annual Power Costs as a basis for
the Purchaser’s subsequent monthly payments.
(c) The
Purchaser shall make said monthly payments as advances on account towards the
payment of its share of the Annual Power Costs at the offices of ▇▇▇▇▇▇▇ at East
Wenatchee, Washington,
(1) in
the case of the Interim Delivery Period, not later than the last day of the
month in which the Interim Delivery Period commences, and not later than the
twentieth day of each month thereafter, to the month in which occurs the
Commencement of Normal Routine Operation, and
(2) in
the case of the first Contract Year and thereafter, not later than the last day
of the month in which the Commencement of Normal Routine Operation occurs, or
January 31, 1969, whichever is later, and not later than the twentieth day
of each month thereafter,
whether
or not the ▇▇▇▇▇ Project is then operable or operating; provided that if the
period which is the Interim Delivery Period or the first Contract Year commences
other than on the first day of a month, the payment for the first month of such
period shall be reduced to an amount equal to the Purchaser’s Estimated Cost
divided by the number of days in such period and multiplied by the number of
days in the first month included within such period.
(d) If
payment in full is not made on or before the close of business on the due date,
a delayed-payment charge of two per cent (2%) of the unpaid amount due will be
made. Remittances received by mail will be accepted without
assessment of the two per cent (2%) delayed-payment charge if the postmark
indicates the payment was mailed on or before the due date. If the
due date is a Sunday or a holiday, the next following business day shall be the
last day on which payment may be made or mailed without the addition of the
delayed-payment charge. Except as to any portion of a monthly payment
which may in good faith be disputed by the Purchaser, ▇▇▇▇▇▇▇ may, whenever any
amount due remains unpaid subsequent to the thirtieth day after the due date and
after giving thirty (30) days’ advance notice in writing, discontinue
deliveries to the Purchaser until such ▇▇▇▇ and any subsequent payments which
have become due are paid. No such discontinuance shall relieve the
Purchaser from any of its obligations under this contract; provided, that until
the Purchaser’s Power Allocation has been reallocated under the provisions of
Section 21 hereof, ▇▇▇▇▇▇▇ shall use its best efforts to sell the power and
energy made available by such discontinuance for the account of the
Purchaser.
(e) ▇▇▇▇▇▇▇
shall pay into the Revenue Fund established by the Bond Resolution that share of
the Annual Power Costs determined by multiplying the Annual Power Costs by the
percentage of ▇▇▇▇▇ Project Output reserved by ▇▇▇▇▇▇▇ in accordance with
Section 4 hereof as it may be modified by Section 21
hereof.
(f) On
or before one hundred twenty (120) days after the end of the Interim
Delivery Period, ▇▇▇▇▇▇▇ will submit to the Purchaser a detailed statement of
the actual Annual Power Costs for the Interim Delivery Period, based on the
audit of the accounts of the ▇▇▇▇▇ Project provided for in Section 12
hereof, and will compare such actual Annual Power Costs with the estimated
Annual Power Costs for the Interim Delivery Period. If such actual
costs exceed such estimated costs, ▇▇▇▇▇▇▇ shall ▇▇▇▇ the Purchaser for an
amount equal to such excess multiplied by the Purchaser’s Power Allocation for
the Interim Delivery Period, and the Purchaser agrees to pay such ▇▇▇▇
promptly. If such estimated costs exceed such actual costs, ▇▇▇▇▇▇▇
shall give credit to the Purchaser for an amount equal to such excess multiplied
by such Power Allocation, such credit to be given (in full until exhausted)
against monthly payments commencing with the first monthly payment after the
submission of such statement.
(g) On
or before one hundred twenty (120) days after the end of each Contract
Year, ▇▇▇▇▇▇▇ will submit to the Purchaser, based on the audit of the accounts
of the ▇▇▇▇▇ Project provided for in Section 12 hereof, a detailed
statement of the actual Annual Power Costs for such Contract Year and a
statement of the amount existing in the Revenue Fund created by the First Bond
Resolution as of the close of such Contract Year. If the amount so
existing in the Revenue Fund exceeds the required amount of working capital,
▇▇▇▇▇▇▇ shall give credit to the Purchaser for an amount equal to such excess
multiplied by the Purchaser’s Power Allocation for such Contract Year, such
credit to be given (in full until exhausted) against monthly payments in the
then current Contract Year; provided that, if ▇▇▇▇▇▇▇ and all the Purchasers
shall agree thereto in writing, all or any part of such excess may be applied
(and such credit shall be correspondingly reduced by such application) to the
making of repairs, renewals, replacements, additions, betterments, improvements
or extensions in connection with the ▇▇▇▇▇ Project; and provided, further, that
if such statement is submitted following the expiration of the term of this
contract, ▇▇▇▇▇▇▇ shall thereupon make a cash refund of such amount to the
Purchaser. If the required amount of working capital exceeds the
amount so existing in the Revenue Fund, ▇▇▇▇▇▇▇ shall ▇▇▇▇ the Purchaser for an
amount equal to such excess multiplied by such Power Allocation, and the
Purchaser agrees to pay such ▇▇▇▇ promptly. As used in this
subsection (g), the “required amount of working capital” shall be
$1,500,000, or such lesser amount (but not less than $750,000) or such greater
amount as may be agreed upon by ▇▇▇▇▇▇▇ and the Purchasers, and the amount
existing in the Revenue Fund as of the close of any Contract Year shall be
deemed to be the amount of the then excess of the current assets in the Revenue
Fund over the current liabilities thereof determined in accordance with the
Uniform System of Accounts; provided that such current liabilities shall not
include Debt Service for the next following Contract Year.
(h) The
Purchaser shall pay to ▇▇▇▇▇▇▇ for the Initial Delivery Period an amount
determined by multiplying the Annual Power Costs for the Initial Delivery Period
by the Purchaser’s Power Allocation. For this purpose, ▇▇▇▇▇▇▇ shall
prepare and mail monthly to the Purchaser a statement showing the portion of the
Annual Power Costs allocable to the preceding month and the Purchaser shall pay
▇▇▇▇▇▇▇ its percentage thereof promptly. If payment of the amount so
due is not made by the twentieth day after receipt of the statement by the
Purchaser, a late-payment charge of two per cent (2%) of the unpaid amount due
will be made. Remittances received by mail will be accepted without
assessment of the two per cent (2%) delayed-payment charge if the postmark
indicates the payment was mailed on or before the twentieth day after such
receipt. On or before one hundred twenty (120) days after the
end of the Initial Delivery Period, ▇▇▇▇▇▇▇ will submit to the Purchaser a
detailed statement of the Annual Power Costs for the Initial Delivery Period,
based on the audit of the accounts of the ▇▇▇▇▇ Project provided for in
Section 12 hereof, and will compare such Annual Power Costs with the
aggregate of the monthly payments previously made by the
Purchasers. If such actual costs exceed such aggregate payments,
▇▇▇▇▇▇▇ shall ▇▇▇▇ the Purchaser for an amount equal to such excess multiplied
by the Purchaser’s Power Allocation for the Initial Delivery Period, and the
Purchaser agrees to pay such ▇▇▇▇ promptly. If such aggregate
payments exceed such actual costs; ▇▇▇▇▇▇▇ shall promptly pay to the Purchaser
an amount equal to such excess multiplied by such Power Allocation.
Section 7. Scheduling of
Deliveries.
(a) Deliveries
will be made insofar as possible as requested by the Purchaser, all as provided
in this Section 7; provided, that such deliveries, together with deliveries
requested by all other Purchasers (including deliveries to ▇▇▇▇▇▇▇ pursuant to
its reservation under Section 4 hereof) will be possible of fulfillment
under the terms of the License and will not exceed the capability of the ▇▇▇▇▇
Project or subject it or its operation to undue hazard.
(b) It
is the intent of the parties hereto that the power and energy purchased
hereunder by the Purchaser shall be fully coordinated with other resources
available to the Purchaser and with the resources of other Purchasers and that
the operation of the ▇▇▇▇▇ Project shall be coordinated with the operation of
the Northwest Power Pool. Scheduling of generation from the ▇▇▇▇▇
Project shall be as requested by the Purchaser, acting singly or as a member of
a group of Purchasers, subject to the limitations set forth in this Section and
in other Sections of this contract.
(c) The
Purchaser, acting singly or as a member of a group of Purchasers, shall make
available to ▇▇▇▇▇▇▇ at least eight (8) hours before 12:01 A.M. of
each day an hourly schedule of desired total energy deliveries for that
day. Such schedule shall be based upon the probable water supply to
the ▇▇▇▇▇ Project and the resulting probable output. Changes in the
desired energy deliveries may be made at any time upon the request of the
Purchaser if required by changes in estimated river flows or system
requirements, and the Purchaser may request that such changes be made
continuously through the use of automatic load control
equipment. Deviations from schedule for ▇▇▇▇▇ Project Output shall be
held to a minimum by ▇▇▇▇▇▇▇ and corrected as promptly as possible on an hourly
basis under conditions as nearly equivalent as possible to those obtaining when
the deviations occurred.
(d) The
schedules and deliveries requested by the Purchaser shall be in accordance with
the following:
(1) The
Purchaser shall not request the delivery of energy, or equivalent spill, at a
rate in excess of an amount determined by multiplying the peaking capability of
the ▇▇▇▇▇ Project at the time of such request by the Purchaser’s Power
Allocation. The Purchaser shall request such deliveries at a rate not
less than an amount determined by multiplying the total deliveries of energy, or
equivalent spill, required to comply with the minimum discharge provisions of
the License, by the Purchaser’s Power Allocation; provided that, if the
aggregate requests of all the Purchasers shall provide sufficient discharge from
the ▇▇▇▇▇ Project to comply with such provisions of the License, ▇▇▇▇▇▇▇ may not
require the scheduling of additional delivery or spill by the
Purchaser;
(2) The
Purchaser shall be entitled to schedule a share of that part of ▇▇▇▇▇ Project
Output resulting from the inflow of the stream each hour determined by
multiplying said part of ▇▇▇▇▇ Project Output by the Purchaser’s Power
Allocation;
(3) The
Purchaser shall be entitled to schedule a share of the pondage available at the
▇▇▇▇▇ Project (hereinafter called the “Purchaser’s Allocation of Pondage”),
determined by multiplying the total pondage available by the Purchaser’s Power
Allocation; and
(4) The
Purchaser may schedule more or less than its share of ▇▇▇▇▇ Project Output
determined in accordance with subsection 7(d)2 hereof by scheduling from or
to a pondage account established for each Purchaser. The aggregate
amount of the energy scheduled from the pondage account shall not exceed the
Purchaser’s Allocation of Pondage determined in accordance with
subsection 7(d)3 hereof and shall subsequently require, except as all of
the Purchasers shall otherwise agree, the scheduling of an equivalent amount of
energy to the account for refill by 7:00 A.M. on the following
Monday. Scheduling by the Purchaser to its pondage account shall be
only against its prior accumulated pondage draft. Refill obligations
shall be reduced proportionately when inflow of the stream exceeds the hydraulic
capacity of the ▇▇▇▇▇ Project and will be cancelled when spill
occurs.
Section 8. Points of
Delivery. The power and energy to be made available to the
Purchaser by ▇▇▇▇▇▇▇ hereunder shall be delivered at approximately 230 kv and at
the Purchaser’s request delivered at (a) the ▇▇▇▇▇ Project’s 230 kv
bus at the point or points of connection with any non-Project transmission
lines, and/or (b) any point where the 230 kv transmission facilities
of the ▇▇▇▇▇ Project connect with non-Project facilities in the vicinity of the
Rocky Reach switchyard, and/or (c) other points of delivery as may be
agreed upon from time to time by all of the Purchasers and ▇▇▇▇▇▇▇; provided,
however, that except as provided in the next succeeding paragraph of this
Section, and until ▇▇▇▇▇▇▇ has had a reasonable opportunity to construct
additional facilities if necessary to comply with Section 20 (f) hereof,
the power and energy to be delivered to the Purchaser at all points of delivery
specified in (b) above shall not exceed the capacity of the ▇▇▇▇▇ Project
transmission facilities between the ▇▇▇▇▇ Project’s 230 kv bus and all said
points of delivery multiplied by the Purchaser’s Power Allocation; the amount so
determined to be hereafter referred to as “Purchaser’s Share of Transmission
Capacity”.
Each
Purchaser of a portion of ▇▇▇▇▇ Project Output shall have the right, without
additional charge by ▇▇▇▇▇▇▇, to use or assign to another such Purchaser its
Purchaser’s Share of Transmission Capacity to transmit ▇▇▇▇▇ Project and/or
non-Project power and energy. During any time transmission capacity
is not used or assigned by a Purchaser entitled to the same or any transmission
capacity is made available by opposed power flow such capacity shall be divided
among Purchasers desiring the same in proportion to their respective power
allocations.
Section 9. Voltage Control and Reactive
Deliveries.
(a) ▇▇▇▇▇▇▇
shall maintain voltage levels at the ▇▇▇▇▇ Project to best coordinate with the
systems of the Purchasers and the systems operated by members of the Northwest
Power Pool.
(b) Reactive
kilovolt-amperes shall be made available up to the capability of the equipment
of the ▇▇▇▇▇ Project, consistent with the power generation and voltage level
schedule for the ▇▇▇▇▇ Project at the time.
(c) The
Purchaser is entitled at any time to a share of the reactive output equal to
that available at the time of maximum power output from the ▇▇▇▇▇ Project
determined by multiplying the total reactive output by the Purchaser’s Power
Allocation. The Purchaser may take additional reactive deliveries
when available, or otherwise, by reducing deliveries of power from the ▇▇▇▇▇
Project to the Purchaser so as to provide the additional reactive
capability.
Section 10. Character and Continuity of
Service.
(a) Power
and energy delivered hereunder shall be approximately 230 kv, three-phase
alternating current, at approximately sixty cycles per
second. ▇▇▇▇▇▇▇ may temporarily interrupt or reduce deliveries of
electric energy to the Purchaser if ▇▇▇▇▇▇▇ determines that such interruption or
reduction is necessary in case of emergencies, or in order to install equipment
in, make repairs to, replacements, investigations and inspections of, or perform
other maintenance work on the ▇▇▇▇▇ Project. In order that operations
of the Purchasers will not be unreasonably interrupted or interfered with,
▇▇▇▇▇▇▇, after consulting with the Purchaser regarding any such planned
interruption or reduction, giving the reason therefor and stating the probable
duration thereof, will to the best of its ability schedule such interruption at
a time which will cause the least interference to the operations of the
Purchaser and the operations of the other Purchasers.
(b) Except
as interrupted by Uncontrollable Forces or as provided otherwise by this
Section, the Purchaser’s share of ▇▇▇▇▇ Project Output shall be made available
in accordance with this contract at all times during the term of this contract
commencing with the Initial Date of Delivery.
Section 11. Metering and Transmission
Losses.
(a) ▇▇▇▇▇▇▇
shall provide and maintain suitable meters in the generator leads of the power
plant of the ▇▇▇▇▇ Project to indicate and record the output of the ▇▇▇▇▇
Project. ▇▇▇▇▇ Project Output shall be determined from totalized
readings from said meters and in accordance with the provisions of
subsection 2(d) hereof. ▇▇▇▇▇▇▇ shall also arrange for suitable
metering at the point of delivery specified in Section 8 hereof or at other
points as agreed upon. Meters shall be read by ▇▇▇▇▇▇▇ or an agent of
▇▇▇▇▇▇▇ and records thereof shall be made available to the Purchaser as may be
reasonably required.
(b) The
amounts of ▇▇▇▇▇ Project Output delivered hereunder shall be determined as
though they were made at the low voltage side of the power transformers of the
▇▇▇▇▇ Project. All losses of power and energy from the Purchaser’s
Power Allocation purchased hereunder resulting from transformation and
transmission shall be borne by the Purchaser.
Section 12. Accounts.
(a) ▇▇▇▇▇▇▇
agrees to keep accurate records and accounts of the ▇▇▇▇▇ Project in accordance
with the Uniform System of Accounts and in accordance with the rules and
regulations prescribed by the Division of Municipal Corporations of the State
Auditor’s office of the State of Washington, separate and apart from its other
accounting records. Said accounts shall be the subject of an annual
audit by a firm of certified public accountants, experienced in electric utility
accounting and of national reputation, to be employed by ▇▇▇▇▇▇▇. The
transactions with respect to each Contract Year shall be subject to such an
audit. In addition, such an audit shall be prepared to cover all
transactions relating to the Interim Delivery Period, as well as a separate
audit covering transactions relating to the Initial Delivery
Period.
(b) A
copy of each such audit, including all recommendations of the accountants, shall
be furnished by ▇▇▇▇▇▇▇ to the Purchaser promptly after the same shall have been
prepared.
Section 13. Information to be Made Available to
the Purchaser.
(a) All
drawings, designs, plans, specifications and terms of contracts relating to the
construction and operation of the ▇▇▇▇▇ Project are or will be placed on file in
the office of ▇▇▇▇▇▇▇ at East Wenatchee, Washington, and will be open to
inspection by the Purchaser.
(b) All
agreements and data relating to the financing of the ▇▇▇▇▇ Project may be
examined by the Purchaser at the office of ▇▇▇▇▇▇▇.
(c) All
operating and financial records and reports relating to the ▇▇▇▇▇ Project may be
examined by the Purchaser at the office of ▇▇▇▇▇▇▇.
(d) Policies
of insurance carried by ▇▇▇▇▇▇▇ pursuant to Section 15 hereof shall be
available at the office of ▇▇▇▇▇▇▇ for inspection by the Purchaser.
(e) The
Purchaser’s representatives shall at all times be given reasonable access to the
▇▇▇▇▇ Project.
Section 14. Advisory
Committee—Arbitration.
(a) In
order that the Purchasers may, in an orderly way, participate in problems
relating to the ▇▇▇▇▇ Project, there is hereby established the ▇▇▇▇▇ Advisory
Committee (herein called the “Committee”). The Purchaser and each of
the other Purchasers are entitled to representation on the Committee and may
each appoint a representative to attend Committee meetings. A
Chairman shall be elected by the members of the Committee. The
Committee will meet regularly each month, or as otherwise determined by the
Committee, for the purpose of discussing the problems with respect to the ▇▇▇▇▇
Project and may make recommendations to ▇▇▇▇▇▇▇ with reference
thereto. Special meetings shall be called by the Chairman at the
request of ▇▇▇▇▇▇▇ or upon the request of any member of the
Committee. All meetings will be held at the office of ▇▇▇▇▇▇▇ at East
Wenatchee, Washington, or at such other place or places as may be determined by
the Committee.
(b) Copies
of the operating and capital budgets referred to in subsection 6(a)(2)
hereof shall be submitted to the Committee.
(c) Except
in the event of an emergency requiring immediate action, ▇▇▇▇▇▇▇ shall give to
the Committee reasonable notice, in no case less than thirty (30) days,
whenever it proposes to replace items of major equipment in or to construct
additions, improvements or betterments to or extensions of the ▇▇▇▇▇ Project, or
to enter into additional new or special contractual arrangements relating to or
substantially modifying the operation or Annual Power Costs of the ▇▇▇▇▇
Project.
(d) ▇▇▇▇▇▇▇
will give due consideration to the recommendations of the
Committee. In considering said recommendations, ▇▇▇▇▇▇▇ shall give
due regard to the objective of achieving from the ▇▇▇▇▇ Project the optimum
electric power production consistent with economy, reliability and facility of
operation and ▇▇▇▇▇▇▇’ statutory duties. Written recommendations may
be made to ▇▇▇▇▇▇▇ whenever such recommendations are approved in writing by
members of the Committee representing Purchasers who are purchasing forty-nine
per cent (49%) or more of that part of the ▇▇▇▇▇ Project Output purchased under
this contract and the other contracts referred to in subsection 2(i) hereof
by all Purchasers. Such written recommendations shall be forwarded to
▇▇▇▇▇▇▇ with appropriate supporting data. ▇▇▇▇▇▇▇ shall take action
on such recommendations within a reasonable time by adopting, modifying or
rejecting such recommendations. If ▇▇▇▇▇▇▇ modifies or rejects said
recommendations it shall notify the Committee of its action in writing, giving
the reasons therefor.
(e) If
▇▇▇▇▇▇▇ modifies or rejects a written recommendation of the Committee dealing
with matters which may be arbitrated as set forth in subsection 14(f)
hereof, and made in accordance with the procedures set forth in
subsection 14(d) hereof, the Committee may, by affirmative vote of members
of the Committee representing Purchasers who purchase forty-nine per cent (49%)
or more of that part of ▇▇▇▇▇ Project Output purchased under this contract and
the other contracts referred to in subsection 2(i) hereof by all
Purchasers, submit the recommendation to a board of arbitrators. The
board of arbitrators shall be composed of three (3) persons, one of whom
shall be appointed by ▇▇▇▇▇▇▇, one of whom shall be appointed by majority vote
of the members of the Committee, and the third person shall be appointed by the
two persons so appointed. In the event said two persons cannot agree
upon the appointment of a third person, then such third person shall be
appointed by the Chief Justice of the Supreme Court of the State of
Washington. The procedure for arbitration shall be governed by the
laws of the State of Washington. Insofar as the parties hereto may
legally do so, they agree to abide by the decision of said board; provided, that
▇▇▇▇▇▇▇ shall not be bound by any decision of a board of arbitrators to the
extent that such decision is retroactive beyond the date when the matter
arbitrated was made the subject of written recommendation of the
Committee.
(f) Subject
to the provisions of Section 22 hereof, the matters which may be arbitrated
in accordance with subsection 14(e) hereof shall consist of all matters
pertaining to the maintenance, operation, additions, betterments, extensions,
improvements, replacements and renewals of the ▇▇▇▇▇ Project, insurance to be
carried on the ▇▇▇▇▇ Project and its operation, financing and refinancing,
voluntary payments in lieu of taxes or other voluntary donations made by
▇▇▇▇▇▇▇, and any matter substantially adversely affecting Annual Power Costs,
except, however, that this Section 14 shall not require ▇▇▇▇▇▇▇ to submit
to arbitration any matter which ▇▇▇▇▇▇▇ cannot lawfully submit to
arbitration.
(g) In
the event this Section 14 or any paragraph, sentence, clause or phrase
thereof shall be adjudicated by a court of last resort and of competent
jurisdiction to be invalid or illegal, the remainder of this contract shall be
unaffected by such adjudication, and all other provisions of this contract shall
remain in full force and effect as though this Section or such part thereof so
adjudicated to be invalid had not been included herein.
Section 15. Insurance. ▇▇▇▇▇▇▇
agrees to obtain and maintain in full force and effect during the term of this
contract, to the extent available at reasonable cost, adequate insurance with
responsible insurers with policies payable to ▇▇▇▇▇▇▇ for the benefit of ▇▇▇▇▇▇▇
and the Purchasers as their respective interests may appear,
against:
(1) Obligations
of ▇▇▇▇▇▇▇ under the Workmen’s Compensation Law of the State of Washington, and
Employer’s liability;
(2) Public
liability for bodily injury and property damage;
(3) Physical
loss or damage to the ▇▇▇▇▇ Project;
(4) Business
interruption loss to ▇▇▇▇▇▇▇ and/or the Purchasers resulting from delay in
completion of the ▇▇▇▇▇ Project, and from interruption or reduction of
generation or transmission of power and energy caused by physical loss, damage
or destruction; and
(5) Any
other insurance determined to be necessary by ▇▇▇▇▇▇▇ and concurred in by the
Purchasers who are purchasing sixty percent (60%) or more of that part of the
▇▇▇▇▇ Project Output purchased under this contract and the other contracts
referred to in subsection 2(i) hereof by all the Purchasers.
Section 16. Operation and
Maintenance. ▇▇▇▇▇▇▇ covenants and agrees that it will operate
and maintain the ▇▇▇▇▇ Project in an efficient and economical manner, consistent
with good business and operating practices of comparable non-federally owned
hydroelectric projects on the Columbia River in the United States.
Section 17. Board of Consulting Engineers on
Construction Problems. ▇▇▇▇▇▇▇ shall establish a Board of
five, (5) Consulting Engineers during the construction of the ▇▇▇▇▇ Project,
which shall include two (2) engineers of outstanding ability and national
reputation, selected by ▇▇▇▇▇▇▇ from a list of not less than four (4) such
engineers submitted by the Committee to ▇▇▇▇▇▇▇.
Section 18. Construction and Financing
Contracts. ▇▇▇▇▇▇▇ agrees that prior to commencing
construction of the ▇▇▇▇▇ Project it will have completed the financing of the
estimated Cost of Acquisition and Construction, shall have let the major
contract for the construction thereof, and shall have obtained adequate surety
bonds for the completion of said contract. ▇▇▇▇▇▇▇ Corporation shall
have prepared the plans and specifications for the ▇▇▇▇▇ Project, and Messrs.
▇▇▇▇▇▇ and Leighton shall have prepared the plans and specifications for the
office building included in the ▇▇▇▇▇ Project, all of which plans and
specifications shall have been subject to review by the Purchaser, and ▇▇▇▇▇▇▇
agrees that it will not (without the consent of the Purchasers who are
purchasing sixty per cent (60%) or more of that part of the ▇▇▇▇▇ Project Output
purchased under this contract and the other contracts referred to in
subsection 2(i) hereof by all the Purchasers) modify, amend or waive full
compliance with, nor make any elections provided for in, the said plans and
specifications, in any material respect.
Section 19. Completion of
Construction. ▇▇▇▇▇▇▇ agrees to proceed diligently with the
financing and construction of the ▇▇▇▇▇ Project and, subject to Uncontrollable
Forces, plans to complete the ▇▇▇▇▇ Project by September 1,
1968.
Section 20. Additional
Facilities.
(a) From
time to time during the term hereof ▇▇▇▇▇▇▇ may propose to expand the ▇▇▇▇▇
Project by installing additional generating facilities. Whenever
▇▇▇▇▇▇▇ proposes to so expand the ▇▇▇▇▇ Project it shall give notice in writing
of such intent to the Purchaser stating:
(1) The
estimated cost of such additional generating facilities;
(2) The
proposed method of financing the cost of said facilities;
(3) The
estimated additional power and energy which would be available as a result of
the installation of said facilities;
(4) The
estimated incremental cost (i.e., the costs which will be incurred as a result
of installing the proposed additional facilities, which costs would not be
incurred were such proposed additional facilities not installed) of said
additional power and energy on an annual basis; and
(5) The
estimated construction period for the installation of said
facilities.
The
notice shall also contain other available pertinent information.
(b) The
Purchaser shall have the option of purchasing a share of said additional power
and energy determined by multiplying the total additional output by the
Purchaser’s Power Allocation, and may exercise such option by giving written
notice to ▇▇▇▇▇▇▇ on or before the expiration of ninety (90) days from the
receipt of said written notice from ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall give a
second notice to the Purchaser if any of the other Purchasers shall fail to
exercise its option for its full share of said power and energy, and the
Purchaser may, by giving written notice to ▇▇▇▇▇▇▇ within sixty (60) days
after the receipt of the second notice from ▇▇▇▇▇▇▇, have its respective share
of said power and energy increased either in proportion or, as shall be mutually
agreed upon, so as to make available to the Purchaser and to the other
Purchasers power and energy available as a result of any of the other Purchasers
failing to elect to take its full share of said additional power and
energy. ▇▇▇▇▇▇▇, in addition to its share of said additional output
determined by multiplying the total amount of said additional power and energy
by the percent reservation for ▇▇▇▇▇▇▇ specified in Section 4 hereof, shall
be entitled to the additional power and energy which the Purchaser and other
Purchasers shall not elect to take in accordance with the foregoing
provision. Failure to exercise its option to purchase additional
power and energy which would be available from the installation of additional
generating facilities proposed by ▇▇▇▇▇▇▇ at any time shall not be construed to
waive the rights of the Purchaser to a share of the additional power and energy
which would be available from additional facilities proposed for installation by
▇▇▇▇▇▇▇ at a later date.
(c) If
the Purchaser exercises its option to take its share of said additional power
and energy, it shall pay for said additional power and energy a percentage of
the incremental annual cost of said additional facilities corresponding to the
percent the share of additional power and energy which it purchases is of the
total additional power and energy available as the result of the installation of
the additional facilities. If the Purchaser does not elect to take
additional power and energy which would be available from the installation of
additional generating facilities it shall continue to receive the same
percentage of ▇▇▇▇▇ Project Output and pay the same Annual Power Costs therefor
as if such additional generating facilities had not been installed.
(d) If,
after the Purchaser shall have exercised its option as aforesaid, ▇▇▇▇▇▇▇ shall
determine that it is not economically feasible for it to install additional
generating facilities as proposed, ▇▇▇▇▇▇▇ shall be under no obligation to so do
and shall so notify the Purchaser of such determination.
(e) Notwithstanding
any other provisions of Section 20 hereof, whenever ▇▇▇▇▇▇▇ is compelled to
install additional facilities at or in the ▇▇▇▇▇ Project by any order or
decision of the Federal Power Commission or any state or federal government
agency with authority to issue or make and enforce such an order or decision,
the Purchaser shall share the benefits and costs resulting from the installation
of said additional facilities in the same manner and to the same extent as if
the Purchaser had voluntarily exercised its option to purchase the power and
energy resulting from the installation of additional generating facilities as
provided above in Section 20 hereof.
(f) ▇▇▇▇▇▇▇
agrees that it will construct as a part of the ▇▇▇▇▇ Project such transmission
lines and such terminal facilities as are necessary to deliver power and energy
from the ▇▇▇▇▇ Project to the points of delivery specified in Section 8 of
this contract and the similar contracts with the other
Purchasers. The Purchaser hereby agrees that ▇▇▇▇▇▇▇ may at any time
or from time to time construct as a part of the ▇▇▇▇▇ Project (1) one
230/115-kv stepdown substation at the ▇▇▇▇▇ Project and one 230/115-kv stepdown
substation near the Rocky Reach switchyard with a combined capacity of not more
than 250,000 kva, (2) one 115-kv transmission line approximately
10 miles long from the ▇▇▇▇▇ Project to the vicinity of ▇▇▇▇▇▇▇▇ and
Bridgeport, and (3) one 115-kv transmission line approximately 8 miles
long from the vicinity of the Rocky Reach switchyard to the Eastmont area of
▇▇▇▇▇▇▇ County, including, in each case, necessary terminal
facilities.
Section 21. Adjustment of Power
Allocation. The Purchaser’s Power Allocation shall be
automatically increased pro rata with that of the other Purchasers, not in
excess of a cumulative maximum of Twenty-Five Per Cent (25%) of its original
percentage allocation specified in Exhibit “A” hereto, in the event of a
Default (as hereinafter defined) by any one or more of the other
Purchasers. If any of the other Purchasers defaults, and the
Purchaser’s Power Allocation is automatically increased in accordance with this
Section, the Purchaser either individually or as a member of a group shall have
a right of recovery from that one of the Purchasers in default for such amount
as the Purchaser may sustain as a loss or damage by reason of such Default and
may commence such suit, action or proceeding as may be necessary or appropriate
to recover the amount of said loss or damage. The term “Default” as
used herein shall mean the failure by any one of the Purchasers to make the
payments specified in Section 6 hereof and contemporaneously with said
failure to make payments there shall exist, with respect to that one of the
Purchasers, any one or more of the following conditions:
(a) An
order, judgment or decree shall be entered by any court of competent
jurisdiction:
(1) Appointing
a receiver, trustee or liquidator for said Purchaser or the whole or any
substantial part of the properties of said Purchaser;
(2) Approving
a petition filed against said Purchaser under the provision of an Act to
Establish a Uniform System of Bankruptcy Throughout the United States, Approved
July 1, 1898, as amended;
(3) Granting
relief to said Purchaser under an amendment to said Bankruptcy Act which shall
give relief similar to that afforded by said Act; or
(4) Assuming
custody or control of the whole or any substantial part of the properties of
said Purchaser under the provisions of any other law for the relief or aid of
debtors;
and such
order, judgment or decree shall not be vacated or set aside or stayed (or, in
case custody or control is assumed by said order, such custody or control shall
not otherwise be terminated) within sixty (60) days from the date of the
entry of such order, judgment or decree;
(b) Said
Purchaser shall:
(1) Admit
in writing its inability to pay its debts generally as they become
due;
(2) File
a petition in bankruptcy;
(3) Make
an assignment for the benefit of its creditors;
(4) Consent
to the appointment of a receiver of the whole or any substantial part of its
properties;
(5) Be
adjudicated a bankrupt on the basis of a petition in bankruptcy filed against
it;
(6) File
a petition or an answer seeking relief under any amendment to said Bankruptcy
Act which shall afford relief substantially similar to that afforded by said
Act; or
(7) Consent
to the assumption by any court of competent jurisdiction under the provisions of
any other law for the relief or aid of debtors of custody or control of such
Purchaser or of the whole or any substantial part of its
properties;
provided
that if prior to an imminent Default by any Purchaser (hereinafter called the
“Defaulting Purchaser”), the Defaulting Purchaser shall demonstrate, to the
satisfaction of other Purchasers receiving in the aggregate at least two-thirds
(⅔) of the ▇▇▇▇▇ Project Output being purchased by Purchasers other than the
Defaulting Purchaser under this contract and the other contracts referred to in
subsection 2(i) hereof and to the satisfaction of ▇▇▇▇▇▇▇, the inability of
the Defaulting Purchaser to pay for its power allocation under its contract and
its ability to pay for a smaller power allocation thereunder, then the
Defaulting Purchaser shall be allowed thereafter to take such smaller power
allocation thereunder and shall thereafter be liable thereunder for the smaller
power allocation in the same manner as for its previous power allocation
thereunder; and, in such event, the automatic increase in the Purchaser’s Power
Allocation as above provided shall apply only to the amount of such decrease in
power allocation of the Defaulting Purchaser.
Section 22. Additions, Betterments, Improvements
and Extensions. ▇▇▇▇▇▇▇ may at its option make in any Contract
Year additions, betterments or improvements to or extensions of the ▇▇▇▇▇
Project costing in the aggregate not more than $25,000, but may not make in such
Contract Year such additions, betterments, improvements or extensions costing in
the aggregate more than $25,000 unless such excess amount shall have been
approved in writing by Purchasers who are purchasing sixty per cent (60%) or
more of the part of the ▇▇▇▇▇ Project Output purchased under this contract and
the other contracts referred to in subsection 2(i) hereof by all
Purchasers. Notwithstanding the provisions of this Section 22,
such approval of the Purchasers shall not be required in connection with the
construction of the facilities referred to in Section 20
hereof.
Section 23. Liability of
Parties. ▇▇▇▇▇▇▇ and the Purchaser each assumes full
responsibility and liability for the maintenance and operation of its respective
properties and shall indemnify and save harmless the other party from all
liability and expense on account of any and all damages, claims or actions,
including injury to or death of persons, arising from any act or accident in
connection with the installation, presence, maintenance and operation of the
property and equipment of the indemnifying party; provided, that any liability
which is incurred by ▇▇▇▇▇▇▇ through the operation and maintenance of the ▇▇▇▇▇
Project and not covered by insurance shall be paid solely from the revenues of
the ▇▇▇▇▇ Project, and any payments made by ▇▇▇▇▇▇▇ to satisfy such liability
shall become part of the Annual Power Costs.
Section 24. Waiver of
Default. Any waiver at any time by either party to this
contract of its rights with respect to any default of the other party hereto, or
with respect to any other matter arising in connection with such contract, shall
not be considered a waiver with respect to any subsequent default, right or
matter.
Section 25. Notices and Computation of
Time. Any notice or demand, except those provided for in
Section 7 hereof, by the Purchaser under this contract to ▇▇▇▇▇▇▇ shall be
deemed properly given if mailed postage prepaid and addressed to Public Utility
District No. 1 of ▇▇▇▇▇▇▇ County, Washington, at East Wenatchee,
Washington; any notice or demand by ▇▇▇▇▇▇▇ to the Purchaser under this contract
shall be deemed properly given if mailed postage prepaid and addressed to Puget
Sound Power & Light Company, Attention ▇▇▇▇▇ ▇. ▇▇▇▇▇, President,
▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇; and computing any period of time from
such notice, such period shall commence at 12:00 P.M. (midnight) on the
date mailed. The designations of the name and address to which any
such notice or demand is directed may be changed at any time and from time to
time by either party giving notice as above provided.
Section 26. Modification of Contract
Terms. It is recognized by the parties hereto that, by virtue
of the Bond Resolution, this contract cannot be amended, modified or otherwise
altered by agreement of the parties in any manner that will impair or adversely
affect the security afforded by the provisions of this contract for the purchase
and sale of a portion of ▇▇▇▇▇ Project Output for the payment of the principal,
interest and premium, if any, on Revenue Bonds as they respectively become
payable, as long as any of the 1963 Bonds and Completion Bonds as defined in the
First Bond Resolution are outstanding and unpaid or until provision is
irrevocably made for the payment thereof.
Section 27. ▇▇▇▇▇▇▇’ Bond Resolution and
License. It is recognized by the parties hereto that ▇▇▇▇▇▇▇
in its operation of the ▇▇▇▇▇ Project and in the delivery of a portion of ▇▇▇▇▇
Project Output hereunder to the Purchaser, must comply with the requirements of
the Bond Resolution and with the License, and it is, therefore, accordingly
agreed that this Power Sales Contract is made, and arbitration hereunder shall
be, subject to the terms and provisions of the Bond Resolution and the
License. ▇▇▇▇▇▇▇ shall not, without the written consent of the
Purchaser, amend, modify or otherwise change the Bond Resolution if such
amendment, modification or change would be to the disadvantage of the
Purchaser. Except to the extent modification, amendment or change is
permitted by this Section 27, said Bond Resolution shall continue to be
binding upon ▇▇▇▇▇▇▇ so long as the Purchaser is purchasing power and energy
during the term of this contract and irrespective of whether the Bonds have been
redeemed. ▇▇▇▇▇▇▇ shall not, over the objection of the Purchaser,
voluntarily accept or apply for an amendment or modification of the
License.
Section 28. Conflict of
Laws. The parties hereto agree that this contract shall be
governed by the laws of the State of Washington.
Section 29. Assignment of
Contract. This contract shall inure to the benefit of, and
shall be binding upon the respective successors and assigns of the parties to
this contract. No assignment or transfer of this contract shall
relieve the parties hereto of any obligation incurred hereunder.
Section 30. Uniformity of Power Sales
Contracts. The Purchaser is one of several Purchasers as
follows:
|
Puget
Sound Power & Light Company
Portland
General Electric Company
Pacific
Power & Light Company
The
Washington Water Power Company
|
It is
understood and agreed that all of said contracts for the sale and purchase of
power shall be uniform in all material respects in their terms, conditions and
provisions with the exception of the power allocation for each of the
Purchasers. If any of said contracts are amended or replaced, then
this contract shall, at the option of the Purchaser, be amended or replaced to
conform to the changed or substituted contract; provided, however, that ▇▇▇▇▇▇▇
shall have the right to sell power and energy reserved by it pursuant to
Section 4 hereof on such terms and conditions as it shall elect and nothing
herein shall be construed to require ▇▇▇▇▇▇▇ to offer equal terms and conditions
to the purchasers of such reserved power and energy.
In
Witness Whereof, the parties hereto have caused this agreement to be
executed by their proper officers respectively, being thereunto duly authorized,
and their respective corporate seals to be hereto affixed, the day and year
first above written.
|
Public
Utility District No. 1 of
▇▇▇▇▇▇▇
County, Washington
|
||
|
(Seal)
|
By /s/
▇▇▇▇▇
▇▇▇▇▇▇
President
|
|
|
By /s/
▇▇▇▇▇▇ Prey
Vice
President
|
||
|
Attest:
|
||
|
/s/
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
|
||
|
Secretary
|
||
|
Puget
Sound Power & Light Company
|
||
|
(Seal)
|
||
|
By /s/
▇. ▇. ▇▇▇▇▇▇
Vice
President
|
||
|
Attest:
|
||
|
/s/ ▇.
▇. ▇▇▇▇▇▇▇▇
Secretary
|
EXHIBIT
“A”
Distribution
of ▇▇▇▇▇ Project Output
|
Purchasers
|
Original
Percentage Allocation
|
|||
|
Puget
Sound Power & Light Company
|
31.3%
|
|||
|
Portland
General Electric Company
|
20.3%
|
|||
|
Pacific
Power & Light Company
|
6.9%
|
|||
|
The
Washington Water Power Company
|
3.5%
|
|||
|
62%
|
||||