EXHIBIT 10.26(a)
AGREEMENT FOR THE PURCHASE
AND SALE OF ELECTRICITY
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THIS AGREEMENT for the purchase and sale of electricity is entered
into as of the date of this execution by and between GEOTHERMAL DEVELOPMENT
ASSOCIATES, a Nevada corporation, ("Seller"), and SIERRA PACIFIC POWER COMPANY,
a Nevada corporation ("Purchaser"), upon the following terms and conditions:
IT IS AGREED:
(1) Sale of Electricity. Seller shall sell and Purchaser shall
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purchase all of the electricity generated and delivered to the Point of
Delivery, defined herein, by Seller at its facility for generation of electric
power ("the Plant") to be located on land leased from Purchaser which land is
more particularly described in Exhibit A, attached hereto and incorporated
herein by this reference. Said Plant shall have nameplate rating of 5MW (net-
maximum) and shall be fueled by geothermal energy.
(2) Performance Criteria. Seller shall comply with the following
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performance criteria:
(a) Within 270 days of the execution of this Agreement, Seller
shall complete and bring to commercial fluid production, one geothermal well on
the land leased from Purchaser under that certain lease of even date hereinwith,
or land pooled or unitized therewith. For purposes of this Agreement, the term
"Commercial Fluid Production" shall mean the point at which a geothermal well,
alone or in combination with other ▇▇▇▇▇, is
producing, or its capable of producing, a resource of sufficient temperature and
volume to supply twenty-five percent (25%) of the Plant's heat requirements.
(b) Within three (3) calendar years of the execution of this
Agreement, Seller shall construct and bring to commercial power production, one
electrical generating plant with a maximum nameplate rating of 5 MW (net-
maximum). For the purposes of this Agreement, the term "commercial power
production" shall mean the point at which the first kilowatt hour is delivered
to the Point of Delivery.
If Seller should fail to meet either of the performance criteria in
the time stated, this Agreement shall be null and void and the obligations of
both parties hereunder shall terminate automatically and without notice.
Seller's compliance with the performance criteria shall be subject to written
verification by Purchaser, which verification shall not be unreasonably
withheld. Time frames quoted above may be extended by Purchaser if
circumstances beyond Seller's control have impeded Seller's performance,
provided Seller has used due diligence in attempting to mitigate such
circumstances and meet the stated time limitation. Purchaser's extension of the
time limit for one performance criterion does not constitute a waiver of the
other, or affect in any way the Purchaser's right to its enforcement.
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(3) Rate.
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(a) For all power purchased from Seller's facility at the Point of
Delivery, Purchaser shall pay Seller the sum of $0.0717 per kWh. For the
purposes of this Agreement, "Point of Delivery" shall be the Steamboat
substation 25 kv source closest to the plant, which source is owned by
Purchaser. Seller agrees to comply with Purchaser's Electric Rules 2 and 15,
all special conditions of Schedule CSPP and all subsequent revisions of said
schedule and rules.
(b) Monthly bills will be submitted to Purchaser by Seller. The
amount of each ▇▇▇▇ will be computed on the basis of energy delivered to
Purchaser during the billing period just ended, multiplied by the rate specified
above. The billing period shall be the time interval between two consecutive
meter readings taken for billing purposes. Purchaser shall pay each ▇▇▇▇ within
fifteen (15) days of the billing date. A monthly penalty of 1.0 percent of the
unpaid balance will be assessed on bills not paid within fifteen (15) days after
the billing date.
(4) Term. This Agreement shall be effective upon the date of its
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execution and shall continue until a period of ten (10) years has elapsed from
the commencement of the production and sale of electricity by Seller's plant,
and shall continue thereafter from year to year unless terminated by one of the
parties hereto.
(5) Design and Operating Equipments. Once Seller's and Purchaser's
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facilities are connected, both parties will
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operate their respective facilities in accordance with Purchaser's standard 2.2
GN 01 (Exhibit B), which is attached hereto and incorporated herein by this
reference, and the approved facility wiring diagram and specification described
in Paragraph 11 below, as well as any subsequent amendments to either document
which are reasonably applicable to Seller's plant and interconnection
facilities. Seller shall be given reasonable prior notice of all such
amendments. The parties acknowledge that with operating experience adjustment
of the operating requirements may be necessary. Seller shall not make any
modification to its facilities which substantially affects performance without
advance notification to Purchaser.
(6) Metering. Seller's facility will be metered according to Metering
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Option 1, as described in Paragraph 3.1 of Exhibit B.
(7) Conditions. The obligations of either party under this Agreement
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are conditioned upon the following events having occurred:
(a) Seller's attainment of qualifying facility status for the
plant pursuant to the Public Utilities Regulatory Policy Act of 1978 and 18 CFR
292, and any applicable amendments or supplements thereto.
(b) Seller's compliance with any applicable portions of General
Order 32 of the Public Service Commission of Nevada and any amendments or
supplements thereto.
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(c) Approval of the pricing provisions herein as a portion of
Purchaser's purchased power costs by the Public Service Commission of Nevada.
(8) Responsibility for Maintenance. It shall be the responsibility of
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Seller at its sole cost and expense to maintain all of the facilities, including
all control and protective devices, from the metering devices to Seller's
generation facility. It shall be the responsibility of the Purchaser at its
sole cost and expense to maintain facilities for the transmission of electrical
energy, up to and including the service drop and the devices for metering
electrical energy installed pursuant to this Agreement.
Seller agrees to give Purchaser sixty (60) days' written notice of
all scheduled maintenance periods.
(9) Special Facilities. Seller shall be responsible for all standard
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interconnection costs. In the event it is necessary for Purchaser to install
any special or additional interconnection facilities, including control or
protective devices, line extensions, multiple metering, or reinforcement of its
system to receive or continue to receive the power delivered under this
Agreement, Seller shall reimburse Purchaser for its costs associated with the
installation of such facilities under a separate special facilities agreement.
(10) Prior Approval. Equipment specifications and detailed plans for
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the installation of Seller's interconnection facilities, control and protective
devices, and facilities to
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accomodate Purchaser's meters will be submitted to Purchaser for review and
advance written approval prior to actual installation. Such review and written
approval are acknowledgements that Seller's facility complies with Purchaser's
requirements only. Purchaser shall not, by reason of such review and approval
or failure to review and approve, be responsible for strength, details of
design, adequacy, or capability of any of Seller's equipment, nor shall
Purchaser's acceptance be deemed an endorsement of any item of equipment.
Seller and Purchaser acknowledge that the equipment specifications and detail
plans submitted to Purchaser are intended only for the specific site and
installation described in this Agreement.
(11) Right of Entry. Purchaser may enter Seller's premises (a) at any
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reasonable time, to inspect Seller's protective devices, or (b) at any time
without notice, to disconnect the interconnection facilities if, in Purchaser's
opinion, a hazardous condition exists and immediate disconnection is necessary
to protect Purchaser's customers, other persons, Purchaser's facilities, or
Seller's facilities from damage.
Purchaser and Purchaser's escorted visitors may also enter Seller's
premises, with reasonable notice and permission of Seller, to conduct tours of
the generation plant and related facilities and to observe and monitor Seller's
generating facilities.
(12) Information Transfer. Seller agrees to make available to
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Purchaser upon request any and all information
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related to the installation, operation and maintenance of the facility and the
use of the resource. Such data will be treated as confidential and can only be
released by Purchaser with written permission of Seller, which permission shall
not be unreasonably withheld. The parties will cooperate in developing mutually
agreeable tests and/or modifications to be performed on the plant and resource.
(13) Follow-On Plants. If Seller intends to build additional
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geothermal generation plant(s) on any portion of the land described in Exhibit
A, or on land pooled, unitized, or combined therewith, and Seller intends to
sell a portion of said plant(s) to another party, Seller shall first offer such
portion to Purchaser at the price and on the terms that would be offered to such
a third party. Any such offers shall be in writing and Purchaser shall have
ninety (90) days from the date of receipt of such an offer to accept or reject
it. Upon receipt of Purchaser's rejection of such an offer, or upon expiration
of the ninety-day period described above, whichever comes first, Seller may
offer the same portion of such plant or plants to a third party or parties. In
no event shall such offer be on different terms or at a lower price than those
offered to Purchaser, unless such terms or price have first been offered to
Purchaser according to the procedure outlined in this section.
(14) Additional Resources. If Seller intends to purchase or lease
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additional geothermal rights in the Steamboat Springs Known Geothermal Resource
Area (KGRA), or purchase or
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lease additional land in the KGRA, for the purpose of developing geothermal
resources, Purchaser shall have the right to purchase up to seventy-five percent
(75%) interest in said rights or lands. The purchase price of any such interest
shall be one-third of the Seller's total cost of any parcel or right, or portion
thereof, in return for a one-quarter interest in the portion of the rights or
lands in which Purchaser is buying an interest.
Seller shall give Purchase written notice of Seller's intent to
acquire such rights or lands at least ninety (90) days prior to such
acquisition. Purchaser shall then have ninety (90) days from its receipt of
such notice to notify Seller of its intent to purchase some or all of the
seventy-five percent (75%) interest available to it. Said notice shall be in
writing and shall specify the amount to be purchased, the purchase price, and
the terms of payment. If Seller does not receive such a notice within the
stated period, Purchaser shall have no further rights to any portion of the
acquisition.
Upon Seller's receipt of Purchaser's notice, Seller and Purchaser
agree to negotiate in good faith an agreement defining the relative right and
responsibilities of the parties with regard to any subsequent development of the
rights or lands in which Purchaser has brought an interest.
(15) Liability and Indemnification. Each party shall indemnify and
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hold harmless the other party and the directors, officers, and employees of such
other party against and from any
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and all loss and liability for injuries to persons, including employees of
either party, and damages, including property of either party, resulting from or
arising out of (a) the engineering, design, construction, maintenance, or
operation of or (b) the making of replacements, additions, or betterments to,
the indemnitor's facilities. This provision shall apply notwithstanding the
active or passive negligence of the indemnitee. Neither party shall be
indemnified for liability or loss resulting from its sole negligence or willful
misconduct. The indemnitor shall, on the other party's request, defend and suit
asserting a claim covered by this indemnity and shall pay all costs, including
reasonable attorney's fees, that may be incurred by the other party in enforcing
this indemnity.
(16) A. Insurance. During the term of this Agreement, Seller shall
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maintain the following insurance:
(a) Workers' Compensation of self-insurance which satisfies the
applicable requirements of Nevada law. Within thirty (30) days after execution
of this Agreement, Seller shall provide Purchaser with a certificate evidencing
such insurance, and providing for thirty-day written notice to Purchaser prior
to cancellation, termination, alternation or material change of such insurance.
(b) Comprehensive General Liability and Comprehensive Automobile
Liability of not less than $500,000 combined single limit or equivalent for
bodily injury, personal injury and property damage as the result of any one
occurrence.
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(c) Comprehensive General Liability shall include coverage for
Premises-Operations, Owners and Contractors Protective Products/Completed
Operations Hazard, Explosion, Collapse, Underground, Contractual Liability, and
Broad Form Property Damage including Completed Operations. Comprehensive
Automobile Liability shall include coverage for Owned, Hired and Non-owned
automobiles.
B. Additional Insurance Provisions:
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(a) Evidence of coverage described in Paragraph 17(A) above shall
state that coverage provided is primary and is not excess to or contributing
with any insurance or self-insurance maintained by Purchaser.
(b) Purchaser shall have the right to inspect or obtain a copy of the
original policy(ies) of insurance.
(c) All insurance certificates, and a thirty-day advance notice of
cancellations, terminations, alterations and material changes of such insurance
shall be issued and submitted to the following:
Sierra Pacific Power Company
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(17) Permits and Licenses. Seller agrees to obtain any and all state,
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federal and local permits, licenses, or other documents necessary for the
operation of Seller's facility and the sale of energy therefrom to Purchaser.
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(18) Notices. Whenever in this Agreement it shall be required,
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permitted or desired that notice or demand be given by either party to or on the
other, such notice or demand shall be in writing and may be either personally
served or sent by United States mail and shall be deemed to have been given when
personally served or when deposited in the United States mail, certified or
registered, with postage prepaid and properly addressed. For the purposes
hereof the addresses of the parties hereto (until notice of a change thereof is
given as provided in this paragraph) shall be as follows:
Seller: Geothermal Development Associates
G. ▇▇▇▇▇▇ ▇▇▇▇▇, III
President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Purchaser: Sierra Pacific Power Company
Attn: ▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Senior Vice President
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
(19) Successors in Interest. This Agreement shall be binding on both
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parties, and on their heirs, successors in interest and permitted assigns.
(20) Several Obligations. Except where specifically stated in this
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Agreement to be otherwise, the duties, obligations and liabilities of the
Parties are intended to be several and not joint or collective. Nothing
contained in this Agreement shall ever be construed to create an association,
trust, partnership, or joint venture or impose a trust or partnership duty,
obligation or liability on or with regard to either Party. Each
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Party shall be individually and severally liable for its own obligations under
this Agreement.
(21) Force Majeure. If the performance of any obligations under this
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Agreement is prevented by casualty, accident, strike, labor dispute, political
disturbance, or other violence, any law, proclamation or regulation of any
governmental agency, inability to secure environmental permits or any other
condition beyond the control of the party affected thereby, such party shall be
excused from performance hereunder and either party hereto shall be entitled to
terminate this Agreement.
(22) Assignment. (a) Neither party shall voluntarily assign this
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Agreement without the prior written consent of the other party, except to a
partnership in which a party hereto is a general partner.
(b) In the event that either party wishes to assign this agreement to
a corporation or other entity which does not fall into the two categories
described in (a) above, said party shall send written notice of such intent to
the other party. Said notice shall describe the financial organization and
assets of the potential assignee in sufficient detail to permit the noticed
party to evaluate the effect of the assignment on its interest in this Agreement
and the even-dated geothermal lease executed by the parties. The noticed party
shall have thirty days from its receipt of the notice to consent or refusal to
consent to the assignment. Failure to give written consent or refusal within
said thirty day period shall be interpreted as
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consent by the noticed party. In no event shall consent to any assignment be
unreasonably withheld.
(23) Entire Agreement. This document constitutes the entire agreement
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of the parties and supersedes all previous agreements, whether written or oral.
This Agreement may be amended only by an instrument in writing signed by both
parties hereto.
(24) Governing Law. As to portions of its composition and performance
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to which state law is applicable, this Agreement shall be construed in
accordance with the laws of the State of Nevada.
EXECUTED this 18th day of November, 1983.
SELLER: PURCHASER:
GEOTHERMAL DEVELOPMENT SIERRA PACIFIC POWER
ASSOCIATES COMPANY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
By /s/ By /s/
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Title_________________________ Title_________________________
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