Exhibit 10.3
AMENDMENT TO THE
POWER PURCHASE AGREEMENT
BETWEEN
JRW ASSOCIATES, L.P. AND
PACIFIC GAS AND ELECTRIC COMPANY
(PG&E LOG NO. 35C045)
THIS AMENDMENT ("Amendment") is by and between PACIFIC GAS AND ELECTRIC
COMPANY ("PG&E"), a California corporation and JRW Associates, L.P., a
California limited partnership ("Seller"). PG&E and Seller are sometimes
referred to herein individually as "Party" and collectively as the "Parties"
RECITALS
A. On December 9, 1985, Seller (or Seller's predecessor, as applicable) and
entered into a Power Purchase Agreement, (as amended, "the PPA") pursuant to
which PG&E purchases electric power from Seller and Seller sells electric power
to PG&E.
B. On April 6, 2001, PG&E filed voluntary petition under chapter 11 of the
United States Bankruptcy Code in the San Francisco Division of the United States
Bankruptcy Court for the Northern District of California (the "Bankruptcy
Court") (In re Pacific Gas and Electric Company, Banks. Case No. 01-03923).
C. On June 14, 2001, the Commission issued D.▇▇-▇▇-▇▇▇, which approved as
reasonable certain non-standard PPA price modifications.
D. Seller and PG&E now desire to enter into the PPA price modification set
forth below. Seller has advised PG&E that Seller is unable to enter into the PPA
price modification unless the Bankruptcy Court has approved this Amendment and
Seller is provided a limited option to terminate this Amendment following
Bankruptcy Court approval if Seller is unable to Arrange for fuel purchases to
accommodate the price modification contemplated under this Amendment.
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AMENDMENT
In consideration of the mutual promises and covenants contained herein,
PG&E and Seller agree to as follows:
1. INTERIM ENERGY PRICE
Unless otherwise set fourth in the PPA, for the period commencing with the
date on which this Amendment has been executed by the Parties and ending upon
the commencement of the Fixed Rate Period, as defined in Section 2 below, the
price for energy delivered, if any, to PG&E by Seller shall be determined
pursuant to the PPA, without reference to this Amendment.
2. FIXED ENERGY PRICE
Commencing with this date that is the earlier of, August 1, 2001, August
16, 2001 or September 1, 2001 following approval of the Bankruptcy Court as
specified in Section 4 below (hereafter, the "Bankruptcy Court Approval Date")
and ending on July 15, 2006 (this period referred to hereafter as the "Fixed
Rate Period"), Seller elects to replace the energy price term specified in the
PPA (PG&E's "full short-run avoided costs" or "full short-run avoided operating
costs" as the case may be) with the applicable energy prices as specified in
Attachment A. No provision of the PPA other than the energy price term is or
shall be deemed to be modified, amended, waived or otherwise affected by this
Amendment. The parties agree to reasonably cooperate and contest any challenge
in any Commission proceeding that seeks to alter or modify the energy pricing
terms set fourth in Attachment A, including, but not limited to any challenge to
the reasonableness of PG&E having entered into this Amendment.
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3. SELLER'S OPTION PERIOD
For a fifteen-day period following the Bankruptcy Court Approval Date,
Seller shall have the sole right to terminate this Amendment. Upon termination
of this Amendment pursuant to this section 3, this Amendment shall be deemed a
nullity.
4. EFFECTIVENESS
This Amendment shall not become effective unless and until it has been
approved by the Bankruptcy Court. If the Bankruptcy Court has not approved this
Amendment by August 31, 2001, this Amendment shall be deemed a nullity.
5. SIGNATURES
IN WITNESS WHEREOF, Seller and PG&E have caused this Amendment to be
executed by their authorized representatives.
PACIFIC GAS AND ELECTRIC COMPANY
a California corporation
By: /s/ illegible
-------------------------
Title: Director
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Date: 7/14/01
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JRW ASSOCIATES, L.P.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Ex VP & COO
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Date: 7/13/01
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Pacific Gas and Electric Company
[LOGO OMITTED]
June 1, 1993
JRW ASSOCIATES, L.P.
ATTN. ▇▇▇ ▇▇▇▇▇▇▇
CIO WAUKESHA-▇▇▇▇▇▇ INDUSTRIES
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sir/Madam:
This is to notify you of a change of address for Article 9, "Notices", of the
Power Purchase Agreement (PPA) between PG&E and JRW Associates. Please direct
all future written notices to:
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Director, Power Finance Department, B13D
Pacific Gas and Electric Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The address in the PPA relating to insurance matters has also changed. All
insurance certificates, endorsements, cancellations, terminations, alterations,
and material changes of such insurance must be issued and submitted to the
following:
Pacific Gas and Electric Company
Power Contracts Department - B23C
Attn: Insurance Coordinator
▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CPUC Decision ▇▇-▇▇-▇▇▇ dated April 7, 1993, adopted the Division of Ratepayer
Advocate's recommendation for modifying the reporting requirements applicable to
the quarterly report of negative avoided cost or hydro spill. The above decision
ordered that: Decision (D) ▇▇-▇▇-▇▇▇, Ordering Paragraph 17, is modified to read
in full as follows:
"Each utility shall promptly file a report for any quarter in which a
negative avoided cost or hydro spill condition occurs."
Please inform all parties in your organization of the above information. If
you have any questions please call me a (▇▇▇) ▇▇▇-▇▇▇▇.
Sincerely,
/s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Power Systems Engineer
(▇▇▇)▇▇▇-▇▇▇▇
FIRST AMENDMENT
TO THE
POWER PURCHASE AGREEMENT
FOR FIRM CAPACITY AND ENERGY
(PG&E LOG NO. 25C045)
This First Amendment is by and between Pacific Gas and Electric Company, a
California Corporation ("PG&E"), and JRW Associates, L.P., a California Limited
Partnership ("Seller"). It amends the Standard Offer 2 Power Purchase Agreement
signed by PG&E on December 9, 1985 and by Interpro International, Inc.
("Interpro"), Seller's predecessor in interest, on September 3, 1985
("Agreement"), for a 10,750 kW cogeneration project located at J.R. Wood, Inc.,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, on October 9, 1989, PG&E was notified by Interpro of the
assignment of the Agreement from Interpro to National Cogeneration Corporation
("National Cogen"), in connection with the sale of substantially all of
Interpro's assets to National Cogen, which notice was acknowledged by PG&E on
October 27, 1989; and
WHEREAS, on February 16, 1990, Seller assumed all the rights and
obligations under the agreement in connection with the sale of substantially all
of National Cogen's assets to Seller; and
WHEREAS, on September 26, 1990, PG&E was notified by National Cogen of the
assignment of the Agreement from National Cogen to Seller; and
WHEREAS, on December 10, 1990, National Cogen executed a formal written
assignment of the Agreement to Seller, and
WHEREAS, on December ___, 1990. PG&E consented in writing to the assignment
of the Agreement from National Cogen to Seller, and
WHEREAS, PG&E and Seller wish to amend the Agreement to change certain%
provisions,
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, PG&E and Seller agree as follows:
1. All underlined terms used herein shall have the meanings ascribed to
them in APPENDIX A, Section A-1 DEFINITIONS, of the Agreement.
1
2. In the space indicated in Article 2, Section (a), page 4, line 5,
insert:
"115 kV"
3. Article 2, Section (c), page 4, lines 16-17 shall read:
The scheduled operation date of the Facility is December 1, 1990.
4. In the space indicated in Article 2, Section (d), page 5, line 2,
insert:
"10,750 kW"
5. In the space indicated in Article 2, Section (f), page 5, line 8, insert:
"December 1, 1990"
6. Article 3, Section (a), page 6, shall read:
PG&E shall pay Seller for firm capacity at the rate of $201 per
kW-year under Option 2 set forth in Section C-5 of Appendix C. The
$201 per kW-year price for firm capacity was negotiated and agreed to
by PG&E and Seller, and represents a discount from PG&E's full avoided
costs as approved by the CPUCC. PG&E's obligation to pay for the
contract capacity shall begin on the actual operation date. The $201
per kW-year price for firm capacity shall be subject to adjustment as
provided for in Appendix D.
7. Article 4, pages 6-7, shall read:
All written notices shall be directed as follows:
To PG&E:
Pacific Gas and Electric Company
Attention: Vice President-Power Generation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To Seller.
7RW Associates, L.P.
c/o Wellhead Electric Company, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2
8. Article 7, pages 7-8 shall read:
This Agreement shall be binding upon execution and remain in effect
thereafter for 30 years from the actual operation date provided,
however, that it shall terminate if Seller fails to meet the deadline
set forth in Paragraph 2 of the Agreement dated______________, or if
the actual operation date does not occur before April 30, 1991.
9. Article 8 is added to read:
ARTICLE 8 - CURTAILMENT
Each year throughout the term of this Agreement, the Facility will be
subject to up to 3,000 hours of curtailment during off-peak and
super-off-peak hours. Off-peak and super-off-peak hours are those time
periods defined in Appendix B. Table B, as modified or changed from
time to time by the CPUC. The curtailment specified by this Article
may be either physical curtailment or economic curtailment or a
combination of both, as determined by PG&E in the sole exercise of its
judgement and discretion.
IN WITNESS WHEREOF, the Parties hereto have caused this First Amendment to be
executed by their duly authorized representatives, and it is effective as of the
last date set forth below.
JRW ASSOCIATES, L.P. PACIFIC GAS AND ELECTRIC
JRW Cogen, Inc., COMPANY
General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------- -----------------------
NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TITLE: President TITLE: Vice President, Power
Planning & Contracts
DATE: 12-13-90 DATE: 12-21-90
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3
SECOND AMENDMENT
----------------
THIS SECOND AMENDMENT by and between PACIFIC GAS AND ELECTRIC COMPANY, a
California Corporation ("PG&E") and JRW ASSOCIATES, L.P., a California Limited
Partnership ("TRW") (individually, "Party", and collectively, "Parties"), amends
that cetain Standard Offer 2 Power Purchase Agreement signed by PG&E on December
9, 1985 and by Interpro International, Inc. ("Interpro"). JRW's
predecessor-in-interest, on September 3, 1985 (the "PPA"), for a 10,750 kW
cogeneration project locate A- at J.R. Wood, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (PG&E Log No. 25C045).
RECITALS
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A. The Parties executed that certain Settlement Agreement dated as of
January 14. 1992 (the "Settlement Agreement").
B. The Settlement Agreement provides, inter alia, that if the Settlement
Agreement is approved by the California Public Utilities Commission (the
"Commission") in accordance with Paragraph 4 of the Settlement Agreement, the
parties shall amend the PPA by executing this Second Amendment
C. On,May 8.1992, the Settlement Agreement was approved by the Commission
in accordance with Paragraph 4 of the Settlement Agreement.
AGREEMENT
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NOW THEREFORE, in consideration of the above Recitals, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows:
1. Defined Terms . Capitalized or underlined terms and conditions used
herein, not otherwise defined herein or in the Settlement Agreement, shall have
the meanings given them in the PPA.
2. Amendment of PPA. In accordance with terms and conditions of the
Settlement Agreement, the PPA is hereby amended as follows:
(a) Delete Article 3(b) and substitute in its place the following:
"PG&E shall pay Seller for energy, except for energy delivered
during periods of economic curtailment, at prices equal to 95
percent of PG&E's full shortrun avoided operating costs as
approved by the CPUC."
3. General. Except as amended herein and by the First Amendment, and
subject to the provisions of the Settlement Agreement, which remain in full
force and effect, the PPA shall continue in full force and effect.
IN WITNESS WHEREOF, the Parties hereto have caused this Second Amendment to be
executed by their duly authorized representatives, and it is effective as of the
last date set forth below.
JRW ASSOCIATES, L.P. PACIFIC GAS AND ELECTRIC
JRW Cogen, Inc., COMPANY
General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TITLE: President TITLE: Vice President,
Power Systems
DATE: March 11, 1993 DATE: March 12, 1993
POWER PURCHASE AGREEMENT
FOR
FIRM CAPACITY AND ENERGY
BETWEEN
INTERPRO INTERNATIONAL INC.
AND
PACIFIC GAS AND ELECTRIC COMPANY
1
FIRM CAPACITY AND ENERGY
POWER PURCHASE AGREEMENT
CONTENTS
Article Page
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1 QUALIFYING STATUS 3
2 PURCHASE OF POWER 4
3 PURCHASE PRICE 6
4 NOTICES 6
5 DESIGNATED SWITCHING CENTER 7
6 TERMS AND CONDITIONS 7
7 TERM OF AGREEMENT 7
Appendix A: GENERAL TERMS AND CONDITIONS
Appendix B: ENERGY PRICES
Appendix C: FIRM CAPACITY PRICE SCHEDULE
Appendix D: ADJUSTMENT OF CAPACITY PAYMENTS IN
THE EVENT OF TERMINATION OR REDUCTION
Appendix E: INTERCONNECTION
2
FIRM CAPACITY AND ENERGY
POWER PURCHASE AGREEMENT
BETWEEN
INTERPRO INTERNATIONAL INC.
AND
PACIFIC GAS AND ELECTRIC COMPANY
INTERPRO INTERNATIONAL INC., a Utah corporation ("Seller"), and PACIFIC GAS
AND ELECTRIC COMPANY ("PGandE"), referred to collectively as "Parties" and
individually as "Party", agree as follows:
ARTICLE 1 QUALIFYING STATUS
Seller warrants that, at the date of first power deliveries from Seller's
Facility(1) and during the term of agreement, its Facility shall meet the
qualifying facility requirements established as of the effective date of this
Agreement by the Federal Energy Regulatory Commission's rules (18 Code of
Federal Regulations 292) implementing the Public Utility Regulatory Policies Act
of 1978 (16 U.S.C.A. 796, et seq.).
------------------
1 Underlining identifies those terms which are defined in Section A-l of
Appendix A.
3
ARTICLE 2 PURCHASE OF POWER
(a) Seller shall sell and deliver and PGandE shall purchase and accept
delivery of firm capacity and energy at the voltage level of ________ (1)kV as
indicated below--
1. Contract capacity - 8,526 kW; and
2. Energy - net energy output (2).
Seller may convert its energy sale option as provided in section A-3 of
Appendix A.
(b) Seller shall provide the firm capacity and energy set forth above from
its 10,750 kW Facility located at J. R. Wood Inc., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(c) The scheduled operation date of the Facility is September 1, 1986. At
the end of each calendar quarter Seller shall give written notice to PGandE of
any change in the scheduled operation date.
(d) To avoid exceeding the physical limitations of the interconnection
facilities, Seller shall limit the Facility's actual rate of delivery into the
PGandE system to __________ (1)kW.
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1 The Seller requests, and PGandE consents, that this blank not be filled in
at the time of executing the Agreement because the Seller, recognizing that
the information is not yet available to make a definitive determination of
the number to be inserted in this blank, shall request PGandE to perform an
interconnection study to be done in its accustomed manner of making such
studies to determine the number to be inserted.
2 Insert either "net energy oust" or "surplus energy output" to show the
energy sale option selected by Seller.
4
(e) The primary energy source for the Facility is natural gas.
(f) If Seller does not begin construction of its Facility by __________
(2), PGandE may reallocate the [Date] existing capacity on PGandE's transmission
and/or distribution system which would have been used to accommodate Seller's
power deliveries to other uses. In the event of such reallocation, Seller shall
pay PGandE for the cost of any upgrades or additions to PGandE's system
necessary to accommodate the output from the Facility. Such additional
facilities shall be installed, owned, and maintained in accordance with the
applicable PGandE tariff.
(g) The transformer loss adjustment factor is ________ (3)
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1 The appropriate number will be inserted upon completion of an
interconnection study.
2 Seller shall provide this date in the project development schedule to be
submitted no later than 30 days after signing the Special Facilities
Agreement for the Facility.
3 If Seller chooses to have meters placed on Seller's side of the
transformer, an estimated transformer loss adjustment factor of 2 percent,
unless the Parties agree otherwise, will be applied. This estimated
transformer loss figure will be adjusted to a measurement of actual
transformer losses performed at Seller's request and expense.
5
ARTICLE 3 PURCHASE PRICE
(a) PGandE shall pay Seller for firm capacity at the contract capacity
price under option 2 set forth in Section C-5 of Appendix C. The contract
capacity price is derived from PGandE's full avoided costs as approved by the
CPUC. PGandE's obligation to pay for the contract capacity shall begin on the
actual operation date. Seller elects to have its contract capacity price
determined from the firm capacity price schedule in effect on the date of
execution of this Agreement'. The contract capacity price shall be subject to
adjustment as provided for in Appendix D.
(b) PGandE shall pay Seller for energy at prices equal to PGandE's full
short run avoided operating costs as approved by the CPUC.
(c) The contract capacity price is applicable to deliveries of capacity
beginning after December 30,1982.
ARTICLE 4 NOTICES
All written notices shall be directed as follows:
To PGandE: Pacific Gas and Electric Company
Attention: Vice President -
Electric Operations
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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1 Insert either "the date of execution of this Agreement" or "the actual
operation date".
6
To Seller: Interpro International Inc.
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE 5 DESIGNATED SWITCHING CENTER
The designated PGandE switching center shall be unless changed by PGandE:
Yosemite District Operator
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE 6 TERMS AND CONDITIONS
This Agreement includes the following appendices which are attached and
incorporated by reference:
Appendix A - GENERAL TERMS AND CONDITIONS
Appendix B - ENERGY PRICES
Appendix C - FIRM CAPACITY PRICE SCHEDULE
Appendix D - ADJUSTMENT OF CAPACITY PAYMENTS IN THE
EVENT OF TERMINATION OR REDUCTION
Appendix E - INTERCONNECTION
ARTICLE 7 TERM OF AGREEMENT
This Agreement shall be binding upon execution and remain in effect
thereafter for 30 years from the actual operation date; provided, however, that
it shall terminate if the actual operation date does not occur within five years
of the execution date.
7
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives and effective as of the last
date set forth below.
INTERPRO INTERNATIONAL INC. PACIFIC GAS AND ELECTRIC COMPANY
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇
Chief -
TITLE: President TITLE: Siting Department
DATE SIGNED: 9-3-85 DATE SIGNED: 12/9/85
8
APPENDIX A
GENERAL TERMS AND CONDITIONS
CONTENTS
Section Page
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A-1 DEFINITIONS ▇-▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇-▇
▇-▇ ▇▇▇▇▇▇ SALE OPTIONS ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇ PAYMENT A-16
A-6 ADJUSTMENTS OF PAYMENTS ▇-▇▇
▇-▇ ▇▇▇▇▇▇ TO RECORDS AND PGandE DATA ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇ OF DELIVERIES AND HYDRO A-18
SPILL CONDITIONS
A-9 FORCE MAJEURE ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ LIABILITY; DEDICATION ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ ▇▇▇-▇▇▇▇▇▇ A-24
A-14 ASSIGNMENT ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇ OF LAWS ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ AND A-25
AUTHORIZATION
A-18 NOTICES ▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇-▇▇
▇-▇
▇▇▇▇▇▇▇▇ A
GENERAL TERMS AND CONDITIONS
A-1 DEFINITIONS
Whenever used in this Agreement, appendices, and attachments hereto, the
following terms shall have the following meanings:
Actual operation date - The day following the day during which all features
and equipment of the Facility are demonstrated to PGandE's satisfaction to be
capable of operating simultaneously to deliver power continuously into PGandE's
system as provided in this Agreement.
Adjusted capacity price - The $/kW-year purchase price from Table B,
Appendix C for the period of Seller's actual performance.
Capacity sale reduction - A reduction in the amount of capacity provided or
to be provided under this Agreement, other than a temporary reduction during
probationary periods under Section C-5.
Contract capacity - That capacity identified in Article 2(a) except as
otherwise changed as provided herein.
A-2
Contract capacity price - The capacity price applicable for the period from
the actual operation date through the term of agreement from either the firm
capacit price schedule, Table B of Appendix C, or the successor to Table B in
effect on the actual operation date. Seller has indicated its choice of firm
capacity price schedule in Article 3(a).
Contract termination - The early termination of this Agreement.
CPUC - The Public Utilities Commission of the State of California.
Current firm capacity price - The $/kW-year capacity price from the firm
capacity price schedule published by PGandE at the time notice of termination or
reduction of contract capacity is given, for a term equal to the period from the
date of termination or reduction to the end of the term of agreement.
Designated PGandE switching center - That switching center or other PGandE
installation identified in Article 5.
Dispatchable - The Facility is operable and can be called upon at any time
to increase its deliveries of capacity to any level up to the contract capacity.
A-3
Facility - That generation apparatus described in Article 2 and all
associated equipment owned, maintained, and operated by Seller.
Firm capacity price schedule - The periodically published schedule of the
$/kW-year prices that PGandE offers to pay for capacity. See Table B, Appendix
C.
Forced outage - Any outage resulting from a design defect, inadequate
construction, operator error or a breakdown of the mechanical or electrical
equipment that fully or partially curtails the electrical output of the
Facility.
Interconnection facilities - All means required and apparatus installed to
interconnect and deliver power from the Facility to the PGandE system including,
but not limited to, connection, transformation, switching, metering,
communications, and safety equipment, such as equipment required to protect (1)
the PGandE system and its customers from faults occurring at the Facility, and
(2) the Facility from faults occurring on the PGandE system or on the systems of
others to which the PGandE system is directly or indirectly connected.
Interconnection facilities also include any necessary additions and
reinforcements by PGandE to the PGandE system required as a result of the
interconnection of the Facility to the PGandE system.
A-4
Net energy output - The Facility's gross output in kilowatt-hours less
station use and transformation and transmission losses to the point of delivery
into the PGandE system. Where PGandE agrees that it is impractical to connect
the station use on the generator side of the power purchase meter, PGandE may,
at its option, apply a station load adjustment.
Prudent electrical practices - Those practices, methods, and equipment, as
changed from time to time, that are commonly used in prudent electrical
engineering and operations to design and operate electric equipment lawfully and
with safety, dependability, efficiency, and economy.
Scheduled operation date - The day specified in Article 2 (c) when the
Facility is, by Seller's estimate, expected to produce energy and capacity that
will be available for delivery to PGandE.
Special facilities - Those additions and reinforcements to the PGandE
system which are needed to accommodate the maximum delivery of energy and
capacity from the Facility as provided in this Agreement and those parts of the
interconnection facilities which are owned and maintained by PGandE at Seller's
request, including metering and data processing equipment. All special
facilities shall be owned, operated, and maintained pursuant to PGandE's
electric Rule No. 21, which is attached hereto.
A-5
Station use - Energy used to operate the Facility's auxiliary equipment.
The auxiliary equipment includes, but is not limited to, forced and induced
draft fans, cooling towers, boiler feed pumps, lubricating oil systems, plant
lighting, fuel handling systems, control systems, and sump pumps.
Surplus energy output - The Facility's gross output, in kilowatt-hours,
less station use, and any other use by Seller, and transformation and
transmission losses to the point of delivery into the PGandE system.
Term of Agreement - The period of time during which this Agreement will be
in effect as provided in Article 7.
Voltage level - The voltage at which the Facility interconnects with the
PGandE system, measured at the point of delivery.
A-2 CONSTRUCTION
A-2.1 Land Rights
Seller hereby grants to PGandE all necessary rights of way and easements,
including adequate and continuing access rights on property of Seller, to
A-6
install, operate, maintain, replace, and remove the special facilities. Seller
agrees to execute such other grants, deeds, or documents as PGandE may require
to enable it to record such rights of way and easements. If any part of PGandE's
equipment is to be installed on property owned by other than Seller, Seller
shall, at its own cost and expense, obtain from the owners thereof all necessary
rights of way and easements, in a form satisfactory to PGandE, for the
construction, operation, maintenance, and replacement of PGandE's equipment upon
such property. If Seller is unable to obtain such rights of way and easements,
Seller shall reimburse PGandE for all costs incurred by PGandE in obtaining
them. PGandE shall at all times have the right of ingress to and egress from the
Facility at all reasonable hours for any purposes reasonably connected with this
Agreement or the exercise of any and all rights secured to PGandE by law or its
tariff schedules.
A-2.2 Design, Construction, ownership, and maintenance
(a) Seller shall design, construct, install, own, operate, and maintain all
interconnection facilities, except special facilities, to the point of
interconnection with, the PGandE system as required for PGandE to receive firm
capacity and energy from the Facility. The Facility and interconnection
facilities shall meet all requirements of applicable codes and all standards of
prudent electrical practices and shall be maintained in a safe and prudent
A-7
manner. A description of the interconnection facilities for which Seller is
solely responsible is set forth in Appendix E, or if the interconnection
requirements have not yet been determined at the time of the execution of this
Agreement, the description of such facilities will be appended to this Agreement
at the time such determination is made.
(b) Seller shall submit to PGandE the design and all specifications for the
interconnection facilities (except special facilities) and, at PGandE's option,
the Facility, for review and written acceptance prior to their release for
construction purposes. PGandE shall notify Seller in writing of the outcome of
PGandE's review of the design and specifications for Seller's interconnection
facilities (and the Facility, if requested) within 30 days of the receipt of the
design and all of the specifications for the interconnection facilities (and the
Facility, if requested). Any flaws perceived by PGandE in the design and
specifications for the interconnection facilities (and the Facility, if
requested) will be described in PGandE's written notification. PGandE's review
and acceptance of the design and specifications shall not be construed as
confirming or endorsing the design and specifications or as warranting their
safety, durability, or reliability. PGandE shall not, by reason of such review
or lack of review, be responsible for strength, details of design, adequacy, or
A-8
capacity of equipment built pursuant to such design and specifications, nor
shall PGandE's acceptance be deemed to be an endorsement of any of such
equipment. Seller shall change the interconnection facilities as may be
reasonably required by PGandE to meet changing requirements of the PGandE
system.
(c) In the event it is necessary for PGandE to install interconnection
facilities for the purposes of this Agreement, they shall be installed as
special facilities.
(d) Upon the request of Seller, PGandE shall provide a binding estimate for
the installation of interconnection facilities by PGandE.
A-2.3 Meter Installation
(a) PGandE shall specify, provide, install, own, operate, and maintain as
special facilities all metering and data processing equipment for the
registration and recording of energy and other related parameters which are
required for the reporting of data to PGandE and for computing the payment due
Seller from PGandE.
(b) Seller shall provide, construct, install, own, and maintain at Seller's
expense all that is required to accommodate the metering and data processing
equipment, such as, but not limited to, metal-clad switchgear, switchboards,
A-9
cubicles, metering panels, enclosures, conduits, rack structures, and equipment
mounting pads.
(c) PGandE shall permit meters to be fixed on PGandE's side of the
transformer. If meters are placed on PGandE's side of the transformer, service
will be provided at the available primary voltage and no transformer loss
adjustment will be made. If Seller chooses to have meters placed on Seller's
side of the transformer, an estimated transformer loss adjustment factor of 2
percent, unless the Parties agree otherwise, will be applied.
A-3 ENERGY SALE OPTIONS
A-3.1 General
Seller has two energy sale options, net energy output or surplus energy
output. Seller has made its initial selection in Article 2(a).
A-3.2 Energy Sale Conversion
(a) Seller is entitled to convert from one option to the other 12 months
after execution of this Agreement, and thereafter at least 12 months after the
effective date of the most recent conversion, subject to the following
conditions:
A-10
(1) Seller shall provide PGandE with a written request to convert its
energy sale option.
(2) Seller shall comply with all applicable tariffs on file with the
CPUC and contracts in effect between the Parties at the time of conversion
covering the existing and proposed (i) facilities used to serve Seller's
premises and (ii) interconnection facilities.
(3) Seller shall install and operate equipment required by PGandE to
prevent PGandE from serving any part of Seller's load which is served by
the Facility and not under contract for PGandE standby service. At Seller's
request PGandE shall provide this equipment as special facilities.
(4) If the energy sale conversion results in a capacity sale
reduction, the provisions in Appendix D shall apply.
(b) If, as a result of an energy sales conversion, Seller no longer
requires the use of interconnection facilities installed and/or operated and
maintained by PGandE as special facilities under a special Facilities Agreement,
Seller may reserve these facilities, for its future use, by continuing its
performance under its Special Facilities Agreement. If Seller does not wish to
reserve such facilities, it may terminate its Special Facilities Agreement.
A-11
If Seller's energy sale conversion results in its discontinuation of its
use of PGandE facilities not covered by Seller's Special Facilities Agreement,
Seller cannot reserve those facilities for future use. Seller's future use of
such facilities shall be contingent upon the availability of such facilities at
the ▇▇▇▇ ▇▇▇▇▇▇ requests such use. If such facilities are not available, Seller
shall bear the expense necessary to install, own, and maintain the needed
additional facilities in accordance with PGandE's applicable tariff.
(c) PGandE shall process requests for conversion in the order received. The
effective date of conversion shall depend on the completion of the changes
required to accommodate Seller's energy sale conversion.
A-4 OPERATION
A-4.1 Inspection and Approval
Seller shall not operate the Facility in parallel with PGandE's system
until an authorized PGandE representative has inspected the interconnection
facilities, and PGandE has given written approval to begin parallel operation.
Seller shall notify PGandE of the Facility's start-up date at least 45 days
prior to such date. PGandE shall inspect the interconnecting facilities within
30 days of the receipt of such notice. If parallel operation is not authorized
A-12
by PGandE, PGandE shall notify Seller in writing within five days after
inspection of the reason authorization for parallel operation was withheld.
A-4.2 Facility Operation and Maintenance
Seller shall operate and maintain its Facility according to prudent
electrical practices, applicable laws, orders, rules, and tariffs and shall
provide such reactive power support as may be reasonably required by PGandE to
maintain system voltage level and power factor. Seller shall operate the
Facility at the power factors or voltage levels prescribed by PGandE's system
dispatcher or designated representative. If Seller fails to provide reactive
power support, PGandE may do so at Seller's expense.
A-4.3 Point of Delivery
Seller shall deliver the energy at the point where Seller's electrical
conductors (or those of Seller's agent) contact PGandE's system as it shall
exist whenever the deliveries are being made or at such other point or points as
the Parties may agree in writing. The initial point of delivery of Seller's
power to the PGandE system is set forth in Appendix E.
A-13
A-4.4 Operating Communications
(a) Seller shall maintain operating communications with the designated
PGandE switching center. The operating communications shall include, but not be
limited to, system paralleling or separation, scheduled and unscheduled
shutdowns, equipment clearances, levels of operating voltage or power factors
and daily capacity and generation reports.
(b) Seller shall keep a daily operations log for each generating unit which
shall include information on unit availability, maintenance outages, circuit
breaker trip operations requiring a manual reset, and any significant events
related to the operation of the Facility.
(c) If Seller makes deliveries greater than one megawatt, Seller shall
measure and register on a graphic recording device power in kW and voltage in kV
at a location within the Facility agreed to by both Parties.
(d) If Seller makes deliveries greater than one and up to and including ten
megawatts, Seller shall report to the designated PGandE switching center, twice
a day at agreed upon times for the current day's operation, the hourly readings
in kW of capacity delivered and the energy in kWh delivered since the last
report.
A-14
(e) If Seller makes deliveries of greater than ten megawatts, Seller shall
telemeter the delivered capacity and energy information, including real power in
kW, reactive power in kVAR, and energy in kWh to a switching center selected by
PGandE. PGandE may also require Seller to telemeter transmission kW, kVAR, and
kV data depending on the number of generators and transmission configuration.
Seller shall provide and maintain the data circuits required for telemetering.
When telemetering is inoperative, Seller shall report daily the capacity
delivered each hour and the energy delivered each day to the designated PGandE
switching center.
(f) If Seller provides dispatchable capacity greater than ten megawatts
pursuant to Option 1 in Section C-5 of Appendix C, Seller may be required by
PGandE to provide telemetering and control equipment to allow the Facility to
respond to system load frequency requirements on digital control from PGandE.
A-4.5 Meter Testing and Inspection
(a) All meters used to provide data for the computation of the payments due
Seller from PGandE shall be sealed, and the seals shall be broken only by PGandE
when the meters are to be inspected, tested, or adjusted.
A-15
(b) PGandE shall inspect and test all meters upon their installation and
annually thereafter. At Seller's request and expense, PGandE shall inspect or
test a meter more frequently. PGandE shall give reasonable notice to Seller of
the time when any inspection or test shall take place, and Seller may have
representatives present at the test or inspection. If a meter is found to be
inaccurate or defective, PGandE shall adjust, repair, or replace it at its
expense in order to provide accurate metering.
A-4.6 Adjustments to Meter Measurements
If a meter fails to register, or if the measurement made by a meter during
a test varies by more than two percent from the measurement made by the standard
meter used in the test, an adjustment shall be made correcting all measurements
made by the inaccurate meter for --(1) the actual period during which inaccurate
measurements were made, if the period can be determined, or if not, (2) the
period immediately preceding the test of the meter equal to one-half the time
from the date of the last previous test of the meter, provided that the period
covered by the correction shall not exceed six months.
A-5 PAYMENT
PGandE shall mail to Seller not later than 30 days after the end of each
monthly billing period (1) a statement showing the capacity and energy delivered
A-16
to PGandE during on-peak, partial-peak, and off-peak periods during the monthly
billing period, (2) PGandE's computation of the amount due Seller, and (3)
PGandE's check in payment of said amount. Except as provided in Section A-6, if
within 30 days of receipt of the statement Seller does not make a report in
writing to PGandE of an error, Seller shall be deemed to have waived any error
in PGandE's statement, computation, and payment, and they shall be considered
correct and complete.
A-6 ADJUSTMENTS OF PAYMENTS
(a) In the event adjustments to payments are required as a result of
inaccurate meters, PGandE shall use the corrected measurements described in
Section A-4.6 to recompute the amount due from PGandE to Seller for the firm
capacity and energy delivered under this Agreement during the period of
inaccuracy.
(b) The additional payment to Seller or refund to PGandE shall be made
within 30 days of notification of the owing Party of the amount due.
A-7 ACCESS TO RECORDS AND PGandE DATA
Each Party, after giving reasonable written notice to the other Party,
shall have the right of access to all metering and related records including
A-17
operations logs of the Facility. Data filed by PGandE with the CPUC pursuant to
CPUC orders governing the purchase of power from qualifying facilities shall be
provided to Seller upon request; provided that Seller shall reimburse PGandE for
the costs it incurs to respond to such request.
A-8 CURTAILMENT OF DELIVERIES AND HYDRO SPILL CONDITIONS
(a) PGandE shall not be obligated to accept or pay for and may require
Seller to interrupt or reduce deliveries of energy (1) when necessary in order
to construct, install, maintain, repair, replace, remove, investigate, or
inspect any of its equipment or any part of its system, or (2) if it determines
that interruption or reduction is necessary because of emergencies, forced
outages, force majeure, or compliance with prudent electrical practices.
(b) In anticipation of a period of hydro spill conditions, as defined by
the CPUC, PGandE may notify Seller that any purchases of energy from Seller
during such period shall be at hydro savings prices quoted by PGandE. If Seller
delivers energy to PGandE during any such period, Seller shall be paid hydro
savings prices for those deliveries in lieu of prices which would otherwise be
applicable. The hydro savings prices shall be calculated by PGandE using the
following formula:
▇-▇▇
▇▇▇ - ▇
------- ▇ ▇▇
▇▇▇
where:
AQF = Energy, in kWh, projected to be available during hydro spill
conditions from all qualifying facilities under agreements containing
hydro savings price provisions.
S = Potential energy, in kWh, from PGandE hydro facilities which will be
spilled if all AQF is delivered to PGandE.
PP = Prices published by PGandE for purchases during other than hydro
spill conditions.
(c) PGandE shall not be obligated to accept or pay for and may require
Seller with a Facility with a nameplate rating of one megawatt or greater to
interrupt or reduce deliveries of energy during periods when purchases under
this Agreement would result in costs greater than those which PGandE would incur
if it did not make such purchases but instead generated an equivalent amount of
energy itself.
(d) Whenever possible, PGandE shall give Seller reasonable notice of the
possibility that interruption or reduction of deliveries under subsections (a)
or (c), above, may be required. PGandE shall give Seller notice of general
periods when hydro spill conditions are anticipated, and shall give Seller as
much advance notice as practical of any specific hydro spill period and the
A-19
hydro savings price which will be applicable during such period. Before
interrupting or reducing deliveries under subsection (c)., above, and before
invoking hydro savings prices under subsection (b), above, PGandE shall take
reasonable steps to make economy sales of the surplus energy giving rise to the
condition. If such economy sales are made, while the surplus energy condition
exists Seller shall be paid at the economy sales price obtained by PGandE in
lieu of the otherwise applicable prices.
(e) If Seller is selling net energy output to PGandE and simultaneously
purchasing its electrical needs from PGandE, energy curtailed pursuant to
subsections (b) or (c) above shall not be used by Seller to meet its electrical
needs. When Seller elects not to sell energy to PGandE at the hydro savings
price pursuant to subsection (b) or when PGandE curtails deliveries of energy
pursuant to subsection (c), Seller shall continue to purchase all its electrical
needs from PGandE. If Seller is selling surplus energy output to PGandE,
subsections (b) or (c) shall only apply to the surplus energy output being
delivered to PGandE, and Seller can continue to internally use that generation
it has retained for its own use.
A-9 FORCE MAJEURE
(a) The term force majeure as used herein means unforeseeable causes, other
than forced outages, beyond the reasonable control of and without the fault or
A-20
negligence of the Party claiming force majeure including, but not limited to,
acts of God, labor disputes, sudden actions of the elements, actions by federal,
state, and municipal agencies, and actions of legislative, judicial, or
regulatory agencies which conflict with the terms of this Agreement.
(b) If either Party because of force majeure is rendered wholly or partly
unable to perform its obligations under this Agreement, that Party shall be
excused from whatever performance is affected by the force majeure to the extent
so affected provided that:
(1) the non-performing Party, within two weeks after the occurrence of
the force majeure, gives the other Party written notice describing the
particulars of the occurrence,
(2) the suspension of performance is of no greater scope and of no
longer duration than is required by the force majeure,
(3) the non-performing Party uses its best efforts to remedy its
inability to perform (this subsection shall not require the settlement of
any strike, walkout, lockout or other labor dispute on terms which, in the
sole judgment of the Party involved in the dispute, are contrary to its
interest. It is understood and agreed that the settlement of strikes,
walkouts, lockouts or other labor disputes shall be at the sole discretion
of the Party having the difficulty),
A-21
(4) when the non-performing Party is able to resume performance of its
obligations under this Agreement, that Party shall give the other Party
written notice to that effect, and
(5) capacity payments during such periods of force majeure on Seller's
part shall be governed by Section C-2(c) of Appendix C.
(c) In the event a Party is unable to perform due to legislative, judicial,
or regulatory agency action, this Agreement shall be renegotiated to comply with
the legal change which caused the non-performance.
A-10 INDEMNITY
Each Party as indemnitor shall save harmless and indemnify the other Party
and the directors, officers, and employees of such other Party against and from
any and all loss and liability for injuries to persons including employees of
either Party, and property damages including property of either Party resulting
from or arising out of (1) the engineering, design, construction, maintenance,
or operation of, or (2) the making of replacements, additions, or betterments
to, the indemnitor's facilities. This indemnity and save harmless provision
shall apply notwithstanding the active or passive negligence of the indemnitee.
A-22
Neither Party shall be indemnified hereunder for its liability or loss resulting
from its sole negligence or willful misconduct. The indemnitor shall, on the
other Party's request, defend any suit asserting a claim covered by this
indemnity and shall pay all costs, including reasonable attorney fees, that may
be incurred by the other Party in enforcing this indemnity.
A-11 LIABILITY; DEDICATION
(a) Nothing in this Agreement shall create any duty to, any standard of
care with reference to, or any liability to any person not a Party to it.
Neither Party shall be liable to the other Party for consequential damages.
(b) Each Party shall be responsible for protecting its facilities from
possible damage by reason of electrical disturbances or faults caused by the
operation, faulty operation, or nonoperation of the other Party's facilities,
and such other Party shall not be liable for any such damages so caused.
(c) No undertaking by one Party to the other under any provision of this
Agreement shall constitute the dedication of that Party's system or any portion
thereof to the other Party or to the public or affect the status of PGandE as an
independent public utility corporation or Seller as an independent individual or
entity and not a public utility.
▇-▇▇
▇-▇▇ ▇▇▇▇▇▇▇ OBLIGATIONS
Except where specifically stated in this 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 Party shall be liable individually and severally for its
own obligations under this Agreement.
A-13 NON-WAIVER
Failure to enforce any right or obligation by either Party with respect to
any matter arising in connection with this Agreement shall not constitute a
waiver as to that matter or any other matter.
A-14 ASSIGNMENT
Neither Party shall voluntarily assign its rights nor delegate its duties
under this Agreement, or any part of such rights or duties, without the written
consent of the other Party, except in connection with the sale or merger of a
A-24
substantial portion of its properties. Any such assignment or delegation made
without such written consent shall be null and void. Consent for assignment
shall not be withheld unreasonably. Such assignment shall include, unless
otherwise specified therein, all of Seller's rights to any refunds which might
become due under this Agreement.
A-15 CAPTIONS
All indexes, titles, subject headings, section titles, and similar items
are provided for the purpose of reference and convenience and are not intended
to affect the meaning of the contents or scope of this Agreement.
A-15 CHOICE OF LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of California, excluding any choice of law rules which may direct the
application of the laws of another jurisdiction.
A-17 GOVERNMENTAL JURISDICTION AND AUTHORIZATION
Seller shall obtain any governmental authorizations and permits required
for the construction and operation of the Facility. Seller shall reimburse
PGandE for any and all losses, damages, claims, penalties, or liability it
A-25
incurs as a result of Seller's failure to obtain or maintain such authorizations
and permits.
A-18 NOTICES
Any notice, demand, or request required or permitted to be given by either
Party to the other, and any instrument required or permitted to be tendered or
delivered by either Party to the other, shall be in writing (except as provided
in Section C-3) and so given, tendered, or delivered, as the case may be, by
depositing the same in any United States Post Office with postage prepaid for
transmission by certified mail, return receipt requested, addressed to the
Party, or personally delivered to the Party, at the address in Article 4 of this
Agreement. Changes in such designation may be made by notice similarly given.
A-19 INSURANCE
A-19.1 General Liability Coverage
(a) Seller shall maintain during the performance hereof, General Liability
Insurance(1) of not less than $1,000,000 if the Facility is over 100 kW,
-----------------------
1 Governmental agencies which have an established record of self- insurance
may provide the required coverage through self-insurance.
A-26
$500,000 if the Facility is over 20 kW to 100 kW, and $100,000 if the Facility
is 20 kW or below of combined single limit or equivalent for bodily injury,
personal injury, and property damage as the result of any one occurrence.
(b) General Liability Insurance 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.
(c) Such insurance, by endorsement to the policy(ies), shall include PGandE
as an additional insured if the Facility is over 100 kw insofar as work
performed by Seller for PGandE is concerned, shall contain a severability of
interest clause, shall provide that PGandE shall not by reason of its inclusion
as an additional insured incur liability to the insurance carrier for payment of
premium for such insurance, and shall provide for 30-days' written notice to
PGandE prior to cancellation, termination, alteration, or material change of
such insurance.
A-19.2 Additional Insurance Provisions
(a) Evidence of coverage described above in Section A-19.1 shall state that
coverage provided is primary and is not excess to or contributing with any
insurance or self-insurance maintained by PGandE.
A-27
(b) PGandE shall have the right to inspect or obtain a copy of the original
policy(ies) of insurance.
(c) Seller shall furnish the required certificates(1) and endorsements to
PGandE prior to commencing operation.
(d) All insurance certificates(1), endorsements, cancellations,
terminations, alterations, and material changes of such insurance shall be
issued and submitted to the following:
PACIFIC GAS AND ELECTRIC COMPANY
Attention: Manager - Insurance Department
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------
1 A governmental agency qualifying to maintain self-insurance should provide
a statement of self-insurance.
A-28
APPENDIX B
ENERGY PRICES
TABLE A
Energy Prices Effective August 1 - October 31, 1985
The energy purchase price calculations which will apply to energy deliveries
determined from meter readings taken during August, September, and October
1985 are as follows:
(a) (b) (c) (d)
Revenue Requirement Energy Purchase
Incremental for Cash Price(4)
Time Period Energy Rate(1) Cost of Energy(2) Working Capital(3) (d)=[(a) x (b)] + (c)
----------- -------------- ----------------- ----------------- ---------------------
(Btu/KWh) ($/10(6) Btu) ($/KWh) ($/KWh)
August 1 - September 30
(Period A)
Time of
Delivery Basis:
On-Peak 12,168 5.2445 0.00041 0.06423
Partial-Peak 11,369 5.2445 0.00038 0.06000
Off-Peak 9,429 5.2445 0.00033 0.04978
Seasonal Average 10,515 5.2445 0.00036 0.05551
(Period A)
October 1 - October 31
(Period 8)
Time of
Delivery Basis:
On-Peak 14,224 5.2445 0.00053 0.07513
Partial-Peak 13,552 5.2445 0.00051 0.07158
Off-Peak 10,261 5.2445 0.00038 0.05419
Seasonal Average 11,954 5.2445 0.00045 0 06314
(Period B)
--------------------
1 Incremental energy rates (Btu/kwh) for Seasonal Period A and Seasonal
Period B are derived from the marginal energy costs (including variable
operating and maintenance expense) adopted by the CPUC in Decision No.
▇▇-▇▇-▇▇▇ (page 339). They are based upon natural gas as the incremental
fuel and weighted average hydroelectric power conditions.
2 Cost of natural gas under PGandE Gas Schedule No. G-55 effective on August
1, 1985.
3 Revenue Requirement for Cash Working Capital as prescribed by the CPUC in
Decision No. ▇▇-▇▇-▇▇▇.
4 Energy Purchase Price = (Incremental Energy Rate x Cost of Energy) +
Revenue Requirement for Cash Working Capital. The energy purchase price
excludes the applicable energy line loss adjustment factors. However, as
ordered by Ordering Paragraph No. 12 (j) of CPUC Decision No. ▇▇-▇▇-▇▇▇,
this figure is currently 1.0 for transmission and primary distribution loss
adjustments and is equal to marginal cost line loss adjustment factors for
the secondary distribution voltage level. These factors may be changed by
the CPUC in the future. The currently applicable energy loss adjustment
factors are shown in Table C.
B-1
TABLE B(1)
Time Periods
Monday
through Sundays
Friday(2) Saturdays(2) and Holidays
--------- ------------ ------------
Seasonal Period A
(May 1 through September 30)
On-Peak 12:30 p.m.
to
6:30 p.m.
Partial-Peak 8:30 a.m. 8:30 a.m.
to to
12:30 p.m. 10:30 p.m.
6:30 p.m.
to
10:30 p.m.
Off-Peak 10:30 p.m. 10:30 p.m. All Day
to to
8:30 a.m. 8:30 a.m.
Seasonal Period B
(October 1 through April 30)
On-Peak 4:30 p.m.
to
8:30 p.m.
Partial-Peak 8:30 p.m. 8:30 a.m.
to to
10:30 p.m. 10:30 p.m.
8:30 a.m.
to
4:30 p.m.
Off-Peak 10:30 p.m. 10:30 p.m. All Day
to to
8:30 a.m. 8:30 a.m.
1 This table is subject to change to accord with the on-peak, partial-peak,
and off-peak periods as defined in PGandE's own rate schedules for the sale
of electricity to its large industrial customers.
2 Except the following holidays: New Year's Day, Washington's Birthday,
Memorial Day, Independence Day, Labor Day, Veteran's Day, Thanksgiving Day,
and Christmas Day, as specified in Public Law 90-363 (5 U.S.C.A. Section
6103 (a)).
B-2
TABLE C
Energy Loss Adjustment Factors(l)
Primary Secondary
Transmission Distribution Distribution
------------ ------------ ------------
Seasonal Period A
(May 1 through September 30)
On-Peak 1.0 1.0 1.0148
Partial-Peak 1.0 1.0 1.0131
Off-Peak 1.0 1.0 1.0093
Seasonal Period B
(October 1 through April 30)
On-Peak 1.0 1.0 1.0128
Partial-Peak 1.0 1.0 1.0119
Off-Peak 1.0 1.0 1.0087
--------------------------
1 The applicable energy loss adjustment factors may be revised pursuant to
orders of the CPUC.
B-3
APPENDIX C
FIRM CAPACITY PRICE SCHEDULE
CONTENTS
Section Page
------- ----
C-1 GENERAL C-2
C-2 PERFORMANCE REQUIREMENTS C-2
C-3 SCHEDULED MAINTENANCE C-5
C-4 ADJUSTMENTS TO CONTRACT CAPACITY C-6
C-5 PAYMENT OPTIONS C-7
C-6 DETERMINATION OF NATURAL FLOW DATA ▇-▇▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇-▇▇
▇-▇ DETERMINATION OF AVERAGE DRY C-17
YEAR CAPACITY RATINGS
C-9 INFORMATION REQUIREMENTS C-18
C-10 ILLUSTRATIVE EXAMPLE C-19
C-1
APPENDIX C
FIRM CAPACITY PRICE SCHEDULE
C-1 GENERAL
This Appendix C establishes conditions and prices under which PGandE shall
pay for firm capacity.
C-2 PERFORMANCE REQUIREMENTS
(a) To receive full capacity payments the Facility must meet the following
requirements:
(1) The contract capacity shall be available(1) for all of the on-peak
hours(2) in the peak months on the PGandE system, which are presently the
months of June, July, and August, subject to a 20 percent allowance for
forced outages in any month. Compliance with this provision shall be based
on the Facility's total on-peak availability(1) for each of the peak months
and shall exclude any energy associated with generation levels greater than
the contract capacity.
----------------
1 For purposes of Option I, "available" means either dispatchable by PGandE
or actually delivered to PGandE_ For purposes of Option 2, "available"
means actually delivered to PGandE.
2 On-peak, partial-peak, and off-peak hours are defined in Table B, Appendix
B.
C-2
(2) If Seller selects Option 1, the contract capacity shall be
dispatchable throughout the year, subject to (i) a monthly allowance for
forced outages of 20% of the hours Seller is called upon to deliver power
to PGandE and (ii) the allowances for scheduled maintenance outages. Except
during the peak months on the PGandE system, Seller may accumulate and
apply the 20 percent allowance for forced outages for any consecutive three
month period. Seller shall demonstrate that the Facility is fueled by a
reliable fuel supply and adequate fuel storage is available to deliver
power as requested by PGandE's system dispatcher. Such demonstration could
reasonably include documentation of the current availability of the fuel,
identification of the source, and production of contracts for its purchase
and supply.
(b) If Seller is prevented from meeting the performance requirements
because of a forced outage on the PGandE system or a condition set forth in
Section ▇-▇, ▇▇▇▇▇▇ shall continue capacity payments. Under Option 2, capacity
payments will be calculated in the same manner used for scheduled maintenance
outages.
(c) If Seller is prevented from meeting the performance requirements
because of force majeure, PGandE shall continue capacity payments for ninety
days from the occurrence of the force majeure. Thereafter, Seller shall be
C-3
deemed to have failed to have met the performance requirements. Under Option 2,
capacity payments will be calculated in the same manner used for scheduled
maintenance outages.
(d) If Seller is prevented from meeting the performance requirements
because of exteme dry year conditions, PGandE shall continue capacity payments.
Extreme dry year conditions are drier than those used to' establish contract
capacity pursuant to Section C-8. Seller shall warrant to PGandE that the
Facility is a hydroelectric facility and that such conditions are the sole cause
of Seller's inability to meet its contract capacity obligations. Under Option 1,
starting with the month in which Seller cannot provide its contract capacity,
payments shall .be made under Option 2 for a one-year period, and if at the end
of this one-year period Seller is not able to resume the contract capacity due
solely to continued extreme dry year conditions, Seller shall continue to
receive payments under Option 2 for additional one-year periods as long as such
conditions continue to exist.
(e) If Seller is prevented from meeting the performance requirements for
reasons other than those described above in Sections C-2(b), (c), or (d):
(1) Seller shall receive the reduced capacity payments as provided in
Section C-5 for a probationary period not to exceed15 months, or as
otherwise agreed to by the Parties.
C-4
(2) If, at the end of the probationary period Seller has not
demonstrated that the Facility can meet the performance requirements,
PGandE may derate the contract capacity pursuant to Section C-4(b).
C-3 SCHEDULED MAINTENANCE
Outage periods for scheduled maintenance shall not exceed 840 hours (35
days) in any 12-month period. This allowance may be used in increments of an
hour or longer on a consecutive or nonconsecutive basis. Seller may accumulate
unused maintenance hours from one 12-month period to another up to a maximum of
1,080 hours (45 days). This accrued time must be used consecutively and only for
major overhauls. Seller shall provide PGandE with the following advance notices:
24 hours for scheduled outages less than one day, one week for a scheduled
outage of one day or more (except for major overhauls), and six months for a
major overhaul. Seller shall not schedule major overhauls during the peak months
(presently June, July and August). Seller shall make reasonable efforts to
schedule or reschedule routine maintenance outside the peak months, and in no
event shall outages for scheduled maintenance exceed 30 peak hours during the
peak months. Seller shall confirm in writing to PGandE pursuant to Article 4,
within 24 hours of the original notice, all notices Seller gives personally or
by telephone for scheduled maintenance.
C-5
C-4 ADJUSTMENTS TO CONTRACT CAPACITY
(a) Seller may increase the contract capacity with the approval of PGandE
and receive payment for the additional capacity thereafter in accordance with
the applicable capacity purchase price published by PGandE at the time the
increase is first delivered to PGandE.
(b) Seller may reduce the contract capacity at any time by giving notice
thereof to PGandE, subject to the provisions of Appendix D if the reduction
occurs after the actual operation date. PGandE may reduce the contract capacity
in accordance with Section C-2(e) as a result of appropriate data showing Seller
has failed to meet the performance requirements of Section C-2. The amount by
which the contract capacity is reduced by PGandE shall be deemed a capacity sale
reduction without notice as provided in Section D-3 of Appendix D.
(c) Either Party may request, when it reasonably appears that the capacity
of the Facility may have changed for any reason, that a new contract capacity be
determined.
C-6
C-5 PAYMENT OPTIONS
Seller has two options for calculation of capacity payments and Seller has
made its selection in Article 3(a). As used below in this section, month refers
to a calendar month. The two options are as follows:
Option 1
When Seller meets the requirements of Section C-2 the monthly payment for
capacity will be one-twelfth of the product of the contract cam price, the
contract capacity, the appropriate capacity loss adjustment factor from Table A
based on the Facility's interconnection voltage, and the appropriate performance
bonus factor, if any, from Table C. Capacity payments will continue during
scheduled maintenance outages provided that the provisions of Section C-3 are
met.
During a probationary period Seller's monthly payment for capacity shall be
determined by substituting for the contract capacity, the capacity at which
Seller would have met the performance requirements. In any month during the
probationary period that Seller does not meet the performance requirements at
whatever capacity was determined for the previous month, Seller's monthly
payment for capacity shall be determined by substituting the capacity at which
Seller would have met the performance requirements.
C-7
The performance bonus factor shall not be applied during a probationary period.
Option 2
The monthly payment for capacity will be the product of the Period Price
Factor (PPF), the Monthly Delivered Capacity (MDC), the appropriate capacity
loss adjustment factor from Table A based on the Facility's interconnection
voltage, and the appropriate performance bonus factor, if any, from Table C,
plus any allowable payment for outages due to scheduled maintenance. Firm
capacity prices shall be applied to meter readings taken during the separate
times and periods as illustrated in Table B, Appendix B.
The PPF is determined by multiplying the contract capacity price by the
following Option 2 Allocation Factors(1):
Option 2 x Contract = PPF
Allocation Factor Capacity Price ($/kW-month)
--------------
Seasonal
Period A .18540
-------------- ------------
Seasonal
Period B .01043
-------------- ------------
---------------
1 These allocation factors were prescribed by the CPUC in Decision No.
▇▇-▇▇-▇▇▇. All allocation factors are subject to change by PGandE based on
PGandE's marginal capacity cost allocation, as determined in general rate
case proceedings before the CPUC. Seasonal Periods A and B are defined in
Table B. Appendix B.
C-8
The MDC is determined in the following manner:
(1) Determine the Performance Factor (P), which is defined as the lesser of
1.0 or the following quantity:
A (< or = 1.0)
P = --------------------
C x (B-S) x (0.8*)
Where:
A = Total kilowatt-hours delivered during all on-peak and partial-peak
hours excluding any energy associated with generation levels greater
than the contract capacity.
C = Contract capacity in kilowatts.
B = Total on-peak and partial-peak hours during the month.
S = Total on-peak and partial-peak hours during the month Facility is
out of service on scheduled maintenance.
(2) Determine the Monthly Capacity Factor (MCF which is computed using the
following expression:
M
MCF = P x (1.0 - -)
D
Where:
M = The number of hours during the month Facility is out of service on
scheduled maintenance.
D = The number of hours in the month.
---------------------
* 0.8 reflects a 20% allowance for forced outage.
C-9
(3) Determine the MDC by multiplying the MCF by C:
MDC (kilowatts) = MCF x C
The monthly payment for capacity is then determined by multiplying the PPF
by the MDC, by the appropriate capacity loss adjustment factor presented from
Table A, and by the appropriate performance bonus factor, if any, from Table C.
monthly payment = PPF x MDC x capacity loss x performance
for capacity adjustment factor bonus factor
Furthermore, the payment for a month in which there is an outage for
scheduled maintenance shall also include an amount equal to the product of the
average hourly capacity payment(1) for the most recent month in the same type of
Seasonal Period (i.e., Seasonal Period A or Seasonal Period B) during which
deliveries were made times the number of hours of outage for scheduled
maintenance in the current month. Capacity payments will continue during the
outage periods for scheduled maintenance provided that the provisions of section
C-3 are met.
During a probationary period Seller's monthly payment for capacity shall be
determined by substituting for the contract capacity, the capacity at which
-------------------
1 Total monthly payment divided by the total number of hours in the monthly
billing period.
C-10
Seller would have met the performance requirements. In the event that during the
probationary period Seller does not meet the performance requirements at
whatever capacity was established for the previous month, Seller's monthly
payment for capacity shall be determined by substituting the capacity at which
Seller would have met the performance requirements. The performance bonus factor
shall not be applied during probationary periods.
TABLE A
If the Facility is non-remote(1) the capacity loss adjustment factors are as
follows:
Capacity Loss
Interconnection Voltage Adjustment Factor
----------------------- -----------------
Transmission .989
Primary Distribution .991
Secondary Distribution .991
If the Facility is remote the capacity loss adjustment
factor is ________________ (2)
----------------
1 As defined by the CFUC.
2 The Seller acknowledges that this blank cannot be filled in at the time of
executing the Agreement because the information is not yet available to
make a definitive determination of whether the Facility is remote or
non-remote and, if remote, the number to be inserted in this blank. Seller
shall request PGandE to perform a capacity loss adjustment factor study to
be done in its accustomed manner of making such studies to determine
whether the Facility is remote or non-remote and, if remote, the number to
be inserted. If the Facility is determined to be non-remote, "N/A" shall be
inserted.
C-11
TABLE B
Firm Capacity Price Schedule
----------------------------
(Levelized $/kW-year)
Actual
Operation
Date Term of Agreement
---- -----------------
Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 20 25 30
---- - - - - - - - - - -- -- -- -- -- -- -- -- --
1983 72 111 96 88 84 85 88 91 93 96 98 100 102 104 106 115 122 128
1984 156 111 95 88 89 92 95 98 100 103 105 108 110 112 114 124 131 137
1985 60 58 59 66 73 79 84 88 92 95 99 102 104 107 110 120 129 135
1986 56 58 69 78 85 90 95 99 103 106 110 113 116 118 121 132 141 148
1987 61 77 88 95 10.1 105 109 113 117 120 124 127 130 132 135 147 156 163
1988 96 104 110 114 119 122 126 129 133 136 139 142 145 148 151 163 173 180
C-12
TABLE C
Performance Bonus Factor
The following shall be the performance bonus factors applicable to the
calculation of the monthly payments for capacity delivered by the Facility after
it has demonstrated a capacity factor in excess of 85%.
DEMONSTRATED
CAPACITY FACTOR PERFORMANCE
(%) BONUS FACTOR
------------------------------------------
85 1.000
90 1.059
95 1.118
100 1.176
After the Facility has delivered power during the span of all of the peak
months on the PGandE system (presently June, July, and August) in any year
(span),
(1) the capacity factor for each such month shall be calculated in the
following manner:
F
CAPACITY FACTOR (%) = ----------------------- x 100
(N-W) x Q
Where:
For Option 1
------------
F = Total kilowatt-hours delivered by Seller in any peak month
during all on-peak hours that Seller is asked to deliver power
C-13
to PGandE excluding any energy associated with generation levels
greater than the contract capacity.
N = Total on-peak hours that Seller is asked to deliver power to PGandE
during the month.
W = Total on-peak hours during the peak month that the Facility is out
of service on scheduled maintenance during the on-peak hours that
Seller is asked to deliver power to PGandE.
Q = Contract capacity in kilowatts.
For Option 2
------------
F = Total kilowatt-hours delivered by Seller in any peak month during
all on-peak hours excluding any energy associated with generation
levels greater than the contract capacity.
N = Total on-peak hours during the month.
W = Total on-peak hours during the peak month that the Facility is out
of service on scheduled maintenance.
Q = Contract capacity in kilowatts.
(ii) the arithmetic average of the above capacity factors shall be
determined for that span,
(iii) the average of the above arithmetic average capacity factors for the
most recent span(s), not to exceed 5, shall be calculated and shall become the
Demonstrated Capacity Factor.
C-14
To calculate the performance bonus factor for a Demonstrated Capacity
Factor not shown in Table D use the following formula:
Performance Bonus Factor = Demonstrated Capacity Factor (%)
--------------------------------
85%
THE FOLLOWING SECTIONS SHALL APPLY ONLY TO HYDROELECTRIC PROJECTS
-----------------------------------------------------------------
C-6 DETERMINATION OF NATURAL FLOW DATA
Natural flow data shall be based on a period of record of at least 50 years
and which includes historic critically dry periods. In the event Seller
demonstrates that a natural flow data base of at least 50 years would be
unreasonably burdensome, PGandE shall accept a shorter period of record with a
corresponding reduction in the averaging basis set forth in Section C-8. Seller
shall determine the natural flow data by month by using one of the following
methods:
Method 1
If stream flow records are available from a recognized gauging station on
the water course being developed in the general vicinity of the project, Seller
may use the data from them directly.
C-15
Method 2
If directly applicable flow records are not available, Seller may develop
theoretical natural flows based on correlation with available flow data for the
closest adjacent and similar area which has a recognized gauging station using
generally accepted hydrologic estimating methods.
C-7 THEORETICAL OPERATION STUDY
Based on the monthly natural flow data developed under section C-6 a
theoretical operation study shall be prepared by Seller. Such a study shall
identify the monthly capacity rating in kW and the monthly energy production in
kWh for each month of each year. The study shall take into account all relevant
operating constraints, limitations, and requirements including but not limited
to --
(1) Release requirements for support of fish life and any other operating
constraints imposed on the project;
(2) Operating characteristics of the proposed equipment of the Facility
such as efficiencies, minimum and maximum operating levels, project control
procedures, etc.;
C-16
(3) The design characteristics of project facilities such as head losses in
penstocks, valves, tailwater elevation levels, etc.; and
(4) Release requirements for purposes other than power generation such as
irrigation, domestic water supply, etc.
The theoretical operation study for each month shall assume an even
distribution of generation throughout the month unless Seller can demonstrate
that the Facility has water storage characteristics. For the study to show
monthly capacity ratings, the Facility shall be capable of operating during all
on-peak hours in the peak months on the PGandE system, which are presently the
months of June, July, and August. If the project does not have this capability
throughout each such month, the capacity rating in that month of that year shall
be set at zero for purposes of this theoretical operation study.
C-8 DETERMINATION OF AVERAGE DRY YEAR CAPACITY RATINGS
Based on the results of the theoretical operation study developed under
Section C-7, the average dry year capacity rating shall be established for each
month. The average dry year shall be based on the average of the five years of
the lowest annual generation as shown in the theoretical operation study. Once
such years of lowest annual generation are identified, the monthly capacity
rating is determined for each month by averaging the capacity ratings from each
C-17
month of those years. The contract capacity shown in Article 2(a) shall not
exceed the lowest average dry year monthly capacity ratings for the peak months
on the PGandE system, which are presently the months of June, July, and August.
C-9 INFORMATION REQUIREMENTS
Seller shall provide the following information to PGandE for its review:
(1) A summary of the average dry year capacity ratings based on the
theoretical operation study as provided in Table D;
(2) A topographic project map which shows the location of all aspects of
the Facility and locations of stream gauging stations used to determine natural
flow data;
(3) A discussion of all major factors relevant to project operation;
(4) A discussion of the methods and procedures used to. establish the
natural flow data. This discussion shall be in sufficient detail for PGandE to
determine that the methods are consistent with those outlined in Section C-6 and
are consistent with generally accepted engineering practices; and
(5) Upon specific written request by PGandE, Seller's theoretical operation
study.
C-18
C-10 ILLUSTRATIVE EXAMPLE
(1) Determine natural flows - These flows are developed based on historic
stream gauging records and are compiled by month, for a long-term period
(normally at least 50 years or more) which covers dry periods which historically
occurred in the 1920's and 30's and more recently in 1976 and 77. In all but
unusual situations this will require application of hydrological engineering
methods to records that are available, primarily from the USGS publication
"Water Resources Data for California".
(2) Perform theoretical operation study - Using the natural flow data
compiled under (1) above a theoretical operation study is prepared which
determines, for each month of each year, energy generation (kWh) and capacity
rating (kW). This study is performed based on the Facility's design, operating
capabilities, constraints, etc., and should take into account all factors
relevant to project operation. Generally such a study is done by computer which
routes the natural flows through project features, considering additions and
withdrawals from storage, spill past the project, releases for support of fish
life, etc., to determine flow available for generation. Then the generation and
capacity amounts are computed based on equipment performance, efficiencies, etc.
C-19
(3) Determine average dry year capacity ratings After the theoretical
project operation study is complete the five years in which the annual
generation (kWh) would have been the lowest are identified. Then for each month,
the capacity rating (kW) is averaged for the five years to arrive at a monthly
average capacity rating. The contract capacity is then set by the Seller based
on the monthly average dry year capacity ratings and the performance
requirements of Appendix C. An example project is shown in the attached
completed Table D.
C-20
EXAMPLE
-------
TABLE D
Summary of Theoretical Operation Study
Project: New Creek 1 Dispatchable: Yes ___ No X
Water Source: West Fork New Creek
Mode of Operation: Run of the river
Type of Turbine: ▇▇▇▇▇▇▇ Design Flow: 100 cfs Design Head: 150 feet
Operating Characteristics(1):
Flow Head (feet) Output Efficiency (%)
(cfs) Gross Net (kW) Turbine Generator
----- ----- --- ---- ------- ---------
Normal Operation 100 160 150 1,120 90 98
Maximum Operation 110 160 148 1,150 85 98
Minimum Operation 30 160 155 290 75 98
Average Dry Year Operation - Based on the average of the following lowest
generation years: 1930, 1932, 1934, 1949, 1977.
Energy Generation Capacity Output Percent of
Month (kWh) (kW) Total Hours Operated(2)
----- ----- ---- ----------------------
January 855,000 1,150 100
February 753,000 1,120 100
March 818,000 1,100 100
April 727,000 1,010 100
May 699,000 940 100
June 612,000 850 100
July 484,000 650 100
August 305,000 410 100
September 245,000 340 100
October 148,800 200 100
November 468,000 650 100
December 595,000 800 100
Maximum Contract Capacity: 410 kW
--------------------
1 If Facility has a variable head, operating curves should be provided.
2 For this to be less than 100%, Facility must be dispatchable.
▇-▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ PAYMENTS
IN THE EVENT OF TERMINATION OR REDUCTION
CONTENTS
Section Page
------- ----
▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇-▇
▇-▇ TERMINATION WITH PRESCRIBED NOTICE D-4
D-3 TERMINATION WITHOUT PRESCRIBED NOTICE ▇-▇
▇-▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇-▇
▇-▇
APPENDIX D
ADJUSTMENT OF CAPACITY PAYMENTS
IN THE EVENT OF TERMINATION OR REDUCTION
D-1 GENERAL PROVISIONS
(a) This Appendix shall be applicable in the event there is a contract
termination or a capacity sale reduction (each sometimes referred to as
"termination" in this Appendix D).
(b) The Parties agree that the amount which PGandE pays Seller for the
capacity which Seller makes available to PGandE is based on the agreed value to
PGandE of Seller's performance of capacity obligations during the full period of
the term of agreement. The Parties further agree that in the event PGandE does
not receive such full performance by reason of a termination:
(1) PGandE shall be deemed damaged by reason thereof,
(2) it would be impracticable or extremely difficult to fix the actual
damages to PGandE resulting therefrom,
(3) the refunds and payments as provided in Sections D-2 and D-3, as
applicable, are in the nature of adjustments in capacity prices and
D-2
liquidated damages, and not a penalty, and are fair and reasonable, and
(4) such refunds and payments represent a reasonable endeavor by the
Parties to estimate a fair compensation for the reasonable losses that
would result from such termination or reduction.
(c) In the event of a capacity sale reduction, the quantity by which the
contract capacity is reduced shall be used to calculate the payments due PGandE
in accordance with Sections D-2 and D-3, as applicable.
(d) Seller shall be invoiced by PGandE for all refunds and payments due
under this Appendix D and the special facilities agreement. From the date of the
notice of termination or the date of termination, whichever is earlier, Seller
shall pay interest, compounded monthly, on all overdue amounts, at the published
Federal Reserve Board three months' Prime Commercial Paper rate.
(e) If Seller does not make payments pursuant to Section D-1(d), PGandE
shall have the right to offset any amounts due it against any present or future
payments due Seller.
(f) Notices of termination shall be made in accordance with Section A-l8 of
Appendix A.
D-3
D-2 TERMINATION WITH PRESCRIBED NOTICE
In the event Seller terminates this entire Agreement, or all or part of the
contract capacity thereof, with the following prescribed written notice:
Amount of Contract Capacity Length of
Termiminated Notice Required
------------ ---------------
1,000 kW or under 3 months
over 1,000 kW through 10,000 kW 9 months
over 10,000 kW through 25,000 kW 12 months
over 25,000 kW through 50,000 kW 36 months
over 50,000 kW through 100,000 kW 48 months
over 100,000 kW 60 months
Then the following provisions shall apply:
(1) With respect to the amount by which the contract capacity is reduced,
Seller shall refund to PGandE an amount equal to the difference between (a) the
capacity payments already paid by PGandE, based on the original term of
agreement and (b) the total capacity payments which PGandE would have paid based
on the period of Seller's actual performance using the adjusted capacity price.
Additionally, Seller shall pay interest, compounded monthly, on all
overpayments, at the published Federal Reserve Board three months' Prime
Commercial Paper rate.
(2) From the date PGandE receives the termination notice to the date of
actual termination, PGandE shall make capacity payments based on the adjusted
capacity price for the amount of contract capacity being terminated.
D-4
(3) From the date PGandE receives the termination notice, PGandE shall
continue to pay for the amount of contract capacity not being terminated, if
any, at the original contract capacity price.
D-3 TERMINATION WITHOUT PRESCRIBED NOTICE
(a) If Seller terminates this Agreement, or all or a part of the contract
capacity thereof, without the notice prescribed in Section D-2, the provisions
prescribed in Section D-2 will all apply. Additionally:
(b) Seller shall pay PGandE a sum equal to the amount by which the contract
capacity is being terminated times the difference between the current firm
capacity price on the date of termination for a term equal to the balance of the
term of agreement and the contract capacity price, pro-rated for the length of
notice given by multiplying by the difference between the prescribed length of
notice and the actual notice given, with the difference divided by 12. In the
event that the current firm capacity price is less than the contract capacity
price, no payment under this Section D-3 shall be due either Party.
This additional payment shall be computed using the following formula:
J - H
G = CC x (T - CCP) x -----
12
D-5
Where G >/= 0
and where:
G = additional payment.
CC = the amount by which the contract capacity is being terminated.
T = the current firm capacity price.
CCP = the contract capacity price.
H = the actual number of months notice given.
J = the prescribed length of notice.
D-4 TERMINATION EXAMPLES
These examples demonstrate how to calculate capacity payment adjustments
when capacity sales are terminated.
(a) Termination with Prescribed Notice
(1) Example Based on option 1
Assumptions:
i. Term of agreement is 15 years;
ii. Actual operation date is July 1, 1985;
iii. Prescribed notice is given on July 1, 1.986;
D-6
iv. Contract capacity to be reduced by 10,000 kW on July 1, 1987;
actual performance to be from July 1, 1985 through July 1,
1987(1);
v. The applicable capacity loss adjustment factor is 989; and
vi. No performance bonus for capacity has been earned.
The amount of overpayment (E) made by PGandE to Seller during each
monthly billing period is calculated as follows:
E = (A - B) x C x L x U
Where:
A = contract capacity price per month for the actual operation date
(July 1, 1985) and the term of agreement which is 15 years =
$110/kW-yr / 12mo/yr = $9.17/kW-mo.
B = adjusted capacity price per month for the actual operation date
(July 1, 1984) and a two-year agreement term = $58/kW-yr / 12 mo/yr =
$4.83/kW-mo.
---------------------
1 The capacity payment is adjusted upon receiving notice, so no refund is
necessary for the last month of the first twelve months of operation and
all of the second twelve months (June 1, 1986 to July 1, 1987). Seller
performed for eleven months prior to payment adjustment. (Note that due to
the 30-day interval between delivery and payment, performance in the
twelfth month (June 1986) can be paid for at the adjusted capacity price.
D-7
C = amount by which the contract capacity- is being reduced = 10,000 kW.
L = capacity loss adjustment factor = .989.
U = performance bonus factor; when Seller does not qualify for a
performance bonus factor, as in this example, U is removed from the
above calculation of E.
Therefore:
E = ($9.17/kW-mo - $4.83/kW-mo) x 10,000 kW x .989 = $42,923 per month.
Table A shows a step-by-step derivation of the refund Seller owes
PGandE for the early termination outlined above. The $497,342 that Seller
owes PGandE appears at the lower right-hand corner of the table. All other
figures of this table represent intermediate calculation steps.
D-8
TABLE A
(a) (b) (c) (D) (E) (f) (g)
--- --- --- --- --- --- ---
Interest
Amount Accumu- Charge(6) on
Monthly of lated Accumulated Balance(7)
Billing Date of Over- Over- Interest Overpayment (g)=
Period(1) Payment(2) Payment(3) Payment(4) Rate(5) (f)=(d)x(e) (c)+(d)+(f)
--------- ---------- ---------- ---------- ------- ----------- -----------
$ $ % $ $
7/85 8/30/85 42,923 0 1.2 0 42,923
8/85 9/30/85 42,923 42,923 1.0 429 86,275
9/85 10/30/85 42,923 86,275 0.9 776 129,974
10/85 11/30/85 42,923 129,974 0.8 1,040 173,937
11/85 12/30/85 42,923 173,937 0.7 1,218 218,078
12/85 1/30/86 42,923 218,078 0.8 1,745 262,746
1/86 3/2/86 42,923 262,746 0.9 2,365 308,034
2/86 3/30/86 42,923 308,034 1.0 3,080 354,037
3/86 4/30/86 42,923 354,037 1.1 3,894 400,854
4/86 5/30/86 42,923 400,854 1.2 4,810 448,587
5/86 6/30/86 42,923 448,587 1.3 5,832 497,342
========
-----------------
1 The month in which power deliveries were made. For purposes of
simplification, the monthly billing period will coincide exactly with each
calendar month.
2 The date on which payment for the monthly billing period stated in column
(a) is made.
3 The amount of overpayment made by PGandE to Seller during each monthly
billing period.
4 The amount of overpayment accumulated up through last month's date of
payment.
5 The interest rate for the period between the date of payment for the
previous monthly billing period and the date of payment for this monthly
billing period. These interest rates are arbitrarily chosen for use in this
example.
6 the- amount of interest charge accrued between the. date, of) payment for
the previous monthly billing period and the date of payment for this
monthly billing period on the accumulated overpayment balance existing as
of the previous monthly billing period's date of payment.
7 The amount Seller owes PGandE at this stage of the calculation. The balance
(g) for a given monthly billing period equals the accumulated overpayment
(d) for the monthly billing period immediately following.
D-9
(2) Example Based on Option 2
Assumptions:
i. Term of agreement is 15 years;
ii. Actual operation date is April 1, 1985;
iii. Prescribed notice is given on April 1, 1987;
iv. Contract capacity is reduced by 10,000 kW on April 1, 1988;
actual performance is from April 1, 1985 through April 1,
1988(1);
v. Scheduled outage for maintenance: 18 days = 432 hours in
both November 1985 and November 1986;
vi. The applicable capacity loss adjustment factor is 989; and
vii. Listed below is Seller's Performance Factor (P), the
Demonstrated Capacity Factor (Y) in % (when measured), and
where applicable, the performance bonus factor (U) earned
for each of the monthly billing periods(2) prior to the time
capacity payment is adjusted. Also listed below are the
number of hours
---------------
1 The capacity payment is adjusted upon receiving notice, so no refund is
necessary for the last month of the first twenty-four months of operation
and all of the last twelve months (March 1, 1987 to April 1, 1988). Seller
performed for twenty-three months prior to payment adjustment. [Note that
due to the 30-day interval between delivery and payment, performance in the
twenty-fourth month (March 1987) can be paid for at the adjusted capacity
price.]
2 For purposes of simplification, the monthly billing period will coincide
exactly with each calendar month.
D-10
the Facility was out of service for scheduled maintenance
(M) and the number of hours in the month (D) for each of
these months.
Monthly Billing Period P Y U M D
---------------------- - - - - -
April 1985 .85 - - 0 720
May 1985 .95 - - 0 744
June 1985 .90 80 - 0 720
July 1985 1.00 88 - 0 744
August 1985 .90 96 - 0 744
September 1985 1.00 - 1.035* 0 720
October 1985 .96 - 1.035 0 744
November 1985 .98 - 1.035 432 720
December 1985 1.00 - 1.035 0 744
January 1986 1.00 - 1.035 0 744
February 1986 .92 - 1.035 0 672
March 1986 .85 - 1.035 0 744
April 1986 .78 - 1.035 0 720
May 1986 1.00 - 1.035 0 744
June 1986 .94 100 1.035 0 720
July 1986 .95 95 1.035 0 744
August 1986 1.00 92 1.035 0 744
September 1986 1.00 - 1.080** 0 720
October 1986 .93 - 1.080 0 744
November 1986 .84 - 1.080 432 720
December 1986 .88 - 1.080 0 744
January 1987 .94 - 1.080 0 744
February 1987 1.00 - 1.080 0 672
------------------
* This performance bonus factor was calculated by averaging the Demonstrated
Capacity Factors for each of the months of June, July, and August 1985, and
then dividing that average by 85(%):
80 + 88 + 96
U = ------------ / 85 = 1.035
3
** This performance bonus factor was calculated by averaging the Demonstrated
Capacity Factors for each. of the months of June, July, and August 1985,
and June, July, and August 1986, and then dividing that average by 85(%):
80 + 88 + 96 + 100 + 95 + 92
U = ---------------------------- / 85 = 1.080
6
D-11
The amount of overpayment (E) made by PGandE to Seller during each
monthly billing period is calculated as follows:
M M
E = [P x (1 - -) x K x L x U x (A - B) x C] + [- x R]
D D
Where:
P = performance factor.
M = number of hours of scheduled maintenance for that monthly billing
period.
D = number of hours in that monthly billing period.
K = allocation factor from Section C-5.
L = capacity loss adjustment factor = .989.
U = performance bonus factor; when Seller does not qualify for a
performance bonus factor, U is removed from the above calculation of
E.
A = Contract capacity price for the actual operation date (April 1,
1985) and term of agreement which is 15 years = $110/kW-yr.
B = adjusted capacity price for the actual operation date and a
three-year agreement term = $59/kW-yr.
C = amount by which the contract capacity is being reduced = 10,000 kW.
D-12
R = amount of overpayment for the most recent monthly billing period in
the same Seasonal Period (i.e., Seasonal Period A or Seasonal Period
B).
The results of the calculations are:
Amount of
Monthly Billing Period Overpayment (E)
---------------------- ---------------
April 1985 $ 4,472
May 1985 88,838
June 1985 84,163
July 1985 93,514
August 1985 84,163
September 1985 96,787
October 1985 5,227
November 1985 5,271
December 1985 5,445
January 1986 5,445
February 1986 5,009
March 1986 4,628
April 1986 4,247
May 1986 96,787
June 1986 90,980
July 1986 91,948
August 1986 96,787
September 1986 100,995
October 1986 5,284
November 1986 5,079
December 1986 5,000
January 1987 5,341
February 1987 5,682
Table B shows a step-by-step derivation of the refund Seller owes
PGandE for the early termination outlined above. The $1,136,015 that Seller
owes PGandE appears at the lower right-hand corner of the table. All other
figures of this table represent intermediate calculation steps.
D-13
TABLE B
(a) (b) (c) (d} (e) (f) (g)
--- --- --- --- --- --- ---
Interest
Amount Accumu- Charge(6) on
Monthly of lated Accumulated Balance(7)
Billing Date of Over- Over- Interest Overpayment (g)=
Period(1) Payment(2) Payment(3) Payment(4) Rate(5) (f)=(d)x(e) (c)+(d)+(f)
--------- ---------- ---------- ---------- ------- ----------- -----------
$ $ % $ $
4/85 5/30/85 4,472 0 1.3 0 4,472
5/85 6/30/85 88,838 4,472 1.4 63 93,373
6/85 7/30/85 84,163 93,373 1.3 1,214 178,750
7/85 8/30/85 93,514 178,750 1.2 2,145 274,409
8/85 9/30/85 84,163 274,409 1.0 2,744 361,316
9/85 10/30/85 96,787 361,316 0.9 3,252 461,355
10/85 11/30/85 5,227 461,355 0.8 3,691 470,273
11/85 12/30/85 5,271 470,273 0.7 3,292 478,836
12/85 1/30/86 5,445 478,836 0.8 3,831 488,112
1/86 3/2/86 5,445 488,112 0.9 4,393 497,950
2/86 3/30/86 5,009 497,950 1.0 4,980 507,939
3/86 4/30/86 4,628 507,939 1.1 5,587 518,154
4/86 5/30/86 4,247 518,154 1.2 6,218 528,619
5/86 6/30/86 96,787 528,619 1.3 6,872 632,278
6/86 7/30/86 90,980 632,278 1.4 8,852 732,110
7/86 8/30/86 91,948 732,110 1.4 10,250 834,308
8/86 9/30/86 96,787 834,308 1.3 10,846 941,941
9/86 10/30/86 100,995 941,941 1.2 11,303 1,054,239
10/86 11/30/86 5,284 1,054,239 1.0 10,542 1,070,065
11/86 12/30/86 5,079 1,070,065 1.1 11,771 1,086,915
12/86 1/30/87 5,000 1,086,915 1.1 11,956 1,103,871
1/87 3/2/87 5,341 1,103,871 1.0 11,039 1,120,251
2/87 3/30/87 5,682 1,120,251 0.9 10,082 1,136,015
=========
-------------
1 The month in which power deliveries were made. For purposes of
simplification, the monthly billing period will coincide exactly with each
calendar month.
2 The date on which payment for the monthly billing period stated in column
(a) is made.
3 The amount of overpayment made by PGandE to Seller during each monthly
billing period.
4 The amount of overpayment accumulated up through last month's date of
payment.
5 The interest rate for the period between the date of payment for the
previous monthly billing period and the date of payment for this monthly
billing period. These interest rates are arbitrarily chosen for use in this
example.
6 The amount of interest charge accrued between the date of payment for the
previous monthly billing period and the date of payment for this monthly
billing period on the accumulated overpayment balance existing as of the
previous monthly billing period's date of payment.
7 The amount Seller owes PGandE at this stage of the calculation. The balance
(g) for a given monthly billing period equals the accumulated overpayment
(d) for the monthly billing period immediately following.
D-14
(b) Termination without Prescribed Notice
If Seller terminates without prescribed notice, Seller will owe PGandE a
refund [the calculation of which is described in Sections D-4(a)(1) and
D-4(a)(2) of this example] and payment (G). This example demonstrates how the
payment (G) is calculated. Assumptions:
i. Term of agreement is 15 years;
ii. Actual operation date is July 1, 1985;
iii. Notice is given on January 1, 1990; and
iv. Contract capacity is to be reduced by 10,000 kW on July 1, 1990;
actual performance is from July 1, 1985 through July 1, 1990.
The payment (G) is calculated as follows:
▇-▇
G = CC x (T - CCP) x (---) G > or = 0
12
Where:
CC = The amount of contract capacity being terminated = 10,000 kW.
T = the current firm capacity price $140/kW-yr is arbitrarily chosen for
use in this example for a July 1, 1990 Operation Date and 10-year
agreement term.
CCP= the contract capacity price = $110/kW-yr.
H = the actual number of months notice given = six months.
J = the prescribed notice = twelve months.
▇-▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇-▇
▇ ▇ ▇▇ ▇ (▇ - ▇▇▇) x (---)
12
G = 10,000 kW x ($140/kW-yr - $110/kW-yr) x
22 mos. - 6 mos.
(-----------------)
(12 mos./yr
G = $150,000
========
D-16
APPENDIX E
INTERCONNECTION
CONTENTS
Section Page
------- ----
E-1 INTERCONNECTION TARIFFS E-2
E-2 POINT OF DELIVERY LOCATION SKETCH E-3
E-3 INTERCONNECTION FACILITIES FOR WHICH E-4
SELLER IS RESPONSIBLE
E-1
E-1 INTERCONNECTION TARIFFS
The applicable tariff follows on the succeeding pages.
E-2
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8616-E
San Francisco. California Cancelling Original Cal. P.U.C. Sheet No. 7693-E
--------------------------------------------------------------------------------
RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION
This describes the minimum operation, metering and interconnection requirements
for any generating source or sources paralleled with the Utility's electric
system. Such source or sources may include, but are not limited to,
hydroelectric generators, wind-turbine generators, steam or gas driven turbine
generators and photovoltaic systems.
A. GENERAL
1. The type of interconnection and voltage available at any location and
the Utility's specific interconnection requirements shall be
determined by inquiry at the Utility's local office.
2. The Utility's distribution and transmission lines which are an
integral part of its overall system are distinguished by the voltages
at which they are operated. Distribution lines are operated at
voltages below 60 kv and transmission lines are operated at voltages
60 kv and higher.
3. The Power Producer (Producer) shall ascertain and be responsible for
compliance with the requirements of all governmental authorities
having jurisdiction.
4. The Producer shall sign the Utility's written form of power purchase
agreement or parallel operation agreement before connecting or
operating a generating source in parallel with the Utility's system.
5. The Producer shall be fully responsible for the costs of designing,
installing, owning, operating and maintaining all interconnection
facilities defined in Section B.1.
6. The Producer shall submit to the Utility, for the Utility's review and
written acceptance, equipment specifications and detailed plans for
the installation of all interconnection facilities to be furnished by
the Producer prior to their purchase or installation. The Utility's
review and written acceptance of the Producer's equipment
specifications and detailed plans shall not be construed as confirming
or endorsing the Producer's design or as warranting the equipment's
safety, durability or reliability. The Utility shall not, by reason of
such review or lack of review, be responsible for strength, details of
design adequacy, or capacity of equipment built pursuant to such
specifications, nor shall the Utility acceptance be deemed an
endorsement of any such equipment.
7. No generating source shall be operated in parallel with the Utility's
system until the interconnection facilities have been inspected by the
Utility and the Utility has provided written approval to the Producer.
8. Only duly authorized employees of the Utility are allowed to connect
Producer-installed interconnection facilities to, or disconnect the
same from, the Utility's overhead or underground lines.
B. INTERCONNECTION FACILITIES
1. GENERAL: Interconnection facilities are all means required, and
apparatus installed, to interconnect the Producer's generation with
the Utility's system. Where the Producer desires to sell power to the
Utility, interconnection facilities are also all means required, and
apparatus installed, to enable the Utility to receive power deliveries
from the Producer. Interconnection facilities may include, but are not
limited to:
a. connection, transformation, switching, metering, communications,
control, protective and safety equipment; and
b. any necessary additions to and reinforcements of the Utility's
system by the Utility.
2. METERING
a. A Producer desiring to sell power to the Utility shall provide,
install, own and maintain all facilities necessary to accommodate
metering equipment specified by the Utility. Such metering
equipment may include meters telemetering (applicable where
deliveries to the Utility exceed 10 MIW) and other recording and
communications devices as may be required for the reporting of
power delivery an to the Utility. Except as provided for in
Section B.2.b following, the Utility shall provide, install, own
and maintain all metering equipment as special facilities in
accordance with Section F.
(Continued)
--------------------------------------------------------------------------------
Advice Letter No. 1025-E Date Filed May 21, 1984
Decision No. ▇▇-▇▇-▇▇▇ Effective June 20, 1984
Resolution No.
Issued By
▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Rates and Economic Analysis
E-2(a)
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8617-E
San Francisco. California Cancelling Original Cal. P.U.C. Sheet No. 7694-E
--------------------------------------------------------------------------------
RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION (Cont'd.)
B. INTERCONNECTION FACILITIES
2. METERING
b. The Producer may at its option provide, install, own and maintain
current and potential transformers rated above 600 volts and a
non-revenue type graphic recorder where applicable. Such metering
equipment, its installation and maintenance shall all be In
conformance with the Utility's specifications.
c. The Utility's meters shall be equipped with detents to prevent
reverse registration so that power deliveries to and from the
Producer's equipment can be separately recorded.
3. CONTROL, PROTECTION AND SAFETY EQUIPMENT
a. GENERAL: The Utility has established functional requirements
essential for safe and reliable parallel operation of the
Producer's generation. These requirements provide for control,
protective and safety equipment to:
(1) sense and properly react to failure and malfunction on the
Utility's system;
(2) assist the Utility in maintaining its system integrity and
reliability; and
(3) protect the safety of the public and the Utility's personnel.
b. Listed below are the various devices and features generally
required by the Utility as a prerequisite to parallel operation
of the Producer's generation:
CONTROL. PROTECTION AND SAFETY EQUIPMENT GENERAL REQUIREMENTS(1)
--------------------------------------------------------------------------------
GENERATOR SIZE
--------------
10 kw or 11 kw to 41 kw to 101 kW to 401 kw to Over
Device or Feature Less 40 kw 100 kw 400 kw 1,000 kw 1,000 kw
----------------- ---- ----- ------ ------ -------- --------
Dedicated Transformer(2) - X X X X X
Interconnection Disconnect Device X X X X X X
Generator Circuit Breaker X X X X X X
Over-voltage Protection X X X X X X
Under-voltage Protection - - X X X X
Under/Over-frequency Protection X X X X X X
Ground Fault Protection - - X X X X
Over-current relay w/Voltage Restraint - - - X X
Synchronizing(3) Manual Manual Manual Manual Manual Automatic
Power Factor or Voltage Regulation X X X X
c. DISCONNECT DEVICE: The producer shall provide, install, own and
Maintain the interconnection disconnect device required by
Section 8.3.b at a location readily accessible to the Utility.
Such device shall normally be located near the Utility's meter or
meters for sole operation by the Utility. The interconnection
disconnect device and its precise location shall be specified by
the Utility. At the Producer's option and request, the Utility
will provide, Install, own and maintain the disconnect device on
the Utility's system as special facilities in accordance with
Section F.
------------------
1 Detailed requirements are specified in the Utility's current operating,
metering and equipment protection publications, as revised from time to
time by the Utility and available to the Producer upon request. For a
particular generator application, the Utility will furnish its specific
control, protective and safety requirements to the Producer after the exact
location of the generator has been agreed upon and the interconnection
voltage level has been established.
2 This is a transformer interconnected with no other Producers and serving no
other Utility customers. Although the dedicated transformer is not a
requirement for generators rated 10 kw or less, its installation is
recommended by the Utility.
3 This Is a requirement for synchronous and other types of generators with
stand-alone capability. For all such generators, the Utility will also
require the installation of "reclose blocking" features on its system to
block certain operations of the Utility's automatic line restoration
equipment.
(Continued)
--------------------------------------------------------------------------------
Advice Letter No. 1025-E Date Filed May 21, 1984
Decision No. ▇▇-▇▇-▇▇▇ Effective June 20, 1984
Resolution No.
Issued By
▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Rates and Economic Analysis
E-2 (b)
Pacific Gas and Electric Company Original Cal. P.U.C. Sheet No. 8618-E
San Francisco. California Cancelling ________ Cal. P.U.C. Sheet No. ______
--------------------------------------------------------------------------------
RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION (Cont'd.)
B. INTERCONNECTION FACILITIES (continued)
4. UTILITY SYSTEM ADDITIONS AND REINFORCEMENTS
a. Except as provided for in Section B.5. all additions to and
reinforcements of the Utility's system necessary to interconnect
with and receive power deliveries from the Producer's generation
will be provided, installed, owned and maintained by the Utility
as special facilities in accordance with Section F. Such
additions and reinforcements may include the installation of a
Utility distribution or transmission line extension or the
increase of capacity in the Utility's existing distribution or
transmission lines. The Utility shall determine whether any such
additions or reinforcements shall include an increment of
additional capacity for the Utility's use in furnishing service
to its customers. If so, then the costs of providing, installing,
owning and maintaining such additional capacity shall be Lorne by
the Utility and/or its customers in accordance with the Utility's
applicable tariffs on file with and authorized by the California
Public Utilities Commission (Commission).
b. The Producer shall advance to the Utility its estimated costs of
performing a preliminary or detailed engineering study as may be
reasonably required to identify any Producer related Utility
system additions and reinforcements. Where such. preliminary or
detailed engineering study involves analysis of the Utility's
transmission lines-(66 kv and higher), the Utility shall complete
its study within twelve calendar months of receiving all
necessary plans and specifications from the Producer.
5. PRODUCER-INSTALLED UTILITY-OWNED LINE EXTENSIONS: The Producer may at
its option provide and install an extension of the Utility's
distribution or transmission lines where required to complete the
Producer's interconnection with the Utility. Such extension shall be
installed by contractors approved by the Utility and in accordance
with its design and specifications. The Producer shall pay the Utility
its estimated costs of design, administration and inspection as may be
reasonably required to assure such extension is installed in
compliance with the Utility's requirements. Upon final inspection and
acceptance by the Utility, the Producer shall transfer ownership of
the line extension to the Utility where thereafter it shall be owned
and maintained as special facilities in accordance with Section F.
This provision does not preclude the Producer from installing, owning
and maintaining a distribution or transmission line extension as part
of its other Producer-owned interconnection facilities.
6. COSTS OF FUTURE UTILITY SYSTEM ALTERATIONS; The Producer shall be
responsible for the costs of only those future Utility system
alterations which are directly related to the Producer's. presence or
necessary to maintain the Producer's interconnection in accordance
with the Utility's applicable operating, metering and equipment
publication in effect when the Producer and the Utility entered into a
written form of power purchase agreement. Alterations made at the
Producer's expense shall specifically exclude increases of existing
line capacity necessary to accommodate the other Producers or Utility,
customers. Such alterations may, however, include relocation or
undergrounding of the Utility's distribution or transmission lines as
may be ordered by a governmental authority having jurisdiction.
7. ALLOCATION OF THE UTILITY'S EXISTING LINE CAPACITY: For two or more
Producers seeking to use an existing line, a first come, first served
approach shall be used. The first Producer to request an
interconnection shall have the right to use the existing line and
shall incur no obligation for costs associated with future line
upgrades needed to accommodate other Producers or customers. The
Utility's power purchase agreement shall specify the date by which the
Producer must begin construction. If that date passes and construction
has not commenced, the Producer shall be given 30 days to correct the
deficiency after receiving a reminder from the Utility that the
construction start-up date has passed. If construction has not
commenced after the 30-day corrective period, the Utility shall have
the right to withdraw its commitment to the first Producer and offer
the right to interconnect on the existing line to the next Producer in
order. If two Producers establish the right of first-in-time
simultaneously, the two Producers shall share the costs of any
additional line upgrade necessary to facilitate their cumulative
capacity requirements. Costs shall be shared based on the relative
proportion of capacity each Producer will add to the line.
(Continued)
--------------------------------------------------------------------------------
Advice Letter No. 1025-E Date Filed May 21, 1984
Decision No. ▇▇-▇▇-▇▇▇ Effective June 20, 1984
Resolution No.
Issued By
▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Rates and Economic Analysis
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8619-E
San Francisco. California Cancelling Original Cal. P.U.C. Sheet No. 7695-E
--------------------------------------------------------------------------------
RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION (Cont'd.)
C. ELECTRIC SERVICE FROM THE UTILITY: If the Producer requires regular,
supplemental, interruptible or standby service from the Utility, the
Producer shall enter Into separate contractual arrangements with the
Utility in accordance with the Utility's applicable electric tariffs on
file with and authorized by the Commission.
D. OPERATION
1. PREPARALLEL INSPECTION: In accordance with Section A.7, the Utility
will inspect the Producer's interconnection facilities prior to
providing it with written authorization to commence parallel
operation. Such inspection shall determine whether or not the Producer
has installed certain control, protective and safety equipment to the
Utility's specifications, Where the Producer's generation has a rated
output in excess of 100 kw, the Producer shall pay the Utility its
estimated costs of performing the inspection.
2. JURISDICTION OF THE UTILITY'S SYSTEM DISPATCHER: The Producer's
generation while operating in parallel with the Utility's system is at
all times under the jurisdiction of the Utility's system dispatcher.
The system dispatcher shall normally delegate such control to the
Utility's designated switching center.
3. COMMUNICATIONS: The Producer shall maintain telephone service from the
local telephone company to the location of the Producer's generation.
In the event such location is remote or unattended, telephone service
shall be provided to the nearest building normally occupied by the
Producer's generator operator. The Utility and the Producer shall
maintain operating communications through the Utility's designated
switching center.
4. GENERATOR LOG: The Producer shall at all times keep and maintain a
detailed generator operations log. Such log shall include, but not be
limited to, information on unit availability, maintenance outages,
circuit breaker trip operations requiring manual reset and unusual
events. The Utility shall have the right to review the Producer's log.
5. REPORTING ABNORMAL CONDITIONS: The Utility shall advise the Producer
of abnormal conditions which the Utility has reason to believe could
affect the Utility's operating conditions or procedures. The Producer
shall keep the Utility similarly informed.
6. POWER FACTOR: The Producer shall furnish reactive power as way be
reasonably required by the Utility.
a. The Utility reserves the right to specify that generators with
power factor control capability, Including synchronous
generators, be capable of operating continuously at any power
factor between 95 percent leading (absorbing vars) and 90 percent
tagging (producing vars) at any voltage level within + or - 5.0
percent of rated voltage. For other types of generators with no
inherent power factor control capability, the Utility reserves
the right to specify the installation of capacitors by the
Producer to correct generator output to near 95 percent leading
power factor. The Utility may also require the installation of
switched capacitors on its system to produce reactive support
equivalent to that provided by operating a synchronous generator
of the some size between 95 percent leading and 90 percent
lagging power factor.
b. Where either the Producer or the Utility determines that it Is
not practical for the Producer to furnish the Utility's required
level of reactive power or when the Utility specifies switched
capacitors in its system pursuant to Section D.6.a, the Utility
will provide, install, own and maintain the necessary devices on
its system in accordance with Section F.
E. INTERFERENCE WITH SERVICE AND COMMUNICATION FACILITIES
1. CEMERAL: The Utility reserves the right to refuse to connect to any
new equipment or to remain connected to any existing equipment of a
size or character that may be detrimental to the Utility's operations
or service to its customers.
(Continued)
--------------------------------------------------------------------------------
Advice Letter No. 1025-E Date Filed May 21, 1984
Decision No. ▇▇-▇▇-▇▇▇ Effective June 20, 1984
Resolution No.
Issued By
▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Rates and Economic Analysis
Pacific Gas and Electric Company Revised Cal. P.U.C. Sheet No. 8620-E
San Francisco. California Cancelling Original Cal. P.U.C. Sheet No. 7696-E
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RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION (Cont'd.)
E. INTERFERENCE WITH SERVICE AND COMMUNICATION FACILITIES (continued)
2. The Producer shall not operate equipment that superimposes upon the
Utility's system a voltage or current which causes interference with
the Utility's operations, service to the Utility's customers or
interference to communication facilities. If the Producer causes
service interference to others, the Producer must diligently pursue
and take corrective action at the Producer's expense after being given
notice and reasonable time to do so by the Utility. If the Producer
does not take timely corrective action, or continues to operate the
equipment causing the interference without restriction or limit, the
Utility may, without liability, disconnect the Producer's equipment
from the Utility's system until a suitable permanent solution provided
by the Producer is operational at the Producer's expense.
F. SPECIAL FACILITIES
1. Where the Producer requests the Utility to furnish interconnection
facilities or where it is necessary to make additions to or
reinforcements of the Utility's system and the Utility agrees to do
so, such facilities shall be deemed to be special facilities and the
costs thereof' shall be borne by the Producer, including such
continuing ownership costs as may be applicable.
2. Special facilities are (a) those facilities installed. at the
Producer's request which the Utility does not normally furnish under
its tariff schedules, or (b) a prorate portion of existing facilities
requested by the Producer, allocated for the sole use of such
Producer, which would not normally be allocated for such sole use.
Unless otherwise provided by the Utility's filed tariff schedules,
special facilities will be installed, owned and maintained or
allocated by the Utility as an accommodation to the Producer only if
acceptable for operation by the Utility and the reliability of service
to the Utility's customers is not impaired.
3. Special facilities will be furnished under the terms and conditions of
the Utility's "Agreement for installation or Allocation of Special
Facilities for Parallel Operation of Nonutility-owned Generation
and/or Electrical Standby Service" (Form 79-280, effective June 1984)
and its Appendix A, "Detail of Special Facilities Charges" (Form
79-702, effective June 1984). Prior to the Producer signing such an
agreement, the Utility shall provide the Producer with a breakdown of
special facilities costs in a form having detail sufficient for the
information to be reasonably understood by the Producer. The special
facilities agreement will include, but is not limited to, a binding
quotation of charges to the Producer and the following general terms
and conditions:
a. Where facilities are installed by the Utility for the Producer's
use as special facilities, the Producer shall advance to the
Utility its estimated installed cost of the special facilities.
The amount advanced is subject to the monthly ownership charge
applicable to customer-financed special facilities as set forth
in Section I of the Utility's Rule No. 2.
b. At the Producer's option, and where such Producer's generation is
a qualifying facility and the Producer has established credit
worthiness to the Utility's satisfaction, the Utility shall
finance those special facilities it deems to be removable and
reusable equipment. Such equipment shall include, but not be
limited to, transformation, disconnection and metering equipment.
c. Existing facilities allocated for the Producer's use as special
facilities and removable and reusable equipment financed by the
Utility in accordance with Section F.3.b are subject to the
monthly ownership charge applicable to Utility-financed special
facilities as set forth in Section 1 of Rule 2.
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4 A qualifying facility is one which meets the requirements established by
the Federal Energy Regulatory Commission's rules (18 Code of Federal
Regulations 292) implementing the Public Utility Regulatory Policies Act of
1978 (16 U.S.C.A. 796, et seq.).
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Advice Letter No. 1025-E Date Filed May 21, 1984
Decision No. ▇▇-▇▇-▇▇▇ Effective June 20, 1984
Resolution No.
Issued By
▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Rates and Economic Analysis
Pacific Gas and Electric Company Original Cal. P.U.C. Sheet No. 8621-E
San Francisco. California Cancelling ________ Cal. P.U.C. Sheet No. ______
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RULE NO. 21 -- NONUTILITY-OWNED PARALLEL GENERATION (Cont'd.)
F. SPECIAL FACILITIES (continued)
d. Where the Producer elects to install and deed to the Utility an
extension of the Utility's distribution or transmission lines for
use as special facilities in accordance with Section 8.5, the
Utility's estimate of the installed cost of such extension shall
be subject to the monthly ownership charge applicable to
customer-financed special facilities as set forth in Section I of
the Rule No. 2.
4. Where payment or collection of continuing monthly ownership charges is
not practicable, the Producer shall be required to make an equivalent
one-time payment in lieu of such monthly charges.
5. Costs of special facilities borne by the Producer may be subject to
downward adjustment when such special facilities are used to furnish
permanent service to a customer of the Utility. This adjustment will
be based upon the extension allowance or other such customer allowance
which the Utility would have utilized under its then applicable
tariffs if the special facilities did not otherwise exist. In no event
shall such adjustment exceed the original installed cost of that
portion of the special facilities used to serve a now customer. An
adjustment, where applicable, will consist of a refund applied to the
Producer's initial payment. for special facilities and/or a
corresponding reduction of the ownership charge.
G. EXCEPTIONAL CASES: Where the application of this rule appears impractical
or unjust, the Producer may refer the matter to the Commission for special
ruling or for the approval of special conditions.
H. INCORPORATION INTO POWER PURCHASE AGREEMENTS: Pursuant to Decision No.
▇▇-▇▇-▇▇▇, if in accordance with Section A.4 the Producer enters into a
written form of power purchase agreement with Utility, a copy of the Rule
No. 21 in effect on the date of execution will be appended to, and
Incorporated by reference into such power purchase agreement. The Rule
appended to such power purchase agreement shall then be applicable for the
term of the Producer's power purchase agreement with the Utility.
Subsequent revisions to this rule shall not be Incorporated into the rule
appended to such power purchase agreement.
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Advice Letter No. 1025-E Date Filed May 21, 1984
Decision No. ▇▇-▇▇-▇▇▇ Effective June 20, 1984
Resolution No.
Issued By
▇. ▇. ▇▇▇▇▇▇▇▇
Vice-President
Rates and Economic Analysis
E-2(f)
E-2 POINT OF DELIVERY LOCATION SKETCH
The Seller requests, and PGandE consents, that the location sketch not be
made at the time of executing the Agreement, because the Seller, recognizing
that the information is not yet available to make a definitive determination of
the sketch to be inserted here, shall request PGandE to perform an
interconnection study to be done in its accustomed manner of making such studies
to determine the sketch to be inserted.
E-3
E-3 INTERCONNECTION FACILITIES FOR WHICH SELLER IS RESPONSIBLE
The Seller requests, and PGandE consents, that this listing of facilities
not be filled in at the time of executing the Agreement, because the Seller,
recognizing that the information is not yet available to make a definitive
determination of the listing of facilities to be inserted here, shall request
PGandE to perform an interconnection study to be done in its accustomed manner
of making such studies to determine the listing of facilities to be inserted.
E-4