Exhibit 10.3.1
POWER PURCHASE CONTRACT
BETWEEN SOUTHERN CALIFORNIA EDISON COMPANY
AND
REPUBLIC GEOTHERMAL, INC.
TABLE OF CONTENTS
SECTION TITLE PAGE
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1 PROJECT SUMMARY......................................................1
2 DEFINITIONS..........................................................2
3 TERM.................................................................8
4 GENERATING FACILITY..................................................9
5 OPERATING OPTIONS...................................................18
6 INTERCONNECTION FACILITIES..........................................19
7 METERING............................................................20
8 POWER PURCHASE PROVISIONS...........................................21
9 PAYMENT AND BILLING PROVISIONS......................................43
10 TAXES...............................................................45
11 TERMINATION.........................................................46
12 SALE OF GENERATING FACILITY.........................................46
13 ABANDONMENT OF PROJECT..............................................47
14 LIABILITY...........................................................48
15 INSURANCE ..........................................................50
16 UNCONTROLLABLE FORCES...............................................52
17 NONDEDICATION OF FACILITIES.........................................54
18 PRIORITY OF DOCUMENTS...............................................54
19 NOTICES AND CORRESPONDENCE..........................................55
20 PREVIOUS COMMUNICATIONS.............................................55
21 THIRD PARTY BENEFICIARIES...........................................55
22 NONWAIVER...........................................................56
23 DISPUTES............................................................56
24 SUCCESSORS AND ASSIGNS..............................................58
25 EFFECT OF SECTION HEADINGS..........................................58
26 TRANSMISSION........................................................58
27 GOVERNING LAW.......................................................60
28 CONFIDENTIALITY.....................................................60
29 MULTIPLE ORIGINALS..................................................61
SIGNATURES..........................................................61
APPENDIX A.........................................................A-1
APPENDIX B.........................................................B-1
APPENDIX C.........................................................C-1
1. PROJECT SUMMARY
This Contract is entered into between Southern California Edison Company
("Edison") and Republic Geothermal, Inc., a California Corporation
("Seller"). Seller is willing to construct, own, and operate a Qualifying
Facility and sell electric power to Edison and Edison is willing to
purchase electric power delivered by Seller to Edison at the Point of
Interconnection pursuant to the terms and conditions set forth as follows:
1.1 All Notices shall be sent to Seller at the following address:
Republic Geothermal, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
1.2 Seller's Generating Facility:
a. Nameplate Rating: 46,800 kW.
b. Location: East Mesa, Imperial County, California
c. Type (Check One):
_____ Cogeneration Facility
[ x ] Small Power Production Facility
1.3 Contract Capacity: 24,000 kW
1.3.1 Estimated as-available capacity: 0.
1.4 Expected annual production: 168,192,000 kWh.
1.5 Expected date of Firm Operation: April 1, 1986.
1.6 Contract Term: 30 years.
1.7 Operating Options pursuant to Section 5: (Check One)
[ x ] Operating Option I. Excess Generator output dedicated to
Edison. No electric service or standby service required from Edison.
____ Operating Option II. Entire Generator output dedicated to Edison
with separate electric service required from Edison.
1.8 The Capacity Payment Option selected by Seller pursuant to section 8.1
shall be: (Check One)
____ Option A -- As-available capacity based upon:
____ Standard Offer No. 1 Capacity Payment Schedule, or
____ Forecast of Annual As-Available Capacity Payment Schedule
[ x ]Option B -- Firm Capacity
[ x ]Standard Offer No. 2 Capacity Payment
Schedule in effect at time of Contract execution
____ Standard Offer No. 2 Capacity Payment
Schedule in effect at time of Firm Operation
a. The Contract Capacity Price: $158 kW-yr. (Firm Capacity)
1.9 The Energy Payment Option selected by Seller pursuant to Section
8.2 shall be: (Check One)
[ x ] Option 1 -- Forecast of Annual Marginal Cost of Energy in
effect, at date of execution of this Contract. (Appendix B)
_____ Option 2 -- Levelized Forecast of Marginal Cost of Energy
in effect at date of execution of this Contract. (Appendix C)
For the energy payment refund pursuant to Section 8.5 under
Option 2, Edison's Incremental Cost of Capital is 15%.
Seller may change once between Options 1 and 2, provided Seller
delivers written notice of such change at least 90 days prior to the
date of Firm Operation.
For Option 1 or 2, Seller elects to receive the following percentages
in 20% increments, the total of which shall equal 100%:
100 percent of Forecast of Annual Marginal Cost of Energy, and
0 percent of Edison's published avoided cost of energy as updated
periodically and accepted by the Commission.
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GENERAL TERMS AND CONDITIONS
2. DEFINITIONS
When used with initial capitalizations, whether in the singular or in the
plural, the following terms shall have the following meanings:
2.1 Adjusted Capacity Price: The $/kW-yr capacity purchase price based on
the Capacity Payment Schedule in effect at the time of Contract execution
for the time period beginning on the date of Firm Operation for the first
generating unit and ending on the date of termination or reduction of
Contract Capacity under Capacity Payment Option B.
2.2 Appendix A: Capacity Payment Schedule -- Forecast of Annual
As-Available Capacity
2.3 Appendix B: Energy Payment Schedule -- Forecast of Annual Marginal Cost
of Energy
2.4 Appendix C: Energy Payment Schedule -- Levelized Forecast of Marginal
Cost of Energy
2.5 Capacity Payment Schedule(s): Published capacity payment schedule(s) as
authorized by the Commission and in effect at the tine of execution of this
Contract for as-available or firm capacity.
2.6. Commission: The Public Utilities Commission of the State of
California.
2.7 Contract: This document and Appendices, as amended from time to time.
2.8 Contract Capacity: The electric power producing capability of the
Generating Facility which is committed to Edison.
2.9 Contract Capacity Price: The capacity purchase price from the Capacity
Payment Schedule approved by the Commission and in effect on the date of
execution of this Contract for Capacity Payment Option B.
2.10 Contract Term: Period in years commencing with date of Firm Operation
during which Edison shall purchase electric power from Seller.
2.11 Current Capacity Price: The $/kW-yr capacity price provided in the
Capacity Payment Schedule determined by the year of termination or
reduction of Contract
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Capacity and the number of years from such termination or reduction to the
expiration of the Contract Term for Capacity Payment Option B.
2.12 Edison: The Southern Ca1iforna Edison Company.
2.13 Edison Electric System Integrity: The state of operation of Edison's
electric system in a manner which is deemed to minimize the risk of injury
to persons and/or property and enables Edison to provide adequate and
reliable electric service to its customers.
2.14 Emergency: A condition or situation which in Edison's sole judgment
affects Edison Electric System Integrity.
2.15 Energy: Kilowatthours generated by the Generating Facility which are
purchased by Edison at the Point of Interconnection.
2.16 Firm Operation: The date agreed on by the Parties on which each
generating unit of the Generating Facility is determined to be a reliable
source of generation and on which such unit can be reasonably expected to
operate continuously at its Contract Capacity.
2.17 First Period: The period of the Contract Term specified in
Section 3.1.
2.18 Forced Outage: Any outage other than a scheduled outage of the
Generating Facility that fully or partially curtails its electrical output.
2.19 Generating Facility: All of Seller's generators, together with all
protective and other associated equipment and improvements, necessary to
produce electrical power at Seller's Facility excluding associated land,
land rights, and interests in land.
2.20 Generator: The generator(s) and associated prime mover(s), which are a
part of the Generating Facility.
2.21 Interconnection Facilities: The electrical interconnection facilities
furnished, at no cost to Edison, by Seller, or by the Interconnecting
Utility on the Seller's behalf, which are appurtenant to, and/or incidental
to, the Project. The Interconnection Facilities shall include, but are not
limited to, transmission lines and/or distribution lines between the
Project and transmission lines and/or distribution lines of the
Interconnecting Utility, relays, power-circuit breakers, metering devices,
telemetering devices, and other control and protective devices specified by
the Interconnecting Utility as necessary for operation of the Project in
parallel with the Interconnecting Utility's electric system.
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2.22 Interconnecting Utility: Any utility which takes delivery of
electrical energy generated by the Generating Facility and which transmits
such electrical energy to the Point of Interconnection.
2.23 Operate: To provide the engineering, purchasing, repair, supervision,
training, inspection, testing, protection, operation, use, management,
replacement, retirement, reconstruction, and maintenance of and for the
Generating Facility in accordance with applicable California utility
standards and good engineering practices.
2.24 Operating Representatives: Individual(s) appointed by each Party for
the purpose of securing effective cooperation and interchange of
information between the Parties in connection with administration and
technical matters related to this Contract.
2.25 Parties: Edison and Seller.
2.26 Party: Edison or Seller.
2.27 Peak Months: Those months which the Edison annual system peak demand
could occur. Currently, but subject to change with notice, the peak months
for the Edison system are June, July, August, and September.
2.28 Point of Interconnection: The point where the electrical energy
generated by the Seller at the Project is delivered to the Edison electric
system.
2.29 Project: The Generating Facility and Interconnection Facilities
required to permit the Generator to deliver electric energy and make
capacity available to Interconnecting Utility.
2.30 Qualifying Facility: Cogeneration or Small Power Production Facility
which meets the criteria as defined in Title 18, Code of Federal
Regulations, Section 292.201 through 292.207.
2.31 Renewable Resources: Wind parks, small hydroelectric, solar, and
geothermal resources which produce electric power.
2.32 Second Period: The period of the Contract Term specified in Section
3.2.
2.33 Seller: The Party identified in Section 1.0.
2.34 Seller's Facility: The premises and equipment of Seller located as
specified in Section 1.2.
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2.35 Small Power Production Facility: The facilities and equipment which
use biomass, waste, or Renewable Resources, including wind, solar,
geothermal, and water, to produce electrical energy as defined in Title 18,
Code of Federal Regulations, Section 292.201 through 292.207.
2.36 Summer Period: Defined in Edison's Tariff Schedule No. TOU-8 as now in
effect or as may hereafter be authorized by the Commission.
2.37 Tariff Schedule No. TOU-8: Edison's time-of-use energy tariff for
electric service exceeding 500 kW, as now in effect or as may hereafter be
authorized by the Commission.
2.38 Uncontrollable Forces: Any occurrence beyond the control of a Party
which causes that Party to be unable to perform its obligations hereunder
and which a Party has been unable to overcome by the exercise of due
diligence, including but not limited to flood, drought, earthquake, storm,
fire, pestilence, lightning and other natural catastrophes, epidemic, war,
riot, civil disturbance or disobedience, strike, labor dispute, action or
inaction of government or other proper authority, which may conflict with
the terms of this Contract, or failure, threat of failure or sabotage of
facilities which have been maintained in accordance with good engineering
and operating practices in California. The failure of the Interconnecting
Utility to deliver electrical energy to the Point of Interconnection shall
be an Uncontrollable Force only if such failure is beyond the control of
the Interconnecting Utility.
2.39 Winter Period: Defined in Edison's Tariff Schedule No. TOC-8 as now in
effect or as may hereafter be authorized by the Commission.
3. TERM
This Contract shall be effective upon execution by the Parties and shall
remain effective until either Party gives 90 days prior written notice of
termination to the other Party, except that such notice of termination
shall not be effective to terminate this Contract prior to expiration of
the Contract Term specified in Section 1.6.
3.1 The First Period of the Contract Term shall commence upon date of Firm
Operation but not later than 5 years from the date of execution of
this contract.
a. If the Contract Term specified in Section 1.6 is 15 years, the
first Period of the Contract Term shall be for 5 years.
b. If the Contract Term specified in Section 1.6 is 20, 25, or 30
years, the First Period of the Contract Term shall be for 10
years.
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3.2 The Second Period of the Contract Term shall commence upon expiration
of the First Period and shall continue for the remainder of the
Contract Term.
4. GENERATING FACILITY
4.1 Ownership
The Generating Facility shall be owned by Seller.
4.2 Design
4.2.1 Seller, at no cost to Edison, shall:
a. Design the Generating Facility.
b. Acquire all permits and other approvals necessary for the
construction, operation, and maintenance of the Generating
Facility.
c. Complete all environmental impact studies necessary for the
construction, operation, and maintenance of the Generating
Facility.
4.2.2 Edison shall have the right to review the design of the
Generating Facility's electrical system and the Seller's
Interconnection Facilities. Edison shall have the right to request
modifications to the design of the Generating Facility's electrical
system and the Seller's Interconnection Facilities. Such modifications
shall be required if necessary to maintain Edison Electric System
Integrity. If Seller does not agree to such modifications, resolution
of the difference between the Parties shall be made pursuant to
Section 23.
4.3 Construction
Edison shall have the right to review, consult with, and make
recommendations regarding Seller's construction schedule and to
monitor the construction and start-up of the Project. Seller shall
notify Edison, as far in advance of Firm Operation as reasonably
possible, of changes in Seller's Construction Schedule which may
affect the date of Firm Operation.
4.4 Operation
4.4.1. Edison shall have the right to monitor operation of the Project
and may require changes in Seller's method of operation if such
changes are necessary, in Edison's sole judgment, to maintain
Edison Electric System Integrity.
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4.4.2 Seller shall notify, in writing, Edison's Operating
Representative at least 14 days prior to the initial delivery
of electrical energy from the Project to the Point of
Interconnection.
4.4.3 Edison shall have the right to require Seller to curtail or
reduce the delivery of electrical energy from the Project to
the Edison electric system whenever Edison determines, in its
sole judgment, that such curtailment or reduction is necessary
to facilitate maintenance of Edison's facilities, or to
maintain Edison Electric System Integrity. If Edison requires
Seller to curtail or reduce the delivery of electrical energy
from the Project to the Edison electric system pursuant to this
Section 4.4.3, Seller shall have the right to continue to serve
its total electrical requirements. Each Party shall endeavor to
correct, within a reasonable period, the condition on its
system which necessitates the curtailment or the reduction of
delivery of electrical energy from the Project. The duration of
the curtailment or the reduction shall be limited to the period
of time such a condition exists.
4.4.4 Each Party shall keep the other Party's Operating
Representative informed as to the operating schedule of their
respective facilities affecting each other's operation
hereunder, including any reduction in Contract Capacity
availability. In addition, Seller shall provide Edison with
reasonable advance notice regarding its scheduled outages
including any reduction in Contract Capacity availability.
Reasonable advance notice is as follows:
SCHEDULED OUTAGE ADVANTAGE NOTICE
EXPECTED DURATION TO EDISON
----------------- ----------------
Less than one day 24 Hours
One day or more 1 Week
(except major overhauls)
Major overhaul 6 Months
4.4.5 Notification by each Party's Operating Representative of outage
date and duration should be directed to the other Party's
Operating Representative by telephone.
4.4.6 Seller shall not schedule major overhauls during Peak Months.
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4.4.7 Seller shall maintain an operating log at Seller's Facility
with records of: real and reactive power production; changes in
operating status, outages, Protective Apparatus operations; and
any unusual conditions found during inspections. Changes in
setting shall also be logged for Generators which are
"block-loaded" to a specific kW capacity. In addition, Seller
shall maintain records applicable to the Generating Facility,
including the electrical characteristics of the Generator and
settings, adjustments of the Generator control equipment, and
well-field information. Information maintained pursuant to this
Section 4.4.7 shall, be provided to Edison, within 30 days of
Edison's request.
4.4.8 At Edison's request, Seller shall make all reasonable effort to
deliver power at an average rate of delivery at least equal to
the Contract Capacity during periods of Emergency. In the event
that the Seller has previously scheduled an outage coincident
with an Emergency, Seller shall make all reasonable efforts to
reschedule the outage. The notification periods listed in
Section 4.4.4 shall be waived by Edison if Seller reschedules
the outage.
4.4.9 Seller shall demonstrate the ability to provide Edison the
specified Contract Capacity within 30 days of the date of Firm
Operation. Thereafter, at least once per year at Edison's
request, Seller shall demonstrate the ability to provide
Contract Capacity for a reasonable period of time as required
by Edison. Seller's demonstration of Contract Capacity shall be
at Seller's expense and conducted at a time and pursuant to
procedures mutually agreed upon by the Parties. If Seller fails
to demonstrate the ability to provide the Contract Capacity,
the Contract Capacity shall be reduced by agreement of the
Parties pursuant to Section 8.1.2.5.
4.4.10 Seller warrants that, at the date of first electrical energy
deliveries from the Project and during the term of this
Contract, the Generating Facility shall meet the requirements
established as of the effective date of this Contract by the
Federal Energy Regulatory Commission's rules (Title 18, Code of
Federal Regulations, Section 292.201 through 292.207)
implementing the Public Utility Regulatory Policies Act of 1978
(16 U.S.C.A. 79696 et seq.).
4.4.11 The Seller warrants that the Generating Facility shall, at all
times, conform to all applicable laws and regulations. Seller
shall obtain and maintain any governmental authorizations and
permits for the continued operation of the Generating Facility.
If, at any time, Seller does not hold
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such authorizations and permits, Seller agrees to reimburse
Edison for any loss which Edison incurs as a result of the
Seller's failure to maintain governmental authorization and
permits.
4.4.12 In the event electrical energy from the Project is curtailed or
reduced pursuant to Sections 4.4.3, 16 or 8.4, the Seller, in
its sole discretion, may elect to (i) sell said electrical
energy to a third party or (ii) deliver said electrical energy
to a third party for future delivery to Edison at times and at
amounts agreeable to Edison. The Seller shall be responsible
for making all such arrangements. The provisions in this
Section 4.4.12 shall only apply for the duration of the
curtailment or reduction.
4.4.13 Seller shall maintain operating communications with the Edison
switching center designated by the Edison Operating
Representative. The operating communications shall include, but
not be limited to, system paralleling or separation, scheduled
and unscheduled shutdowns, equipment clearances, levels of
operating voltage, reactive power generation, and daily
capacity and generation reports.
4.5 Maintenance
4.5.1 Seller shall maintain the Generating Facility in accordance
with applicable California utility industry standards and good
engineering and operating practices. Edison shall have the
right to monitor such maintenance of the Generating Facility.
Seller shall maintain and deliver a maintenance record of the
Generating Facility to Edison's Operating Representatives upon
request.
4.5.2 Seller shall make a reasonable effort to schedule routine
maintenance during Off-Peak Months. Outages for scheduled
maintenance shall not exceed a total of 30 peak hours for the
Peak Months.
4.5.3 The allowance for scheduled maintenance is as follows:
a. Outage periods for scheduled maintenance shall not exceed
840 hours (35 days) in any l2-month period. This allowance may
be used in increments of an hour or longer on a consecutive or
nonconsecutive basis.
b. Seller may accumulate unused maintenance hours on a
year-to-year basis up to a maximum of 1,080 hours (45 days).
This accrued time must be used consecutively and only for major
overhauls.
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4.6 Any review by Edison of the design, construction, operation, or
maintenance of the Project is solely for the information of Edison. By
making such review, Edison makes no representation as to the economic and
technical feasibility, operational capability, or reliability of the
Project. Seller shall in no way represent to any third party that any such
review by Edison of the Project, including, but not limited to, any review
of the design, construction, operation, or maintenance of the Project by
Edison, is a representation by Edison as to the economic and technical
feasibility, operational capability, or reliability of said facilities.
Seller is solely responsible for economic and technical feasibility,
operational capability, and reliability thereof.
4.7 Edison shall have access to the Seller's geothermal field and
power-generating facilities for the purpose of gathering technical
information and records. The technical information and records shall
include, but not be limited to, drilling data, well-testing data,
well-production data and design, power plant performance data and design,
environmental data, brine handling design, and operation and maintenance
data. Edison agrees not to interfere with Seller's rules and operating
regulations.
5. OPERATING OPTIONS
5.1 Seller shall elect in Section 1.7 to Operate its Generating Facility
pursuant to one of the following options:
a. Operating Option I: Seller dedicates the excess Generator output to
Edison with no electrical service or standby service required from
Edison.
b. Operating Option II: Seller dedicates the entire Generator output
to Edison with electrical service required from Edison.
5.2 After expiration of the First Period of the Contract Term, Seller may
change the Operating Option, but not more than once per year upon at least
90 days prior written notice to Edison. A reduction in Contract Capacity as
a result of a change in operating options shall be subject to Section
8.1.2.5. Edison shall not be required to remove or reserve capacity of
Interconnection Facilities made idle by a change in operating options.
Edison may dedicate any such idle Interconnection Facilities at any time to
serve other customers or to interconnect with other electric power sources.
Edison shall process requests for changes of operating option in the
chronological order received.
6. INTERCONNECTION FACILITIES
6.1 Seller shall design, engineer, procure, construct, and test the
Interconnection Facilities in accordance with applicable California utility
standards and good
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engineering practices and the rules and regulations of the Interconnecting
Utility or shall contract with the Interconnecting Utility or an
independent contractor acceptable to Edison to furnish such design,
engineering, procurement, construction and testing.
6.2 The design, installation, operation, maintenance, and modifications of
the Interconnection Facilities shall be at Seller's expense.
6.3 Seller, at no cost to Edison, shall acquire all permits and approvals
and complete all environmental impact studies necessary for the design,
installation, operation, and maintenance of the Interconnection Facilities.
7. METERING
7.1. All meters and equipment used for the measurement of electrical power
for determining Edison's payments to Seller pursuant to this Contract shall
be provided, owned, and maintained by Edison and/or the Interconnecting
Utility at Seller's expense.
7.2 If Seller's Generating Facility is rated at a Capacity of 500 kW or
greater, then Edison, at its option, may install at Seller's expense,
generation metering and/or telemetering equipment.
7.3 Edison's or the Interconnecting Utility's meters shall be sealed and
the seals shall be broken only when the meters are to be inspected, tested,
or adjusted by Edison or Interconnecting Utility. Seller shall be given
reasonable notice of testing and have the right to have its Operating
Representative present on such occasions.
7.4 Edison's or Interconnecting Utility's meters installed pursuant to this
Contract shall be tested by Edison or Interconnecting Utility, at Edison's
or Interconnecting Utility's expense, at least once each year and at any
reasonable time upon request by either Party, at the requesting Party's
expense. If Seller makes such request, Seller shall reimburse said expense
to Edison or Interconnecting Utility within thirty days after presentation
of a ▇▇▇▇ therefor.
7.5 Metering equipment found to be inaccurate shall be repaired, adjusted,
or replaced by Edison or Interconnecting Utility such that the metering
accuracy of said equipment shall be within plus or minus two percent. If
metering equipment inaccuracy exceeds plus or sinus two percent, the
correct amount of Energy and capacity delivered during the period of said
inaccuracy shall be estimated by Edison and agreed upon by the Parties.
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8. POWER PURCHASE PROVISIONS
Prior to the date of Firm Operation, Seller shall be paid for Energy only
pursuant to Edison's published avoided cost of energy based on Edison's
full avoided operating cost as periodically updated and accepted by the
Commission. If at any time electrical energy can be delivered to Edison and
Seller is contesting the claimed jurisdiction of any entity which has not
issued a license or other approval for the Project, Seller, in its sole
discretion and risk, may deliver electrical energy to Edison and for any
electrical energy purchased by Edison Seller shall receive payment from
Edison for (i) Energy pursuant to this Section, and (ii) as-available
capacity based on a capacity price from the Standard Offer No. 1 Capacity
Payment Schedule as approved by the Commission. Unless and until all
required licenses and approvals have been obtained, Seller may discontinue
deliveries at any time.
8.1 Capacity Payments
Seller shall sell to Edison and Edison shall purchase from Seller capacity
pursuant to the Capacity Payment Option selected by Seller in Section 1.8.
The Capacity Payment Schedules will be based on Edison's full avoided
operating costs as approved by the Commission throughout the life of this
Contract.
8.1.1 Capacity Payment Option A -- As-Available Capacity.
If Seller selects Capacity Payment Option A, Seller shall be paid a
Monthly Capacity Payment calculated pursuant to the following formula:
Monthly Capacity Payment = (A x D)+(B x D)+(C x D)
Where A = kWh purchased by Edison during on-peak periods defined
in Edison's Tariff Schedule No. TOU-8.
B = kWh purchased by Edison during mid-peak periods defined in
Edison's Tariff Schedule No. TOU-8.
C = kWh purchased by Edison during off-peak periods defined in
Edison's Tariff Schedule No. TOU-8
D = The appropriate time differentiated capacity price from
either the Standard Offer No. 1 Capacity Payment Schedule or
Forecast of Annual As-Available Capacity Payment Schedule as
specified by Seller in Section 1.8.
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8.1.1.1 If Seller specifies the Standard Offer No. 1 Capacity
Payment Schedule in Section 1.8, then the formula set forth in
Section 8.1.1 shall be computed with D equal to the appropriate
time differentiated capacity price from the Standard Offer No. 1
Capacity Payment Schedule for the Contract Term.
8.1.1.2 If Seller specifies the Forecast of Annual As-Available
Capacity Payment Schedule in Section 1.8, the formula set forth
in section 8.1.1 shall be computed as follows:
a. During the First Period of the Contract Term, D shall
equal the appropriate time differentiated capacity price
from the Forecast of Annual As-Available Capacity Payment
Schedule.
b. During the Second Period of the Contract Term, the
formula shall be computed with D equal to the appropriate
time differentiated capacity price from Standard Offer No. 1
Capacity Payment Schedule, but not less than the greater of
(i) the appropriate time differentiated capacity price from
the forecast of Annual As-Available Capacity Payment
Schedule for the last year of the First Period, or (ii) the
appropriate time differentiated capacity price from the
Standard Offer No. 1. Capacity Payment Schedule for the
first year of the Second Period.
8.1.2 Capacity Payment Option B--Firm Capacity Purchase
If Seller selects Capacity Payment Option B, Seller shall
provide to Edison for the Contract Term the Contract
Capacity specified in Section 1.3, or as adjusted pursuant
to Section 8.1.2.6, and Seller shall be paid as follows:
8.1.2.1 If Seller meets the performance requirements set
forth in Section 8.1.2.2, Seller shall be paid a Monthly
Capacity Payment, beginning from the date of Firm
Operation equal to the sum of the on-peak, mid-peak, and
off-peak Capacity Period Payments. Each capacity period
payment is calculated pursuant to the following formula:
Monthly Capacity Period = A x B x C x D
Payment
Where A = Contract Capacity Price specified in Section 1.8
based on the Standard Offer No. 2 Capacity Payment
Schedule as approved by
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the Commission and in effect on the date of the
execution of this Agreement.
B = Conversion factors to convert annual capacity prices
to monthly payments by time of delivery as specified
in Standard Offer No. 2 Capacity Payment Schedule and
subject to periodic modifications as approved by the
Commission.
C = Contract Capacity specified in Section 1.3.
D = Period Performance Factor, not to exceed 1.0,
calculated as follows:
Period Performance Factor = [Period kWh Purchased by Edison (Limited
by the Level of Contract Capacity)]
--------------------------------------------------------------------------------
[0.8 x Contract Capacity x (Period Hours minus Maintenance Hours
Allowed in Section 4.5.)]
8.1.2.2 Performance Requirements
To receive the Monthly Capacity Payment in Section
8.1.2.1, Seller shall provide the Contract Capacity in
each Peak Month for all on-peak hours as such peak hours
are defined in Edison's Tariff Schedule No. TOU-8 on file
with the Commission, except that Seller is entitled to a
20% allowance for Forced Outages for each Peak Month.
Seller shall not be subject to such performance
requirements for the remaining hours of the year.
a. If Seller fails to meet the requirements specified in
Section 8.1.2.2, Seller, in Edison's sole discretion,
may be placed on probation for a period not to exceed
15 months. If Seller fails to meet the requirements
specified in Section 8.1.2.2 during the probationary
period, Edison may derate the Contract Capacity to the
greater of the capacity actually delivered during the
probationary period, or the capacity at which Seller
can reasonably meet such requirements. A reduction in
Contract Capacity as a result of this Section 8.1.2.2
shall be subject to Section 8.1.2.5.
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b. If Seller fails to meet the requirements set forth in
this Section 8.1.2.2 due to a forced outage on the
Edison system, or a request to reduce or curtail
delivery under Section 8.4, Edison shall continue
Monthly Capacity Payments pursuant to Capacity Payment
Option B. The Contract Capacity curtailed shall be
treated the same as scheduled maintenance outages in
the calculation of the Monthly Capacity Payment.
8.1.2.3 If Seller is unable to provide Contract Capacity due to
Uncontrollable Forces, Edison shall continue Monthly
Capacity Payments pursuant to Capacity Payment Option B
for 90 days from the occurrence of the Uncontrollable
Force. Monthly Capacity Payments payable during a period
of interruption or reduction by reason of an
Uncontrollable Force shall be treated the same as
scheduled maintenance outages.
8.1.2.4 Capacity Bonus Payment
For Capacity Payment Option B, Seller may receive a
Capacity Bonus Payment as follows:
a. Bonus During Peak Months
For a Peak Month, Seller shall receive a Capacity
Bonus Payment if (i) the requirements set forth in
Section 8.1.2.2 have been met, and (ii) the on-peak
capacity factor exceeds 85%.
b. Bonus During Non-Peak Months
For a non-peak month, Seller shall receive a Capacity
Bonus Payment if (i) the requirements set forth in
Section 8.1.2.2 have been met, (ii) the on-peak
capacity factor for each Peak Month during the year
was at least 85%, and (iii) the on-peak capacity
factor for the non-peak month exceeds 85%.
c. For any eligible month, the Capacity Bonus Payment
shall be calculated as follows:
Capacity Bonus Payment = A x B x C x D
Where A = (1.2 x On-Peak Capacity Factor)-1.02
Where the On-Peak Capacity Factor, not to exceed 1.0, is calculated as follows:
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(Period kWh Purchased by Edison (Limited by the Level
of Contract Capacity))
On-Peak Capacity Factor = [(Contract Capacity) x (Period Hours minus Maintenance
Hours Allowed in Section 4.5)]
B = Contract Capacity Price specified in Section 1.8
for Capacity Payment Option B
C = 1/12
D = Contract Capacity specified in Section 1.3
d. When Seller is entitled to receive a Capacity
Bonus Payment, the Monthly Capacity Payment
shall be the sum of the Monthly Capacity
Payment pursuant to Section 8.1.2.1 and the
Monthly Capacity Bonus Payment pursuant to this
Section 8.1.2.4.
8.1.2.5 Capacity Reduction
a. Seller may reduce the Contract Capacity specified
in Section 1.3, provided that Seller gives Edison
prior written notice for a period determined by
the amount of Contract Capacity reduced as
follows:
Amount of Contract Length of
Capacity Reduced Notice Required
---------------- ---------------
23,000 kW or under 12 months
25,001- 50,000 kW 36 months
50,001 - 100,000 kW 48 months
over 100,000 kW 60 months
b. Subject to Section 9.3, Seller shall refund to
Edison with interest at the current published
Federal Reserve Board three months prime
commercial paper rate, an amount equal to the
difference between (i) the accumulated Monthly
Capacity Payments paid by Edison pursuant to
Capacity Payment Option B up to the time the
reduction notice is received by Edison, and (ii)
the total capacity payments which Edison would
have paid if based on the Adjusted Capacity Price.
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c. From the date the reduction notice is received to
the date of actual capacity reduction, Edison
shall make capacity payments based on the Adjusted
Capacity Price for the amount of Contract Capacity
being reduced.
d. Seller may reduce Contract Capacity without the
notice prescribed in Section 8.1.2.5(a), provided
that Seller shall refund to Edison the amount
specified in Section 8.1.2.5(b) and an amount
equal to: (i) the amount of Contract Capacity
being reduced, times (ii) the difference between
the Current Capacity Price and the Contract
Capacity Price, times (iii) the number of years
and fractions thereof (not less than one year) by
which the Seller has been deficient in giving the
prescribed notice. If the Current Capacity Price
is less than the Contract Capacity Price, only
payment under Section 8.1.2.5(b) shall, be due to
Edison.
8.1.2.6 Adjustment to Contract Capacity
The Parties may agree in writing at any time to
adjust the Contract Capacity. Seller may reduce the
Contract Capacity pursuant to section 8.1.2.5. Seller
may increase the Contract Capacity with Edison's
approval and thereafter receive payment for the
increased capacity in accordance with the Contract
Capacity Price for the Capacity Payment Option
selected by Seller for the remaining Contract Term.
8.1.2.7 Excess Capacity
For Capacity Payment Option B, Seller shall be paid
for capacity in excess of Contract Capacity based on
the as-available capacity price in Standard Offer No.
1 Capacity Payment Schedule, as updated and approved
by the Commission.
8.2 Energy Payments -- First Period
During the First Period of the Contract Term, Seller shall be paid a
Monthly Energy Payment for the electrical energy delivered by the
Seller and purchased by Edison at the Point of Interconnection
pursuant to the Energy Payment Option selected by the Seller in
Section 1.9, as follows.
8.2.1 Energy Payment Option 1 -- Forecast of Annual Marginal Cost of
Energy. If Seller selects Energy Payment Option 1, then during
the First Period of
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the Contract Term, Seller shall be paid a Monthly Energy
Payment for electrical energy delivered by Seller and
purchased by Edison at the Point of Interconnection during
each month in the First Period of the Contract Term pursuant
to the following formula:
Monthly Energy Payment = [(A x D) + (B x D) + (C x D)] x E
Where A = kWh purchased by Edison during on-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
B = kWh purchased by Edison during mid-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
C = kWh purchased by Edison during off-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
D = The sum of: (i) the appropriate time
differentiated energy price from the Forecast of
Annual Marginal Cost of Energy, multiplied by the
decimal equivalent of the percentage of the forecast
specified in Section 1.9, and (ii) the appropriate
time differentiated energy price from Edison's
published avoided cost of energy multiplied by the
decimal equivalent of the percentage of the
published energy price specified in Section 1.9.
E = Energy Loss Adjustment Factor For Remote Generating
Sites*
*The Energy Loss Adjustment Factor For Remote Generating Sites shall be 1.0,
subject to adjustment by Commission orders and rulings.
8.2.2 Energy Payment Option 2 -- Levelized Forecast of Marginal Cost
of Energy. If Seller selects Energy Payment Option 2, then
during the First Period of the Contract Term, Seller shall be
paid a Monthly Energy Payment for electrical energy delivered
by Seller and purchased by Edison each month during the First
Period of the Contract Term pursuant to the following formula:
Monthly Energy Payment = [(A x D) + (B x D) + (C x D)] x E
Where A = kWh purchased by Edison during on-peak periods
defined in Edison's tariff Schedule No. TOU-8.
19
B = kWh purchased by Edison during mid-peak periods
defined in Edison's tariff Schedule No. TOU-8.
C = kWh purchased by Edison during off-peak periods
defined in Edison's Tariff Schedule No. TOU-8.
D = The sum of: (i) the appropriate time differentiated
energy price from the Levelized Forecast of Marginal
Cost of Energy, for the First Period of the Contract
Term multiplied by the decimal equivalent of the
percentage of the levelized forecast specified in
Section 1.9, and (ii) the appropriate time
differentiated energy price from Edison's published
avoided cost of energy multiplied by the decimal
equivalent of the percentage of the published energy
price specified in Section 1.9.
E = Energy Loss Adjustment Factor For Remote Generating
Sites*
*The Energy Loss Adjustment Factor For Remote Generating Sites shall be 1.0,
subject to adjustment by Commission orders or rulings.
8.2.2.1 Performance Recruitment for Energy Payment Option 2
During the First Period when the annual forecast
referred to in Section 8.2.1 is greater than the
levelized forecast referred to in Section 8.2.2,
Seller shall deliver to Edison at least 70 percent of
the average annual kWh delivered to Edison during
those previous periods when the levelized forecast
referred to in Section 8.2.2 is greater than the
annual forecast referred to in section 8.2.1. If
Seller does not meet the performance requirements of
this Section 8.2.2.1, Seller shall be subject to
Section 8.5.
8.3 Energy Payments -- Second Period
During the Second Period of the Contract Term, Seller shall be paid a
Monthly Energy Payment for electrical energy delivered by Seller and
purchased by Edison at the Point of Interconnection at a rate equal
to 100% of Edison's published avoided cost of energy based on
Edison's full avoided operating cost as updated periodically and
accepted by the Commission, pursuant to the following formula:
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Monthly Energy Payment = kWh purchased by Edison for each on-peak, mid-peak, and
off-peak time period defined in Edison's Tariff
Schedule No. TOU-8
x Edison's published avoided cost of energy by time of
delivery for each time period
x Energy Loss Adjustment Factor for Remote Generating
Sites*
*The Energy Loss Adjustment Factor For Remote Generating Sites shall be 1.0,
subject to adjustment by Commission orders or ruling.
8.4 Edison shall not be obligated to accept or pay for electrical energy
generated by the Generating Facility, and may request Seller whose
Generating Facility is one (1) MW or greater to discontinue or reduce
delivery of electric energy, for not more than 300 hours annually
during off-peak hours when (i) purchases would result in costs
greater than those which Edison would incur if it did not purchase
electrical energy from Seller but instead utilized an equivalent
amount of electrical energy generated from another Edison source, or
(ii) the Edison Electric System demand would require that Edison
hydro-energy be spilled to reduce generation.
8.5 Energy Payment Refund
If Seller elects Energy Payment Option 2, Seller shall be subject to
the following:
8.5.1 If Seller fails to perform the Contract obligations for any
reason during the first Period of the Contract Term, or fails
to meet the performance requirements set forth in Section
8.2.2.1, and at the time of such failure to perform, the net
present value of the cumulative Energy payments received by
Seller pursuant to Energy Payment Option 2 exceeds the net
present value of what Seller would have been paid pursuant to
Energy Payment Option 1, Seller shall make an energy payment
refund equal to the difference in such net present values in
the year in which the refund is due. The present value
calculation shall be based upon the rate of Edison's
incremental cost of capital specified in Section 1.9.
8.5.2 Not Less than 90 days prior to the date Energy is first
delivered to the Point of Interconnection, Seller shall
provide and maintain a performance bond, surety bond,
performance insurance, corporate guarantee, or bank
21
letter of credit, satisfactory to Edison, which shall insure
payment to Edison of the Energy Payment Refund at any time
during the First Period. Edison may, in its sole discretion,
accept another form of security except that in such instance a
1-1/2 percent reduction shall then apply to the levelized
forecast referred to in Section 8.2.2 in computing payments
for Energy. Edison shall be provided with certificates
evidencing Seller's compliance with the security requirements
in this Section which shall also include the requirement that
Edison be given 90 days prior written notice of the expiration
of such security.
8.5.3 If Seller fails to provide replacement security not less than
60 days prior to the date of expiration of existing security,
the Energy Payment Refund provided in Section 8.5 shall be
payable forthwith. Thereafter, payments for Energy shall be
100 percent of the Monthly Energy Payment provided in section
8.2.1.
8.5.4 If Edison at any time determines the security to be otherwise
inadequate, and so notifies Seller, payments thereafter for
Energy shall be 100 percent of the Monthly Energy Payment
provided in Section 8.2.1. If within 30 days of the date
Edison gives notice of such inadequacies, Seller satisfies
Edison's security requirements, Energy Payment Option 2 shall
be reinstated. If Seller fails to satisfy Edison's security
requirements within the 30-day period, the Energy Payment
Refund provided in section 8.5 shall be payable forthwith.
9. PAYMENT AND BILLING PROVISIONS
------------------------------
9.1 For Energy and capacity purchased by Edison:
9.1.1 Edison shall mail to Seller no later than thirty days after
the end of each monthly billing period (1) a statement showing
the Energy and capacity delivered to Edison during the
on-peak, mid-peak, and off-peak periods, as those periods are
specified in Edison's Tariff Schedule No. TOU-8 for that
monthly billing period, (2) Edison's computation of the amount
due Seller, and (3) Edison's check in payment of said amount.
9.1.2 If the monthly payment period involves portions of two
different published Energy payment schedule periods, the
monthly Energy payment shall be prorated on the basis of the
percentage of days at each price.
22
9.1.3 If the payment period is less than 27 days or greater than 33
days, the capacity payment shall be prorated on the basis of
the average days per month per year.
9.1.4 If, within thirty days of receipt of the statement, seller
does not make a report in writing to Edison of an error,
Seller shall be deemed to have waived any error in Edison's
statement, computation, and payment, and they shall be
considered correct and complete.
9.2 Edison shall ▇▇▇▇ the Seller, on a monthly basis, for the costs
Edison has incurred in the transmission of the electrical energy from
the Project to the Point of Interconnection pursuant to the
provisions of Section 26.
9.3 Payments Due to Contract Capacity Reduction
9.3.1 The Parties agree that the refund and payments provided in
Section 8.1.2.5 represent a fair compensation for the
reasonable losses that would result from such reduction of
Contract Capacity.
9.3.2 In the event of a reduction in Contract Capacity, the
quantity, in kW, by which the Contract Capacity is reduced
shall be used to calculate the refunds and payments due Edison
in accordance with Section 8.1.2.5, as applicable.
9.3.3 Edison shall provide invoices to Seller for all refunds and
payments due Edison under this Section 9 which shall be due
within 60 days.
9.3.4 If Seller does not make payments as required in Section 9.2.3,
Edison shall have the right to offset any amounts due it
against any present or future payments due Seller and may
pursuit any other remedies available to Edison as a result of
seller's failure to perform.
9.4 Energy Payment Refund
Energy Payment Refund is immediately due and payable upon Seller's
failure to perform the contract obligations as specified in Section
8.5.
10. TAXES
10.1 Seller shall pay ad valorem taxes and other taxes properly
attributable to the Project. If such taxes are assessed or levied
against Edison, Seller shall pay Edison for such assessment or levy.
23
10.2 Seller shall pay ad valorem taxes and other taxes properly attributed
to land, land rights, or interest in land for the Project. If such
taxes are assessed or levied against Edison, Seller shall pay Edison
for such assessment or levy.
10.3 Edison shall refer any requests for information regarding the Project
from any taxing authority to Seller, and Seller shall not withhold
any properly requested information from any requesting taxing
authority.
11. TERMINATION
This Contract shall terminate if Firm Operation does not occur within 5
years of the date of contract execution.
12. SALE OF GENERATING FACILITY
12.1 If Seller desires to sell the Generating Facility, Seller shall
promptly offer to Edison, or any entity designated by Edison in its
sole discretion, the right to purchase the Generating Facility.
Edison, or any such entity designated by Edison, shall have up to
sixty days following the offer to accept Seller's offer or reach
agreement with Seller.
12.2 If the Parties are unable to reach a satisfactory agreement within
sixty days following the offer pursuant to Section 12.1, and the
Generating Facility is offered to any third party or parties, Edison,
or any such entity designated by Edison, has the right for thirty
days following each offer to agree to purchase the Generating
Facility under the same terms and conditions, if such terms and
conditions are better to Edison than those offered in Section 12.1.
Any offers to sell made more than two years after Edison's failure to
accept a previous offer to sell under Section 12.1, shall again be
subject to the terms of Sections 12.1 and 12.2.
13. ABANDONMENT OF PROJECT
13.1 The Generating Facility shall be deemed to be abandoned if Seller
discontinues operation of the Generating Facility with the intent
that such discontinuation be permanent. Such intent shall be
conclusively presumed by either (i) Seller's notice to Edison of such
intent, or (ii) Seller's operation of the Generating Facility in such
a manner that no Energy is generated therefrom for 200 consecutive
days during any period after Firm Operation of the first generating
unit, unless otherwise agreed to in writing by the Parties. If the
Project is prevented from generating Energy due to an Uncontrollable
Force, then such
24
period shall be extended for the duration of the Uncontrollable
Force, not to exceed one year.
13.2 If Seller abandons the Generating Facility during the term of this
Agreement, Edison, or any entity designated by Edison in its sole
discretion, shall have the right to purchase the Generating Facility
pursuant to the provisions of Section 12.
14. LIABILITY
14.1 Each Party (First Party) releases the other Party (Second Party), its
directors, officers, employees and agents from any loss, damage,
claim, cost, charge, or expense of any kind or nature (including any
direct, indirect or consequential loss, damage, claim, cost, charge,
or expense), including attorney's fees and other costs of litigation
incurred by the First Party, in connection with damage to property of
the First Party caused by or arising out of the Second Party's
construction, engineering, repair, supervision, inspection, testing,
protection, operation, maintenance, replacement, reconstruction, use
or ownership of its facilities, to the extent that such loss, damage,
claim, cost, charge, or expense is caused by the negligence of Second
Party, its directors, officers, employees, agents, or any person or
entity whose negligence would be imputed to Second Party.
14.2 Each Party shall indemnify and hold harmless the other Party, its
directors, officers, and employees or agents from and against any
loss, damage, claim, cost, charge, or expense of any kind or nature
(including direct, indirect or consequential loss, damage, claim,
cost, charge, or expense), including attorney's fees and other costs
of litigation, incurred by the other Party in connection with the
injury to or death of any person or damage to property of a third
party arising out of the indemnifying Party's construction,
engineering, repair, supervision, inspection, testing, protection,
operation, maintenance, replacement, reconstruction, use, or
ownership of its facilities, to the extent that such loss, damage,
claim, cost, charge, or expense is caused by the negligence of the
indemnifying Party, its directors, officers, employees, agents, or
any person or entity whose negligence would be imputed to the
indemnifying Party; provided, however, that each Party shall be
solely responsible for and shall bear all cost of claims brought by
its contractors or its own employees and shall indemnify and hold
harmless the other Party for any such costs including costs arising
out of any workers compensation law. Seller releases and shall defend
and indemnify Edison from any claim, cost, loss, damage, or liability
arising from any contrary representation concerning the effect of
Edison's review of the design, construction, operation, or
maintenance of the Project.
25
14.3 The provisions of this Section 14 shall not be construed so as to
relieve any insurer of its obligations to pay any insurance claims in
accordance with the provisions of any valid insurance policy.
14.4 Neither Party shall be indemnified by the other Party under Section
14.2 for its liability or loss resulting from its sole negligence or
willful misconduct.
15. INSURANCE
15.1 Until Contract is terminated, Seller shall obtain and maintain in
force as hereinafter provided comprehensive general liability
insurance, including contractual liability coverage, with a combined
single limit of not less than $l,000,000 each occurrence. The
insurance carrier or carriers and form of policy shall be subject to
review and approval by Edison.
15.2 Prior to the date Seller's generating facility first delivers
electrical energy to the Point of Interconnection, Seller shall (i)
furnish certificate of insurance to Edison, which certificate shall
provide that such insurance shall not be terminated nor expire except
on thirty days prior written notice to Edison, (ii) maintain such
insurance in effect for so long as Seller's Generating Facility is
delivering electrical energy to the Point of Interconnection, and
(iii) furnish to Edison an additional insured endorsement with
respect to such insurance in substantially the following form: "In
consideration of the premium charged, Southern California Edison
Company (Edison) is named as additional insured with respect to all
liabilities arising out of Seller's use and ownership of Seller's
Generating Facility.
"The inclusion of more than one insured under this policy shall not
operate to impair the rights of one insured against another insured
and the coverages afforded by this policy will apply as though
separate policies had been issued to each insured. The inclusion of
more than one insured will not, however, operate to increase the
limit of the carrier's liability. Edison will not, by reason of its
inclusion under this policy, incur liability to the insurance carrier
for payment of premium for this policy.
"Any other insurance carried by Edison which may be applicable shall
be deemed excess insurance and Seller's insurance primary for all
purposes despite any conflicting provisions in Seller's policy to be
contrary."
15.3 If Seller fails to comply with the provisions of this Section 15,
Seller shall, at its own cost, defend, indemnify, and hold harmless
Edison, its directors, officers, employees, agents, assigns, and
successors in interest from and against any and
26
all loss, damage, claim, cost, charge, or expense of any kind or
nature (including direct, indirect or consequential loss, damage,
claim, cost, charge, or expense, including attorney's fees and other
costs of litigation) resulting from the death or injury to any person
or damage to any property, including the personnel and property of
Edison, to the extent that Edison would have been protected had
Seller complied with all of the provisions of this Section 15.
16. UNCONTROLLABLE FORCES
16.1 Neither Party shall be considered to be in default in the performance
of any of the agreements contained in this Contract, except for
obligations to pay money when and to the extent failure of
performance shall be caused by an Uncontrollable Force.
16.2 If either Party, because of an Uncontrollable Force, is rendered
wholly or partly unable to perform its obligations under this
Contract, the Party shall be excused from whatever performance is
affected by the Uncontrollable Force to the extent so affected
provided that:
(1) The non-performing Party, within two weeks after the occurrence
of the Uncontrollable Force, 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 Uncontrollable Force;
(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);
(4) When the non-performing Party is able to resume performance of
its obligations under this Contract, that Party shall give the
other Party written notice to that effect; and
(5) Capacity payments during such periods of Uncontrollable Force on
Seller's part shall be governed by Section 8.1.2.3.
27
16.3 In the event that either Party's ability to perform cannot be
corrected when the Uncontrollable Force is caused by the actions or
inactions of legislative, judicial or regulatory agencies or other
proper authority, this Contract may be mended to comply with the
legal or regulatory change which caused the nonperformance.
If a loss of Qualifying Facility status occurs due to an
Uncontrollable Force and Seller fails to make the changes necessary
to maintain its Qualifying Facility status, the Seller shall
compensate Edison for any economic detriment incurred by Edison as a
result of such failure.
17. NONDEDICATION OF FACILITIES
Neither Party, by this Contract, dedicates any part of its facilities
involved in this Project to the public or to the service provided under the
Contract, and such service shall cease upon termination of the Contract.
18. PRIORITY OF DOCUMENTS
If there is a conflict between this document and any Appendix, the
provisions of this document shall govern. Each Party shall notify the other
immediately upon the determination of the existence of any such conflict.
19. NOTICES AND CORRESPONDENCE
All notices and correspondence pertaining to this Contract shall be in
writing and shall be sufficient if delivered in person or seat by certified
mail, postage prepaid, return receipt requested, to Seller as specified in
Section 1.1, or to Edison as follows:
Southern California Edison Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
All notices sent pursuant to this Section 19 shall be effective when
received, and each Party shall be entitled to specify as its proper address
any other address in the United States upon written notice to the other
Party.
20. PREVIOUS COMMUNICATIONS
This Contract contains the entire agreement and understanding between the
Parties, their agents, and employees as to the subject matter of this
contract, and merges and supersedes all prior agreements, commitments,
representations, and discussions
28
between the Parties. No Party shall be bound to any other obligations,
conditions, or representations with respect to the subject matter of this
Contract.
21. THIRD PARTY BENEFICIARIES
This Contract is for the sole benefit of the Parties and shall not be
construed as granting any rights to any person or entity other than the
Parties or imposing obligations on either Party to any person or entity
other than the Parties.
22. NONWAIVER
None of the provisions of the Contract shall be considered waived by either
Party except when such waiver is given in writing. The failure of either
Edison or Seller to insist in any one or more instances upon strict
performance of any of the provisions of the Contract or to take advantage
of any of its rights hereunder shall not be construed as a waiver of any
such provisions or the relinquishment of any such rights for the future,
but the same shall continue to remain in full force and effect.
23. DISPUTES
23.1 Any dispute arising between the Parties relating to interpretation of
the provisions of this Contract or to performance of the Parties
hereunder, other than matters which may not be settled without the
consent of an involved insurance company, shall be reduced to
writing, by the complaining Party, stating the complaint and proposed
solution and submitted to the other Party's manager responsible for
the administration of this Contract. Such manager's interpretation
and decision thereon shall be incorporated into a written document
outlining his interpretation and decision and specifying that it is
the final decision of such manager. A copy of such document shall be
furnished to complaining Party within ten days following the receipt
of complaining Party's written complaint.
23.2 The decision of such manager pursuant to Section 23.1 shall be final
and conclusive from the date of receipt of such copy by the
complaining Party, unless within thirty days complaining Party
furnishes a written appeal to such manager. Following receipt of such
appeal, a joint hearing shall be held within fifteen days of said
appeal, at which time the Parties shall each be afforded an
opportunity to present evidence in support of their respective
positions. Such joint hearing shall be conducted by one authorized
representative of Seller and one authorized representative of Edison
and other necessary persons. Pending final decision of a dispute
hereunder, the Parties shall proceed diligently with the performance
of their obligations under this Contract.
29
23.3 The final decision by the Parties' authorized representatives shall
be made within fifteen days after presentation of all evidence
affecting the dispute, and shall be reduced to writing. The decision
shall be final and conclusive.
23.4 If the authorized representatives cannot reach a final decision
within the fifteen-day period set forth in Section 23.3, any remedies
which are provided by law may be pursued.
24. SUCCESSORS AND ASSIGNS
Neither Party shall voluntarily assign its rights nor delegate its duties
under this Contract, 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 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 unreasonably withheld. Such assignment
shall include, unless otherwise specified therein, all of Seller's rights
to any refunds which might become due under the Contract.
25. EFFECT OF SECTION READINGS
Section headings appearing in this Agreement are inserted for convenience
only, and shall not be construed as interpretations of text.
26. TRANSMISSION
26.1 Edison shall endeavor to make arrangements with Interconnecting
Utilities for the necessary transmission of the electrical energy
from the Project to the Point of Interconnection. Seller shall be
responsible for all such costs associated with such transmission of
electrical energy, including the cost of transmission losses from the
Project to the Point of Interconnection as provided for in the
transmission arrangements between Edison and the Interconnecting
Utilities.
26.2 If Edison is unable to secure firm transmission service or equivalent
arrangements from Interconnecting Utilities which are required to
transmit the electrical energy from the Project to the Point of
Interconnection at terms and conditions satisfactory to Edison in its
sole judgment, then Edison shall not be liable to the Seller for any
damages arising from Edison's failure to secure said transmission
service or arrangements nor will Edison be required to purchase
Energy which is not delivered or capacity which is not made available
at the Point of Interconnection.
30
26.3 If Edison is able to secure transmission service or equivalent
arrangements from Interconnecting Utilities which are required to
transmit the electrical energy from the Project to the Point of
Interconnection, then Edison shall notify Seller of the costs, terms
and conditions of such arrangements and Seller shall have 60 calendar
days to accept or reject such service or arrangements. In the event
Seller rejects such service or arrangements, then Edison shall not be
obligated to seek other service or arrangements, nor will Edison be
liable to the Seller for any damages arising from Seller's failure to
accept such service or arrangements, nor will Edison be required to
purchase Energy which is not delivered or capacity which is not made
available at the Point of Interconnection.
21. GOVERNING LAW
This Contract shall be interpreted, governed, and construed under the laws
of the State of California as if executed and to be performed wholly within
the State of California.
28. CONFIDENTIALITY
28.1 Except as provided herein, the Parties shall hold all information in
this Contract and all information related to or received pursuant to
this Contract as confidential.
28.2 Neither Party shall disclose any part nor the whole of this Contract
to any third party without the express prior written consent of the
other Party; such consent shall not be unreasonably withheld.
28.3 From time to time governmental and/or regulatory agencies may request
disclosure of the Contract or Contract-related information from
either Party or both Parties and if such is the case either Party or
both Parties may consent to such disclosure provided, that (i) the
requestor(s) be notified by the disclosing Party that the information
being released is confidential, and that (ii) the disclosing Party
inform the other Party to the extent practicable, 10 days prior to
delivery of the information, in writing, as to the nature of the
information to be disclosed and to whom disclosed.
29. MULTIPLE ORIGINALS
This Contract is executed in two counterparts, each of which shall be
deemed an original.
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SIGNATURES
IN WITNESS WHEREOF, the Parties hereto have executed this Contract this 18th of
July, 1984.
SOUTHERN CALIFORNIA EDISON COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Vice President
REPUBLIC GEOTHERMAL, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
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