--------------------------------------------
LONG TERM FIRM
POWER PURCHASE AGREEMENT
BETWEEN
SIERRA PACIFIC POWER COMPANY
AND
ORNI 7
JUNE 28, 2004
--------------------------------------------
TABLE OF CONTENTS
SECTION PAGE
------- ----
1. DEFINITIONS.............................................................................................. 1
2. TERM; TERMINATION AND SURVIVAL OF OBLIGATIONS............................................................12
3. SUPPLY SERVICE OBLIGATIONS...............................................................................13
4. PRICE OF PRODUCT.........................................................................................15
5. RENEWABLE ENERGY CREDITS/RENEWABLE ENERGY BENEFITS.......................................................16
6. TAX CREDITS..............................................................................................17
7. RENEWABLE QUOTAS.........................................................................................18
8. RIGHT OF FIRST OFFER.....................................................................................18
9. METERING, INVOICING AND PAYMENTS.........................................................................18
10. FACILITY CONSTRUCTION; OPERATIONS AND MODIFICATIONS......................................................22
11. EMERGENCY................................................................................................25
12. PLANNED OUTAGES..........................................................................................26
13. REPORTS; OPERATIONAL LOG.................................................................................27
14. COMMUNICATIONS...........................................................................................28
15. SCHEDULING NOTIFICATION..................................................................................29
16. COMPLIANCE...............................................................................................29
17. APPROVALS................................................................................................30
18. SECURITY.................................................................................................31
19. INDEMNIFICATION..........................................................................................33
20. LIMITATION OF LIABILITY..................................................................................34
21. FORCE MAJEURE............................................................................................35
22. DISPUTES.................................................................................................36
23. NATURE OF OBLIGATIONS....................................................................................37
24. ASSIGNMENT...............................................................................................37
25. DEFAULT AND REMEDIES.....................................................................................38
26. REPRESENTATIONS AND WARRANTIES OF SUPPLIER...............................................................40
27. REPRESENTATIONS AND WARRANTIES OF BUYER..................................................................41
28. INSURANCE................................................................................................42
29. NOTICES..................................................................................................44
30. MERGER...................................................................................................45
31. COUNTERPARTS AND INTERPRETATION..........................................................................45
32. SEVERABILITY.............................................................................................45
33. WAIVERS; REMEDIES CUMULATIVE.............................................................................46
34. AMENDMENTS...............................................................................................46
35. TIME IS OF THE ESSENCE...................................................................................46
36. CONFIDENTIALITY..........................................................................................46
37. CHOICE OF LAW............................................................................................48
38. FURTHER ASSURANCES.......................................................................................48
39. No Third Party Beneficiary...............................................................................48
40. CONFLICTS................................................................................................48
ii
EXHIBITS
EXHIBIT 1 DESCRIPTION OF SUPPLIER'S GENERATING FACILITY.............................................1-1
EXHIBIT 2A PRODUCT RATES............................................................................2A-1
EXHIBIT 2B EXCESS PRODUCT RATES.....................................................................2B-1
EXHIBIT 3 STANDBY SERVICE TARIFF....................................................................3-1
EXHIBIT 4 NOTICES, BILLING AND PAYMENT INSTRUCTIONS.................................................4-1
EXHIBIT 5 ONE-LINE DIAGRAM OF GENERATING FACILITY AND INTERCONNECTION FACILITY......................5-1
EXHIBIT 6 PROJECT MILESTONE SCHEDULE................................................................6-1
EXHIBIT 7 PERFORMANCE TESTS.........................................................................7-1
EXHIBIT 8 FORM OF AVAILABILITY NOTICE...............................................................8-1
EXHIBIT 9 BUYER'S REQUIRED REGULATORY APPROVALS.....................................................9-1
EXHIBIT 10 SUPPLIER'S REQUIRED REGULATORY APPROVALS.................................................10-1
EXHIBIT 11 SUPPLIER'S REQUIRED PERMITS FOR CONSTRUCTION
AND OPERATION............................................................................11-1
EXHIBIT 12 SUPPLIER'S REQUIRED AGREEMENTS...........................................................12-1
EXHIBIT 13 SUPPLY AMOUNT............................................................................13-1
EXHIBIT 14 PIPING / FLOW DIAGRAM OF GENERATING FACILITY.............................................14-1
EXHIBIT 15 OPERATION AND MAINTENANCE AGREEMENT; OPERATOR
GOOD STANDING CERTIFICATE................................................................15-1
EXHIBIT 16 GROUND LEASE; RIGHTS-OF-WAY..............................................................16-1
EXHIBIT 17 FORM OF LETTER OF CREDIT.................................................................17-1
iii
LONG TERM FIRM
POWER PURCHASE AGREEMENT
This Long Term Firm Power Purchase Agreement is made and entered into as of June
28, 2004 (the "Effective Date") by and between Sierra Pacific Power Company, a
Nevada corporation ("Buyer"), and ORNI 7, a Delaware LLC ("Supplier"). Buyer and
Supplier are referred to individually as a "Party" and collectively as the
"Parties".
WHEREAS, Buyer is an operating electric public utility, subject to the
applicable rules and regulations of the PUCN and the FERC;
WHEREAS, the Nevada State Legislature passed the Renewable Energy Law in June
2001, which requires Buyer to purchase a certain percentage of its load
requirements from generating facilities fueled by renewable resources;
WHEREAS, Supplier desires to build the Generating Facility which is a 26 MW
geothermal power plant near Steamboat Springs, Washoe County, Nevada, and which
Supplier desires to designate as a QF or an EWG, as appropriate, with the
Federal Energy Regulatory Commission in order to comply with the requirements of
this Agreement;
WHEREAS, the electricity generated by the Generating Facility will comply with
the requirements of the Renewable Energy Law and satisfy a portion of the
Buyer's obligations under the Renewable Quotas to purchase renewable energy; and
WHEREAS, Supplier desires to sell to Buyer, firm energy generated by the
Generating Facility and to transfer associated renewable energy credits, and
Buyer wishes to purchase such energy and receive such renewable energy credits
from Supplier, upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
conditions contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Buyer and Supplier,
intending to be legally bound, hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth below:
1.1 "After Tax Basis" means a basis such that any payment received or
deemed to have been received by a Party (the "Original Payment")
under the terms of Section 19.1 of this Agreement, shall be
supplemented by a further payment to such Party so that the sum
of the two payments shall equal the Original Payment, after
taking into account (x) all Taxes that would result from the
receipt or accrual of such payments, if legally required, and (y)
any reduction in Taxes that would result from the deduction of
the expense indemnified against, if legally permissible,
calculated by reference to the highest Federal and Nevada
statutory Tax rates applicable to corporations doing business in
Nevada and on a net
present value basis by reference to the applicable federal rate
then in effect under section 1274(d) of the Internal Revenue Code
of 1986, as amended.
1.2 "Agreement" means this Power Purchase Agreement together with the
Exhibits attached hereto, as such may be amended from time to
time.
1.3 "Average Annual Supply Amount" means the total annual MWh for
each Contract Year as listed in Exhibit 13 (Supply Amount)
divided by 8760 hours, as may be adjusted pursuant to Section 3.7
(Adjustment to Supply Amount). The Average Annual Supply Amount
for the First Full Contract Year is nineteen and four tenths
(19.4).
1.4 "Availability Notice" means a notice delivered by Supplier to
Buyer pursuant to Section 15 (Scheduling Notification) notifying
Buyer of the availability of the Generating Facility.
1.5 "Billing Period" has the meaning ascribed to that term in Section
9.2.1 (Invoicing and Payment).
1.6 "Bonneville Power Administration" means Bonneville Power
Administration, a federal agency under the U.S. Department of
Energy, that markets wholesale electrical power and operates and
markets transmission services in the Pacific Northwest, or any
successor entity thereto.
1.7 "Business Day" means any day other than Saturday, Sunday, and any
day that is a holiday observed by Buyer.
1.8 "Buyer" has the meaning set forth in the preamble of this
Agreement.
1.9 "Buyer's REC Account" means the account maintained by the REC
Administrator for the purpose of tracking the production, sale,
transfer, purchase and retirement of RECs by Buyer.
1.10 "Buyer Required Regulatory Approvals" means the approvals,
consents, authorizations or permits of, or filing with, or
notification to the Governmental Authorities listed on Exhibit 9.
1.11 "COB" means an electricity trading hub located near the
California-Oregon border.
1.12 "Commercial Operation" means that the Generating Facility has
been constructed in accordance with the requirements of the IOA
and Good Utility Practice and has delivered Energy to the
Delivery Point[s] and all of the requirements set forth in
Section 0 (Commercial Operation Date) and Exhibits 6 and 7 have
been satisfied.
1.13 "Commercial Operation Date" means the date on which Commercial
Operation occurs.
1.14 "Confidential Information" has the meaning ascribed to that term
in Section 36.1 (Confidential Information).
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1.15 "Contract Representative" of a Party means the individual
designated by that Party in Exhibit 4 responsible for ensuring
effective communication, coordination and cooperation between the
Parties. A Party may change its Contract Representative by
providing notice of such change to the other Party in accordance
with the procedures set forth in Section 29 (Notices).
1.16 "Contract Year" shall mean each year beginning on January 1 and
ending on December 31 of such year following the Commercial
Operation Date; provided, however, that the first Contract Year
shall commence on the Commercial Operation Date and end on the
following December 31.
1.17 "Control Area" has the meaning set forth in the OATT of the
Control Area Operator as follows:
An electric power system or combination of electric power systems
to which a common automatic generation control scheme is applied
in order to: (i) match, at all times, the power output of the
generators within the electric power system(s) and capacity and
energy purchased from entities outside the electric power
system(s), with the load within the electric power system(s);
(ii) maintain scheduled interchange with the other Control Areas,
within the limits of Good Utility Practices; (iii) maintain the
frequency of the electric power system(s) within reasonable
limits in accordance with Good Utility Practices; and (iv)
provide sufficient generating capacity to maintain operating
reserves in accordance with Good Utility Practices.
1.18 "Control Area Operator" means a Person, its agents and successors
that are responsible for the operation of the Transmission System
and for maintaining reliability of the electrical transmission
system(s), including the Transmission System, within the Control
Area. At the time of execution of this Agreement, the Control
Area Operator is the Transmission Provider.
1.19 "Credit Rating" of a Person means the credit rating then assigned
by a Relevant Rating Agency to the long-term senior unsecured
non-credit-enhanced indebtedness of that Person.
1.20 "Cure Period" has the meaning ascribed to that term in Section
25.2.
1.21 "Default Notice" means the notice of an Event of Default to the
Defaulting Party.
1.22 "Defaulting Party" has the meaning ascribed to that term in
Section 25.1.
1.23 "Delivered Amount" means, with respect to any Dispatch Hour, the
actual amount of Energy delivered by Supplier to Buyer at the
Delivery Point[s] during such Dispatch Hour.
1.24 "Delivery Point[s]" means the Steamboat substation or other
points on the Transmission System as may be mutually agreed upon
by the Parties and set forth in Exhibit 5.
3
1.25 "Derating" means a condition of the Generating Facility as a
result of which it is unable to produce the Supply Amount during
a Dispatch Hour.
1.26 "Disclosing Party" has the meaning ascribed to that term in
Section 36.1 (Confidential Information).
1.27 "Dispatch Hour" means each hour from the Operation Date through
the end of the Term.
1.28 "Dispute" has the meaning ascribed to that term in Section 22.1
(Dispute or Claim).
1.29 "Effective Date" has the meaning ascribed to that term in the
preamble of this Agreement.
1.30 "Emergency" means any circumstance or combination of
circumstances or any condition of the Generating Facility, the
Interconnection Facilities, the Transmission System, or the
transmission system of other electric utilities, which is
reasonably likely to endanger life or property and necessitates
immediate action to avert injury to persons or serious damage to
property or is reasonably likely to adversely affect, degrade or
impair Transmission System reliability or transmission system
reliability of other electric utilities.
1.31 "Energy" means electrical energy (measured in MWh) that is
generated by the Generating Facility from and after the Operation
Date. Energy shall also mean the capacity intended to be
available and/or delivered to the Buyer at the specifications and
Delivery Point[s] stated herein.
1.32 "Environmental Law" shall mean any federal, state, and local law
(including common law), regulation, rule, ordinance, code,
decree, judgment, binding directive, or judicial or
administrative order relating to the protection, preservation or
restoration of human health, the environment, or natural
resources, including any law relating to the releases or
threatened releases of Hazardous Substances into any media
(including ambient air, surface water, groundwater, land, surface
and subsurface strata) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, release,
transport and handling of Hazardous Substances.
1.33 "EPC Contract" has the meaning set forth in Exhibit 6.
1.34 "Event of Default" has the meaning ascribed to that term in
Section 25.1.
1.35 "EWG" means an exempt wholesale generator pursuant to section 32
of the Public Utility Holding Company Act of 1935, as amended.
1.36 "Excess Energy" means, with respect to any Dispatch Hour, any
Delivered Amount of Energy that exceeds the Supply Amount of
Energy delivered by Supplier to Buyer at the designated Delivery
Point[s]. Excess Energy, including Energy in excess of the
Maximum Amount, is non-firm Energy.
4
1.37 "Excess Product" means the Product associated with Excess Energy.
1.38 "Excess Product Rates" means the rates for Excess Product set
forth in Exhibit 2B of this Agreement under "Excess Product
Rates".
1.39 "FERC" means the Federal Energy Regulatory Commission and any
successor agency thereto.
1.40 "Force Majeure" has the meaning set forth in Section 21 (Force
Majeure).
1.41 "Generating Facility" means Supplier's geothermal generating
power plant, located near Steamboat Springs, Washoe County,
Nevada with an aggregate installed total nominal nameplate
capacity of approximately 26.0 MW and including any associated
facilities and equipment required to deliver Energy to the
Delivery Point[s], as further described in Exhibits 1, 5 and 14
hereto.
1.42 "Good Utility Practice" means (i) the applicable practices,
methods and acts required by or consistent with applicable Laws
and reliability criteria, whether or not the Party whose conduct
at issue is a member of any relevant organization and otherwise
engaged in or approved by a significant portion of the electric
utility industry during the relevant time period, or (ii) any of
the practices, methods and acts which, in the exercise of
reasonable judgment in light of the facts known at the time the
decision was made, could have been expected to accomplish the
desired result at a reasonable cost consistent with good business
practices, reliability, safety and expedition. Good Utility
Practice is not intended to be limited to the optimum practice,
method or act to the exclusion of all others, but rather to
acceptable practices, methods or acts generally accepted in the
region and industry. Good Utility Practice shall include
compliance with applicable Laws and regulations, applicable
reliability criteria, and the criteria, rules and standards
promulgated in the National Electric Safety Code and the National
Electrical Code, as they may be amended from time to time,
including the criteria, rules and standards of any successor
organizations.
1.43 "Governmental Authority" means, as to any person, any Federal,
state, local, or other governmental, regulatory or administrative
agency, court, commission, department, board, or other
governmental subdivision, legislature, rulemaking board,
tribunal, or other governmental authority having jurisdiction
over such Person or its property or operations.
1.44 "Hazardous Substance" means (i) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials,
friable asbestos, urea formaldehyde foam insulation and
transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls (PCBs) in regulated
concentrations, (ii) any chemicals or other materials or
substances which are now or hereafter become defined as or
included in the definition of "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants", "pollutants" or words of similar
import under any Environmental Law and (iii) any other chemical
or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated as such under any
5
Environmental Law, including the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Comprehensive
Environmental Response Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., or any similar state statute.
1.45 "IEEE-SA" means the Institute of Electrical and Electronics
Engineers Standards Association and any successor entity thereto.
1.46 "Indemnified Party" has the meaning provided in Section 19.1
(Third Party Claims).
1.47 "Indemnifying Party" has the meaning provided in Section 19.1
(Third Party Claims).
1.48 "Interconnection Facilities" means the equipment and facilities,
including any modifications, additions and upgrades made to such
facilities, which are necessary to connect the Generating
Facility to the Transmission System as described in Exhibit 5.
1.49 "Invoice" means the statements described in Section 9.2
(Invoices) setting forth the Supply Amount, Delivered Amount,
Excess Energy, Shortfall, Replacement Costs, and REC Replacement
Costs, if any, and the associated payment due for the Billing
Period or the Contract Year, in the case of REC Replacement
Costs.
1.50 "IOA" means the Interconnection and Operating Agreement that has
been or will be executed between Supplier and Transmission
Provider, or its successors, for the Generating Facility.
1.51 "Law" means any federal, state, local or other law (including any
Environmental Laws), common law, treaty, code, rule, ordinance,
binding directive, regulation, order, judgment, decree, ruling,
determination, permit, certificate, authorization, or approval of
a Governmental Authority, which is binding on a Party or any of
its property.
1.52 "Loss" means any and all claims, demands, suits, obligations,
payments, liabilities, costs, fines, Penalties, sanctions,
judgments, damages, losses or expenses in connection with any
claim by a third party against an Indemnified Party pursuant to
Section 19 (Indemnification).
1.53 "Material Adverse Effect" means, with respect to a Party, a
material adverse effect on the ability of such Party to perform
its obligations under this Agreement, individually or in the
aggregate, or on the business, operations or financial condition
of such Party.
1.54 "Maximum Amount" means, with respect to a Dispatch Hour, an
amount of Energy equal to 26.0 MWh.
1.55 "Meter" means any of the physical metering devices, data
processing equipment and apparatus associated with the meters
owned by Buyer, or its designee, required for (i) an accurate
determination of the quantities of Delivered Amounts
6
from the Generating Facility and for recording other related
parameters required for the reporting of data to Supplier, and
(ii) the computation of the payment due to Supplier from Buyer.
Meters do not include any check meters Supplier may elect to
install as contemplated by Section 9.1.1 (Meters).
1.56 "Minimum Credit Rating" of a Person means that the Credit Rating
of that Person is at least (i) A- (or its equivalent) as
determined by Standard & Poor's or (ii) A3 (or its equivalent) as
determined by Moody's.
1.57 "Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc, or any successors
thereto.
1.58 "MW" means megawatts of electrical power.
1.59 "MWh" means megawatt hours of electrical energy.
1.60 "NERC" means the North American Electric Reliability Council and
any successor entity thereto.
1.61 "Nevada Power Company" means Nevada Power Company, a Nevada
corporation and operating electric public utility, or any
successor entity thereto, subject to the applicable rules of the
PUCN and the FERC.
1.62 "Non-Defaulting Party" means the Party other than the Defaulting
Party.
1.63 "OATT" means Transmission Provider's or Control Area Operator's
then-effective Open Access Transmission Tariff, which has been
accepted for filing by the FERC.
1.64 "Off-Peak" means hours ending 01 through 06 PPT, hours ending 23
through 24 PPT and all hours Sunday and NERC designated holidays.
1.65 "On-Peak" means hours ending 07 through 22 PPT Monday through
Saturday, other than on NERC designated holidays.
1.66 "Operating Representative" of a Party means any of the
individuals designated by that Party, as set forth in Exhibit 4,
to transmit and receive routine operating and Emergency
communications required under this Agreement. A Party may change
any of its Operating Representatives by providing notice of the
change to the other Party in accordance with the notice
procedures set forth in Section 29 (Notices) herein.
1.67 "Operation Date" means the first date on which the Generating
Facility is energized and operates in parallel with the
Transmission System and delivers Energy to the Delivery Point[s].
1.68 "PacifiCorp" means PacifiCorp, an Oregon corporation and an
electric utility, or any successor entity thereto, subject to the
applicable rules of the OPUC and the FERC.
7
1.69 "PPT" means Pacific Standard Time or Pacific Daylight Time, which
ever is then prevailing.
1.70 "Party" or "Parties" means each entity set forth in the preamble
of this Agreement and its permitted successor or assigns.
1.71 "Penalties" means any penalties, fines, damages, or sanctions
imposed on Buyer under Laws.
1.72 "Person" or "Persons" means any natural person, partnership,
limited liability company, joint venture, corporation, trust,
unincorporated organization, or Governmental Authority.
1.73 "Planned Operation Date" means the date specified in Item 5 of
Exhibit 1 as the date on which the Operation Date is expected to
occur.
1.74 "Planned Outage" has the meaning ascribed to that term in Section
12 (Planned Outages).
1.75 "Power Quality Standards" means the Power Quality Standards
established by NERC, WECC, Buyer, IEEE-SA, National Electric
Safety Code, the National Electric Code, or their respective
successor organizations or codes as they may be amended from time
to time and consistent with Good Utility Practice.
1.76 "Product" means (i) all Energy produced by the Generating
Facility, except Station Usage (ii) all RECs and (iii) all
Renewable Energy Benefits.
1.77 "Product Rates" means the rates set forth in Exhibit 2A of this
Agreement under "Product Rates".
1.78 "Project Milestone" means each of the milestones listed in
Exhibit 6, Project Milestone Schedule under the column "Project
Milestone".
1.79 "Project Milestone Schedule" means the schedule of Project
Milestones, completion dates and required documentation specified
in Exhibit 6.
1.80 "PUCN" means the Public Utilities Commission of Nevada and any
successor entity thereto.
1.81 "PUCN Approval Date" means the date on which an order of the PUCN
approving this Agreement becomes effective pursuant to Nevada
Administrative Code Section 703.790.
1.82 "QF" means a cogeneration or small power production facility
which meets the criteria as defined in Title 18, Code of Federal
Regulations, ▇▇.▇▇. 292.201 through 292.207.
1.83 "Qualified Financial Institution" means a financial institution
having an office in the United States, with total assets of at
least $10,000,000,000 U.S. and whose
8
general long-term unsubordinated unsecured debt is rated at least
"A" by S&P and "A2" by ▇▇▇▇▇'▇.
1.84 "REC Administrator" means the entity appointed by the PUCN to
administer the REC trading program, pursuant to the Renewable
Quotas.
1.85 "Receiving Party" has the meaning ascribed to that term in
Section 36.1 (Confidential Information).
1.86 "REC Replacement Costs" has the meaning ascribed to that term in
Section 3.6.
1.87 "RECs" means all renewable energy credits, offsets or other
benefits allocated, assigned or otherwise awarded or certified to
the Supplier or Buyer by any Governmental Authority or as
received in connection with Renewable Quotas, in either case
derived from the ownership or operation of, or production of
energy from the Generating Facility or due to the Generating
Facility's use of geothermal resources for generation, whether
existing now or in the future and whether foreseen or unforeseen,
including credits, offsets or other benefits attributable,
without duplication, to (i) Energy sold under this Agreement,
(ii) Energy consumed by the Generating Facility, such as Station
Usage or Standby Service, and (iii) the difference between the
gross metered production and the net metered output of the
Generating Facility, but in all cases shall not mean Tax Credits
or Renewable Energy Benefits.
1.88 "Relevant Rating Agency" means ▇▇▇▇▇'▇ or S&P.
1.89 "Renewable Energy Benefits" means any and all economic,
environmental or other benefits derived from the ownership or
operation of, or production of Energy from the Generating
Facility or due to the Generating Facility's use of geothermal
resources for generation, whether existing now or in the future
and whether foreseen or unforeseen, including but not limited to
emissions credits or allowances, but excluding RECs and Tax
Credits.
1.90 "Renewable Energy Law" means an act relating to energy, revising
and clarifying provisions requiring certain providers of electric
service to comply with a portfolio standard for renewable energy,
and providing for other matters relating thereto, codified as
Nevada Revised Statutes ▇▇.▇▇. 704.7801 to 704.7828, as amended
or superseded.
1.91 "Renewable Energy System" means a "renewable energy system" as
defined in the Renewable Energy Law and the regulations
promulgated thereunder, as such Laws may be amended or
superseded.
1.92 "Renewable Quotas" means any Law, including, without limitation,
the requirements of Nevada Revised Statutes ▇▇.▇▇. 704.7801 to
704.7828, inclusive, as amended or superseded, and regulations
promulgated thereunder by the PUCN, which impose an obligation on
Buyer to meet a required percentage of its retail load or energy
requirements by purchasing or generating electricity derived from
renewable energy generating facility systems or which provide for
the trading of RECs, as such Laws may be amended or superseded.
9
1.93 "Replacement Costs" means, with respect to any period of time,
the difference between (i) Buyer's costs to replace any Shortfall
as calculated in Section 3.5.4 plus related Penalties, and
transmission costs and (ii) the Product Rates multiplied by the
number of MWhs related to the Shortfall. If the difference is
less than zero, then the Replacement Costs shall be equal to
zero.
1.94 "Schedule" or "Scheduling" means the actions of Supplier, Buyer
and/or their designated Operating Representatives of notifying,
requesting, and confirming to each other the amount of Energy to
be delivered on any given day or days at any given hour at the
Delivery Point[s].
1.95 "Shaped COB Firm Price" means an hourly price calculated pursuant
to the following procedures. The average Dow ▇▇▇▇▇ Mid-Columbia
Electricity Index hourly prices for firm energy will be
calculated during the On-Peak and Off-Peak periods as follows:
(i) the On-Peak average is calculated by summing the 16 On-Peak
hourly values and dividing by 16, (ii) the Off-Peak average is
calculated by summing the 8 Off-Peak hourly values and dividing
by 8, and (iii) for Sunday and NERC holidays, a 24 hour average
is calculated by summing the 24 hourly values and dividing by 24.
For each hour, an hourly shaping factor is calculated by taking
the Dow ▇▇▇▇▇ Mid-Columbia Electricity Index hourly price for
firm energy for that hour and dividing by the corresponding
On-Peak average, Off-Peak average or 24-hour average determined
by the preceding sentence. The Shaped COB Firm Price is
calculated for each hour by taking the hourly shaping factor for
the hour (a) multiplied by the On-Peak, Off-Peak or 24 hour Dow
▇▇▇▇▇ COB Electricity Index price for firm energy that
corresponds to that hour, (b) multiplied by 106.46% (based on a
6.46% transmission loss factor) and (c) added to $8.56/MWh. The
amounts in subsections (b) and (c) above are designed to take
into account the cost of transmission to deliver energy from COB
and currently represent the point-to-point transmission rates for
PacifiCorp and Bonneville Power Administration under their Open
Access Transmission Tariff and shall be updated from time to time
to account for any change in those tariffs or other transmission
costs. The Parties will endeavor to agree on appropriate changes
in these amounts, but failing that agreement, the appropriate
amount will be determined through the process for resolving
Disputes in Section 22 (Disputes) of the Agreement.
1.96 "Shortfall" means the amount, if any, by which the Delivered
Amount of Energy is less than the Supply Amount of Energy in any
Dispatch Hour.
1.97 "Sierra Pacific Power Company" means Sierra Pacific Power
Company, a Nevada corporation and an operating electric public
utility, or any successor entity thereto, subject to the
applicable rules of the PUCN and the FERC.
1.98 "Standard and Poor's" or "S&P" means Standard and Poor's Ratings
Group, a division of McGraw Hill, Inc., or any successors
thereto.
1.99 "Standby Service" means the electric service supplied by Sierra
Pacific Power Company for Station Usage pursuant to the PUCN
approved tariff, a copy of
10
which is attached hereto as Exhibit 3, as such tariff may be
amended from time to time.
1.100 "Station Usage" means all Energy used by the Generating Facility.
1.101 "Supplier" has the meaning set forth in the preamble of this
Agreement.
1.102 "Supplier Required Regulatory Approvals" means the approvals,
consents, authorizations or permits of, or filings with or
notifications to the Governmental Authorities listed on Exhibit
10.
1.103 "Supply Amount" means, with respect to any Dispatch Hour, the
amount of Energy stated in Exhibit 13 unless reduced due to a
Planned Outage pursuant to Section 12.1.2, or as may be adjusted
pursuant to Section 3.7.1 and Section 3.7.2. The Supply Amount is
firm Energy.
1.104 "Tax" or "Taxes" means any Federal, state, local or foreign
income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits,
withholding, social security (or similar), unemployment,
disability, real property (including assessments, fees or other
charges based on the use or ownership of real property), personal
property, transactional, sales, use, transfer, registration,
value added, alternative or add-on minimum, estimated tax, or
other tax of any kind whatsoever, or any liability for unclaimed
property or escheatment under common law principles, including
any interest, penalty or addition thereto, whether disputed or
not, including any item for which liability arises as a
transferee or successor-in-interest.
1.105 "Tax Credits" has the meaning ascribed to that term in Section
6.1.
1.106 "Term" has the meaning ascribed to that term in Section 2.2
(Term).
1.107 "Transferred RECs" means RECs that have been transferred by
Supplier to Buyer pursuant to the terms of the Agreement, in
accordance with the Renewable Quotas and which have been properly
recorded to Buyer's REC Account.
1.108 "Transmission Provider" means Sierra Pacific Power Company or any
successor operator or owner of the Transmission System.
1.109 "Transmission System" means the facilities used for the
transmission of electric energy in interstate commerce, including
any modifications or upgrades made to such facilities, owned or
operated by the Transmission Provider, except the Interconnection
Facilities.
1.110 "UEPA" means the Utility Environmental Protection Act, as set
forth in NRS 704.820 to 704.900.
1.111 "WECC" means the Western Electric Coordinating Council (formerly
Western System Coordinating Council) and any successor entity
thereto.
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1.112 "Yearly REC Amount" shall be 208,000,000 RECs for each Contract
Year or as may be adjusted pursuant to Section 3.7 (Adjustment To
Supply Amount). If the initial Contract Year is not a full
Contract Year, then the Yearly REC Amount shall be the number of
full calendar months ("FCM") the Generating Facility is in
Commercial Operation during the first Contract Year divided by 12
multiplied by 208,000,000.
2. TERM; TERMINATION AND SURVIVAL OF OBLIGATIONS
2.1 Effective Date. This Agreement shall become effective on the
Effective Date.
2.2 Term. Supplier's obligation to deliver Product, and Buyer's
obligation to accept and pay for Product, under this Agreement
shall commence on the Operation Date and shall continue for a
period of 20 years from January 1 immediately following the
Commercial Operation Date, subject to earlier termination of this
Agreement pursuant to the terms hereof (the "Term"); provided,
however, that for the avoidance of doubt, unless the approvals
described in Section 17.2 (PUCN Approval), are received as
contemplated thereby, Buyer shall not be obligated to accept or
pay for any Product.
2.3 Termination.
2.3.1 Mutual Agreement. This Agreement may be terminated by
written agreement of the Parties.
2.3.2 For Cause. This Agreement may be terminated at any time by
the Non-Defaulting Party upon 14 days' prior notice to the
Defaulting Party in the event an Event of Default has
occurred and is continuing after the applicable Cure
Period (if any) set forth in Section 25.2 has expired.
2.3.3 Optional Termination. This Agreement may be terminated at
any time upon 14 days written notice from Buyer in the
event the PUCN and FERC approval[s] are not obtained
pursuant to Section 17 (Approvals).
2.3.4 Force Majeure. Except as set forth immediately below, this
Agreement may be terminated by either Party if the other
Party's obligations hereunder have been excused by the
occurrence of an event of Force Majeure pursuant to
Section 21 (Force Majeure) for longer than 6 consecutive
months. If an event of Force Majeure has caused a
catastrophic failure of major equipment (such as but not
limited to the turbine or generator) used to provide
Product, and if Seller documents and Buyer verifies that
the replacement or repair time for that major equipment
exceeds 6 months, Buyer may not exercise its rights under
this paragraph until the Seller's obligations hereunder
have been excused for longer than 12 consecutive months.
2.3.5 No termination of this Agreement by Supplier shall be
effective unless (i) Supplier has first given Nevada Power
Company a written offer to enter into a new power purchase
agreement on the identical terms set forth in this
Agreement and (ii) Nevada Power Company shall not have
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accepted such offer by written notice to the Parties
within 14 days of receipt of such offer.
2.4 Effect of Termination - Survival of Obligations. Any default
under or termination of this Agreement or expiration of the Term
shall not release either Party from any applicable provisions of
this Agreement with respect to:
2.4.1 The payment of any amounts owed to the other Party arising
prior to or resulting from termination of, or on account
of breach of, this Agreement;
2.4.2 Indemnity obligations contained in Section 19
(Indemnification), which shall survive to the full extent
of the statute of limitations period applicable to any
third party claim;
2.4.3 Limitation of liability provisions contained in Section 20
(Limitation of Liability);
2.4.4 For a period of one year after the termination date, the
right to submit a payment dispute pursuant to Section 22
(Disputes);
2.4.5 The resolution of any dispute submitted pursuant to
Section 22 (Disputes) prior to, or resulting from,
termination; or
2.4.6 The obligations under Section 36 (Confidentiality).
3. SUPPLY SERVICE OBLIGATIONS
3.1 Supply Amount. Subject to the other provisions of this Agreement,
commencing on the Commercial Operation Date, Supplier shall
supply and deliver the Supply Amount to Buyer during every
Dispatch Hour on a continuous basis at the Delivery Point[s].
3.2 Dedication. All Product shall be dedicated exclusively to Buyer
for the Term of this Agreement.
3.3 Buyer's Obligation and Delivery. Buyer shall take delivery of the
Supply Amount and any Excess Energy at the Delivery Point[s] in
accordance with the terms of this Agreement. Supplier shall be
responsible for all costs associated with delivery of the Supply
Amount and any Excess Energy to the Delivery Point[s].
3.4 Consumption. Supplier shall acquire Standby Service necessary to
meet the electrical requirements of the Generating Facility.
3.5 Replacement Costs.
3.5.1 After Commercial Operation, if the sum of the Delivered
Amount, not including any Excess Energy delivered during
Off-Peak Hours, over a monthly Billing Period is less than
95% of the sum of the Supply
13
Amount over the same period, the Buyer shall calculate its
Replacement Costs and the Supplier shall reimburse the
Buyer for all of its Replacement Costs for the period.
3.5.2 After Commercial Operation, if the sum of the Delivered
Amount, not including any Excess Energy delivered during
Off-Peak Hours, over a monthly Billing Period is equal to
or greater than 95% of the sum of the Supply Amount over
the same period, the Supplier shall not reimburse the
Buyer for its Replacement Costs for the period.
3.5.3 The Parties recognize and agree that the payment of
amounts by Supplier pursuant to this Section 3.5
(Replacement Costs) is an appropriate remedy in the event
of such a failure and that any such payment does not
constitute a forfeiture or penalty of any kind, but rather
constitutes anticipated costs to Buyer under the terms of
this Agreement.
3.5.4 The cost to Buyer to replace any Shortfall of Energy shall
be determined solely by Buyer from the higher of the
following amounts: (i) the Shaped COB Firm Price or (ii)
the incremental cost of generation owned by Sierra Pacific
Power Company, which incremental cost shall be calculated
based on the daily incremental fuel cost and the
applicable unit's incremental heat rate curve plus the
applicable unit's operation and maintenance cost. The
operation and maintenance cost shall be equal to the
average operation and maintenance cost per kWh for the
applicable unit derived from the most recent FERC Form 1
filing.
3.5.5 Information used by Buyer to establish Replacement Costs
shall be verifiable and Buyer shall on a quarterly basis
make available to Supplier supporting calculations
pursuant to Section 9.2.4 (Payment to Buyer).
3.6 REC Replacement Costs.
3.6.1 If after the REC Administrator issues all the REC
statements for a Contract Year, as of December 31 of such
Contract Year, the sum of Transferred RECs for such
Contract Year is less than the Yearly REC Amount, and to
the extent such shortfall is not excused due to Force
Majeure, then Supplier shall indemnify Buyer for any costs
required to purchase RECs in replacement of those RECs not
delivered ("REC Replacement Costs").
3.6.2 The cost to Buyer to replace any RECs not delivered,
pursuant to Section 3.6.1 shall be determined solely by
Buyer based on the cost of purchasing replacement RECs
with a comparable expiration date or the cost of replacing
RECs not delivered with RECs of the Buyer's choice already
in the Buyer's REC Account; provided, however, that Buyer
shall not be required to purchase such replacement RECs in
order receive payment for REC Replacement Costs.
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3.6.3 Information used by Buyer to establish REC Replacement
Costs shall be verifiable and Buyer shall make available
to Supplier supporting calculations pursuant to Section
9.2.4 (Payment to Buyer).
3.7 Adjustment to Supply Amount
3.7.1 Prior to Commercial Operation: On or before Milestone "G"
of Exhibit 6, but no later than thirteen (13) months after
PUCN approval of this Agreement, the Supplier may, only
once as set forth herein, increase the Maximum Amount,
Supply Amount, Average Annual Supply Amount, Yearly REC
Amount and the amounts in Section 1.40 (Generating
Facility). The amounts may be increased such that (i) the
Average Annual Supply Amount shall be equal to or less
than 24.5 MW, and (ii) the Maximum Amount and Yearly REC
Amount shall increase in the same proportion as the
increase of the Average Annual Supply Amount in the first
Contract Year that is a full calendar year (the "First
Full Contract Year"). The Average Annual Supply Amount for
any Contract Year shall not exceed the Average Annual
Supply Amount for the First Full Contract Year determined
pursuant to this Section 3.7.1
3.7.2 After Commercial Operation Date. On or before October 1 of
each year, Supplier may reduce or increase the Supply
Amount and/or Yearly REC Amount, provided that (i) the
Average Annual Supply Amount shall not exceed the Average
Annual Supply Amount for the First Full Contract Year as
such may be modified in Section 3.6.1 and (ii) the Supply
Amount may not be increased above the Maximum Amount, by
providing notice of such to Buyer. Each reduction or
increase, subject to this provision, (a) may not be
greater than 5% of the Average Annual Supply Amount in
that year, and (b) only applies to the third subsequent
Contract Year and remaining Contract Years and shall not
apply to the first or second subsequent Contract Years. In
no event shall reductions in the Supply Amount and Yearly
REC Amount be allowed to accommodate sales of Product,
Energy, RECs, or Renewable Energy Benefits to third
parties. Reductions to the Supply Amount are capped such
that the Average Annual Supply Amount must always be equal
to or greater than eighty (85%) of the greater of (i) the
original Average Annual Supply Amount on the Effective
Date, or (ii) the increased Average Annual Supply Amount
pursuant to Section 3.7.1 above. The Yearly REC Amount may
only be reduced by up to the same percentage that the
Average Annual Supply Amount is reduced and must always be
equal to or greater than 85% of the Yearly REC Amount for
the First Full Contract Year on the Effective Date.
4. PRICE OF PRODUCT
4.1 Product Payments. Supplier shall be paid for the Product based on
the Delivered Amount of Energy as determined by hourly data from
monthly Meter readings, as follows:
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4.1.1 Upon the Operation Date and prior to the Commercial
Operation Date, all Product associated with Delivered
Amounts of Energy from the Generating Facility shall be
paid for by Buyer at the lesser of (i) 90% of the Dow
▇▇▇▇▇ COB Electricity Index for firm energy or (ii) 90% of
the Dow ▇▇▇▇▇ COB Electricity Index for non-firm energy,
or (iii) the Excess Product Rates as set forth in Exhibit
2B.
4.1.2 Subsequent to the Commercial Operation Date.
4.1.2.1 All Product associated with Delivered Amounts of
Energy from the Generating Facility other than
Excess Energy, from and after the Commercial
Operation Date, shall be paid for by Buyer at the
Product Rates set forth in Exhibit 2A.
4.1.2.2 All Product associated with Excess Energy from
the Generating Facility, from and after the
Commercial Operation Date, shall be paid for by
Buyer at the lesser of (i) 90% of the Dow ▇▇▇▇▇
COB Electricity Index for firm energy or (ii) 90%
of the Dow ▇▇▇▇▇ COB Electricity Index for
non-firm energy, or (iii) the Excess Product
Rates as set forth in Exhibit 2B.
4.1.3 Maximum Amount. All Product delivered during any Dispatch
Hour in excess of the Maximum Amount shall be paid for by
Buyer at the lesser of (i) 75% of the Dow ▇▇▇▇▇ COB
Electricity Index for firm energy or (ii) 75% of the Dow
▇▇▇▇▇ COB Electricity Index for non-firm energy, or (iii)
75% of the Excess Product Rates as set forth in Exhibit
2B.
5. RENEWABLE ENERGY CREDITS/RENEWABLE ENERGY BENEFITS
5.1 Transfer of Credits. Supplier hereby transfers to Buyer all RECs
derived from the ownership or operation of, or production of
energy from, the Generating Facility and Energy for Station
Usage, and any benefits derived from RECs, whether existing now
or in the future and whether foreseen or unforeseen. All RECs and
any benefits derived therefrom are exclusively dedicated to and
vested in Buyer. Supplier shall timely prepare and execute all
documents and shall take all actions necessary under Nevada Law
or regulation or other Law to cause the RECs to vest in the
Buyer, without further compensation, including the registration
of the Generating Facility with the PUCN or other Governmental
Authority, the provision of periodic production data to the PUCN
or REC trading program administrator and the filing of requests
with the trading administrator for transfers of RECs to Buyer.
Supplier and Buyer will use their mutual and best commercial
efforts to support and affect the registration of the transfer of
RECs with the PUCN or other Governmental Authority. The quantity
of RECs transferred to Buyer shall be the amount of RECs
attributable to the ownership and operation of, and all energy
produced at, the Generating Facility and Energy for Station
Usage. All RECs in addition to RECs related to Energy purchased
under the Agreement are transferred at no expense to the Buyer.
RECs shall be deemed transferred to the Buyer when they have been
properly recorded in the Buyer's REC Account by
16
the REC Administrator, pursuant to the terms of the Agreement and
in accordance with the Renewable Quotas.
5.2 Renewable Energy Benefits. Supplier hereby transfers to Buyer, at
no charge to Buyer, all Renewable Energy Benefits, in and of
themselves and as derived from the ownership or operation of, or
production of energy from the Generating Facility, or due to the
Generating Facility's use of geothermal resources for generation.
All Renewable Energy Benefits derived therefrom are exclusively
dedicated to and vested in Buyer. Supplier shall timely execute
all documents and shall timely take all actions necessary under
Nevada Law or regulation or other Law to cause the Renewable
Energy Benefits to vest in or be transferred to Buyer, without
further compensation. The amount of Renewable Energy Benefits
transferred to Buyer shall be the amount of Renewable Energy
Benefits derived from the ownership or operation of or production
of energy from the Generating Facility or due to the Generating
Facility's use of geothermal resources for generation or other
applicable standards.
6. TAX CREDITS
6.1 The Parties agree that the price of the Product as provided for
in Section 4 (Price of Products) and as specified in Exhibits 2A
and 2B accounts for state, local and/or Federal production tax
credit[s] and or investment tax credit[s] specific to investments
in renewable energy production and delivery facilities (if any)
("Tax Credit[s]") in effect as of the Effective Date of this
Agreement. If, in any year, Supplier or its investors receive any
quantifiable benefit as a result of the availability or enactment
of additional Tax Credit[s] at any time, or the extension of
deadlines for the expiration of existing Tax Credit[s] at any
time, then Supplier shall pay to Buyer the quantifiable benefit
received by Supplier or its investors of such additional or
extended Tax Credit[s]. Whether any such new or extended Tax
Credit will have such a quantifiable benefit in any year will be
determined by the Supplier's independent, third-party auditor or,
if Supplier's auditor refuses or is unable to make such
determination, by another auditor jointly selected by the
Parties, within 120 days of the end of such year, which auditor
shall not be the then current auditor of either party. This
determination will be based upon the availability of credits for
Product sales made under this Agreement or Supplier and its
investors' ability to use Tax Credits over such year. Based on
this analysis, such a quantifiable benefit, if any, will be
certified to Buyer by an officer of Supplier in a report that
summarizes the reasons for the auditor's conclusions as to why
such Tax Credits will or will not have a quantifiable benefit.
Buyer shall have the right to review and approve such report
which approval shall not be unreasonably withheld. If Buyer does
not approve Supplier's report, then the quantifiable benefit will
be determined through the dispute resolution provisions of
Section 22 (Disputes) below. Supplier shall make payment of any
amount due under this Section in 12 equal monthly installments
(together with interest on such amount from the end of the
applicable calendar year at the rate calculated in Section 9.3
(Overdue Amounts and Refunds)), the first installment of which
shall be due within 30 days after Buyer's approval of the
certified report referred to above (or as otherwise determined
through the dispute resolution provisions if such report is not
approved by Buyer). Supplier shall apply for any Tax Credit[s]
17
which might be available to Supplier or the Generating Facility
from any Governmental Authority.
6.2 Supplier and Buyer agree that the Product Rates set forth in
Exhibit 2A and Exhibit 2B are not subject to adjustment or
amendment if Supplier fails to receive any Tax Credits, or if
such Tax Credits expire, are repealed or otherwise cease to apply
to the Supplier or the Generating Facility in whole or in part,
or Supplier or its investors are unable to benefit from such Tax
Credit.
7. RENEWABLE QUOTAS
7.1 The Parties agree that the RECs will be used by Buyer in meeting
its obligations pursuant to the Renewable Quotas and the
regulations promulgated thereunder as either may be amended or
superseded or as otherwise determined by Buyer. Supplier shall
cooperate with Buyer in all respects to ensure Buyer's compliance
with all applicable requirements set forth in the Renewable
Quotas and any regulations promulgated thereunder and shall
provide all information reasonably requested by Buyer or
otherwise necessary to allow the PUCN to determine compliance
with the Renewable Quotas and regulations adopted pursuant
thereto.
8. RIGHT OF FIRST OFFER
8.1 Should Supplier (or any direct parent of Supplier) intend to sell
the Generating Facility (or its direct equity interests in
Supplier), before any such sale may occur, Supplier shall give
notice thereof to Buyer. Upon Buyer's receipt of such notice,
Buyer shall have the right to negotiate in good faith with
Supplier for no more than 60 days, unless otherwise agreed to by
Supplier, the terms of the sale of the Generating Facility to
Buyer or its designee on an exclusive basis. If Buyer desires to
enter into such negotiation, Buyer shall notify Supplier of such
decision within 15 days of receipt of Supplier's notice, and
Buyer's failure to do so within such 15 day period shall be
deemed a rejection by Buyer of its right to so negotiate.
Supplier will provide in a timely manner, information regarding
the Generating Facility which is customary to allow the Buyer to
perform due diligence and to negotiate in good faith for the
purchase of the Generating Facility, such information to be
provided only after the execution by the Parties of a
non-disclosure agreement that governs the delivery, return, and
destruction of such information as appropriate. If the Parties
fail to execute a definitive agreement to effect Buyer's purchase
of the Generating Facility within the 60 day period, Supplier
shall be free to sell the Generating Facility as intended.
8.2 In the event that Buyer does not exercise its right pursuant to
Section 8.1 within 60 days as set forth above, Supplier must
comply with Section 24 (Assignment) in any assignment or
delegation of Supplier's rights, interests or obligations herein
to a purchaser of the Generating Facility.
9. METERING, INVOICING AND PAYMENTS
9.1 Metering.
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9.1.1 Meters. Buyer shall, at Supplier's cost, provide, install,
own, operate and maintain all Meters in good operating
condition. The Meters shall be used for quantity
measurements under this Agreement. Such equipment shall be
bi-directional and shall be capable of measuring and
reading instantaneous and hourly real and reactive energy
and capacity. The Meters shall also be used for, among
other things, metering Station Usage of the Supplier's
Generating Facility. Supplier, at its own expense, may
install additional check meters. Any check-metering
equipment to be installed by Supplier on Buyer-owned
facilities shall be mutually agreed upon and installation
procedures shall be developed.
9.1.2 Location. Meters shall be installed at the location
specified in Exhibit 5, or as otherwise reasonably
determined by Buyer to effectuate this Agreement.
9.1.3 Non-Interference. Supplier shall not undertake any action
that may interfere with the operation of the Meters.
Supplier shall be liable for all costs, expense, and
liability associated with any such interference with the
Meters.
9.1.4 Meter Testing. Meters shall be tested at least once every
calendar year by Buyer. Either Party may request a special
test of Meters or check meters, but such Party shall bear
the cost of such testing unless there is an inaccuracy
outside the limits established in American National
Standard Institute Code for Electricity Metering (ANSI
C12.1, latest version), in which case the Party whose
meters were found to be inaccurate shall be responsible
for the costs of the special testing. Meters installed
pursuant to this Agreement shall be sealed and the seal
broken only when the meters are to be adjusted, inspected
or tested. Authorized representatives of both Parties
shall have the right to be present at all routine or
special tests and to inspect any readings, testing,
adjustment or calibration of the Meters or check meters.
Buyer's Operating Representative shall provide 15 days
prior notice of routine meter testing to Supplier's
Operating Representative. If Supplier has installed check
meters in accordance with Section 9.1.1 (Meters), Supplier
shall test and calibrate each such meter at least once
every calendar year. Supplier's Operating Representative
shall provide 15 days prior notice of routine check meter
testing to Buyer's Operating Representative. In the event
of special meter testing, the Parties Operating
Representatives shall notify each other with as much
advance notice as practicable.
9.1.5 Metering Accuracy. If the Meters are registering but their
accuracy is outside the limits established in ANSI C12.1,
Buyer shall repair and recalibrate or replace the Meters
and Buyer shall adjust payments to Supplier for the
Delivered Amount for the lesser of the period in which the
inaccuracy existed or 90 days. If the period in which the
inaccuracy existed cannot be determined, adjusted payments
shall be made for a period equal to one-half of the
elapsed time since the latest prior test
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and calibration of the Meters; however, the adjustment
period shall not exceed 90 days. If adjusted payments are
required, Buyer shall render a statement describing the
adjustments to Supplier within 30 days of the date on
which the inaccuracy was rectified. Additional payments to
Supplier, or Buyer's Invoice for refunds due Buyer, as
applicable shall accompany Buyer's statement. Any payments
required pursuant to this Section shall be made within 30
days of receipt of Buyer's statement.
9.1.6 Failed Meters. If the Meters fail to register, Buyer shall
make payments to Supplier based upon Supplier's check
metering, provided, however, that if the accuracy of the
check meters is subsequently determined to be outside the
limits established in ANSI C12.1, Buyer shall adjust the
payments to Supplier for the Delivered Amount calculated
using the check meters for the lesser of the period in
which the inaccuracy existed or 90 days. If the period in
which the inaccuracy cannot be determined, adjusted
payments shall be made for a period equal to one-half of
the elapsed time since the latest prior test and
calibration of the check meters; however, the adjustment
period shall not exceed 90 days. If no such metering is
available, payments shall be based upon Buyer's best
estimate of the Delivered Amount. In such event, Buyer's
estimated payments shall be in full satisfaction of
payments due hereunder.
9.2 Invoices.
9.2.1 Invoicing and Payment. On or before the last day of each
month, Buyer shall send to Supplier an Invoice for the
prior month (a "Billing Period"). The Invoice shall be
calculated based upon Meter data available to Buyer and
shall comply with this Section.
9.2.2 Monthly Invoice Calculation. On each monthly Invoice,
Buyer shall calculate the following amounts:
9.2.2.1 The Supply Amount during each Dispatch Hour of
the Billing Period;
9.2.2.2 The sum of the Supply Amounts during all Dispatch
Hours of the Billing Period;
9.2.2.3 The Delivered Amount, excluding Excess Energy,
during each Dispatch Hour of the Billing Period;
9.2.2.4 The sum of the Delivered Amounts, excluding
Excess Energy, during all Dispatch Hours of the
Billing Period multiplied by the Product Rate for
Delivered Amounts;
9.2.2.5 If applicable, Excess Energy delivered during
each Dispatch Hour of the Billing Period;
20
9.2.2.6 If applicable, the sum of the Excess Energy
during all Dispatch Hours of the Billing Period
multiplied by the applicable rate for Excess
Product;
9.2.2.7 The Shortfall, if any, during each Dispatch Hour
of the Billing Period;
9.2.2.8 The sum of the Shortfalls, if any, during all
Dispatch Hours of the Billing Period;
9.2.2.9 The Replacement Costs, if any, in respect of the
Shortfall referred to in Section 9.2.2.7 above,
during each Dispatch Hour of the Billing Period;
and
9.2.2.10 The sum of the Replacement Costs, if any, during
all Dispatch Hours of the Billing Period.
9.2.3 Replacement REC Invoice Calculation. In addition to the
requirements for monthly Invoices set forth in Section
9.2, after the REC Administrator issues its final REC
statement for a Contract Year, the Buyer shall send to
Supplier a yearly Invoice for such Contract Year, which
shall include the following calculations:
9.2.3.1 The sum of the Transferred RECs during the
Contract Year;
9.2.3.2 The difference between the Yearly REC Amount and
the sum of the Transferred RECs during such
Contract;
9.2.3.3 The REC Replacement Costs, if any, payable to
Buyer in respect of the undelivered RECs referred
to in Section 9.2.3.2 above, during such Contract
Year.
9.2.4 Payment to Buyer. In the event any Shortfall occurs
pursuant to Section 3 (Supply Service Obligations), the
Invoice referred to in Section 9.2.1 (Invoicing and
Payment) above shall deduct Replacement Costs, REC
Replacement Costs and any other amounts owing to Buyer
from amounts due to Supplier and shall indicate the net
payment due Supplier or Buyer, as applicable. Buyer shall
provide supporting data in reasonable detail to support
its calculations of Replacement Costs, REC Replacement
Costs and any other amounts owing to Buyer. Any payment
due to Buyer shall be made within ten calendar days of the
date of the Invoice.
9.2.5 Method of Payment. Contemporaneously with delivery of the
Invoice, Buyer shall remit the payment amount by wire or
electronic fund transfer or otherwise pursuant to the
instructions stated in Exhibit 4.
9.2.6 Examination and Correction of Invoices. As soon as
practicable, but no later than 12 months after Supplier's
receipt of Buyer's Invoice and
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payment, Supplier shall notify Buyer in writing of any
alleged error in Buyer's Invoice.
9.2.6.1 If Supplier notifies Buyer of an alleged error in
Buyer's Invoice, the Parties agree to make good
faith efforts to reconcile the billing and
mutually agree on the appropriate remedy, if any.
9.2.6.2 If a correction is determined to be required,
Buyer shall provide an adjusted Invoice to
Supplier. If such error results in an additional
payment to Supplier, Buyer's payment in the
amount due Supplier shall accompany the adjusted
Invoice. If such error resulted in a refund owed
to Buyer, Supplier shall pay Buyer the amount of
the Invoice within 10 calendar days of the date
of the statement or at Buyer's option, Buyer may
offset such amount against the subsequent monthly
payment to Supplier.
9.2.6.3 If Supplier fails to provide notice of an alleged
error within 12 months of receipt of an Invoice,
then Supplier shall be deemed to have waived all
rights to object to the Invoice for the subject
Billing Period.
9.2.6.4 Buyer may correct any Invoice errors it discovers
and make adjustments in payments as a result
thereof within 12 months of Supplier's receipt of
Buyer's Invoice.
9.3 Overdue Amounts and Refunds. Overdue amounts and refunds of
overpayments shall bear interest from and including, the due date
or the date of overpayment, as the case may be, to the date of
payment of such overdue amounts or refund at a rate calculated
pursuant to 18 C.F.R. ss. 35.19a.
9.4 Buyer Right to Offset. Buyer shall have the right to offset any
amounts Supplier owes to Buyer against the amounts owed by Buyer
to Supplier.
9.5 Taxes. If Buyer is required to remit any Taxes imposed on or
associated with the Energy or its delivery up to the Delivery
Point[s], the amount shall be deducted from any sums due to the
Supplier. Either Party, upon written request of the other Party,
shall provide a certificate of exemption or other reasonably
satisfactory evidence of exemption if either Party is exempt from
Taxes, and shall use reasonable efforts to obtain and cooperate
with the other Party in obtaining any exemption from or reduction
of any Tax.
Supplier shall indemnify and hold harmless Buyer from and against
Taxes imposed on Buyer as a result of Supplier's actions or
inactions and that otherwise would not have occurred in the
absence of this Agreement in accordance with Section 19
(Indemnification).
22
10. FACILITY CONSTRUCTION; OPERATIONS AND MODIFICATIONS
10.1 Construction of Generating Facility. Supplier shall construct the
Generating Facility in accordance with Good Utility Practices, in
accordance with the Project Milestones and to ensure (i) Supplier
is capable of meeting its supply obligations over the Term, (ii)
the Generating Facility is at all times a Renewable Energy System
and (iii) Supplier is at all times in compliance with all
requirements of a renewable energy generator set forth in the
Renewable Energy Law and any regulations promulgated thereunder.
Supplier shall provide to Buyer in a form satisfactory to Buyer:
(i) within 30 days after execution of the IOA, an update to
Exhibit 5 which shall include a single line diagram of the
Generating Facility, Interconnection Facilities, the Delivery
Point[s] and the location of Meters, which location shall be
reasonably acceptable to Buyer; (ii) within 30 days of the
commencement of construction of the Generating Facility, Exhibit
14; and (iii) within 30 Business Days after the Commercial
Operation Date, a revised version of Exhibit 14 reflecting the
Generating Facility as built. At Buyer's request, Supplier shall
provide Buyer with copies of the construction contract for the
facility and any documentation and drawings reasonably requested
by Buyer, redacted of any pricing and Confidential Information.
10.2 Performance of Project Milestones. Supplier shall complete each
Project Milestone specified in Exhibit 6, Project Milestone
Schedule, on or before 1600 hours PPT on the date specified for
each Project Milestone listed in Exhibit 6.
10.2.1 Completion of Project Milestones. Upon Supplier's
completion of each Project Milestone, Supplier shall
provide to Buyer in writing pursuant to Section 29
(Notices) documentation as specified in Exhibit 6 and
reasonably satisfactory to Buyer demonstrating such
Project Milestone completion within 30 days of such
completion but no later than the date specified for each
Project Milestone listed in Exhibit 6. Buyer shall
acknowledge receipt of the documentation provided under
this Section and shall provide Supplier with written
acceptance or denial of each Project Milestone within 15
days of receipt of the documentation. If any Project
Milestone is not completed by 1600 hours on the date
specified in Exhibit 6, then the Supplier shall be in
Default pursuant to Section 25 (Default and Remedies).
10.2.2 Progress Towards Completion. Supplier shall notify Buyer
promptly (and in any event within ten days) following its
becoming aware of information that leads to a reasonable
conclusion that a Project Milestone will not be met, and
shall convene a meeting with Buyer to discuss the
situation not later than 15 days after becoming aware of
this information.
10.3 Commercial Operation Date. Supplier shall notify Buyer at least
10 days prior to the commencement of any performance tests
required by the EPC Contract or the IOA. Buyer shall have the
right to be present at and witness each such test. Supplier shall
notify Buyer at least 10 days prior to the commencement of the
performance tests required by Exhibit 7. Buyer shall be deemed to
waive its right to be present at the performance tests if Buyer
fails to appear at the scheduled time for the performance tests.
Within seven days of the successful completion of the performance
tests pursuant to Exhibit 7, Supplier shall provide Buyer with
all
23
completed test summary data sheets and other relevant data
derived from such tests demonstrating to Buyer's satisfaction
that such tests have been successfully completed. The date
specified under Milestone K of Exhibit 6 notwithstanding,
Supplier may attain Commercial Operation, with energy payment for
the Supply Amount delivered in accordance with Exhibit 2 A, at
such earlier time as successful completion of the performance
tests as above can be achieved.
10.4 Modification. Without the prior written consent of Buyer, which
shall not be unreasonably withheld, Supplier shall not be
entitled to make any modification to the Generating Facility that
might (i) expose Buyer to any additional liability or increase
its obligations under the Agreement or (ii) adversely affect
Supplier's or Buyer's ability to perform its obligations under
this Agreement or any Law or to any third party. Any such
modifications shall be conducted in accordance with Good Utility
Practice and all applicable Laws and reliability criteria, as
such may be amended from time to time. To the extent additions
and modifications interfere with the ability of the Generating
Facility to provide the Supply Amount beyond the limits for
Planned Outage[s] set forth in Section 12 (Planned Outages),
Supplier shall pay Replacement Costs to Buyer pursuant to Section
3.5 (Replacement Costs).
10.5 Operation and Maintenance. Supplier, at all times shall install,
operate, maintain and repair the Generating Facility in
accordance with Good Utility Practice and to ensure (i) Supplier
is capable of meeting its supply obligations over the Term, (ii)
the Generating Facility is at all times a Renewable Energy System
and (iii) Supplier is at all times in compliance with all
requirements of a renewable energy generator set forth in the
Renewable Energy Law and any regulations promulgated thereunder.
Supplier agrees to (i) to maintain adequate records of all
operations of the Generating Facility, and (ii) to follow such
regulations, directions and procedures of Buyer, the Control Area
Operator, the Transmission Provider, WECC, NERC and any
applicable Governmental Authority to protect and prevent the
Transmission System from experiencing any negative impacts
resulting from the operation of Supplier's Generating Facility.
In the event of an inconsistency, the Buyer shall choose whose
procedures shall govern. Each Party shall use all reasonable
efforts to avoid any interference with the other's operations.
Supplier shall cause the Energy of the Generating Facility to
meet the Power Quality Standards at all times, and shall operate
the Generating Facility consistent with WECC, NERC, Buyer,
Control Area Operator and Transmission Provider requirements.
10.6 Operation and Maintenance Agreement. No later than 90 days prior
to the Commercial Operation Date, if the owner of the Generating
Facility is not the operator, Supplier shall provide an unpriced
copy of the agreement between Supplier and the operator which
requires the operator to operate the Generating Facility in
accordance with the terms hereof which shall be attached to this
Agreement as Exhibit 15. Supplier shall provide a certified copy
of a certificate warranting that the operator is a corporation or
partnership in good standing with the State of Nevada which shall
be attached to this Agreement.
10.7 Ground Lease; Rights-of-way. If the land on which the Generating
Facility is located is not owned by the Supplier, no later than
60 days prior to
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commencement of construction, Supplier shall provide a copy of
the agreement with the owner of the land which establishes the
right of the Supplier to construct the Generating Facility on the
land and the existence of required rights-of-way and easements,
which shall be attached to this Agreement as Exhibit 16.
10.8 Right to Review. Buyer and Supplier each shall have the right to
review during normal business hours the relevant books and
records of the other Party to confirm the accuracy of such as
they pertain only to transactions under this Agreement. The
review shall be consistent with standard business practices and
shall follow reasonable notice to the other Party. Reasonable
notice for a review of the previous month's records shall be a
minimum of seven Business Days. If a review is requested of other
than the previous month's records, then notice of that request
shall be provided with a minimum of 14 Business Days notice by
the requesting Party. The notice shall specify the period to be
covered by the review. The Party providing records can exercise
its right under Section 36 (Confidentiality) to protect the
confidentiality of the records.
11. EMERGENCY
11.1 In the event of an Emergency, Buyer and Supplier shall promptly
comply with any applicable requirements of any Governmental
Authority, NERC, WECC, Control Area Operator, Transmission
Provider, transmission operator, or any successor of any of them,
regarding the reduced or increased generation of the Generating
Facility.
11.2 Each Party shall provide prompt oral and written notification to
the other Party of any Emergency. If requested by the other
Party, the Party declaring the Emergency shall provide a
description in reasonable detail of the Emergency and any steps
employed to cure it.
11.3 In the event of an Emergency, either Party may take reasonable
and necessary action to prevent, avoid or mitigate injury,
danger, damage or loss to its own equipment and facilities, or to
expedite restoration of service; provided, however, that the
Party taking such action shall give the other Party prior notice,
if practicable, before taking any action. This Section shall not
be construed to supersede Sections 11.1 and 11.2.
11.4 In the event of an Emergency, Buyer can request Supplier not to
institute a Planned Outage of the Generating Facility and
Supplier agrees to take all commercially reasonable steps to
avoid instituting the Planned Outage until such time as the
condition of the Emergency has passed. Supplier may present a
reasonable estimate of costs expected to be incurred as a result
of the Supplier not instituting the Planned Outage. If Buyer
agrees to the estimated costs, Supplier shall be required not to
institute the Planned Outage and Buyer shall reimburse Supplier
for actual costs incurred, not to exceed the estimated amounts.
11.5 In the event of an Emergency declared by the Supplier, such that
the Supplier cannot deliver some or all of the Supply Amount to
the Delivery Point[s], the Supplier will pay the Buyer's
Replacement Costs pursuant to Section 3.5
25
(Replacement Costs) unless the Supplier declares a Force Majeure
in accordance with Section 21 (Force Majeure).
11.6 In the event on an Emergency declared by Buyer, as a result of
which Buyer is unable to receive some or all of the Product at
the Delivery Point[s] or is unable to deliver some or all of the
Product to its customers, then Buyer shall have no payment
liability in respect of such Product for up to one hundred
sixty-eight (168) consecutive hours. If the Emergency lasts
longer than one hundred sixty-eight (168) consecutive hours,
Buyer shall pay the Supplier for up to the Supply Amount for the
hours that exceed one hundred sixty-eight (168) hours, provided
that the Buyer has not declared Force Majeure and provided, that
the Supplier demonstrates to the Buyer that the Generating
Facility would have been available to deliver Energy up to the
Supply Amount during the Emergency. The Supplier shall not pay
the Buyer for Replacement Costs to the extent Buyer is not able
to receive some or all of the Product at the Delivery Point[s] or
is unable to deliver some or all of the Product to its customers.
12. PLANNED OUTAGES
12.1 Supplier shall request and obtain Buyer's prior written approval
before conducting any non-forced outage of the Generating
Facility or reducing the capability of the Generating Facility to
deliver the Supply Amount (all hereinafter referred to as
"Planned Outages") so as to minimize the impact on the
availability of the Generating Facility.
12.1.1 Within 90 days prior to the Commercial Operation Date and
on or before October 1 of each Contract Year, Supplier
shall provide Buyer with a schedule of proposed Planned
Outages for the upcoming Contract Year. The proposed
Planned Outages schedule will designate the days and
amount (in MWs) in which the Generating Facility output
will be reduced in whole or in part. Each proposed
schedule shall include all applicable information,
including the following: month, day and time of requested
outage, facilities impacted, duration of outage, purpose
of outage, and other relevant information. The total
combined Planned Outages in any Contract Year shall not
exceed 15 days, prorated in the first Contract Year based
on the number of days in such year, unless otherwise
approved by Buyer.
12.1.2 Buyer shall promptly review Supplier's proposed schedule
and shall either require modifications or approve the
proposed schedule within 30 days of Buyer's receipt of
such schedule. The Supply Amount will be reduced
accordingly in part or total during the period of the
Planned Outage. Supplier shall use its best efforts to
accomplish all Planned Outage[s] in accordance with the
approved schedule. Supplier shall be responsible to Buyer
for Replacement Costs if any outage period exceeds its
approved schedule, or is not approved by Buyer, provided
that changes to the approved schedule may be requested by
either Party and each Party shall make reasonable efforts
to accommodate such changes, provided further that Buyer
shall have no obligation to agree to Supplier's revisions
to the approved Planned Outage[s] schedule.
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12.1.3 Regardless of any prior approval of a Planned Outage, the
Supplier shall not start a Planned Outage on the
Generating Facility without notification of the approved
Planned Outage to the Buyer's Operating Representative
seven days prior to the start of such Planned Outage.
13. REPORTS; OPERATIONAL LOG
13.1 Copies of Communications. Supplier shall promptly provide Buyer
with copies of any orders, decrees, letters or other written
communications to or from any Governmental Authority asserting or
indicating that Supplier or its Generating Facility is in
violation of Laws which relate to Supplier or operation or
maintenance of the Generating Facility which could have an
adverse effect on Buyer. Supplier shall keep Buyer apprised of
the status of any such matters.
13.2 Notification of Generating Facility Status. Supplier shall notify
Buyer of the status of the Generating Facility as an EWG, QF or
such other status no later than 90 days prior to the Operation
Date. Supplier shall notify Buyer, as soon as practicable, of any
changes in that status after the Operation Date of this
Agreement.
13.3 Notices of Change in Generating Facility. In addition to any
consent required pursuant to Section 0 (Modification), Supplier
shall provide notice to Buyer as soon as practicable prior to any
temporary or permanent change to the performance, operating
characteristics, or turbine/generators of the Generating
Facility. Such notice shall describe any changes, expected or
otherwise, to the total capacity of the Generating Facility, the
rate of production and delivery of Energy, interconnection and
transmission issues, and such additional information as may be
required by Buyer.
13.4 Operational Data. Supplier shall provide Buyer with the following
data: hot water in pounds per hour and temperature in degrees
Fahrenheit at the turbine inlet valve necessary to operate the
plant at the Supply Amount as shown in a preliminary piping or
flow diagram provided by Supplier as described in Exhibit 14, the
Supply Amounts as listed in Exhibit 13, and up to the total
facility capacity as described in Exhibit 1. Subject to Buyer's
review and acceptance, Supplier may change this data no later
than concurrent with completion of item 2(G) in Exhibit 6. This
information will be used as a baseline and monitoring tool for
items 2(E) and 2(G) in Exhibit 6.
13.5 Project Reports and Project Review Meetings.
13.5.1 Prior to the Commercial Operation Date. Supplier shall
provide to Buyer in a quarterly project report, with a
monthly update, all pertinent information in connection
with Supplier's hot water and steam supply to be used for
the Generating Facility including: drilling data, test and
well performance information and any reports pertaining to
the geothermal reservoir; progress in obtaining Project
Milestones; progress in obtaining any approvals or
certificates in connection with achieving the Commercial
Operation Date; and a discussion of any foreseeable
disruptions or delays. The project reports should be
27
provided at the latest on the 15th day of every month when
such quarterly or monthly update is due. The Parties shall
conduct meetings every six months or more frequently if
requested by Buyer to review this data and any information
related to Supplier's completion of or progress toward the
Project Milestone activities listed in Exhibit 6.
13.5.1.1 Projected Operation Date; Commercial Operation
Date. In addition to any other requirements for
Commercial Operation under this Agreement, the
Supplier shall provide notice to Buyer of its
best estimate of the projected Operation Date and
Commercial Operation Date on the PUCN Approval
Date and as soon as Supplier becomes aware of any
changes in such projected dates, and shall
coordinate with Buyer regarding the commencement
of operation of the Generating Facility.
13.5.2 After Commercial Operation Date. After the Commercial
Operation Date, Supplier shall provide to Buyer on January
1 and July 1 of each calendar year throughout the Term of
this Agreement, in both electronic and hard copy format, a
report which shall include all pertinent information in
connection with Supplier's Generating Facility including:
all reporting information maintained in the operational
log; data on hot water and steam supply to be used for the
Generating Facility including drilling data, test and well
performance information and any reports pertaining to the
geothermal reservoir. Each February during the Term, the
Parties shall meet to conduct an annual review of the
Generating Facility and geothermal resource performance.
Additional data and meetings may be required as
necessitated by Generating Facility performance.
13.5.3 Operational Log. Supplier shall maintain an operations
log, which shall include the aggregate Delivered Amounts
for the Contract Year, planned and unplanned maintenance
outages, circuit breaker trip operations requiring a
manual reset, partial deratings of equipment, and any
other significant event or information related to the
operation of the Generating Facility. The operations log
shall be available for inspection by Buyer upon reasonable
advance request, and Supplier shall make the data that
supports the log available on a real time basis by remote
access to Buyer, if Buyer acquires the necessary equipment
and software license to process the data by remote access.
14. COMMUNICATIONS
14.1 Supplier's Operating Representative or designated alternate shall
be available to address and make decisions on all operational
matters under this Agreement on a 24 hour, seven day per week
basis. Supplier shall, at its expense, maintain and install a 24
hour, seven day per week communication link with Buyer's
Operating Representative at Buyer's operations center and with
Buyer's schedulers as listed on Exhibit 4, to maintain
communications between personnel on site at the
28
Generating Facility, Buyer and the Control Area Operator at all
times. Supplier shall provide at its expense:
14.1.1 For the purposes of telemetering, a telecommunications
circuit from the Generating Facility to the Buyer's
operations center;
14.1.2 Two dedicated ringdown voice telephone lines for purposes
of accessing Buyer's dial-up metering equipment and for
communications with Buyer's operations center; and
14.1.3 Equipment to transmit to and receive telecopies and email
from Buyer and the Control Area Operator, including
cellular telephones.
15. SCHEDULING NOTIFICATION
15.1 Scheduling Notification. Supplier shall provide to Buyer notices
containing information including Supplier's good faith daily and
hourly forecast of the Delivered Amount, Generating Facility
Planned Outages, Derating, other outages and similar changes that
may affect the Delivered Amount.
15.1.1 Availability Notice.
15.1.1.1 No later than 0500 PPT each day, or as otherwise
specified by the Buyer consistent with Good
Utility Practice, Supplier shall deliver to
Buyer's Operating Representative an Availability
Notice in the form set forth in Exhibit 8. The
Availability Notice will cover the 42 hours
beginning with hour ending 0700 of that day
through hour ending 2400 for the following day or
such other period specified by Buyer consistent
with Good Utility Practice.
15.1.1.2 Supplier shall update the Availability Notice and
notify the Buyer's Operating Representative as
soon as practicable after becoming aware (i) of
an expected Derating, or (ii) that Excess Energy
is expected.
15.1.1.3 The information in the Availability Notice,
including the forecasted Delivered Amount and
Excess Energy, will be the Supplier's good faith
forecast and will indicate any Dispatch Hour for
which the Delivered Amount is expected to be less
than the Supply Amount or any Dispatch Hour for
which Excess Energy is expected.
15.1.1.4 In the event of a Derating, Supplier shall
provide: (i) the extent, if any, to which the
Derating is attributable to a Planned Outage;
(ii) the magnitude of the Derating; (iii) the
hours during which the Derating is expected to
apply; and (iv) the cause of the Derating.
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16. COMPLIANCE
16.1 Each Party shall comply with all relevant Laws and regulations
and shall, at its sole expense, maintain in full force and effect
all relevant permits, authorizations, licenses and other
authorizations material to the maintenance of its facilities and
the performance of obligations under this Agreement. Each Party
and its representatives shall comply with all relevant
requirements of the Control Area Operator, Transmission Provider
and each Governmental Authority to ensure the safety of its
employees and the public.
16.2 Buyer and Supplier shall perform, or cause to be performed, their
obligations under this Agreement in all material respects in
accordance with Good Utility Practices and in good faith.
17. APPROVALS
17.1 Condition Precedent. Each Party's performance of its respective
obligations under Sections 3 (Supply Service Obligations), 4
(Price of Product), 5 (Renewable Energy Credits/Renewable Energy
Benefits), 7 (Renewable Quotas), 8 (Right of First Offer), 10
(Facility Construction; Operations and Modifications), 11
(Emergency), 12 (Planned Outages), 14 (Communications), 15
(Scheduling Notification) and 28 (Insurance) of this Agreement is
subject to Buyer obtaining the PUCN approval described in Section
17.2 (PUCN Approval) in form and substance satisfactory to Buyer
and without any conditions unsatisfactory to Buyer.
17.2 PUCN Approval. Within 90 days after the execution date of this
Agreement, Buyer shall submit this Agreement to the PUCN for:
17.2.1 A determination that the terms and conditions of this
Agreement are just and reasonable; 17.2.2 A determination
that the Generating Facility is a Renewable Energy System;
17.2.3 A determination that the Energy purchased under this
Agreement can be used to satisfy Buyer's renewable energy
portfolio requirement;
17.2.4 A determination that this Agreement and its terms and
conditions are prudent and that all costs of Energy
delivered under this Agreement are recoverable by Buyer in
Buyer's tariff;
17.2.5 A determination that any litigation costs incurred by
Buyer in good faith associated with this Agreement shall
be considered in a general rate case for a prudence
determination and recovery therein;
17.2.6 A determination that the actions, terms, and conditions
are in full compliance with the terms, conditions, and
requirements of the Renewable Energy Law and any
regulations promulgated thereunder;
17.2.7 A determination that it was appropriate for Buyer to enter
into this Agreement to purchase Renewable Energy and RECs
from Supplier rather than to construct and own its own
facility; and
30
17.2.8 Approval of this Agreement and its terms and conditions in
their entirety.
17.3 Failure to Obtain Approval. If PUCN fails to grant approval or
acceptance of this Agreement (including all items provided in
Section 17.2 (PUCN Approval)) within 135 days of Buyer's
submittal of same for approval, then Buyer shall, in its sole
unreviewable discretion, have the right to terminate this
Agreement.
17.4 Cooperation. Each Party agrees to notify the other Party of any
significant developments in obtaining any approval in connection
with achieving Commercial Operation of the Generating Facility,
including PUCN approval. Each Party shall use reasonable efforts
to obtain such required approvals and shall exercise due
diligence and shall act in good faith to cooperate with and
assist each other in acquiring each approval necessary to
effectuate this Agreement. Further, each Party agrees to
reasonably support each other in regulatory proceedings to obtain
the requisite approvals.
18. SECURITY
18.1 Security. As a condition of Buyer's execution of and continuing
compliance with this Agreement, Supplier shall:
18.1.1 provide to Buyer a letter of credit from a Qualified
Financial Institution in form and substance acceptable to
Buyer in the amount equal to the product of $4.09 per MWh
and the annual total Supply Amount specified in Exhibit 13
for the first Contract Year or, if the first Contract Year
is not a full calendar year, the second Contract Year.
This letter of credit shall be posted as soon as
practicable after Supplier's execution of this Agreement,
but in any event prior to the submittal of this Agreement
to the PUCN pursuant to Paragraph 17.2. No later than 30
days prior to the expiry date of any letter of credit,
Supplier shall cause the letter of credit to be renewed or
replaced with another letter of credit in an equal amount.
The Buyer shall have the right to draw on the letter of
credit, at the Buyer's sole discretion (i) in the event
Supplier fails to make any payments owing under this
Agreement or to reimburse the Buyer for costs, including
Replacement Costs, REC Replacement Costs and Penalties,
that the Buyer has incurred or may incur as a result of
the Supplier's failure to perform under this Agreement,
(ii) if the letter of credit has not been renewed or
replaced at least 30 days prior to the date of its
expiration or (iii) if the financial institution that
issued the letter of credit has been downgraded to below
the Minimum Credit Rating and Supplier has not caused a
replacement letter of credit to be issued for the benefit
of Buyer within seven days of such downgrade pursuant to
Section 18.2 (Maintaining Security) below. The letter of
credit shall be released by Buyer to Supplier (i) if this
Agreement is terminated because of a failure to obtain
PUCN approval, or (ii) no later than 10 days after the
later to occur of (x) the end of the first Contract Year
that is a full calendar year during which Supplier has
complied with each of its obligations under
31
this Agreement and (y) 12 months after the Buyer has
submitted its annual report to the PUCN for that Contract
Year and the Buyer has not suffered a Penalty due to
Supplier's performance under this Agreement during that
Contract Year; or
18.1.2 deposit with Buyer as soon as practicable after Supplier's
execution of this Agreement, but in any event prior to the
submittal of this Agreement to the PUCN pursuant to
Paragraph 17.2,cash in the amount equal to the product of
$4.09 per MWh and the annual total Supply Amount specified
in Exhibit 13 for the first Contract Year or, if the first
Contract Year is not a full calendar year, the second
Contract Year. The Buyer shall have the right to apply
such funds, at the Buyer's sole discretion, in the event
Supplier fails to make any payments owing under this
Agreement or to reimburse Buyer for costs, including
Replacement Costs, REC Replacement Costs and Penalties,
that Buyer has incurred or may incur as a result of
Supplier's failure to perform under this Agreement. Any
unused deposit shall be released by Buyer to Supplier (i)
if this Agreement is terminated because of a failure to
obtain PUCN approval, or (ii) no later than 10 days after
the later to occur of (x) the end of the first Contract
Year that is a full calendar year during which Supplier
has complied with each of its obligations under this
Agreement and (y) 12 months after the Buyer has submitted
its annual report to the PUCN for that Contract Year and
the Buyer has not suffered a Penalty due to Supplier's
performance under this Agreement during that Contract
Year.
18.2 Maintaining Security. If at any time after the Effective Date of
this Agreement, Standard & Poor's, ▇▇▇▇▇'▇ or another nationally
recognized firm downgrades the credit rating to below the Minimum
Credit Rating of the financial institution that issued the letter
of credit pursuant to Section 18.1 (Security) above, then
Supplier shall (i) provide Buyer with written notice of such
downgrade within two Business Days of Supplier being notified of
any such downgrade, but not to exceed 30 days from such downgrade
and (ii) cause a replacement letter of credit satisfying the
conditions of Section 18.1.1 to be issued in favor of Buyer
within seven days of such downgrade. In the event such a
downgrade also constitutes an Event of Default pursuant to
Section 25 (Default and Remedies), the requirements of this
Section are in addition to, and not in lieu of, the requirements
of Section 25 (Default and Remedies).
18.2.1 Supplier shall take all necessary action and shall be in
compliance with Section 18.1 (Security) within 15 days of
the downgrade.
18.3 Supplier hereby waives any and all rights it may have, including
rights at law or otherwise, to require Buyer to provide financial
assurances or security (including, but not limited to, cash,
letters of credit, bonds or other collateral) in respect of its
obligations under this Agreement. Supplier shall not earn or be
entitled to any interest on any security provided pursuant to
this Section 18 (Security), including amounts deposited pursuant
to Section 18.1.2.
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19. INDEMNIFICATION
19.1 Third Party Claims. A Party to this Agreement (the "Indemnifying
Party") shall indemnify, defend and hold harmless, on an After
Tax Basis, the other Party, its parent and affiliates, and each
of their officers, directors, employees, attorneys, agents and
successors and assigns (each an "Indemnified Party") from and
against any and all Losses arising out of, relating to, or
resulting from the Indemnifying Party's breach of, or the
performance or non-performance of its obligations under this
Agreement (including Taxes, and failure to maintain insurance at
levels required by this Agreement, Penalties, fines, reasonable
attorneys' fees and costs associated with Renewable Quotas);
provided, however, that no Party shall be indemnified hereunder
for any Loss to the extent resulting from its own gross
negligence, fraud or willful misconduct.
19.1.1 In furtherance of the foregoing indemnification and not by
way of limitation thereof, the Indemnifying Party hereby
waives any defense it otherwise might have against the
Indemnified Party under applicable workers' compensation
laws.
19.1.2 In claims against any Indemnified Party by an agent of the
Indemnifying Party, or anyone directly or indirectly
employed by them or anyone for whose acts the Indemnifying
Party may be liable, the indemnification obligation under
this Section 19 (Indemnification) shall not be limited by
a limitation on amount or type of damages, compensation or
benefits payable by or for the Indemnifying Party or a
subcontractor under workers' or workmen's compensation
acts, disability benefit acts or other employee benefit
acts.
19.2 No Negation of Existing Indemnities; Survival. Each Party's
indemnity obligations under this Agreement shall not be construed
to negate, abridge or reduce other indemnity or other rights or
obligations, which would otherwise exist at Law or in equity. The
obligations contained herein shall survive any termination,
cancellation, expiration, or suspension of this Agreement to the
extent that any third party claim is commenced during the
applicable statute of limitations period.
19.3 Indemnification Procedures.
19.3.1 Any Indemnified Party seeking indemnification under this
Agreement for any Loss shall give the Indemnifying Party
notice of such Loss promptly but in any event on or before
30 days after the Indemnified Party's actual knowledge of
such claim or action. Such notice shall describe the Loss
in reasonable detail, and shall indicate the amount
(estimated if necessary) of the Loss that has been, or may
be sustained by, the Indemnified Party. To the extent that
the Indemnifying Party will have been actually and
materially prejudiced as a result of the failure to
provide such notice, the Indemnified Party shall bear all
responsibility for any additional costs or expenses
incurred by the Indemnifying Party as a result of such
failure to provide notice.
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19.3.2 In any action or proceeding brought against an Indemnified
Party by reason of any claim indemnifiable hereunder, the
Indemnifying Party may, at its sole option, elect to
assume the defense at the Indemnifying Party's expense,
and shall have the right to control the defense thereof
and to determine the settlement or compromise of any such
action or proceeding. Notwithstanding the foregoing, an
Indemnified Party shall in all cases be entitled to
control its own defense in any action if it:
19.3.2.1 May result in injunctions or other equitable
remedies with respect to the Indemnified Party
which would affect its business or operations in
any materially adverse manner;
19.3.2.2 May result in material liabilities which may not
be fully indemnified hereunder; or
19.3.2.3 May have a significant adverse impact on the
business or the financial condition of the
Indemnified Party (including a material adverse
effect on the tax liabilities, earnings, ongoing
business relationships or regulation of the
Indemnified Party) even if the Indemnifying Party
pays all indemnification amounts in full.
19.3.3 Subject to Section 19.3.2, neither Party may
settle or compromise any claim for which
indemnification is sought under this Agreement
without the prior written consent of the other
Party; provided, however, said consent shall not
be unreasonably withheld or delayed.
20. LIMITATION OF LIABILITY
20.1 Responsibility for Damages. Except where caused by the other
Party's negligence or willful misconduct, each Party shall be
responsible for all physical damage to or destruction of the
property, equipment and/or facilities owned by it and any
physical injury or death to natural Persons resulting there from,
and shall not seek recovery or reimbursement from the other Party
for such damage.
20.2 Limitation on Damages. To the fullest extent permitted by Law and
notwithstanding other provisions of this Agreement, in no event
shall a Party be liable to the other Party, whether in contract,
warranty, tort, negligence, strict liability, or otherwise, for
special, indirect, incidental, multiple, consequential (including
lost profits or revenues, business interruption damages and lost
business opportunities), exemplary or punitive damages related
to, arising out of, or resulting from performance or
nonperformance of this Agreement. For purposes of clarification,
Replacement Costs, REC Replacement Costs or payment made by
either Party to satisfy Penalties or payments owing under
Sections 3.5 (Replacement Costs), 3.6 (REC Replacement Costs),
7.1 (Renewable Quotas), 9.5 (Taxes) or 28.6 (Supplier's Minimum
Insurance Requirements), shall not be considered special,
indirect, incidental, multiple, punitive, consequential or
incidental damages under this Section. In addition, this
limitation on damages shall not apply with respect to claims
brought by third parties for which a Party is entitled to
indemnification under this Agreement.
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20.3 Survival. The provisions of this Section 20 (Limitation of
Liability) shall survive any termination, cancellation,
expiration, or suspension of this Agreement.
21. FORCE MAJEURE
21.1 Excuse. Subject to Section 21.4 (Conditions), neither Party shall
be considered in default under this Agreement for any delay or
failure in its performance under this Agreement (including any
obligation to deliver or accept Product) if such delay or failure
is due to an event of Force Majeure, but only to the extent that:
21.1.1 such event of Force Majeure is not attributable to fault
or negligence on the part of that Party;
21.1.2 such event of Force Majeure is caused by factors beyond
that Party's reasonable control; and
21.1.3 despite taking all reasonable technical and commercial
precautions and measures to prevent, avoid, mitigate or
overcome such event and the consequences thereof, the
Party affected has been unable to prevent, avoid, mitigate
or overcome such event or consequences.
21.2 Definition. "Force Majeure" means, subject to Section 21.3
(Exclusions):
21.2.1 Acts of God such as storms, floods, lightning and
earthquakes;
21.2.2 Sabotage or destruction by a third party of facilities and
equipment relating to the performance by the affected
Party of its obligations under this Agreement;
21.2.3 Transmission System or generating equipment failure;
21.2.4 War, riot, acts of a public enemy or other civil
disturbance;
21.2.5 Strike, walkout, lockout or other significant labor
dispute; or
21.2.6 Action or inaction of a Governmental Authority (including
expropriation, requisition or material change in law
imposed by a Governmental Authority).
21.3 Exclusions. None of the following shall constitute an event of
Force Majeure:
21.3.1 Economic hardship of either Party;
21.3.2 Prior to Commercial Operation Date, the non-availability
of the resource supply to generate electricity from the
Generating Facility, unless caused by an independent
identifiable event of Force Majeure;
21.3.3 After Commercial Operation Date, the non-availability of
the resource supply to generate electricity from the
Generating Facility;
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21.3.4 A Party's failure to obtain any permit, license, consent,
agreement or other approval from a Governmental Authority,
except to the extent it is caused by an event listed in
Sections 21.2.1 and 21.2.5; and
21.3.5 A Party's failure to meet a Project Milestone, except to
the extent it is caused by an event listed in Sections
21.2.1 through 21.2.5.
21.4 Conditions. In addition to the conditions set forth in Section
21.1 (Excuse) above, a Party may rely on a claim of Force Majeure
to excuse its performance only to the extent that such Party:
21.4.1 Provides prompt notice of such Force Majeure event to the
other Party, giving an estimate of its expected duration
and the probable impact on the performance of its
obligations under this Agreement;
21.4.2 Exercises all reasonable efforts to continue to perform
its obligations under this Agreement;
21.4.3 Expeditiously takes action to correct or cure the event or
condition excusing performance so that the suspension of
performance is no greater in scope and no longer in
duration than is dictated by the problem; provided,
however, that settlement of strikes or other labor
disputes will be completely within the sole discretion of
the Party affected by such strike or labor dispute;
21.4.4 Exercises all reasonable efforts to mitigate or limit
damages to the other Party; and
21.4.5 Provides prompt notice to the other Party of the cessation
of the event or condition giving rise to its excuse from
performance.
22. DISPUTES
22.1 Dispute or Claim. Any action, claim or dispute which either Party
may have against the other arising out of or relating to this
Agreement or the transactions contemplated hereunder, or the
breach, termination or validity thereof ("Dispute") shall be
submitted in writing to the other Party. The written submission
of any Dispute shall include a concise statement of the question
or issue in dispute together with a statement listing the
relevant facts and documentation that support the claim.
22.2 Good Faith Resolution. The Parties agree to cooperate in good
faith to expedite the resolution of any Dispute. Pending
resolution of a Dispute, the Parties shall proceed diligently
with the performance of their obligations under this Agreement.
22.3 Informal Negotiation. The Parties shall first attempt in good
faith to resolve any Dispute through informal negotiations by the
Operating Representatives or Contract Representatives and senior
management of each Party.
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22.4 Arbitration. In the event the Parties are unable to resolve the
Dispute through informal negotiations as described above, the
Parties may elect to pursue arbitration pursuant to the rules of
the American Arbitration Association, or any other method chosen
by the Parties, subject to the express prior written agreement of
both Parties. Such written agreement shall include all guidelines
to be followed by the Parties in such arbitration or dispute
resolution prior to the commencement of such arbitration. Neither
Party shall be obligated to pursue arbitration over any other
method of dispute resolution.
22.5 Litigation Rights. In the event the Parties are unable to
satisfactorily resolve the Dispute within 30 days from the
receipt of notice of the Dispute, subject to any extensions of
time as may be mutually agreed upon in writing, or any
arbitration agreement, either Party may initiate litigation in a
court of law with jurisdiction located in Las Vegas or Reno,
Nevada, which shall be the exclusive venue to litigate disputes.
22.6 Recovery Costs. In the event any action is brought at law or in
equity in court to enforce any provision of this Agreement, or
for damages by reason of any alleged breach of this Agreement,
then the prevailing Party will be entitled to recover from the
other Party all costs of the suit, including, court costs and the
prevailing Party's reasonable attorney's fees and related costs
and expenses of litigation.
23. NATURE OF OBLIGATIONS
23.1 The provisions of this Agreement shall not be construed to create
an association, trust, partnership, or joint venture; or impose a
trust or partnership duty, obligation, or liability or agency
relationship between the Parties.
23.2 By this Agreement, neither Party dedicates any part of its
facilities or the service provided under this Agreement to the
public.
24. ASSIGNMENT
24.1 Buyer may assign this Agreement as follows:
24.1.1 Buyer may assign this Agreement or assign or delegate its
rights and obligations under this Agreement, in whole or
in part, without Supplier's consent, if such assignment is
made to: (i) Nevada Power Company; (ii) where such
assignment does not occur by operation of law, any
successor to Buyer provided such successor is a public
utility holding a certificate of public convenience and
necessity granted by the PUCN pursuant to NRS Chapter 704;
(iii) a legally authorized governmental or
quasi-governmental agency charged with providing retail
electric service in Nevada; or (iv) as otherwise required
by Law.
24.1.2 Buyer also may assign this Agreement, in whole or in part,
without Supplier's consent, to a party or Person whose
Credit Rating, as published by either Relevant Rating
Agency, is equal or superior to the Minimum Credit Rating
as of the time of assignment.
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24.2 Supplier may, without the consent of Buyer (and without relieving
itself from liability hereunder), (i) transfer, pledge, encumber,
or assign this Agreement or the account, revenues or proceeds
hereof in connection with any financing or other financial
arrangements for the Generating Facility and (ii) transfer or
assign this Agreement to an affiliate in connection with a
transfer of the Generating Facility; provided, that Supplier
provides Buyer prior notice of any such transfer and, with
respect to any transfer to an affiliate of Supplier, such
affiliate enters into an assignment and assumption agreement in
form and substance satisfactory to Buyer.
24.3 Except as stated above, neither this Agreement nor any of the
rights, interests, or obligations hereunder shall be assigned by
either Party, including by operation of Law, without the prior
written consent of the other Party, which consent shall not be
unreasonably withheld. Any assignment of this Agreement in
violation of the foregoing shall be, at the option of the
non-assigning Party, void.
24.4 A Party's assignment or transfer of rights or obligations
pursuant to Section 24 (Assignment) (other than Section 24.2) of
this Agreement shall relieve said Party from any liability and
financial responsibility for the performance thereof arising
after any such transfer or assignment, provided such transferee
enters into an assignment and assumption agreement in form and
substance satisfactory to the other Party.
24.5 During the Term, Supplier will not sell, transfer or otherwise
dispose of its ownership interest in the Generating Facility to
any third party absent an agreement from such third party,
enforceable by Buyer, to perform Supplier's obligations under and
otherwise be bound by the terms of this Agreement.
24.6 Supplier shall procure and deliver to Buyer an undertaking,
enforceable by Buyer, from each party possessing a security
interest in the Generating Facility to the effect that, if such
party forecloses on its security interest, (a) it will assume
Supplier's obligations under and otherwise be bound by the terms
of this Agreement, and (b) it will not sell, transfer or
otherwise dispose of its interest in the Generating Facility to
any third party absent an agreement from such third party to
assume Supplier's obligations under and otherwise be bound by the
terms of this Agreement.
24.7 This Agreement and all of the provisions hereof are binding upon,
and inure to the benefit of, the Parties and their respective
successors and permitted assigns.
25. DEFAULT AND REMEDIES
25.1 Except to the extent excused due to an event of Force Majeure in
accordance with Section 21 (Force Majeure), an event of default
("Event of Default") shall be deemed to have occurred with
respect to a Party (the "Defaulting Party") upon the occurrence
of one or more of the following events:
25.1.1 in the case of either the Buyer or the Supplier, failure
to make timely payments due under this Agreement;
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25.1.2 in the case of the Supplier, its failure to achieve
Commercial Operation by the date specified in Exhibit 6;
25.1.3 in the case of the Supplier, its failure to meet any of
the Project Milestone Requirements as set forth in
Exhibit 6;
25.1.4 in the case of the Supplier, its failure to comply with
the provisions of Section 18 (Security);
25.1.5 failure of the Supplier's Generating Facility to deliver
at least 50 percent of the total Supply Amount to Buyer
during any two consecutive Billing Periods after the
Commercial Operation Date;
25.1.6 in the case of the Supplier, its failure to comply with
the provisions of Section 24 (Assignment);
25.1.7 failure by the Buyer or the Supplier to comply with any
other obligations imposed upon it by this Agreement,
which failure to comply has a Material Adverse Effect on
the other Party or its rights and obligations under this
Agreement;
25.1.8 failure by the Buyer or the Supplier to comply with the
material requirements of the Control Area Operator,
Transmission Provider, Buyer, WECC, PUCN, FERC, or any
successor thereto where following such directions is
required hereunder, which failure to comply has a
Material Adverse Effect on the other Party or its rights
and obligations under this Agreement;
25.1.9 in the case of the Supplier, its failure at any time to
qualify the Generating Facility as a Renewable Energy
System or itself as a renewable energy producer or
similar status under the Renewable Energy Law or any
regulations promulgated thereunder; or
25.1.10 in the case of the Supplier, its failure to install,
operate, maintain or repair the Generating Facility in
accordance with Good Utility Practice, which failure has
a Material Adverse Effect on the other Party or its
rights and obligations under this Agreement.
25.2 Upon the occurrence of an Event of Default, the Defaulting Party
shall be entitled to a period of 30 days from such occurrence
(the "Cure Period") to cure such Event of Default during which
time the duties and obligations of the Non-Defaulting Party under
this Agreement are suspended; provided, however, that in the case
of an Event of Default under Section 25.1.3, with written notice
from the Defaulting Party to the Non-Defaulting Party such Cure
Period may be extended for an additional 60 days if (i) Supplier
can demonstrate to Buyer that such Event of Default was not
capable of being cured within such 30 day period and such Event
of Default is capable of being cured within an additional 60 day
period, (ii) the Defaulting Party is diligently and continuously
proceeding to cure such Event of Default. In such an event, Buyer
may demand that Supplier post additional security in a form and
amount consistent with Sections 18.1.1 and/or 18.1.2.
39
25.3 If an Event of Default is not cured by the Defaulting Party
during the Cure Period, the Non-Defaulting Party shall be
entitled to all legal and equitable remedies that are not
expressly prohibited by the terms of this Agreement.
26. REPRESENTATIONS AND WARRANTIES OF SUPPLIER
The Supplier represents and warrants to the Buyer as follows:
26.1 Organization. The Supplier is a Limited Liability Corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite power and
authority to own, lease and/or operate its properties and to
carry on its business as is now being conducted. The Supplier is
duly qualified or licensed to do business as a foreign Limited
Liability Corporation (LLC) and is in good standing in each
jurisdiction in which the property owned, leased or operated by
it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so duly
qualified or licensed and in good standing would not have a
Material Adverse Effect.
26.2 Authority Relative to this Agreement. The Supplier has full
authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated herein and has taken all
necessary corporate actions necessary to authorize the execution,
deliver and performance of this Agreement. No other proceedings
or approvals on the part of the Supplier are necessary to
authorize this Agreement. This Agreement constitutes a legal,
valid and binding obligation of Supplier enforceable in
accordance with its terms except as the enforcement thereof may
be limited by applicable bankruptcy, insolvency or similar laws
affecting the enforcement of rights generally.
26.3 Consents and Approvals; No Violation. Other than obtaining the
Supplier Required Regulatory Approvals as set out in Exhibit 10,
the execution, delivery and performance of this Agreement by the
Supplier shall not (i) conflict with or result in any breach of
any provision of the articles of organization (or other similar
governing documents) of the Supplier; (ii) require any consent,
approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except where the
failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, could not
reasonably be expected to have a Material Adverse Effect or (iii)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, agreement,
lease or other instrument or obligation to which the Supplier or
any of its subsidiaries is a party or by which any of their
respective assets may be bound, except for such defaults (or
rights of termination, cancellation or acceleration) as to which
requisite waivers or consents have been obtained.
26.4 Regulation as a Utility. Except as set forth in Exhibit 10, the
Supplier is not subject to regulation as a public utility or
public service company (or similar designation) by the United
States, any State of the United States, any foreign country or
any municipality or any political subdivision of the foregoing.
40
26.5 Availability of Funds. The Supplier has, or will have, and shall
maintain sufficient funds available to it to perform all
obligations under this Agreement and to consummate the
obligations contemplated pursuant thereto.
26.6 Interconnection Cost Due Diligence. Supplier has conducted due
diligence regarding the costs of all facilities necessary to
interconnect the Generating Facility to the Delivery Point[s] and
all such costs are covered by the Product Rates depicted in
Exhibit 2A.
26.7 Permits, Authorizations, Leases, Grants, etc. Supplier has
applied or will apply for or has received the permits,
authorizations, leases, grants as listed in Exhibits 10 and 11,
and that no other permits, authorizations, licenses, grants, etc.
are required by Supplier to construct and operate the Generating
Facility or fulfill its obligations under this Agreement.
26.8 Related Agreements. Supplier has entered into or will enter into
all necessary and material agreements as listed in Exhibit 12
related to Supplier's obligations under this Agreement.
26.9 Certification. The Generating Facility qualifies as a Renewable
Energy System and Supplier has been and is in compliance with all
requirements set forth in the Renewable Energy Law and any
regulations promulgated thereunder.
26.10 Title. Supplier owns all Product attributable to the Generating
Facility and has the right to sell such Product to Buyer.
Supplier will convey good title to the Product to the Buyer free
and clear of any liens or other encumbrances or title defects,
including any which would affect Buyer's ownership of any portion
of such Product or prevent the subsequent transfer of any portion
of such Product by Buyer to a third party.
27. REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to the Supplier as follows:
27.1 Organization; Qualification. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws
of the State of Nevada and has all requisite corporate power and
authority to own, lease, and operate its properties and to carry
on its business as is now being conducted. The Buyer is duly
qualified or licensed to do business as a corporation and is in
good standing in each jurisdiction in which the property owned,
leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the
failure to be so duly qualified or licensed and in good standing
would not have a Material Adverse Effect.
27.2 Authority Relative to this Agreement. Buyer has full corporate
authority to execute and deliver this Agreement to which it is a
party and to consummate the transactions contemplated herein. The
execution and delivery of this Agreement has been duly and
validly authorized by the Buyer and no other corporate
proceedings on the part of the Buyer are necessary to authorize
this Agreement. This Agreement constitutes a legal, valid and
binding obligation of Buyer
41
enforceable in accordance with its terms except as the
enforcement thereof may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of rights
generally.
27.3 Consents and Approvals; No Violation. Other than obtaining the
Buyer Required Regulatory Approvals as set out in Exhibit 9, the
execution, delivery and performance of this Agreement by the
Buyer shall not (i) conflict with or result in any breach of any
provision of the articles of organization (or other similar
governing documents) of the Buyer; (ii) require any consent,
approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except (a) where the
failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification, could not
reasonably be expected to have a Material Adverse Effect or (b)
for those consents, authorizations, approvals, permits, filings
and notices which become applicable to the Buyer as a result of
specific regulatory status of the Buyer (or any of its
affiliates) or as a result of any other facts that specifically
relate to the business or activities in which the Buyer (or any
of its affiliates) is or proposes to be engaged, which consents,
approvals, authorizations, permits, filings and notices have been
obtained or made by Buyer; or (iii) result in a default (or give
rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, agreement, lease or other instrument
or obligation to which the Buyer or any of its subsidiaries is a
party or by which any of their respective assets may be bound,
except for such defaults (or rights of termination, cancellation
or acceleration) as to which requisite waivers or consents have
been obtained.
27.4 Related Agreements. Buyer warrants that it has entered into or
will enter into all necessary and material agreements related to
Buyer's obligations under this Agreement.
28. INSURANCE
28.1 General Requirements. Supplier shall maintain at all times, at
its own expense, general/commercial liability, worker's
compensation, and other forms of insurance relating to its
property, operations and facilities in the manner and amounts set
forth herein from the Effective Date of this Agreement. Supplier
shall maintain coverage on all policies written on a "claims
made" or "occurrence" basis. If converted to an occurrence form
policy, the new policy shall be endorsed to provide coverage back
to a retroactive date acceptable to Buyer.
28.2 Qualified Insurers. Every contract of insurance providing the
coverage required herein shall be with an insurer or eligible
surplus lines insurer qualified to do business in the State of
Nevada and with the equivalent, on a continuous basis, of a "Best
Rating" of "A-" or better and shall include provisions or
endorsements:
28.2.1 Stating that such insurance is primary insurance with
respect to the interest of the Buyer and that any
insurance maintained by Buyer is excess and not
contributory insurance required hereunder;
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28.2.2 Stating that no reduction, cancellation or expiration of
the policy shall be effective until 30 days from the date
notice thereof is actually received by Buyer; provided,
that upon Buyer's receipt of any notice of reduction,
cancellation or expiration, that Party shall immediately
provide notice thereof to the other Party; and
28.2.3 Naming the Buyer as an additional insured on the general
liability insurance policies of Supplier as its interests
may appear with respect to this Agreement.
28.3 Certificates of Insurance. Within 30 days of the Effective Date,
Supplier shall provide to Buyer, and shall continue to provide to
Buyer within 30 days of each anniversary of the Effective Date
until the expiration of this Agreement, upon any change in
coverage, or at the request of Buyer not to exceed once each
year, properly executed and current certificates of insurance
with respect to all insurance policies required to be maintained
by Supplier under this Agreement. Certificates of insurance shall
provide the following information:
28.3.1 The name of insurance company, policy number and
expiration date;
28.3.2 The coverage required and the limits on each, including
the amount of deductibles or self-insured retentions,
which shall be for the account of Supplier maintaining
such policy; and
28.3.3 A statement indicating that the Buyer shall receive at
least 30 days prior notice of cancellation or expiration
of a policy or of a reduction of liability limits with
respect to a policy.
28.4 Certified Copies of Insurance Policies. At Buyer's request, in
addition to the foregoing certifications, Supplier shall deliver
to Buyer a copy of each insurance policy, certified as a true
copy by an authorized representative of the issuing insurance
company.
28.5 Inspection of Insurance Policies. Buyer shall have the right to
inspect the original policies of insurance applicable to this
Agreement at the Supplier's place of business during regular
business hours.
28.6 Supplier's Minimum Insurance Requirements.
28.6.1 Worker's Compensation. Worker's compensation insurance in
accordance with statutory requirements including
employer's liability insurance with limits of not less
than $1,000,000 per occurrence and endorsement providing
insurance for obligations under the U.S. Longshoremen's
and Harbor Worker's Compensation Act and the ▇▇▇▇▇ Act
where applicable.
28.6.2 General Liability. General liability insurance including
bodily injury, property damage, products/completed
operations, contractual and personal injury liability
with a combined single limit of at least $2,000,000 per
occurrence and at least $2,000,000 annual aggregate.
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28.6.3 Automobile Liability. Automobile liability insurance
including owned, non-owned and hired automobiles with
combined bodily injury and property damage limits of at
least $1,000,000 per occurrence and at least $1,000,000
aggregate.
28.6.4 Failure to Comply. If Supplier fails to comply with the
provisions of this Section 28 (Insurance), Supplier shall
save harmless and indemnify Buyer from any direct or
indirect loss and liability, including attorneys' fees
and other costs of litigation, resulting from the injury
or death of any person or damage to any property if Buyer
would have been protected had Supplier complied with the
requirements of this Section 28 (Insurance), in
accordance with Section 19 (Indemnification).
29. NOTICES
29.1 All notices hereunder shall, unless expressly specified
otherwise, be in writing and shall be addressed, except as
otherwise stated herein, to the Parties' Contract Representatives
as set forth in Exhibit 4 or as modified from time to time by the
receiving Party by notice to the other Party. Any changes to
Exhibit 4 shall not constitute an amendment to this Agreement.
29.2 All notices or submittals required by this Agreement shall be
sent either by hand-delivery, regular first class U.S. mail,
registered or certified U.S. mail postage paid return receipt
requested, overnight courier delivery, electronic mail or
facsimile transmission. Such notices or submittals will be
effective upon receipt by the addressee, except that notices or
submittals transmitted by electronic mail or facsimile
transmission shall be deemed to have been validly and effectively
given on the day (if a Business Day and, if not, on the next
following Business Day) on which it is transmitted if transmitted
before 4:00 p.m. PPT, and if transmitted after that time, on the
following Business Day; provided, however, that if any notice or
submittal is tendered to an addressee and the delivery thereof is
refused by such addressee, such notice shall be effective upon
such tender.
29.3 All oral notifications required under this Agreement shall be
made to the receiving Party's Operating Representative and shall
promptly be followed by notice as provided in the other
provisions of this Section 29 (Notices).
29.4 Notices of Force Majeure or an Event of Default pursuant to
Section 21 (Force Majeure) or pursuant to Section 25 (Default and
Remedies), respectively and notices of a change to Exhibit 4
shall be sent either by hand delivery, registered or certified
U.S. mail (postage paid return receipt requested), or overnight
courier delivery. Such notices will be effective upon receipt by
the addressee; provided, however, that if any notice is tendered
to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender.
29.5 Any payments required to be made under this Agreement shall be
made pursuant to the instructions in Exhibit 4 as such
instructions may be changed by any Party from time to time by
notice.
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30. MERGER
30.1 This Agreement contains the entire agreement and understanding
between the Parties with respect to all of the subject matter
contained herein, thereby merging and superseding all prior
agreements and representations by the Parties with respect to
such subject matter.
31. COUNTERPARTS AND INTERPRETATION
31.1 This Agreement may be executed in two counterparts, both of which
shall be deemed an original.
31.2 In the event an ambiguity or question of intent or interpretation
arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise
favoring or disfavoring any Party by virtue of authorship of any
of the provisions of this Agreement.
31.3 Any reference to any Federal, state, local, or foreign statute or
law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise.
31.4 The words "include", "includes" and "including" in this Agreement
shall not be limiting and shall be deemed in all instances to be
followed by the phrase "without limitation".
31.5 References to Articles and Sections herein are cross-references
to Articles and Sections, respectively, in this Agreement, unless
otherwise stated.
31.6 The headings or section titles contained in this Agreement are
inserted solely for convenience and do not constitute a part of
this Agreement between the Parties, nor should they be used to
aid in any manner in the construction of this Agreement.
31.7 Discontinued or Modified Index. If Dow ▇▇▇▇▇ discontinues
publishing or substantially modifies any index utilized herein,
then the index used herein will be modified to the most
appropriate available index, with appropriate changes to take
into account any changes in the location of measurement.
32. SEVERABILITY
32.1 If any term, provision or condition of this Agreement is held to
be invalid, void or unenforceable by a Governmental Authority and
such holding is subject to no further appeal or judicial review,
then such invalid, void, or unenforceable term, provision or
condition shall be deemed severed from this Agreement and all
remaining terms, provisions and conditions of this Agreement
shall continue in full force and effect.
32.2 The Parties shall endeavor in good faith to replace such invalid,
void, or unenforceable provisions with valid and enforceable
provisions which achieve the purpose intended by the Parties to
the greatest extent permitted by law.
45
33. WAIVERS; REMEDIES CUMULATIVE
33.1 No failure or delay on the part of a Party in exercising any of
its rights under this Agreement or in insisting upon strict
performance of provisions of this Agreement, no partial exercise
by either Party of any of its rights under this Agreement, and no
course of dealing between the Parties shall constitute a waiver
of the rights of either Party under this Agreement. Any waiver
shall be effective only by a written instrument signed by the
Party granting such waiver, and such shall not operate as a
waiver of, or estoppel with respect to, any subsequent failure to
comply therewith. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law.
34. AMENDMENTS
34.1 Amendments to this Agreement shall be mutually agreed upon by the
Parties, produced in writing and shall be executed by an
authorized representative of each Party.
34.2 The Buyer may submit amendment(s) to the PUCN and FERC, as
applicable, for filing, acceptance or approval.
35. TIME IS OF THE ESSENCE
35.1 Time is of the essence to this Agreement and in the performance
of all of the covenants, obligations and conditions hereof.
36. CONFIDENTIALITY
36.1 Confidential Information. "Confidential Information" means
information provided by one Party (the "Disclosing Party") to the
other (the "Receiving Party") in connection with the negotiation
or performance of this Agreement that is clearly labeled or
designated by the Disclosing Party as "confidential" or
"proprietary" or with words of like meaning or, if disclosed
orally, clearly identified as confidential with that status
confirmed promptly thereafter in writing, excluding, however,
information excluded as provided in Section 36.3 (Excluded
Information).
36.2 Treatment of Confidential Information. The Receiving Party shall
treat any Confidential Information with at least the same degree
of care regarding its secrecy and confidentiality as the
Receiving Party's similar information is treated within the
Receiving Party's organization. The Receiving Party shall keep
confidential and not disclose the Confidential Information of the
Disclosing Party to third parties (except as stated hereinafter)
nor use it for any purpose other than the performance under this
Agreement, without the express prior written consent of the
Disclosing Party. The Receiving Party further agrees that it
shall restrict disclosure of Confidential Information as follows:
36.2.1 Disclosure shall be restricted solely to (i) its agents
as may be necessary to enforce the terms of this
Agreement, (ii) its Affiliates, shareholders,
46
directors, officers, employees, advisors, lenders and
representatives as necessary, (iii) any Governmental
Authority in connection with seeking any required
regulatory approval, (iv) to the extent required by
applicable Law, (v) in the case of Buyer only, potential
transferees of Energy or RECs obtained by Buyer and (vi)
potential assignees of this Agreement (together with
their agents, advisors and representatives), as may be
necessary in connection with any such assignment (which
assignment or transfer shall be in compliance with
Section 24 (Assignment)) in each case after advising
those agents of their obligations under this Section.
36.2.2 In the event that the Receiving Party is required by
applicable Law to disclose any Confidential Information,
the Receiving Party shall provide the Disclosing Party
with prompt notice of such request or requirement in
order to enable Disclosing Party to seek an appropriate
protective order or other remedy and to consult with
Disclosing Party with respect to Disclosing Party taking
steps to resist or narrow the scope of such request or
legal process. The Receiving Party agrees not to oppose
any action by the Disclosing Party to obtain a protective
order or other appropriate remedy. In the absence of such
protective order, and provided that the Receiving Party
is advised by its counsel that it is compelled to
disclose the Confidential Information, the Receiving
Party shall:
36.2.2.1 Furnish only that portion of the Confidential
Information which the Receiving Party is
advised by counsel is legally required; and
36.2.2.2 Use its commercially reasonable efforts, at the
expense of the Disclosing Party, to ensure that
all Confidential Information so disclosed will
be accorded confidential treatment.
This Section 36.2.2 shall not apply to information
disclosed as contemplated by 36.2.1 (iii).
36.3 Excluded Information. Confidential Information shall be deemed
not to include the following:
36.3.1 Information which is or becomes generally available to
the public other than as a result of a disclosure by the
Receiving Party;
36.3.2 Information which was available to the Receiving Party on
a non-confidential basis prior to its disclosure by the
Disclosing Party; and
36.3.3 Information which becomes available to the Receiving
Party on a non-confidential basis from a person other
than the Disclosing Party or its representative who is
not otherwise bound by a confidentiality agreement with
Disclosing Party or its agent or is otherwise not under
47
any obligation to Disclosing Party or its agent not to
disclose the information to the Receiving Party.
36.4 Injunctive Relief Due to Breach. The Parties agree that remedies
at Law may be inadequate to protect each other in the event of a
breach of this Section, and the Receiving Party hereby in advance
agrees that the Disclosing Party shall be entitled to seek
without proof of actual damages, temporary, preliminary and
permanent injunctive relief from any Governmental Authority of
competent jurisdiction restraining the Receiving Party from
committing or continuing any breach of this Section.
36.5 Public Statements. The Parties shall consult with each other
prior to issuing any public announcement, statement or other
disclosure with respect to this Agreement or the transactions
contemplated hereby and the Supplier shall not issue any such
public announcement, statement or other disclosure without having
first received the written consent of the Buyer, except as may be
required by Law. It shall not be deemed a violation of this
Section to file this Agreement with the PUCN or FERC for approval
as required by applicable Law.
37. CHOICE OF LAW
This Agreement and the rights and obligations of the Parties
shall be construed and governed by the Laws of the State of
Nevada.
38. FURTHER ASSURANCES
38.1 The Parties hereto agree to execute and deliver promptly, at the
expense of the Party requesting such action, any and all other
and further instruments, documents and information which a Party,
may request and which are reasonably necessary or appropriate to
give full force and effect to the terms and intent of this
Agreement.
39. NO THIRD PARTY BENEFICIARY
39.1 Except with respect to the rights of the Indemnified Party in
Section 19.1 (Third Party Claims), (i) nothing in this Agreement
nor any action taken hereunder shall be construed to create any
duty, liability or standard of care to any third party, (ii) no
third party shall have any rights or interest, direct or
indirect, in this Agreement or the services to be provided
hereunder, and (iii) this Agreement is intended solely for the
benefit of the Parties, and the Parties expressly disclaim any
intent to create any rights in any third party as a third-party
beneficiary to this Agreement or the services to be provided
hereunder.
40. CONFLICTS
40.1 The Parties acknowledge that the Supplier has or will enter into
an IOA with the Transmission Provider. If the Buyer is also the
Transmission Provider and conflicts arise between any term,
provision, or condition contained in this Agreement and the IOA,
Supplier shall comply with the most stringent requirement. If
such conflict cannot be resolved by the Supplier meeting the more
48
stringent requirement, the Parties agree to work in good faith to
resolve the conflict. If the Buyer is not the Transmission
Provider, the Parties shall perform their obligations under this
Agreement as provided herein.
49
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representative on the date first stated above.
BUYER: SUPPLIER:
SIERRA PACIFIC POWER COMPANY ORNI 7
by: ORMAT FUNDING CORP.
its Sole Member
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇ By: /s/ Ran Raviv
----------------------------- ----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇ Name: Ran Raviv
Title: EVP and CFO Title: Vice President
50
EXHIBIT 1
DESCRIPTION OF SUPPLIER'S GENERATING FACILITY
1. Name of Facility: Galena Geothermal No. 1
(a) Location: Steamboat Springs, Washoe County Nevada
2. Owner: ORNI 7 LLC
3. Operator: Ormat Nevada, Inc.
4. Equipment:
(a) Type of Facility: Geothermal
(b) Capacity
Total nominal nameplate capacity: 26.0 MW
Total nominal net capacity: 20.5 MW
5. Planned Operation Date: October 1, 2005
1-1
EXHIBIT 2A
PRODUCT RATES
The Product Rate for the Term shall be $52.00 per MWh for the first full year of
operation, escalating at 1% per year thereafter.
The Product Rate through the end of the first Contract Year shall be $52.00 per
MWh ("Initial Product Rate"). The Product Rate shall be increased at the
beginning of each Contract Year by an amount equal to one percent of the Product
Rate for the previous Contract Year, for the duration of the Agreement;
provided, however, that the Product Rate for the second Contract Year shall be
determined by the following formula:
Product Rate = Initial Product Rate * [1 + (0.01 * FCM/12)]
Where FCM is the number of full calendar months the Generating Facility is in
Commercial Operation during the first Contract Year.
2A-1
EXHIBIT 2B
EXCESS PRODUCT RATES
The Excess Product Rate for the Term shall be $ 29.79 per MWh.
2B-1
EXHIBIT 3
STANDBY SERVICE TARIFF
Sierra Pacific Power Company Schedule LSR, Large Standby Service Rider, dated
December 17, 2003 or any successor rate schedule or as may be amended from time
to time by the PUCN.
3-1
EXHIBIT 4
NOTICES, BILLING AND PAYMENT INSTRUCTIONS
SUPPLIER:
Operating Representative: Contract Representative:
------------------------ -----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Address: 1010 Power Plant Drive Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: 775/▇▇▇-▇▇▇▇ Ext 19 Phone: 775/▇▇▇-▇▇▇▇
Fax: 775/▇▇▇-▇▇▇▇ Fax: 775/▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇ Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Payment Check: Union Bank of California
Corporate Trust Department
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Payment Wire Transfer: Union Bank of California
Acct Name: ORMAT FDG./Revenue A/C
For: ABA: ▇▇▇▇▇▇▇▇▇
Account No.: 6711724301
Invoices:
ORNI 7, LLC
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇, Asset Manager
Phone: 775/▇▇▇-▇▇▇▇
Fax: 775/▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
Operating Notifications:
▇▇▇▇▇▇ ▇▇▇▇▇▇
i) Pre-Schedule Phone: 775/▇▇▇-▇▇▇▇ Ext 19
Fax: 775/▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇) Real Time Phone: 775/▇▇▇-▇▇▇▇ Ext 19
Fax: 775/▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
iii) Monthly Checkout Person: Phone: 775/356-902
Fax: 775/▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇.▇▇▇
4-1
BUYER:
a) Operating Representative: Contract Representative:
------------------------ -----------------------
Address: Schedulers Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
North- ▇▇▇▇ ▇▇▇▇▇ Manager, Resource Contracts
Nevada Power Company
Mailing ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇/▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Physical ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Phone: 775/▇▇▇-▇▇▇▇ Phone: 702/▇▇▇-▇▇▇▇
Fax: 775/▇▇▇-▇▇▇▇ Fax: 702/▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇.▇▇▇ E-mail: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
b) Invoices
--------
US Post Office: Overnight Delivery
-------------- ------------------
(Via Certified Mail)
Address: Nevada Power Company Address: Nevada Power Company
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇, M/S 20 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ M/S 20
Telephone: 702/▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: 702/▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇.▇▇▇
c) Scheduling
----------
i) Pre-Schedule Primary Name: ▇▇▇▇ ▇▇▇▇▇▇ Phone: 775/▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Alternate Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Phone: 775/▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
E-mail: ▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
▇▇▇▇▇▇@▇▇▇▇.▇▇▇
Fax: 775/▇▇▇-▇▇▇▇
ii) Real Time: Phone: 775/▇▇▇-▇▇▇▇
Fax: 775/▇▇▇-▇▇▇▇
iii) Monthly Checkout: ▇▇▇▇▇ ▇▇▇▇▇ Phone: 702/▇▇▇-▇▇▇▇
Fax: 702/▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇.▇▇▇
d) Control Area/Transmission
-------------------------
i) Reliability Dispatch: Phone: 775/▇▇▇-▇▇▇▇
Fax: 775/▇▇▇-▇▇▇▇
ii) Transmission Dispatch: Phone: 775/▇▇▇-▇▇▇▇
Fax: 775/▇▇▇-▇▇▇▇
4-2
EXHIBIT 5
ONE-LINE DIAGRAM OF GENERATING FACILITY
AND
INTERCONNECTION FACILITIES
Exhibit 5 shall contain a one-line diagram of the Generating Facility, the
Interconnection Facilities, the Delivery Point[s], ownership and the location of
Meters, which location shall be reasonably satisfactory to Buyer. Within 30 days
after it executes the IOA, Supplier shall provide an update to Exhibit 5.
5-1
EXHIBIT 6
PROJECT MILESTONE SCHEDULE
1. All time periods are in months after the PUCN Approval Date. As stated
below for convenience of drafting after PUCN approval will be shown as
"AA". Any other timing is as otherwise described in specific items
below. Buyer will update this Exhibit with actual dates after PUCN
approval is received.
2. All milestones may be completed earlier than stated times, at the sole
option of Supplier.
A) Project Milestone: Supplier shall provide a geophysical or geological
exploration plan on the geothermal resource, or in the case of an
existing operating resource, a professional resource report, which
defines the geothermal resource. Such plan shall specify start and
completion dates of the geophysical or geological exploration work, or
a summary of the work performed to date.
Completion Date: Two months AA
Documentation: Supplier shall provide Buyer with documentation from a
qualified professional of the actual resource exploration work
completed and the associated data.
B) Project Milestone: Supplier shall obtain all permits, licenses,
easements and approvals to construct and operate the Generating
Facility.
Completion Date: Seven months AA for permits and approvals to
construct, Sixteen months total (including seven months as above for
permits to construct) AA for permits and approvals to commence
operation
Documentation: Supplier shall provide Buyer with written documentation
and decisions from the appropriate agencies indicating hearings during
which approvals were granted and final written decisions from those
agencies where the approval was made.
C) Project Milestone: Supplier shall demonstrate to Buyer that it has
complete financing for construction of the Generating Facility.
Completion Date: Eight months AA
Documentation: Supplier shall provide Buyer with written documentation
demonstrating that Supplier has secured construction financing of the
Generating Facility.
D) Project Milestone: Notice to Proceed has been issued to the
construction contractor under the turnkey engineering, procurement and
construction
6-1
contract (the "EPC Contract") for the Generating Facility and
construction of the Generating Facility has commenced.
Completion Date: Eleven months AA
Documentation: Supplier shall provide Buyer a copy of the executed
Notice to Proceed acknowledged by the construction contractor and
documentation from qualified professionals which indicates that
physical work has begun on-site regarding the construction of the
Generating Facility.
E) Project Milestone: Supplier shall complete the drilling and testing of
the initial production well(s), which shall deliver hot water at not
less than an average of 500,000 pounds per hour and a temperature of
not less than 300 degrees Fahrenheit for a test period of 48 continuous
hours or until stabilization occurs. Stabilization shall be considered
met when the flow rate and temperature at the end of any 8-hour
continuous period shall not be less than 98% of the first hour of the
8-hour period. Supplier shall provide Buyer pursuant to Section 29
(Notices) of this Agreement with written notification 48 hours prior to
conducting such drilling and testing, but shall provide such notice
with as much advance notice as practicable. In the case of an existing
operating resource, a report on the well field which provides for the
verification of the existence of the equivalent source of geothermal
fluid shall be provided.
Completion Date: Three months AA
Documentation: Supplier shall provide Buyer with the data from the well
test, which well test is performed by qualified professionals, which
indicates delivery of hot water of the quantity and quality as
indicated. An authorized representative of Buyer shall have the right
to be present during and witness such test. In the case of an existing
operating resource, the report as above shall satisfy the documentation
requirement.
F) Project Milestone: Supplier's major equipment shall be delivered to
Generating Facility's construction site.
Completion Date: Two months after Notice to Proceed has been issued to
the construction contractor under the EPC Contract, defined in
Milestone D above (or thirteen (13) months after AA).
Documentation: Supplier shall provide Buyer with documentation that the
major equipment has been delivered to the Generating Facility's
construction site.
G) Project Milestone: Supplier shall complete the drilling of the all the
production and injection ▇▇▇▇▇, which shall deliver a combined rate of
hot water at not less than 500,000 pounds per hour per well and an
average temperature of not less than 300 degrees Fahrenheit, and shall
be capable of
6-2
injecting fluids produced by the production ▇▇▇▇▇. Supplier shall
provide Buyer pursuant to Section 29 (Notices) of this Agreement with
written notification 48 hours prior to conducting any such drilling and
testing, but shall provide such notice with as much advance notice as
practicable. In the case of an existing operating resource, a report on
the well field which provides for the verification of the existence of
the equivalent source of geothermal fluid shall be provided.
Completion Date: Eight months after Notice to Proceed has been issued
to the construction contractor under the EPC Contract.
Documentation: Supplier shall provide Buyer with the data from the well
tests, which well tests are performed by qualified professionals, which
indicate delivery of hot water of the quantity and quality as indicated
and the capability of injection of all production fluids from the
production ▇▇▇▇▇. An authorized representative of Buyer shall have the
right to be present during and witness such drilling and testing. In
the case of an existing operating resource, the report as above shall
satisfy the documentation requirement.
H) Project Milestone: Supplier shall qualify as an EWG, QF or such similar
status under applicable Law.
Completion Date: No later than 30 calendar days prior to the Planned
Operation Date.
Documentation: Supplier shall provide Buyer with documentation that it
has filed for and obtained EWG, QF or such similar status under
applicable Law and shall remain an EWG, QF or such similar status for
the entire Term of this Agreement.
I) Project Milestone: The Generating Facility achieves the Operation Date.
Completion Date: Seventeen months AA
Documentation: Buyer's Meters shall record Energy being delivered from
the Generating Facility to Buyer and the Generating Facility provides
written notice to Buyer that the Generating Facility satisfies the
definition of Operation Date in the Agreement.
J) Project Milestone: Supplier shall have installed 2 turbines with a
total installed capacity nameplate rating stated in Exhibit 1.
Completion Date: Seventeen months AA
Documentation: Supplier provides written notice to Buyer that the
Generating Facility is comprised of a total of 2 or more turbine
generators, all of which are fully installed and operational at the
Generating Facility site, and further satisfies the definition of the
Generating Facility in the Agreement.
6-3
K) Project Milestone: The Generating Facility achieves the Commercial
Operation Date.
Completion Date: Eighteen months AA
Documentation: Supplier provides written notice to Buyer that the
Generating Facility satisfies the definition of the Commercial
Operation Date in the Agreement.
6-4
EXHIBIT 7
PERFORMANCE TESTS
1. MECHANICAL COMPLETION TESTS
The following preliminary tests shall be conducted at the Site during the start
up process:
a. Radiographic and hydrostatic examination of main brine line
welding.
b. Functional test of main controls and alarms, i.e. control and
protective devices, fire detection and alarm system.
c. Setting and testing of safety valves.
d. Balancing and vibration tests of main rotating equipment,
including turbines and generators and motors larger then 100 HP.
e. Automatic operation of standby equipment. f. Operation of fire
fighting equipment.
g. Generator short circuit and open circuit characteristic checks. h.
Generator and power cable megger insulation tests. i. Setting of
protective relays.
j. Electrical ground and/or insulation tests of equipment. k. Check
out of instrument loops.
2. TESTS REQUIRED FOR FINAL ACCEPTANCE
Generating Unit Test
a. Each Generating Unit shall run at stable condition at 100% (+10%
to -30%) of the unit rated power, conditional upon adequate heat
source supply, for four (4) hours without any failure or
malfunction.
b. The Generating Unit shall be tripped manually with the unit
remaining in safe condition without any damage, and capable of
immediate restart.
c. After the Generating Unit comes to a standstill and after
resetting the same, it shall be started again according to the
normal hot start procedure as described in O&M manuals, and resume
normal operation conditions.
Net Deliverable Energy Test (Performance Test)
After completion of the Mechanical Completion Tests and the Generating
Unit Tests, the Facility will be tested as close as possible to the
Design Conditions, for a period of ninety six (96) hours at full rated
load to verify the Facility's Net Deliverable Energy.
Instrumentation Uncertainty
Kilowatt meters +/- 1.5% (of full scale)
Kilowatt-hour meters +/- 1.5% (of full scale)
Ambient Air temperature meters +/- 1 (Degree)F
Heat Source flow rate meters +/- 2% (of full scale)
Heat Source temperature meters +/- 1 (Degree)F
Heat Source Pressure meters +/- 0.5 % (of full scale)
7-1
EXHIBIT 8
FORM OF AVAILABILITY NOTICE
Date of Notice:
Time of Notice:
Supplier:
Name of Supplier's Representative:
Buyer:
Availability Date:
Contact Information:
8-1
A B C D E
--------------------------------------------------------------------------------------------------------------------
Availability Total
From Plant Derating Permitted Plant Total Cause and Time of Derating
(MWhs) (MWhs) Derating (MWhs)
--------------------------------------------------------------------------------------------------------------------
(A<or =___) (___ - A) Yes/No (A-B)
--------------------------------------------------------------------------------------------------------------------
0700
--------------------------------------------------------------------------------------------------------------------
0800
--------------------------------------------------------------------------------------------------------------------
0900
--------------------------------------------------------------------------------------------------------------------
1000
--------------------------------------------------------------------------------------------------------------------
1100
--------------------------------------------------------------------------------------------------------------------
1200
--------------------------------------------------------------------------------------------------------------------
1300
--------------------------------------------------------------------------------------------------------------------
1400
--------------------------------------------------------------------------------------------------------------------
1500
--------------------------------------------------------------------------------------------------------------------
1600
--------------------------------------------------------------------------------------------------------------------
1700
--------------------------------------------------------------------------------------------------------------------
1800
--------------------------------------------------------------------------------------------------------------------
1900
--------------------------------------------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------------------------------------------
2100
--------------------------------------------------------------------------------------------------------------------
2200
--------------------------------------------------------------------------------------------------------------------
2300
--------------------------------------------------------------------------------------------------------------------
2400
--------------------------------------------------------------------------------------------------------------------
0100
--------------------------------------------------------------------------------------------------------------------
0200
--------------------------------------------------------------------------------------------------------------------
0300
--------------------------------------------------------------------------------------------------------------------
0400
--------------------------------------------------------------------------------------------------------------------
0500
--------------------------------------------------------------------------------------------------------------------
0600
--------------------------------------------------------------------------------------------------------------------
0700
--------------------------------------------------------------------------------------------------------------------
0800
--------------------------------------------------------------------------------------------------------------------
0900
--------------------------------------------------------------------------------------------------------------------
1000
--------------------------------------------------------------------------------------------------------------------
1100
--------------------------------------------------------------------------------------------------------------------
1200
--------------------------------------------------------------------------------------------------------------------
1300
--------------------------------------------------------------------------------------------------------------------
1400
--------------------------------------------------------------------------------------------------------------------
1500
--------------------------------------------------------------------------------------------------------------------
1600
--------------------------------------------------------------------------------------------------------------------
1700
--------------------------------------------------------------------------------------------------------------------
1800
--------------------------------------------------------------------------------------------------------------------
1900
--------------------------------------------------------------------------------------------------------------------
2000
--------------------------------------------------------------------------------------------------------------------
2100
--------------------------------------------------------------------------------------------------------------------
2200
--------------------------------------------------------------------------------------------------------------------
2300
--------------------------------------------------------------------------------------------------------------------
2400
--------------------------------------------------------------------------------------------------------------------
8-2
EXHIBIT 9
BUYER'S REQUIRED REGULATORY APPROVALS
1. Public Utilities Commission of Nevada for the Agreement
2.
9-1
EXHIBIT 10
SUPPLIER'S REQUIRED REGULATORY APPROVALS
As no project opposition is expected, timing estimates are made without
consideration of extended public hearings or debates.
-----------------------------------------------------------------------------------------------------------------------------------
ESTIMATED ESTIMATED START ESTIMATED COMPLETION
PERMIT AGENCY DURATION DATE DATE
-------- -------- --------- --------------- --------------------
PERMITS PRIOR TO CONSTRUCTION
Conditional Use Grading Permit City of Reno Planning Commission 120 days 15-Apr-04 15-June-04
Chemical Accident Prevention Program State of NV 150 days 15-Mar-04 27-Aug-04
Initial Review 30 days 22-Mar-04 30-Apr-04
Public Comments 30 days 3-May-04 11-Jun-04
AIR Quality Permit to Construct Washoe County 60 days 15-May-04 15-Jul-04
Disturbance Permit NV Division of Forestry, State of NV 60 days 30-Apr-04 30-Jun-04
Biological Survey 20 days 23-Feb-04 10-Mar-04
Cultural Survey 20 days 15-Mar-04 30-Apr-04
Must be completed prior to beginning next phase of permitting. Estimated
completion date October 1, 2004.
-----------------------------------------------------------------------------------------------------------------------------------
PERMITS FOR DRILLING
Drilling Permit Nevada Division of Mineral 45 days 30-May-04 1-Jul-04
Drilling AIR Quality Permit Washoe County 30 days 30-May-04 30-Jul-04
Disturbance Permit NV Division of Forestry, State of NV 60 days 30-Apr-04 30-Jun-04
Biological Survey 20 days 30-Apr-04 30-May-04
Cultural Survey 20 days 10-May-04 30-May-04
May be completed prior to construction. Estimated completion date August 1,
2004.
-----------------------------------------------------------------------------------------------------------------------------------
PERMITS FOR CONSTRUCTION
Building Permit Washoe County 30 days 1-Oct-04 1-Nov-04
Dust Plan Washoe County 20 days 1-Oct-04 20-Oct-04
Chemical Accident Prevention Program,
construction schedule State of NV 5 day 1-Sep-04 5-Sep-04
Must be completed prior to construction. Estimated completion date November 1,
2004.
-----------------------------------------------------------------------------------------------------------------------------------
PERMITS FOR OPERATION
Hazardous Materials Permit City of Reno 10 days 1-Jun-05 1-Jul-05
Pressure Vessel Permits State of Nevada 10 days 1-Jun-05 1-Jul-05
Underground Injection Permit
(Modification) State of Nevada 180 days 15-Jun-04 15-Jan-05
AIR Quality Permit to Operate Washoe County 30 days 1-Jun-05 1-Jul-05
Chemical Accident Prevention Program,
Permit to Operate State of NV 30 days 1-Jun-05 1-Jul-05
QF Certification Federal Energy Regulatory Commission 30 days 1-Jun-05 1-Jul-05
Must be completed prior to operation.
-----------------------------------------------------------------------------------------------------------------------------------
10-1
EXHIBIT 11
SUPPLIER'S REQUIRED PERMITS FOR CONSTRUCTION AND OPERATION
SAME AS EXHIBIT 10
11-1
EXHIBIT 12
SUPPLIER'S REQUIRED AGREEMENTS
1. Interconnection Agreement
2.
12-1
EXHIBIT 13
SUPPLY AMOUNT
The Supply Amount(s) shall be the Energy amounts for each Dispatch Hour that
shall be supplied by Supplier to Buyer as specified by each value in the
attached table below.
YEARS 1, 4, 7, 10, 13, 16, 19
-------------------------------------------------------------------------------------------------------------------------
HOUR OF
THE DAY JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
------- --- --- --- --- --- --- --- --- --- --- --- ---
1 23.19 24.12 21.80 21.50 21.74 16.64 15.50 15.50 19.01 19.70 21.72 23.06
2 23.24 24.03 22.23 21.71 22.05 17.52 16.36 16.36 19.38 20.16 21.81 22.78
3 23.23 24.52 22.34 22.16 22.36 18.35 16.77 16.77 19.99 20.45 21.97 23.02
4 23.44 24.48 22.49 22.37 22.35 18.25 17.18 17.18 20.20 20.67 22.04 23.23
5 23.69 24.61 22.57 22.82 22.40 18.99 17.61 17.61 20.73 21.07 22.05 23.37
6 23.72 24.58 22.90 22.69 22.60 19.53 17.96 17.96 20.55 21.44 22.14 23.38
7 23.94 24.73 22.71 23.07 22.63 19.50 17.66 17.66 21.29 21.71 22.28 23.40
8 24.10 24.76 22.91 22.82 22.15 18.23 17.55 17.55 21.54 22.06 22.32 23.36
9 23.75 24.26 22.49 21.82 21.69 17.56 16.63 16.63 20.35 21.62 21.46 23.33
10 23.30 23.59 22.21 21.28 20.73 16.44 15.81 15.81 18.94 20.14 21.42 23.02
11 23.16 23.26 21.63 20.02 19.69 15.54 14.69 14.69 18.40 20.18 21.08 22.40
12 22.50 22.81 21.15 19.19 18.87 13.87 13.22 13.22 17.54 18.98 20.59 22.13
13 21.99 22.00 20.73 18.68 18.35 13.85 11.97 11.97 16.46 18.29 20.38 21.93
14 21.45 21.68 20.30 18.08 17.57 13.43 11.19 11.19 15.76 17.33 19.80 21.93
15 20.89 21.46 20.12 18.20 16.90 12.79 10.91 10.91 15.07 16.73 19.65 21.83
16 20.61 21.58 20.18 18.01 16.84 12.91 10.90 10.90 14.49 16.24 19.68 22.09
17 20.35 20.94 19.93 18.34 16.90 12.97 10.67 10.67 14.21 15.82 19.97 22.29
18 21.39 21.46 19.59 18.79 16.89 13.39 11.04 11.04 13.91 15.33 20.87 22.53
19 21.43 22.20 20.68 19.50 16.62 13.20 12.42 12.42 13.86 16.26 21.33 22.65
20 21.85 22.83 21.22 19.99 16.36 13.44 13.74 13.74 14.79 17.24 21.75 22.74
21 22.04 23.29 21.81 20.23 18.01 14.52 14.82 14.82 15.79 17.92 21.97 22.82
22 21.95 23.51 22.14 20.35 18.73 16.08 14.98 14.98 16.37 19.12 22.25 22.82
23 22.16 23.51 22.55 20.47 19.40 16.79 15.38 15.38 17.62 19.80 22.42 22.87
24 22.69 23.53 22.74 20.68 19.97 17.39 15.46 15.46 18.42 19.48 22.38 22.97
DAILY
TOTAL 540.08 557.75 519.43 492.75 471.80 381.17 350.42 350.42 424.65 457.75 513.31 545.94
MONTHLY
TOTAL 16742.4 15616.9 16102.5 14782.4 14625.7 11435.1 10863.0 10863.0 12739.4 14190.1 15399.3 16924.3
ANNUAL
TOTAL 170284.06
ANNUAL
GROSS 215916.48
ANNUAL
STATION
SERVICE
TOTAL 45632.42
NOTE: SUPPLY AMOUNTS LISTED FOR YEAR 1 ARE FOR THE FIRST CONTRACT YEAR THAT IS A
FULL CALENDAR YEAR; AND SUCH AMOUNTS WILL ALSO BE APPLICABLE TO ANY INITIAL
CONTRACT YEAR STARTING ON THE COMMERCIAL OPERATION DATE THAT IS NOT A FULL
CALENDAR YEAR.
13-1
EXHIBIT 13
SUPPLY AMOUNT
The Supply Amount(s) shall be the Energy amounts for each Dispatch Hour that
shall be supplied by Supplier to Buyer as specified by each value in the
attached table below.
YEARS 2, 5, 8, 11, 14, 17, 20
-------------------------------------------------------------------------------------------------------------------------
HOUR OF
THE DAY JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
------- --- --- --- --- --- --- --- --- --- --- --- ---
1 22.84 23.75 21.46 21.16 21.40 16.37 15.24 15.24 18.70 19.39 21.38 22.69
2 22.88 23.66 21.89 21.38 21.70 17.24 16.09 16.09 19.08 19.84 21.46 22.43
3 22.87 24.15 21.99 21.81 22.01 18.05 16.50 16.50 19.68 20.13 21.63 22.66
4 23.07 24.10 22.14 22.02 22.00 17.95 16.90 16.90 19.88 20.34 21.69 22.86
5 23.33 24.23 22.22 22.46 22.05 18.69 17.33 17.33 20.40 20.73 21.71 23.01
6 23.35 24.20 22.55 22.34 22.24 19.22 17.67 17.67 20.22 21.11 21.79 23.01
7 23.57 24.35 22.36 22.71 22.28 19.19 17.38 17.38 20.95 21.37 21.93 23.04
8 23.73 24.38 22.56 22.46 21.80 17.94 17.27 17.27 21.20 21.72 21.97 23.00
9 23.38 23.89 22.14 21.48 21.35 17.28 16.36 16.36 20.02 21.28 21.12 22.96
10 22.94 23.22 21.87 20.94 20.40 16.17 15.55 15.55 18.64 19.82 21.08 22.66
11 22.80 22.90 21.29 19.71 19.38 15.28 14.45 14.45 18.11 19.86 20.75 22.05
12 22.15 22.46 20.82 18.88 18.57 13.64 12.99 12.99 17.26 18.68 20.26 21.78
13 21.65 21.66 20.40 18.38 18.05 13.62 11.76 11.76 16.19 17.99 20.06 21.58
14 21.12 21.34 19.98 17.79 17.29 13.20 10.99 10.99 15.50 17.05 19.48 21.59
15 20.57 21.12 19.80 17.90 16.63 12.57 10.72 10.72 14.82 16.46 19.34 21.49
16 20.29 21.25 19.86 17.72 16.57 12.69 10.71 10.71 14.25 15.97 19.36 21.74
17 20.03 20.61 19.62 18.05 16.63 12.75 10.48 10.48 13.97 15.56 19.65 21.94
18 21.06 21.12 19.28 18.49 16.62 13.16 10.85 10.85 13.67 15.07 20.54 22.17
19 21.10 21.86 20.36 19.19 16.35 12.98 12.21 12.21 13.63 16.00 20.99 22.29
20 21.51 22.48 20.89 19.67 16.09 13.21 13.51 13.51 14.54 16.96 21.40 22.38
21 21.70 22.93 21.47 19.91 17.72 14.28 14.58 14.58 15.53 17.63 21.62 22.46
22 21.61 23.14 21.79 20.03 18.43 15.82 14.74 14.74 16.11 18.82 21.90 22.46
23 21.82 23.14 22.20 20.14 19.09 16.52 15.13 15.13 17.33 19.48 22.07 22.51
24 22.33 23.17 22.39 20.35 19.66 17.11 15.20 15.20 18.12 19.17 22.03 22.61
Daily
Total 531.70 549.12 511.33 485.00 464.32 374.94 344.60 344.60 417.79 450.43 505.21 537.38
Monthly
Total 16482.8 15375.4 15851.1 14549.9 14394.1 11248.2 10682.6 10682.6 12533.7 13963.2 15156.3 16658.8
Annual
Total 167578.69
Annual
Gross
Total 212486.13
Annual
Station
Service
Total 44907.43
13-2
EXHIBIT 13
SUPPLY AMOUNT
The Supply Amount(s) shall be the Energy amounts for each Dispatch Hour that
shall be supplied by Supplier to Buyer as specified by each value in the
attached table below.
YEARS 3, 6, 9, 12, 15, 18
-------------------------------------------------------------------------------------------------------------------------
HOUR OF
THE DAY JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
------- --- --- --- --- --- --- --- --- --- --- --- ---
1 22.48 23.38 21.12 20.82 21.06 16.10 14.99 14.99 18.40 19.07 21.04 22.33
2 22.52 23.29 21.54 21.04 21.36 16.96 15.83 15.83 18.77 19.52 21.12 22.07
3 22.51 23.77 21.65 21.47 21.66 17.76 16.23 16.23 19.36 19.80 21.28 22.30
4 22.71 23.72 21.79 21.67 21.65 17.66 16.62 16.62 19.56 20.02 21.35 22.50
5 22.96 23.85 21.87 22.11 21.70 18.39 17.04 17.04 20.07 20.40 21.36 22.64
6 22.98 23.82 22.19 21.99 21.89 18.91 17.38 17.38 19.90 20.77 21.44 22.65
7 23.21 23.97 22.01 22.35 21.93 18.89 17.09 17.09 20.61 21.03 21.58 22.67
8 23.36 24.00 22.20 22.11 21.46 17.65 16.98 16.98 20.87 21.37 21.62 22.63
9 23.02 23.51 21.79 21.14 21.01 16.99 16.09 16.09 19.70 20.94 20.78 22.60
10 22.58 22.86 21.52 20.61 20.08 15.91 15.29 15.29 18.33 19.50 20.74 22.30
11 22.44 22.54 20.95 19.39 19.07 15.03 14.20 14.20 17.81 19.54 20.41 21.70
12 21.80 22.11 20.49 18.58 18.27 13.40 12.77 12.77 16.97 18.37 19.94 21.43
13 21.31 21.32 20.08 18.08 17.76 13.39 11.55 11.55 15.92 17.70 19.73 21.24
14 20.79 21.00 19.66 17.50 17.00 12.98 10.80 10.80 15.24 16.77 19.17 21.24
15 20.24 20.79 19.48 17.61 16.36 12.35 10.53 10.53 14.57 16.19 19.03 21.15
16 19.97 20.91 19.54 17.43 16.29 12.47 10.52 10.52 14.01 15.71 19.05 21.39
17 19.72 20.29 19.30 17.76 16.36 12.53 10.29 10.29 13.73 15.30 19.33 21.59
18 20.72 20.79 18.97 18.19 16.35 12.94 10.66 10.66 13.44 14.82 20.21 21.82
19 20.77 21.51 20.03 18.88 16.08 12.75 11.99 11.99 13.39 15.73 20.65 21.94
20 21.17 22.12 20.55 19.36 15.83 12.99 13.27 13.27 14.30 16.68 21.06 22.03
21 21.36 22.57 21.13 19.59 17.43 14.04 14.33 14.33 15.27 17.34 21.28 22.10
22 21.27 22.78 21.45 19.71 18.13 15.55 14.49 14.49 15.84 18.51 21.55 22.10
23 21.47 22.78 21.85 19.82 18.78 16.25 14.87 14.87 17.05 19.17 21.71 22.15
24 21.98 22.80 22.03 20.03 19.34 16.83 14.95 14.95 17.83 18.86 21.68 22.25
Daily
Total 500.85 540.50 503.22 477.25 456.85 368.71 338.78 338.78 410.94 443.11 497.11 528.82
Monthly
Total 15526.4 15133.9 15599.7 14317.4 14162.4 11061.3 10502.2 10502.2 12328.1 13736.3 14913.3 16393.4
Annual
Total 164176.53
Annual
Gross
Total 208172.25
Annual
Station
Service
Total 43995.73
13-3
EXHIBIT 14
PIPING / FLOW DIAGRAM OF GENERATING FACILITY
Supplier shall provide Exhibit 14 as contemplated by Section 10.1 (Construction
of Generating Facility) of this Agreement within 30 days following the
commencement of construction of the Generating Facility.
14-1
EXHIBIT 15
OPERATION AND MAINTENANCE AGREEMENT;
OPERATOR GOOD STANDING CERTIFICATE
Supplier to provide within 10 days after execution of this Agreement.
15-1
EXHIBIT 16
GROUND LEASE; RIGHTS-OF-WAY
16-1
EXHIBIT 17
FORM OF LETTER OF CREDIT
DATE OF ISSUANCE:
BENEFICIARY:
Sierra Pacific Power Company
▇▇ ▇▇▇ ▇▇▇▇▇, ▇/▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Irrevocable Transferable Standby Letter of Credit No. ____________
Dear Madam or Sir:
We ("Issuing Bank") hereby establish our Irrevocable Transferable
Standby Letter of Credit ("Letter of Credit") in favor of Sierra Pacific Power
Company, a Nevada corporation ("Beneficiary") for the account of [Supplier], a
[___________] ("Account Party"), for the aggregate amount not exceeding
______________________ United States Dollars ($___________), available to you at
sight upon demand at our counters at [Location] on or before the expiration
hereof against presentation to us of (a) a sight draft in the form of Exhibit A,
completed in accordance with the instructions contained in such Exhibit A and
executed by your officer, and (b) a certificate in the form of Exhibit B,
completed in accordance with the instructions contained in such Exhibit B and
executed by your officer.
This Letter of Credit shall become effective immediately upon issuance
and shall expire at our counters in [Location] on ______________ (the
"Expiration Date"). This Letter of Credit is subject to the following:
1. Capitalized terms used herein and not otherwise defined have the
meanings given in that certain Power Purchase Agreement, dated as of
________, between Beneficiary and Account Party (as the same may be
amended, the "Agreement").
2. The amount which may be drawn by you under this Letter of Credit shall
be automatically reduced by the amount of any drawings paid through
the Issuing Bank referencing this Letter of Credit No. ____. Partial
drawings are permitted hereunder.
3. We hereby agree with you that documents drawn under and in compliance
with the terms of this Letter of Credit shall be duly honored upon
presentation as specified.
4. This Letter of Credit is subject to (i) the Uniform Customs and
Practice for Documentary Credits, 1993 Revision, International Chamber
of Commerce Publication No.500 (the "UCP"), except to the extent that
the terms hereof are inconsistent with the provisions of the UCP,
including but not limited to Articles 13(b) and 17 of the UCP, in
which case the terms of this Letter of Credit shall govern, and (ii)
to the extent not inconsistent with the UCP, the laws of the State of
New York.
5. With respect to Article 13(b) of the UCP, a demand for payment under
this Letter of Credit may be made only on a day, and during hours, in
which the Issuing Bank is open for business (a "Business Day"). If we
receive your demand for payment at such office at or prior to 12:00
P.M. Pacific Standard Time on any Business Day in strict conformity
with the terms and conditions of
this Letter of Credit, we will honor the same by making payment in
accordance with your payment instructions on that same Business Day.
If we receive your demand for payment at such office after 12:00 P.M.
Pacific Standard Time on any Business Day in strict conformity with
the terms and conditions of this Letter of Credit, we will honor the
same by making payment in accordance with your payment instructions on
the next Business Day.
6. With respect to Article 17 of the UCP, in the event of an Act of God,
riot, civil commotion, insurrection, war or any other cause beyond our
control that interrupts our business (collectively, an "Interruption
Event") and causes the place for presentation of this Letter of Credit
to be closed for business on the last day for presentation, the expiry
date of this Letter of Credit will be automatically extended without
amendment to a date 30 calendar days after the place for presentation
reopens for business.
7. This Letter of Credit may not be transferred without our consent and
may not be amended, changed or modified without the express written
consent of the Beneficiary, the Issuing Bank and the Account Party.
8. Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to us at the address of the Issuing
Bank, and shall specifically refer to this Letter of Credit No. _____.
9. This Letter of Credit sets forth in full the terms of our undertaking.
Reference in this Letter of Credit to other documents is for
identification purposes only and such reference shall not modify or
affect the terms hereof or cause such documents to be deemed
incorporated herein.
[ISSUING BANK SIGNATURE]
Exhibit A
to Letter of Credit
No. *****
SIGHT DRAFT
[Insert date on or prior to Expiration Date]
[Issuing Bank],
as Issuing Bank
[Issuing Bank Address]
Attn: Letter of Credit Dept.
Re: Irrevocable Transferable Standby Letter of Credit No. *****
At Sight
Pay to Sierra Pacific Power Company in immediately available funds _____________
_______ Dollars ($__________________), pursuant to Irrevocable Transferable
Standby Letter of Credit No. ***** of [Issuing Bank].
[BENEFICIARY]
By:
Name:
Title:
Exhibit B
to Letter of Credit
No. *****
[The certificate is to be on the letterhead of the Beneficiary]
[Date]
[Issuing Bank]
as Issuing Bank
[Issuing Bank Address]
Attn: Letter of Credit Dept.
Re: Irrevocable Transferable Standby Letter of Credit No. *****
Gentlemen:
This is a certificate presented in accordance with your Irrevocable Transferable
Standby Letter of Credit No. held by us (the "Letter of Credit").
{Use one of the following conditions}
We hereby certify that Account Party has failed to make a payment to Beneficiary
owing under the Agreement, or to reimburse Beneficiary for costs, including
Replacement Costs, REC Replacement Costs and Penalties, that the Beneficiary has
incurred or may incur as a result of the Account Party's failure to perform
under the Agreement.
OR
We hereby certify that the Letter of Credit has not been renewed or replaced at
least 30 days prior to its Expiration Date.
OR
We hereby certify that the credit rating of [Issuing Bank] has been downgraded
to below the Minimum Credit Rating and a replacement letter of credit has not
been issued in favor of Buyer within seven days of such downgrade.
IN WITNESS WHEREOF, this certificate has been executed and delivered by a duly
authorized officer of the undersigned on the date first above written.
[BENEFICIARY]
By:
Name:
Title: