POWER SALES CONTRACT between PUBLIC UTILITY DISTRICT NO. 1 OF CHELAN COUNTY, WASHINGTON and PUGET SOUND POWER & LIGHT COMPANY
Exhibit
10.4
between
PUBLIC
UTILITY DISTRICT NO. 1
OF CHELAN
COUNTY, WASHINGTON
and
PUGET
SOUND POWER & LIGHT COMPANY
THIS
POWER SALES CONTRACT, made and entered into as of the fourteenth day of
November, 1957, by and between PUBLIC UTILITY DISTRICT NO. 1 OF CHELAN
COUNTY, WASHINGTON (hereinafter called the "District"), a municipal corporation
organized and existing under the laws of the State of Washington, and PUGET
SOUND POWER & LIGHT COMPANY (hereinafter called the "Purchaser"), a
private corporation organized and existing under the laws of the State of
Massachusetts,
W I T N E S S E T H
WHEREAS,
the District is authorized by law to own and operate an electric public utility
system or systems for the purpose of furnishing the District and the inhabitants
thereof and other persons, including public and private corporations within or
without its limits, with electric current for all uses; and
WHEREAS,
the Commission of the District on the 20th day of November, 1956, adopted
Resolution No. 1412 providing a plan and system for the acquisition and
construction of an electric utility system known as the Rocky Reach
Hydro-Electric System (Federal Power Commission Licensed Project No. 2145)
and pursuant thereto issued $23,100,000 of bonds to defray a portion of the cost
of the acquisition and construction of the Rocky Reach Hydro-Electric Power
Project (hereinafter defined as the "Project"), and expects to issue additional
bonds in the estimated amount of approximately $260,000,000 pursuant to a
resolution of the District, to obtain the monies estimated to be necessary to
complete the acquisition and construction of said Project, a certified copy of
each of said resolutions having been delivered to the Purchaser;
and
WHEREAS,
said Project will initially have seven (7) turbogenerators with total peaking
capability of approximately 775,000 kilowatts or more, and associated
transmission and transformation facilities connecting the Project with the
system of the Bonneville Power Administration (hereinafter referred to as
"Bonneville"), and with the District's Rock Island Hydro-Electric Project
(Federal Power Commission Licensed Project No. 943), the latter of which in
turn is connected through transmission and transformation facilities of the
District to the District's Lake Chelan Hydro-Electric Project (Federal Power
Commission Licensed Project No. 637).
NOW,
THEREFORE, for and in consideration of the premises and of the covenants and
undertakings of the parties hereinafter set forth, and subject to the provisions
of the hereinabove described bond resolutions and license, and to the laws of
the State of Washington, the parties hereto covenant and agree as
follows:
SECTION
1. Definitions
As used
in this contract, the following words and phrases shall have the meanings
hereinafter set forth, unless the context shall clearly indicate that another
meaning is intended:
(A) The
term "Project." shall mean the Rocky Reach Hydro-Electric Power Project licensed
by the Federal Power Commission as Project No. 2145 Washington, and any
amendments thereto, and extensions or renewals thereof, or licensed under a new
or annual license upon expiration thereof, and authorized to be acquired and
constructed by the District pursuant to Resolution No. 1412 adopted by the
Commission of the District November 20, 1956, except as otherwise provided
in Section 23 of this contract.
(B) The
term "Generator Bus" shall mean the point on the low-voltage side of the Project
generating station's transformer banks at which point the electric output of the
Project is measured.
(C) The
term "Rocky Reach Project Output" (hereinafter referred to as "Project Output")
shall mean the amount of power and energy, including reactive power, produced by
said Project at any time during the term of this contract under the operating
conditions which exist at that time; and after deductions for station use and
losses, service to Project supervisors' cottages in the vicinity of the Project,
replacement of power and energy due to tailwater encroachment on the District's
Lake Chelan Hydro-Electric Project not exceeding 4,000 kilowatts of annual
average energy so long as License No. 2145 for the Project is not amended
so as to adversely affect the District's Lake Chelan Hydro-Electric Project, and
replacement of power and energy for losses if required by law to be made
available to the owner of the proposed ▇▇▇▇▇ Project; provided, however, for the
purposes of Section 5 and Section 15 hereof with respect to scheduling of power
and energy, including reactive power, and pondage, Project Output shall be
deemed to mean the power and energy capable of being produced under the
conditions above specified in this paragraph (C) of this
Section 1.
(D) The
term "Uncontrollable Forces" shall mean any cause reasonably beyond the control
of either party to this contract and which by the exercise of due diligence such
party is unable to prevent or overcome, including but not limited to an act of
God, fire, flood, explosion, strike, sabotage, an act of the public enemy, civil
or military authority including court orders, injunctions, and orders of
government agencies with proper jurisdiction, insurrection or riot, an act of
the elements, failure of equipment, or inability to obtain or ship materials or
equipment because of the effect of similar causes on suppliers or
carriers.
(E) The
term "Rocky Reach Hydro-Electric System Revenue Bonds" (sometimes hereinafter
referred to as the "Bonds") shall mean the electric revenue bonds issued or
partly issued and to be issued by the District and at any time outstanding for
the purpose of providing funds for the payment of all costs of the District
incurred in connection with the financing, acquisition and construction of the
Project, including, but without limitation, amounts required to pay interest on
all of said Bonds during the estimated period of construction and for such
additional period or periods thereafter as shall be specified in the resolution
or resolutions authorizing the issuance of said Bonds, to provide working
capital, to repay any advances made by the District, Puget Sound
Power & Light Company or others in connection with the investigation,
development and/or construction of the Project which are repayable out of the
proceeds of said Bonds, and to provide the amounts required for the Reserve
Account in the Bond Fund and for the Reserve and Contingency Fund as provided
for in the resolution or resolutions authorizing the issuance of said Bonds, and
shall include the bonds referred to in paragraphs (F) and (G) of this
Section 1.
(F) The
term "Series of 1956 Bonds" shall mean the Rocky Reach Hydro-Electric System
Revenue Bonds, Series of 1956, issued by the District in the aggregate principal
amount of $23,100,000 pursuant to Resolution No. 1412 adopted
November 20, 1956 for the purpose of defraying a portion of the cost of
acquiring and constructing the Project
(G) The
term "Subsequent Series Bonds" shall mean the Rocky Reach Hydro-Electric System
Revenue Bonds to be issued by the District pursuant to a resolution or
resolutions to be adopted as authorized under the provisions of Resolution
No. 1412, to pay all of the estimated costs of the financing, acquisition
and construction of the Project in the aggregate principal amount estimated to
be necessary for that purpose and which have been issued prior to the Date of
Commercial Operation of the Project, when supplemented by the proceeds of the
Series of 1956 Bonds, including but without limitation, amounts required to pay
the costs and expenses enumerated in paragraph (E) of this
Section.
(H) The
term "Purchasers" shall mean Puget Sound Power & Light Company, Aluminum
Company of America, Portland General Electric Company, Pacific Power &
Light Company, and The Washington Water Power Company and, with the consent of
the District, shall include additional purchasers of a percentage share of
Project Output under contracts similar to this contract.
(I) The
words "Date of Commercial Operation", and any clause or phrase referring to the
commencement of commercial operation of the Project, shall mean the day the
District is ready to deliver power and energy from the last of the initial seven
(7) generating units to be installed in the Project after each of said seven (7)
units has been installed and has been placed in normal continuous
operation.
SECTION
2. Term of
Contract
This
contract shall be in full force and effect as of the date of execution thereof
until the Series of 1956 Bonds and the Subsequent Series Bonds are paid or
provision is made for the retirement thereof in accordance with
Section 14.2 of the resolutions authorizing the issuance of said bonds, or
fifty (50) years from and after the Date of Commercial Operation, whichever is
later.
SECTION
3. Construction of
Project
The
District will diligently proceed with the construction of the Project until it
is completed, except to the extent that such construction is delayed or impeded
by reason of Uncontrollable Forces. The District estimates that the
first and seventh generating units in the Project will be ready for commercial
operation on the following dates:
1st
Unit - July
15, 1961
7th
Unit - May
15, 1962
The
District will prepare and submit to the Purchaser monthly reports of progress
during the period of construction of the Project and quarterly reports including
data as to the date of expected completion of the Project and the comparison of
estimated construction time and cost with the estimates made prior to commencing
construction and shall promptly advise the Purchaser of any substantial
engineering and construction problems as they arise.
Purchaser,
together with other purchasers may also at its or their option, maintain at its
or their expense an observer at the Project who shall be given full access at
reasonable times to the Project and to all plans, records or other documents
under the control of the District relating to the Project.
SECTION
4. Coordinated Operation of the
Project
Subject
to the provisions of the license issued by the Federal Power Commission for the
Project, the stream flow of the Columbia River, water storage and flood rights
relating to the Project, and the operating and maintenance requirements of the
Project consistent with good practice, the District agrees that it will during
the term of this contract maintain and operate the Project in consultation with
the Purchaser as provided for in Section 9 hereof. It is the
intent of the parties hereto that, subject to the requirements of Section 5
hereof, the District shall operate and maintain the Project so as to produce the
maximum power and energy, including reactive power, usable in and coordinated to
the load requirements of the parties hereto and of all other purchasers of power
and energy from the Project, and to the maximum feasible extent with the
Northwest Power Pool, that the Project is capable of producing; provided, the
District in order to prevent injury to persons or to avoid damage to property or
equipment, may in an emergency without consultation with the Purchaser,
temporarily interrupt or reduce deliveries of power and energy hereunder but
only for so long as such emergency shall exist, and shall promptly notify the
Purchaser of the extent of and reason for such interruption or
reduction. Prior to the expiration of the license for the Project
issued by the Federal Power Commission the District shall apply for, and use and
continue to use its best efforts to obtain, a new license or annual licenses
authorizing it to maintain and operate the Project for a term which shall not be
less than the unexpired term of this contract.
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SECTION
5. Power and Energy To Be
Made Available To Purchaser -
Scheduling
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Beginning
on the Date of Commercial Operation and thereafter for the duration of this
contract, the District agrees to make available to the Purchaser at the Point of
Delivery designated in Section 12 hereof, power and energy from the Project
in an amount equal to fifty per centum (50%) of the Project Output, less
transmission and transformation losses between the Generator Bus and the Point
of Delivery associated with such amount; provided, that the District may, upon
giving Purchaser at least three (3) years' prior written notice of any
withdrawal, withdraw from the Purchaser percentages of the Project Output up to
an aggregate of eleven and one-tenth per centum (11.1%) of the Project Output
for ultimate utilization in Chelan and ▇▇▇▇▇▇▇ Counties, but in no event shall
any notice of withdrawal be given before the Date of Commercial
Operation.
The
District agrees to make available to the Purchaser and the Purchaser agrees to
take from the District, in addition to the power and energy made available as
provided in the preceding paragraph of this Section 5, power and energy in
amounts up to the following additional percentages of Project Output, less
transmission and transformation losses between the Generator Bus and the Point
of Delivery associated with such amounts, which the District does not retain for
ultimate utilization in Chelan and ▇▇▇▇▇▇▇ Counties, for the periods of time set
opposite each percentage, to-wit:
2.2% July
1, 1967 to the termination of this contract, plus an additional 2.4% July 1,
1972 to the termination of this contract, plus an additional 2.2% July 1, 1977
to the termination of this contract,
provided,
that the District, at least two (2) years prior to the beginning of each such
period, shall have given the Purchaser written notice as to the percentage, up
to the maximum of each of the foregoing amounts, to be made available to the
Purchaser. The District reserves the right to withdraw for ultimate
utilization in Chelan and ▇▇▇▇▇▇▇ Counties the additional percentages of Project
Output made available to the Purchaser pursuant to the provisions of this
paragraph of this Section 5 on three (3) years' advance written notice;
provided, however, that no such notice for the withdrawal of any such additional
percentages shall be given until two (2) years after the beginning of any period
in which the additional percentage applies.
The
foregoing amounts of power and energy made available to the Purchaser pursuant
to the preceding paragraphs of this Section 5, and the corresponding
related percentages of the Project Output, are hereinafter referred to as the
"Purchaser's Share of Project Output" and the "Purchaser's Allotment",
respectively. The Purchaser's Allotment of all initial Purchasers is
set forth in Exhibit "A", hereto attached.
The
Purchaser shall be entitled to the use of a share of the total usable pondage at
the Project (hereinafter called "Purchaser's Allotment of
Pondage"). Such share of the pondage shall be determined by
multiplying the total equivalent energy of such pondage by Purchaser's
Allotment. The District shall establish a pondage account for the
Purchaser in an initial amount equal to the Purchaser's Allotment of
Pondage.
The
Purchaser, acting singly or in concert with other Purchasers, shall make
available to the District at least eight (8) hours before 12:01 A.M. of
each day an hourly schedule of requested total energy deliveries for that
day. Such schedule and deliveries thereunder shall not exceed the
Purchaser's Share of Project Output. Revisions in such schedule for
any day may be made at any time on request to the District by the Purchaser
during such day if such revisions are required by reason of changes in estimated
requirements of the Purchaser's system and changes in such schedule shall be
made as required to reflect actual river flow conditions at the
Project. Deviations from the total scheduled production of the
Project shall be held to a minimum by the District and corrected as promptly as
possible on an hourly basis under conditions as nearly equivalent as possible to
those obtaining when the deviation occurred. Such schedule shall be
prepared in accordance with the following provisions:
(a) A
base schedule shall be prepared, determined from the probable inflow water
supply to the Project for that day, not including pondage;
(b) In
addition to each daily base schedule established pursuant to paragraph (a)
of this Section, a schedule of hourly use of pondage shall be prepared;
provided, however, that such use of pondage shall not result in releases of
water at the Project inconsistent with the provisions of Article 40 of
Federal Power Commission License No. 2145 and shall not result in reducing
said pondage account below zero nor increasing it above the initial
amount. The Purchaser shall schedule equivalent energy to its pondage
account in amounts sufficient to restore the account to its initial amount by
7:00 A.M. of the Monday following delivery from said
account. The Purchaser's obligation to restore its pondage account
shall be reduced proportionately when inflow of the river exceeds the hydraulic
capacity of the Project and will be cancelled when spill occurs;
(c) The
hourly schedule of requested total energy deliveries shall be the composite of
the schedules referred to in paragraphs (a) and (b) of this
Section 5.
SECTION
6. Payments by Purchaser to the
District
From and
after the date of Commercial Operation, the Purchaser agrees to pay to the
District in annual amounts (adjusted for any changes in Purchaser's Allotment
during the year) in monthly installments for power and energy made available to
the Purchaser under this contract, which amounts shall be equal to the
District's costs associated with the ownership, operation and maintenance of and
renewals and replacements to the Project multiplied by the Purchaser's
Allotment. Such costs shall include, but shall not be limited to, the
following items of cost incurred or paid by the District in connection with the
Project, whether or not the Project is inoperable or the operation thereof is
interrupted, suspended, pr interfered with, in whole or in part, during the term
of this contract or during any portion of said term, to-wit:
(a) All
expenses of the Project, less credits properly related thereto, chargeable to
Operating Expense Accounts under the Uniform System of Accounts for Public
Utilities and Licensees, as the same are prescribed by the Federal Power
Commission at the date of the execution of this contract (hereinafter called the
"Uniform System of Accounts"), except the expense enumerated in
paragraph (e) of this Section. The term "Operating Expense
Accounts" shall include renewals and replacements of "Minor Items of Property"
as such term is used in the Uniform System of Accounts. Improvements
and extensions to or any replacement of "Units of Property", as the latter term
is used in the Uniform System of Accounts, shall be charged to the Reserve and
Contingency Fund;
(b) Governmental
taxes, assessments, or other similar charges lawfully imposed upon or incurred
by the District due to the District's ownership or operation of, or sale of
power from, said Project, or voluntary payments in reasonable amounts in lieu of
such taxes; and
(c) An
amount equal to the amount required to pay:
(1) The
principal of and interest on (to the extent that such interest is not paid from
the Construction Fund), and premiums if any, which are required to be paid on
the Rocky Reach Hydro-Electric System Revenue Bonds in accordance with the
schedules of monies to be made available for bond retirement provided in the
resolutions of the District authorizing the issuance of said bonds;
(2) Amortization
of the indebtedness of the District to the Fiscal Agent of the District as the
balance of the compensation of said Fiscal Agent for services rendered in
connection with the development and financing of the Project;
(3) Amortization
of the indebtedness of the District to the Attorney for the District as the
balance of the compensation for legal services rendered in connection with the
development and financing of the Project.
The
indebtedness to be paid to the District's Fiscal Agent and Attorney, as provided
in subparagraphs (2) and (3) above, shall not exceed thirty-five
ten-thousandths of the net proceeds, exclusive of accrued interest, received by
the District from the sale of all revenue bonds issued by it to pay all the
remaining costs incurred in connection with the financing, acquisition and
construction of the Project as defined in paragraph (A) of Section 1
of this contract, payable twenty-eight and three-quarters (28-3/4)
ten-thousandths thereof in thirty (30) equal semi-annual installments, without
interest to maturity, beginning on the tenth day of the seventh month following
the month in which the Date of Commercial Operation occurs, and six and
one-quarter (6-1/4) ten-thousandths thereof in ten (10) equal semi-annual
installments beginning six months from the maturity date of the thirtieth (30th)
semi-annual installment above described. In the event a portion of
the monies required to pay all of the estimated remaining costs of the
financing, acquisition and construction of the Project, as defined in
paragraph (A) of Section 1 of this contract, is hereafter obtained by
the District otherwise than as net proceeds received from the sale of revenue
bonds issued by it, the monies so obtained shall for the purpose of this
paragraph be considered the same as net proceeds received from the sale of
revenue bonds issued by the District, but net proceeds received from the sale of
revenue bonds thereafter issued by the District to repay the monies so obtained
shall not be considered as net proceeds received from the sale of revenue bonds
issued by the District.
The term
"net proceeds'' as used in this paragraph (c) shall mean the amount of
money received by the District from such sales after deducting any amount
representing accrued interest on the bonds so sold, and brokerage or placement
fees payable to bankers for effecting such sales.
(d) An
amount equal to:
(1) Fifteen
per centum (15%) of the payments specified in subparagraph (1) of
paragraph (c) of this Section or, during periods when such fifteen per
centum (15%) of such payments is insufficient to enable the District to make the
payments into the Reserve and Contingency Fund pursuant to the provisions of
Section 6.4 of Resolution No. 1412 and paragraph D of
Section 8 hereof, such other sums as may be necessary to enable the
District to make said payments; plus
(2) The
amounts required, if any, during the term of this contract for necessary
renewals to and replacements of the Project which are in excess of the monies
available in the Reserve and Contingency Fund together with any bond proceeds
available for such purpose pursuant to the provisions of Section 7 hereof
and the proceeds of any applicable insurance;
(3) Such
additional amounts, if any, as shall be mutually agreed upon between the parties
hereto.
(e) Any
cost of or reasonable accruals for payment of any assessments or agreed payments
for benefits received by the District for the account of the Project from
upstream storage or other headwater improvements on the Columbia River or its
tributaries, of the nature now provided for in Section 10(f) of the Federal
Power Act. Any accruals for the foregoing purposes will be set aside
into a "Contingent Operating and Maintenance Reserve Fund", and any such
assessments or agreed payments shall be charged against the Contingent Operating
and Maintenance Reserve Fund to the extent of such accruals for the year
involved; and provided, further, that the difference between the amount accrued
and the amount of any such assessments for upstream benefits when actually
determined by the Federal Power Commission, or its successor, or the amount of
such agreed payment when made, shall be accounted for, billed to and paid by or
credited to the Purchaser, in the same manner and on the same basis that
accounting, billing and payment would have been made therefor if such cost had
been determined during the period in which such benefits were
received.
From the
aggregate of the foregoing amounts there shall be deducted any credits (not
deducted pursuant to paragraph (a) of this Section 6) by reason of the
receipt of any revenues and other income derived from sources other than the
direct sale of power from the Project, excluding from such credits revenues from
investment of monies in the Reserve Account in the Bond Funds created and to be
created by the resolutions of the District authorizing the Rocky Reach
Hydro-Electric System Revenue Bonds and in the Reserve and Contingency Fund
created by Section 6.4 of Resolution No. 1412 of the District and in
the Construction Fund created by Section 6.6 of Resolution
No. 1412. The revenues so derived from the investment of monies
in said Funds shall accrue to said respective Funds. If the amounts
included in paragraph (b) of this Section 6 result in a cost to the
Project exceeding that which would otherwise result if all of the Project Output
were sold to public utility customers for resale, any such excess shall be
collected from the customer, the sale to which results in such excess, and the
amounts so collected shall constitute a credit hereunder.
The
amounts payable by the Purchaser to the District pursuant to
subparagraph (1) of paragraph (c) of this Section 6 shall not
commence until the first calendar month in which the interest on the Bonds
referred to in said subparagraph is not payable from the Construction Fund to be
created by resolution of the District authorizing the issuance of said Bonds;
and shall be paid in substantially equal monthly installments on or before the
twentieth (20th) day of each calendar month for such month as advance payments
on account of the bills to be submitted by the District, pursuant to
Section 22 hereof. Notwithstanding any provision of this
contract, it is not intended that Purchaser by this contract assumes any
obligation or liability as guarantor, endorser, surety or otherwise, in respect
to the securities issued or to be issued by the District.
SECTION
7. Issuance of Additional
Bonds
The
District agrees that, should the costs to the District in connection with any
unusual loss or damage or major renewals of or replacements to the Project be in
excess of the monies then in the Reserve and Contingency Fund and proceeds of
insurance policies, if any, covering such loss or damage, the District will
issue additional bonds payable from the revenues of the Project to pay that
portion of such costs which exceeds the sum of (a) the proceeds of insurance
policies, if any, and (b) the monies then in the Reserve and Contingency Fund in
excess of $2,000,000 provided the District can then legally issue such bonds and
that such bonds can be marketed. The District shall take all
reasonable steps to establish the legality of and to sell such
bonds. Any resolution authorizing the issuance of such bonds, or
additional bonds for the acquisition or construction of additions and
betterments to or extensions of the Project, shall provide for annual payments
into a special fund for the payment of the principal of, interest on, and
premium if any, on said bonds over a period of time which shall not be less than
the estimated service life of the facilities to be acquired or constructed from
the proceeds thereof, which annual payments shall be as nearly equal as
practicable in each year in which provision is made for the retirement of
principal. Such bonds shall be included in the definition of "Rocky
Reach Hydro-Electric System Revenue Bonds" for the purpose of determining the
annual power costs of the District set forth in Section 6 hereof and the
payments to be made by Purchaser to the District pursuant to
subparagraph (1) of paragraph (c) and subparagraph (1) of
paragraph (d) of said Section 6.
SECTION
8. Project Revenues - Special
Funds
The
District agrees that it will maintain the special funds created and established
by Resolution No. 1412, which resolution authorized the Series of 1956
Bonds, and that like funds will be created and established by the resolution
authorizing the Subsequent Series Bonds (and any bonds issued to defray the cost
of additions and betterments or major replacements to the Project that shall be
required to maintain it in good and efficient operating condition by reason of
any unusual loss or damage to the Project for which funds are not available from
the proceeds of insurance or from the Reserve and Contingency Fund), which funds
and the purposes thereof are as follows:
A. A
Construction Fund, and a Construction Interest Account in said Fund, into which
Fund there shall be deposited all amounts received or collected prior to the
Date of Commercial Operation as specified in Section 6.1 of the resolution
authorizing the Subsequent Series Bonds and the proceeds of sale of all Rocky
Reach Hydro-Electric System Revenue Bonds, except:
1. A
sum not to exceed Two Million Dollars ($2,000,000) to be deposited in the
Revenue Fund mentioned in paragraph B of this Section 8;
2. An
amount of cash equal to the largest amount required to be paid or set aside in
the Interest Account in the Bond Fund created for the payment of each series of
such Bonds (hereinafter referred to in subparagraph 1 of paragraph C
of this Section 8) with respect to any such series of Bonds in any
twelvemonth period from the date of such Bonds to the final maturity date
thereof.
Monies in
the Construction Fund from time to time shall be used only for the purpose of
paying interest on said Bonds to the Date of Commercial Operation and for six
(6) months thereafter, and for paying, or reimbursing payments made in
connection with, costs of construction of the Project. Surplus monies
remaining in the Construction Fund after paying or providing for the payment of
the foregoing amounts shall be paid into the Reserve and Contingency Fund
(hereinafter mentioned in paragraph D of this Section 8) in addition
to all other payments required to be paid therein;
B. A
Revenue Fund into which shall be placed initially Two Million Dollars
($2,000,000) from the proceeds of sale of the Subsequent Series Bonds for
working capital, and into which all income, revenues, receipts and profits
derived by the District from the operation of the Project subsequent to the Date
of Commercial Operation shall be deposited;
C. A
Bond Fund for each series of said Bonds into which the District will transfer
from the Construction Fund or from the Revenue Fund in substantially equal
monthly installments the amounts required annually by such resolutions for the
purpose of paying the principal of, interest on, and premium if any, on the
Rocky Reach Hydro-Electric System Revenue Bonds in accordance with their terms,
which shall include:
1. An
Interest Account in each of the Bond Funds into which there shall be paid in
equal monthly installments the amount required to pay the interest on the Bonds
semi-annually. During the period prior to the Date of Commercial
Operation and for six months thereafter the interest on the Bonds shall be paid
out of the Construction Interest Account in the Construction Fund;
2. A
Reserve Account in each of the Bond Funds for the Series of 1956 Bonds, the
Subsequent Series Bonds, and each other series of bonds issued
thereafter. There has been, or there will be, paid into the Reserve
Account for each such series of bonds from the proceeds of sale of each such
series an amount of cash equal to the largest amount of interest to be paid on
such series of bonds, respectively, during any twelve-month period from the date
of such series of bonds to the final maturity thereof. Such Reserve
Accounts shall thereafter be maintained at all times at said amounts by
additional payments from the Revenue Fund as may become necessary as long as any
of such Bonds or additional bonds are outstanding.
The
Reserve Account: in the Bond Fund for the Series of 1956 Bonds shall be used for
the purpose of making up any deficiencies in the Interest Account and the Bond
Retirement Account in said Bond Fund, and the Reserve Account in the Bond Fund
for the Subsequent Series Bonds shall be used for the purpose of making up any
deficiency in the Interest Account in said Bond Fund.
Any
monies in the Reserve Accounts in the Bond Funds in excess of the minimum
amounts required to be maintained therein may, and when such excess monies
amount to One Hundred Thousand Dollars ($100,000) or more shall, be used at
least semi-annually to retire Bonds by call for redemption, or for the purchase
of Bonds at prices not exceeding the then applicable call
price. During the period prior to the Date of Commercial Operation
and for six months after said date, any excess monies in the Reserve Account
shall be transferred to the Construction Fund;
3. Bond
Retirement Accounts in the Bond Funds into which shall be paid monthly the
amounts specified in paragraph B of Section 6.2 of each of the
aforesaid bond resolutions, which amounts shall be used for the purpose of
retiring Bonds by call for redemption or purchase as therein
stated;
D. The
Reserve and Contingency Fund into which there shall be paid Sixty-Six Thousand
Six Hundred Sixty-Six Dollars and Sixty-Seven Cents ($66,666.67) per month
beginning with the first month after the Date of Commercial Operation until the
balance therein is equal to Eight Million Dollars ($8,000,000), and thereafter,
and during the remainder of the term of this contract, such amounts payable
monthly as may be required to maintain said fund in that amount, such later
payments, however, not to exceed the amount of the first monthly
payment. After all of the Bonds are retired, any amounts in the
Reserve and Contingency Fund in excess of $8,000,000 shall be ratably applied to
reduce the payments to be made by the Purchaser pursuant to Section 6
hereof.
The
monies in the Reserve and Contingency Fund shall be used for the following
purposes:
1. To
make up any deficiency in the Bond Funds;
2. To
pay the cost of renewals and replacements to the Project;
3. To
pay the cost of additions to and extensions of the Project, excepting the cost
of the additional facilities referred to in Section 23 hereof;
4. To
pay extraordinary operation and maintenance costs in connection with the
Project.
All
monies in the Reserve and Contingency Fund in excess of Eight Million Dollars
($8,000,000) shall be used for retiring Rocky Reach Hydro-Electric System
Revenue Bonds in the manner provided in the resolutions authorizing the issuance
of said Bonds, at least annually.
Should
any amount remain in any of the funds established in connection with the
Project, including working capital and all reserves, in excess of outstanding
obligations against such funds at the expiration of this contract, there shall
be refunded to the Purchaser, as excess payment for power and energy theretofore
purchased, a share of such remainders determined by multiplying the total
thereof by the percentage of the Project Output to which the Purchaser is
entitled pursuant to the provisions of this contract immediately prior to the
expiration of the term thereof as specified in Section 2
hereof.
SECTION
9. Project Purchaser's
Committee - Arbitration
(a) In
order that the Purchasers may, in an orderly way, participate in problems
relating to the Project, there is hereby established the Project Purchasers'
Committee (herein called the "Committee"). The Purchaser and each of
the other Purchasers are entitled to representation on the Committee and may
each appoint a representative to attend Committee meetings. A
Chairman shall be elected by the members of the Committee. The
Committee will meet regularly as determined by the Committee, for the purpose of
discussing the problems with respect to said Project and may make
recommendations to the District with reference thereto. Special
meetings may be called by the Chairman and shall be called by the Chairman at
the request of the District or upon the request of members of the Committee
representing one-third (1/3) of the power purchased by the
members. All meetings will be held in Wenatchee, Washington, or at
such other place or places as may be determined by the Committee. The
District shall not be liable for any cost or expense of the Committee or any
member thereof.
(b) The
District shall give the Committee reasonable notice, in no case less than thirty
(30) days except in the event of an emergency requiring immediate action,
whenever it proposes to replace items of major equipment in or to construct
additions or betterments to or extensions of said Project, or to enter into
additional new or special contractual arrangements relating to and substantially
modifying the operation of said Project, or the cost of power
therefrom.
(c) The
District will give due consideration to the recommendations of the
Committee. In considering said recommendations, the District shall
give due regard to the objective of achieving from said Project the optimum
electric power production consistent with economy, reliability and facility of
operation and the District's statutory duties. If in the opinion of
the Committee the District has given inadequate consideration to its informal
recommendations, written recommendations may be made to the District whenever
such recommendations are approved in writing by members of the Committee
representing Purchasers who are purchasing two-thirds (2/3) of the power
purchased by the Purchasers. Such written recommendations shall be
forwarded to the District with appropriate supporting data. The
District shall take action on such recommendations within a reasonable time by
adopting, modifying, or rejecting such recommendations. If the
District modifies or rejects said recommendations it shall notify the Committee
of its action in writing, giving the reasons therefor.
(d) If
the District modifies or rejects a written recommendation of the Committee
dealing with matters which may be arbitrated as set forth in
subparagraph (e) hereof, and made in accordance with the procedures set
forth in subparagraph (c) hereof, the Committee may, by affirmative vote of
members of the Committee representing Purchasers who purchase two-thirds (2/3)
of the power purchased by the Purchasers, submit the recommendation to a board
of arbitrators. The board of arbitrators shall be composed of three
(3) persons, one of whom shall be appointed by the District, one of whom shall
be appointed by the affirmative vote of members of the Committee representing
Purchasers who are purchasing more than one-half (1/2) of the power purchased by
the Purchasers, and the third person shall be appointed by the two persons so
appointed. In the event said two members cannot agree upon the
appointment of a third person, then such third person shall be appointed by the
Chief Justice of the Supreme Court of the State of Washington. The
procedure for arbitration shall be governed by the laws of the State of
Washington. Insofar as the parties hereto may legally do so, they
agree to abide by the decision of said board; provided, that the District shall
not be bound by any decision of a board of arbitration to the extent that such
decision is retroactive beyond the date when the matter arbitrated was made the
subject of written recommendation of the Committee.
(e) The
matters which may be arbitrated in accordance with subparagraph (d) hereof
shall consist of all matters pertaining to the maintenance, and operation of or
additions or betterments to, or extensions of, or replacements or renewals to,
the Project, insurance to be carried on said Project (which in no event shall be
less than that required under the terms of the bond resolution), amounts to be
charged to the cost of operating the Project as a result of voluntary payments
in lieu of taxes and all other matters materially affecting the cost of power to
the Purchasers, except such of said matters as are by law vested exclusively in
the discretion of the District.
(f) In
the event this Section 9 or any paragraph, sentence, clause or phrase
thereof shall be finally adjudicated by a court of competent jurisdiction to be
invalid or illegal, the remainder of this contract shall be unaffected by such
adjudication, and all other provisions of this contract shall remain in full
force and effect as though this Section or such part thereof so adjudicated to
be invalid had not been included herein.
SECTION
10. Board of Consulting
Engineers on Construction Problems
The
District shall appoint and maintain during the construction of the Project a
Board of five (5) Consulting Engineers of outstanding ability and national
reputation, which shall include two (2) engineers selected from a list of not
less than four (4) such engineers submitted by the Committee to the
District.
SECTION
11. Increase of Purchaser's
Allotment
In the
event of a Default (as hereinafter defined) by any of the other Purchasers, the
Purchaser's Allotment at that time shall be automatically increased, which
increase shall be effective for the remaining term of this contract, pro rata
with that of the other Purchasers, but the cumulative total of all such
increases on account of Defaults shall never exceed twenty-five per centum (25%)
of the Purchaser's Allotment immediately prior to such Default (excluding from
the Purchaser's Allotment for this purpose any increases made therein under the
provisions of this Section 11); provided, however, that the Purchaser's
Allotment including the cumulative total of all such increases and all increases
made pursuant to any other provision of this contract shall never exceed
fifty-six and eight-tenths per centum (56.8%) of the Project
Output. For the purposes of this Section 11, the District shall
be considered a Purchaser and its Purchaser's Allotment at the time of Default
shall be equal to that percentage of the Project Output which remains after
deducting the total of the percentages representing all other Purchaser's
Allotments, at the time of Default, from the Project Output.
The term
"Default" as used herein shall mean the failure by any one of the Purchasers to
make the payments specified in Section 6 hereof and contemporaneously with
said failure to make payments there shall exist, with respect to that one of the
Purchasers, any one or more of the following conditions:
(a) An
order, judgment or decree shall be entered by any court of competent
jurisdiction:
(1) Appointing
a receiver, trustee or liquidator for any of the Purchasers or the whole or any
substantial part of the properties of any of the Purchasers;
(2) Approving
a petition filed against any of the Purchasers under the provisions of an Act to
Establish a Uniform System of Bankruptcy Throughout the United States, Approved
July 1, 1898, as amended;
(3) Granting
relief to any of the Purchasers under an amendment to said Bankruptcy Act which
shall give relief similar to that afforded by said Act; or
(4) Assuming
custody or control of the whole or any substantial part of any of the
Purchaser's properties under the provisions of any other law for the relief or
aid of debtors;
and such
order, judgment or decree shall not be vacated or set aside or stayed (or, in
case custody or control is assumed by said order, such custody or control shall
not otherwise be terminated), within sixty (60) days from the date of the entry
of such order, judgment or decree.
(b) Any
of the Purchasers shall:
(1) Admit
in writing its inability to pay its debts generally as they become
due;
(2) File
a petition in bankruptcy;
(3) Make
an assignment for the benefit of its creditors;
(4) Consent
to the appointment of a receiver of the whole or any substantial part of its
properties;
(5) Be
adjudicated a bankrupt on the basis of a petition in bankruptcy filed against
it;
(6) File
a petition or an answer seeking relief under any amendment to said Bankruptcy
Act which shall afford relief substantially similar to that afforded by said
Act; or
(7) Consent
to the assumption by any court of competent jurisdiction under the provisions of
any other law for the relief or aid of debtors of custody or control of any of
the Purchasers or of the whole or any substantial part of its
properties;
provided,
that if prior to an imminent default by any of the Purchasers it shall
demonstrate to the satisfaction of the District and the other Purchasers
receiving in the aggregate at least two-thirds (2/3) of the balance of the
Project Output its inability to pay for its Purchaser's Allotment and its
ability to pay for a smaller Purchaser's Allotment, then it shall be allowed to
thereafter take such smaller Purchaser's Allotment and shall be thereafter
liable for the same in the same manner as for its Purchaser's Allotment prior
thereto; and, in such event, the automatic increase in the Purchaser's Allotment
as above provided shall apply only to the difference between the prior
Purchaser's Allotment and such lesser Purchaser's Allotment of that one of the
Purchaser's threatened with default,
(c) If
any of the other Purchasers defaults, and the Purchaser's Allotment is
automatically increased in accordance with this Section, the Purchaser either
individually or as a member of a group shall have a right of recovery from that
one of the Purchasers in default for such amount as the Purchaser may sustain as
a loss or damage by reason of such default and may commence such suit, action or
proceeding as may be necessary or appropriate to recover the amount of said loss
or damage.
SECTION
12. Point of
Delivery
The power
and energy to be made available to the Purchaser by the District hereunder shall
be delivered at the high-voltage side of the transformer banks located at the
generating station of the Project. Other points of delivery within
Chelan County may be agreed upon from time to time, Purchaser agreeing to pay
the cost of delivering power and energy to any point of delivery other than that
herein specified if facilities in addition to initial Project facilities are
required for such purpose.
SECTION
13. Metering
The
District shall provide and maintain suitable meters at the Generator Bus of the
Project to measure the amounts of power and energy including reactive power
produced by the Project. The District shall also arrange for suitable
metering at other points as may be mutually agreed to by the parties
hereto.
The
District shall cause such metering equipment to be tested at least once every
two (2) years. If the Purchaser requests additional tests and
inspections of such metering equipment to be made, the costs thereof shall be
paid by the Purchaser unless such metering on tests shows the measurement made
by such metering equipment used during the tests varied more than two per centum
(2%) from the measurement made by the standard meter used in such
tests. Either party will give the other reasonable notice of the time
when any such tests and inspections are to be made in order that both parties
may be properly represented at each such test or inspection.
SECTION
14. Character of
Service
Power and
energy made available hereunder shall be in the form of three-phase current
alternating at a frequency of approximately sixty (60) cycles per second, and
deliveries thereof shall be made at approximately 230 kv, or such other voltage
as may be mutually agreed upon by the parties hereto.
SECTION
15. Reactive
Power
The
District will make available at the Point of Delivery the reactive power
included in the Purchaser's Share of Project Output and additional reactive
power at any time to the extent that said Purchaser elects to reduce deliveries
of power and energy within the Purchaser's Share of Project
Output. Voltage levels at the Project will be maintained in
coordination with the Purchaser's system and other interconnected
systems.
SECTION
16. Continuity of
Service
The
District shall maintain continuous service to Purchaser, but may temporarily
interrupt or reduce deliveries of electric energy hereunder if the District
determines that such interruption or reduction is necessary or desirable in the
case of emergencies, or in order to install equipment in, make repairs,
replacements, investigations and inspections of, or perform other maintenance
work on the Project. Except in the case of an emergency and in order
that the Purchaser's operations will not be unreasonably interfered with, the
District shall give the Purchaser reasonable notice of any such interruption or
reduction, the reason therefor, and the probable duration thereof.
SECTION
17. Notices
Any
notice or demand by the Purchaser or the Project Purchasers' Committee under
this contract shall be deemed properly given if mailed (certified or
registered), postage prepaid, or telegraphed to the Manager of Public Utility
District No. 1 of Chelan County, Wenatchee, Washington, and any notice or
demand by the District under this contract shall be deemed properly given if
mailed (certified or registered), postage prepaid, or telegraphed to the
Purchaser at its office in the City of Seattle, Washington. The
designation of the name and address to which any such notice or demand is to be
directed may be changed at any time, and from time to time, by either party by
similar notice.
SECTION
18. Assignment of
Contract
This
contract shall inure to the benefit of, and shall be binding upon, the
respective successors and assigns of the parties to this contract. No
assignment or transfer of this contract shall relieve the parties hereto of any
obligation incurred hereunder.
SECTION
19. Accounting
The
District shall cause proper books of account to be kept for the District showing
as a separate utility system the accounts of the Project and in accordance with
the rules and regulations prescribed by any governmental agency authorized to
prescribe such rules, including the Division of Municipal Corporations of the
State Auditor's Office of the State of Washington, or other State department or
agency succeeding to such duties of the State Auditor's Office, and in
accordance with the Uniform System of Accounts prescribed by the Federal Power
Commission or other Federal agency having jurisdiction over electric public
utility companies owning and operating properties similar to the electric
properties operated by the District, whether or not the District is required by
law to use such system of accounts, and all such accounting records shall be
available for inspection and utilization by the duly authorized representatives
of the Purchaser at all reasonable times. The District shall supply
monthy to the Purchaser such reports of the operation and maintenance of the
Project as the Purchaser may from time to time reasonably
request. The District shall cause such books of account to be audited
by independent certified public accountants, experienced in electric utility
accounting and of national reputation, to be employed by the
District. The audits to be made by such certified public accountants,
as above mentioned, shall be made annually and shall cover each calendar year
during the term of this contract, beginning with the year in which the Date of
Commercial Operation occurs, and shall be completed within one hundred twenty
(120) days following the end of each such calendar year. A copy of
each such annual audit, including any recommendations of the accountants with
respect thereto, shall be made available by the District to the
Purchaser.
SECTION
20. Operation and Maintenance of
Project
The
District will maintain the Project in good operating condition at all times
except to the extent prevented by Uncontrollable Forces and will make renewals
and replacements thereof, as needed. In the event of any failure of
or damage whatsoever to facilities of the Project, or any reduction in the
delivery of power and energy therefrom for any cause whatsoever, the District
agrees that it will, with due diligence, expedite the repair or replacement of
said facilities or remedy the condition causing such reduction to the end that
the delivery of power and energy as required by this contract will be
re-established as soon as reasonably possible When requested by the Purchaser
and to the extent reasonable to do so under all of the circumstances, the
District shall also use its best efforts to obtain the necessary replacement
power and energy at the lowest possible cost for so long a period of time as any
deficiency exists for the causes heretofore stated in this
Section 20. The cost of such replacement power and energy shall
be paid by the Purchaser in addition to all other costs to be paid by the
Purchaser in accordance with the other provisions of this contract.
The
District shall operate and maintain the Project in an efficient, economical and
workmanlike manner and consistent with good business and operating practices
followed by other electric utilities in the Pacific Northwest. The
costs of operation and maintenance shall at all times be reasonable and
consistent with the costs of operation and maintenance of similar electric
facilities by public and private agencies in the Pacific Northwest.
Authorized
representatives of the Purchaser shall have reasonable access to the entire
Project for the purpose of inspection, and all books and records pertaining to
the operation and maintenance of the Project shall be made available to the
Purchaser by the District at all reasonable times for inspection and
utilization.
Maintenance,
repairs, renewals and replacements shall be scheduled and performed by the
District with the intent of obtaining the optimum operation of the Project as
required to meet the respective requirements of all purchasers of power and
energy from the Project, and shall be performed at all times in a prudent and
economical manner.
The
parties hereto hereby agree to cooperate on matters relating to operation,
maintenance and repair of the Project and the power resources of the Purchaser,
as such matters relate to said operation and maintenance of the Project in
coordination with the operation and maintenance of the power resources of the
Purchaser and other interconnected generating systems, to assure continued
maximum production of usable power and energy in the most efficient manner from
the Project with the reservoir, generating and transmission facilities and water
available at the generating stations of the parties.
Calculation
of the transmission and transformation losses referred to in Section 5
hereof shall be made by the District using factors to be agreed upon by
representatives of the parties hereto.
The
District shall not voluntarily sell or otherwise dispose of the Project or any
portion thereof so as to impair the obligation of the District to make available
to Purchaser Purchaser's Share of Project Output hereunder or perform any act
that would adversely affect the rights of the Purchaser hereunder.
SECTION
21. Insurance
The
District agrees promptly to take all necessary steps to procure at the earliest
practicable time and thereafter to maintain in effect at all times insofar as
reasonably possible to do so, adequate insurance with responsible insurers under
policies with losses payable to the District for the benefit of the District and
the Purchaser as their respective interests may appear, to protect and insure
against:
(a) Employer's
liability to the extent not covered by the Workmen's Compensation Act of the
State of Washington. The District shall comply with the provisions of
the Workmen's Compensation Act of the State of Washington;
(b) Public
liability of the District for bodily injury and property damage;
(c) Physical
damage due to fire;
(d) All
risks of physical damage to property and equipment during transportation and
installation;
(e) All
risks of physical damage and loss in excess of an appropriate deductible amount,
arising from perils not covered by the above insurance to the extent available
at reasonable cost;
(f) Other
risks as deemed necessary.
To the
extent not covered by the foregoing insurance, the District agrees to procure
and keep in effect at all times such policies of insurance, and in such amounts,
as shall be required by the terms of the bond resolutions authorizing the
issuance of Rocky Reach Hydro-Electric System Revenue Bonds.
SECTION
22. Billing
Prior to
the tenth (10th) day of each calendar month after the Date of Commercial
Operation, the District shall mail to the Purchaser a ▇▇▇▇ showing in
detail:
(a) The
amounts due for the prior month pursuant to Section 6 hereof except the
amounts due pursuant to paragraph (c)(1) of said
Section 6;
(b) The
amount due in the prior month pursuant to paragraph (c)(1) of
Section 6 hereof, as provided in said Section 6; and each ▇▇▇▇ shall
reflect any advance payment by Purchaser pursuant to Section 6
hereof.
The
balance due upon said ▇▇▇▇ shall be due and payable by the Purchaser on or
before the twentieth (20th) day of said month or on or before the tenth (10th)
day following the date of mailing said ▇▇▇▇, whichever is the later (which date
is hereinafter referred to as the "Due Date"). Failure to receive a
▇▇▇▇ shall not release the Purchaser from liability for payment. If
payment in full is not made on or before the Due Date, a delayed payment charge
of two per centum (2%) of the unpaid amount of the ▇▇▇▇ will be made, except
that, in the case of a bona fide dispute as to the amount of the ▇▇▇▇, the
delayed payment charge shall be applicable only to the portion thereof
admittedly due and not paid.
Except as
to any portion of a ▇▇▇▇ which may in good faith be disputed by the Purchaser,
the District may, whenever a ▇▇▇▇ or portion thereof remains unpaid after thirty
(30) days' advance notice of said delinquency in writing by registered mail,
discontinue service to the Purchaser until such ▇▇▇▇ is paid, or at its option,
cancel the contract. No such discontinuance of service or
cancellation shall affect the Purchaser's liability for any charges accrued
prior thereto, nor be deemed to waive any right of the District to
damages.
If at any
time service is discontinued as provided in this Section 22, the Purchaser
agrees that it will nevertheless continue to make the payments required to be
paid by it to the District the same as though service had not been
discontinued.
Remittances
received by mail will be accepted without assessment of the two per centum (2%)
delayed payment charge, provided the postmark indicates payment was mailed on or
before the Due Date. If the Due Date is on a Sunday or a holiday, the
following business day shall be the last day on which payment can be made
without the addition of the delayed payment charge.
A final
accounting for each calendar year shall be rendered to the Purchaser by the
District on or before May 15 of the succeeding year. Any balance
due the District shall be paid within thirty (30) days from the date of
mailing said final accounting. Settlement for any credit due the
Purchaser shall be made promptly after such final accounting has been rendered
as aforesaid.
SECTION
23. Installation of Additional
Units
(a) From
time to time during the term hereof the District may propose to expand the
Project by installing additional generating facilities. Whenever the
District proposes to so expand the Project it shall give notice in writing of
such intent to the Purchaser stating:
(1) The
estimated cost of such additional generating facilities;
(2) The
proposed method of financing the cost of said facilities;
(3) The
estimated additional power and energy which would be available as a result of
the installation of said facilities;
(4) The
estimated incremental cost (i.e., the costs which will be incurred as a result
of installing the proposed additional facilities, which costs would not be
incurred were such proposed additional facilities not installed) of said
additional power and energy on an annual basis; and
(5) The
estimated construction period for the installation of said
facilities.
The
notice shall also contain other available pertinent information.
(b) The
Purchaser shall have the option of purchasing a share of said additional power
and energy determined by multiplying the total additional power and energy by
the Purchaser's Allotment as it may exist from time to time pursuant to the
provisions of Sections 5 and11 hereof, and may exercise such option by
giving written notice to the District on or before the expiration of ninety
(90) days from the receipt of said written notice from the
District. Failure to exercise its option to purchase additional power
and energy which would be available from the installation of additional
generating facilities proposed by the District at any time shall not be
construed to waive the rights of the Purchaser to a share of the additional
power and energy which would be available from additional facilities proposed
for installation by the District at a later date.
(c) If
the Purchaser exercises its option to take its share of said additional power
and energy, it shall pay for said additional power and energy a percentage of
the incremental annual cost of said additional facilities corresponding to the
per cent the share of additional power and energy which it purchases is to the
total additional power and energy available as a result of the installation of
the additional facilities. If the Purchaser does not elect to take
additional power and energy which would be available from the installation of
additional generating facilities, it shall continue to receive the same amount
of power and energy and pay the same annual power cost therefor as if such
additional generating facilities had not been installed.
(d) If,
after the Purchaser shall have exercised its option as aforesaid, the District
shall determine that it is not economically feasible for it to install
additional generating facilities as proposed, the District shall be under no
obligation to do so and shall so notify the Purchaser.
(e) Notwithstanding
any other provisions of Section 23 hereof, whenever the District is
compelled to install additional facilities at or in the Project by any order or
decision of the Federal Power Commission or any State or Federal government
agency with authority to issue or make and enforce such an order or decision,
the Purchaser shall share the benefits and costs resulting from the installation
of said additional facilities in the same manner and to the same extent as if
the Purchaser had voluntarily exercised its option to purchase the power and
energy resulting from said installation as provided earlier in Section 23
hereof.
SECTION
24. District's Bond Resolution
and License
It is
recognized by the parties hereto that the District in its operation of the
Project and in the delivery of the power hereunder to the Purchaser, must comply
with the requirements of the resolutions authorizing the issuance of the Rocky
Reach Hydro-Electric System Revenue Bonds and with the license for the
construction and operation of the Project as issued by the Federal Power
Commission and amendments thereof from time to time made and it is therefore
accordingly agreed that this contract is made subject to the terms and
provisions of said resolutions and license. The District shall not,
without the written consent of the Purchaser, amend, modify or otherwise change
said resolutions or apply for or consent to an amendment, modification or change
of said license if such amendment, modification or change would be to the
disadvantage of the Purchaser; provided, however, that the District shall in due
course make application to the Federal Power Commission for amendment of the
Rocky Reach license (Project No. 2145) to permit the change in capacity of
generating units initially installed from 90,000 kilowatts each to 101,650
kilowatts each (nameplate rating).
SECTION
25. Liability of
Parties
The
District and the Purchaser each assumes full responsibility and liability for
the maintenance and operation of its respective properties and shall indemnify
and save harmless the other party from all liability and expense on account of
any and all damages, claims or actions, including injury to or death of persons,
arising from any act or accident in connection with the installation, presence,
maintenance, and operation of the property and equipment of the indemnifying
party; provided, that any liability which is incurred by the District through
the operation and maintenance of the Project and not covered by insurance shall
be paid solely from the revenue of the said Project, and any payments made by
the District to satisfy such liability shall become part of the annual power
costs as set forth in Section 6 hereof.
At all
times that the District is taking a percentage of the Project Output it shall
have all of the rights and obligations of a Purchaser under this contract,
except those set forth in Sections 9, 22 and 23 hereof. The
percentage of the Project Output taken by the District at any time shall be
deemed to be that percentage of the Project Output which remains at that time
after deducting the total of the percentages representing all other Purchaser's
Allotments.
SECTION
26. Conflict of
Laws
The
parties hereto agree that this contract shall be governed by the laws of the
State of Washington.
SECTION
27. Waiver of
Default
Any
waiver at any time by either party hereto of its rights with respect to the
other party or with respect to any other matters arising in connection with this
contract shall not be considered a waiver with respect to any subsequent default
or matter.
IN
WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals as
of the day and year first above written.
|
(SEAL)
|
PUBLIC
UTILITY DISTRICT NO. 1
OF
CHELAN COUNTY, WASHINGTON
By /s/ ▇. ▇.
▇▇▇▇▇▇▇▇▇▇
President
|
|
|
ATTEST:
/s/
▇▇▇▇
▇▇▇▇▇▇▇
Secretary
|
||
|
(SEAL)
|
PUGET
SOUND POWER & LIGHT COMPANY
By /s/ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
President
|
|
|
ATTEST:
/s/
▇▇▇▇▇ ▇.
▇▇▇▇▇
Secretary
|
EXHIBIT
"A"
Distribution of Project
Output
|
Percent
of Project Output Sold
|
||||||||||
|
Purchasers
|
Date
of Commercial Operation to and Including June 30,
1967
|
July 1,
1967 to and Including June 30, 1972
|
July 1,
1972 to and Including June 30, 1977
|
Thereafter
during the remainder of the term of
the
Contracts
|
||||||
|
Puget
Sound Power &
Light Company (1)
|
50.0
|
52.2
|
54.6
|
56.8
|
||||||
|
Aluminum
Company
of America
|
23.0
|
|
23.0
|
23.0
|
23.0
|
|||||
|
Portland
General
Electric Company
|
16.0
|
14.7
|
13.3
|
12.0
|
||||||
|
Pacific
Power &
Light Company
|
7.1
|
6.5
|
5.9
|
5.3
|
||||||
|
The
Washington Water
Power Company
|
3.9
|
3.6
|
|
3.2
|
2.9
|
|||||
|
100.0
|
100.0
|
100.0
|
100.0
|
|||||||
|
(1) -
Subject to the provisions of Section 5 of the Power Sales Contract
between Puget Sound Power & Light Company and the
District.
|