Execution Copy
AMENDED AND RESTATED AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT, made and entered into as of July
1, 1998, by and between Selkirk Cogen Partners, L.P., a Delaware limited
partnership (hereinafter referred to as SELLER), with offices at Boston,
Massachusetts, and NIAGARA MOHAWK POWER CORPORATION, a domestic corporation
(hereinafter referred to as NIAGARA) with its office and principal place of
business at Syracuse, New York.
W I T N E S S E T H :
WHEREAS, SELLER (by assignment) and NIAGARA are parties to an
Agreement dated December 7, 1987, as amended by an Amendment dated December 14,
1989, the Second Amendment dated January 25, 1990, the Third Amendment dated
October 23, 1992, an Agreement dated March 31, 1994, and the Fourth Amendment
dated June 26, 1996 (collectively referred to as the "Original Agreement").
(Capitalized terms not otherwise defined herein shall have the meaning set forth
in Schedule A to this AGREEMENT.)
WHEREAS, SELLER will own and operate an electric generating plant
(hereinafter referred to as "Phase I") in Selkirk, New York, with an initial
capacity of approximately 79 megawatts, and with expected annual production of
approximately 625,000 megawatt-hours initially, so arranged that the ELECTRICITY
generated therein can be delivered to the electric transmission system of
NIAGARA with which it will be
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physically connected at the Receiving Point as set forth in the Phase I
Interconnection Agreement; and
WHEREAS, NIAGARA, in the conduct of its business, can make use of the
amount of ELECTRICITY which SELLER may generate at Phase I; and
WHEREAS, SELLER represents that, prior to commencement of operation of
Phase I, Phase I is or will become: (1) a qualifying facility (hereinafter
referred to as "QF") as defined in the Public Utility Regulatory Policies Act of
1978 (hereinafter referred to as "PURPA"); 16 USCS Section 824a-3 et seq., 18
CFR Section 292.205 et seq. ) and (2) a cogeneration facility as defined in
Section 2.2-a of the New York State Public Service Law (hereinafter referred to
as "2-a"); and
WHEREAS, SELLER represents that, if required, Phase I is or will be
qualified for exemption from the prohibitions set forth in the Power Plant &
Industrial Fuel Use Act hereinafter referred to as "FUA"); 42 USCS Section 8301,
et seq., particularly Sections 8311, 8312 and 8322(c), 10 CFR Section 500 et
seq., particularly Section 503.37 et seq.); and
WHEREAS, SELLER represents that, if required, Phase I will be
certified as a MAJOR STEAM ELECTRIC FACILITY as defined in Article VIII of the
New York Public Service Law (Vol. 47 XxXxxxxx'x Consolidated Laws of New York,
Section 140 et seq.); provided, however, SELLER has the right to terminate this
AGREEMENT upon a finding by the Public Service Commission of the State of New
York ("COMMISSION") or
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the New York State Board on Electric Generation, Siting and the Environment that
Phase I is subject to Article VIII; and
WHEREAS, SELLER and NIAGARA desire to amend the Original Agreement on
the terms and conditions set forth in this AGREEMENT.
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter set forth, the Parties hereto have agreed and do hereby mutually
agree as follows:
FIRST: Prior to commencement of the operation of Phase I, SELLER shall
certify to NIAGARA or deliver to NIAGARA other evidence in writing satisfactory
to NIAGARA that Phase I (1) is a QF as defined in PURPA (15 USCS Section 824a-3,
et seq., 18 CFR Section 292.205, at et seq.), (2) is a cogeneration facility as
defined in 2-a, and (3) that, if required, Phase I has qualified for exemption
from the prohibitions set forth in the FUA in accordance with Section 8322 of
the FUA and 10 CFR Section 503.37 et seq.
As of the Effective Date, NIAGARA shall have no contractual right and
shall waive any other right which it might have under state or federal law to
demand information from SELLER, or any other person, including but not limited
to any Governmental Authority, with respect to SELLER's status as a qualifying
facility ("QF Status"). SELLER shall have the right, but not the obligation, in
its sole discretion to obtain and/or maintain its QF Status under federal or New
York law (including compliance with 2-a and/or PURPA). NIAGARA's rights and
obligations, including without limitation its obligation
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to pay for ELECTRICITY produced by SELLER as set forth hereunder, shall continue
as a matter of contractual right regardless of whether the SELLER maintains its
QF Status. Any failure by SELLER to comply with the requirements applicable to
QF Status under New York law (including compliance with 2-a) shall have no
adverse impact on SELLER under this AGREEMENT. In the event SELLER wishes to
qualify or perform as an Exempt Wholesale Generator under Section 32 of PUHCA
and the FERC's regulations promulgated thereunder, as the same may be amended,
modified or restated from time to time, NIAGARA shall cooperate with (including,
without limitation, by providing consents and affidavits), and shall not take
any action to oppose, impede or subvert, SELLER's efforts to obtain appropriate
regulatory exemptions and approvals, including market-based rate approval.
Except to the extent that the contract prices under this AGREEMENT are or may be
based thereon, during the term of the AGREEMENT, SELLER (i) shall waive any
statutory right it may have under Section 66-c of NYPSL pursuant to which SELLER
may demand a 6(cent) per kWh minimum power purchase rate from NIAGARA, and (ii)
shall waive, for itself and for the successors and assigns of Phase I with
respect to Phase I, any statutory right it may have under PURPA or NYPSL to
require NIAGARA to enter into a power purchase contract or otherwise take the
output of Phase I; provided, however, that until the end of the Proxy-Market
Price Period NIAGARA agrees, at SELLER's request, to act as agent for SELLER
(or, if necessary to effectuate such sales to the New York Power Pool, by
purchase and resale of SELLER's capacity and/or energy, at no cost to NIAGARA),
for the sale on up to a monthly basis of the Phase I's ELECTRICITY to the New
York Power Pool or any third party, in each case on a nondiscriminatory basis
with
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respect to NIAGARA's or any third party's capacity and energy, at no cost
to SELLER. NIAGARA agrees to use its Reasonable Best Efforts to effect such
sales on the most favorable terms, including price, to SELLER giving
consideration to the quantity, term and market conditions prevailing at the time
of sale. Nothing contained herein shall be construed to constitute a waiver by
the SELLER of any other rights it may have under PURPA, NYPSL or applicable law,
including rights with respect to back-up services, interconnection, reactive
power or other similar rights, whether or not a contract is required or
desirable.
SECOND: NIAGARA acknowledges prior receipt of the DEPOSIT on November
25, 1988 in the amount of $10 per KW of capacity, i e., $790,000.00. Not later
than the last day for commencement of construction specified by Paragraph THIRD
of the AGREEMENT, i.e., May 25, 1990, SELLER shall post with NIAGARA an
additional deposit (hereinafter referred to as the "FIRST ADDITIONAL DEPOSIT")
of $5 per KW of capacity, i e., $395,000.00. The DEPOSIT and FIRST ADDITIONAL
DEPOSIT (hereinafter referred to collectively as the "DEPOSITS") shall be posted
in the form of cash or, at SELLER's option, an irrevocable letter of credit from
a financial institution rated at least AA for a term that extends ten (10) days
past the scheduled date of commercial operation of Phase I. If all or any part
of the DEPOSITS are made in cash, NIAGARA shall hold such cash in escrow with
the Marine Midland Bank, N.A., or another bank chosen by NIAGARA and reasonably
acceptable to SELLER, and invest it in the Certificate of Deposit or U.S.
Treasury Xxxx of the SELLER's choice; provided, however, the instrument must
mature on or before the scheduled date of commercial operation of
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Phase I. The DEPOSITS plus any interest earned in accordance with the
COMMISSION's Order Establishing Milestones and Soliciting Comments, issued and
effective May 25, 1988, will be refunded within thirty (30) days of the later of
Phase I's initial operation date, as said date is determined in accordance with
the provisions of Paragraph ELEVENTH, or the maturation date, if pertinent, of
any Certificate of Deposit or U.S. Treasury Xxxx used to satisfy the deposit
requirements, provided that SELLER has met the commencement and completion of
construction milestones set forth in Paragraph THIRD. In the event that SELLER
fails to post the DEPOSITS as required or otherwise fails to comply with the
requirements of this Paragraph, this AGREEMENT shall at the option of NIAGARA
become null and void without liability of any description, kind or nature
whatever by NIAGARA to SELLER and the DEPOSITS, if made, shall be retained by
NIAGARA and any interest accrued shall be returned to SELLER.
THIRD: SELLER must commence on-site construction of Phase I no later
than twenty-four (24) months after the approval of the Original Agreement
pursuant to Paragraph TWENTIETH, thereafter continuously pursue such
construction in a good faith effort to complete construction and thereafter
place Phase I in operation no later than sixty (60) months after such approval.
For the purposes of this AGREEMENT, SELLER shall be deemed to have commenced
on-site construction when: (1) activity is coordinated, continuous, and reaches
a sufficient degree of intensity, (2) active construction efforts are made
related to major project features, and (3) actual physical construction of those
features begins. Commencement of construction does not occur with mere site
preparation or equipment design which are insufficient to meet this test.
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In the event that SELLER is unable to comply with the requirements of
this Paragraph THIRD, this AGREEMENT shall at the option of NIAGARA become null
and void without liability of any description, kind or nature whatever by
NIAGARA to SELLER, and the DEPOSITS described in Paragraph SECOND shall be
forfeited, and any interest accrued shall be returned to SELLER. Notwithstanding
the above, in the event SELLER is unable to comply with the deadline for the
commencement of construction, as defined in this Paragraph THIRD, SELLER may, in
addition to the deposit posted pursuant to the COMMISSION's ORDER and defined in
Paragraph SECOND, post additional cash deposits with NIAGARA for each month of
proposed or actual delay in meeting said commencement of construction. In no
event shall the delay in commencing construction of Phase I be longer than
eighteen (18) months from the commencement of construction milestone as defined
in Paragraph SECOND.
Such additional deposit(s) payable to NIAGARA shall: (i) be in the
form of cash; (ii) be in the amount of $0.50/KW per month, i e., $39,500 per
month; and (iii) be posted in monthly increments on or before said milestone
date or any extensions thereof. Such additional deposits, if any, together with
the DEPOSITS provided for in Paragraph SECOND shall be known as the TOTAL
DEPOSIT.
In the event that SELLER is unable to comply with the operational
deadline set forth in this Paragraph THIRD, NIAGARA shall be entitled to draw
against the TOTAL DEPOSIT posted by SELLER as follows: NIAGARA shall be entitled
to a forfeiture of the TOTAL DEPOSIT in an amount equal to one-twelfth (1/12) of
the TOTAL DEPOSIT
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for each month of delay in operation beyond said milestone. In no event shall
such operational deadline be extended beyond one year from the initial
operational deadline. If SELLER has not commenced Commercial Operation, within
one (1) year from said operational deadline, this AGREEMENT shall at the option
of NIAGARA become null and void without liability of any description, kind or
nature whatever by NIAGARA to SELLER.
For purposes of this AGREEMENT, the "Date of Commercial Operation"
shall be hereinafter defined as that point in time when Phase I shall produce
ELECTRICITY continuously, as confirmed by SELLER. SELLER shall use all
reasonable efforts to reach commercial operation not later than
one-hundred-and-eighty (180) days after the first sale of ELECTRICITY to
NIAGARA.
FOURTH: SELLER shall deliver to NIAGARA and NIAGARA shall accept and
pay for ELECTRICITY produced at Phase I or otherwise provided hereunder, subject
to the terms and conditions of this AGREEMENT.
NIAGARA agrees that its obligation to accept and pay for ELECTRICITY
as provided herein shall in no event be subject to any curtailment of
electricity under the provisions of 18 C.F.R. ss. 292.304(f) (1997), or any
subsequent or similar rule or regulation adopted by the COMMISSION or the FERC,
or any rule or order of the COMMISSION, the FERC, or any other Governmental
Authority interpreting or applying those provisions or authorizing NIAGARA to
reserve any rights under those provisions.
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FIFTH: SELLER shall deliver the ELECTRICITY to the system of NIAGARA
at approximately 115,000 volts, 60 Hertz and 3 Phase. The installation of the
electrical connections and the operation of Phase I must meet or exceed the
requirements of NIAGARA's ESB #756, a copy of which is incorporated herein by
reference. SELLER shall deliver the ELECTRICITY to the Delivery Point.
SELLER shall have the right, subject to NIAGARA's consent, which shall
not be unreasonably withheld, to construct, at SELLER's cost, alternative
interconnection equipment upon one (1) year's written notice to NIAGARA. Such
alternative interconnection, if any, shall deliver the ELECTRICITY to the system
of NIAGARA at a voltage to be mutually agreed upon by NIAGARA and SELLER, 60
Hertz and 3 Phase, and shall be constructed and operated so as to meet or exceed
the requirements of the version of NIAGARA's ESB #756 in effect at the time the
notice required by this Paragraph FIFTH is provided to NIAGARA. In the event
that such alternate interconnection equipment is constructed, the Receiving
Point under the Phase I Interconnection Agreement shall be as mutually agreed by
NIAGARA and SELLER.
SIXTH: NIAGARA's acceptance of and obligation to pay for the Delivered
Energy Quantity, the Delivered Capacity Quantity and the Call Option Quantity
under Section II of ATTACHMENT I for ELECTRICITY produced may be suspended for
any period(s) of time during which, for reasons of necessary maintenance,
repair, service, system emergency, safety, or similar actions, NIAGARA's
transmissions system is temporarily physically unable to accept such
ELECTRICITY. If necessary, and solely for the reasons
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set forth above, NIAGARA may order that Phase I's generating facility be
disconnected from NIAGARA's transmission system.
NIAGARA shall give reasonable notice under the circumstances of the
need for such disconnection to employees or agents of SELLER designated from
time to time by SELLER to receive such notice. Upon receipt of such notice,
SELLER shall carry out the required action without undue delay. Upon written
request of SELLER, NIAGARA shall promptly inform SELLER, in writing, of the
reasons for any disconnection.
During any period of disconnection, NIAGARA shall use its best efforts
to restore NIAGARA's capability to accept delivery of ELECTRICITY as promptly as
possible.
NIAGARA shall inform SELLER of any planned outages to the facilities
serving Phase I and use its best efforts to schedule any planned outages upon
consultation with the SELLER and commensurate with SELLER's schedule for planned
maintenance or other outages.
NIAGARA shall bear any costs incurred by it in connection with any
such disconnection or reconnection. All deliveries of ELECTRICITY which are
subject to any such suspension may be rescheduled at the option of the SELLER.
SEVENTH: In addition to the Parties' obligations under Attachment I,
the following shall apply to the Parties' rights and obligations with respect to
ELECTRICITY:
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(A) During the Proxy-Market Price Period, the following shall apply to
SELLER's obligation to deliver, and NIAGARA's obligation to take and pay for
ELECTRICITY:
1. At the option of SELLER, SELLER shall have the right to sell and
deliver, and NIAGARA shall take and pay for, ELECTRICITY as
follows: (i) energy up to the specified Monthly Contract Quantity
for the applicable period plus the Overgeneration Amount, and
(ii) capacity, which is subject to both seasonal variation and
degradation, associated with the Monthly Contract Quantity, in
each case, for each Interval during the immediately succeeding
Settlement Period.
2. The right of SELLER to sell and deliver ELECTRICITY to NIAGARA
hereunder shall be limited to energy and associated capacity as
described in Paragraph SEVENTH, Section A.1. SELLER shall not
object to NIAGARA's inclusion of all capacity associated with the
Notional Quantity of ELECTRICITY pursuant to the terms hereof as
capacity available to NIAGARA for regulatory purposes.
3. SELLER shall have the right to sell and deliver ELECTRICITY to
NIAGARA for periods ranging for a minimum period of time of one
hour to a maximum period of one month. On or prior to 12:00 p.m.
noon of the Business Day two days prior to the first day of the
month, SELLER shall provide to NIAGARA a schedule showing, on an
hour-by-hour basis, the
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projected deliveries of ELECTRICITY to NIAGARA for the following
calendar month. SELLER shall have the right to update such
schedule on an hourly basis by providing notice of the change, in
writing or through electronic telecommunications, no less than
thirty minutes prior to the start of the hour in which the change
to the schedule is to be effected.
4. If SELLER determines not to exercise its rights to sell and
deliver ELECTRICITY to NIAGARA in accordance with Paragraph
SEVENTH, Section A.1, SELLER may sell and deliver such
ELECTRICITY to third parties, provided SELLER has first
offered to sell such ELECTRICITY from Phase I up to the
Monthly Contract Quantity for the applicable period to NIAGARA
at the Market Energy Price, and, if applicable, the Market
Capacity Price on the following schedule:
(a) ELECTRICITY sales for one hour up to and
including one week - SELLER shall notify NIAGARA of
such request by 9:00 am two Business Days prior to
the start of the ELECTRICITY sale and NIAGARA shall
respond no later than four hours from such request;
(b) ELECTRICITY sales for more than one week up to
and including one month - SELLER shall notify NIAGARA
of such request by 9:00 am three Business Days prior
to the start of the ELECTRICITY sale and NIAGARA
shall respond no later than one Business Day from
such request;
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(c) ELECTRICITY sales for more than one month and up
to and including twelve months SELLER shall notify
NIAGARA of such request by 9:00 am five Business Days
prior to the start of the ELECTRICITY sale and
NIAGARA shall respond no later than three Business
Days from such request;
(d) ELECTRICITY sales for more than twelve months -
SELLER shall notify NIAGARA of such request by 9:00
am seven Business Days prior to the start of the
ELECTRICITY sale and NIAGARA shall respond no later
than five Business Days from such request.
All notifications by SELLER and responses by NIAGARA described
herein shall be made during normal business hours (8:00 am to
5:00 p.m.). Notwithstanding the above, notification by SELLER
and response by NIAGARA for the sale of ELECTRICITY to a third
party shall be completed prior to the FERC approved
notification period for market participants to submit
day-ahead bids to the ISO/PE.
(B) In addition, and without prejudice, to SELLER's rights in Section
(A) above, the following shall apply with respect to NIAGARA's right to schedule
ELECTRICITY from the SELLER during the S.C.-6 Price Period which comprises part
of the Proxy-Market Price Period:
1. At the option of NIAGARA, NIAGARA shall have the right ("Call
Option") solely during the S.C.-6 Price Period, and subject to
the
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conditions stated in this Paragraph SEVENTH, Section B, to
schedule delivery of ELECTRICITY from Phase I up to the Monthly
Contract Quantity ("Call Option Quantity"), provided that SELLER
has not scheduled such ELECTRICITY for sale and delivery to
NIAGARA or any other party pursuant to Section (A) of this
Paragraph SEVENTH. SELLER shall be obligated to sell and deliver
the Call Option Quantity to NIAGARA at the Delivery Point,
provided, however, that SELLER shall be excused from this
obligation if Phase I is unavailable due to outages for any
reason (including, but not limited to, the full or partial
unavailability of Phase I due to an insufficiency or inadequacy
of gas supply or gas transportation for any reason including but
not limited to unavailability at the Call Gas Price).
2. In the event NIAGARA exercises its Call Option, SELLER may, at
its option, sell and deliver, and NIAGARA shall take and pay for,
ELECTRICITY tendered at the Delivery Point which is in excess of
the Call Option Quantity up to the Effective DMNC ("Excess
Energy").
3. The price NIAGARA shall pay for the Call Option Quantity and
Excess Energy shall be the Call Energy Price which in each
applicable Interval shall be the higher of (1) the S.C.-6 Rate,
and (2) Phase I's Variable Energy Cost.
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4. NIAGARA must comply with the following notice obligations in
order to exercise its Call Option. On each day immediately
prior to the day on which NIAGARA desires to purchase
ELECTRICITY under the Call Option, NIAGARA must notify
SELLER no later than 10:00 a.m. of the Call Option Quantity
it requires for each Interval of the twenty-four (24) hour
period commencing at 12:01 a.m. of the following day and
ending at 12:01 a.m. of the next following day; provided
however, that in lieu of separate schedules for Saturday,
Sunday and Monday, not later than 10:00 a.m. on each
applicable Friday the amount of the Call Option Quantity for
each Interval of the seventy-two (72) hour period commencing
at 12:01 a.m. of the following Saturday and ending at 12:01
of the following Tuesday ("Schedule"). The Schedule run time
for Phase I shall be no less than twenty four (24) hours and
the maximum ramp rate shall be 800 kW per minute when
ramping up and 1600 kW per minute when ramping down.
5. SELLER shall have the right to sell and deliver Excess
Energy to NIAGARA for periods ranging from a minimum period
of one hour to a maximum period of twenty four (24) hours
during the Call Option period. On or prior to 12:00 p.m.
noon of the day SELLER receives NIAGARA's Schedule, SELLER
shall provide to NIAGARA a schedule showing, on an
hour-by-hour basis, the projected deliveries of Excess
Energy to NIAGARA for the following day. SELLER shall have
the
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right to update such schedule on an hourly basis by
providing notice of the change, in writing or through
electronic telecommunications, no less than thirty minutes
prior to the start of the hour in which the change to the
schedule is to be effected. SELLER's right to sell and
deliver the Excess Energy is in addition to its right to
sell and delivery the Overgeneration Amount to NIAGARA.
(C) Upon the expiration of the Proxy-Market Price Period and until the
term of this AGREEMENT expires, the following shall apply with respect to the
sale and delivery of ELECTRICITY:
1. During this period, NIAGARA shall have no obligation to take
and pay for ELECTRICITY under the Delivered Energy Payment
and Delivered Capacity Payment components of the Energy
Payment under Section II of ATTACHMENT I except to the
extent that NIAGARA elects to purchase ELECTRICITY pursuant
to its rights of first refusal described below.
2. During this period, SELLER shall not sell ELECTRICITY from
Phase I in any amount up to the Monthly Contract Quantity
for the applicable period to third parties, unless SELLER
shall first offer to sell and deliver such ELECTRICITY to
NIAGARA at the Market Energy Price, and, if applicable, the
Market Capacity Price and NIAGARA has declined the
opportunity to take and pay for such ELECTRICITY on
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the schedule set forth in Section A.4 of Paragraph SEVENTH.
SELLER shall not object to NIAGARA's inclusion of all
capacity associated with the Notional Quantity of
ELECTRICITY pursuant to the terms hereof as capacity
available to NIAGARA for regulatory purposes.
D. SELLER may, but is not required, to deliver energy and/or capacity
to NIAGARA at the Delivery Point from Phase I or Phase II or from any other
source arranged by SELLER, and such energy and/or capacity shall be deemed
ELECTRICITY hereunder, and further subject to SELLER's rights to assign this
AGREEMENT pursuant to the assignment provisions contained herein. The foregoing
sentence shall not be deemed to relieve SELLER of its obligations (i) to provide
NIAGARA with the Call Option Quantity in accordance with Section B of Paragraph
SEVENTH, or (ii) to perform the DMNC tests for Phase I in accordance with
Section VI of ATTACHMENT I. Any right or obligation of SELLER to provide
ELECTRICITY under this Paragraph SEVENTH to NIAGARA shall entitle SELLER to sell
and deliver to NIAGARA, and obligate NIAGARA to take and pay for, the
Overgeneration Amount.
E. ELECTRICITY in excess of the Monthly Contract Quantity for any
Interval, except for Excess Energy delivered with the Call Option Quantity,
shall not be subject to this AGREEMENT and, at the option of SELLER (including
the
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Excess Energy), may be sold to third parties without an obligation to offer such
energy and capacity to NIAGARA.
EIGHTH: SELLER shall have the right to shut down the operation of
Phase I or temporarily disconnect it from NIAGARA's system whenever and for such
periods of time as may be necessary for maintenance, repair, emergency or
safety. SELLER shall bear the cost of disconnection and reconnection, which
shall include the direct costs of personnel, including overhead, required to
accomplish such disconnection and reconnection, but which shall not include the
cost of replacement power.
NIAGARA and SELLER shall coordinate maintenance of Phase I in the
manner set forth on ATTACHMENT VIII.
NINTH: (A) After netting the amounts due pursuant to the payment
provisions of this AGREEMENT, SELLER shall provide NIAGARA with a Notice of any
payments due under this AGREEMENT for the preceding Settlement Period on or
before the 5th day of each calendar month, unless SELLER and NIAGARA otherwise
agree. Payments shall be due on the Payment Date immediately following the
associated Settlement Period. NIAGARA shall pay SELLER on or before the Payment
Date the amounts due under a Notice by wire transfer to SELLER's following
account, or such other account that SELLER may designate by written notice to
NIAGARA:
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Banker's Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
ABA #: 000-000-000
Account Name: Selkirk Cogen Project Revenue Fund #12103
Account #: _______________
SELLER shall pay NIAGARA on or before the Payment Date the amounts due under a
Notice by wire transfer to NIAGARA's following account, or such other account
that NIAGARA may designate by written notice to SELLER:
Citibank
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
ABA #: 000-000-000
Account Name: Niagara Mohawk Power Corporation
Account #: ________________
Any amount remaining unpaid after the time it is due and not disputed in good
faith shall thereafter be subject to a late payment charge equal to the prime
rate for U.S. currency as published from time to time under "Money Rates" in The
Wall Street Journal multiplied by the unpaid amount calculated for the period
from and including the Payment Date in which it was due to the date it is
actually paid.
If either Party, in good faith, disputes any part of any Notice of a
payment obligation, that Party shall provide a written explanation of the basis
for such dispute and the undisputed portion of the net payment obligations set
forth in such Notice shall be paid by the Party obligated to pay such amounts no
later than the applicable Payment Date. Any adjustment under this Paragraph
shall bear interest at the prime
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rate for U.S. currency as published from time to time under "Money Rates" in The
Wall Street Journal, from and including the Payment Date any such underpayment
or overpayment was originally due but excluding the date on which such
underpayment or overpayment is finally settled by the Parties hereto, or in the
event the Parties hereto are unable to settle such matter, such matter shall be
settled by an independent nationally recognized public accounting firm mutually
selected by the Parties whose determination shall be final and binding on the
Parties hereto and whose fees and expenses shall be borne by the Party found to
be at substantial fault by such independent public accounting firm. If the
independent public accounting firm finds that there is no substantial fault on
the part of either Party, each Party shall be responsible for its own fees and
expenses. No Notice (or payment obligation thereunder) shall be subject to this
Paragraph unless a notice of dispute is given with respect thereto within one
year of the Payment Date applicable to such Notice.
(B) Commencing on the Effective Date and throughout the term of this
AGREEMENT, NIAGARA will pay SELLER , or SELLER will pay NIAGARA, as appropriate,
the monthly payment set forth in ATTACHMENT I. NIAGARA and SELLER agree that on
or before January 15 of each year during the term of the contract, NIAGARA and
SELLER may review any amounts paid pursuant to this AGREEMENT during the prior
year to ensure that the amounts paid following the Effective Date were in
accordance with ATTACHMENT I and this Paragraph NINTH. In the event that either
Party shall discover an error, the Party discovering the error shall notify the
other Party. Such notice shall specify the amount overpaid
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or underpaid by a Party in each billing period during the prior year. In the
event a Party was overpaid, that Party shall promptly refund any overpayments to
the other Party. In the event a Party was underpaid, the other Party shall
promptly make up any underpayments. Such annual review and true-up of payments
shall not limit either Party's right to monitor the amounts paid versus the
amounts due, seek proper payments or refunds upon or after the discovery of
billing errors at other times, or impose any late payment charge expressly
provided for by this AGREEMENT to the extent permitted in Paragraph NINTH.
(C) After the Effective Date, the monthly Notice provided by SELLER to
NIAGARA shall reflect adjustments for the following payment obligations incurred
in the preceding Settlement Period:
1. Netting for Cost Changes. On each Payment Date, NIAGARA shall be
obligated to pay to SELLER (to the extent that such number is
positive) and SELLER shall be obligated to pay NIAGARA (to the extent
that such number is negative and in such case the absolute value of
such number) (x) the difference between (a) any increase as compared
to the costs under SELLER's contractual arrangements with NIAGARA as
of January 1, 1997 during the associated Settlement Period in (i)
NIAGARA's local distribution system gas transportation and fixed and
variable charges and retainages actually incurred by SELLER, and (ii)
electrical interconnection costs and costs associated with industry
reliability standards actually incurred by SELLER (including without
limitation any increase in costs related to SELLER's compliance with
ESB
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#756), provided that such costs shall be direct in nature and
exclusive of general and administrative expenses, and (b) any
decreases as compared to the costs under SELLER's contractual
arrangements with NIAGARA as of January 1, 1997 during the associated
Settlement Period in those costs listed in (i) and (ii) above, and (y)
any increase as compared to the costs under SELLER's contractual
arrangements with NIAGARA as of January 1, 1997 during the associated
Settlement Period in costs incurred by SELLER caused by changes in
federal, state or local laws, rules or regulations; provided that this
clause (y) shall only be effective during the Proxy-Market Price
Period and any periods thereafter during which like adjustments in
costs are also recovered by any entity that owns any of NIAGARA's
non-nuclear generating assets.
2. Certain Other Cost Additions. On each Payment Date, NIAGARA shall be
obligated to pay to SELLER any increase as compared to the costs under
SELLER's contractual arrangements with NIAGARA as of January 1, 1997 in
electrical transmission costs or access or other charges, which are
actually incurred by SELLER during the associated Settlement Period
while physically delivering electricity to (x) NIAGARA during the
Proxy-Market Price Period or (y) an ISO/PE following the Proxy-Market
Price Period; provided that this clause (y) shall only be effective
during the periods when like increases in costs or charges are then
also recovered by any entity that owns any of NIAGARA's non-nuclear
generating assets.
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3. Reactive Power, Voltage Support Services and Line-Loss Charges.
NIAGARA and SELLER acknowledge that the contract prices under this
AGREEMENT do not include charges for reactive power, voltage support
services or line-losses. In the event that NIAGARA's tariffs require
SELLER to pay NIAGARA for reactive power or line-losses during periods
when the SELLER's generating facilities are generating electricity, the
contract prices under this AGREEMENT for each applicable Settlement
Period will be equitably increased in an amount equal to all reactive
power charges and/or line-loss charges or costs actually incurred by
SELLER during the associated Settlement Period. In addition, in the
event (i) under any ISO tariff, SELLER is required to provide voltage
support services, as defined by such ISO tariff, NIAGARA shall pay to
SELLER on each Payment Date any and all voltage support service
payments made by the ISO to NIAGARA in the associated Settlement Period
which are attributable to the voltage support services provided by
SELLER, and (ii) the ISO charges SELLER for any line-losses, the
contract prices under this AGREEMENT will be equitably increased in an
amount equal to all such line-loss charges incurred by SELLER during
the associated Settlement Period.
During the full term of this AGREEMENT, SELLER agrees to keep Phase I
insured in accordance with the provisions of ATTACHMENT VI hereto.
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TENTH: SELLER and NIAGARA shall install, own and maintain their
respective interconnection facilities in accordance with the Phase I
Interconnection Agreement and the Phase II Interconnection Agreement.
If, at some future time, it becomes necessary for NIAGARA to relocate
or rearrange its transmission system to which Phase I is connected, NIAGARA
shall advise SELLER one year in advance in writing. If such relocation or
rearrangement is ordered or required by a Governmental Authority, NIAGARA shall
give prior written notice to SELLER equal in time to the notice given NIAGARA by
such Governmental Authority, to the extent possible. NIAGARA shall consult with
SELLER on the new facilities that NIAGARA shall propose to reestablish the
connection. Such new facilities shall be reasonably satisfactory to SELLER and,
at a minimum, shall provide SELLER with at least as much output capacity as with
the prior connection facilities. NIAGARA shall bear the full cost and expense of
reestablishing the connection to SELLER. NIAGARA shall use its best efforts to
minimize the duration of any disruption to SELLER's service during the
relocation or rearrangement of NIAGARA's transmission facilities.
If, at some future time, NIAGARA determines it is necessary to retire
or abandon its transmission systems to which Phase I is connected, NIAGARA shall
advise SELLER, at least one year in advance, in writing, indicating NIAGARA's
annual costs of transmission facilities dedicated exclusively to accommodate the
output of Phase I. SELLER shall then have the option of paying NIAGARA for these
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annual costs or of providing alternate interconnection to NIAGARA's transmission
system. Such alternative interconnection may be the purchase by SELLER of
NIAGARA's existing 115 kV facilities at depreciated book cost or salvage value,
whichever is lower, but not less than zero. In the event SELLER elects to pay to
NIAGARA the annual charges associated with these facilities, said charges shall
be recomputed as of January 1 of every year.
ELEVENTH: This AGREEMENT shall be effective as of the Effective Date
and shall expire at 11:59:59 P.M. on June 30, 2008.
TWELFTH: ELECTRICITY delivered by SELLER hereunder shall be measured
by electric watthour meters of a type approved by the COMMISSION. The existing
meters located in SELLER's Interconnection Facility (as defined in the Phase I
Interconnection Agreement) satisfy the requirements of this Paragraph TWELFTH.
These metering facilities have been installed, and are owned by SELLER and
maintained by NIAGARA in accordance with the Phase I Interconnection Agreement,
and shall be sealed by NIAGARA, with the seal broken only upon occasion when the
meters are to be inspected, tested or adjusted and representatives of both
NIAGARA and SELLER are present. The meter and installation costs shall be borne
by SELLER. The meters shall be maintained in accordance with the rules set forth
in 16 NYCRR Part 92 which are incorporated herein by reference. In the event
that any meter is found to be inaccurate after the initial year, NIAGARA will
repair or replace the same as soon as possible at the expense of SELLER. Each
Party
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shall have the right at all reasonable times, upon giving not less than five (5)
days notice to the other Party for the purpose of permitting the other Party to
be present at the inspection, to inspect, and test said meters and, if found
defective, NIAGARA shall adjust, repair or replace the same at the expense of
SELLER. Any test or inspection requested by a Party shall be at the expense of
that Party. SELLER shall have the right but not the obligation, to read all
meters installed and maintained pursuant to the Paragraph. Upon written request,
NIAGARA shall provide SELLER's operating personnel with appropriate instructions
and training to enable such personnel to read the meters.
If a meter fails to register, or if the measurement made by a meter is
found to be inaccurate by more than the limits defined in 16 NYCRR Part 92, then
an adjustment shall be made correcting all measurements made by the inaccurate
or defective meter for a) the actual period during which inaccurate measurements
were made, if that period can be determined to the satisfaction of the Parties;
or b) if the actual period cannot be determined to the mutual satisfaction of
the Parties, one-half of the period from the date of the last previous test of
the meter. To the extent that the adjustment period covers a period of
deliveries for which payment has already been made, a payment corresponding to
the adjustment for that period shall be made by the Party against whom the
adjustment runs, to the other Party, not later than the twenty-fifth (25) day of
the month following the month in which the paying Party receives notice from the
other Party that such a payment is due. SELLER may elect to install its own
metering equipment in addition to NIAGARA's metering
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equipment. Such metering equipment shall meet the requirements of 16 NYCRR Part
92. Should any metering equipment installed by SELLER fail to register during
the term of this AGREEMENT, the Parties shall use NIAGARA's metering equipment,
if installed, to determine the amount of ELECTRICITY delivered to NIAGARA. On a
day or days on which neither NIAGARA's nor SELLER's metering equipment is in
service, the quantity of ELECTRICITY delivered shall be determined in such
manner as the Parties shall agree.
THIRTEENTH: The duly authorized agent or agents of NIAGARA shall, at
all reasonable business hours, upon reasonable notice, have free access to the
premises of SELLER for the purpose of inspecting the records of ELECTRICITY
generated at Phase I and delivered to the electric transmission system of
NIAGARA thereat for purchase by NIAGARA.
FOURTEENTH: During the term of this AGREEMENT, NIAGARA shall have the
right, easement and privilege to construct, operate, repair, maintain, remove
and/or replace such electric transmission lines as it may reasonably require
over and across the premises of SELLER for the purposes of receiving and
transmitting the ELECTRICITY herein provided to be delivered to NIAGARA, subject
to the reasonable approval of SELLER. It shall be reasonable for SELLER to
refuse its approval of any such action by NIAGARA if such action would interfere
with the normal operations of Phase I.
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FIFTEENTH: Each Party hereto respectively assumes full responsibility
in connection with the ELECTRICITY supplied hereunder on its side of the
Delivery Point and for the wires, apparatus, devices and appurtenances used in
connection therewith. Each Party shall indemnify, save harmless and defend the
other against all claims, demands, cost or expense for loss, damage or injury to
person or persons or property in any manner directly or indirectly arising from,
connected with or growing out of the generation, transmission or use of energy
by it on its side of the Delivery Point or for the operation of switching
equipment in connection with said delivery; provided, however, that each Party
shall be liable for all claims of the Party's own employees arising out of any
provision of the Workers' Compensation Law. Each Party shall maintain Workers'
Compensation and Employers' Liability Insurance covering their respective
employees as required by law and SELLER shall carry Liability Insurance
including contractual coverage in the amount of at least $1,000,000 per
occurrence.
SIXTEENTH: (A) Upon notice to NIAGARA, SELLER may assign or transfer
the AGREEMENT in whole or in part, without the consent of NIAGARA, (a) as
collateral security for purposes of securing indebtedness, or (b) to any
approved assignee or transferee (an "Approved Assignee"). An Approved Assignee
shall be (i) any person who (x) (a) acquires Phase I, or (b) has a plant with
technical capability that is equal to or greater than the technical capability
of Phase I, and (y) has (a) a long-term unsecured debt credit rating of no less
than investment grade issued by Xxxxx'x Investor's Service ("Xxxxx'x") or
Standard & Poor's Corporation ("S&P")
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or the equivalent of such rating from another nationally recognized rating
agency, or (b) a net worth calculated in accordance with generally accepted
accounting principles ("Net Worth"), that is equal to or greater than the Net
Worth of the entity making such assignment or transfer on the date of such
assignment or transfer, provided that evidence of such qualifying Net Worth is
reasonably demonstrated to NIAGARA; or (ii) any Affiliate of SELLER; provided
(x) such Affiliate has a long-term unsecured debt credit rating of no less than
investment grade issued by Xxxxx'x or S&P or the equivalent of such rating from
another nationally recognized rating agency, (y) such Affiliate has a Net Worth
that is equal to or greater than the Net Worth of the entity making such
assignment or transfer on the date of such assignment or transfer, or (z) SELLER
unconditionally guarantees, pursuant to a guarantee in form and substance
reasonably satisfactory to NIAGARA, the obligations of such Affiliate in
connection with such assignment or transfer. SELLER may split and assign the
quantities of ELECTRICITY and Intervals to Approved Assignees, each in respect
of a lesser quantity and/or Intervals that the full amounts thereof hereunder,
provided that (a) each such assignment is for 50,000 MWh of ELECTRICITY per year
or any integral multiples thereof and to the extent that the remaining
unassigned balance of the quantity of ELECTRICITY hereunder for any such year is
less than 50,000 MWh, then for such remaining balance, (b) each such assignment
is for a period of at least one year, and (c) the sum of all assigned and
retained quantities of ELECTRICITY and Intervals does not exceed the total
quantities of ELECTRICITY and Intervals hereunder. At the request of SELLER
during the term of the AGREEMENT,
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NIAGARA and SELLER shall use their Reasonable Best Efforts to mutually agree
upon reasonable alternatives to the assignment qualification contained in the
immediately preceding sentence. Except to the extent expressly provided in any
applicable guarantee, upon any such assignment or transfer, SELLER shall be
released and have no further obligations to NIAGARA hereunder with respect to
the assigned or transferred quantities and/or Intervals.
(B) NIAGARA shall not assign its rights and obligations hereunder
except as expressly authorized under this section.
(1) In the event that NIAGARA restructures its corporate structure or
assets, including by creating any new entities that hold significant
assets, whether in connection with the Niagara Restructuring or
otherwise, upon notice to SELLER (or its assignee hereunder) the
AGREEMENT will be assigned to and assumed by the entity or entities
owning all or substantially all of NIAGARA's electric transmission and
distribution assets or, if separated from NIAGARA's electric
transmission assets pursuant to such a restructuring (i) such
assignee's performance under this AGREEMENT is unconditionally
guaranteed, pursuant to a guarantee in form and substance reasonably
satisfactory to SELLER (or its assignee hereunder), by each of the
other entities arising out of the restructuring, including any entity
spun-off to NIAGARA's shareholders or any Affiliate of NIAGARA holding
significant assets that were held by NIAGARA prior (or any
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subsidiary of NIAGARA) to the restructuring, unless such assignee has
a long-term unsecured debt credit rating issued by Xxxxx'x, S&P or
another nationally recognized rating agency that is at least as
favorable as NIAGARA's long-term unsecured debt credit rating
immediately prior to the effective date of the restructuring, and (ii)
if such assignee is not the entity which will collect from customers
the Competitive Transition Charge approved by the COMMISSION pursuant
to the Commission Approval, such assignee's performance under this
AGREEMENT is unconditionally guaranteed, pursuant to a guarantee in
form and substance reasonably satisfactory to SELLER (or its assignee
hereunder), by each of the entities which will collect from customers
the Competitive Transition Charge provided by the COMMISSION pursuant
to the Commission Approval.
(2) Upon notice to SELLER (or its assignee hereunder), NIAGARA may
assign its rights and obligations under this AGREEMENT to any third
party ("NIAGARA Assignee") (except those parties referenced in
paragraph (1) above) provided that the NIAGARA Assignee has (i)
received a long-term unsecured debt credit rating by Xxxxx'x or S&P of
at least investment grade or the equivalent of such rating from
another nationally recognized rating agency, as of the date of
consummation of the assignment; or (ii) furnished SELLER with such
collateral security as may
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be reasonably accepted to SELLER in order to limit SELLER's credit
risk in connection with such assignment.
(C) NIAGARA acknowledges and agrees that (1) based on SELLER's
representations, SELLER is a Delaware limited partnership;(2) NIAGARA's sole
recourse against SELLER shall be to the assets of the limited partnership,
irrespective of any failure to comply with applicable law or any provisions of
this AGREEMENT, except that the partners in SELLER may be joined as nominal
parties for the purpose of enforcing NIAGARA's rights hereunder; (3) no claim
shall be made against any partner in SELLER in connection with this AGREEMENT;
(4) NIAGARA shall have no right to any claim against SELLER for any capital
contributions from any partner in SELLER not yet due and owing; and (5) this
representation is made expressly for the benefit of SELLER and the other
partners in SELLER.
(D) In the event that NIAGARA restructures its corporate structure or
assets, including by creating any new entities that hold significant assets,
whether in connection with the Niagara Restructuring or otherwise, SELLER (or
its assignee hereunder) shall have the right to replace the AGREEMENT, as
applicable, with power purchase and/or hedging contractual arrangements
substantially equivalent to those that are entered into between the entity(ies)
holding the transmission and/or distribution assets of NIAGARA or which will
collect from customers the Competitive Transition Charge approved by the
COMMISSION pursuant to the Commission Approval and the entity(ies) holding the
non-nuclear generating assets
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of NIAGARA, whether or not such assets are spun-off to NIAGARA's shareholders (a
"Genco Contract"), provided that the term, price and quantity under the
AGREEMENT shall not be altered thereby, unless any of such terms are materially
and expressly conditioned by certain provisions in the Genco Contract, in which
case appropriate and equitable adjustments in such terms shall be mutually
agreed upon by NIAGARA or its assignee, as the case may be, and SELLER.
SEVENTEENTH: This AGREEMENT and all of its terms and conditions
shall bind and enure to the benefit of the heirs, executors, administrators,
successors, grantees and assigns of the respective Parties hereto. This
AGREEMENT shall be governed by the substantive laws of the State of New York,
irrespective of conflict of law rules.
EIGHTEENTH: This AGREEMENT is exclusive and contains all of the
terms of the agreement between the Parties and no change or variation in this
AGREEMENT may be made except in express terms and by an instrument in writing
signed by the Parties hereto. Except as expressly included in this AGREEMENT, no
term of the Original Agreement, including any term of any amendment thereto,
shall survive the Effective Date.
NINETEENTH: In the event of any dispute under this AGREEMENT
(other than a payment dispute), either Party may make application to an
appropriate administrative or judicial authority or body for relief. Payment
disputes shall be resolved in accordance with Paragraph NINTH.
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TWENTIETH: Each Party to this AGREEMENT acknowledges that the
COMMISSION had ordered NIAGARA to submit the Original Agreement to the
COMMISSION for its review and possible modification or abrogation within sixty
(60) days of submittal. If either Party objects to any modification to the
Original Agreement by the COMMISSION, it may terminate this AGREEMENT upon
written notice within thirty (30) days from the date the COMMISSION orders such
modification without any liability to the other Party. In the event the
COMMISSION conditions its initial approval of the Original Agreement to provide
for less than full recovery by NIAGARA, through its Fuel Adjustment Clause, of
any payments made by NIAGARA to SELLER under the terms of the Original
Agreement, then this AGREEMENT shall without further notice become null and void
without further liability by either Party to the other. Each Party to this
AGREEMENT acknowledges and agrees that NIAGARA intends to request that the
COMMISSION, in its review of the Original Agreement, expressly find that
NIAGARA's actions, in concluding the pricing provisions of the Original
Agreement, are acceptable to the COMMISSION and each Party to this AGREEMENT
understands and agrees that if the COMMISSION does not so find, this shape
AGREEMENT is null, void and of no effect. NIAGARA agrees to issue a letter to
SELLER, after COMMISSION review and action satisfactory to NIAGARA, stating that
NIAGARA shall not terminate this AGREEMENT pursuant to this Paragraph TWENTIETH.
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TWENTY FIRST: All written notifications pursuant to this AGREEMENT
shall be in writing and shall be personally delivered or mailed by certified or
registered first class mail, return receipt requested, as follows:
TO NIAGARA: To SELLER
SELKIRK Cogen Partners L.P.
NIAGARA MOHAWK POWER CORPORATION 00 Xxxxx Xxxx Xxxxx
Director Energy Transactions Xxxxxxx, Xxx Xxxx 00000
000 Xxxx Xxxxxxxxx Xxxx Attn: General Manager
Xxxxxxxx, Xxx Xxxx 00000 000-005-5773 (phone)
000-000-0000(phone) 000-000-0000 (fax)
000-000-0000(fax)
with a copy to:
Selkirk Cogen Partners, L.P.
c/o US Generating Company
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Legal Group
000-000-0000 (phone)
000-000-0000 (fax)
Either Party may change its address for notices by notice to the other
in the manner provided above.
TWENTY-SECOND: In the event either Party hereto is rendered unable,
wholly or in part, by Force Majeure to carry out its obligations under the
AGREEMENT, other than the obligation to make payments of amounts due hereunder,
it is agreed that upon notice, with reasonably full particulars of such Force
Majeure given by such Party to the other Party in writing within a reasonable
time frame after the occurrence of the cause relied upon, then the obligation or
obligations
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hereunder of the Party giving such notice, so far as they are affected by such
Force Majeure, shall be suspended during the continuance of an inability so
caused. Such cause shall, as far as possible, be remedied with all reasonable
dispatch.
TWENTY THIRD: SELLER shall have the right to have NIAGARA wheel some
or all of the output of Phase I to third parties pursuant to applicable law, or
NIAGARA's, or other companies', duly filed transmission and distribution tariffs
or schedules.
SELLER may, at its option but subject to NIAGARA's right of first
refusal under this AGREEMENT, elect firm and interruptible transmission service
under the Transmission Agreement for delivery of electricity from Phase I to
Consolidated Edison Company of New York, Inc. ("Con Edison"); provided that
NIAGARA shall have no obligation to transmit energy on a firm basis under the
Transmission Agreement in excess of the Contract Demand (as set forth in the
Transmission Agreement), inclusive of amounts transmitted under the Transmission
Agreement with respect to Phase II. SELLER may, at its option but subject to
NIAGARA's right of first refusal under this AGREEMENT, elect interruptible
transmission service under the Transmission Agreement for delivery of
electricity from Phase I to any third party in addition to Con Edison; provided
that NIAGARA shall have no obligation to transmit energy on an interruptible
basis under the Transmission Agreement in excess of the amounts permitted
pursuant to Schedule E of the Transmission Agreement. The rights and obligations
under this paragraph are in addition to any rights or
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obligations which the Parties may have pursuant to Paragraph TWELFTH of this
AGREEMENT or under the Transmission Agreement.
TWENTY-FOURTH: No failure on the part of a Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof. No
waiver by a Party of any right hereunder with respect to any matter or default
arising in connection with this AGREEMENT shall be considered a waiver with
respect to any subsequent matter or default.
TWENTY-FIFTH: This AGREEMENT may be executed by the Parties in
separate counterparts, each of which shall be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the Parties hereto have caused this Amended and
Restated Agreement to be executed as of the day and year first above written.
Selkirk Cogen Partners, L.P.
By: JMC Selkirk, Inc., Managing
General Partner
By: /s/Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Vice President
Date: 8/10/98
NIAGARA MOHAWK POWER CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Title: Vice President-Marketing and
Planning
Date: 8/11/98
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SCHEDULE A
Definitions
As used in this AGREEMENT:
"AGREEMENT" means this Amended and Restated Agreement dated as of July
1, 1998, by and between SELLER and NIAGARA and the schedules and attachments
thereto.
"Affiliate" means, with respect to any Party to this AGREEMENT, any
person or entity which controls, is controlled by, or is under the common
control with, such Party, wherein the term "control" shall mean the power to
direct the management and policies by or of such Party through the ownership of
voting securities, by contract or otherwise.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in the State of New York are authorized or required to
be closed.
"Call Energy Price" shall have the meaning set forth in Section (B)(3)
of Paragraph SEVENTH of the Agreement.
"Call Gas Price" shall have the meaning set forth in Section II of
ATTACHMENT I.
"Call Option Quantity" shall have the meaning set forth in Section
(B)(1) of Paragraph SEVENTH.
"COMMISSION" means the Public Service Commission of the State of New
York.
"Commission Approval" means a final COMMISSION order setting forth the
findings, authorizations and approvals set forth in Schedule 6.6C of the Master
Restructuring Agreement.
"Competitive Transition Charge" means a charge, however designated, for
the recovery of strandable costs.
"Contract Year" means the period commencing on the Effective Date and
ending at 11:59:59 p.m. on the first anniversary of the last day of the month in
which the Effective Date occurs and each successive 12-month period thereafter
to the extent applicable.
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"Delivered Call Quantity" means the Call Option Quantity and Excess
Energy SELLER sells, and tenders for delivery at the Delivery Point, to NIAGARA
pursuant to Section (B) of Paragraph SEVENTH for each Interval during the
Settlement Period, and NIAGARA shall be obligated to take and pay for such
ELECTRICITY and Excess Energy at the Call Energy Price.
"Delivered Capacity Quantity" means the amount of capacity SELLER
sells to NIAGARA pursuant to Sections (A) and (C) of Paragraph SEVENTH of the
AGREEMENT, which is subject to both seasonal variation and degradation,
associated with and up to the specified Monthly Contract Quantity, for each
Interval during the Settlement Period, and NIAGARA shall be obligated to take
and pay for such capacity from SELLER at the Market Capacity Price.
"Delivered Energy Quantity" means the amount of energy SELLER sells,
and tenders for delivery at the Delivery Point, to NIAGARA pursuant to Sections
(A) and (C) of Paragraph SEVENTH of the AGREEMENT up to the specified Monthly
Contract Quantity plus the Overgeneration Amount, for each Interval during the
Settlement Period, and NIAGARA shall be obligated to take and pay for such
energy from SELLER at the Market Energy Price.
"Delivery Point" means (a) with respect to ELECTRICITY delivered from
Phase I, the Receiving Point as set forth in the Phase I Interconnection
Agreement; (b) with respect to any ELECTRICITY delivered from Phase II, the
Receiving Point as set forth in the Phase II Interconnection Agreement; and (c)
with respect to ELECTRICITY delivered hereunder from any other source, any other
interconnection on NIAGARA's transmission system, subject to NIAGARA's
concurrence which shall not be unreasonably withheld.
"Effective DMNC" shall have the meaning set forth in Section VI(c) of
Attachment I.
"Effective Date" means 11:59:59 p.m. on June 30, 1998.
"ELECTRICITY" means the capacity and/or energy produced by Phase I or
otherwise sold by SELLER in accordance with the terms of this AGREEMENT.
"ESB #756" means NIAGARA's Electric System Bulletin #756 dated
December 1997 (including Appendix C but excluding any provisions related to
coordinated maintenance), as amended, supplemented or modified from time to
time, provided that no amendment, supplement or modification shall be effective
with respect to SELLER sooner than sixty days after receipt by SELLER of the
effective version and NIAGARA agrees to provide notice of any planned amendment,
supplement or modification and drafts thereof as far in advance of effectiveness
as is reasonably possible and NIAGARA shall give due consideration of any
comments of
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SELLER thereto with respect to Phase I.
"Force Majeure" as used herein means acts of God, strikes, lockouts,
act of public enemies, wars, blockades, insurrections, riots, epidemics,
landslides, lightning, system emergencies, earthquakes, fires, storms, floods,
washouts, arrests, explosions, breakage or accident to machinery, equipment or
transmission or distribution lines; provided that the term Force Majeure does
not mean or include any cause which by the exercise of reasonable diligence of
the Party claiming suspension could be overcome.
"Gas IPPs" means those IPPs which produce power using primarily
natural gas.
"Governmental Authority" means any federal, state, municipal or local
governmental authority, department, commission, board, agency, body or official,
whether executive, legislative, administrative, regulatory or judicial,
including but not limited to the FERC and the COMMISSION.
"Interval" means (i) 1 hour; provided that, in the event that
following the Proxy-Market Price Period, ISO/PE procedures require the use of an
alternate time period, such alternate time period shall automatically be deemed
to be incorporated in, and shall supersede, the 1 hour period set forth herein,
or (ii) such time period as NIAGARA and SELLER shall mutually agree in writing;
provided that such mutually agreed upon time period may only be subsequently
modified upon the prior written consent of NIAGARA and SELLER.
"IPP(s)" means those independent power producers that are identified
on the signature pages and on Schedule A of the Master Restructuring Agreement.
"ISO/PE" means a New York Independent System Operator and Power
Exchange.
"LBMP" shall have the meaning ascribed to it in the definition of
Market Energy Price.
"Market Capacity Price" shall equal zero prior to the establishment of
the ISO/PE and thereafter at any time when no separate market for capacity
exists. Commencing on the first day of the month following the calendar month in
which the ISO/PE is established and only if there then exists a separate market
for capacity, the Market Capacity Price shall mean the market price paid to
sellers for capacity, at the Delivery Point or the region in which the Delivery
Point is located, established by the ISO/PE capacity auction; provided, however,
that at such time the Parties shall conduct good faith negotiations and use
their Reasonable Best Efforts to mutually
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determine whether to continue the pricing referred to in clause (i) of the
definition of Market Energy Price for a mutually agreed upon additional period
of time.
"Market Energy Price" means for any Interval (i) prior to and until
the establishment of the ISO/PE and the implementation of LBMP pricing hereunder
(as defined below), NIAGARA's short-term avoided energy and capacity at the
voltage level of the Delivery Point, as stated in its tariff approved by the
COMMISSION providing for the purchase of power from PURPA qualifying facilities,
which tariff is currently designated as S.C.-6, as the same may be in effect
from time to time or any successor tariff thereto (the "S.C.-6 Rate") or such
other price as may be agreed upon by NIAGARA and SELLER during individual
negotiations, and (ii) on the first day of the month following the calendar
month in which the ISO/PE is established and implementing day ahead locational
based market pricing ("LBMP"), the LBMP paid to sellers for energy, at the
Delivery Point or the region in which the Delivery Point is located, specified
and published by the ISO/PE; provided, however, that at such xxxx XXXXXX and
NIAGARA shall conduct good faith negotiations and use their Reasonable Best
Efforts to mutually determine whether to continue the pricing referenced in
clause (i) above for a mutually agreed upon additional period of time. The
Market Energy Price shall not be reduced or offset by any costs that NIAGARA may
incur, including, without limitation, costs for ancillary services, transmission
services or transition (stranded) costs.
"Master Restructuring Agreement" means the Agreement dated July 9,
1997, as amended, by and between NIAGARA, the SELLER and several other
independent power producers identified therein.
"Monthly Contract Quantity" means the amount of electricity (expressed
in MWh/hr) as set forth in ATTACHMENT I-A under the heading Monthly Contract
Quantity for the applicable month, and which may be adjusted in accordance with
the terms of ATTACHMENT I-A.
"Niagara Restructuring" means NIAGARA's proposed corporate
restructuring and disaggregation in connection with the PowerChoice proposal.
"Notice" means a notice of payments due pursuant to Paragraph NINTH
delivered by SELLER to NIAGARA.
"Notional Quantity" means the amount of capacity (expressed in MW) as
set forth in ATTACHMENT I-A under the heading Notional Quantity for the
applicable Contract Year.
"NYPSL" means the New York Public Service Law.
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"Original Agreement" shall have the meaning set forth in the first
WHEREAS clause.
"Overgeneration Amount" means an amount of energy in excess of the
Monthly Contract Quantity of electricity set forth in ATTACHMENT I-A; provided
such amount of excess energy shall not exceed 5% of the Monthly Contract
Quantity of electricity for the applicable Interval. SELLER shall have the right
to put the Overgeneration Amount to NIAGARA hereunder at the Market Energy Price
or the Call Energy Price, as applicable.
"Party" means the SELLER or NIAGARA.
"Parties" means the SELLER and NIAGARA.
"Payment Date" means the day of the month which is the later of (i)
the 25th day of the month in which a Notice is given by SELLER to NIAGARA; or
(ii) the 15th day after the delivery by SELLER to NIAGARA of a Notice. In the
event that such 25th or 15th day is not a Business Day, the corresponding
payment shall be due on or before the first Business Day following such 25th or
15th day or legal holiday, as the case may be.
"Phase I" means the first unit of the PLANT which commenced commercial
operation on April 17, 1992.
"Phase II" means the second unit of the PLANT which commenced
operation on September 1, 1994.
"Phase I Interconnection Agreement" means the Interconnection
Agreement, dated October 20, 1992, between NIAGARA and SELLER with respect to
Phase I.
"Phase II Interconnection Agreement" means the Interconnection
Agreement, dated October 20, 1992, between NIAGARA and SELLER with respect to
Phase II.
"PLANT" means SELLER's two unit electric generating facility located
in Selkirk, New York.
"Proxy-Market Price Period" means the period commencing on the
Effective Date and ending on the first day of the calendar month following the
calendar month in which the ISO/PE has been fully established and functioning,
provided the following conditions have been satisfied during each of the
previous six months: (i) the volumes (in GWh) of energy sales and purchases
transacted through the ISO/PE in the day ahead market based upon the day ahead
pricing mechanism adopted by the
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FERC for the ISO/PE for the Upstate Market shall be at least equal to those
corresponding with the months listed in the following table (which GWh shall
include the aggregate contract quantities of energy during such period under all
physical delivery Restated Contracts with Gas IPPs, regardless of whether the
IPPs parties thereto actually effected such sales, and all sales on up to a
monthly basis of energy (other than sales through the ISO/PE) by the IPPs
parties to the Master Restructuring Agreement which are effectuated by NIAGARA
acting as agent for any such IPP);
Month GWh
January 4,611
February 4,136
March 4,327
April 3,827
May 3,788
June 3,974
July 4,278
August 4,160
September 3,793
October 3,856
November 3,896
December 4,361
and (ii) only if a separate market for capacity then exists, a minimum of 5,700
MW of the capacity sales and purchases within the Upstate Market have been
transacted through the ISO/PE capacity auction (which MW shall include the
aggregate capacity associated with the aggregate contract quantities of energy
during such period under all physical delivery Restated Contracts with Gas IPPs,
regardless of whether the IPPs parties thereto actually effected such sales, and
all sales on up to a monthly basis of capacity (other than sales through the
ISO/PE) by the IPPs parties to the Master Restructuring Agreement which are
effectuated by NIAGARA acting as agent for any such IPP). Notwithstanding the
foregoing, the Proxy-Market Price Period may be extended or terminated upon the
mutual agreement of the parties.
In the event the ISO/PE does not provide adequate information to confirm the
monthly sales within the Upstate Market transacted through the ISO/PE, NIAGARA
and SELLER agree to renegotiate the conditions based on the original intent of
the Master Restructuring Agreement (as defined by the "Proxy-Market Price
Period", page 28, Attachment A-8 of the "Terms and Conditions of Amended PPA and
Restated Contracts".
"PUHCA" shall mean the Public Utility Holding Company Act of 1935, as
amended.
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"PURPA" shall mean the Public Utility Regulatory Policies Act of 1978,
as amended.
"Reasonable Best Efforts" means, with respect to any Party, such
Party's diligent pursuance of the course of action or result stated as
determined by such Party itself in good faith, but shall not require such Party
to pay any sum or other consideration or incur or assume any liability or
obligation that is not otherwise expressly required to be paid, incurred or
assumed pursuant to this AGREEMENT, excluding (i) normal and customary
incidental out-of-pocket costs and expenses and (ii) attorneys' fees (except,
with respect to any IPP, attorneys' fees required to be paid by NIAGARA pursuant
to the IPPs' Special Counsel Fee Letter or the IPPs' Local Regulatory Counsel
Fee Letter).
"Restated Contracts" has the meaning set forth in Exhibit A to the
Master Restructuring Agreement.
"S.C.-6 Rate" shall have the meaning ascribed to it in the definition
of Market Energy Price.
"S.C.-6 Price Period" means the period commencing on the Effective
Date and expiring on the earlier to occur of (a) the first day of the month
following the calendar month in which the ISO/PE is established and implementing
LBMP pricing and (b) twenty four (24) months after the Effective Date.
"Settlement Date" means the last day of each calendar month during the
term of this AGREEMENT commencing on the Effective Date.
"Settlement Period" means each calendar month during the term of this
AGREEMENT.
"Transmission Agreement" means the Transmission Services Agreement,
dated as of December 13, 1990, as amended, between NIAGARA and SELLER.
"Upstate Market" means collectively (i) the service territory retail
loads in the regions currently served by Niagara Mohawk Power Corporation, New
York State Electric & Gas Corporation, Rochester Gas & Electric Corporation and
Central Xxxxxx Gas & Electric Corporation (each a "Utility", collectively the
"Utilities"), and (ii) wholesale sales transactions by any of the Utilities to
third parties outside the regions currently served by such Utility, excluding
any such sales which are effectuated pursuant to contracts having a term of at
least one year existing as of the date of the Master Restructuring Agreement to
the extent such contracts are in effect thereafter.
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"Variable Energy Cost" shall have the meaning set forth in Section II
of ATTACHMENT I.
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