Availability Guarantee – Liquidated Damages Sample Clauses
The Availability Guarantee – Liquidated Damages clause establishes a contractual commitment that a service or system will meet specified uptime or performance levels, with predetermined financial penalties if these targets are not achieved. Typically, this clause outlines the minimum acceptable availability percentage (such as 99.9% uptime per month) and details the calculation and payment of liquidated damages—fixed sums payable by the provider for each period of non-compliance. Its core function is to incentivize reliable performance and provide the customer with a clear, enforceable remedy if the agreed service levels are not maintained, thereby allocating risk and ensuring accountability.
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Availability Guarantee – Liquidated Damages. From Commencement Date through the last day of the Term, Contractor warrants and covenants that Wind Project Availability at each Wind Project will meet or exceed the Availability Guarantee as set forth in Section 3.1. In the event Wind Project Availability does not meet or exceed the Availability Guarantee, Contractor shall then pay the Company liquidated damages, not as a penalty, for the Wind Project’s lost yields at the end of each Annual Reference Period. Base for compensation (“Production Baseline”) shall be Measured Production adjusted to the level of performance guaranteed, as follows: Production Baseline [MWh] = Measured Production [MWh] X (Availability Guarantee [%] / Wind Project Availability [%]) The compensatory payment or applicable credit due to Company for liquidated damages shall be calculated at the end of each Annual Reference Period pursuant to the formula as follows: Compensatory payment/credit [$] = LD Rate [USD/MWh] X (Production Baseline [MWh] - Measured Production [MWh]); Where the LD Rate is the amount to be received by Company for each MWh below the Availability Guarantee as defined in Section 1.1. Example of calculation at 97.5% in USD, with the following assumed data: - Measured Production: 350,000 MWh - Availability Guarantee: 97.5 % - Wind Project Availability: 95.5 % - LD Rate: $/MWh Production Baseline = 350,000 x (97.5 /95.5) = 357,330 MWh Compensatory payment [$] = $ 0 x (357,330 – 350,000) = x 7,330 = $ THIS GUARANTEE (“Guarantee”), effective as of [ ], by [ ], a [ PacifiCorp (“Company”).