Common use of Capacity Payment Clause in Contracts

Capacity Payment. On the basis of the Rated Capacity, commencing on the Commercial Operation Date and for the remainder of the Term, Department shall pay Seller a payment for the Contract Capacity (the "Capacity Payment"), on a monthly basis in arrears, regardless of whether Department requests that Seller deliver Energy from the Facility. The annual Capacity Payment shall be an amount equal to $120,000/MW-yr, the monthly payments shall be as set forth in Appendix C. To the extent that the Commercial Operation Date occurs on a Day other than the first Day of a calendar month, and to the extent that the Term ends on a Day other than the last Day of a calendar month, Department shall pay the Capacity Payment on a pro-rata basis for that month. Each monthly Capacity Payment shall be reduced by $12,500 (as adjusted upward pursuant to the next succeeding sentence (the "Capacity Payment Reduction Amount"). To the extent that the application of a Capacity Payment Reduction Amount would result in a negative Capacity Payment in any month, the Capacity Payment Reduction Amounts in the next succeeding month(s) shall be increased by such negative Capacity Payment amount.