ISO Change Cost Payment Clause Samples
The ISO Change Cost Payment clause defines the obligation for one party to compensate the other for costs incurred due to changes mandated by the Independent System Operator (ISO). In practice, this clause applies when the ISO issues directives that require modifications to operations, equipment, or procedures, resulting in additional expenses for one of the contract parties. For example, if the ISO requires a generator to curtail output or upgrade equipment, the affected party may be entitled to reimbursement for the associated costs. The core function of this clause is to allocate financial responsibility for unforeseen costs arising from regulatory or operational changes imposed by the ISO, thereby reducing uncertainty and ensuring that such costs are fairly distributed.
ISO Change Cost Payment. It is the intent of the Parties that Seller shall be reimbursed by SCE by the amount of one-half (½) of the ISO Change Cost below the ISO Change Cost Threshold Amount, and by the amount of the ISO Change Cost above the ISO Change Cost Threshold Amount, if the ISO Change Cost has been a cost to Seller; and further, that SCE shall be paid by Seller by the amount of one-half (½) of the ISO Change Cost below the ISO Change Cost Threshold Amount, and by the amount of the ISO Change Cost above the ISO Change Cost Threshold Amount, if the ISO Change Cost has been a savings to Seller (collectively, the “ISO Change Cost Payment”). The procedure for calculating the total net incremental change in ISO charges to Seller or Seller’s Actual Revenue during any Facility Term Year associated with an ISO Change Cost and for calculating any payment owed to a Party in respect of an ISO Change Cost is described in Exhibit P. The procedure for addressing disputes related to an ISO Change Cost determination is set forth in Section 11.03 below. In addition, it is the intent of the Parties that SCE be afforded certain rights after a Change in ISO Tariff to mitigate an ISO Change Cost owing from SCE. These mitigation rights, the circumstances in which rights may be exercised and the procedure for exercising such rights are set forth in Section 11.04.