Common use of Rate Change Clause in Contracts

Rate Change. It is the intent of the Parties that the charges listed in Sections 4.2 and 4.3(a) are fixed charges that are applicable for the entire term of this Transaction Agreement and are not subject to change except as provided in this Section 7. However, given the length of the term, the Parties have agreed that if Seller experiences a change in its cost structure resulting in costs that cannot be recovered pursuant to the FCA, whether due to new investment, inflation, changes in Law (including, without limitation, changes in environmental Law), additional Taxes, fees, or charges imposed as the result of any changes in Laws after January 1, 2004, or any other causes, such that the charges set forth in Section 4.2 or 4.3(a) above, or both, result in under-recovery by Seller when compared to amounts that Seller would receive under a rate based on average system cost of service, Seller may file under Section 205 of the Federal Power Act (as may be amended or recodified from time to time) to change the Demand Charge or Energy Charge component of the Power Price, or both, solely for the purpose of increasing such charges up to the average system cost of service. Notwithstanding Section 8.7 of the Master Agreement, the “just and reasonable” standard shall apply to the review of such a rate filing. Once Seller has filed to change the Demand Charge or Energy Charge component of the Power Price through a Section 205 filing, Buyer shall subsequently have the right under Section 206 of the Federal Power Act (as may be amended or recodified from time to time) to file a complaint seeking a change in the Demand Charge or Energy Charge component or both if Buyer believes Seller is recovering through such charges more than it would receive under a rate based on an average system cost of service. The “just and reasonable” standard shall likewise apply to the review of such complaint. Either Party may contest and challenge at FERC (or other appropriate forum with jurisdiction, if any) the rate change request of the other Party. In the event that either (i) the rate increase(s) requested by Seller result in an aggregate increase of five percent (5%) or more in the total non-fuel cost of Power (as specified in Section 4.2 and 4.3(a) of this Transaction Agreement) to the Buyer over the term of this Transaction Agreement, or (ii) an aggregate decrease of five percent (5%) or more in the total non-fuel cost of Power (as specified in Section 4.2 and 4.3(a) of this Transaction Agreement) to Buyer over the term of this Transaction Agreement is granted by FERC pursuant to a Section 206 proceeding(s) filed by Buyer, the Party adversely affected by such ruling may, for a period of ninety (90) days following the issuance of an order granting such increase or decrease, terminate this Transaction Agreement by providing not less than two (2) years prior written notice to the other Party. In such event, neither Party shall be obligated to pay the other Party the Termination Payment provided for in Section 4.2 of the Master Agreement.

Rate Change. It is the intent of the Parties that the charges listed in Sections 4.2 and 4.3(a) are fixed charges that are applicable for the entire term of this Transaction Agreement and are not subject to change except as provided in this Section 7. However, given the length of the term, the Parties have agreed that if Seller experiences a change in its cost structure resulting in costs that cannot be recovered pursuant to the FCA, whether due to new investment, inflation, changes in Law (including, without limitation, changes in environmental Law), additional Taxes, fees, or charges imposed as the result of any changes in Laws after January 1, 2004, or any other causes, such that the charges set forth in Section 4.2 or 4.3(a) above, or both, result in under-recovery by Seller when compared to amounts that Seller would receive under a rate based on average system cost of service, Seller may file under Section 205 of the Federal Power Act (as may be amended or recodified from time to time) to change the Demand Charge or Energy Charge component of the Power Price, or both, solely for the purpose of increasing such charges up to the average system cost of service. Notwithstanding Section 8.7 of the Master Agreement, the “just and reasonable” standard shall apply to the review of such a rate filing. Once Seller has filed to change the Demand Charge or Energy Charge component of the Power Price through a Section 205 filing, Buyer shall subsequently have the right under Section 206 of the Federal Power Act (as may be amended or recodified from time to time) to file a complaint seeking a change in the Demand Charge or Energy Charge component or both if Buyer believes Seller is recovering through such charges more than it would receive under a rate based on an average system cost of service. The “just and reasonable” standard shall likewise apply to the review of such complaint. Either Party may contest and challenge at FERC (or other appropriate forum with jurisdiction, if any) the rate change request of the other Party. In the event that either (i) the rate increase(s) requested by Seller result in an aggregate increase of five percent (55 %) or more in the total non-fuel cost of Power (as specified in Section 4.2 and 4.3(a) of this Transaction Agreement) to the Buyer over the term of this Transaction Agreement, or (ii) an aggregate decrease of five percent (5%) or more in the total non-fuel cost of Power (as specified in Section 4.2 and 4.3(a) of this Transaction Agreement) to Buyer over the term of this Transaction Agreement is granted by FERC pursuant to a Section 206 proceeding(s) filed by Buyer, the Party adversely affected by such ruling may, for a period of ninety (90) days following the issuance of an order granting such increase or decrease, terminate this Transaction Agreement by providing not less than two (2) years prior written notice to the other Party. In such event, neither Party shall be obligated to pay the other Party the Termination Payment provided for in Section 4.2 of the Master Agreement.