Regulatory Disallowance Clause Samples
A Regulatory Disallowance clause defines how parties will address situations where a regulatory authority disallows or reduces certain charges, costs, or revenues that are part of the agreement. Typically, this clause specifies the process for adjusting payments, refunds, or contract terms if a regulator determines that a particular fee or expense cannot be recovered or passed through. For example, if a utility company is not permitted by regulators to recover certain costs from customers, this clause would outline how those costs are handled between the contracting parties. Its core function is to allocate the risk of regulatory intervention, ensuring that both parties understand their financial responsibilities if regulatory disallowance occurs.
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Regulatory Disallowance. If the MPSC has indicated in an order that it is unlikely that Buyer will be permitted complete recovery from its customers of the energy charges to be paid pursuant to this Section, then Buyer shall have the right to require that the charges to be paid by Buyer under this Section be adjusted to the charges which the MPSC indicates Buyer can recover from its customers. Any such adjustment shall be effective no earlier than the date of such MPSC indication. Pending appellate review of such indication and final determination of the charges that may be recovered by Buyer pursuant to this Agreement, the amounts not paid to the Seller due to any such adjustment shall be placed by Buyer in an interest-bearing separate account with the administrative costs incurred by that account to be borne by the account. The balance in the separate account, less administrative costs, shall be paid to the appropriate Party upon the completion of appellate review which establishes the charges that Buyer will be permitted to recover from its customers. Future energy charges to be paid by Buyer shall be no greater than will be recoverable from Buyer’s customers pursuant to such final appellate determination.
Regulatory Disallowance. In the event that the NMPRC should, at any time after the Start Date, enter a final order the effect of which is to disapprove the Program or to prevent PNM from obtaining full cost recovery for expenses incurred under this Agreement, PNM shall have the right, exercisable by notice to Comverge within twenty (20) days after the entry of such final order, to terminate this Agreement. Any notice by PNM so terminating this Agreement (the “Termination Notice”) shall specify the effective date of the termination. Within thirty (30) days after giving the Termination Notice, PNM shall pay the termination payment required in Appendix B(IV).
Regulatory Disallowance. If the MPSC has ruled in an order that Buyer will not be permitted complete recovery from its customers of the capacity and energy charges to be paid pursuant to Section 7, Compensation, then Buyer shall have the right to require that the charges to be paid by Buyer under Section 7 be adjusted to the charges which the MPSC indicates Buyer can recover from its customers. Any such adjustment shall be effective no earlier than the date of such MPSC order. Pending appellate review of such order and final determination of the charges that may be recovered by Buyer pursuant to this Agreement, the amounts not paid to the Seller due to any such adjustment shall be placed by Buyer in an interest-bearing separate account with the administrative costs incurred by that account to be borne by the account. The balance in the separate account, less administrative costs, shall be paid to the appropriate Party upon the completion of appellate review which establishes the charges that Buyer will be permitted to recover from its customers. Future capacity and energy charges to be paid by Buyer shall be no greater than will be recoverable from Buyer’s customers pursuant to such final appellate determination. Seller shall refund to Buyer any portions of the capacity and energy charges paid by Buyer to Seller under this Agreement which Buyer is not permitted, for any reason, to recover from its customers through its electric rates, or at Buyer’s sole option, Buyer shall offset said amounts against amounts owed Seller by Buyer as provided in Section 9, Billing. Buyer shall not seek a Disallowance Order and shall use goodfaith, commercially reasonable efforts to oppose any proposal to disallow costs included in the Agreement. Nothing in the Agreement shall constitute a waiver of any rights Seller may have to appeal or collaterally challenge a Disallowance Order as a violation of Seller’s rights or as otherwise unlawful. Notwithstanding the foregoing, Seller shall have the right to terminate this Agreement without further liability at any time following a Disallowance Order up to sixty (60) Days following final resolution of any appeal of or collateral challenge to such order by giving Buyer thirty
Regulatory Disallowance. Notwithstanding any other provision of this Agreement, if Southwestern, commencing on the ten (10) year anniversary of the Cogeneration Commercial Operation Date (the "Tenth Anniversary") is denied the authorization of any Commission which may have jurisdiction over Southwestern's retail rates and charges, to recover from its customers any or all of the Capacity Payments made to Seller pursuant to the terms of this Agreement, based upon an explicit finding that Southwestern's purchase of energy from Seller hereunder was or is imprudent the amount of such payments for which Southwestern is denied recovery (the "Recovery Deficiency") shall be treated in accordance with this Section 14.
Regulatory Disallowance. In the event Buyer is regulated by a federal or Provincial regulatory body, and such body shall disallow all or any portion of any costs incurred or yet to be incurred by Buyer under any provision of this Agreement, such action shall not operate to excuse Buyer from performance of any obligation provided herein nor shall such action give rise to any right of Buyer to any refund or retroactive adjustment of the Contract Price.