EXHIBIT 10.52
TRANSITION POWER PURCHASE AGREEMENT
By and Between
NEW YORK STATE ELECTRIC & GAS CORPORATION
and
MISSION ENERGY WESTSIDE, INC.
Dated: as of August 1, 1998
[THIS TRANSITION POWER PURCHASE AGREEMENT SETS FORTH THE TERMS ON WHICH MISSION
ENERGY WESTSIDE, INC. OR NYSEG MAY EXERCISE AN OPTION PURSUANT TO WHICH MISSION
ENERGY WESTSIDE, INC. WOULD PROVIDE AND SELL, AND NYSEG WOULD ACCEPT AND
PURCHASE, INSTALLED ELECTRIC GENERATING CAPACITY.]
This Transition Power Purchase Agreement ("Agreement") is made and entered
into as of August 1, 1998, by and between Mission Energy Westside, Inc.
("Generator"), a California corporation and New York State Electric & Gas
Corporation ("NYSEG"), a New York corporation (each of Generator and NYSEG being
referred to herein, individually, as a "Party", and collectively, as the
"Parties"),
WITNESSETH:
WHEREAS, NGE Generation, Inc. ("NGEGen"), an affiliate of NYSEG, and
Pennsylvania Electric Company ("Penelec"), have offered to jointly sell by
auction their respective interests in the Xxxxx City Generating Station (the "HC
Station"), a coal-fired generating plant located in Indiana County,
Pennsylvania;
WHEREAS, Generator, Penelec, and NGEGen have entered into the Asset
Purchase Agreement dated as of August 1, 1998 pursuant to which Generator shall
purchase the HC Station;
WHEREAS, the rights and obligations of buyers and suppliers of electric
generating capacity, energy, transmission and ancillary services may be modified
by the proposal pending before the Federal Energy Regulatory Commission ("FERC")
to restructure the New York Power Pool, which contemplates the formation of the
New York Independent System Operator ("ISO") and the implementation of the ISO
Tariff filed on December 19, 1997 in FERC Docket Nos. ER97-1523-000, OA97-470-
000 and ER97-4234-000 and the order dated June 30, 1998 as such filings and
orders may be amended from time to time. FERC may approve, accept, modify, or
reject the proposal, and its actions may affect the rights and obligations under
this Agreement;
WHEREAS, NYSEG desires to enter into an option agreement for the purchase
and sale of electric generating capacity and not ancillary services or energy;
and
WHEREAS, in partial consideration for NYSEG's interest in the HC Station,
Generator and NYSEG have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, Generator and NYSEG agree as follows:
SECTION 1 - DEFINITIONS
AND FORMAT
1.1 Format
------
(a) References to Sections herein are cross-references to Sections in this
Agreement, unless otherwise stated.
(b) All Schedules that are attached to this Agreement are incorporated by
reference as if fully set forth herein.
1.2 Definitions
-----------
In addition to the terms defined elsewhere in this Agreement, when used
with initial capitalization, whether singular or plural, the following terms
shall have the meanings set forth below. Any term used in this Agreement that is
not defined herein shall have the meaning customarily attributed to such term by
the electric utility industry in New York.
(a) "APA" means the Asset Purchase Agreement by and among NGEGen,
NYSEG, Pennsylvania Electric Company and Generator dated as of August
1, 1998.
(b) "Contract Period" means each of the following four periods:
(i) from the Transfer Date to May 31, 1999 (the "First Contract
Period");
(ii) June 1, 1999 through the end of the 1999 Summer Capability
Period (currently October 31, 1999) (the "Second Contract
Period");
(iii) from the start of the 1999/2000 Winter Capability Period
(currently November 1, 1999) to the end of the 2000 Summer
Capability Period (currently October 31, 2000); and
(iv) the 2000/2001 Winter Capability Period (currently November 1,
2000 through April 30, 2001).
If, for any reason, the Transfer Date is after May 31, 1999, the
commencement of the subsequent Contract Period during which the Transfer Date
occurs shall be on the Transfer Date, and the subsequent Contract Period shall
end as described above.
(c) Force Majeure has the meaning set forth in Section 8.
(d) "Installed Capacity" means electric generating capacity that satisfies
the Installed Capacity requirements established by the ISO or NYPP, as they
apply to NYSEG or
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by PJM to the extent NYSEG exercises its rights under Section 3.5(c) to
designate Installed Capacity to satisfy PJM requirements.
(e) "ISO" shall mean the New York independent system operator, as described
in the Supplemental Filing, or its successor.
(f) "ISO Tariff" shall mean the tariff described in the Supplemental
Filing, as it may be amended from time to time.
(g) "NYPP" shall mean the New York Power Pool or its successor.
(h) "NYSEG" shall mean New York State Electric & Gas Corporation or its
successor.
(i) "Option" means a Put Option or Call Option.
(j) "Penelec" shall mean Pennsylvania Electric Company.
(k) "PJM" means PJM Interconnection L.L.C., the Delaware Limited Liability
Company continued by that certain Amended and Restated Operating Agreement of
PJM Interconnection, L.L.C., dated as of June 2, 1997, as amended from time to
time, or its successor.
(l) "Purchased Capacity" means Installed Capacity with respect to which a
Put Option or Call Option has been exercised.
(m) "Replacement Capacity" shall mean Installed Capacity under this
Agreement from a source different from the source identified by Generator and
subsequently identified to the NYPP or ISO in NYSEG's periodic reports required
under applicable procedures or directly or indirectly to PJM to the extent such
Installed Capacity satisfies NYPP or ISO Installed Capacity requirements
applicable to NYSEG, or, if required by Section 4, satisfies PJM Installed
Capacity requirements.
(n) "Replacement Capacity Costs" shall mean the incremental cost of
Replacement Capacity to the extent it exceeds the cost of the applicable
Option Price(s) in accordance with Section 5.1 and Appendix C.
(o) "Summer Capability Period" shall have the meaning provided by the NYPP,
the ISO or their successor(s) as may be modified from time to time. Summer
Capability Period is currently each May 1 through October 31 of each year.
(p) "Supplemental Filing" shall mean the December 19, 1997 Supplemental
Filing to the Comprehensive Proposal to Restructure the New York Wholesale
Electric Market in FERC Docket Nos. ER97-1523-000, OA97-470-000, and ER97-4234-
000.
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(q) "Transfer Date" means the date on which NGE Generation, Inc. transfers
title to its interest in the HC Station to the Generator.
(r) "Winter Capability Period" shall have the meaning provided for by the
NYPP, the ISO or their successor(s) as may be modified from time to time. Winter
Capability Period is currently each November 1 through April 30 of the following
calendar year.
SECTION 2 - TERM
Subject to required regulatory authorizations, if any, this Agreement shall
become effective when signed by the Parties, except that the rights to exercise
Options and the obligations to purchase and sell Installed Capacity shall become
effective on the Transfer Date. Unless terminated earlier in accordance with the
terms hereof, this Agreement shall terminate on April 30, 2001, or on the last
day of the 2000/2001 Winter Capability Period ending in the year 2001, if
different, or earlier pursuant to the terms of this Agreement. If the APA is
validly terminated pursuant to its terms prior to the Transfer Date, then this
Agreement shall also terminate.
SECTION 3 - OPTIONS
3.1 Put Option
----------
To the extent required by Generator in accordance with this Agreement,
NYSEG shall accept and purchase Installed Capacity from Generator for any
designated Contract Period in amounts up to the Maximum Put Capacity for the
respective Contract Period. Generator's right to require NYSEG to accept and
purchase such Installed Capacity from Generator is referred to herein as
Generator's "Put Option."
3.2 Call Option
-----------
To the extent required by NYSEG in accordance with this Agreement,
Generator shall provide and sell Installed Capacity to NYSEG for any designated
Contract Period in amounts up to the Maximum Call Capacity for the respective
Contract Period. NYSEG's right to require Generator to provide and sell such
Installed Capacity to NYSEG is referred to herein as NYSEG's "Call Option."
3.3 Maximum Put Capacity and Maximum Call Capacity
----------------------------------------------
(a) The Maximum Put Capacity for each Contract Period shall be equal to the
SICR for the respective Contract Period.
(b) The Maximum Call Capacity for each Contract Period shall be equal to
the SICR for the respective Contract Period, minus the amount of Installed
Capacity for which Generator exercises its Put Option with respect to such
Contract Period, but not less than zero.
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3.4 SICR (Supplemental Installed Capacity Requirement)
----
SICR shall be equal to:
(a) 942 MW for the First Contract Period;
(b) for each subsequent Contract Period, the lesser of (i) 942 MW or (ii)
one half the difference of (ICR plus WPS) minus IC, for the respective Contract
Period, [(ICR + WPS IC)/2] where:
ICR = NYSEG's forecast of its annual Installed Capacity
requirement to satisfy the NYPP or ISO requirements including
applicable reserve margins, net of NYSEG's estimate of Installed
Capacity associated with NYSEG's customers that have converted or
will convert to retail access service.
WPS = NYSEG's wholesale capacity sales requirements and any
applicable reserves on these sales, to the Town of Massena, the
Burlington Electric Department, and the Vermont Public Power
Supply Authority (estimated in Appendix A).
IC = The Installed Capacity of the NYSEG resources as identified
in Appendix B to the extent NYSEG receives or will receive
Installed Capacity credit from the NYPP or the ISO for these
resources.
NYSEG's forecasts and estimates shall be applicable to the
forthcoming Contract Period.
3.5 Exercise of Options
-------------------
(a) Not later than 45 days prior to the anticipated Transfer Date, NYSEG
shall notify Generator in writing of the Maximum Put Capacity for the Second
Contract Period.
(b) Not later than 30 days prior to the anticipated Transfer Date,
Generator shall notify NYSEG in writing whether it is exercising its Put Option
for the First and Second Contract Period(s), and if so, the quantity of
Installed Capacity for which Generator is exercising its Put Option.
(c) By the first business day following the deadline in Section (b), NYSEG
shall notify Generator in writing whether it is exercising its Call Option for
the First and Second Contract Periods, and if so, the quantity of Installed
Capacity for which NYSEG is exercising its Call Option, and for the First
Contract Period, if either Party has exercised its Option, the amount of
Installed Capacity that must satisfy the PJM requirements specified in
Section 4.
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(d) If either or both Parties exercise their Options for the First Contract
Period, the obligations to provide and sell, and to accept and purchase,
Installed Capacity pursuant to such exercised Option(s) shall become effective
as of the Transfer Date.
(e) By June 15, 1999 and June 15, 2000, NYSEG shall notify Generator in
writing of the Maximum Put Capacity for the forthcoming Contract Period.
(f) By July 15, 1999 and July 14, 2000, Generator shall notify NYSEG in
writing whether it is exercising its Put Option for the forthcoming Contract
Period, and if so, the quantity of Installed Capacity for which Generator is
exercising its Put Option.
(g) By July 16, 1999 and July 17, 2000, NYSEG shall notify Generator in
writing whether it is exercising its Call Option for the forthcoming Contract
Period, and if so, the quantity of Installed Capacity for which NYSEG is
exercising its Call Option.
(h) By 25 days prior to the anticipated Transfer Date for the first two
Contract Periods and September 15 of each year for subsequent Contract Periods,
Generator shall, if either Party exercises its Option, inform NYSEG in writing
of the location and name of and amount from each generating unit that Generator
will use to supply the Installed Capacity required pursuant to this Agreement.
(i) By October 1 of each year, NYSEG is required to report all sources to
be used to supply NYSEG's Installed Capacity requirement to the NYPP or ISO.
(j) November 1 is the start date for the Winter Capability Period.
(k) If NYPP or the ISO modifies current notification schedules or the
definition of Winter Capability Period or Summer Capability Period such that the
schedule dates contained in this Section 3.5 are inconsistent with the modified
schedule or definition, then NYSEG shall provide reasonable notice thereof to
Generator and shall thereafter have the right to revise the dates in this
Section 3.5 to be consistent with said modification.
(l) Subject to Section 4.1(a)(ii) and 4.2, and to the extent permitted by
ISO or NYPP procedures, and consistent with Generator's obligations under
Sections 3 and 4, Generator may use generating resources other than those
identified in Section (h) above and shall notify NYSEG of any changes in the
name and location of, and the amount of Installed Capacity from, any generating
unit to be used by Generator to supply the Installed Capacity required pursuant
to this Agreement at least thirty (30) days before the date NYSEG is required to
report such change to the NYPP or ISO.
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SECTION 4 - GENERATOR'S OBLIGATION TO PROVIDE PURCHASED CAPACITY
4.1 If either Party exercises its Option, for the First Contract Period,
NYSEG may designate up to the lesser of the aggregate amount of the Option(s)
that have been exercised for the First Contract Period or 505 MW of Installed
Capacity to satisfy PJM Installed Capacity requirements in accordance with this
Section 4. Any amount not so designated up to the aggregate amount of the
Option(s) that have been exercised shall satisfy the NYPP or ISO requirements
described below. In no event may either or both Parties exercise Options in
excess of the SICR. If either or both Parties exercise their Option(s), then,
unless excused by Force Majeure, Generator shall:
(a) satisfy all requirements applicable to suppliers of Installed
Capacity established by
(i) NYPP or the ISO (including locational and performance
requirements and compliance with and satisfaction of all
applicable tariffs, rules and practices) so that NYSEG will
receive Installed Capacity credit in the amount elected by NYSEG
and/or Generator hereunder, and/or
(ii) PJM for up to 505 MW of Installed Capacity, only during the
First Contract Period and only to the extent NYSEG designates
Installed Capacity to satisfy such PJM requirements in accordance
with Section 3.5(c); and
(b) reasonably cooperate with NYSEG in arranging any necessary
interfaces or protocols to satisfy NYPP, ISO, or PJM requirements
associated with any services provided under this Agreement.
4.2 If NYSEG exercises its option as described in Section 4.1(a)(ii), then
that amount of Installed Capacity shall be supplied from the HC Station unless
the Parties mutually agree otherwise.
SECTION 5 - PAYMENT FOR PURCHASED CAPACITY AND BILLING
5.1 Monthly Payments and Billing
----------------------------
If an Option or Options are exercised, subject to Section 5.2, NYSEG shall
make monthly payments to Generator for each month during the Contract Period for
which such Option or Options have been exercised. Subject to Section 5.2, such
monthly payments, each referred to herein as a "Monthly Payment" or MP, shall be
calculated as follows:
MP = the sum of
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(A) the product of (i) the applicable Put Price from Appendix C
hereto, (ii) the amount of Installed Capacity for which a
Put Option has been exercised and which is provided by
Generator to the extent (a) NYSEG receives Installed
Capacity credit to satisfy NYPP or ISO requirements
applicable to NYSEG to the extent NYSEG has designated NYPP
or the ISO, or (b) the Installed Capacity satisfies
requirements specified in Section 4.1(a)(ii) to the extent
NYSEG has designated PJM Installed Capacity in accordance
with Sections 3.5(c) and 4, and (iii) the number of to the
extent NYSEG has designated NYPP or the ISO days in the
month or part thereof
and
(B) the product of (i) the applicable Call Price from Appendix C
hereto, (ii) the Installed Capacity for which a Call Option
has been exercised and which is provided by Generator to the
extent (a) NYSEG receives Installed Capacity credit to
satisfy NYPP or ISO requirements applicable to NYSEG to the
extent NYSEG has designated NYPP or the ISO, or (b) the
Installed Capacity satisfies requirements specified in
Section 4.1(a)(ii) to the extent NYSEG has designated PJM
Installed Capacity in accordance with Sections 3.5(c) and 4,
and (iii) the number of days in the month or part thereof.
NYSEG shall make no other payment to Generator for Installed Capacity actually
provided under this Agreement.
5.2 Capacity Deficiency
-------------------
(a) Whenever the amount of Installed Capacity credit that NYSEG receives
(i) from NYPP or the ISO, or (ii) to the extent NYSEG has designated PJM
Installed Capacity in accordance with Sections 3.5(c) and 4, from PJM for
capacity supplied by Generator, is less than the amount of Installed Capacity
for which an Option has been exercised, then unless excused by Force Majeure,
Generator shall pay NYSEG monthly for any costs incurred by NYSEG associated
with Generator's failure to supply Installed Capacity under this Agreement as
follows:
The sum of (a) all charges imposed by the NYPP, ISO or PJM, including
penalties and fines to the extent they exceed charges that would have
been due under Section 5.1 had Generator performed with respect to the
amount of Installed Capacity by which the Generator was deficient and
on which NYSEG incurred NYPP or ISO charges or directly or indirectly
incurred PJM charges; (b) if Generator fails to provide Replacement
Capacity, and NYSEG obtains Replacement Capacity, then NYSEG's
Replacement Capacity Cost, to the extent
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not included in (a); and (c) all related transaction costs to the
extent not included in (a) and (b), that are reasonably incurred,
associated with Generator's failure to provide Installed Capacity.
(b) If NYSEG incurs any costs over a period greater than one calendar month
or at one time associated with Generator deficiencies described above in this
Section at a different time, or if NYSEG purchases more Installed Capacity than
the amount by which Generator was deficient, then NYSEG shall, in its reasonable
discretion, allocate these costs on a monthly basis and determine the portion
associated with the deficiency.
(c) NYSEG shall set off any payments Generator owes under this Section 5.2
against any payments NYSEG owes Generator under Section 5.1. If payments due
NYSEG under Section 5.2 exceed payments due Generator under Section 5.1.,
Generator shall pay NYSEG the difference.
5.3 Statements
----------
NYSEG shall provide to the Generator a monthly statement not later than 15
days after the end of each calendar month during a Contract Period with respect
to which an Option or Options have been exercised. Such statement shall set
forth (i) the amount due for Purchased Capacity for which such Option or Options
have been exercised, calculated in accordance with Sections 5.1 and 5.2; (ii)
Generator's reimbursement obligation, if any, under Section 5.2, and (iii) the
computation of the amount due and determination of the Party obligated to pay
such amount, including each quantity used in such computation and determination.
5.4 Billing and Payment
-------------------
If the statement provided pursuant to Section 5.3 shows that a payment is
due from NYSEG to Generator, NYSEG shall pay the amount due within 15 days of
the issuance of the statement. If the statement shows that payment is due from
Generator to NYSEG, NYSEG shall render a xxxx to the Generator for the amount
due simultaneously with the issuance of the statement, and the Generator shall
pay such xxxx within 15 days of the issuance thereof by NYSEG.
5.5 Adjustments and Corrections
---------------------------
(a) If adjustments or corrections to bills or statements are required as a
result of errors in computation or billing, the Parties shall recompute amounts
due hereunder and otherwise correct any errors in such bills or statements. If
the total amount, as recomputed, due from a Party for the period of inaccuracy
varies from the total amount due as previously computed, and payment of the
previously computed amount has been made, the difference shall be paid to the
Party entitled to receive it within thirty (30) days after the recomputation.
(b) Interest on unpaid amounts or payments received after the due date shall
accrue at a rate equal to the prime commercial lending rate established from
time to time by Chase
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Manhattan Bank, N.A., New York, New York, or its successor, from the due date
until the date upon which payment is made.
(c) All xxxxxxxx to NYSEG shall be sent to:
Xxxx Xxxxxxxx
Manager of Electric Supply Planning and Procurement
New York State Electric & Gas Corporation
0000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxx 00000-0000
(d) All xxxxxxxx to Generator shall be sent to:
Mission Energy Westside, Inc.
00000 Xxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx, President
(e) Any payments owed directly by Generator to the ISO, NYPP, or PJM
pursuant to the procedures established in the ISO Tariff, by the ISO or in the
NYPP procedures, or in the PJM procedures, shall not be NYSEG's responsibility.
(f) If a Party contests the billed amount, the contesting Party shall pay
the undisputed billed amount and provide written notice to the other Party
identifying the reason for the dispute. Interest at the rate specified in
Section 5.5(b) shall accrue on the portion, if any, that is refunded or credited
when the contested amount is resolved.
(g) Each Party may set off any amounts owed to the other Party against any
amount owed pursuant to this Agreement or other arrangements agreed to between
the Parties, including, without limitation, amounts owed NYSEG under Section
5.2.
5.6 Records
-------
The Parties shall each keep and maintain accurate and detailed records
relating to the sales of Installed Capacity under this Agreement for a period of
not less than six (6) years. Such records shall be made available for inspection
by either Party or any governmental agency having jurisdiction with respect
thereto during normal business hours upon reasonable notice.
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5.7 Survival
--------
The Provisions of this Section 5 shall survive termination, expiration,
cancellation, suspension, or completion of this Agreement to the extent
necessary to allow for final billing and payment.
SECTION 6- INDEMNIFICATION
6.1 Generator's Indemnification
---------------------------
The Generator shall indemnify, hold harmless and defend NYSEG, its parent,
affiliates, and successors, and their officers, directors, employees, agents,
subcontractors, and successors, from and against any and all claims, demands,
liabilities, costs (including, without limitation, those identified in Section
5.5(e)), losses, judgments, damages and expenses (including, without limitation,
reasonable attorney and expert fees, and disbursements incurred by NYSEG in any
actions or proceedings between NYSEG and a third party, the Generator, or any
other party) for damage to property, injury to or death of any person, including
NYSEG's employees, Generator's employees and their affiliates' employees, or any
third parties, to the extent caused wholly or in part by any act or omission,
negligent or otherwise, by the Generator and/or its officers, directors,
employees, agents, and subcontractors arising out of or connected with this
Agreement.
6.2 NYSEG's Indemnification
-----------------------
NYSEG shall indemnify, hold harmless and defend Generator, its parent,
affiliates and successors, and their officers, directors, employees, agents,
subcontractors, and successors, from and against any and all claims, demands,
liabilities, costs, losses, judgments, damages, and expenses (including, without
limitation, reasonable attorney and expert fees, and disbursements incurred by
Generator in any actions or proceedings between Generator and a third party,
NYSEG, or any other party) for damage to property, injury to or death of any
person, including Generator's employees, NYSEG's employees and their affiliates'
employees, or any third parties, to the extent caused wholly or in part by any
act or omission, negligent or otherwise, by NYSEG and/or its officers,
directors, employees, agents, and subcontractors arising out of or connected
with this Agreement.
6.3 Indemnification Procedures
--------------------------
If either Party intends to seek indemnification under this Section 6 from
the other Party, the Party seeking indemnification shall give the other Party
notice of such claim within ninety (90) days of the commencement of, or the
Party's actual knowledge of, such claim or action. Such notice shall describe
the claim in reasonable detail, and shall indicate the amount (estimated if
necessary) of the claim that has been, or may be sustained by, said Party. To
the extent that the other Party will have been actually and materially
prejudiced as a result of the failure to provide such notice, such notice will
be a condition precedent to any liability of the
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other Party under the provisions for indemnification contained in this
Agreement. Neither Party may settle or compromise any claim without the prior
consent of the other Party; provided, however, said consent shall not be
unreasonably withheld or delayed.
6.4. Survival
--------
The indemnification obligations of each Party under this Section 6 shall
not be limited in any way by any limitation on insurance, by the amount or types
of damages, or by any compensation or benefits payable by the Parties under
Worker's Compensation Acts, disability benefit acts or other employee acts, or
otherwise. The provisions of this Section 6 shall survive termination,
cancellation, suspension, completion or expiration of this Agreement.
SECTION 7- LIMITATION OF LIABILITY
7.1 Limitation on Damages
---------------------
Except for indemnity obligations set forth in Section 6, neither NYSEG nor
the Generator, nor their respective officers, directors, agents, employees,
parents, affiliates, successors, assigns, or subcontractors shall be liable to
the other Party or its parent, subsidiaries, affiliates, officers, directors,
agents, employees, successors, assigns, or subcontractors for claims, suits,
actions, causes of action or otherwise for incidental, punitive, special,
indirect, multiple or consequential damages (including attorneys' fees or
litigation costs) connected with, or resulting from, performance or non-
performance of this Agreement, or any actions undertaken in connection with, or
related to this Agreement, including, without limitation, any such damages which
are based upon causes of action for breach of contract, tort (including
negligence and misrepresentation), breach of warranty or strict liability.
7.2 Subject to indemnity obligations set forth in Section 6, upon an Event
of Default by NYSEG under this Agreement, which Event of Default is not
excusable due to an event of Force Majeure or due to an Event of Default by
Generator under this Agreement, NYSEG's liability to the Generator shall be
limited to the Generator's direct damages incurred by the Generator as a result
of such default by NYSEG, which shall be payments under Section 5.1 for services
rendered.
7.3 Subject to indemnity obligations set forth in Section 6, upon an Event
of Default by Generator under this Agreement, which Event of Default is not
excusable due to an event of Force Majeure or due to an Event of Default by
NYSEG under this Agreement, Generator's liability to NYSEG shall be limited to
NYSEG's direct damages incurred by NYSEG as a result of such default by
Generator, which shall be payments due under Section 5.2.
7.4 The provisions of this Section 7 shall apply regardless of fault and
shall survive termination, cancellation, suspension, completion or expiration of
this Agreement.
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SECTION 8 - FORCE MAJEURE
8.1 Force Majeure
Subject to due diligence obligations under Section 8.3, a Party shall not
be considered to be in default or breach of this Agreement, and shall be excused
from performance, or liability for damages to the other Party, if and to the
extent it shall be delayed in or prevented from performing or carrying out any
of the obligations or responsibilities of this Agreement, arising out of or from
any act, omission or circumstances occasioned by or in consequence of any act of
God, labor disputes, act of the public enemy, war, invasion, riot, fire, storm,
flood, ice, explosion, or by any other cause or causes beyond the reasonable
control of the Party invoking Force Majeure to avoid liability, including any
order, regulation or restriction imposed by governmental, military or lawfully
established civilian authorities.
8.2 Obligation to Make Payment
Nothing contained in this Section 8 shall relieve any Party of the
obligation to make payments when due pursuant to this Agreement.
8.3 Due Diligence
Any Party claiming Force Majeure shall (1) provide prompt written notice of
such Force Majeure event to the other Party giving a detailed written
explanation of the event and estimate of its expected duration and probable
effect on the performance of that Party's obligations hereunder; and (2) use due
diligence in accordance with Good Utility Practice (as defined in the
Supplemental Filing) to continue to perform its obligations under this Agreement
and to remove the condition that prevents performance, including the provision
of Replacement Capacity, if available, irrespective of cost; except that
settlement of any labor dispute shall be in the sole judgment of the affected
Party. If Generator fails to provide Replacement Capacity and NYSEG obtains
Replacement Capacity, then this Section 8 shall not relieve Generator of its
obligations under Section 5.2.a.
8.4 Survival
The provisions in this Section 8 shall survive termination, cancellation,
suspension, completion or expiration of this Agreement.
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SECTION 9 - DEFAULT AND TERMINATION
9.1 Default Defined
---------------
Each of the following events shall be deemed to be an Event of Default
hereunder.
a. Failure of either Party to pay any amounts due to the other Party
and such failure is not cured or rectified within 15 days after
notice thereof from the non-defaulting Party.
b. Failure of Generator, in a material respect, to comply with,
observe, or perform any other covenant, warranty or obligation
under this Agreement, and such failure is not cured or rectified
within 30 days after notice thereof from NYSEG.
c. Failure of NYSEG, in a material respect, to comply with, observe,
or perform any other covenant, warranty or obligation under this
Agreement, and such failure is not cured or rectified within 30
days after notice thereof from Generator.
9.2 Occurrence of Event of Default
------------------------------
Subject to Section 6, upon occurrence of an Event of Default by either
Party, the defaulting Party shall be liable to the non-defaulting Party for
only direct damages as defined in Sections 7.2 and 7.3 resulting from the
Event of Default.
In addition, the non-defaulting Party may pursue any remedies or other
damages provided for under law and NYSEG may terminate this Agreement by
giving at least 25 days advance written notice to Generator, such
termination to be effective as of the date specified in such notice.
9.3 The provisions of this Section 9 shall survive termination,
cancellation, suspension, completion or expiration of this Agreement.
SECTION 10 - ADDITIONAL REMEDIES
The Parties shall be entitled to injunctive relief to prevent breaches by a
Party, and specific performance to enforce the terms of this Agreement, in
addition to any other remedy to which a Party is entitled under this Agreement,
at law, or in equity.
14
SECTION 11 - DISPUTES
Any disagreement between NYSEG and Generator as to their rights and
obligations under this Agreement shall first be addressed by the Parties. If
representatives of the Parties are unable in good faith to satisfactorily
resolve their disagreement, the Parties shall refer the matter to their
respective senior management. If after using their best efforts to try to
resolve the dispute, senior management cannot resolve the dispute in 30 days,
either Party may exercise any right or remedy available pursuant to this
Agreement.
SECTION 12 - REPRESENTATIONS
12.1 Representations of NYSEG.
------------------------
NYSEG represents and warrants to Generator as follows:
a. Organization. NYSEG is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of New
York and NYSEG has the requisite corporate power and authority to
carry on its business as now being conducted.
b. Authority Relative to this Agreement. NYSEG has the requisite power
------------------------------------
and authority to execute and deliver this Agreement and, subject to
the procurement of applicable regulatory approvals, to carry out
the actions required of it by this Agreement. The execution and
delivery of this Agreement and the actions it contemplates have
been duly and validly authorized by all required corporate action.
The Agreement has been duly and validly executed and delivered by
NYSEG and constitutes a valid and binding Agreement of NYSEG.
c. Regulatory Approval. NYSEG has obtained or will obtain by the
-------------------
Transfer Date any and all approvals of, and given any notice to,
any public authority that are required for NYSEG to execute and
deliver this Agreement.
d. Compliance With Law.
-------------------
(1) NYSEG represents and warrants that it is not in violation of
any applicable law, statute, order, rule, or regulation
promulgated or judgment entered by any Federal, state, or
local governmental authority, which violation would affect
NYSEG's performance of its obligations under this Agreement.
(2) NYSEG represents and warrants that it will comply with all
applicable laws, rules, regulations, codes, and standards of
all
15
Federal, state, and local governmental agencies having
jurisdiction over NYSEG or the transactions under this
Agreement.
12.2 Representations of Generator
----------------------------
Generator represents and warrants to NYSEG as follows:
a. Generator is a corporation duly organized, validly existing and in
good standing under the laws of California and Generator has the
requisite corporate power and authority to carry on its business as
now being conducted.
b. Authority Relative to this Agreement. Generator has the requisite
------------------------------------
power and authority to execute and deliver this Agreement and,
subject to the procurement of applicable regulatory approvals, to
carry out the actions required of it by this Agreement. The
execution and delivery of this Agreement and the actions it
contemplates have been duly and validly authorized by all required
corporate action. This Agreement has been duly and validly executed
and delivered by Generator and constitutes a valid and binding
Agreement of Generator.
c. Regulatory Approval. Generator has obtained or will obtain by the
-------------------
Transfer Date any and all approvals of, and given any notice to,
any public authority that are required for Generator to execute and
deliver this Agreement.
d. Compliance With Law.
-------------------
(1) Generator represents and warrants that it is not in
violation of any applicable, law, statute, order, rule, or
regulation promulgated or judgment entered by any federal,
state, or local governmental authority, which violation
would affect Generator's performance of its obligations
under this Agreement.
(2) Generator represents and warrants that it will comply with
all applicable laws, rules, regulations, codes, and
standards of all Federal, state, and local governmental
agencies having, jurisdiction over the Generator or the
transactions under this Agreement.
12.3 Representations of Both Parties
-------------------------------
The representations in Sections 12.1 and 12.2 shall continue in full force
and effect for the term of this Agreement.
16
SECTION 13 - ASSIGNMENT OR OTHER CHANGE IN CORPORATE IDENTITY
This Agreement and all of the provisions hereof shall be binding upon, and
inure to the benefit of the Parties and their respective successors and
permitted assigns, but assignment of any right, interest or obligation under
this Agreement may not be made without the other Party's written consent, which
may not be unreasonably withheld. Assignments that are not consented to may be
voided by the non-assigning Party. Notwithstanding the foregoing, (a) NYSEG may
assign this Agreement to an affiliate of NYSEG that has a contractual or
statutory obligation to supply Installed Capacity to NYSEG's retail customers;
and (b) Generator may assign, transfer, pledge or otherwise dispose of its
rights and interests hereunder to a trustee or lending institution(s) for the
purposes of financing or refinancing the acquisition of the HC Station,
including upon or pursuant to the exercise of remedies under such financing or
refinancing, or by way of assignments, transfers, pledges, conveyances or
dispositions in lieu thereof; provided, however, that no such assignment,
transfer, pledge, conveyance, or disposition shall relieve or in any way
discharge Generator from the performance of its duties and obligations under
this Agreement. NYSEG agrees to execute and deliver, at Generator's expense,
such documents as may be reasonable and necessary to accomplish any such
assignment, transfer, pledge, conveyance, or disposition of rights hereunder for
purposes of the financing or refinancing of the acquisition of the HC Station,
so long as NYSEG's rights under this Agreement are not thereby altered, amended,
diminished or otherwise impaired.
SECTION 14 - HEADINGS
The descriptive headings of the Sections of this Agreement are inserted for
convenience only and do not affect the meaning or interpretation of this
Agreement.
SECTION 15 - WAIVER
Except as otherwise provided in this Agreement, any failure of a Party to
comply with any obligation, covenant, agreement, or condition herein may be
waived by the Party entitled to the benefit thereof only by a written instrument
signed by the Party granting such waiver, but such waiver shall not operate as a
waiver of, or estoppel with respect to any subsequent failure of the first Party
to comply with such obligation, covenant, agreement, or condition.
SECTION 16 - COUNTERPARTS
This Agreement may be executed in two or more counterparts, all of which
will be considered one and the same Agreement and each of which will be deemed
an original.
17
SECTION 17 - GOVERNING LAW
This Agreement and all rights, obligations, and performances of the Parties
hereunder, are subject to all applicable Federal and state laws, and to all
duly-promulgated orders and other duly-authorized action of governmental
authorities having jurisdiction.
When not in conflict with or preempted by Federal law, this Agreement will
be governed by and construed in accordance with the law of the State of New
York, without giving effect to the conflict of law principles thereof. Except
for those matters covered in this Agreement that are jurisdictional to the FERC
and the appellate courts to the extent of any appeals from FERC proceedings, any
action arising out of or concerning this Agreement must be brought in the
federal and state courts of the State of New York. Both Parties hereby consent
to the exclusive jurisdiction of the State of New York for the purpose of
hearing and determining any action not preempted by Federal law or not within
the jurisdiction of the FERC.
SECTION 18 - SEVERABILITY
If any of the provisions of this Agreement are held to be unenforceable or
invalid by any court or regulatory authority of competent jurisdiction, the
Parties shall, to the extent possible, negotiate an equitable adjustment to the
provisions of this Agreement with a view toward effecting the purpose of this
Agreement, and the validity and enforceability of the remaining provisions
hereof shall not be affected thereby.
SECTION 19 - AMENDMENT
a. If any provisions of the ISO Tariff, or any other PJM, ISO or NYPP rules
or practices concerning Installed Capacity are changed, then, at the
written request of either Party, the Parties shall use their best efforts
to amend, modify or supplement this Agreement to preserve and maintain the
economic benefits accruing to each Party hereunder. If after 30 days from
said request the Parties fail to reach such agreement, then both Parties
reserve all rights under the Federal Power Act.
b. Except as provided in the last sentence of Section 19.a, (i) this
Agreement may be amended, modified or supplemented only by the written
agreement of both Parties, and (ii) to the maximum extent of the law, the
rates, terms and conditions in this Agreement shall not be subject to
change, regardless of whether such change is sought (a) by the FERC acting
sua sponte on behalf of a Party or third party, (b) by a Party, (c) by a
--- ------
third party, or (d) in any other manner.
18
SECTION 20 - ENTIRE AGREEMENT
This Agreement constitutes the entire understanding between the Parties,
and supersedes any and all previous understandings, oral or written, which
pertain to the subject matter contained herein or therein.
SECTION 21 - FURTHER ASSURANCES
The Parties hereto agree to promptly execute and deliver, at the expense of
the Party requesting such action, any and all other and further instruments and
documents which may be reasonably requested in order to effectuate the
transactions contemplated hereby.
SECTION 22 - NO THIRD PARTY BENEFICIARIES
Subject to the requirements of Section 4, nothing in this Agreement,
express or implied, is intended to confer on any person, other than the Parties,
any rights or remedies under or by reason of this Agreement.
SECTION 23 - CONFIDENTIALITY
Each Party shall hold in confidence all confidential documents and
information furnished by the other Party in connection with this Agreement
unless disclosure is compelled by judicial or administrative process or other
provision of law. If disclosure is so compelled, the Party shall use best
efforts to obtain trade secret protection for such information and documentation
and shall promptly notify the other Party if it receives notice, or otherwise
concludes, that the production of any information subject to this Section 23 is
being sought under any provision of law. Either Party may utilize information
subject to this Section 23 in any proceeding under Section 11, subject to
appropriate confidentiality arrangements. The Parties agree that monetary
damages would be inadequate to compensate for breach of obligations under
Section 23. Each Party agrees, subject to Section 10, that the other Party shall
be entitled to equitable relief, by way of injunction or otherwise, if it
breaches or threatens to breach its obligations under Section 23.
19
In Witness Whereof, the Parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
New York State Electric & Gas Corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx
Executive Vice President
Mission Energy Westside, Inc.
By: /s/ Xxxxx X. Xxxx
------------------------
Xxxxx X. Xxxx
President
20
Appendix A
Pre-existing Wholesale Power Supply Capacity Requirements
Customer Contract Capacity Estimated Capacity (MW)
(MW) Requirement
Massena up to 30 15
Burlington Vt. (BED) up to 10 7
VPPSA (Vermont Public Power ) 7 (winter) 7
5 (summer)
00
XXXXXXXX X
Illustration of NYSEG Resources
The capacity values listed in this Appendix A are illustrative only and do not
accurately represent the Plant's capacity in future years. These values will be
updated when SICR is forecasted as described in Section 3.
RESOURCE CAPACITY OTHER CAPACITY
Hydro Plants: Other:
------------ -----
Keuka 1.5 Nine Xxxx 0 000.0
High Falls 16.0 Xxxxxx Lake Diesel 1.8
Kents Falls 11.0 Other purchase (starts 25.0
Rainbow Falls 3.0 -----
9/99) 233.8
Cadyville 6.0
Mi11 "C" 5.0 Grand Totals 1419.1
Mechanicville 19.0
----
Total: 61.8
NUGs:
----
Xxxxx Falls 2.1
Allegheny Hydro No. 8/No. 9 35.7
Saranac Power 240.0
Indeck-Silver Springs 60.0
KES Chateaugay 17.8
LFG Energy 5.0
Lockport Energy Assoc. 179.0
Lower Saranac Hydro 9.0
Waste Mgmt.-High Acres 2.4
-----
Total NUGs: 551.0
NYPA Contracts:
--------------
Niagara Firm 110
Niagara Peaking 000
Xx. Xxxxxxxx 93
Gilboa 99
Expansion Load Credit 45
EDP Credit 4
Reserve Credit 72
-----
Total NYPA: 573
22
APPENDIX C
Put Prices and Call Prices ($/MW-Day)
Contract Periods Call Price Put Price
---------------- ---------- ---------
First Contract Period 63.3 49.9
Second Contract Period 63.3 49.9
From the start of the 1999/2000 91.7 72.3
Winter Capability Period
(currently November 1, 1999) to
the end of the 2000 Summer
Capability Period (currently
October 31, 2000)
The 2000/2001 Winter Capability 103.0 77.2
Period (currently November 1,
2000 Through April 30, 2001)
23
