NIKISKI COGENERATION PLANT SYSTEM USE AND DISPATCH AGREEMENT
Page 1
NIKISKI COGENERATION PLANT SYSTEM USE
AND
DISPATCH AGREEMENT
Parties: Alaska Electric Generation and Transmission Cooperative, Inc.
Chugach Electric Association, Inc.
NIKISKI COGENERATION PLANT SYSTEM USE AND DISPATCH AGREEMENT
08/11/99 Page 7
NIKISKI COGENERATION PLANT SYSTEM USE
AND DISPATCH AGREEMENT
Article I. Purpose
1.1 The Nikiski Cogeneration Plant System Use and Dispatch
Agreement has three broad purposes; first, to ensure that
Nikiski Cogeneration Plant electrical power is dispatched to
meet the essential purpose of providing additional capacity
for the HEA system when needed, second, provide for the
economic operation of the Unit by placing it in continuous,
full load operation and to make the power available for
Chugach system use and third to grant to Chugach the right
to provide dispatch service for disposition of the Unit.
Article Il. Parties
2.1 The Parties to this Agreement are Chugach Electric
Association, Inc. (Chugach), an Alaska non-profit electric
cooperative membership corporation with offices at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, and Alaska Electric Generation and Transmission,
Inc. (AEG&T), the mailing address of which is ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇.
Article Ill. Recitals
3.1 Chugach owns and operates electric generation, transmission
and distribution facilities;
3.2 Chugach owns and operates a remote control system to control
its facilities known as a supervisory control and data
acquisition system (SCADA);
3.3 AEG&T, whose members include ▇▇▇▇▇ Electric Association, Inc.
(HEA), is a Generation and Transmission Cooperative which both
owns and operates generation facilities and purchases power
from Chugach in order to supply the power requirements of
of AEG&Ts members:
3.4 AEG&T supplies power to HEA which AEG&T purchases from Chugach
through a take-or-pay Agreement for Sale of Electric Power
and Energy which currently provides for the sale and purchase
of 73 MW of capacity with the minimum associated energy of not
less than 350,000 MWH per year;
3.5 AEG&T currently owns and operates a General Electric Frame 6
gas turbine power plant known as the Soldotna No. 1 Plant,
equipped with its own remote terminal unit (RTU) which is
compatible with Chugach's SCADA equipment;
3.6 AEG&T will move the generator and turbine from the Soldotna
No. 1 Plant, to the agricultural products plant owned by Kenai
Fertilizer Company LLC (KFC), which is located near Nikiski,
Alaska all in general accordance with agreements between AEG&T
and KFC to develop the "Nikiski Cogeneration Plant"(the Unit);
3.7 Economic operation of the Unit will be enhanced by base load
operation;
3.8 The parties have determined that Chugach can operate the Unit
as a Chugach system resource (subject to conditions specified
in this agreement), and that such operation is of benefit to
Chugach, AEG&T and HEA, and Chugach is willing to do so;
3.9 Base load operation of the Unit as a Chugach system resource,
as provided for in this
agreement, will allow AEG&T/HEA to economically purchase
energy requirements from Chugach in excess of the current HEA
obligations;
3.10 Base load operation of the Unit will also eliminate the need
for Chugach to operate its ▇▇▇▇▇▇▇ ▇▇▇▇ facility to provide
reliability under normal operating conditions, thereby
maintaining the current level of electric service reliability
to the Kenai Peninsula at a reduced cost to Chugach and its
wholesale customers;
3.11 AEG&T desires to maximize the economic benefits to AEG&T of
owning the Unit by entering into this Agreement to secure
necessary dispatch services to reliably dispatch the Unit,
and make available the Unit for operation as an integral part
of the Interconnected System;
3.12 Chugach desires to supply the dispatch services, and AEG&T
desires to obtain those services from Chugach under the terms
and conditions of this Agreement;
3.13 AEG&T and Chugach desire to have the Unit available for the
Interconnected System use as outlined in this Agreement;
3.14 All Parties intend that AEG&T shall remain the owner of the
Unit and that AEG&T shall remain responsible for the Unit in
all respects consistent with that ownership, including but
not limited to responsibility for all operations,
maintenance, debt, and repairs.
Article IV. Definitions
AEG&T Fuel: The quantity of fuel consumed by the Unit to provide for AEG&T
Use.
AEG&T Use: Operation of the Unit whether initiated by Chugach or requested by
HEA or AEG&T, to provide capacity and energy to HEA in excess of the
capacity required to be purchased and sold under the Chugach
Wholesale Power Agreement, or in lieu of any portion of such
capacity as Chugach may be unable or unwilling to supply.
Agreement: This Nikiski Cogeneration Plant System Use and Dispatch Agreement.
Banked Fuel: A quantity of natural gas fuel equal to the difference between (a)
the quantities of HEA Fuel and AEG&T Fuel estimated for the
preceding year in accordance with Section 7.9(b), and (b) the
actual quantities of AEG&T Fuel and HEA Fuel which AEG&T had the
right under this Agreement to supply for such year.
Base Load: Operation of the Unit at a steady level as close to the maximum
capacity (MW) of the Unit as possible without violating any Unit
operating restrictions.
Chugach Unit Fuel Price: The price paid by Chugach under the terms of the
Marathon Contract for natural gas delivered to its
▇▇▇▇▇▇▇ ▇▇▇▇ facility, until the supply available
under the Marathon Contract is exhausted, and
then, the highest of (a) the average price then paid
for natural gas by Chugach, less transportation
charges, (b) the average price of natural gas
delivered to the Chugach Beluga facility, or (c) the
current price charged by Chugach to AEG&T for natural
gas supplied pursuant to Section 9.2(b)(2).
Chugach Use: Dispatch of the Unit initiated by Chugach for any and all Chugach
power commitments to retail and wholesale consumers including
AEG&T and HEA. Chugach Use includes operation for resale to
▇▇▇▇▇ Electric Association under the terms of the Chugach
Wholesale Power Agreement.
Chugach Wholesale Power Agreement: The Agreement for Sale of Electric Power
and Energy between Chugach, AEG&T and HEA,
bearing signatures dated September 1985.
Date of Commercial Operation: The date when HEA in the exercise of reasonable
professional judgment declares the Unit to be
commercially operable.
Effective Date: The date on which this Agreement is last executed by all
parties, subject to Chugach obtaining gas contract amendments
acceptable to Chugach from Marathon, ARCO, Chevron and
(if necessary) ML&P and any required Jurisdictional Reviews.
HEA Fuel: HEA Fuel as the term is defined in section 7.9(b)(ii) of this
Agreement, but in no event less than zero.
Interconnected System: The entire interconnected generation, transmission, and
distribution system in the Railbelt Region of Alaska.
Jurisdictional Reviews: The approval in writing of any governmental entity,
regulatory body, or lender, the approval of which is
required at the time in order for this Agreement or any
amendment or modification thereof to become effective.
KFC: The Kenai Fertilizer Company LLC, an Alaska Limited Liability Company, or
any successor entity.
KFC Agreement: An agreement entered into between KFC and AEG&T in connection
with the construction or operation and maintenance of the Unit.
KFC Plant: The agricultural products plant near Nikiski, Alaska operated by KFC
and formerly known as the Unocal Plant.
Marathon Contract: The Agreement for the Sale and Purchase of Natural Gas
between Chugach and Marathon Oil Company dated September
26, 1988.
Operation and Maintenance (or O&M) Services: Those activities, whether
performed on-site or off-site of
a generating unit, including,
but not limited to, routine
acquisition of consumables,
facility upkeep, inspections,
overhauls, replacements, and
record keeping associated with
retention of continuous
operating availability,
timely completion of repairs,
and prudent oversight of
generating assets.
Output of the Unit: The total electrical energy produced by the Unit at any
given time.
Point of Interconnection: The 115 kV side of the Units step-up transformer.
Regular Working Hours: The hours between 8:00 a.m. and 5:00 p.m., Monday
through Friday, except State legal holidays.
SCADA System: A computerized control and telecommunications system which
includes computer hardware and software, sensing equipment,
telecommunications equipment, and all associated equipment and
facilities. SCADA is an acronym for Supervisory Control and Data
Acquisition.
Spin: The portion of generation capacity related to base load capability, when
the Unit is in operation and synchronized with the transmission network
that is in excess of the Output of the Unit.
Unit: That portion of the Nikiski cogeneration plant which consists of a
General Electric Frame 6 simple cycle combustion turbine, generator and
switchyard including step-up transformer.
All other terms not specifically defined herein shall have those definitions as
listed in the Alaska Intertie Agreement dated December 23, 1985, among The
Alaska Power Authority (now known as Alaska Energy Authority), ML&P, Chugach,
GVEA, AEG&T, and others, as amended from time to time.
Article V. Term
5.1 This Agreement shall become effective on the Effective Date
and shall terminate concurrently with the Chugach Wholesale
Power Agreement; provided, that this Agreement may be extended
at any time by the written consent of the parties.
Article VI. Scope of Services
6.1 Chugach shall provide the dispatching services under this
Agreement in the following order of priority:
a) AEG&T Use;
b) Chugach Use;
c) The reserves which AEG&T may be obligated to provide,
if any.
6.2 During the term of this agreement, Chugach will Base Load the
Unit when it is made available by AEG&T. The only exceptions
are
a) When the Unit is operated for an AEG&T Use
(priority 6.1.a);.
b) When the Kenai Peninsula is islanded due to the loss of
all interconnected transmission lines, the Unit load may
be reduced to 30 MW or other mutually agreed upon value,
until such time as the Kenai Peninsula is again
interconnected with the Interconnected System;
c) When ▇▇▇▇▇▇▇ ▇▇▇▇ is experiencing spill and transmission
constraints cannot handle full output of both ▇▇▇▇▇▇▇
▇▇▇▇ and the Unit, Unit output will be reduced or AEG&T
will direct the HEA/AEG&T share of ▇▇▇▇▇▇▇ ▇▇▇▇ be
reduced accordingly;
d) During system emergencies such as gas supply emergencies,
volcanic activity, or Kenai Peninsula transmission system
outages, Unit output will be reduced at the reasonable
discretion of the dispatcher until a mutually acceptable
operating level can be determined;
and
e) As the parties may establish by written agreement.
It is expected that Chugach will operate the Unit
approximately 8000 hours per year at the declared capability
of the Unit, as defined in the Alaska Intertie Agreement.
6.3 Unit availability for any use will be limited by scheduled
and unscheduled maintenance, only. AEG&T will use its best
efforts to minimize scheduled and unscheduled downtime in a
manner consistent with continuous duty of the Unit.
6.4 When the Unit operates for AEG&T Use exclusively, Chugach
will be allocated all spin in excess of that required by
AEG&T. In the event Chugach does not choose to acquire the
spin, AEG&T is free to market the spin to others.
6.5 Operating Restrictions for the Unit are:
a) Normal Use:
Unit minimum load 6 MW
Unit minimum up time none
Start up restrictions none
b) Emergency Use:
Unit minimum load minimum
controllable
Unit minimum up time none
Start up restrictions none
c) At any time, AEG&T reserves the right to restrict
Unit operations and/or generated output levels to
less than rated for reasons of safety or operational
status. AEG&T will exert best efforts to take timely
actions required to correct the cause of the
restriction.
d) If AEG&T adopts operating restrictions less
restrictive than those listed in Section 6.5(a) for
any unit disposition covered by AEG&T Use other than
serving HEA load, then the same operating
restrictions shall replace those in Section 6.5(a).
6.6 This Agreement does not obligate Chugach to provide any sales
of electrical power and energy to AEG&T for service to HEA in
excess of Chugach's obligation under the Chugach Wholesale
Power Agreement.
Article VII. Other Rights and Obligations
7.1 The parties agree to interface their telecommunications
systems at the ▇▇▇▇▇▇▇ ▇▇▇▇ PoweR Plant; specifically, at the
Chugach Main Distribution Frame terminal strip in the Chugach
telecommunications building. AEG&T shall maintain a suitable
telecommunications link between ▇▇▇▇▇▇▇ ▇▇▇▇ Power Plant and
the Unit. AEG&T shall maintain a communication system with
the necessary interfaces to interconnect with the Chugach
microwave system and shall be solely responsible for the costs
associated with the maintenance of the equipment owned by
AEG&T. The use of both parties' communication systems will be
as a single system. However, no payment shall be due either
party for use of its communication system by the other
provided the use is part of the services contemplated by this
Agreement.
7.2 Chugach shall allow AEG&T to maintain an existing eight (8)
foot diameter antenna at the 135-foot elevation of Chugach's
telecommunications tower at ▇▇▇▇▇▇▇ ▇▇▇▇ Power Plant. Chugach
shall supply 120 Volt A-C power to a circuit breaker in a
panel in Chugach's telecommunication building for use by AEG&T
as a power supply for AEG&T's telecommunications equipment.
Chugach shall allow AEG&T to maintain an existing
telecommunications building within the vicinity of the base of
the tower and utilize the existing telecommunications
electrical ground.
7.3 AEG&T shall maintain at its own expense all of the remote
terminal units (RTU's), telemetering equipment, or any other
equipment on its system that is necessary for Chugach to
operate and control the Unit using Chugach's existing
equipment. Such equipment shall be compatible and
suitable for interfacing with the Chugach SCADA system.
7.4 AEG&T shall classify all of the alarms on its SCADA system
under one (1) of the following four(4) classifications
1. Alarm Priority 1--Unit Trip
2. Alarm Priority 2--Trip Possible
3. Alarm Priority 3--Alarm-No Trip
4. Alarm Priority 4--Start Inhibit
Chugach shall display these alarms at the Chugach Power
Control Center through the Chugach SCADA system.
7.5 Chugach shall follow the Notification Procedures set forth in
Exhibit C.
7.6 AEG&T shall install and maintain any additional metering as
described in Exhibit B. Such metering shall be of the type and
quality needed to provide Chugach with the information
necessary to accomplish the monitoring, controlling,
recording, and reporting functions as outlined in Exhibit A.
Chugach shall not be required to add facilities on AEG&Ts
side of the Point of Interconnection. No new facilities
related to the provision of services under this Agreement will
be added by either party to its generation and transmission
system without proper metering. Upon the construction or
addition of any such new facilities the parties will
negotiate and prepare appropriate modifications to Exhibit B.
7.7 AEG&T is solely responsible for providing adequate system
protection for the Unit, including all protection required for
remote operations.
7.8 Operations and Maintenance:
a) The Parties agree to jointly plan annual maintenance
activities and schedules for generation facilities
located on the Kenai Peninsula, and involve each other
immediately when a need to change schedules is
identified.
b) AEG&T/HEA agrees to call on Chugach support when in-house
resources are insufficient to perform O&M work, and
utilize Chugach's expertise to provide technical and
management O&M Services when needed. Such support shall
be requested in advance of undertaking such O&M Services,
and scheduled and coordinated to the maximum extent
possible. Upon receipt by Chugach of a request for O&M
Services from AEG&T/HEA, Chugach will provide a cost
estimate for the requested services and Chugach will not
provide the services until AEG&T/HEA has considered the
cost estimate and authorized Chugach to proceed. This
Section 7.8(b) does not preclude AEG&T/HEA from enlisting
specified technical support and assistance from
suppliers of equipment associated with the Unit, such as
General Electric field engineers.
c) Should AEG&T elect to contract for the O&M Services for
the Unit other than with HEA, Chugach shall be given the
first right of refusal to provide such O&M Services. If
AEG&T requests an estimate, Chugach shall have 30 days to
provide an estimate for provision of such services.
Chugach shall have 30 days to match any bid or contract
offer being considered by the AEG&T board. If the
Chugach estimate is accepted, or if Chugach offers
to match any bid or contract, then Chugach shall be
awarded the O&M Services contract.
d) Any rights of Chugach or obligations of HEA under this
section 7.8 of this agreement are subject to AEG&Ts
agreement with KFC for performance of the operation and
maintenance of the Unit. Any such agreement will be
appended to this Agreement as Exhibit D.
7.9 Fuel Supply:
a) Except as herein provided Chugach will use its reasonabl
best efforts, to the extent tha natural gas is available
under Chugachs existing and replacement natural gas
contracts, to provide all natural gas fuel required to
operate the Unit. If Chugach at any time determines that
for whatever reason it may not be able to deliver fuel to
the Unit, it will immediately so advise AEG&T. For
Chugach gas delivered to the KFC Plant at meter no.106
connecting the KFC Plant to the ▇▇▇▇ Inlet Gas Gathering
System or meter no. 414 connecting the KFC Plant to the
Kenai Pipeline System, AEG&T will provide transportation
of the fuel to the Unit at no additional cost.
b) Notwithstanding the foregoing, AEG&T shall have the
option to supply a portion of the fuel for the Unit in an
amount up to (i) the AEG&T Fuel plus (ii) the quantity of
fuel calculated on an annual basis as follows
(the HEA Fuel)
HEA Fuel (in mcf/year) = E (A-B) + F, where as to
the year D
A = Total MWh purchased by
AEG&T under the Chugach
Wholesale Power Agreement
B = 350,000 MWh
D = Total MWh generated by the
Unit for Chugach Use
(measured at the Units
13.8 kV bus)
E = Total fuel (in mcf) used in
the Unit for Chugach Use.
F = Banked Fuel.
Prior to the beginning of each calendar year AEG&T will
provide Chugach with an operating plan, including an
estimate of the quantity of HEA Fuel and the AEG&T Fuel
for that year. Chugach will cooperate in providing AEG&T
with information necessary to make such estimate. In
calculating the estimate, the values for A, D and E
will be based upon the operating plan for the year.
Except where this formula is used for projections, actual
data will be used based on the most recent calendar year.
c) During each hour that the Unit is operated for AEG&T Use,
AEG&T shall have the right to provide all fuel
requirements associated with that use.
d) During each hour that the Unit is operated for Chugach
Use, AEG&T shall have the right to provide a portion of
the fuel to the Unit in an amount up to the estimated HEA
Fuel for the year divided by the expected hours of Unit
operation during the year for Chugach Use, and Chugach
will utilize such amount, or any lesser amount as AEG&T
may direct in accordance with this Agreement. Prior to
the first day of each month AEG&T will notify Chugach as
to the percentage of the HEA Fuel and AEG&T Fuel that
AEG&T will provide to the Unit and Chugach will schedule
the fuel deliveries to the Unit accordingly. AEG&T will
be entitled to utilize any such lesser notification
period the ▇▇▇▇ Inlet gas industry may afford for gas
balancing.
7.10 Purchase of Power: In addition to its 350,000 MWh purchase
obligation under the Chugach Wholesale Power Agreement, AEG&T
will purchase from Chugach in each calendar year after the
Date of Commercial Operation a quantity of energy (MWh) equal
to HEAs residual energy (MWh) requirements less the quantity
of energy (MWh) received by AEG&T as HEAs allocated share
under the ▇▇▇▇▇▇▇ ▇▇▇▇ Hydroelectric Project Agreement for the
Sale and Purchase of Electric Power
and less the quantity of energy (MWh) generated for AEG&T Use;
provided, that the quantity of energy which AEG&T shall be
committed to purchase pursuant to this provision for its
residual energy requirements shall not exceed 320,000 MWh per
year. AEG&Ts purchase obligation under this provision shall
commence on the Date of Commercial Operation. Residual energ
is that energy used by HEA which is above the 350,000 MWh
purchase obligation under the Chugach wholesale power
agreement but does not include any energy supplied from
capacity used to supply demand in excess of 73 MW on the
Chugach system.
Article VIII. Energy Accounting and Power Factor
8.1 The Chugach Dispatcher shall maintain records of the Unit
output between Chugach Use and AEG&T Use and keep running
accounts of the energy use for the Unit.
8.2 Chugach shall dispatch the Unit within the limitations
established by AEG&T from time to time.
Article IX. Compensation, Billing and Payment
9.1 All rights and costs of ownership of the Unit will remain with
AEG&T except as explicitly stated in this Agreement.
9.2 Chugach will pay compensation to AEG&T for use of the Unit
monthly as follows:
a) Chugach Use: For Chugach Use, Chugach shall pay AEG&T
monthly compensation ("C") equal to the cost of
operation and maintenance expense ("O") plus the
value of HEA Fuel actually delivered and consumed on
site ("V") which is expressed in the following
formula:
C = O + V
Where:
"C" is the compensation in dollars paid to AEG&T.
"O" shall be $5.00/MWh multiplied by the monthly MWh
electrical Output of the Unit for Chugach Use, as
measured at the 13.8 kV meter, multiplied by "A",
below.
A shall be an adjustment for inflation, to be
applied for each calendar year beginning on January
1, 1999. "A" shall be calculated as follows
A = .2(1+ppi) + .8(1+cpi)
Where
ppi is the percentage change, expressed as a
decimal, in the Producer Price Index of Metals
Commodities as published by the Bureau of Labor
Statistics of the United States Department of Labor,
for the month ending on January 31 of the year in
which the adjustment is made, as compared with such
index for the month ending January 31 of the
year preceding the date of the adjustment; and
cpi is the percentage change, expressed as a
decimal, in the U.S. Consumer Price Index for Urban
Wage Earners and Clerical Workers published by the
Bureau of Labor Statistics of the United States
Department of Labor, for the month ending on January
31 of the year in which the adjustment is made, as
compared with such index for the month ending Januar
31 of the year preceding the date of the adjustment.
"V" is the value of the quantity of HEA Fuel provided
by AEG&T and consumed by the Unit during the month.
The value will be based upon the Chugach Unit Fuel
Price in effect during the month, provided, however,
that if AEG&T provides HEA Fuel in addition to that
quantity initially committed under the terms of the
KFC Agreement and the price (including
transportation costs) paid by HEA to the supplier is
less than the Chugach Unit Fuel Price, then the value
of the additional volume supplied shall be the
Chugach Unit Fuel Price less one-half of the
difference between the price paid by
AEG&T and the Chugach Unit Fuel Price.
b) AEG&T Use: For AEG&T Use, AEG&T shall pay Chugach:
1. for dispatch services a daily dispatch rate
of $350 for each day or part of a day during
which the Unit is dispatched for AEG&T Use
except that the payment is waived if Chugach
either uses the spin of the Unit or jointly
utilizes the energy Output of the Unit
during any part of that day; and
2. for all fuel and transportation costs
incurred by Chugach in the AEG&T Use.
Chugach shall invoice these as separately itemized
charges to AEG&T.
c) Allocation of fuel costs between simultaneous Uses:
For AEG&T Use where Chugach utilizes the spin but
does not generate any energy, 100% of the fuel costs
are allocated to AEG&T.
When energy as measured at the Units 13.8 kV bus is
being produced simultaneously for AEG&T Use and
Chugach Use then the fuel costs will be divided in
proportion to the energy being produced for each use.
9.3 Within ten days after the end of each month, Chugach shall
provide AEG&T with an accounting of the use of the Unit for
the previous month showing the total energy and fuel use by
the type of operation. In such accounting, Chugach may
designate certain items as being estimated due to the
unavailability of final underlying data, in which event
adjustments to the correct amounts, when amounts are
determined, shall be included in an accounting for a
subsequent month. This accounting shall be the basis for the
Unit billing by AEG&T.
9.4 Payment by Chugach shall be due in AEG&T's office by the 15th
day after mailing of the ▇▇▇▇. Payment shall be mailed or
direct deposit to AEG&T. Amounts not received on or before
the due date shall be payable with interest accrued at the
rate of 1 percent per month compounded monthly from the due
date to the date of payment.
9.5 In the event any portion of any ▇▇▇▇ is disputed, the disputed
amount may be paid or may be withheld. In either event,
Chugach shall provide AEG&T a detailed written explanation of
why the amount is in dispute. If the disputed portion is paid
and later found to be not owed, AEG&T shall refund to Chugach
the disputed portion plus interest on a monthly basis at the
statutory interest rate to the date the refund check is mailed
by AEG&T. If the disputed portion is withheld and later found
to be owed, Chugach shall pay the disputed portion to AEG&T
plus interest on a monthly basis at the statutory interest
rate from the due date of payment to the date the refund check
is mailed by Chugach.
Article X. Emergencies and Problems
10.1 Chugach shall make best efforts to continue to provide
dispatch services in accordance with this Agreement during
SCADA, communication or other outages.
10.2 AEG&T shall maintain and supply Chugach an up-to-date list of
personnel authorized to receive any information which Chugach
is obligated to supply to AEG&T under this Agreement such that
the Chugach dispatcher at all times will be able to reach
personnel designated by AEG&T to receive the information.
Article XI. Liability and Indemnity
11.1 Regardless of fault or causation, each party shall assume all
responsibility and hold the other party harmless from and
defend the other party against all claims for injury or
damage of any sort arising out of the operation of this
Agreement to persons or property on its respective side of
the Point of Interconnection. Chugach shall not be liable
for any lost revenue or other damages suffered by AEG&T or
any other entity or person as a result of any act, or failure
to act, on the part of Chugach under this Agreement, except
that Chugach agrees that it will be responsible for injury to
AEG&T caused intentionally by Chugach or through Chugach's
gross negligence, and except that Chugach shall indemnify
AEG&T against any premium or penalty charges for which HEA
may become liable pursuant to the terms of Paragraph 5.4 of
the Chugach Wholesale Power Agreement if Chugach dispatched
the excess power through inadvertence or willful disregard of
the dispatch instructions received from AEG&T for AEG&T Use.
This indemnity provision shall not apply to a willful breach
of this Agreement by either party.
Article XII. Uncontrollable Forces
12.1 An uncontrollable force shall mean an act of God, act or
omission of government, failure of or threat of failure of
facility, unscheduled maintenance and repair, labor or
material shortage, strike, lockout, or other industrial
disturbances, act of the public enemy, war, blockade,
insurrection, riot, epidemic, landslide, avalanche,
earthquake, fire, storm, lightning, flood, washout, civil
disturbance, restraint by court order or public authority,
action or non-action by or inability to obtain necessary
authorization or approval from any governmental agency or
authority, and any other act or omission similar to the kind
herein enumerated. Strikes, lockouts, and other labor
disturbances shall be considered uncontrollable forces and
nothing in this Agreement shall require either party to settle
a labor dispute against its best judgement.
Each of these matters enumerated constitutes an uncontrollable
force to the extent that it is not within the reasonable
control of affected party, and to the extent that such party
by the exercise of due diligence is unable to overcome it.
In the event either party, by reason of an uncontrollable
force, is rendered unable, wholly or in part, to perform its
obligations under this Agreement, then upon such party giving
notice and particulars of such uncontrollable force, its
obligation to perform (other than the obligation to pay money
shall be suspended during the continuance of any inability so
caused, but for no longer period, and the effects of such
cause shall, so far as possible, be remedied with all
reasonable speed. The affected party shall not be responsible
for its delay in performance under this Agreement during
delays caused by an uncontrollable force, nor shall such
uncontrollable force give rise to claims for damages or
constitute default.
However, should an Uncontrollable Force continuously prevent
performance by either party of substantially all of its
obligations under this Agreement for a period of more than one
year, the Agreement is voidable at the option of either party
upon 30 days written notice to the other party.
Article XIII. Severability
If any provision of this Agreement shall be finally
adjudicated by a court of competent jurisdiction to be invalid
or unenforceable, the remainder of the Agreement shall be
invalid or unenforceable as to future obligations but shall
not operate to extinguish obligations (such as payment
obligations) already accrued.
Article XIV. Termination
14.1 In the event of a material breach of this Agreement,
either party may give written notice to the other. If a
material breach is not cured within thirty (30) days after
the breaching party receives notice of the breach, the
non-breaching party may, at its option, terminate the
Agreement without incurring liability therefor, bring an
action for specific performance, or exercise any other
contract remedy. All liabilities arising under this
Agreement prior to termination shall be and are hereby
preserved.
14.2 This Agreement shall terminate twenty-four months from the
Effective Date, unless prior to said date AEG&T shall have
commenced relocating the generator and turbine from the
Soldotna No. 1 Plant to the KFC Plant near Nikiski, Alaska
Article XV. Miscellaneous Provisions
15.1 Right of First Refusal: Chugach shall have a right of first
refusal to purchase, lease, rent or in any other way acquire
AEG&Ts rights in the Unit or any portion of the electrical
output or capacity of the Unit. The Right of First Refusal
will be retained by Chugach over the life of the Agreement.
The Right of First Refusal shall not apply to a disposition by
AEG&T to HEA.
The Parties intend that this Right of First Refusal not impede
future efforts by AEG&T to dispose of the Unit or its output
while offering Chugach a genuine and full first right of
refusal to purchase the Unit or its electrical output.
Accordingly, Chugach shall promptly respond (no later than 90
days) after notification by AEG&T of a proposed disposition of
the Unit or its output regardless of whether the proposal
resulted from negotiations with a third party, a competitive
bid process or otherwise. Notification by AEG&T of the
proposed disposition of the Unit or its output shall include
disclosure of all information reasonably necessary to allow
Chugach to fully evaluate the proposal and to prepare a
responsive proposal. If Chugach's proposal is substantially
similar to and of equal or greater value to AEG&T as that
described by AEG&T, Chugach's proposal shall be accepted by
AEG&T.
15.2 Grant of Option: AEG&T grants to Chugach an option to
purchase the electricity generated by steam produced by or in
conjunction with the operation of the Unit. The terms of the
option are as follows.
a) Notice. AEG&T will notify Chugach in writing of the
availability of the electricity not less than six months
nor more than thirty-six months before the date of
commercial production of electricity using the steam
produced by the heat recovery steam generator installed
in conjunction with construction of the Unit. The notice
will describe the amount of electricity to be produced
and the process for its production.
b) Right to Option. Chugach shall have six months from the
date of the notice within which to exercise the option.
c) Exercise. The option will be exercised by delivery to
AEG&T of a written notice by Chugach within the foregoing
period specifying the amount of electric output for which
it intended to take or pay.
d) Terms. The purchase price for the electricity shall be
an amount equal to the average thermal generation cost
for the Chugach system, adjusted quarterly in accordance
with the most recently filed fuel surcharge applications,
or computed in similar fashion as that last submitted,
plus an operation and maintenance component computed on
the same basis as the "O" component of compensation
defined under the terms of Section 9.2 a) of this
Agreement.
e) Delivery. AEG&T will deliver the electricity to Chugach
at the Point of Interconnection. Chugach will be
obligated to pay only for electricity delivered.
f) Expiration. If not exercised within the time period set
forth above the option will expire and be of no further
force and effect with respect to the electricity produced
in accordance with the notice, but not with respect to
any subsequent additional production. If exercised, the
rights acquired and obligations assumed under the option
shall terminate upon the termination of this Agreement.
15.3 Assignment: No party shall assign this Agreement, or any part
thereof, without notice to, and consent in writing by, the
other party; provided that such consent shall not be
unreasonably withheld.
15.4 No Third Party Beneficiaries: The provisions of this
Agreement shall not create any rights in favor of any person,
corporation, or association not a participant in this
Agreement, and the obligations herein assumed are solely for
the use and benefit of the participants to this Agreement.
15.5 Notice: Except as otherwise provided herein whenever notice
or communication is provided or required to be given by either
party to the other, such notice or communication shall be in
writing and transmitted by certified United States Mail,
return receipt requested, or by personal delivery, or by
telegraph. All such written communication directed at Chugach
shall be sent to:
Executive Manager Finance & Energy Supply or
Manager of Dispatch
Chugach Electric Association, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or by personal delivery to:
Executive Manager Finance & Energy Supply or
Manager of Dispatch
Chugach Electric Association, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
All such written communication directed to AEG&T shall be sent
to
General Manager
HEA
P. O. ▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
15.6 Entire Agreement: The terms of this Agreement and any
provisions adopted by reference or otherwise incorporated into
this Agreement, including Exhibits A, B, and C, set forth the
full intent of the parties regarding the matters covered by
this Agreement. Neither party is relying on or may rely on
any written or oral collateral, prior, or contemporaneous
agreements, assurances, representations, or warranties not set
forth in this Agreement. No modifications of this Agreement
shall be implied in law or equity, nor may any part hereof be
terminated, amended, supplemented, waived or modified except
by instrument in writing signed by both parties.
15.7 Future Agreements: This Agreement shall not preclude future
agreements on leasing, capacity sale or other ownership or
operating agreements by and among Chugach, AEG&T and HEA.
15.8 Dispatch Agreement: The Soldotna One System Use and Dispatch
Agreement is terminated as of the date AEG&T reasonably
declares that the Soldotna No. 1 Plant has been decommissioned
incident to the construction of the Unit.
15.9 Waiver: Any waiver at any time by a party of its rights with
respect to a default under this Agreement or with respect to
any other matter arising in connection with the Agreement
shall not be deemed a waiver with respect to any other default
or matter.
Any delay short of the statutory period of limitations in
asserting or enforcing a right shall not be deemed a waiver of
such right.
Date: 2-12-99
ALASKA ELECTRIC GENERATION
AND TRANSMISSION COOPERATIVE, INC.
By: /s/ N L Story
N.L. Story
General Manager
Date: Feb 9, 1999
CHUGACH ELECTRIC ASSOCIATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
General Manager
EXHIBIT A
DISPATCH FUNCTIONS AND REPORTS
1. Chugach shall provide the services required to accomplish the remote
starting, loading, monitoring, unloading and stopping of the Unit over
the SCADA system. The Unit shall be base loaded in accordance
with Section 6.2, except during emergencies when unit operation shall
be coordinated through the Chugach Dispatch Center. As outlined in
Exhibit A, Chugach shall record the operations of the Unit and transmit
such information to AEG&T on a monthly basis.
2. Whenever the Chugach SCADA system indicates that the HEA load exceeds
the Contract Capacity in the Chugach Wholesale Power Agreement plus
HEAs share of ▇▇▇▇▇▇▇ ▇▇▇▇ capacity or when directed by HEA,
Chugach will allocate a portion of the Unit output to AEG&T Use. The
portion allocated to AEG&T Use shall equal the amount of MWs required
to meet HEAs load plus reserves, if any, that is not being
purchased under the Chugach Wholesale Power Agreement or from ▇▇▇▇▇▇▇
▇▇▇▇. Any output not allocated to AEG&T Use shall be Chugach Use.
If ▇▇▇▇▇▇▇ ▇▇▇▇ capacity is not available as defined in the
▇▇▇▇▇▇▇ ▇▇▇▇ Scheduling Agreement, then unless directed
otherwise by HEA, AEG&T Use shall equal the amount of MWs
required to meet HEAs load plus reserves, if any, that are
not being purchased under the Chugach Wholesale Power
Agreement.
If neither ▇▇▇▇▇▇▇ ▇▇▇▇ capacity as defined in the ▇▇▇▇▇▇▇
▇▇▇▇ Scheduling Agreement nor Unit capacity are available and
the HEA load exceeds the Contract Capacity in the Chugach
Wholesale Power Agreement, then unless HEA schedules some
other resource to meet HEAs load, the additional HEA load
will be supplied by Chugach under the Excess Capacity
provisions of the Chugach Wholesale Power Agreement.
3. Chugach shall remotely operate the Unit over the SCADA and
telecommunications systems. This operation shall include:
(a) Issuing start commands;
(b) Synchronizing the Unit;
(c) Monitoring alarms;
(d) Limiting Unit operations in response to SCADA alarms;
(e) Adhering to Unit loading limits established by AEG&T;
(g) Adhering to rate of change limitations for generation as
established by AEG&T;
(i) Shutdown and opening generator breaker;
(j) Stopping the unit;
(k) Tripping the Unit in the event SCADA information dictates this
action;
(1) Observing the Notification Procedures set forth in Exhibit "C".
4. Chugach shall record and maintain logs and records of the Unit
operation and shall provide upon request such logs and records to AEG&T
within one (1) week.
These logs and records shall include the following:
(a) Scheduled hours of operation, scheduled loading by use
category, and average load on an hourly basis;
(b) Actual hours of operation, type of and average load on an
hourly basis;
(c) Available operating data, such as: voltage, amperes, VARS,
frequency, ▇▇▇▇▇, power factor, gas flow, temperatures,
breaker positions, and accumulated MWH, MVARH, and MMCF/DAY as
provided by the SCADA system or similar data recorded manually
when the SCADA system is inoperative; and
(d) Alarms and observed or reported deviations from normal Unit
operating parameters.
EXHIBIT B
METERING LOCATIONS
Consistent with provisions of the "Agreement for Sale of Electric Power and
Energy and Lease of Facilities," Addendum 1, metering shall be provided at the
following locations:
I. At the Soldotna Substation:
115-kV Line from Soldotna Substation to Quartz Creek Substation.
115-kV Line from Soldotna Substation to ▇▇▇▇▇▇▇ ▇▇▇▇ Substation.
69-kV Line from Soldotna Substation to Quartz Creek Substation.
69-kV Line from Soldotna Substation to ▇▇▇▇▇▇▇ ▇▇▇▇ Substation.
II. At the Unit:
Unit Generator Output at the 13.8 kV bus.
Unit Generator Gas Usage at the intake manifold.
Unit Station Service at the 480 Volt bus.
EXHIBIT C
NOTIFICATION PROCEDURES
Chugach will perform the respective notification procedures for each alarm
category set forth below:
A. Alarm Priority 1--Unit Trip
Chugach shall contact the Unit Power Plant Specialist (PPS)
immediately. All control systems will be reset to allow restart of the
Unit if conditions causing the trip are known by the Unit PPS and have
been rectified. If the alarm occurs outside Regular Working Hours,
Chugach shall contact the PPS in the manner and order of preference as
designated by AEG&T. If the PPS cannot be contacted, Chugach shall
contact the person designated as AEG&T's standby contact and advise him
of the situation. Chugach shall attempt to restart the Unit after the
control has been reset and clearance has been received from the
Unit PPS.
B. Alarm Priority 2--Trip Possible
Chugach shall contact the Unit PPS immediately. If the alarm occurs
outside Regular Working Hours,
Chugach shall contact the Unit PPS in the manner and order of
preference as designated by AEG&T. If the PPS cannot be contacted,
Chugach shall contact the person designated as the AEG&T standby
contact and advise him of the situation. After investigation, the Unit
PPS may impose operational restrictions on the unit until the situation
can be rectified.
C. Alarm Priority 3--Alarm-No Trip:
If the Unit is in operation, Chugach shall contact the Unit PPS
immediately. If the Unit is shut down, Chugach shall contact the Unit
PPS within 24 hours. If the alarm occurs outside Regular Working
Hours, Chugach shall contact the PPS in the manner and order of
preference as designated by AEG&T. If the PPS cannot be contacted,
Chugach shall contact the person designated as AEG&T's standby contact
and advise him of the situation. After investigation, the Unit PPS may
impose operational restrictions on the unit until the situation can be
rectified.
D. Alarm Priority 4--Start Inhibit
If the unit is in operation, Chugach shall contact the PPS immediately.
If the unit is shut down, Chugach shall contact the Unit PPS within 24
hours, or since these alarms are start inhibits, when first aware of a
need to start up the Unit, whichever comes first. If the alarm occurs
outside Regular Working Hours, Chugach shall contact the PPS in the
manner and order of preference as designated by
AEG&T. If the PPS cannot be contacted, Chugach shall contact the
person designated as AEG&T's standby contact and advise him of the
situation.
