LONG-TERM AGREEMENT
FOR THE PURCHASE AND SALE OF ELECTRICITY
BETWEEN
SIERRA PACIFIC POWER COMPANY
AND
FAR WEST CAPITAL, INC.
1
LONG-TERM AGREEMENT
FOR THE PURCHASE AND SALE OF ELECTRICITY
BETWEEN
SIERRA PACIFIC POWER COMPANY
AND
FAR WEST CAPITAL, INC.
Table Of Contents
Section Title Page
------- ----- ----
1 RECITALS .......................................... 4
2 DEFINITIONS ....................................... 5
3 EXHIBITS .......................................... 7
4 TERM AND TERMINATION .............................. 8
5 REMEDIES .......................................... 8
6 SALE OF CAPACITY AND ENERGY ....................... 8
7 DETERMINATION OF COMMERCIAL OPERATION DATE
AND CONTRACT RATING ............................. 9
8 RATE .............................................. 10
9 PROJECT SCHEDULE .................................. 12
10 METERING .......................................... 13
11 SELLER'S PURCHASE OF CAPACITY AND ENERGY .......... 13
12 PAYMENT ........................................... 14
13 MAINTENANCE ....................................... 14
14 CONTINUITY OF DELIVERIES .......................... 15
15 PROJECT DESIGN, CONSTRUCTION, AND
OPERATION ....................................... 16
16 INTERCONNECTION ................................... 17
17 CONDITIONS ........................................ 19
18 LIABILITY AND INDEMNIFICATION ..................... 19
19 INSURANCE ......................................... 20
20 PERMITS, LICENSES, AND AUTHORIZATIONS ............. 21
21 NOTICES ........................................... 22
2
Table Of Contents (cont.)
Section Title Page
------- ----- ----
22 FORCE MAJEURE ..................................... 22
23 SUCCESSORS IN INTEREST ............................ 24
24 ASSIGNMENT ........................................ 24
25 COLLATERAL ASSIGNMENTS ............................ 24
26 ENTIRE AGREEMENT .................................. 24
27 GOVERNING LAW ..................................... 25
28 PSCN APPROVAL ..................................... 25
29 NOTICE OF SALE OF PROJECT ......................... 26
30 DISPUTE RESOLUTION ................................ 26
31 MULTIPLE ORIGINALS ................................ 27
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LONG-TERM AGREEMENT
FOR THE PURCHASE AND SALE
OF ELECTRICITY
THIS AGREEMENT for the purchase and sale of electricity is entered into as
of the date of its execution by and between SIERRA PACIFIC POWER COMPANY, a
Nevada corporation ("Sierra"), and FAR WEST CAPITAL, INC. a Utah Corporation
("Seller"). Seller and Sierra are sometimes referred to individually as "Party"
and collectively as "Parties."
1. RECITALS. This Agreement is based upon the following facts:
a. Sierra is a public utility engaged in the purchase, production,
transmission, distribution, and sale of electric capacity and
energy; and
b. Seller proposes to construct and own a 2,000 KW geothermal
generating facility located at Steamboat Springs near Sierra's
Steamboat Substation in Washoe County in Sierra's Nevada service
territory, which facility is expected to be certified as a
Qualifying Facility ("QF") as that term is defined below; and
c. Seller desires to sell the electric capacity and energy produced at
Seller's generating facility to Sierra pursuant to the provisions of
a long-term contract; and
d. Sierra purchases the capacity and energy produced by Qualifying
Facilities pursuant to provisions of the Public Utility Regulatory
Policies Act of 1978 ("PURPA") and the rules and regulations
promulgated
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thereunder by the Federal Energy Regulatory Commission ("FERC"),
the California Public Utility Commission ("CPUC"), and the Public
Service Commission of Nevada ("PSCN").
In consideration of the premises, and the mutual covenants
contained herein, the Parties agree as follows:
2. DEFINITIONS. When used with initial capitalizations, whether in the
singular or in the plural, the following terms as used in this Agreement
shall have the following meanings:
a. "Adjusted Net Metered Output" shall mean Net Metered Output, as
adjusted for system transmission losses, if any, pursuant to Section
8a.
b. "Agreement" shall mean this Long-Term Agreement for the Purchase
and Sale of Electricity.
c. "Commercial Operation Date" shall mean 2400 hours on the date upon
which Seller's Project meets the criteria set forth in Section 7.
d. "Contract Year" shall mean each one (1) year period commencing on
either the Commercial Operation Date or each anniversary of such
date thereafter, and ending on the next anniversary of the
Commercial Operation Date.
e. "Contract Rating" shall mean that amount, expressed in kilowatts, as
determined in Section 7.
f. "Interconnection Equipment" shall mean the equipment and facilities
required to effect an electrical
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interface between Sierra's electrical system and Seller's Project
including, but not limited to, electric lines, protective equipment,
metering and communication equipment.
g. "Net Metered Output" shall mean all electric capacity and energy
produced by Seller's Project less Seller's Project Station Use and
transformation and transmission losses, if any, between the meter
and the Point of Delivery.
h. "Point of Delivery" shall mean the point where Seller's electrical
conductors contact Sierra's system as it shall exist whenever the
deliveries are being made.
i. "Prudent Electrical Practice(s)" shall mean those practices,
methods, and equipment, as changed from time to time, that are
commonly used in prudent electrical engineering and operations to
design and operate electric equipment.
j. "Qualifying Facility" shall mean a cogeneration or small power
production facility which meets the criteria as defined in Title 18,
Code of Federal Regulations, Section 292.201 through 292.207.
k. "Scheduled Maintenance Periods" shall mean those times during which
Seller's Project is shut down for routine scheduled maintenance.
l. "Seller's Project" or "Project" shall mean the generating facilities
owned and operated by the Seller as defined in Section 6.
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m. "Station Use" shall mean the capacity and energy used to operate the
Project's auxiliary equipment. Auxiliary equipment includes, but is
not limited to, forced and induced draft fans, well pumps, cooling
towers, boiler feed pumps, lubricating oil systems, plant lighting,
fuel handling systems, control systems, and sump pumps.
3. EXHIBITS. The following Exhibits A through N are attached hereto and
incorporated herein by reference. Exhibits C, G, H, I, J and K, upon
approval by the PSCN of any amendments or supplements to, or replacements
of such rules or schedules, shall be modified to reflect such amendments,
supplements, or replacements (Exhibits A, B, D, E, F, L, M and N may be
modified by mutual agreement of the Parties.).
Exhibit A Project Unit Listing
Exhibit B Contract Rating
Exhibit C Schedule CSPP
Exhibit D Payment Schedule
Exhibit E Sample Billing Calculations
Exhibit F Estimated Project Schedule
Exhibit G Rule No. 16, Service Connections, Meters, and
Customer's Facility
Exhibit H Rule No. 17, Meter Tests and Adjustments of Bills for
Error
Exhibit I Rate Schedule FSS, Firm Standby Service
Exhibit J Rule No. 2 Description of Service
Exhibit K Rule No. 15 Cogenerators and Small Power Producers
(QFs)
Exhibit L SPPCo. Engineering Standard 2.2GN02
Exhibit M Facility Wiring Diagram and Specifications
Exhibit N Final Interconnection Drawing
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4. TERM AND TERMINATION. This Agreement shall be effective from the date
of its execution by both Parties and shall continue thereafter for a term
of thirty (30) years after 2400 hours on the Commercial Operation Date
(the "Term").
This Agreement may be terminated at any time by written notice from Sierra
to Seller in the event either of the following conditions occur:
a. Seller fails to meet any one of the Project completion dates
specified in Section 9 in this Agreement.
b. Seller's Project does not deliver any capacity and energy to Sierra
during any continuous 180 day period after the Commercial Operation
Date of such Project and Seller is not exercising reasonable efforts
to resume operation of the Project.
A notice of termination under this section shall be delivered under the
provisions of Section 21.
5. REMEDIES. Upon either Party's failure to perform any condition of this
Agreement, the other Party, except to the extent specifically limited by
this Agreement, may exercise any rights or remedies it may have in law or
in equity including but not limited to compensation for monetary damages,
injunctive relief and specific performance; provided, however, that
neither Party shall be liable to the other Party for any indirect,
consequential, incidental, punitive or exemplary damages.
6. SALE OF CAPACITY AND ENERGY. Seller shall sell and Sierra shall purchase
all capacity and energy generated, available for sale, and delivered to
the Point of Delivery from Seller's Project. Seller's Project means a
geothermal plant
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located within Sierra's service territory near Steamboat, Nevada,
consisting of two (2) units with a total site specific nameplate rating of
2,000 kilowatts. Specific make, model, and generator nameplate rating for
the units are contained in Exhibit A, Project Unit Listing.
Seller's Project is expected to deliver 1800 kilowatts maximum to Sierra
during any hour, subject to seasonal variation. Seller expects to provide
14,000,000 kilowatt hours of energy to Sierra during each Contract Year.
7. DETERMINATION OF COMMERCIAL OPERATION DATE AND CONTRACT RATING.
a. Prior to declaring the Project commercially operable, Seller shall
demonstrate the Project capability by way of a shakedown period of
operation. The period of sustained operation shall be a minimum of
thirty (30) continuous days during which period the plant shall be
generating a minimum of 500 hours. The average generation net output
level during the 500 hours shall be at least 1200 kW. Seller's
demonstration shall include a showing of the operability of the
Project's auxiliary equipment as noted in Section 2.m.
b. Seller shall notify Sierra that the Project capability demonstration
is complete and certify that the project is commercially operable.
Sierra shall review recorded data to verify the certification.
c. Coincident with or subsequent to Sierra's review of the data, Seller
may begin the test period for determination of the Contract Rating.
Said test period shall consist of 100 hours of continuous operation,
designated by Seller, and delivery of capacity and
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energy by the Project to Sierra. As soon as possible after the
completion of the test period of 100 hours, Seller shall notify
Sierra that the test is complete, and specify the beginning and
ending hour of said 100 hour test period.
d. Sierra will determine, (1) the average Adjusted Net Metered Output
during the 100-hour period, and (2) the average of the 25 maximum
on-peak and mid-peak hours of Adjusted Net Metered Output during the
test period, regardless of whether said 25 hours are continuous. The
Contract Rating for purposes of this Agreement shall be the lesser
of (1) the 100 hour average divided by eight-tenths (0.80) or (2)
the average of the 25 maximum on-peak and mid-peak hours in that
time period.
e. In accordance with the provisions of Section 21, Sierra shall notify
Seller, as soon as reasonably practicable after Seller's Commercial
Operation Date, of the Contract Rating established under this
Section. Said notification shall be incorporated into this Agreement
as Exhibit B.
8. RATE.
a. Net Metered Output quantities shall be reduced to reflect the
additional system transmission losses, if any, that are determined
to be applicable to Seller's Project. The amount of the reduction
shall be deemed zero for purposes of this Agreement. All payments
under this Section shall be based upon such Adjusted Net Metered
Output quantities.
b. Sierra shall pay Seller for the Adjusted Net Metered
10
Output of Seller's Project produced between the effective date of
this Agreement and 2400 hours on the Commercial Operation Date
pursuant to Sierra's Schedule CSPP, attached hereto and incorporated
by reference as Exhibit C.
c. If the Commercial Operation Date of the Project is on or before 2400
hours on December 31, 1988, then
(1) Sierra will pay Seller, during the period commencing on the
Commercial Operation Date and continuing for the first ten
(10) years of the Term, for all Adjusted Net Metered Output
purchased from Seller's Project under the rates set forth in
Exhibit D.
(2) Sierra will pay Seller, during the period commencing on the
tenth (10th) anniversary of the Commercial Operation Date and
continuing for the balance of the Term, for all Adjusted Net
Metered Output purchased from Seller's Project under the rates
set forth in Exhibit C.
d. If the Commercial Operation Date is after December 31, 1988 but
before March 31, 1989 then;
(1) Sierra will pay Seller, during the period commencing on the
Commercial Operation Date and continuing for the first ten
(10) years of the Term, for all Adjusted Net Metered Output
purchased from Seller's Project at a rate calculated at 90% of
the rates set forth in Exhibit D.
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(2) Sierra will pay Seller, during the period commencing on the
tenth (10th) anniversary of the Commercial Operation Date
and continuing for the balance of the Term, for all Adjusted
Net Metered Output purchased from Seller's Project under the
rates set forth in Exhibit C.
9. PROJECT SCHEDULE. Seller's best estimate of its completion dates for
project activities related to establishing a Commercial Operation Date by
March 31, 1989 are set forth below. Seller shall complete the project
activities by 2400 hours on the date specified for each activity. If any
activity is not completed by the time specified, this Agreement shall
terminate effective 2400 hours on the specified completion date.
ACTIVITY COMPLETION DATE
a. Pouring of concrete foundations
for the turbine-generators. August 1, 1988
b. Placement of the two turbine
generators on their
foundation and the connection
of all required fuel piping
including geothermal and
hydrocarbon fluid piping. Nov. 14, 1988
c. Establish the Commercial
Operation Date-
this shall mean the completion
of the activities required in
Sections 7.a., 7.b., and 7.c. March 30, 1989
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10. METERING. Seller's Adjusted Net Metered Output shall be determined by
meters installed at or compensated to the Point of Delivery and adjusted
for appropriate system transmission losses pursuant to Section 8.a. The
metered quantities shall be the gross Project output less Station Use. All
meters will be sealed, operated, and tested in accordance with Sierra's
Electric Rules No. 16 and No. 17, attached hereto and incorporated by
reference as Exhibits G and H, respectively. Upon Approval by the PSCN of
any amendments or supplements to, or replacement of such Rules, Exhibits G
and H shall be changed to reflect those amendments, supplements or
replacements.
11. SELLER'S PURCHASE OF CAPACITY AND ENERGY.
a. Subject to Sierra's transmission capacity limitations Sierra agrees
to provide electric capacity and energy to meet Seller's Station Use
at times when Seller's Project generation output is less than the
Project Station Use. Such service shall be provided pursuant to the
applicable rate schedule attached hereto as Exhibit I, which is
applicable to the backup/standby service that is being provided to
Seller under this Agreement. Such sale shall be subject to the
provisions of Rule No. 2 "Description of Service" attached hereto as
Exhibit J.
b. Seller agrees to limit the starting inrush electric current of
its generators and motors so as not to cause more than a 4 percent
voltage dip on Sierra's distribution system to which Seller's
Project is interconnected.
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12. PAYMENT.
a. Capacity and energy sold to Sierra, pursuant to Section 6, shall
be determined by meters installed at or compensated to the Point of
Delivery. Such meters shall be read on a monthly billing period
basis by Sierra and resulting amounts shall be used by Sierra to
calculate the payment to Seller pursuant to Section 8. Within thirty
(30) days of receipt of such meter readings, Sierra shall deliver
payment for such capacity and energy to Seller at the address
provided in Section 21.
b. Electricity supplied to Seller pursuant to Section 11 shall be
paid for by Seller upon receipt of billing from Sierra, pursuant to
Exhibit I. Should Seller fail to pay statement(s) from Sierra in
full pursuant to Exhibit I, Sierra may offset future payments to
Seller under this Agreement by such amounts.
c. Any other payments required to be made to Sierra under this
Agreement shall be made by Seller within thirty (30) days of receipt
of an invoice from Sierra requesting said payment. Should Seller
fail to pay the amount of such invoice, Sierra may offset future
payments to Seller under this Agreement by such amounts.
13. MAINTENANCE.
a. Seller shall provide Sierra with a list of Scheduled Maintenance
Periods by July 1 of each calendar year, but not later than six (6)
months prior to beginning the proposed scheduled maintenance. Sierra
shall
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provide Seller with scheduled maintenance periods on equipment that
will impact the delivery of capacity and energy from Seller's
project as soon as reasonably practicable. The Parties shall
coordinate with each other whenever possible to preform scheduled
maintenance in order to minimize the impact on the Parties' systems.
b. In the event the Project must be shut down for unscheduled
maintenance, Seller shall notify Sierra as soon as practicable of
the necessity of such shutdown, the time when such shutdown has
occurred, or will occur, and the anticipated duration of the
shutdown. Seller shall take all reasonable measures and exercise
reasonable efforts to avoid unscheduled maintenance and to limit the
duration of the shutdown.
c. An operating procedures document prepared by Sierra which details
the operation procedures to be followed by the Project operators and
Sierra's dispatchers shall be executed prior to delivery of capacity
and energy from the Project.
14. CONTINUITY OF DELIVERIES. Subject to Prudent Electrical Practices, Sierra
may require Seller to curtail, interrupt, or reduce deliveries of Net
Metered Output, in order for Sierra to construct, install, maintain,
repair, replace, remove, investigate, or inspect any of Sierra's equipment
or any part of its system, or if Sierra determines that curtailment,
interruption, or reduction is necessary because of emergencies, operating
conditions, other than economic dispatch, on its system. Seller shall
reduce its generation at Sierra's request on any hour that Sierra would
otherwise be required to operate Sierra's plants below a minimum
operational level. In such circumstances, Sierra shall not
15
be obligated to accept deliveries of, or pay Seller for, Adjusted Net
Metered Output that otherwise would have been delivered during such period
of curtailment, interruption, or reduction. Sierra shall use reasonable
efforts to resume acceptance as soon as is reasonably practicable.
15. PROJECT DESIGN, CONSTRUCTION, AND OPERATION.
a. Seller shall, at Seller's expense, design, construct, install,
operate, and maintain Seller's Project. Specific special Project
requirements as noted in the interconnection study conducted by
Sierra dated July 7, 1987 shall be incorporated into the design of
the Project. Seller shall provide Sierra with those specifications,
drawings, and electrical data concerning the Project necessary to
allow Sierra to make stability and protection studies. All
specifications and changes in specifications, including new or
additional equipment, shall be subject to Sierra's review and
acceptance. Such review and acceptance shall be completed promptly
but in no event longer than sixty (60) days after receipt by Sierra
and shall be for the sole purpose of insuring that Seller's Project
is compatible with Sierra's system. Such acceptance shall not be
unreasonably withheld. Sierra's acceptance of Seller's
specifications, drawings, and electrical data shall not be construed
as confirming nor endorsing the design, nor as a warranty of safety,
durability, or reliability of the Project. Sierra shall not, by
reason of any review, acceptance, or failure to review, be
responsible for the Project, including but not limited to the
strength, details of design, adequacy or capacity thereof, nor shall
Sierra's acceptance be deemed to be an endorsement of the Project.
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b. The design and construction of the Project shall be Seller's
responsibility, and Seller shall ensure that the requirements of all
applicable federal, state, and local laws, and all regulations
promulgated by such laws are met. Prior to commencement of
generation, and upon completion of any major changes, Seller at
Seller's expense, shall arrange for the Project to be inspected and
approved by appropriate federal, state, and local officials to the
extent required by applicable law.
c. Once Seller's and Sierra's electrical facilities are connected,
both Parties will operate their respective facilities in accordance
with Rule No. 15 (Exhibit K) Sierra's Specification 2.2 GN 02
(Exhibit L), and revisions and replacements thereto; the Facility
Wiring Diagram and Specifications (Exhibit M) and the Final
Interconnect Drawing agreed upon by the Parties to this Agreement
(Exhibit N). The Parties acknowledge that with operating experience
adjustment of the operating requirements may be necessary.
d. Sierra's obligation to interconnect Seller's Project is
contingent upon the approval of plans and specifications described
in Section 16 below.
16. INTERCONNECTION.
a. Seller shall install all Seller's Interconnection Equipment.
Seller's Interconnection Equipment shall be of utility grade and of
a rating sufficient to accommodate the delivery of the generation
under this Agreement. Seller shall allow Sierra to review the
adequacy of all protective devices and to establish requirements for
settings and periodic testing, provided, however, that neither such
action or inaction
17
by Sierra shall be construed as warranting the safety or adequacy of
Seller's Interconnection Equipment. Seller shall not make any
modification to Seller's Interconnection Equipment which
substantially affects the delivery of electricity without advance
written notification to Sierra and ultimate acceptance of each
change by Sierra. Such review shall be done promptly but in any
event no longer than sixty (60) days from Sierra's receipt of all
information necessary for such review. Such acceptance shall not be
unreasonably withheld. All such equipment installed hereunder shall
conform with the National Electrical Code. Seller shall reimburse
Sierra for Sierra's costs associated with initial and periodic
testing of Seller's Interconnection Equipment.
b. Connection of Seller's Interconnection Equipment to Sierra's
system shall be by or under the direction of Sierra at Seller's
expense. Sierra shall schedule and complete the final
interconnection and testing of the interconnection facilities
pursuant to a Special Facilities Agreement.
c. In the event that it is necessary for Sierra to install any
facilities and equipment on Sierra's system or to reinforce Sierra's
system to accommodate Seller's deliveries, Seller shall reimburse
Sierra for all of Sierra's costs associated therewith, in accordance
with the provisions of a Special Facilities Agreement. Not less
often than annually, Seller shall also reimburse Sierra pursuant to
Section 12 above, for all of Sierra's operation and maintenance
costs resulting from Sierra's installation of facilities and
equipment under a Special Facilities Agreement. In addition, Seller
shall pay for the cost of the replacement of any such
18
facilities during the term of this Agreement. Sierra shall use
reasonable efforts to minimize such costs.
17. CONDITIONS. The obligation of Sierra to accept delivery of or purchase
capacity and energy under this Agreement is conditioned upon receipt of
copies of the following documents by Sierra prior to the initial delivery
of Adjusted Net Metered Output.
a. Evidence of the certification of Seller's Project as a cogeneration
or small power production facility by the FERC pursuant to PURPA and
the regulations promulgated pursuant to said Act; and
b. Evidence of application for and receipt by Seller of any permits
or other approvals required by Chapter 704 of the Nevada Revised
Statutes; and
c. A statement by independent qualified professionals sufficient to
establish that Seller's Project has geothermal resource supply and
generation equipment capable of producing energy and capacity at its
Contract Rating for the full Term of this Agreement; and
d. Plans and specifications for Seller's Project and Interconnection
Equipment which are acceptable to Sierra, as set forth in Sections
15 and 16 above; and
f. Evidence that Seller has made all filings necessary to qualify to
do business in the State of Nevada.
18. LIABILITY AND INDEMNIFICATION. Each Party shall indemnify and hold
harmless the other Party against and from any and all loss and liability
for personal injury or property damage, resulting from or arising out of
(1) the engineering, design, construction, maintenance, or operation
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of or (2) the asking of replacements, additions, or betterments to, the
indemnitor's facilities. Neither party shall be indemnified for liability
or loss to the extent such liability or loss results from, or is
contributed to by, that Party's negligence or willful misconduct. The
indemnitor shall, on the other Party's request, defend any suit asserting
a claim covered by this indemnity, and shall pay all costs, including
reasonable attorney fees, that may be incurred by the other Party in
enforcing this indemnity.
19. INSURANCE.
a. Seller shall maintain worker's compensation or self-insurance
which satisfies the applicable requirements of Nevada law. Within
thirty (30) days after execution of this Agreement, Seller shall
provide Sierra with a certificate evidencing such insurance.
b. Prior to connection of the Project to Sierra's system, Seller
shall secure and continuously carry for the Term hereof, with an
insurance company or companies acceptable to Sierra, insurance
policies for bodily injury and property damage liability. Such
acceptance shall not be unreasonably withheld. Such insurance shall
include: provisions or endorsements naming Sierra as additional
insured as its interest may appear; provisions that such insurance
is primary insurance with respect to the interest of Sierra and that
any insurance maintained by Sierra is excess and not contributory
insurance with the insurance required hereunder; cross-liability or
severability of insurance interest clause; and provisions that such
policies shall not be cancelled or their limits of liability reduced
without thirty (30) days prior written notice to Sierra. Initial
limits of liability for all
20
requirements under this Section shall be not less than $l,000,000
for each occurrence.
c. Seller shall provide Sierra with a copy of each insurance policy
required under this Section, certified as a true copy by an
authorized representative of the issuing insurance company or, at
the discretion of Sierra, in lieu thereof, a certificate in a form
satisfactory to Sierra certifying to the issuance of such insurance.
Seller shall submit such documents at the address listed in Section
21 prior to connection of the Project to Sierra's system and at all
other times such as insurance policies are renewed or changed.
d. If Seller has not obtained such insurance or maintained the
status of such insurance, Seller shall not deliver capacity and
energy to Sierra, and Sierra shall have no obligation to accept any
tenders of delivery until appropriate insurance is obtained or
reinstated. Sierra's obligation to purchase shall be reinstated only
upon receipt of certificates of insurance showing that such
insurance has, in fact, been obtained or reinstated.
20. PERMITS, LICENSES, AND AUTHORIZATIONS. It shall be Seller's responsibility
to obtain any and all state, federal, and local permits, licenses, or
other documents necessary to the construction and operation of Seller's
Project and the sale of energy and capacity therefrom to Sierra. If Seller
has not obtained such documents or maintained the status and approvals
they represent, Seller shall not deliver capacity and energy to Sierra and
Sierra shall have no obligation to accept any tenders of delivery until
the appropriate documents are obtained or reinstated. Sierra's obligation
to purchase shall be reinstated only upon receipt of proof
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that such documents have, in fact, been obtained or reinstated.
21. NOTICES. Whenever in this Agreement it shall be required, permitted, or
desired that notice or demand be given by either Party to or on the other,
such notice or demand shall be in writing and may be either personally
served or sent by Untied States mail and shall be deemed to have been
given when personally served or when deposited in the United States mail,
certified or registered, with postage prepaid and properly addressed. For
the purposes hereof, the addresses of the Parties hereto, until notice of
a change thereof is given as provided in this paragraph, shall be as
follows:
Sierra: Sierra Pacific Power Company
Attention: Manager, Power and Fuel Contracts
0000 Xxxx Xxxx, Xxxx, XX 00000
X.X. Xxx 00000
Xxxx, XX 00000
Phone: (000) 000-0000
Telecopy: (000) 000-0000
Seller: Far West Capital, Inc.
Attn: Xxxxxx X. Xxxxx
0000 Xxxx Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Phone: (000) 000-0000
Telecopy: (000) 000-0000
22. FORCE MAJEURE.
a. The term Force Majeure as used herein means unforeseeable causes
beyond the reasonable control of and without the fault or negligence
of the Party claiming Force Majeure including, but not limited to,
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acts of God; labor disputes; sudden actions of the elements; actions
by federal, state, and municipal agencies; and actions of
legislative, judicial, or regulatory bodies which prohibit or
seriously impede performance under or compliance with the terms of
this Agreement. Unless caused by an independent identifiable event
of Force Majeure, the non-availability of geothermal resource supply
to generate capacity and energy from the Project shall not be
considered an event of Force Majeure.
b. If either Party, because of Force Majeure, is rendered wholly or
partly unable to perform its obligations under this Agreement, that
Party shall be excused from whatever performance is affected by the
Force Majeure to the extent so affected, provided that:
(1) The Party claiming Force Majeure promptly gives the other
Party oral notice, followed by written confirmation
describing the particulars of the occurrence.
(2) The suspension of performance is of no greater scope and of
no longer duration than is required by the Force Majeure.
(3) The nonperforming Party uses its best efforts to remedy its
inability to perform. This subsection shall not require
settlement of any strike, walkout, lockout, or other labor
dispute on terms which in the sole judgment of the Party
involved in the dispute, are contrary to its interest. It is
understood and agreed that settlement of strikes, walkouts,
lockouts, or other disputes shall be at the sole discretion
of the Party having the difficulty.
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(4) When the nonperforming Party is able to resume performance
of its obligation under this Agreement, that Party shall
give the other Party written notice to that effect.
23. SUCCESSORS IN INTEREST. This Agreement shall be binding on both Parties,
and on their heirs, successors in interest, and permitted assigns except
as provided in Section 25 below.
24. ASSIGNMENT. Subject to Section 25 below, neither Party shall voluntarily
assign this Agreement without the prior written consent of the other
Party. Such consent shall not be unreasonably withheld. Any assignment
made without such consent shall be void.
25. COLLATERAL ASSIGNMENTS. Either Party shall have the right, without the
other Party's consent, but with a thirty (30) day prior written notice to
the other Party, to make a collateral assignment of its rights under this
Agreement to satisfy the requirements of any development, construction, or
other long-term financing.
A collateral assignment as described above shall not constitute a
delegation of Seller's obligations under this Agreement, and this
Agreement shall not bind the collateral assignee. Any collateral assignee
succeeding to any portion of the ownership interest of Seller in the
Project shall be considered seller's successor in interest and shall
thereafter be bound by this Agreement.
26. ENTIRE AGREEMENT. This document constitutes the entire agreement of the
Parties and supersedes all previous agreements whether written or oral.
This Agreement may be amended only by an instrument in writing signed by
both Parties hereto.
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27. GOVERNING LAW. This Agreement shall be interpreted, governed by and
construed according to the laws of the State of Nevada, as if executed and
to be performed wholly within the State of Nevada, and any litigation by
the Parties as to this Agreement shall be in a court of competent
jurisdiction within the State of Nevada.
28. PSCN APPROVAL. The obligation of Sierra to purchase capacity and energy
from Seller pursuant to this Agreement is hereby made expressly
conditional on the approval of this Agreement by the PSCN. The Parties
shall take all reasonable actions necessary to secure approval by the PSCN
of this Agreement in its entirety and without change. PSCN approval shall
be sought as soon as reasonably practicable subsequent to the date of
execution of this Agreement. Failure of the PSCN to approve this Agreement
shall terminate this Agreement effective as of the date of such PSCN
action. PSCN approval shall not be considered to have occurred unless the
PSCN issues an order within ninety (90) days of the filing of this
Agreement for approval, which order:
a. Approves this Agreement in its totality and without change; and
b. Makes a specific finding and order that (1) in the event the 85 MW
cap established in the PSCN Opinion and Order in Docket 87-126, as
modified, is not filled, the Project's Contract Rating shall be
included in the 85 MW cap or (2) in the event the 85 MW cap is
filled, the Project's Contract Rating shall be included as a Sierra
capacity resource eligible to meet Sierra's load requirements; and
25
c. Makes a specific finding and order that Sierra acted in a reasonable
and prudent manner in executing this Agreement.
29. NOTICE OF SALE OF PROJECT. Seller is aware that Sierra may be interested
in purchasing the Project at some future data. In the event Seller is
considering a sale of the Project, it will use reasonable effort to notify
Sierra of the Project's availability for sale. In no event shell this be
construed to be a first right of refusal.
30. DISPUTE RESOLUTION. In the event that a dispute should arise between
Sierra end Seller concerning the terms and enforcement of this Agreement,
the Parties agree to resolve their dispute by means of binding arbitration
conducted in Reno, Nevada, under the rules and procedures of the American
Arbitration Association. The Parties shall first endeavor to select a
single arbitrator who, by reason of his/her education and experience, is
mutually acceptable to both Parties. If the Parties are unable to agree
upon a single arbitrator, they shall each choose one (1) arbitrator, and
the two arbitrators thus selected shall choose a third arbitrator to form
a three-member panel to hear and resolve the dispute. In preparing their
cases for presentation to the arbitrator(s), the Parties shall have the
same rights of discovery afforded to litigants under the Nevada Rules of
Civil Procedure and the local rules of the Second Judicial District Court
for Washoe County, Nevada.
26
31. MULTIPLE ORGINALS. Two (2) copies of this Agreement have been executed by
the Parties. Each executed copy shall be deemed an original.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement this
29TH day of OCTOBER, 1988.
[STAMP] Sierra: SIERRA PACIFIC POWER COMPANY
By /s/ Xxxxxx Xxxxxxx
--------------------------
Titles: Vice President,
Electrical Operations
---------------------
Seller:
FAR WEST CAPITAL, INC.
By /s/ Xxxx X. Xxxxxxxx
-------------------------
Title: Pres.
---------------------
Date: 10-27-88
27
SCHEDULE NO. CSPP
SHORT-TERM RATES
COGENERATION AND SHALL POWER PRODUCTION
APPLICABILITY
This schedule is applicable only to purchases from Qualifying Facilities
as defined in Utility's Nevada Electric Xxxxxx Xx. 0 Rule No. 15 under a
Short-Term Purchase Agreement with Utility and where no other schedules are
specifically applicable.
RATES
Utility will pay the sum of the following rates for the energy and
capacity provided as determined by meter readings:
(1) ENERGY RATE
a. Time-differentiated: 1988 1988
3rd Quarter 4th Quarter
Jul. 1 - Sep. 30 Oct. 1 - Dec. 31
---------------- ----------------
Winter
All On-Peak kWh, per kWh Not Applicable $.02617
Plus all Mid-Peak kWh, per kWh Not Applicable $.02286
Plus all Off-Peak kWh, per kWh Not Applicable $.01835
Summer
All On-Peak kWh, per kWh $.02368 Not Applicable
Plus all Off-Peak kWh, per kWh $.01954 Not Applicable
b. Non-time differentiated: (See Special Condition 3)
All kWh, per kWh $.02161 $.O2186
(Continued)
Issued: 7/1/88
Issued By:
Effective: 7/1/88 Xxxxxx X.Xxxxxxx
President
Advice No.: 271-E
SCHEDULE NO. CSPP
SHORT-TERM RATES
COGENERATION AND SHALL POWER PRODUCTION
(Continued)
(1) CAPACITY RATE
a. Time-differentiated:
1988 1988
3rd Quarter 4th Quarter
Jul. 1 - Sep. 30 Oct. 1 - Dec. 31
---------------- ----------------
Winter
All On-Peak kWh, per kWh Not Applicable $.01515
Plus all Mid-Peek kWh, per kWh Not Applicable $.00256
Plus all Off-Peak kWh, per kWh Not Applicable $.00013
Summer
All On-Peak kWh, per kWh $.02593 Not Applicable
Plus All Off-Peak kWh, per kWh $.00220 Not Applicable
b. Non-time differentiated: (See Special Condition 3)
All kWh, per kWh $0.00752 $.00757
SPECIAL CONDITIONS
1. The payment period for Utility purchases hereunder shall be the time
interval between two consecutive meter readings that are taken for billing
purposes.
2. The Utility and the Qualifying Facility shall have executed a Short-Term
Purchase Agreement for the purchase and sale of capacity and energy.
3. Qualifying Facilities having rated (nameplate) capacities of 100 kW or
less shall have the option to choose either flat or time-differentiated rates.
Qualifying Facilities having rated (nameplate) capacities in excess of 100 kW
will receive payments based on the time-differentiated rates only.
(Continued)
Issued: 7/1/88
Issued By:
Effective: 7/1/88 Xxxxxx X.Xxxxxxx
President
Advice No.: 271-E
EXHIBIT D
PAYMENT SCHEDULE
FAR WEST CAPITAL, INC.
1. This payment schedule is applicable only to purchases of capacity and
energy from the Far West Steamboat Expansion Project described in this
Agreement, for the first ten (10) years of the Term.
2. If the Seller's Project establishes a Commercial Operation Date which
meets the criteria specified in Section 8 of this Agreement and thereby
qualifies for payments pursuant to this Exhibit, Sierra will pay the sum
of the following rates for the energy and capacity delivered as determined
by the Adjusted Net Metered Output:
(a) Period Time Differentiated Rates $ per kilowatt-hour
Winter Energy Rate Capacity Rate
----------- -------------
All on-peak kWH per kWH $O.02634 $0.05508
All mid-peak kWH per kWH $0.02554 $0.00932
All off-peak kWH per kWH $0.02308 $0.00049
Summer
All on-peak kWH per kWH $0.02579 $0.09457
All off-peak kWH per kWH $0.02350 $0.00804
3. The payment period for Sierra purchases hereunder shall be the time
interval between two consecutive meter readings that are taken for billing
purposes.
4. "Peak Period" means the total On-Peak and Mid-Peak hours, approved by
the PSCN which may be revised from time to time and will be automatically
replaced upon PSCN approval, reduced by the number of Peak Period hours,
associated with the Project's Sierra's requirement to curtailment of
continuity of delivery of Net Metered Output pursuant to Section 14.
The Peak Period will be further reduced by the cumulative monthly total of
Peak Period hours associated with Sierra's requirement to curtail Adjusted
Net Metered output pursuant to Section 14 to the extent such monthly
curtailment exceeds 4 hours. Only the hours of curtailment that exceed 4
hours shall be deducted on a cumulative or monthly basis. It shall be
Seller's responsibility to maintain a log of the monthly and cumulative
total of curtailment hours and notify Sierra monthly of such amounts.
5. Daily time periods will be based on Pacific time and are defined as
follows:
Winter Period On-Peak 5:01 p.m. to l0:00 p.m. daily
Mid-Peak 7:00 a.m. to 5:00 p.m. daily
Off-Peak All other hours
Summer Period On-Peak 10:01 a.m. to 10:00 p.m. daily
Off-Peak All other hours
The winter period will consist of eight months from October through May.
The summer period will consist of four months from June through September.
This table is excerpted from Electric Tariffs No. 2, PSCN Sheet No. 7 and
is subject to change in accord with the on-peak, mid-peak, and off-peak
periods as defined in SPPC's own rate schedules for the sale of
electricity, as revised from time to time.
6. The rates contained herein shall be adjusted on June 1 of each year based
on the change in the applicable index during the prior calendar year. The
adjustment shall be calculated as follows:
R(n) = (I(n-1)/I(n-2)) R(n-1)
R = the indexed rate
I = the absolute level of the appropriate year end
index
n = the calendar year in which the adjustment takes
place
The energy rates will be adjusted using the Producer Price Index for the
Coal Subcategory of the Fuels and Related Products. The capacity rates
will be adjusted using the Xxxxx-Xxxxxxx price index, total steam
production plant category. Such rates shall become effective on March 1 of
each year.
