Exhibit 10.3.47
leg. 2, 3 ____________
THIRD AMENDMENT
TO THE
PURCHASE POWER CONTRACT DATED MARCH 24, 1986
AS AMENDED BY
THE FIRM CAPACITY AMENDMENT DATED JULY 28, 1989
THIS THIRD AMENDMENT ("Third Amendment" or "Agreement") is made this
7th day of March 1995, by and between HAWAII ELECTRIC LIGHT COMPANY, INC. (the
"Company" or "HELCO"), and PUNA GEOTHERMAL VENTURE (the "Seller" or "PGV").
WHEREAS, the Company has entered into a Purchase Power Contract for
Unscheduled Energy Made Available From a Qualifying Facility (the "Unscheduled
Energy Contract"), dated March 24, 1986, with Thermal Power Company ("Thermal
Power");
WHEREAS, the Hawaii Public Utilities Commission (the "PUC" or
"Commission") authorized the Company to include the purchased power costs of the
Unscheduled Energy Contract in its fuel clause by its Decision and Order No.
8692 dated March 25, 1986, in Docket No. 5525;
WHEREAS, Thermal Power assigned the Unscheduled Energy Contract to
AMOR VIII with the Company's written consent on July 19, 1988;
WHEREAS, AMOR VIII assigned the Unscheduled Energy Contract to Puna
Geothermal Ventures with the Company's written consent;
WHEREAS, HELCO and PGV have entered into that certain Firm Capacity
Amendment to Purchase Power Contract, dated July 28, 1989 ("Firm Capacity
Amendment"), which amended the Unscheduled Energy Contract;
WHEREAS, by Amendment to Purchase Power Contract, As Amended ("Second
Amendment") HELCO and PGV amended the Unscheduled Energy Contract and Firm
Capacity Amendment (the Unscheduled Energy Contract as amended by the Firm
Capacity Amendment and the Second Amendment, and as may be amended from time to
time, is referred to as the "Amended PPC").
WHEREAS, a number of issues arose between the Company and Seller which
they settled in a Settlement Agreement dated March 7, 1995 ("Settlement
Agreement");
WHEREAS, as part of the Settlement Agreement, the Company and Seller
agreed to amend the Amended PPC as reflected in the terms and conditions herein
and in "APPENDIX D, POWER PURCHASES BY COMPANY (Interim Period)" for the period
(the "Interim Period") starting with the Effective Date (as defined herein)
until the satisfaction by PGV of all of PGV's obligations under the Settlement
Agreement;
WHEREAS, subsequent to the Interim Period, HELCO and PGV desire to
revise the Amended PPC to reflect the parties' understanding of the Amended PPC
prior to the Interim Period as reflected in the terms and conditions herein and
in "APPENDIX D, POWER PURCHASES BY COMPANY (Subsequent to Interim Period)";
WHEREAS, the Seller's facility will continue to be throughout the term
of this contract either (1) a qualifying, small power production facility under
Subchapter 2 of the PUC's Standards for Small Power Production and Cogeneration
in the State of Hawaii, Chapter 74 of Title 6 of the State's Administrative
Rules, or (2) a "non-fossil fuel producer" within the meaning of Section
269-27.2, Hawaii Revised Statutes;
WHEREAS, the Seller is not, and will continue not to be throughout the
term of the Amended PPC, as amended, an "Affiliated Interest" within the meaning
of Section 269-19.5, Hawaii Revised Statutes;
NOW, THEREFORE, in consideration of the premises and the respective
promises herein, the Company and the Seller hereby agree to amend the Amended
PPC as follows:
1. Interim Period Appendix D. Upon the Effective Date (as defined
herein), "APPENDIX D, POWER PURCHASE BY COMPANY", of the Amended PPC is deleted
in its entirety and replaced with "APPENDIX D, POWER PURCHASE BY COMPANY
(Interim Period)", which is attached hereto as Attachment A and incorporated
herein by reference.
2. Subsequent Period Appendix D. Upon the satisfaction by PGV of all
of PGV's monetary and energy obligations under the Settlement Agreement,
"APPENDIX D, POWER PURCHASE BY COMPANY (Interim Period)", shall be deleted in
its entirety and replaced with "APPENDIX D, POWER PURCHASE BY COMPANY
(Subsequent to Interim Period)", which is attached hereto as Attachment B and
incorporated herein by reference.
3. Affiliated Interest. The Seller shall not sell or transfer more
than a 10% equity interest to any person or entity, or enter into any other
transaction that would make the Seller an Affiliated Interest with the Company
as defined by Section 269-19.5, Hawaii Revised Statutes, without first notifying
the Company and receiving appropriate PUC approval, if any is required. If the
PUC (or any other entity which has the authority to do so) finds that the Seller
is an Affiliated Interest with the Company, the Seller shall have 60 days to
take whatever action may be appropriate to render the relationship not to be an
Affiliated Interest. The Company shall have the right to terminate the Amended
PPC, including this Third Amendment and any future amendments, if the PUC
2
prohibits the Company from recovering any payments made to the Seller under this
Amended PPC, as amended herein and from time to time, due to the effect of
Section 269-19.5, Hawaii Revised Statutes, relating to affiliated interests.
4. Continuing Effect. To the extent not amended by this Third
Amendment, the Amended PPC shall remain in full force and effect.
5. Further Performance. Each Party hereto shall and does hereby agree
to make, execute, deliver and cooperate with each other, as the case may be, any
and all agreements, instruments, documents, records and/or funds, as the case
may be, whatsoever required, necessary and/or convenient to effect and
consummate this Agreement and to permit performance of all acts required
hereunder.
6. Counterparts/Facsimile Signatures. This Agreement may be executed
and delivered by the parties hereto in any number of counterparts, each of which
shall be delivered an original or duplicate original, and all of which together
shall constitute one and the same instrument or agreement. Counterparts may be
exchanged by facsimile, which facsimile signatures shall be effective for all
purposes and treated in the same manner as physical signatures. Notwithstanding
the foregoing, the party using facsimile signatures agrees that it will promptly
forward physically signed copies of this Agreement to the other party.
7. Effective Date. This Third Amendment becomes effective on the
earlier of sixty (60) calendar days from the date first above written or when
the PUC authorizes, by appropriate decision and order satisfactory to the Seller
and the Company, the Company's energy payments to the Seller hereunder to be
included in the Company's Fuel Clause pursuant to Rule 6-60-6, Standards For
Electric and Gas Utility Service, Title 6, Chapter 60, of the Hawaii
Administrative Rules, or in the Company's base rates pursuant to Section
269-16(b), Hawaii Revised Statutes, whichever occurs first ("Effective Date").
8. Denial Of Application. Notwithstanding anything in this Agreement
to the contrary, in the event that the Commission denies the Company's
application to include energy payments to Seller in either the Company's Fuel
Clause pursuant to Rule 6-60-6, Standards For Electric and Gas Utility Service,
Title 6, Chapter 60, of the Hawaii Administrative Rules, or in the Company's
base rates pursuant to Section 269-16(b), Hawaii Revised Statutes, within sixty
(60) calendar days from the date first above written, then this Third Amendment
shall be null and void and of no further force and effect.
3
IN WITNESS WHEREOF, the Company and the Seller have executed this
Third Amendment as of the day and year first above written.
HAWAII ELECTRIC LIGHT COMPANY, INC.
By: /s/ Xxxxxx X.X.Xxx
-------------------------------
Name: Xxxxxx X.X.Xxx
Title: President
By: /s/ Xxxxxx X. Hivata
-------------------------------
Name: Xxxxxx X. Hivata
Title: Vice President
PUNA GEOTHERMAL VENTURE
BY AMOR VIII CORPORATION,
a Delaware corporation,
Its General Partner
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By CE PUNA L.P.,
a Maryland limited partnership,
Its General Partner
By CE PUNA I, INC.,
a Maryland corporation,
Its General Partner
By:
----------------------
Name:
--------------------
Title:
-------------------
4
IN WITNESS WHEREOF, the Company and the Seller have executed this
Third Amendment as of the day and year first above written.
HAWAII ELECTRIC LIGHT COMPANY, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
PUNA GEOTHERHAL VENTURE
BY AMOR VIII CORPORATION,
[GRAPHIC] a Delaware corporation,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------
Name: XXXXXX X. XXXXXXXXXX
Title: PRESIDENT
BY CE PUNA L.P.,
a Maryland limited partnership,
Its General Partner
By CE PUNA I, INC.,
a Maryland corporation,
Its General Partner
By:
-------------------------
Name:
-----------------------
Title:
----------------------
4
IN WITNESS WHEREOF, the Company and the Seller have executed this
Third Amendment as of the day and year first above written.
HAWAII ELECTRIC LIGHT COMPANY, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
PUNA GEOTHERMAL VENTURE
BY AMOR VIII CORPORATION,
a Delaware corporation,
Its General Partner
By:
----------------------------
Name:
---------------------------
Title:
-------------------------
BY CE PUNA L.P.,
a Maryland limited partnership,
Its General Partner
By CE PUNA I, INC.,
a Maryland corporation,
Its General Partner
By: /s/ Xxxxxxxx X. Xxxxxxx
-------------------------
Name: XXXXXXXX X. XXXXXXX
Title: VICE PRESIDENT
[GRAPHIC]
4
STATE OF HAWAII )
) ss.
CITY AND COUNTY OF HONOLULU )
On this 7th day of March, 1995, before me personally appeared Xxxxxx X.X.
Xxx and Xxxxxx X. Xxxxxx to me personally known, who, being by me duly sworn,
did say that they are the President and Vice President, respectively, of HAWAII
ELECTRIC LIGHT COMPANY, INC., a Hawaii corporation, and that foregoing
instrument was signed on behalf of HAWAII ELECTRIC LIGHT COMPANY, INC. by
authority of its Board of Directors, and said officers acknowledged said
instrument to be the free act and deed of HAWAII ELECTRIC LIGHT COMPANY, INC.
/s/ Illegible
------------------------------
Notary Public State of Hawaii
My Commission expires: 0-0-00
XXXXX XX XXXXXX )
) ss.
COUNTY OF CLACKAMAS )
On this 3rd day of March, 1995, before me personally appeared XXXXXX X.
XXXXXXXXXX to me personally known, who, being by me duly sworn, did say that
he/she is the PRESIDENT of AMOR VIII CORPORATION, a Delaware corporation; that
said corporation is a general partner of Puna Geothermal Venture, a Hawaii
general partnership, named in the foregoing instrument; that said instrument was
executed by said corporation as the duly authorized general partner of and on
behalf of Puna Geothermal Venture, and acknowledged that the seal affixed to the
foregoing instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed on behalf of said corporation by authority of
its Board of Directors and in the name of and on behalf of Puna Geothermal
Venture, and said officer and acknowledged said instrument to be the free act
and deed of AMOR VIII Corporation as general partner of PUNA GEOTHERMAL VENTURE.
-------------------------------------
OFFICIAL SEAL
XXXXXX XXXXXX
[GRAPHIC] NOTARY PUBLIC-OREGON
COMMISSION NO. 016265
MY COMMISSION EXPIRES JUNE 22, 1996
-------------------------------------
/s/ Illegible
------------------------------
Notary Public State of OREGON
My Commission expires: June, 22, 0000
XXXXX XX Xxxxxxxx )
) ss.
COUNTY OF Harford )
On this 3rd day of March, 1995, before me appeared Xxxxxxxx X. Xxxxxxx, to
me personally known, who, being by me duly sworn, did say that he/she is the
Vice President of CE PUNA I, INC., a Maryland corporation; that said corporation
is a general partner of CE Puna Limited Partnership, a Maryland limited
partnership; that said CE Puna Limited Partnership is a general partner of Puna
Geothermal Venture, a Hawaii general partnership named in the foregoing
instrument; that said instrument was executed by said corporation as the duly
authorized general partner of and on behalf of CE Puna Limited Partnership, as
the duly authorized general partner of and on behalf of Puna Geothermal Venture,
and acknowledged that the seal affixed to the foregoing instrument is the
corporate seal of said corporation, and that said instrument was signed and
sealed on behalf of said corporation by authority of its Board of Directors and
in the name of and on behalf of CE Puna Limited Partnership and in the name of
and on behalf of Puna Geothermal Venture, and said officer acknowledged said
instrument to be the free act and deed of said corporation and as said general
partner of CE Puna Limited Partnership as the general partner of Puna Geothermal
Venture.
/s/ Illegible
----------------------------------- [GRAPHIC]
Notary Public State of Maryland
My Commission expires: May 1, 1996
ATTACHMENT A
TO THE
THIRD AMENDMENT
APPENDIX D
POWER PURCHASES BY COMPANY
(Interim Period)
A. ENERGY PURCHASES BY THE COMPANY
1. Subject to the other provisions of this Contract, including but not
limited to Sections 6 and 7, the Company shall accept and pay for
Energy generated by the Seller's Facility and delivered under a
Legally Enforceable Obligation, all on-peak energy above the Legally
Enforceable Obligation, and all on-peak Emergency Energy (as defined
in APPENDIX F), by the Seller to the Company at the higher of: (a) the
respective on-peak and off-peak energy rates set forth in Section A.3.
of this APPENDIX D, or (b) the Minimum Purchase Rate set forth in
Section A.4. of this APPENDIX D. All deliveries of off-peak Energy
(including off-peak Emergency Energy (as defined in APPENDIX F) under
which the Seller has no Legally Enforceable Obligation to supply shall
be paid for at the off-peak energy rates set forth in Section A.3. of
this APPENDIX D. The rate of delivery of such Energy may exceed the
Allowed Capacity as set forth in APPENDIX A at any given time.
2. Energy furnished by Seller to the Company shall be metered by a
time-of-day meter. The Company shall not pay for any Energy that may
be delivered by the Seller prior to installation and operation of the
Company's meters. The on-peak hours shall be those between 7:00 a.m.
and 9:00 p.m. daily, and the off-peak hours shall be those between
9:00 p.m. on one day and 7:00 a.m. on the following day.
3. The respective on-peak and off-peak energy rates for Energy shall be
one hundred percent (100%) of the Company's respective on-peak and
off-peak Avoided Energy Costs (including avoided costs of fuel and
operation and maintenance) in cents per kilowatthour, calculated in
accordance with the provisions of the PUC's Standards, on file with
the PUC and in effect for the month in which such Energy is delivered,
as adjusted by the Transformer Loss Adjustment Factor that is to be
determined pursuant to Paragraph 3(f)(ii) of APPENDIX B.
ATTACHMENT A
TO THE
THIRD AMENDMENT
4. The Minimum Purchase Rate in this contract shall apply to all
deliveries of Energy under a Legally Enforceable Obligation, and all
on-peak energy above the Legally Enforceable Obligation, made by
Seller to Company. The Minimum Purchase Rate shall not apply to
deliveries of off-peak Energy under which the Seller has no Legally
Enforceable Obligation to supply to HELCO.
5. During each payment period Seller shall be credited at the rate of
$0.002 per kilovarhour for each kilovarhour furnished by the Seller to
the Company in excess of .62 x kwh. The kvarh meters shall be adjusted
to prevent reversal in the event the power factor is leading.
6. [Intentionally Left Blank]
7. The seller shall deliver Energy under Company Dispatch pursuant to a
Legally Enforceable Obligation as follows:
a. On-Peak Period. During the 14 hour period from 7:00 a.m. to 9:00
p.m. each day, the Seller shall be obligated to deliver energy
under the Company's Dispatch at a rate equal to the Seller's firm
capacity obligation described in Paragraph 3 of APPENDIX B of
this Contract.
b. Off-Peak Period. During the 10 hour period from midnight to 7:00
a.m. and 9:00 p.m. to midnight each day, the Seller shall be
obligated to deliver energy under the Company's Dispatch at a
rate not less than the Minimum Delivery Guarantee.
B. CAPACITY PURCHASES BY THE COMPANY
1. As compensation for providing the firm capacity under Company Dispatch
as described in Paragraph 3 of APPENDIX B, the Company will pay the
Seller a capacity payment, payable monthly within 20 days after the
last day of the calendar month in which the firm capacity was
provided, of 1/12 of the Annual Capacity Payment Rate.
2. The Capacity Payment Rate shall be $4,000,000 per year beginning on
July 1, 1990, or on the Commercial Operation date, whichever occurs
first; provided that the Seller has satisfied the Acceptance Test
2
ATTACHMENT A
TO THE
THIRD AMENDMENT
requirement of Paragraph 3(f)(i) of APPENDIX B; and subject to the
sanction provision of Paragraph D.1. Of APPENDIX D.
3. The Company shall not be required to pay any additional capacity
payment for any additional power supplied by the Seller, either at the
Company's or the Seller's request.
4. A failure by the Seller to provide the required firm capacity to the
Company shall result in the reduction in the capacity payment due to
the Seller from the Company in accordance with Paragraph D of APPENDIX
D of this Contract. The Company shall not have any obligation to pay
capacity payments to the Seller for periods in excess of twenty-four
hours in which the Seller is unable to fulfill its obligations under
the Contract, including but not limited to (i) circumstances which are
subject to Paragraph 15 of this Contract relating to Force Majeure
without fault, or (ii) for periods in which the Seller does not
fulfill its obligations under Paragraph 3 of APPENDIX B of this
contract due to the Seller's "default," as such term is defined in
APPENDIX E of this Contract.
5. If the Seller does not satisfy its firm capacity obligations as
described in Paragraph 3 of APPENDIX B and Paragraph C of this
APPENDIX D of this Contract, it shall pay sanctions as described in
Paragraph D of this APPENDIX D.
C. PERFORMANCE STANDARDS
1. The Seller acknowledges and agrees that the Seller's generating
facility is expected to meet the following minimum standards for
satisfactory day-to-day performance during each contract year: (i) an
On-peak Availability (excluding the four-week annual maintenance
period and downtime due to a catastrophic equipment failure) of 95
percent or better; (ii) not more than 6 Plant Trips per year; and
(iii) a forced outage rate of 5 percent or less.
2. The "On-peak Availability" of the Seller's Facility (in percent) is to
be computed by adding the total Energy Under Company's Dispatch
Subject to a legally Enforceable Obligation available from the
Seller's unit during the contract year, multiplying the total by 100,
and dividing by the product of 4,718 on-peak
3
ATTACHMENT A
TO THE
THIRD AMENDMENT
hours per 48 week year (4,732 for leap years) times the firm capacity
obligation (prorated on a daily basis, if necessary).
3. "Catastrophic Equipment Failure" means a sudden, unexpected failure of
a major piece of equipment which (i) substantially reduces or
eliminates the capability of the Seller's Facility to produce power,
(ii) is beyond the reasonable control of the Seller and could not have
been prevented by the exercise of due diligence by the Seller, and
(iii) despite the exercise of all reasonable efforts, requires more
than sixty (60) days to repair.
4. "Plant Trip" means the sudden and immediate removal of the Seller's
Facility from service as a result of an immediate
mechanical/electrical/hydraulic control system trip or operator
initiated trip/shutdown which requires the Company to take immediate
steps to place an unscheduled generator on line to make up for the
loss of output of the Seller's Facility; provided, however, that a
Plant Trip shall not include: (i) any such removal which occurs within
forty-eight (48) hours of the time at which the Seller's Facility is
restarted following an outage; (ii) trips caused or initiated by the
Company; or (iii) trips occurring during periods when the Seller has
continued to furnish capacity to the Company at the request of the
Company's Production Manager after the Seller has notified the
Company's Production Manager that the Seller's Facility is likely to
trip.
5. The "Forced Outage Rate" of the Seller's Facility during a contract
year is to be computed by totaling the average megawatts unavailable
for service due to forced outages or deratings on an hourly basis,
multiplying the total by 100, and dividing by the product of 8,760
hours per year times the weighted average of the Seller's firm
capacity obligation (prorated on a daily basis, if necessary).
D. SANCTIONS
1. The capacity payment is to be made on the basis of the full
availability of the Seller's firm capacity obligation. When the
Seller's full firm capacity obligation is not available, the Seller
shall pay the Company $0.0339 per on-peak hour for each kilowatt of
deficiency based on annual capacity payments of $4 million and 4,718
on-peak hours in a year. During
4
ATTACHMENT A
TO THE
THIRD AMENDMENT
the period from July 1, 1990 to December 31, 1990, the sanction
provided for in this paragraph shall not exceed the capacity payments
provided for in Section B.2. of this APPENDIX D on a monthly basis.
2. For each contract year in which the On-peak Availability of the
Seller's Facility is less than 95 percent, the Seller will pay $10,000
to the Company for each full percentage point of the shortfall unless
the shortfall is due to a catastrophic equipment failure.
3. For each Plant Trip in excess of 6 per contract year, the Seller shall
pay $10,000 to the Company.
4. The Company shall have the right to offset any payment due from the
Seller under this Paragraph against any payments due to the Seller.
5. If the Seller does not deliver 12,500 kw of Firm Capacity as provided
by Paragraph 3 of APPENDIX B, by December 31, 1990, the Seller shall
pay the Company $0.0339 per on-peak hour for each kilowatt deficiency
until the Seller satisfies the Acceptance Test provided in Paragraph
3(f)(i) for 12,500 kw of Firm Capacity; if the Seller does not deliver
25,000 kw of Firm Capacity as provided by Paragraph 3 of APPENDIX B,
by March 1, 1991, the Seller shall pay the Company $0.0339 per on-peak
hour for each kilowatt deficiency until the Seller satisfies the
Acceptance Test provided in Paragraph 3(f)(i) for 25,000 kw of Firm
Capacity.
6. Each party may exercise whatever legal or equitable remedies may be
available to enforce the obligations of this Contract in the event of
a default by the other party.
5
ATTACHMENT B
TO THE
THIRD AMENDMENT
APPENDIX D
POWER PURCHASES BY COMPANY
(Subsequent to Interim Period)
A. ENERGY PURCHASES BY THE COMPANY
1. Subject to the other provisions of this Contract, including but not
limited to Sections 6 and 7, the Company shall accept and pay for
Energy generated by the Seller's Facility and delivered by the Seller
to the Company at the higher of: (a) the respective on-peak and
off-peak energy rates set forth in Section A.3. of this APPENDIX D, or
(b) the Minimum Purchase Rate set forth in Section A.4. of this
APPENDIX D; provided, however, that the rate of delivery of such
Energy shall not exceed the Allowed Capacity as set forth in APPENDIX
A at any given time.
2. Energy furnished by Seller to the Company shall be metered by a
time-of-day meter. The Company shall not pay for any Energy that may
be delivered by the Seller prior to installation and operation of the
Company's meters. The on-peak hours shall be those between 7:00 a.m.
and 9:00 p.m. daily, and the off-peak hours shall be those between
9:00 p.m. on one day and 7:00 a.m. on the following day.
3. The respective on-peak and off-peak energy rates for Energy shall be
one hundred percent (100%) of the Company's respective on-peak and
off-peak Avoided Energy Costs (including avoided costs of fuel and
operation and maintenance) in cents per kilowatthour, calculated in
accordance with the provisions of the PUC's Standards, on file with
the PUC and in effect for the month in which such Energy is delivered,
as adjusted by the Transformer Loss Adjustment Factor that is to be
determined pursuant to Paragraph 3(f)(ii) of APPENDIX B.
4. The Minimum Purchase Rate in this contract shall apply to all
deliveries of Energy made by Seller to Company during the term of this
Contract and to all deliveries of Energy under a Legally Enforceable
Obligation made by Seller to Company.
5. During each payment period Seller shall be credited at the rate of
$0.002 per kilovarhour for each kilovarhour furnished by the Seller to
the Company in
ATTACHMENT B
TO THE
THIRD AMENDMENT
excess of .62 x kwh. The kvarh meters shall be adjusted to prevent
reversal in the event the power factor is leading.
6. Company shall accept and pay for Emergency Energy (as defined in
APPENDIX F) generated by Seller's Facility and made available by
Seller to Company, as follows: the respective on-peak and off-peak
energy rates for Emergency Energy shall be three hundred percent
(300%) of Company's on-peak and off-peak Avoided Energy Costs
(including avoided costs of fuel and operation and maintenance) in
cents per kilowatthour, calculated in accordance with the provisions
of the PUC's Standards, on file with the PUC and in effect for the
quarter in which such Energy is delivered.
7. The Seller shall deliver Energy under Company Dispatch pursuant to a
Legally Enforceable obligation as follows:
(a) On-Peak Period. During the 14 hour period from 7:00 a.m. to 9:00
p.m. each day, the Seller shall be obligated to deliver energy
under the Company's Dispatch at a rate equal to the Seller's firm
capacity obligation described in Paragraph 3 of APPENDIX B of
this Contract.
(b) Off-Peak Period. During the 10 hour period from midnight to 7:00
a.m. and 9:00 p.m. to midnight each day, the Seller shall be
obligated to deliver energy under the Company's Dispatch at a
rate not greater than the Seller's firm capacity obligation
described in Paragraph 3 of APPENDIX B of this Contract and not
less than the Minimum Delivery Guarantee.
B. CAPACITY PURCHASES BY THE COMPANY
1. As compensation for providing the firm capacity under Company Dispatch
as described in Paragraph 3 of APPENDIX B, the Company will pay the
Seller a capacity payment, payable monthly within 20 days after the
last day of the calendar month in which the firm capacity was
provided, of 1/12 of the Annual Capacity Payment Rate.
2. The Capacity Payment Rate shall be $4,000,000 per year beginning on
July 1, 1990, or on the Commercial Operation date, whichever occurs
first; provided that the Seller has satisfied the Acceptance Test
2
ATTACHMENT B
TO THE
THIRD AMENDMENT
requirement of Paragraph 3(f)(i) of APPENDIX B; and subject to
the sanction provision of Paragraph D.1. of APPENDIX D.
3. The Company shall not be required to pay any additional capacity
payment for any additional power supplied by the Seller, either at the
Company's or the Seller's request.
4. A failure by the Seller to provide the required firm capacity to the
Company shall result in the reduction in the capacity payment due to
the Seller from the Company in accordance with Paragraph D of APPENDIX
D of this Contract. The Company shall not have any obligation to pay
capacity payments to the Seller for periods in excess of twenty-four
hours in which the Seller is unable to fulfill its obligations under
the Contract, including but not limited to (i) circumstances which are
subject to Paragraph 15 of this Contract relating to Force Majeure
without fault, or (ii) for periods in which the Seller does not
fulfill its obligations under Paragraph 3 of APPENDIX B of this
Contract due to the Seller's "default," as such term is defined in
APPENDIX E of this Contract.
5. If the Seller does not satisfy its firm capacity obligations as
described in Paragraph 3 of APPENDIX B and Paragraph C of this
APPENDIX D of this Contract, it shall pay sanctions as described in
Paragraph D of this APPENDIX D.
C. PERFORMANCE STANDARDS
1. The Seller acknowledges and agrees that the Seller's generating
facility is expected to meet the following minimum standards for
satisfactory day-to-day performance during each contract year: (i) an
On-peak facility Availability (excluding the four-week annual
maintenance period and downtime due to a catastrophic equipment
failure) of 95 percent or better; (ii) not more than 6 Plant Trips per
year; and (iii) a forced outage rate of 5 percent or less.
2. The "On-peak Availability" of the Seller's Facility (in percent) is to
be computed by adding the total Energy Under Company's Dispatch
Subject to a legally Enforceable obligation available from the
Seller's unit during the contract year, multiplying the total by 100,
and dividing by the product of 4,718 on-peak
3
ATTACHMENT B
TO THE
THIRD AMENDMENT
hours per 48 week year (4,732 for leap years) times the firm capacity
obligation (prorated on a daily basis, if necessary).
3. "Catastrophic Equipment Failure" means a sudden, unexpected failure of
a major piece of equipment which (i) substantially reduces or
eliminates the capability of the Seller's Facility to produce power,
(ii) is beyond the reasonable control of the Seller and could not have
been prevented by the exercise of due diligence by the Seller, and
(iii) despite the exercise of all reasonable efforts, requires more
than sixty (60) days to repair.
4. "Plant Trip" means the sudden and immediate removal of the Seller's
Facility from service as a result of an immediate
mechanical/electrical/hydraulic control system trip or operator
initiated trip/shutdown which requires the Company to take immediate
steps to place an unscheduled generator on line to make up for the
loss of output of the Seller's Facility; provided, however, that a
Plant Trip shall not include: (i) any such removal which occurs within
forty-eight (48) hours of the time at which the Seller's Facility is
restarted following an outage; (ii) trips caused or initiated by the
Company; or (iii) trips occurring during periods when the Seller has
continued to furnish capacity to the Company at the request of the
Company's Production Manager after the Seller has notified the
Company's Production Manager that the Seller's Facility is likely to
trip.
5. The "Forced Outage Rate" of the Seller's Facility during a contract
year is to be computed by totaling the average megawatts unavailable
for service due to forced outages or deratings on an hourly basis,
multiplying the total by 100, and dividing by the product of 8,760
hours per year times the weighted average of the Seller's firm
capacity obligation (prorated on a daily basis, if necessary).
D. SANCTIONS
1. The capacity payment is to be made on the basis of the full
availability of the Seller's firm capacity obligation. When the
Seller's full firm capacity obligation is not available, the Seller
shall pay the Company $0.0339 per on-peak hour for each kilowatt of
deficiency based on annual capacity payments of $4 million and 4,718
on-peak hours in a year. During the period from July 1, 1990 to
December 31, 1990,
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ATTACHMENT B
TO THE
THIRD AMENDMENT
the sanction provided for in this paragraph shall not exceed the
capacity payments provided for in Section B.2. of this APPENDIX D on a
monthly basis.
2. For each contract year in which the On-peak Availability of the
Seller's Facility is less than 95 percent, the Seller will pay $10,000
to the Company for each full percentage point of the shortfall unless
the shortfall is due to a catastrophic equipment failure.
3. For each Plant Trip in excess of 6 per contract year, the Seller shall
pay $10,000 to the Company.
4. The Company shall have the right to offset any payment due from the
Seller under this Paragraph against any payments due to the Seller.
5. If the Seller does not deliver 12,500 kw of Firm Capacity as provided
by Paragraph 3 of APPENDIX B, by December 31, 1990, the Seller shall
pay the Company $0.0339 per on-peak hour for each kilowatt deficiency
until the Seller satisfies the Acceptance Test provided in Paragraph
3(f)(i) for 12,500 kw of Firm Capacity; if the Seller does not deliver
25,000 kw of Firm Capacity as provided by Paragraph 3 of APPENDIX B,
by March 1, 1991, the Seller shall pay the Company $0.0339 per on-peak
hour for each kilowatt deficiency until the Seller satisfies the
Acceptance Test provided in Paragraph 3(f)(i) for 25,000 kw of Firm
Capacity.
6. Each party may exercise whatever legal or equitable remedies may be
available to enforce the obligations of this Contract in the event of
a default by the other party.
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