Exhibit 10 (i) 81
PRODUCER - CUSTOMER NMP-2
REVENUE SHARING AGREEMENT
This Revenue Sharing Agreement ("Agreement"), dated as of the 11th day of
December, 2000, by and between Constellation Nuclear, LLC, ("PRODUCER"), a
Maryland limited liability company with offices located at 00 Xxxx Xxxxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, XX 00000, and Central Xxxxxx Gas & Electric
Corporation ("CUSTOMER"), a New York corporation with offices located at 000
Xxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 (PRODUCER and CUSTOMER are each referred to
herein as a "Party", and collectively as the "Parties").
W I T N E S S E T H:
WHEREAS, PRODUCER and CUSTOMER have entered into an Asset Purchase
Agreement pursuant to which CUSTOMER has agreed to sell and PRODUCER has agreed
to purchase, certain interests in the Nine Mile Point Unit 2 Nuclear Generating
Station ("NMP-2"), dated December 11, 0000 (xxx "XXX-0 XXX");
WHEREAS, simultaneously with the execution of this Agreement, PRODUCER and
CUSTOMER have entered into a Power Purchase Agreement of even date herewith
pursuant to which PRODUCER has agreed to sell and CUSTOMER has agreed to
purchase certain energy and installed capacity from NMP-2 (the "NMP-2 PPA"); and
NOW, THEREFORE, in consideration of these premises, the mutual agreements
set forth herein and other good and valuable consideration, and intending to be
legally bound, the Parties agree as follows:
1. DEFINITIONS.
1.1 "Contract Month" shall mean each consecutive calendar month
starting with the calendar month in which the Effective Date
occurs and ending with (but including) the calendar month
during which the Agreement expires.
1.2 "Contract Quarter" shall mean each consecutive period
comprised of three (3) consecutive Contract Months beginning
with the Contract Month in which the Effective Date occurs. If
the Agreement does not expire on the last day of a Contract
Month, then the Contract Month during which the Agreement
expires shall constitute a Contract Quarter.
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1.3 "Effective Date" shall mean the first full day after the
expiration or termination of the NMP-2 PPA pursuant to its
terms.
1.4 "Energy" shall mean a quantity of electricity that is bid,
produced, consumed, sold, or transmitted over a period of
time, and measured or calculated in megawatt hours (MWh).
1.5 "Floor Price" shall mean the price as defined in Section 4.3
of this Agreement.
1.6 "Interest Rate" shall mean, for any date, the interest equal
to the prime rate of Citibank as may from time to time be
published in The Wall Street Journal under "Money Rates".
1.7 "Market Capacity Price" shall mean the price as defined in
Section 4.3 of this Agreement.
1.8 "Market Energy Price" shall mean the price as defined in
Section 4.3 of this Agreement.
1.9 "Market Price" shall mean the price as defined in Section 4.3
of this Agreement.
1.10 "Monthly Price Adjustment" shall mean the value as calculated
under Section 4.3 of this Agreement.
1.11 "Monthly "New York Independent System Operator" or "NYISO"
shall mean the organization formed in accordance with orders
of the Federal Energy Regulatory Commission to administer the
operation of, to provide equal access to, and to maintain the
reliability of the bulk-power transmission system in New York
State, or any successor organization.
1.12 "Negative Price Adjustment Amount" shall mean the value as
calculated under Section 4.4 of this Agreement.
1.13 "Net Electric Output" shall mean the Energy production
generated by NMP-2 less (a) the Energy used to operate NMP-2,
but excluding Off-site Power Service used to operate NMP-2 as
defined in the NMP-2 ICA, and (b) the Energy used in the
transformation and transmission of electric power to the
Delivery Point, provided that for purposes of this Agreement,
such Net Electric Output shall not be less than zero.
1.14 "Positive Price Adjustment Amount" shall mean the value as
calculated under Section 4.5(i) of this Agreement.
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1.15 "Price Adjustment" shall mean the value as calculated under
Section 4.3 of this Agreement.
2. CONDITION PRECEDENT. It is a condition precedent to the obligations of
PRODUCER and CUSTOMER under this Agreement that the Closing shall have occurred.
3. TERM. The term ("Term") of this Agreement shall begin on the Effective
Date and shall expire at 12:00, midnight, prevailing Eastern Time as applicable
on the day that is exactly ten (10) years after the Effective Date.
4. PURCHASE PRICE ADJUSTMENT.
4.1 As adjustments to the purchase price for NMP-2, PRODUCER shall
pay to CUSTOMER the Price Adjustments as calculated in this
Section 4. An example of the calculation and application of
the Price Adjustment described in this Section 4 is set forth
in Appendix A hereto.
4.2 A Price Adjustment shall be calculated for each Contract
Quarter starting with the Effective Date through the Term of
this Agreement.
4.3 The Price Adjustment for each Contract Quarter shall be equal
to the sum of the Monthly Price Adjustments for each Contract
Month in the Contract Quarter. The Monthly Price Adjustment
for each Contract Month shall be calculated as follows:
Monthly Price
Adjustment = [Market Price - (Floor Price x Monthly
Base Price Factor)] x nine percent (9%) x
(the sum of the Net Electric Output during
each hour of the Contract Month up to a
maximum total amount of Energy in each such
hour of 1,148 MWh).
WHERE:
Market Price = Market Energy Price + Market Capacity Price
for the respective Contract Month.
Market
Energy Price = The average over all hours of the respective
Contract Month of the day-ahead locational
based market price ("LBMP") paid to
producers for energy at the NMP-2 Delivery
Point (defined in the NMP-2 Interconnection
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Agreement) specified and published by the
NYISO or, if the NYISO does not specify or
publish an LBMP for the NMP-2 Delivery
Point, the LBMP specified and published by
the NYISO for the region in which the NMP-2
Delivery Point is located. In the event the
NYISO ceases to provide such prices, the
Parties shall in good faith undertake
commercially reasonable efforts to agree on
a substitute indices to reflect the value of
Energy located at the NMP-2 Delivery Point.
Failure of the parties to agree to such
alternative indices shall constitute a
dispute to be resolved in accordance with
the provisions of Section 5.4.
Market
Capacity Price = The market value of the installed capacity
of NMP-2, expressed in $/MWh. The measure
will reflect the weighted average of the
market prices paid to producers for
installed capacity at the NMP-2 Delivery
Point as published by the NYISO in its
installed capacity auctions. Where Market
Capacity Prices are posted in units of
$/kW-month, such conversion to units of
$/MWh shall be the result of the posted
price in $/kW-month, multiplied by 41.66666,
divided by the number of days in the month.
(For example, if the posted price was $1.50
/kW-month for a month which is 30 days long,
the $/MWh would be $2.0833/MWh [($1.50 x
41.6666)/30]. Note 41.6666 = 1000kW/MWh /24
hours per day). In the event NYISO ceases to
provide such prices, the Parties shall in
good faith undertake commercially reasonable
efforts to agree on a substitute indices to
reflect the value of installed capacity
located at the NMP-2 Delivery Point. Failure
of the parties to agree to such alternative
indices shall constitute a dispute to be
resolved in accordance with the provisions
of Section 5.4.
Floor Price = Set forth in Schedule 1.
Monthly Base
Price Factor = Set forth in Schedule 2.
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4.4 If the Price Adjustment for a Contract Quarter is negative,
PRODUCER shall accrue eighty percent (80%) of that negative
Price Adjustment (that 80% defined herein as the "Negative
Price Adjustment Amount") to be credited against Positive
Price Adjustment Amounts, if any, for subsequent Contract
Quarters, thereby reducing such Positive Price Adjustment
Amounts until the full amount of such Negative Price
Adjustment Amounts has been so credited.
4.5 If the Price Adjustment for a Contract Quarter is positive,
PRODUCER shall:
(i) take 80% of that positive Price Adjustment (the 80%
defined herein as the "Positive Price Adjustment
Amount"); then
(ii) credit against and reduce the Positive Price Adjustment
Amount by the sum of any Negative Price Adjustment
Amounts for prior Contract Quarters, to the extent that
any such Negative Price Adjustment Amounts have not been
credited against Positive Price Adjustment Amounts; then
(iii) make payment of the Purchase Price Adjustment in an
amount equal to any Positive Price Adjustment Amount
remaining after crediting any Negative Price Adjustment
Amounts as described in (ii) above.
4.6 Negative Price Adjustment Amounts calculated with respect to a
Contract Quarter shall only be credited against Positive Price
Adjustment Amounts, if any, for subsequent Contract Quarters.
CUSTOMER shall have no obligation to make any payment to
PRODUCER in respect of any Negative Price Adjustment Amount,
whether by way of refund of payments made by PRODUCER in
respect of Positive Price Adjustment Amounts for prior
Contract Quarters, payment for Negative Price Adjustment
Amounts which are not followed by Positive Price Adjustment
Amounts against which such Negative Price Adjustment Amounts
may be credited, or otherwise.
4.7 EXTRAORDINARY INFLATION: On each anniversary of the date
hereof, if the United States Gross Domestic Product Implicit
Price Deflator (as reported quarterly by the United States
Department of Commerce; the "GDP Deflator") for the most
recently reported quarterly period has increased by more than
5% from the same quarterly period in the prior year, the Floor
Price for each subsequent Contract Year set forth in Schedule
1 hereof, shall be
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increased by the percentage amount such increase is greater
than 5%. For example, if on the first anniversary date hereof
the GDP Deflator for the most recent quarter equals 112, and
the GDP Deflator for the same quarter reported in the previous
year was 105, each Contract Year in Schedule 1 hereof shall be
increased by 1.66%.
5. PAYMENT AND DISPUTES.
5.1 STATEMENTS AND PAYMENTS. PRODUCER shall prepare a statement
("Statement") for each Contract Quarter showing the Price
Adjustment Payment due to CUSTOMER, if any, for such Contract
Quarter and the calculation of the Price Adjustment Amount for
such Contract Quarter (whether positive or negative). PRODUCER
will provide to CUSTOMER such Statement on or before the tenth
(10th) Business Day after the final Contract Month of each
Contract Quarter. PRODUCER shall pay the amount due, if any,
by wire transfer of immediately available funds to an account
specified by CUSTOMER not later than the fifth (5th) Business
Day after the date on which PRODUCER provides the Statement.
5.2 OVERDUE PAYMENTS. Overdue payments shall accrue interest at
the Interest Rate from, and including the due date to, but
excluding, the date of payment.
5.3 BILLING DISPUTES. If CUSTOMER, in good faith, disputes any
Statement or part thereof, CUSTOMER shall notify PRODUCER in
writing of the basis for the dispute within ten (10) business
days of receipt of the Statement. If it is subsequently
determined by arbitration or agreed that an adjustment to the
Statement is appropriate, PRODUCER will prepare and issue a
revised Statement not later than ten (10) Business Days after
it is determined that an adjustment is appropriate. Any Price
Adjustment Payment due to CUSTOMER pursuant to the revised
Statement shall be paid by wire transfer of immediately
available funds to the account specified by CUSTOMER not later
than three (3) Business Days from the date the revised
Statement is issued and shall include interest accrued at the
Interest Rate until the date paid.
5.4 DISPUTE RESOLUTION.
5.4.1 All claims, disputes, and other matters concerning the
interpretation and enforcement of this Agreement, shall
be submitted to binding arbitration in New York, NY and
shall be
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heard by three neutral arbitrators under the Commercial
Arbitration Rules of the American Arbitration
Association.
5.4.2 Only the Parties hereto and their designated
representatives shall be permitted to participate in any
arbitration initiated pursuant to this Agreement. The
arbitration process shall be concluded not later than
six (6) months after the date that it is initiated. The
award of the arbitrators shall be accompanied by a
reasoned opinion if requested by either Party. The award
rendered in such a proceeding shall be final. The
Parties shall keep the award, and any opinion issued by
the arbitrators, confidential unless the Parties agree
otherwise. Any award of amounts due shall include
interest accrued at the Interest Rate until the date
paid. Judgment may be entered upon the arbitration
opinion and award in any court having jurisdiction.
5.4.3 The procedures for the resolution of disputes set forth
herein shall be the sole and exclusive procedures for
the resolution of disputes. Each Party is required to
continue to perform its obligations under this Agreement
pending final resolution of a dispute. All negotiations
pursuant to these procedures for the resolution of
disputes will be confidential, and shall be treated as
compromise and settlement negotiations for purposes of
the Federal Rules of Evidence and State Rules of
Evidence and similarly applicable rules or regulations
of any state or federal regulatory agency with
jurisdiction over a Party.
6. CONTRACT ADMINISTRATION AND OPERATION.
6.1 COMPANY REPRESENTATIVE. PRODUCER and CUSTOMER shall each
appoint a representative (collectively, the "Company
Representatives"), who will be duly authorized to act on
behalf of the Party that appoints him/her, and with whom the
other Party may consult at all reasonable times, and whose
instructions, requests, and decisions shall be binding on the
appointing Party as to all matters pertaining to the
administration of this Agreement.
6.2 RECORD RETENTION AND ACCESS. PRODUCER and CUSTOMER shall each
keep complete and accurate records and all other data required
by either of them for the purpose of proper administration of
this Agreement, including such records as may be required by
state or federal regulatory authorities. All such records
shall be maintained for a minimum of five (5) years after the
creation of the
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record or data and for any additional length of time required
by state or federal regulatory agencies with jurisdiction over
PRODUCER or CUSTOMER. PRODUCER and CUSTOMER, on a confidential
basis, will provide reasonable access to records kept pursuant
to this Section of this Agreement. The Party seeking access to
such records shall pay 100% of any out-of-pocket costs the
other Party incurs to provide such access.
6.3 NOTICES. All notices pertaining to this Agreement not
explicitly permitted to be in a form other than writing shall
be in writing and shall be given by same day or overnight
delivery, electronic transmission, certified mail, or first
class mail. Any notice shall be given to the other Party as
follows:
If to PRODUCER:
Constellation Nuclear, LLC
00 Xxxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Title: President
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If to CUSTOMER:
Central Xxxxxx Gas & Electric Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Title: Senior Vice President
Attn: Xxxxxx X. Upright
Phone: (000) 000-0000
Facsimile: (000) 000-0000
If given by electronic transmission (including telex,
facsimile or telecopy), notice shall be deemed given on the
date received and shall be confirmed by a written copy sent by
first class mail. If sent in writing by certified mail, notice
shall be deemed given on the second business day following
deposit in the United States mails, properly addressed, with
postage prepaid. If sent by same-day or overnight delivery
service, notice shall be deemed given on the day of delivery.
PRODUCER and CUSTOMER may, by written notice
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to the other, change its representative(s) including its
Company representative and the address to which notices are to
be sent.
7. CONFIDENTIALITY. Except as otherwise required by law, the Parties shall
keep confidential the terms and conditions of this Agreement and the
transactions undertaken pursuant hereto. If a Party is required to file this
Agreement with any regulatory body or court, it shall seek trade secret or
similar protection from such authority and promptly notify the other Party.
8. GOVERNMENT REGULATION. This Agreement and all rights and obligations of
the Parties hereunder are subject to all applicable federal, state and local
laws and all duly promulgated orders and duly authorized actions of governmental
authorities having proper and valid jurisdiction over the terms of this
Agreement. Further, if at any time following receipt of any regulatory approvals
required for the initial effectiveness of the NMP-2 Sale, the New York Public
Service Commission, any legislature, any agency, or any court takes any action
relating to or affecting this Agreement, the payments required to be made
hereunder, or CUSTOMER's reflection in rates thereof, neither CUSTOMER or
PRODUCER shall have any right to seek damages from the other, to discontinue
performance under this Agreement, or to modify or seek to modify any of the
terms and conditions in any way as a consequence of such action.
9. GOVERNING LAW/CONTRACT CONSTRUCTION. This Agreement shall be
interpreted, construed, and governed by the law of the State of New York. For
purposes of contract construction, or otherwise, this Agreement is the product
of negotiation and neither Party to it shall be deemed to be the drafter of this
Agreement or any part hereof. The Section and Subsection headings of this
Agreement are for convenience only and shall not be construed as defining or
limiting in any way the scope or intent of the provisions hereof.
10. WAIVER AND AMENDMENT. Any waiver by either Party of any of the
provisions of this Agreement must be made in writing, and shall apply only to
the instance referred to in the writing, and shall not, on any other occasion,
be construed as a bar to, or a waiver of, any right either Party has under this
Agreement. The Parties may not modify, amend, or supplement this Agreement
except by a writing signed by the Parties.
11. BINDING EFFECT; NO THIRD-PARTY RIGHTS OR BENEFITS. This Agreement is
entered into solely for the benefit of PRODUCER and CUSTOMER, and their
respective successors and permitted assigns, and therefore is not intended and
shall not be construed to confer any rights or benefits on any third-party.
12. ENTIRE AGREEMENT. This Agreement contains the complete and exclusive
agreement and understanding between the Parties as to its subject matter.
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13. ASSIGNMENT. CUSTOMER shall have right to assign the Agreement in whole
or in part without consent of PRODUCER. Partial assignments are subject to a
50-MW minimum. PRODUCER shall not have the right to assign this Agreement
without CUSTOMER's prior written consent, PROVIDED that PRODUCER or its
permitted assignee, without CUSTOMER's consent, may assign, transfer, pledge or
otherwise dispose of (absolutely or as security) its rights and interests
hereunder to an Affiliate (an "Assignee Entity") of PRODUCER at least 68% of the
equity securities of which are owned by PRODUCER; PROVIDED, HOWEVER, (i) any
minority owner of the Assignee Entity shall be that entity contemplated to
become an equity owner of PRODUCER's affiliated merchant energy group as set
forth in that certain press release issued by Constellation Energy Group on
October 23, 2000, (ii) no minority owner of the Assignee Entity may have any
control or management or operational rights or role with respect to the Assignee
Entity , and (iii) no such assignment shall relieve or discharge PRODUCER from
any of its obligations hereunder or shall be made if it would reasonably be
expected to prevent or materially impede, interfere with or delay the
transactions contemplated by this Agreement or materially increase the costs of
the transactions contemplated by this Agreement.
14. SIGNATORS' AUTHORITY/COUNTERPARTS. The undersigned certify that they
are authorized to execute this Agreement on behalf of their respective Parties.
This Agreement may be executed in two or more counterparts, each of which shall
be an original. It shall not be necessary in making proof of the contents of
this Agreement to produce or account for more than one such counterpart.
15. NO DEDICATION OF FACILITIES. No undertaking by PRODUCER or CUSTOMER
under any provision of this Agreement shall be deemed to constitute the
dedication of any portion of NMP-2 to the public, to CUSTOMER, or to any other
entity.
IN WITNESS WHEREOF, and intending to be legally bound, the Parties have
executed this Agreement by the undersigned duly authorized representatives as of
the date first stated above.
PRODUCER CUSTOMER
By: /s/ XXXXXX XXXXXX By: /s/ XXXXXX X. UPRIGHT
----------------------------- -----------------------------
Name: XXXXXX XXXXXX Name: XXXXXX X. UPRIGHT
--------------------------- ---------------------------
Title: PRESIDENT Title: SENIOR VICE President
-------------------------- --------------------------
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SCHEDULE 1
FLOOR PRICE
Contract
Year 1 2 3 4 5 6 7 8 9 10
Floor Price 40.75 41.57 42.40 43.25 44.11 44.99 45.89 46.81 47.75 48.70
($/MWh)
SCHEDULE 2
MONTHLY BASE PRICE FACTOR
For every year of the Term:
-------------------------------
BASE PRICE
MONTH FACTOR
-------------------------------
January 0.9176
February 0.9192
March 0.7729
April 0.7707
May 1.0461
June 1.1687
July 1.3861
August 1.4450
September 1.1275
October 0.7801
November 0.7707
December 0.8954
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