MARKETING, CAPACITY AND STORAGE SERVICES AGREEMENT
BETWEEN
BLACK HILLS CORPORATION
AND
PACIFICORP
EXHIBIT A
TABLE OF CONTENTS
Page
1 Definitions . . . . . . . . . . . . . . . . . . . . 2
2 Effective Date and Termination . . . . . . . . . . . .4
3 PacifiCorp's Purchase of Black Hills Surplus Energy. .5
4 Sales of Capacity . . . . . . . . . . . . . . . . . .7
5 Storage of Heavy Load Hour Energy. . . . . . . . . . .9
6 Prices . . . . . . . . . . . . . . . . . . . . . . . 11
7 Payments and Billing . . . . . . . . . . . . . . . . 14
8 Scheduling . . . . . . . . . . . . . . . . . . . . . 17
9 Point of Delivery. . . . . . . . . . . . . . . . . . 17
10 Uncontrollable Forces. . . . . . . . . . . . . . . . 18
11 Indemnification. . . . . . . . . . . . . . . . . . . 19
12 Choice of Law. . . . . . . . . . . . . . . . . . . . 20
13 Waiver . . . . . . . . . . . . . . . . . . . . . . . 20
14 Arbitration. . . . . . . . . . . . . . . . . . . . . 20
15 Audit Rights . . . . . . . . . . . . . . . . . . . . 21
16 Assignability. . . . . . . . . . . . . . . . . . . . 22
17 Entire Agreement . . . . . . . . . . . . . . . . . . 22
18 Notices. . . . . . . . . . . . . . . . . . . . . . . 23
Appendix A - Sample Calculation of Rate of Deposit
MARKETING, CAPACITY AND STORAGE SERVICES AGREEMENT
BETWEEN
BLACK HILLS CORPORATION
AND
PACIFICORP
This MARKETING, CAPACITY AND STORAGE SERVICES AGREEMENT
("Agreement"), dated this 1st day of September, 1995 is between
Black Hills Corporation, a South Dakota corporation ("Black
Hills") and PacifiCorp, an Oregon corporation. Black Hills and
PacifiCorp are sometimes referred to herein collectively as
"Parties" and individually as "Party."
WHEREAS, Black Hills' ▇▇▇▇ ▇▇▇▇▇▇▇ II Unit ("NSII") was
operational on or about July 1, 1995 and produces some short-term
surplus energy in addition to the required needs of Black Hills.
WHEREAS, PacifiCorp desires to purchase energy that is
excess to Black Hills needs.
WHEREAS, PacifiCorp desires to provide capacity, and to
store and shape energy in its system for return to Black Hills at
times when the energy may have higher value to Black Hills.
WHEREAS, PacifiCorp and Black Hills are Parties to the
Reserve Capacity Integration Agreement dated May 5, 1987 ("RCIA")
which provides mutual reserve capacity.
NOW, THEREFORE, the Parties hereto agree as follows:
Section 1: Definitions
1.1 "Annual Energy Requirement" shall mean the amount of
energy Black Hills elects to store in the Storage Account for a
calendar year.
1.2 "Black Hills' Loads" shall mean: (i) energy required
to supply all of Black Hills' firm wholesale and non-end user
contracts of five months or greater in duration (including such
contracts which Black Hills may enter into from time to time
after the execution of this Agreement), (ii) energy scheduled to
PacifiCorp for the Storage Account, and (iii) energy required to
serve Black Hills' retail customers as they exist from time to
time. "Firm wholesale and non-end user contracts" as referenced
in the previous sentence are not contracts, such as this
Agreement, that sell surplus energy on an available basis only
and at market prices which are updated each day notwithstanding
that such contracts may have a term of five months or longer.
1.3 "Black Hills' Resources" shall mean all energy produced
from Black Hills' presently owned generation resources plus Black
Hills' energy entitlement under the Colstrip Agreement.
1.4 "Colstrip Agreement" shall mean the Power Sales
Agreement dated December 31, 1983 between PacifiCorp and Black
Hills.
1.5 "Heavy Load Hours" shall mean the schedule hours 0700
through 2200 Mountain Time, Monday through Saturday.
1.6 "Light Load Hours" shall mean the schedule hours 2300
through 0600 Mountain Time, Monday through Saturday and all hours
on Sundays and all holidays observed by the Western Systems
Coordinating Council (WSCC).
1.7 "Market Price" shall be determined daily for Light Load
Hours and Heavy Load Hours. Market Price for Light Load Hours
shall mean the simple average of the high and low daily indices
for Palo Verde and the high and low daily indices for COB/NOB for
off peak non-firm prices, or $8.00/MWh, whichever is greater.
Market Price for Heavy Load Hours shall mean the simple average
of the high and low daily indices for Palo Verde and the high and
low daily indices for COB/NOB for peak non-firm prices, or
$8.00/MWh, whichever is greater. If a market quote for either of
the indices is not available for any day, the high-low average of
the other index shall be used for that day. If neither index is
available, indices from an adjacent, like day shall be used. The
initial indices shall be as published by Economic Insight, Inc.,
in its "Energy Market Report." In the event that these indices
no longer accurately reflect the true market value of nonfirm
energy or such indices are no longer published, the parties shall
endeavor to agree upon substitute indices to more accurately
reflect market value. In the event of a dispute under this
provision, the Parties agree to resolve the dispute by
arbitration.
1.8 "Peaking Capacity" shall mean electric capacity
purchases under Section 4.
1.9 "Peaking Energy" shall mean energy associated with
Peaking Capacity made available by PacifiCorp.
1.10 "Storage Account" shall mean an energy account
established by PacifiCorp for Black Hills.
1.11 "Storage Period" shall mean all the Heavy Load Hours in
the months of March, April, May, September, October, and November
excluding the Heavy Load Hours that either NSII or the Wyodak
Plant is out of service for annual planned maintenance.
1.12 "Summer Season" shall mean each April 1 through
September 30 period during the term of this Agreement.
1.13 "Surplus Energy" shall mean the energy that PacifiCorp
purchases from Black Hills pursuant to Section 3.
1.14 "Winter Season" shall mean each October 1 through
March 31 period during the term of this Agreement.
Section 2: Effective Date and Termination
2.1 Effective Date. This Agreement shall be effective at
0000 hours Mountain time on the 1 st day of December, 1995 or
such later day as may be established by the Federal Energy
Regulatory Commission (FERC).
2.2 FERC Approval. PacifiCorp shall file this Agreement
with the FERC pursuant to Section 205 of the Federal Power Act.
Black Hills shall file a certificate of concurrence in
PacifiCorp's filing. Black Hills shall supply Pacific with
information reasonably necessary to support PacifiCorp's filing.
The Parties shall afford each other a reasonable opportunity to
review and comment in advance upon any written material proposed
to be submitted by them to the FERC in connection with this
Agreement. If the FERC does not accept or approve this agreement
for filing in its entirety, the Parties shall attempt to amend
this Agreement to comply with the FERC action in a manner
consistent with the Parties' original intent. In the event such
amendment is not executed by the Parties within sixty days, or
longer if the Parties mutually agree to an extension, following
the FERC's action, PacifiCorp shall file a notice of cancellation
with the FERC in a timely manner and this Agreement shall
terminate.
2.3 Additional FERC Review. The methodologies utilized for
pricing purposes in this Agreement and the pricing formulae
specified herein shall remain in effect through the term of this
Agreement and neither Party shall petition the FERC pursuant to
the provisions of Sections 205 or 206 of the Federal Power Act to
amend such methodologies, prices or formulae or support such a
petition filed by any third party.
2.4 Termination. Except as provided in Subsection 4.5,
this Agreement shall terminate as of 2400 hours, Mountain Time on
March 31, 2002.
Section 3: PacifiCorp's Purchase of Black Hills Surplus
Energy
3.1 Purchases. Except as otherwise provided in this
Section 3, commencing on the Effective Date of this Agreement and
continuing through the 2400 hour, Mountain Time on December 31,
2000, Black Hills shall be obligated to sell and PacifiCorp shall
be obligated to purchase an amount of energy equal to the
difference between Black Hills' Resources and Black Hills' Loads.
3.2 Production Cost Exception. Black Hills shall not be
obligated to generate energy to sell to PacifiCorp hereunder or
schedule energy above contract minimums under the Colstrip
Agreement if the incremental cost of doing so is forecasted by
Black Hills, in its sole judgment to be greater than the
estimated revenue Black Hills would receive for such energy as
determined pursuant to Subsection 6.2 or 6.3. Black Hills shall,
in its sole judgment, determine such incremental cost, the
estimated revenue it would receive, and the amount of energy it
can make available to PacifiCorp; provided, that prior to January
1, 2001, none of the energy to be sold to PacifiCorp as described
in Subsection 3.1 shall be generated or scheduled by Black Hills
for any purpose other than service to Black Hills' Loads or sale
to PacifiCorp hereunder.
3.3 Other Resources. Nothing herein shall prevent Black
Hills from purchasing energy under contracts other than the
Colstrip Agreement or producing energy from generation acquired
by Black Hills after the date of this Agreement and scheduling
that energy on a nonfirm basis to others.
3.4 Black Hills' Resources Operating Levels. Black Hills
shall, in its sole judgment, determine prudent operating levels
of the Black Hills' Resources; provided, that such determination
shall be consistent with the provisions set forth in Subsections
3.1 and 3.2.
3.5 Transmission Limitation Purchase Exception. PacifiCorp
shall not be obligated to purchase energy hereunder that, if
purchased, would require a curtailment of PacifiCorp's generating
capability at its ▇▇▇▇ ▇▇▇▇▇▇▇▇ Plant due to transmission
limitations which restrict PacifiCorp's ability to transfer
additional energy out of the State of Wyoming; provided that
PacifiCorp shall limit the use of this exception to a maximum of
10% of the hours each year.
Section 4: Sales of Capacity
4.1 Sale of Peaking Capacity. Commencing October 1, 1996,
and continuing for each Winter Season and for each Summer Season
through March 31, 2002, Black Hills shall have the option to
purchase from PacifiCorp 0 to 60 megawatts of Peaking Capacity
(in whole megawatt increments). Such option shall be exercised
as to each Winter Season and Summer Season and shall be exercised
by Black Hills at least six months prior to the respective season
by providing PacifiCorp written notice of the desired amount of
the Peaking Capacity associated with the season for which the
option is being exercised. Notice for the first Winter Season
hereunder is due on or before April 1, 1996.
4.2 Requirement to Exercise Options. Black Hills shall
fully exercise its Peaking Capacity options by purchasing all of
the 60 megawatts of Peaking Capacity for a Winter Season or a
Summer Season in lieu of purchasing additional peaking capacity
from a third party for any such Winter Season or Summer Season.
Provided, even in the event Black Hills has not fully exercised
its Peaking Capacity option for any season, Black Hills shall not
be precluded from purchasing from others peaking capacity and
associated energy required to serve Black Hills Loads during such
season if such requirements were due to events which were not
anticipated by Black Hills in good faith at the time it exercised
its option for that season; provided further, PacifiCorp shall
have the option, to be exercised seven business days after
receipt of notice of such unanticipated capacity requirement, to
sell to Black Hills such additional capacity, but not to exceed,
when added to other Peaking Capacity being sold, a total of 60
megawatts, at the option price in effect for that season.
4.3 Additional Generator Exception. Black Hills shall be
deemed not to be purchasing peaking capacity from third parties
under Subsection 4.2 if it acquires such peaking capacity from a
generator in which Black Hills, after the date of this Agreement,
acquires an ownership or long-term leasehold interest, partial or
whole.
4.4 Peaking Energy Load Factor. PacifiCorp shall deliver
Peaking Energy as scheduled by Black Hills at a rate up to 100%
per hour of the Peaking Capacity being purchased and at an amount
of up to 15% load factor per season. Black Hills shall not be
obligated to schedule any minimum amount of Peaking Energy during
any season.
4.5 Extended Capacity Purchase Option. Black Hills shall
have a one-time option to extend the purchase of 0 to 60
megawatts of Peaking Capacity from April 1, 2002 to March 31,
2007. PacifiCorp shall notify Black Hills prior to April 1,
2000, of its price for Peaking Capacity during the 2002 to 2007
option period. Black Hills shall exercise its option to extend
prior to April 1, 2001. If Black Hills exercises such option,
the seasonal notice and option to be exercised for each season to
purchase from 0 to 60 megawatts, load factor, and Peaking Energy
price shall be as set forth in Subsections 4.1, 4.2, 4.4, and
6.6, respectively, and the exceptions set forth in Subsections
4.2 and 4.3 shall continue to apply.
Section 5: Storage of Heavy Load Hour Energy
5.1 Account. Commencing January 1, 1996 and continuing
through December 31, 2000, PacifiCorp shall establish a Heavy
Load Hours Storage Account for Black Hills.
5.2 Energy Deposits. On or before January 1 of each
calendar year, Black Hills shall give PacifiCorp written notice
specifying the Annual Energy Requirement to be deposited during
such calendar year, a calculation of the rate of deposit pursuant
to Subsection 5.3, and the planned maintenance schedule for NSII.
Black Hills may choose an Annual Energy Requirement from 0 to
40,000 megawatt-hours each year. Any unused energy remaining in
the Storage Account at the end of any year shall be rolled over
to the next year, except that any energy remaining in the Storage
Account on December 31, 2000, shall be withdrawn during 2001 for
NSII or Wyodak Plant outages, or as otherwise mutually agreed, so
as to bring the Storage Account balance to zero.
5.3 Rate of Deposit. The annual amount of energy to be
deposited in the Storage Account shall be calculated by
subtracting any rolled-over energy from the Annual Energy
Requirement. The rate of deposit shall be calculated by dividing
this result by the number of Heavy Load Hours during the Storage
Period. Black Hills shall adjust the Annual Energy Requirement
so that the rate of deposit is a whole number of megawatt-hours
per hour. Black Hills shall schedule energy to PacifiCorp at
such rate of deposit during all Heavy Load Hours of the Storage
Period except during hours that NSII or Wyodak have experienced a
forced outage; provided, Black Hills shall have the right to vary
the rate of deposit by plus or minus 25% of the constant rate
rounded or truncated to the next megawatt. Any energy Storage
Account shortage caused by such forced outage shall either be
deposited in the Storage Account during other Heavy Load Hours
within 12 months of the shortage or, at other times as the
Parties mutually agree. A sample calculation of the rate of
deposit is attached hereto as Appendix A.
5.4 Withdrawals from the Storage Account. Black Hills may
draw energy from the Storage Account only for the purpose of
replacing energy from a forced or scheduled outage of NSII or its
share of Wyodak, subject to the limitation of Subsection 5.5.
Any draw for a forced outage shall commence after the first hour
during which PacifiCorp provides reserve energy pursuant to the
RCIA. The rate of draw from the Storage Account shall be the
Annual Energy Requirement for such year. However, Black Hills
may cause a deficit in the Storage Account from time to time so
long as the total annual draw does not exceed the Annual Energy
Requirement.
5.5 Planned Maintenance for NSII. Black Hills intends to
normally schedule annual maintenance for NSII during the Storage
Period months. If Black Hills chooses to schedule annual
maintenance for NSII at times other than Storage Period months,
energy withdrawals from the Storage Account associated with such
annual maintenance shall only be by mutual agreement of the
Parties.
Section 6: Prices
6.1 Surplus Energy Price. The price for Surplus Energy
purchased by PacifiCorp pursuant to Section 3 shall be determined
daily.
6.2 Price for Surplus Energy During Light Load Hours.
PacifiCorp shall pay Black Hills a price that is dependent on the
Market Price for Light Load Hours Surplus Energy as follows:
6.2.1 Market Price $10.00/MWh or less. If the Light Load
Hour Market Price for a given day is $10.0/MWh or less,
PacifiCorp shall pay Black Hills such Market Price for all Light
Load Hour Surplus Energy scheduled to PacifiCorp for such day.
6.2.2 Market Price Between $10.00 and $11.00/MWh. If the
Light Load Hour Market Price for a given day is greater than
$10.00/MWh and not greater than $11.00/MWh, PacifiCorp shall pay
Black Hills $10.00/MWh for all Light Load Hour Surplus Energy
scheduled to PacifiCorp for such day.
6.2.3 Market Price Greater than $11.00/MWh. If the Light
Load Hour Market Price for a given day is greater than
$11.00/MWh, PacifiCorp shall pay Black Hills $10.00/MWh plus 50%
of the difference between the Market Price and $11.0/MWh for all
Light Load Hour Surplus Energy scheduled to PacifiCorp for such
day.
6.3 Price for Surplus Energy Heavy Load Hours. PacifiCorp
shall pay Black Hills a price that is dependant on the Market
Price for Heavy Load Hours Surplus Energy as follows:
6.3.1 Market Price $10.00/MWh or less. If the Heavy Load
Hour Market Price for a given day is $10.00/MWh or less,
PacifiCorp shall pay Black Hills such Market Price for all Heavy
Load Hour Surplus Energy scheduled to PacifiCorp for such day.
6.3.2 Market Price Between $10.00 and $12.00/MWh. If the
Heavy Load Hour Market Price for a given day is greater than
$10.00/MWh and not greater than $12.00/MWh, PacifiCorp shall pay
Black Hills $10.00/MWh for all Heavy Load Hour Surplus Energy
scheduled to PacifiCorp for such day.
6.3.3 Market Price Greater than $12.00/MWh. If the Heavy
Load Hour Market Price for a given day is greater than
$12.00/MWh, PacifiCorp shall pay Black Hills $10.00/MWh plus 60%
of the difference between Market Price and $12.00/MWh for all
Heavy Load Hour Surplus Energy scheduled to PacifiCorp for such
day.
6.3.4 Example. If the Heavy Load Hour Market Price for a
given day were determined to be $17.00/MWh, then Black Hills
shall receive $13.00/MWh ($10 + 60% of ($17-$12)) for all Heavy
Load Hour Surplus Energy for such day.
6.4 Price For Peaking Capacity. The price for Peaking
Capacity pursuant to Subsection 4.1 shall be as follows:
10/1/96-9/30/98 $2.00/kW-mo
10/1/98-9/30/00 $2.50/kW-mo
10/1/00-3/31/02 $3.00/kW-mo
6.5 Price For Peaking Capacity During the 2002-2007 Term.
The price for Peaking Capacity pursuant to Subsection 4.4 shall
be calculated by PacifiCorp under the methodology set forth in
this Subsection. PacifiCorp shall base its price per kW-month on
the levelized annual fixed cost per megawatt of owning a typical
simple cycle gas-fired combustion turbine with a rated capacity
of approximately 70 megawatts and with an on-line date of 2002 in
Wyoming. PacifiCorp shall assume depreciation over 25 years, and
PacifiCorp's overall cost of capital using its currently-allowed
FERC equity return. The Parties may apply to the FERC for a
determination of the equity return component if there is a
dispute as to such equity rate.
6.6 Price for Peaking Energy. Black Hills shall pay
PacifiCorp the daily Market Price for all Peaking Energy.
6.7 Price for Banking and Storage. Black Hills shall pay
PacifiCorp a fixed price through the term of this Agreement of
$4.00/MWh for each MWh withdrawn from the Storage Account. Black
Hills shall not incur a liability until energy is removed from
the Storage Account.
Section 7: Payments and Billing
7.1 Payments. Black Hills' payments for all Banking and
Storage services, Peaking Energy, and Peaking Capacity and
PacifiCorp's payments for Black Hills' Surplus Energy sales to
PacifiCorp shall be credited against each other. A ▇▇▇▇ showing
the net amount owed by one party to the other party shall be
calculated monthly.
7.1.1 Black Hills' Surplus Energy Sales Credit. The Black
Hills' Surplus Energy sales credit shall be determined by
applying the daily pricing mechanism in Subsections 6.2 and 6.3
to the Surplus Energy scheduled to PacifiCorp for Heavy Lead
Hours and Light Load Hours respectively for each day of the
billing month.
7.1.2 Peaking Capacity Payment through March 31, 2002. The
payment each month for Peaking Capacity shall equal the Peaking
Capacity determined pursuant to Subsection 4.1 multiplied by the
price specified in Subsection 6.4.
7.1.3 Peaking Capacity Payment 2002-2007. The payment each
month for Peaking Capacity shall equal the Peaking Capacity
determined pursuant to Subsection 4.1 multiplied by the price as
determined in Subsection 6.5.
7.1.4 Peaking Energy. The payment each month for Peaking
Energy shall be determined by applying the Market Price for Heavy
Load Hours to the daily Peaking Energy scheduled from PacifiCorp
pursuant to Subsection 4.4 for each day of the billing month.
7.1.5 Banking and Storage Payment. The payment each month
shall equal the amount of energy withdrawn from the Storage
Account determined pursuant to Subsection 5.4 (stated in
megawatt-hours) multiplied by the price as specified in
Subsection 6.7.
7.2 ▇▇▇▇▇▇▇▇. For those months Black Hills owes PacifiCorp
payments under this Agreement, PacifiCorp shall ▇▇▇▇ ▇▇▇▇▇ Hills
each month by overnight mail for all services provided hereunder
for the preceding month at the address specified in Section 16
and Black Hills shall pay any ▇▇▇▇ showing an amount owing to
PacifiCorp within 15 days of receipt. Payment for all service
provided hereunder shall be made by wire transfer to PacifiCorp
as stated below:
Attention: Cash Administrator
United States National Bank of Oregon
Metropolitan Branch
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 7204
(for credit to PacifiCorp, Account Number ▇▇▇-▇▇▇▇-▇▇▇, A.B.A.
No. 123000220).
For those months PacifiCorp owes payments under this
Agreement to Black Hills, PacifiCorp shall prepare and send a
billing of the amount owing to Black Hills and shall pay the
amount owing to Black Hills on or before the fifteenth day of the
month following the month of energy deliveries for which payment
is being made. Payment to Black Hills shall be made by wire
transfer to Black Hills as stated below:
Norwest Bank South Dakota, N.A.
Minneapolis, Minnesota ABA #▇▇▇▇▇▇▇▇▇
For credit to the account of:
Norwest Bank, South Dakota N.A.
Sioux Falls, South Dakota
For final credit to: Black Hills Power and
Light #▇▇▇▇-▇▇▇-▇▇▇
Payments not received when due shall be considered
overdue. Simple interest shall accrue on any unpaid amounts at a
rate equal to the interest rate as established by the ▇▇▇▇▇▇
Guaranty Trust Company of New York during the period of
delinquency.
7.3 Billing Disputes. In the event that any portion of any
▇▇▇▇ is in dispute, the disputed amount shall be paid under
protest when due. Upon determination of the correct billing
amount, the proper adjustment, with interest, shall promptly be
paid to the Party to whom it is owed by the other Party after
such determination. The interest rate applied shall be the prime
interest rate as established by the ▇▇▇▇▇▇ Guaranty Company of
New York.
Section 8: Scheduling
Black Hills shall preschedule both Surplus Energy sold to
PacifiCorp and any Peaking Energy associated with Peaking
Capacity purchased from PacifiCorp by telephone (unless otherwise
agreed by the Parties' schedulers) no later than 1000 hours on
each work day observed by both Parties immediately preceding the
day or days on which such energy is to be delivered, or as
mutually agreed by the Parties' dispatchers or schedulers.
PacifiCorp and Black Hills shall deliver the prescheduled energy,
except as hourly load variation requires an hourly adjustment to
those preschedules, to the Point of Delivery specified in Section
9.
Section 9: Point Of Delivery
9.1 Point of Delivery. The deliveries of power and energy
contemplated by this Agreement shall be made to the Wyodak
Substation point of interconnection between Pacific's system and
Black Hills' system as defined in the Wyodak Substation
Construction, Ownership and Operation Agreement among Pacific,
Black Hills and Tri-County Electric Association, Inc. dated
September 28, 1981.
Section 10: Uncontrollable Forces
Neither Party to this Agreement shall be considered to be in
default in performance of any obligation hereunder (except for
the payment of money due which will not be so excused) if failure
of performance shall be due to an Uncontrollable Force. The term
"Uncontrollable Force" means any cause beyond the control of the
Party affected, including, but not limited to, failure of
facilities, flood, earthquake, storm, fire, lightning, epidemic,
war, riot, civil disturbance, labor disturbance, sabotage, and
restraint by court order or public authority, which by exercise
of due foresight such Party could not reasonably have been
expected to avoid, and which by exercise of due diligence it
shall be unable to overcome. A Party shall not, however, be
relieved of liability for failure of performance if and to the
extent such failure be due to causes arising out of its own
negligence or deliberate misconduct. Any Party rendered unable
to fulfill any obligation by reason of an Uncontrollable Force
shall exercise due diligence to remove such inability with all
reasonable dispatch and shall notify the other Party of such
Uncontrollable Force as soon as practicable. Nothing contained
herein, however, shall be construed to require a Party to prevent
or settle a strike against its will. Economic hardship shall not
constitute Uncontrollable Force.
Section 11: Indemnification
Except as provided in this Section each Party hereto hereby
assumes all liability for injury or damage to persons or property
arising from the act or neglect of its own employees, agents or
contractors and shall indemnify and hold the other Party harmless
from any liability arising therefrom. Notwithstanding the
foregoing, no Party shall be liable, whether in contract
warranty, tort or strict liability, to the other Party for any
injury or death to any person, or for any loss or damage to any
property, caused by or arising out of an electric disturbance on
that Party's electric system, whether or not such electric
disturbance resulted for that Party's negligent or wrongful act
or omission, excepting only action knowingly or intentionally
taken, or failed to be taken, with the intent that injury or
damage should result therefrom, or which action is wantonly
reckless. Each Party releases the other Party from, and shall
indemnify the other Party for, any such liability. As used in
this Section, (1) the term "Party" means, in addition to such
Party itself, its directors, officers, and employees; (2) the
term "damage" means all damage, including consequential damage,
and (3) the term "person" means any person, including those not
connected with either Party to this Agreement.
Section 12: Choice of Law
This Agreement shall be subject to and construed in
accordance with the laws of the State of Wyoming.
Section 13: Waiver
Failure by a party to exercise any right, remedy or option
hereunder or delay in exercising such right, remedy or option
shall not operate as a waiver by such Party of its right to
exercise any such right, remedy or option. No waiver by a Party
shall be effective unless it is in writing and signed by such
Party, and then only to the extent specifically stated.
Section 14: Arbitration
14.1 Selection of Arbitrator. The Parties shall make
reasonable efforts to settle all disputes arising under this
Agreement as a matter of normal business and without recourse to
either arbitration of litigation. If any dispute arises under
this Agreement that the Parties do not settle, the Parties shall
arbitrate the matter before an arbitrator who is an attorney or
engineer familiar with contracts governing the operation of
electrical systems. Any arbitration may be initiated by either
Party submitting to the other Party a Notice of Arbitration
within one year following the date such dispute arises. The
Parties shall have 30 days following the submittal of a Notice of
Arbitration by either Party to attempt to mutually agree upon an
arbitrator. If the Parties are unable to agree on an arbitrator
within that time, either Party may request that a judge of the
United States District Court for Wyoming designate three persons
to serve as an arbitrator. If the parties are unable to agree on
the selection of one of the three as an arbitrator, each party
shall strike one of the three and the remaining persons shall
serve as the arbitrator. The first party to strike a proposed
arbitrator shall be chosen by lot.
14.2 Conduct of Arbitration. The arbitrator shall have
discretion to establish a schedule and procedure for the
arbitration and may conduct the arbitration based upon written
submittals. The arbitrator shall afford the Parties any or all
of the discovery rights provided for in the Federal Rules of
Civil Procedure.
14.3 Arbitration Costs. Each Party shall bear its own costs
of the arbitration, including its attorneys' fees. The parties
shall share equally the costs of the arbitrator.
Section 15: Audit Rights
Black Hills shall have the right to audit and to examine any
supporting documentation related to any billing under this
Agreement. Any such audit shall be undertaken by Black Hills, or
its representatives, at reasonable times and in conformance with
generally-accepted auditing standards. The right to audit any
billing shall extend for a period of two years following such
billing. PacifiCorp agrees to fully cooperate with any audit by
Black Hills and to retain all necessary records or documentation
for the entire length of the audit period. If any such audit
discloses that an overpayment or an underpayment has been made,
the amount of such overpayment or underpayment shall promptly be
paid to the Party to whom it is owed by the other Party with
interest as determined pursuant to Subsection 7.3.
Section 16: Assignability
Neither Party shall assign this Agreement without the prior
written consent of the other Party, with such consent not
unreasonably withheld. Nothing contained in this Section shall
be construed to prevent either party from making a collateral
assignment of the revenues due under the terms of this Agreement.
No assignment, merger or consolidation shall relieve any Party of
any obligation under this Agreement. Subject to the foregoing
restriction in this Section, this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the Parties
and their respective successors and assigns.
Section 17: Entire Agreement
This Agreement constitutes the entire Agreement of the
Parties hereto and supersedes all prior Agreements, whether oral
or written, with respect to the transactions addressed herein.
This Agreement may be amended only by a written document executed
by the Parties hereto.
Section 18: Notices
Any notice, demand, or request provided for in this
Agreement shall be deemed properly served, given, or made if
delivered in person or sent by registered or certified mail,
postage paid, to the person so designated as its authorized
representative. The titles and addresses of the authorized
representatives hereunder are as follows:
For BLACK HILLS:
Vice President, Power Supply
Black Hills Corporation
▇▇▇ ▇▇▇▇▇ ▇▇.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
Controller
Black Hills Corporation
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▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
For PACIFICORP:
Vice President, Power Systems
PacifiCorp
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇
with a copy to:
Manager, Customer Contract Administration
PacifiCorp
▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇-▇▇▇▇
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed in their respective names by their
respective officers thereunto duly authorized, all of the day and
year first above written.
PACIFICORP
By: /c/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Power Systems
BLACK HILLS CORPORATION
By: /c/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President, Power Supply
APPENDIX A
Sample Calculation of Rate of Deposit
1. Specified Annual Energy Requirement 30,000 MWh
2. Less energy rollover from prior year 4,234 MWh
3. Amount of energy to be deposited 25,766 MWh
(Line 1-Line 2)
4. Number of Heavy Load Hours in Storage Period 1,920 Hours
(Heavy Load Hours less planned maintenance)
5. Rate of deposit 13.420 MWh/h
(Line 3 divided by Line 4)
6. Round or truncate to whole number 14 MWh/h*
7. Revised energy delivered 26,880 MWh
(Line 6 * Line 4)
8. Revised Annual Energy Requirement 31,114 MWh
(Line 7 + Line 2)
_______________
*Black Hills may vary the rate of deposit plus or minus 25%
of the constant rate as provided at Subsection 5.2.
