HECO Exhibit 10.2(e)
AMENDMENT NO. 2
TO
POWER PURCHASE AGREEMENT
BETWEEN
AES HAWAII, INC.
AND
HAWAIIAN ELECTRIC COMPANY,
INC.
This Amendment No. 2 is made and
entered into as of the 8th day of May, 2003, by and between
HAWAIIAN ELECTRIC COMPANY, INC. (“HECO”), a Hawaii
corporation, and AES HAWAII, INC. (“AES Hawaii”,
formerly known as AES Barbers Point, Inc.), a Delaware corporation,
with principal offices in Arlington, Virginia, doing business in
Hawaii.
R E C I
T A L S
:
WHEREAS, The AES Corporation
(“AES”) owns indirectly 100% of AES Hawaii, which in
turn owns the Facility (including the circulating fluidized bed
coal-fired power plant and associated properties) located in
HECO’s service territory;
WHEREAS, AES Barbers Point, Inc.
(now known as AES Hawaii as of September 12, 1997) and HECO entered
into a power purchase agreement dated March 25, 1988, which has
been amended by Amendment No. 1 dated August 28, 1989, and modified
by a letter agreement “Re: Conditional Notice of
Acceptance” dated January 15, 1990 as a result of Decision
and Order No. 10448 (December 29, 1989) and Decision and Order No.
10296 (July 28, 1989) issued by the Public Utilities Commission of
the State of Hawaii (“PUC”) in PUC Docket No. 6177 (as
amended and modified, the “PPA”), under which HECO
purchases 180 megawatts of capacity and associated energy from AES
Hawaii through the Term of the PPA;
WHEREAS, AES Hawaii entered into a
Credit and Reimbursement Agreement dated as of March 20, 1990 to
arrange secured financing, non-recourse to AES, to construct and
operate the Facility;
WHEREAS, HECO has a security
interest in the Facility, which is subordinate to the security
interest of the Facility lenders, securing the performance
obligations of AES Hawaii under the PPA;
WHEREAS, AES Hawaii desires to
refinance the Facility on terms that (1) result in the full
repayment of AES Hawaii’s existing secured financing, (2)
provide for secured debt in a total principal amount up to $450
million, or up to $525 million if AES Hawaii can use the additional
proceeds to improve its cost structure, and sufficiently improve
its cash flow, and (3) provide for HECO’s subordinated
security interest in the Facility as described in the PPA and
related security documents (such refinancing being hereinafter
referred to as the “AES Hawaii Refinancing” and the
lenders for the AES Hawaii Refinancing being hereinafter referred
to as the “AES Hawaii Lenders”), and AES
Hawaii is in the process of negotiating a
commitment for the AES Hawaii Refinancing that is acceptable to AES
Hawaii;
WHEREAS, HECO’s consent is
required in connection with the AES Hawaii Refinancing, as provided
in Section 24.12 of the PPA;
WHEREAS, AES Hawaii and HECO desire
to have HECO’s ratepayers share in the benefit derived from a
favorable refinancing in the form of lower rates under the
PPA;
WHEREAS, AES Hawaii acknowledges how
important it is for HECO and HECO’s customers for AES Hawaii
to maintain nothing but the highest standards of service quality
and technical reliability, and that AES Hawaii has the
responsibility and obligation to comply with Good Engineering and
Operating Practices (“GEOP”) as outlined in Section
3.2B of the PPA, and AES Hawaii will be subject to any maintenance
reserve requirements to be included in the AES Hawaii Refinancing,
which will be established by the AES Hawaii Lenders on market-based
terms based on the advice of the AES Hawaii Lenders’
independent engineer, to facilitate the reliable operation of the
Facility consistent with GEOP;
NOW, THEREFORE, in consideration of
the premises and the mutual agreements and covenants contained
herein and for other good and valuable consideration, HECO and AES
Hawaii (collectively referred to herein as “the
Parties”) hereby agree as follows:
1. Amendment to Section 5.1B
. Section 5.1B of the PPA is hereby
