Exhibit 10.3
AMENDMENT TO THE
POWER PURCHASE AGREEMENT
BETWEEN
JRW
ASSOCIATES, L.P. AND
PACIFIC GAS AND ELECTRIC COMPANY
(PG&E LOG NO. 35C045)
THIS
AMENDMENT ("Amendment") is by and between PACIFIC GAS AND
ELECTRIC
COMPANY ("PG&E"), a California corporation and JRW Associates,
L.P., a
California limited partnership ("Seller"). PG&E and Seller are
sometimes
referred to herein individually as "Party" and collectively as the
"Parties"
RECITALS
A.
On December 9, 1985, Seller (or Seller's predecessor, as
applicable) and
entered into a Power Purchase Agreement, (as amended, "the PPA")
pursuant to
which PG&E purchases electric power from Seller and Seller
sells electric power
to PG&E.
B.
On April 6, 2001, PG&E filed voluntary petition under chapter
11 of the
United States Bankruptcy Code in the San Francisco Division of the
United States
Bankruptcy Court for the Northern District of California (the
"Bankruptcy
Court") (In re Pacific Gas and Electric Company, Banks. Case No.
01-03923).
C.
On June 14, 2001, the Commission issued D.01-06-015, which approved
as
reasonable certain non-standard PPA price modifications.
D.
Seller and PG&E now desire to enter into the PPA price
modification set
forth below. Seller has advised PG&E that Seller is unable to
enter into the PPA
price modification unless the Bankruptcy Court has approved this
Amendment and
Seller is provided a limited option to terminate this Amendment
following
Bankruptcy Court approval if Seller is unable to Arrange for fuel
purchases to
accommodate the price modification contemplated under this
Amendment.
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<PAGE>
AMENDMENT
In
consideration of the mutual promises and covenants contained
herein,
PG&E and Seller agree to as follows:
1.
INTERIM ENERGY PRICE
Unless otherwise set fourth in the PPA, for the period commencing
with the
date on which this Amendment has been executed by the Parties and
ending upon
the commencement of the Fixed Rate Period, as defined in Section 2
below, the
price for energy delivered, if any, to PG&E by Seller shall be
determined
pursuant to the PPA, without reference to this Amendment.
2.
FIXED ENERGY PRICE
Commencing with this date that is the earlier of, August 1, 2001,
August
16, 2001 or September 1, 2001 following approval of the Bankruptcy
Court as
specified in Section 4 below (hereafter, the "Bankruptcy Court
Approval Date")
and ending on July 15, 2006 (this period referred to hereafter as
the "Fixed
Rate Period"), Seller elects to replace the energy price term
specified in the
PPA (PG&E's "full short-run avoided costs" or "full short-run
avoided operating
costs" as the case may be) with the applicable energy prices as
specified in
Attachment A. No provision of the PPA other than the energy price
term is or
shall be deemed to be modified, amended, waived or otherwise
affected by this
Amendment. The parties agree to reasonably cooperate and contest
any challenge
in any Commission proceeding that seeks to alter or modify the
energy pricing
terms set fourth in Attachment A, including, but not limited to any
challenge to
the reasonableness of PG&E having entered into this
Amendment.
2 of
3
<PAGE>
3.
SELLER'S OPTION PERIOD
For
a fifteen-day period following the Bankruptcy Court Approval
Date,
Seller shall have the sole right to terminate this Amendment. Upon
termination
of this Amendment pursuant to this section 3, this Amendment shall
be deemed a
nullity.
4.
EFFECTIVENESS
This
Amendment shall not become effective unless and until it has
been
approved by the Bankruptcy Court. If the Bankruptcy Court has not
approved this
Amendment by August 31, 2001, this Amendment shall be deemed a
nullity.
5.
SIGNATURES
IN
WITNESS WHEREOF, Seller and PG&E have caused this Amendment to
be
executed by their authorized representatives.
PACIFIC GAS AND ELECTRIC COMPANY
a California corporation
By: /s/
illegible
-------------------------
Title: Director
-------------------------
Date: 7/14/01
-------------------------
JRW ASSOCIATES, L.P.
By: Martin V.
Quinn
-------------------------
Title: Ex VP & COO
-------------------------
Date: 7/13/01
-------------------------
3 of 3
<PAGE>
Pacific Gas and Electric Company
[LOGO OMITTED]
June 1, 1993
JRW ASSOCIATES, L.P.
ATTN. BOB POLLOCK
CIO
WAUKESHA-PEARCE INDUSTRIES
P.O. BOX 35068
HOUSTON, TX 77235-5068
Dear Sir/Madam:
This is to notify you of a change of address for Article 9,
"Notices", of the
Power Purchase Agreement (PPA) between PG&E and JRW Associates.
Please direct
all future written notices to:
Mr. Richard A. Layne
Director, Power Finance Department, B13D
Pacific Gas and Electric Company
77 Beale Street, Room 1311
P.O. Box 770000
San Francisco, CA 94177
The address in the PPA relating to insurance matters has also
changed. All
insurance certificates, endorsements, cancellations, terminations,
alterations,
and material changes of such insurance must be issued and submitted
to the
following:
Pacific Gas and Electric Company
Power Contracts Department - B23C
Attn: Insurance Coordinator
P.O. Box 770000, Room
2354 San Francisco, CA 94177
CPUC Decision 93-04-001 dated April 7, 1993, adopted the Division
of Ratepayer
Advocate's recommendation for modifying the reporting requirements
applicable to
the quarterly report of negative avoided cost or hydro spill. The
above decision
ordered that: Decision (D) 82-01-103, Ordering Paragraph 17, is
modified to read
in full as follows:
"Each utility shall promptly file a report for any quarter in which
a
negative avoided cost or hydro spill condition occurs."
Please inform all parties in your organization of the above
information. If
you
have any questions please call me a (415) 973-9434.
Sincerely,
/s/ Linda Lea Weber
Linda Lea Weber
Power Systems Engineer
(415)973-9434
<PAGE>
FIRST AMENDMENT
TO THE
POWER PURCHASE AGREEMENT
FOR FIRM CAPACITY AND ENERGY
(PG&E LOG NO. 25C045)
This
First Amendment is by and between Pacific Gas and Electric Company,
a
California Corporation ("PG&E"), and JRW Associates, L.P., a
California Limited
Partnership ("Seller"). It amends the Standard Offer 2 Power
Purchase Agreement
signed by PG&E on December 9, 1985 and by Interpro
International, Inc.
("Interpro"), Seller's predecessor in interest, on September 3,
1985
("Agreement"), for a 10,750 kW cogeneration project located at J.R.
Wood, Inc.,
7916 West Bellevue Road, Atwater, California 95301.
WHEREAS, on October 9, 1989, PG&E was notified by Interpro of
the
assignment of the Agreement from Interpro to National Cogeneration
Corporation
("National Cogen"), in connection with the sale of substantially
all of
Interpro's assets to National Cogen, which notice was acknowledged
by PG&E on
October 27, 1989; and
WHEREAS, on February 16, 1990, Seller assumed all the rights
and
obligations under the agreement in connection with the sale of
substantially all
of National Cogen's assets to Seller; and
WHEREAS, on September 26, 1990, PG&E was notified by National
Cogen of the
assignment of the Agreement from National Cogen to Seller; and
WHEREAS, on December 10, 1990, National Cogen executed a formal
written
assignment of the Agreement to Seller, and
WHEREAS, on December ___, 1990. PG&E consented in writing to
the assignment
of the Agreement from National Cogen to Seller, and
WHEREAS, PG&E and Seller wish to amend the Agreement to change
certain%
provisions,
NOW,
THEREFORE, in consideration of the mutual promises and
covenants
contained herein, PG&E and Seller agree as follows:
1.
All underlined terms used herein shall have the meanings ascribed
to
them in APPENDIX A, Section A-1 DEFINITIONS, of the Agreement.
1
<PAGE>
2.
In the space indicated in Article 2, Section (a), page 4, line
5,
insert:
"115 kV"
3.
Article 2, Section (c), page 4, lines 16-17 shall read:
The scheduled operation date of the Facility is December 1,
1990.
4.
In the space indicated in Article 2, Section (d), page 5, line
2,
insert:
"10,750 kW"
5. In the space indicated in Article 2, Section (f), page 5, line
8, insert:
"December 1, 1990"
6. Article 3, Section (a), page 6, shall read:
PG&E shall pay Seller for firm capacity at the rate of $201
per
kW-year under Option 2 set forth in Section C-5 of Appendix C.
The
$201 per kW-year price for firm capacity was negotiated and agreed
to
by PG&E and Seller, and represents a discount from PG&E's
full avoided
costs as approved by the CPUCC. PG&E's obligation to pay for
the
contract capacity shall begin on the actual operation date. The
$201
per kW-year price for firm capacity shall be subject to adjustment
as
provided for in Appendix D.
7. Article 4, pages 6-7, shall read:
All written notices shall be directed as follows:
To PG&E:
Pacific Gas and Electric Company
Attention: Vice President-Power Generation
245 Market Street, Room 316
San Francisco, California 94106
To Seller.
7RW Associates, L.P.
c/o Wellhead Electric
Company, Inc.
1818 11th Street, Suite 4
Sacramento, California 95814
2
<PAGE>
8. Article 7, pages 7-8 shall read:
This Agreement shall be binding upon execution and remain in
effect
thereafter for 30 years from the actual operation date
provided,
however, that it shall terminate if Seller fails to meet the
deadline
set forth in Paragraph 2 of the Agreement dated______________, or
if
the actual operation date does not occur before April 30, 1991.
9. Article 8 is added to read:
ARTICLE 8 - CURTAILMENT
Each year throughout the term of this Agreement, the Facility will
be
subject to up to 3,000 hours of curtailment during off-peak and
super-off-peak hours. Off-peak and super-off-peak hours are those
time
periods defined in Appendix B. Table B, as modified or changed
from
time to time by the CPUC. The curtailment specified by this
Article
may be either physical curtailment or economic curtailment or a
combination of both, as determined by PG&E in the sole exercise
of its
judgement and discretion.
IN WITNESS WHEREOF, the Parties hereto have caused this First
Amendment to be
executed by their duly authorized representatives, and it is
effective as of the
last date set forth below.
JRW ASSOCIATES, L.P.
PACIFIC GAS AND ELECTRIC
JRW Cogen, Inc.,
COMPANY
General
Partner
By:/s/ Harold E. Dittmer
By: /s/ Robert J. Haywood
-----------------------
-----------------------
NAME: Harold E. Dittmer
NAME: Robert J. Haywood
TITLE: President
TITLE: Vice President, Power
Planning & Contracts
DATE: 12-13-90
DATE: 12-21-90
-----------------------
-----------------------
3
<PAGE>
SECOND AMENDMENT
----------------
THIS SECOND AMENDMENT by and between PACIFIC GAS AND ELECTRIC
COMPANY, a
California Corporation ("PG&E") and JRW ASSOCIATES, L.P., a
California Limited
Partnership ("TRW") (individually, "Party", and collectively,
"Parties"), amends
that cetain Standard Offer 2 Power Purchase Agreement signed by
PG&E on December
9, 1985 and by Interpro International, Inc. ("Interpro"). JRW's
predecessor-in-interest, on September 3, 1985 (the "PPA"), for a
10,750 kW
cogeneration project locate A- at J.R. Wood, Inc., 7916 West
Bellvue Road,
Atwater, California 953101 (PG&E Log No. 25C045).
RECITALS
--------
A. The
Parties executed that certain Settlement Agreement dated as of
January 14. 1992 (the "Settlement Agreement").
B. The
Settlement Agreement provides, inter alia, that if the
Settlement
Agreement is approved by the California Public Utilities Commission
(the
"Commission") in accordance with Paragraph 4 of the Settlement
Agreement, the
parties shall amend the PPA by executing this Second Amendment
C. On,May
8.1992, the Settlement Agreement was approved by the Commission
in accordance with Paragraph 4 of the Settlement Agreement.
AGREEMENT
---------
NOW THEREFORE, in consideration of the above Recitals, and for
other good and
valuable consideration, the receipt and adequacy of which are
hereby
acknowledged, the Parties hereby agree as follows:
<PAGE>
1.
Defined Terms .
Capitalized or underlined terms and conditions used
herein, not otherwise defined herein or in the Settlement
Agreement, shall have
the meanings given them in the PPA.
2.
Amendment of
PPA. In accordance with terms and conditions of the
Settlement Agreement, the PPA is hereby amended as follows:
(a) Delete Article
3(b) and substitute in its place the following:
"PG&E shall pay Seller for energy, except for energy
delivered
during periods of economic curtailment, at prices equal to 95
percent of PG&E's full shortrun avoided operating costs as
approved by the CPUC."
3.
General. Except as
amended herein and by the First Amendment, and
subject to the provisions of the Settlement Agreement, which remain
in full
force and effect, the PPA shall continue in full force and
effect.
IN WITNESS WHEREOF, the Parties hereto have caused this Second
Amendment to be
executed by their duly authorized representatives, and it is
effective as of the
last date set forth below.
JRW ASSOCIATES, L.P.
PACIFIC GAS AND ELECTRIC
JRW Cogen, Inc.,
COMPANY
General Partner
By: /s/ Louis M. Pearce, III
By: /s/ Robert J. Haywood
------------------------
---------------------
NAME: Louis M. Pearce,
III
NAME: Robert J.
Haywood
TITLE: President
TITLE: Vice President,
Power Systems
DATE: March 11, 1993
DATE: March 12, 1993
<PAGE>
POWER PURCHASE AGREEMENT
FOR
FIRM CAPACITY AND ENERGY
BETWEEN
INTERPRO INTERNATIONAL INC.
AND
PACIFIC GAS AND ELECTRIC COMPANY
1
<PAGE>
FIRM CAPACITY AND ENERGY
POWER PURCHASE AGREEMENT
CONTENTS
Article
Page
-------
----
1
QUALIFYING STATUS
3
2
PURCHASE OF POWER
4
3
PURCHASE PRICE
6
4
NOTICES
6
5
DESIGNATED SWITCHING CENTER
7
6
TERMS AND CONDITIONS
7
7
TERM OF AGREEMENT
7
Appendix A:
GENERAL TERMS AND CONDITIONS
Appendix B:
ENERGY PRICES
Appendix C:
FIRM CAPACITY PRICE SCHEDULE
Appendix D:
ADJUSTMENT OF CAPACITY PAYMENTS IN
THE EVENT OF TERMINATION OR REDUCTION
Appendix E:
INTERCONNECTION
2
<PAGE>
FIRM CAPACITY AND ENERGY
POWER PURCHASE AGREEMENT
BETWEEN
INTERPRO INTERNATIONAL INC.
AND
PACIFIC GAS AND ELECTRIC COMPANY
INTERPRO INTERNATIONAL INC., a Utah corporation ("Seller"), and
PACIFIC GAS
AND ELECTRIC COMPANY ("PGandE"), referred to collectively as
"Parties" and
individually as "Party", agree as follows:
ARTICLE 1 QUALIFYING STATUS
Seller warrants that, at the date of first power deliveries from
Seller's
Facility(1) and during the term of agreement, its Facility shall
meet the
qualifying facility requirements established as of the effective
date of this
Agreement by the Federal Energy Regulatory Commission's rules (18
Code of
Federal Regulations 292) implementing the Public Utility Regulatory
Policies Act
of 1978 (16 U.S.C.A. 796, et seq.).
------------------
1
Underlining identifies those terms which are defined in Section A-l
of
Appendix A.
3
<PAGE>
ARTICLE 2 PURCHASE OF POWER
(a)
Seller shall sell and deliver and PGandE shall purchase and
accept
delivery of firm capacity and energy at the voltage level of
________ (1)kV as
indicated below--
1. Contract
capacity - 8,526 kW; and
2. Energy - net
energy output (2).
Seller may convert its energy sale option as provided in section
A-3 of
Appendix A.
(b)
Seller shall provide the firm capacity and energy set forth above
from
its 10,750 kW Facility located at J. R. Wood Inc., 7916 West
Bellvue Road,
Atwater, California 95301.
(c)
The scheduled operation date of the Facility is September 1, 1986.
At
the end of each calendar quarter Seller shall give written notice
to PGandE of
any change in the scheduled operation date.
(d)
To avoid exceeding the physical limitations of the
interconnection
facilities, Seller shall limit the Facility's actual rate of
delivery into the
PGandE system to __________ (1)kW.
----------
1 The
Seller requests, and PGandE consents, that this blank not be filled
in
at
the time of executing the Agreement because the Seller, recognizing
that
the
information is not yet available to make a definitive determination
of
the
number to be inserted in this blank, shall request PGandE to
perform an
interconnection study to be done in its accustomed manner of making
such
studies to determine the number to be inserted.
2 Insert
either "net energy oust" or "surplus energy output" to show the
energy sale option selected by Seller.
4
<PAGE>
(e)
The primary energy source for the Facility is natural gas.
(f)
If Seller does not begin construction of its Facility by
__________
(2), PGandE may reallocate the [Date] existing capacity on PGandE's
transmission
and/or distribution system which would have been used to
accommodate Seller's
power deliveries to other uses. In the event of such reallocation,
Seller shall
pay PGandE for the cost of any upgrades or additions to PGandE's
system
necessary to accommodate the output from the Facility. Such
additional
facilities shall be installed, owned, and maintained in accordance
with the
applicable PGandE tariff.
(g)
The transformer loss adjustment factor is ________ (3)
----------------
1 The
appropriate number will be inserted upon completion of an
interconnection study.
2 Seller
shall provide this date in the project development schedule to
be
submitted no later than 30 days after signing the Special
Facilities
Agreement for the Facility.
3 If
Seller chooses to have meters placed on Seller's side of the
transformer, an estimated transformer loss adjustment factor of 2
percent,
unless the Parties agree otherwise, will be applied. This
estimated
transformer loss figure will be adjusted to a measurement of
actual
transformer losses performed at Seller's request and expense.
5
<PAGE>
ARTICLE 3 PURCHASE PRICE
(a)
PGandE shall pay Seller for firm capacity at the contract
capacity
price under option 2 set forth in Section C-5 of Appendix C. The
contract
capacity price is derived from PGandE's full avoided costs as
approved by the
CPUC. PGandE's obligation to pay for the contract capacity shall
begin on the
actual operation date. Seller elects to have its contract capacity
price
determined from the firm capacity price schedule in effect on the
date of
execution of this Agreement'. The contract capacity price shall be
subject to
adjustment as provided for in Appendix D.
(b)
PGandE shall pay Seller for energy at prices equal to PGandE's
full
short run avoided operating costs as approved by the CPUC.
(c)
The contract capacity price is applicable to deliveries of
capacity
beginning after December 30,1982.
ARTICLE 4 NOTICES
All written notices shall be directed as follows:
To
PGandE:
Pacific Gas and Electric Company
Attention: Vice President -
Electric Operations
77 Beale Street
San Francisco, CA
94106
-------------
1 Insert
either "the date of execution of this Agreement" or "the actual
operation date".
6
<PAGE>
To
Seller: Interpro International Inc.
Attention: Patrick Cassity, President
3120 South 1300 East
Salt Lake City, Utah
84106
(801) 486-4684
ARTICLE 5 DESIGNATED SWITCHING CENTER
The
designated PGandE switching center shall be unless changed by
PGandE:
Yosemite District Operator
560 West 15th Street, Merced, CA 95341
(209) 723-3841
ARTICLE 6 TERMS AND CONDITIONS
This
Agreement includes the following appendices which are attached
and
incorporated by reference:
Appendix A - GENERAL TERMS AND CONDITIONS
Appendix B - ENERGY PRICES
Appendix C - FIRM CAPACITY PRICE SCHEDULE
Appendix D - ADJUSTMENT OF CAPACITY PAYMENTS IN THE
EVENT OF TERMINATION OR REDUCTION
Appendix E - INTERCONNECTION
ARTICLE 7 TERM OF AGREEMENT
This
Agreement shall be binding upon execution and remain in effect
thereafter for 30 years from the actual operation date; provided,
however, that
it shall terminate if the actual operation date does not occur
within five years
of the execution date.
7
<PAGE>
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be
executed by their duly authorized representatives and effective as
of the last
date set forth below.
INTERPRO INTERNATIONAL INC.
PACIFIC GAS AND ELECTRIC COMPANY
BY: /s/ PATRICK CASSITY
BY: /s/ HARRY M. HOWE
-------------------
-----------------
PATRICK
CASSITY
HARRY M. HOWE
Chief -
TITLE: President
TITLE: Siting
Department
DATE SIGNED: 9-3-85
DATE SIGNED: 12/9/85
8
<PAGE>
APPENDIX A
GENERAL TERMS AND CONDITIONS
CONTENTS
Section
Page
-------
----
A-1
DEFINITIONS
A-2
A-2
CONSTRUCTION
A-6
A-3
ENERGY SALE OPTIONS
A-10
A-4
OPERATION
A-12
A-5
PAYMENT
A-16
A-6
ADJUSTMENTS OF PAYMENTS
A-17
A-7
ACCESS TO RECORDS AND PGandE DATA
A-17
A-8
CURTAILMENT OF DELIVERIES AND HYDRO
A-18
SPILL CONDITIONS
A-9
FORCE MAJEURE
A-20
A-10 INDEMNITY
A-22
A-ll LIABILITY;
DEDICATION
A-23
A-12 SEVERAL
OBLIGATIONS
A-24
A-13 NON-WAIVER
A-24
A-14 ASSIGNMENT
A-24
A-15 CAPTIONS
A-25
A-16 CHOICE OF
LAWS
A-25
A-17
GOVERNMENTAL JURISDICTION AND
A-25
AUTHORIZATION
A-18 NOTICES
A-26
A-19 INSURANCE
A-26
A-1
<PAGE>
APPENDIX A
GENERAL TERMS AND CONDITIONS
A-1 DEFINITIONS
Whenever used in this Agreement, appendices, and attachments
hereto, the
following terms shall have the following meanings:
Actual operation date - The day following the day during which all
features
and equipment of the Facility are demonstrated to PGandE's
satisfaction to be
capable of operating simultaneously to deliver power continuously
into PGandE's
system as provided in this Agreement.
Adjusted capacity price - The $/kW-year purchase price from Table
B,
Appendix C for the period of Seller's actual performance.
Capacity sale
reduction - A reduction in the amount of capacity provided or
to be provided under this Agreement, other than a temporary
reduction during
probationary periods under Section C-5.
Contract capacity - That capacity identified in Article 2(a) except
as
otherwise changed as provided herein.
A-2
<PAGE>
Contract capacity price - The capacity price applicable for the
period from
the actual operation date through the term of agreement from either
the firm
capacit price schedule, Table B of Appendix C, or the successor to
Table B in
effect on the actual operation date. Seller has indicated its
choice of firm
capacity price schedule in Article 3(a).
Contract termination - The early termination of this Agreement.
CPUC
- The Public Utilities Commission of the State of California.
Current firm capacity price - The $/kW-year capacity price from the
firm
capacity price schedule published by PGandE at the time notice of
termination or
reduction of contract capacity is given, for a term equal to the
period from the
date of termination or reduction to the end of the term of
agreement.
Designated PGandE switching center - That switching center or other
PGandE
installation identified in Article 5.
Dispatchable - The Facility is operable and can be called upon at
any time
to increase its deliveries of capacity to any level up to the
contract capacity.
A-3
<PAGE>
Facility - That generation apparatus described in Article 2 and
all
associated equipment owned, maintained, and operated by Seller.
Firm
capacity price schedule - The periodically published schedule of
the
$/kW-year prices that PGandE offers to pay for capacity. See Table
B, Appendix
C.
Forced outage - Any outage resulting from a design defect,
inadequate
construction, operator error or a breakdown of the mechanical or
electrical
equipment that fully or partially curtails the electrical output of
the
Facility.
Interconnection facilities - All means required and apparatus
installed to
interconnect and deliver power from the Facility to the PGandE
system including,
but not limited to, connection, transformation, switching,
metering,
communications, and safety equipment, such as equipment required to
protect (1)
the PGandE system and its customers from faults occurring at the
Facility, and
(2) the Facility from faults occurring on the PGandE system or on
the systems of
others to which the PGandE system is directly or indirectly
connected.
Interconnection facilities also include any necessary additions
and
reinforcements by PGandE to the PGandE system required as a result
of the
interconnection of the Facility to the PGandE system.
A-4
<PAGE>
Net
energy output - The Facility's gross output in kilowatt-hours
less
station use and transformation and transmission losses to the point
of delivery
into the PGandE system. Where PGandE agrees that it is impractical
to connect
the station use on the generator side of the power purchase meter,
PGandE may,
at its option, apply a station load adjustment.
Prudent electrical practices - Those practices, methods, and
equipment, as
changed from time to time, that are commonly used in prudent
electrical
engineering and operations to design and operate electric equipment
lawfully and
with safety, dependability, efficiency, and economy.
Scheduled operation date - The day specified in Article 2 (c) when
the
Facility is, by Seller's estimate, expected to produce energy and
capacity that
will be available for delivery to PGandE.
Special facilities - Those additions and reinforcements to the
PGandE
system which are needed to accommodate the maximum delivery of
energy and
capacity from the Facility as provided in this Agreement and those
parts of the
interconnection facilities which are owned and maintained by PGandE
at Seller's
request, including metering and data processing equipment. All
special
facilities shall be owned, operated, and maintained pursuant to
PGandE's
electric Rule No. 21, which is attached hereto.
A-5
<PAGE>
Station use - Energy used to operate the Facility's auxiliary
equipment.
The auxiliary equipment includes, but is not limited to, forced and
induced
draft fans, cooling towers, boiler feed pumps, lubricating oil
systems, plant
lighting, fuel handling systems, control systems, and sump
pumps.
Surplus energy output - The Facility's gross output, in
kilowatt-hours,
less station use, and any other use by Seller, and transformation
and
transmission losses to the point of delivery into the PGandE
system.
Term
of Agreement - The period of time during which this Agreement will
be
in effect as provided in Article 7.
Voltage level - The voltage at which the Facility interconnects
with the
PGandE system, measured at the point of delivery.
A-2 CONSTRUCTION
A-2.1 Land Rights
Seller hereby grants to PGandE all necessary rights of way and
easements,
including adequate and continuing access rights on property of
Seller, to
A-6
<PAGE>
install, operate, maintain, replace, and remove the special
facilities. Seller
agrees to execute such other grants, deeds, or documents as PGandE
may require
to enable it to record such rights of way and easements. If any
part of PGandE's
equipment is to be installed on property owned by other than
Seller, Seller
shall, at its own cost and expense, obtain from the owners thereof
all necessary
rights of way and easements, in a form satisfactory to PGandE, for
the
construction, operation, maintenance, and replacement of PGandE's
equipment upon
such property. If Seller is unable to obtain such rights of way and
easements,
Seller shall reimburse PGandE for all costs incurred by PGandE in
obtaining
them. PGandE shall at all times have the right of ingress to and
egress from the
Facility at all reasonable hours for any purposes reasonably
connected with this
Agreement or the exercise of any and all rights secured to PGandE
by law or its
tariff schedules.
A-2.2 Design, Construction, ownership, and maintenance
(a)
Seller shall design, construct, install, own, operate, and maintain
all
interconnection facilities, except special facilities, to the point
of
interconnection with, the PGandE system as required for PGandE to
receive firm
capacity and energy from the Facility. The Facility and
interconnection
facilities shall meet all requirements of applicable codes and all
standards of
prudent electrical
practices and shall be maintained in a safe and prudent
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manner. A description of the interconnection facilities for which
Seller is
solely responsible is set forth in Appendix E, or if the
interconnection
requirements have not yet been determined at the time of the
execution of this
Agreement, the description of such facilities will be appended to
this Agreement
at the time such determination is made.
(b)
Seller shall submit to PGandE the design and all specifications for
the
interconnection facilities (except special facilities) and, at
PGandE's option,
the Facility, for review and written acceptance prior to their
release for
construction purposes. PGandE shall notify Seller in writing of the
outcome of
PGandE's review of the design and specifications for Seller's
interconnection
facilities (and the Facility, if requested) within 30 days of the
receipt of the
design and all of the specifications for the interconnection
facilities (and the
Facility, if requested). Any flaws perceived by PGandE in the
design and
specifications for the interconnection facilities (and the
Facility, if
requested) will be described in PGandE's written notification.
PGandE's review
and acceptance of the design and specifications shall not be
construed as
confirming or endorsing the design and specifications or as
warranting their
safety, durability, or reliability. PGandE shall not, by reason of
such review
or lack of review, be responsible for strength, details of design,
adequacy, or
A-8
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capacity of equipment built pursuant to such design and
specifications, nor
shall PGandE's acceptance be deemed to be an endorsement of any of
such
equipment. Seller shall change the interconnection facilities as
may be
reasonably required by PGandE to meet changing requirements of the
PGandE
system.
(c)
In the event it is necessary for PGandE to install
interconnection
facilities for the purposes of this Agreement, they shall be
installed as
special facilities.
(d)
Upon the request of Seller, PGandE shall provide a binding estimate
for
the installation of interconnection facilities by PGandE.
A-2.3 Meter Installation
(a)
PGandE shall specify, provide, install, own, operate, and maintain
as
special facilities all metering and data processing equipment for
the
registration and recording of energy and other related parameters
which are
required for the reporting of data to PGandE and for computing the
payment due
Seller from PGandE.
(b)
Seller shall provide, construct, install, own, and maintain at
Seller's
expense all that is required to accommodate the metering and data
processing
equipment, such as, but not limited to, metal-clad switchgear,
switchboards,
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cubicles, metering panels, enclosures, conduits, rack structures,
and equipment
mounting pads.
(c)
PGandE shall permit meters to be fixed on PGandE's side of the
transformer. If meters are placed on PGandE's side of the
transformer, service
will be provided at the available primary voltage and no
transformer loss
adjustment will be made. If Seller chooses to have meters placed on
Seller's
side of the transformer, an estimated transformer loss adjustment
factor of 2
percent, unless the Parties agree otherwise, will be applied.
A-3 ENERGY SALE
OPTIONS
A-3.1 General
Seller has two energy sale options, net energy output or surplus
energy
output. Seller has made its initial selection in Article 2(a).
A-3.2 Energy Sale Conversion
(a)
Seller is entitled to convert from one option to the other 12
months
after execution of this Agreement, and thereafter at least 12
months after the
effective date of the most recent conversion, subject to the
following
conditions:
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(1) Seller shall provide PGandE with a written request to convert
its
energy sale option.
(2) Seller shall comply with all applicable tariffs on file with
the
CPUC
and contracts in effect between the Parties at the time of
conversion
covering the existing and proposed (i) facilities used to serve
Seller's
premises and (ii) interconnection facilities.
(3) Seller shall install and operate equipment required by PGandE
to
prevent PGandE from serving any part of Seller's load which is
served by
the
Facility and not under contract for PGandE standby service. At
Seller's
request PGandE shall provide this equipment as special
facilities.
(4)
If the energy sale conversion results in a capacity sale
reduction, the provisions in Appendix D shall apply.
(b)
If, as a result of an energy sales conversion, Seller no longer
requires the use of interconnection facilities installed and/or
operated and
maintained by PGandE as special facilities under a special
Facilities Agreement,
Seller may reserve these facilities, for its future use, by
continuing its
performance under its Special Facilities Agreement. If Seller does
not wish to
reserve such facilities, it may terminate its Special Facilities
Agreement.
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<PAGE>
If
Seller's energy sale conversion results in its discontinuation of
its
use of PGandE facilities not covered by Seller's Special Facilities
Agreement,
Seller cannot reserve those facilities for future use. Seller's
future use of
such facilities shall be contingent upon the availability of such
facilities at
the time Seller requests such use. If such facilities are not
available, Seller
shall bear the expense necessary to install, own, and maintain the
needed
additional facilities in accordance with PGandE's applicable
tariff.
(c)
PGandE shall process requests for conversion in the order received.
The
effective date of conversion shall depend on the completion of the
changes
required to accommodate Seller's energy sale conversion.
A-4 OPERATION
A-4.1 Inspection and Approval
Seller shall not operate the Facility in parallel with PGandE's
system
until an authorized PGandE representative has inspected the
interconnection
facilities, and PGandE has given written approval to begin parallel
operation.
Seller shall notify PGandE of the Facility's start-up date at least
45 days
prior to such date. PGandE shall inspect the interconnecting
facilities within
30 days of the receipt of such notice. If parallel operation is not
authorized
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by PGandE, PGandE shall notify Seller in writing within five days
after
inspection of the reason authorization for parallel operation was
withheld.
A-4.2 Facility Operation and Maintenance
Seller shall operate and maintain its Facility according to
prudent
electrical practices, applicable laws, orders, rules, and tariffs
and shall
provide such reactive power support as may be reasonably required
by PGandE to
maintain system voltage level and power factor. Seller shall
operate the
Facility at the power factors or voltage levels prescribed by
PGandE's system
dispatcher or designated representative. If Seller fails to provide
reactive
power support, PGandE may do so at Seller's expense.
A-4.3 Point of Delivery
Seller shall deliver the energy at the point where Seller's
electrical
conductors (or those of Seller's agent) contact PGandE's system as
it shall
exist whenever the deliveries are being made or at such other point
or points as
the Parties may agree in writing. The initial point of delivery of
Seller's
power to the PGandE system is set forth in Appendix E.
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<PAGE>
A-4.4 Operating Communications
(a)
Seller shall maintain operating communications with the
designated
PGandE switching center. The operating communications shall
include, but not be
limited to, system paralleling or separation, scheduled and
unscheduled
shutdowns, equipment clearances, levels of operating voltage or
power factors
and daily capacity and generation reports.
(b)
Seller shall keep a daily operations log for each generating unit
which
shall include information on unit availability, maintenance
outages, circuit
breaker trip operations requiring a manual reset, and any
significant events
related to the operation of the Facility.
(c)
If Seller makes deliveries greater than one megawatt, Seller
shall
measure and register on a graphic recording device power in kW and
voltage in kV
at a location within the Facility agreed to by both Parties.
(d)
If Seller makes deliveries greater than one and up to and including
ten
megawatts, Seller shall report to the designated PGandE switching
center, twice
a day at agreed upon times for the current day's operation, the
hourly readings
in kW of capacity delivered and the energy in kWh delivered since
the last
report.
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<PAGE>
(e)
If Seller makes deliveries of greater than ten megawatts, Seller
shall
telemeter the delivered capacity and energy information, including
real power in
kW, reactive power in kVAR, and energy in kWh to a switching center
selected by
PGandE. PGandE may also require Seller to telemeter transmission
kW, kVAR, and
kV data depending on the number of generators and transmission
configuration.
Seller shall provide and maintain the data circuits required for
telemetering.
When telemetering is inoperative, Seller shall report daily the
capacity
delivered each hour and the energy delivered each day to the
designated PGandE
switching center.
(f)
If Seller provides dispatchable capacity greater than ten
megawatts
pursuant to Option 1 in Section C-5 of Appendix C, Seller may be
required by
PGandE to provide telemetering and control equipment to allow the
Facility to
respond to system load frequency requirements on digital control
from PGandE.
A-4.5 Meter Testing and Inspection
(a)
All meters used to provide data for the computation of the payments
due
Seller from PGandE shall be sealed, and the seals shall be broken
only by PGandE
when the meters are to be inspected, tested, or adjusted.
A-15
<PAGE>
(b) PGandE shall
inspect and test all meters upon their installation and
annually thereafter. At Seller's request and expense, PGandE shall
inspect or
test a meter more frequently. PGandE shall give reasonable notice
to Seller of
the time when any inspection or test shall take place, and Seller
may have
representatives present at the test or inspection. If a meter is
found to be
inaccurate or defective, PGandE shall adjust, repair, or replace it
at its
expense in order to provide accurate metering.
A-4.6 Adjustments to Meter Measurements
If a
meter fails to register, or if the measurement made by a meter
during
a test varies by more than two percent from the measurement made by
the standard
meter used in the test, an adjustment shall be made correcting all
measurements
made by the inaccurate meter for --(1) the actual period during
which inaccurate
measurements were made, if the period can be determined, or if not,
(2) the
period immediately preceding the test of the meter equal to
one-half the time
from the date of the last previous test of the meter, provided that
the period
covered by the correction shall not exceed six months.
A-5 PAYMENT
PGandE shall mail to Seller not later than 30 days after the end of
each
monthly billing period (1) a statement showing the capacity and
energy delivered
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to PGandE during on-peak, partial-peak, and off-peak periods during
the monthly
billing period, (2) PGandE's computation of the amount due Seller,
and (3)
PGandE's check in payment of said amount. Except as provided in
Section A-6, if
within 30 days of receipt of the statement Seller does not make a
report in
writing to PGandE of an error, Seller shall be deemed to have
waived any error
in PGandE's statement, computation, and payment, and they shall be
considered
correct and complete.
A-6 ADJUSTMENTS OF
PAYMENTS
(a)
In the event adjustments to payments are required as a result
of
inaccurate meters, PGandE shall use the corrected measurements
described in
Section A-4.6 to recompute the amount due from PGandE to Seller for
the firm
capacity and energy delivered under this Agreement during the
period of
inaccuracy.
(b)
The additional payment to Seller or refund to PGandE shall be
made
within 30 days of notification of the owing Party of the amount
due.
A-7 ACCESS TO RECORDS
AND PGandE DATA
Each
Party, after giving reasonable written notice to the other
Party,
shall have the right of access to all metering and related records
including
A-17
<PAGE>
operations logs of the Facility. Data filed by PGandE with the CPUC
pursuant to
CPUC orders governing the purchase of power from qualifying
facilities shall be
provided to Seller upon request; provided that Seller shall
reimburse PGandE for
the costs it incurs to respond to such request.
A-8 CURTAILMENT OF
DELIVERIES AND HYDRO SPILL CONDITIONS
(a)
PGandE shall not be obligated to accept or pay for and may
require
Seller to interrupt or reduce deliveries of energy (1) when
necessary in order
to construct, install, maintain, repair, replace, remove,
investigate, or
inspect any of its equipment or any part of its system, or (2) if
it determines
that interruption or reduction is necessary because of emergencies,
forced
outages, force majeure, or compliance with prudent electrical
practices.
(b)
In anticipation of a period of hydro spill conditions, as defined
by
the CPUC, PGandE may notify Seller that any purchases of energy
from Seller
during such period shall be at hydro savings prices quoted by
PGandE. If Seller
delivers energy to PGandE during any such period, Seller shall be
paid hydro
savings prices for those deliveries in lieu of prices which would
otherwise be
applicable. The hydro savings prices shall be calculated by PGandE
using the
following formula:
A-18
<PAGE>
AQF - S
------- X PP
AQF
where:
AQF =
Energy, in kWh,
projected to be available during hydro spill
conditions from all qualifying facilities under agreements
containing
hydro savings price provisions.
S =
Potential
energy, in kWh, from PGandE hydro facilities which will be
spilled if all AQF is delivered to PGandE.
PP =
Prices published
by PGandE for purchases during other than hydro
spill conditions.
(c)
PGandE shall not be obligated to accept or pay for and may
require
Seller with a Facility with a nameplate rating of one megawatt or
greater to
interrupt or reduce deliveries of energy during periods when
purchases under
this Agreement would result in costs greater than those which
PGandE would incur
if it did not make such purchases but instead generated an
equivalent amount of
energy itself.
(d)
Whenever possible, PGandE shall give Seller reasonable notice of
the
possibility that interruption or reduction of deliveries under
subsections (a)
or (c), above, may be required. PGandE shall give Seller notice of
general
periods when hydro spill conditions are anticipated, and shall give
Seller as
much advance notice as practical of any specific hydro spill period
and the
A-19
<PAGE>
hydro savings price which will be applicable during such period.
Before
interrupting or reducing deliveries under subsection (c)., above,
and before
invoking hydro savings prices under subsection (b), above, PGandE
shall take
reasonable steps to make economy sales of the surplus energy giving
rise to the
condition. If such economy sales are made, while the surplus energy
condition
exists Seller shall be paid at the economy sales price obtained by
PGandE in
lieu of the otherwise applicable prices.
(e)
If Seller is selling net energy output to PGandE and
simultaneously
purchasing its electrical needs from PGandE, energy curtailed
pursuant to
subsections (b) or (c) above shall not be used by Seller to meet
its electrical
needs. When Seller elects not to sell energy to PGandE at the hydro
savings
price pursuant to subsection (b) or when PGandE curtails deliveries
of energy
pursuant to subsection (c), Seller shall continue to purchase all
its electrical
needs from PGandE. If Seller is selling surplus energy output to
PGandE,
subsections (b) or (c) shall only apply to the surplus energy
output being
delivered to PGandE, and Seller can continue to internally use that
generation
it has retained for its own use.
A-9 FORCE MAJEURE
(a)
The term force majeure as used herein means unforeseeable causes,
other
than forced outages, beyond the reasonable control of and without
the fault or
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negligence of the Party claiming force majeure including, but not
limited to,
acts of God, labor disputes, sudden actions of the elements,
actions by federal,
state, and municipal agencies, and actions of legislative,
judicial, or
regulatory agencies which conflict with the terms of this
Agreement.
(b)
If either Party because of force majeure is rendered wholly or
partly
unable to perform its obligations under this Agreement, that Party
shall be
excused from whatever performance is affected by the force majeure
to the extent
so affected provided that:
(1)
the non-performing Party, within two weeks after the occurrence
of
the
force majeure, gives the other Party written notice describing
the
particulars of the occurrence,
(2) the suspension of performance is of no greater scope and of
no
longer duration than is required by the force majeure,
(3) the non-performing Party uses its best efforts to remedy
its
inability to perform (this subsection shall not require the
settlement of
any
strike, walkout, lockout or other labor dispute on terms which, in
the
sole
judgment of the Party involved in the dispute, are contrary to
its
interest. It is understood and agreed that the settlement of
strikes,
walkouts, lockouts or other labor disputes shall be at the sole
discretion
of
the Party having the difficulty),
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<PAGE>
(4) when the non-performing Party is able to resume performance of
its
obligations under this Agreement, that Party shall give the other
Party
written notice to that effect, and
(5) capacity payments during such periods of force majeure on
Seller's
part
shall be governed by Section C-2(c) of Appendix C.
(c)
In the event a Party is unable to perform due to legislative,
judicial,
or regulatory agency action, this Agreement shall be renegotiated
to comply with
the legal change which caused the non-performance.
A-10 INDEMNITY
Each
Party as indemnitor shall save harmless and indemnify the other
Party
and the directors, officers, and employees of such other Party
against and from
any and all loss and liability for injuries to persons including
employees of
either Party, and property damages including property of either
Party resulting
from or arising out of (1) the engineering, design, construction,
maintenance,
or operation of, or (2) the making of replacements, additions, or
betterments
to, the indemnitor's facilities. This indemnity and save harmless
provision
shall apply notwithstanding the active or passive negligence of the
indemnitee.
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<PAGE>
Neither Party shall be indemnified hereunder for its liability or
loss resulting
from its sole negligence or willful misconduct. The indemnitor
shall, on the
other Party's request, defend any suit asserting a claim covered by
this
indemnity and shall pay all costs, including reasonable attorney
fees, that may
be incurred by the other Party in enforcing this indemnity.
A-11
LIABILITY; DEDICATION
(a)
Nothing in this Agreement shall create any duty to, any standard
of
care with reference to, or any liability to any person not a Party
to it.
Neither Party shall be liable to the other Party for consequential
damages.
(b)
Each Party shall be responsible for protecting its facilities
from
possible damage by reason of electrical disturbances or faults
caused by the
operation, faulty operation, or nonoperation of the other Party's
facilities,
and such other Party shall not be liable for any such damages so
caused.
(c)
No undertaking by one Party to the other under any provision of
this
Agreement shall constitute the dedication of that Party's system or
any portion
thereof to the other Party or to the public or affect the status of
PGandE as an
independent public utility corporation or Seller as an independent
individual or
entity and not a public utility.
A-23
<PAGE>
A-12 SEVERAL OBLIGATIONS
Except where specifically stated in this Agreement to be otherwise,
the
duties, obligations, and liabilities of the Parties are intended to
be several
and not joint or collective. Nothing contained in this Agreement
shall ever be
construed to create an association, trust, partnership, or joint
venture or
impose a trust or partnership duty, obligation, or liability on or
with regard
to either Party. Each Party shall be liable individually and
severally for its
own obligations under this Agreement.
A-13 NON-WAIVER
Failure to enforce any right or obligation by either Party with
respect to
any matter arising in connection with this Agreement shall not
constitute a
waiver as to that matter or any other matter.
A-14 ASSIGNMENT
Neither Party shall voluntarily assign its rights nor delegate its
duties
under this Agreement, or any part of such rights or duties, without
the written
consent of the other Party, except in connection with the sale or
merger of a
A-24
<PAGE>
substantial portion of its properties. Any such assignment or
delegation made
without such written consent shall be null and void. Consent for
assignment
shall not be withheld unreasonably. Such assignment shall include,
unless
otherwise specified therein, all of Seller's rights to any refunds
which might
become due under this Agreement.
A-15 CAPTIONS
All
indexes, titles, subject headings, section titles, and similar
items
are provided for the purpose of reference and convenience and are
not intended
to affect the meaning of the contents or scope of this
Agreement.
A-15 CHOICE OF LAWS
This
Agreement shall be interpreted in accordance with the laws of
the
State of California, excluding any choice of law rules which may
direct the
application of the laws of another jurisdiction.
A-17 GOVERNMENTAL JURISDICTION AND AUTHORIZATION
Seller shall obtain any governmental authorizations and permits
required
for the construction and operation of the Facility. Seller shall
reimburse
PGandE for any and all losses, damages, claims, penalties, or
liabil
