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SOUTHERN CALIFORNIA EDISON COMPANY REFORMED STANDARD OFFER 1 AS-AVAILABLE CAPACITY AND ENERGY POWER PURCHASE AGREEMENT

Power Purchase Agreement

SOUTHERN CALIFORNIA EDISON COMPANY REFORMED STANDARD OFFER 1 AS-AVAILABLE CAPACITY AND ENERGY POWER PURCHASE AGREEMENT | Document Parties: ZOND PANAERO WINDSYSTEM P | SOUTHERN CALIFORNIA EDISON COMPANY | PAMC MANAGEMENT CORPORATION You are currently viewing:
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ZOND PANAERO WINDSYSTEM P | SOUTHERN CALIFORNIA EDISON COMPANY | PAMC MANAGEMENT CORPORATION

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Title: SOUTHERN CALIFORNIA EDISON COMPANY REFORMED STANDARD OFFER 1 AS-AVAILABLE CAPACITY AND ENERGY POWER PURCHASE AGREEMENT
Governing Law: California     Date: 6/29/2005

SOUTHERN CALIFORNIA EDISON COMPANY REFORMED STANDARD OFFER 1 AS-AVAILABLE CAPACITY AND ENERGY POWER PURCHASE AGREEMENT, Parties: zond panaero windsystem p , southern california edison company , pamc management corporation
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                                                                    Exhibit 10.2

                                                                    ------------

 

 

                       SOUTHERN CALIFORNIA EDISON COMPANY

                            REFORMED STANDARD OFFER 1

                        AS-AVAILABLE CAPACITY AND ENERGY

                            POWER PURCHASE AGREEMENT

 

                                     BETWEEN

 

 

                       SOUTHERN CALIFORNIA EDISON COMPANY

 

 

                                        AND

 

 

                           PAMC MANAGEMENT CORPORATION

 

 

                                  QFID NO. 6308

 

 

                       Pursuant To Decision No. 04-01-050

 

 

<PAGE>

 

 

 

                                TABLE OF CONTENTS

                                 -----------------

 

Section   Title                                                               Page

-------   -----                                                               ----

 

         The Parties...........................................................1

         Recitals..............................................................1

  1        Project Summary.......................................................2

  2        Definitions...........................................................6

  3        Termination of Original Contract, Effective

         Date and Termination of Agreement.....................................9

  4        Project Fee...........................................................9

  5        Project Development Milestones........................................9

  6        Generating Facility..................................................11

  7        Operating Options....................................................14

  8        Interconnection Facilities...........................................15

  9        Review and Disclaimer................................................16

  10       Real Property Rights.................................................16

  11       Metering.............................................................17

  12       Qualifying Facility Status and Permits...............................19

  13       Energy Purchase......................................................19

  14       Capacity Purchase....................................................20

  15       Curtailment..........................................................20

  16       Interruption of Deliveries...........................................22

  17       Payment and Billing..................................................22

  18       Indemnity and Liability..............................................23

  19       Insurance............................................................24

  20       Force Majeure........................................................25

  21       Review of Records and Data...........................................26

  22       Assignment...........................................................26

  23       Abandonment..........................................................26

  24       Non-Dedication.......................................................27

  25       Non-Waiver...........................................................27

  26       Section Headings.....................................................27

  27       Governing Law........................................................27

  28       Amendment, Modification or Waiver....................................27

  29       Several Obligations..................................................27

  30       Signatures...........................................................28

 

         Appendix A:      Time of Delivery Periods

         Appendix B:      Southern California Edison Company's Tariff Rule No. 21

         Appendix C:      Interconnection Facilities Agreement

         Appendix D:      Metrological Tower Side Letter

 

 

<PAGE>

                       Southern California Edison Company

                          Reformed Standard Offer No. 1

            As-Available Energy and Capacity Power Purchase Agreement

 

 

                                      PARTIES

 

 

PAMC Management Corporation, a Colorado corporation, who is acting on its own

behalf and on behalf of all other owners of the Generating Facility and

seller(s) of electrical power generated by the Generating Facility,

(collectively, referred to as "Seller"), and Southern California Edison Company

("Edison" or "SCE"), a California corporation, referred to collectively as

"Parties" and individually as "Party", agree as follows:

 

 

                                    RECITALS

 

This Agreement is made with reference to the following facts, among others:

 

A.    Edison is a California investor-owned public utility corporation ("IOU").

 

B.    Seller operates an electric power generation facility near Palm Springs,

     California, which Seller represents and warrants, is a qualifying facility

     ("QF") under applicable regulations of the Federal Energy Regulatory

     Commission.

 

C.    On April 12, 1982, Edison and Mesa Wind Developers, as

     successor-in-interest to Pan Aero Corporation ("Mesa Wind") entered into an

     agreement entitled "Wind Park Power Purchase and Sales Agreement." The Wind

     Park Power Purchase and Sales Agreement, as amended, is referred to herein

     as the "Original Contract." The Original Contract is subject to termination

     by any Party on five years written notice which shall not be given prior to

     the expiration of fifteen (15) years from the Firm Operation of all

     generating units. Such notice of termination was given by SCE to Seller on

     June 23, 2000. On June 22, 2005, the Original Contract was assigned to PAMC

     Management Corporation ("PAMC") pursuant to an Assignment of Power

     Contract, dated as of June 22, 2005, between PAMC and Mesa Wind. Edison

     consented to such assignment pursuant to that certain Consent Agreement,

     dated as of June 22, 2005 between Edison and Mesa Wind.

 

D.    On August 22, 2002, the CPUC issued Decision ("D.") No. 02-08-071, in which

     it ordered Edison and other IOUs to make SO1 power purchase agreements

     available to certain QFs that meet the requirements of that decision.

 

E.    On or about December 22, 2003, the CPUC issued Decision 03-12-062 (the

     "Short Term 2004 Procurement Decision"), in which it ordered that "QFs in

     operation and under contract to provide power to an investor-owned utility

     at any point between January 1, 1998 and December 18, 2003, whose contracts

     are set to expire before January 1, 2005, shall be afforded interim

 

 

                                       1

 

<PAGE>

 

     treatment, consistent with that provided in D.02-08-071." Short Term 2004

     Procurement Decision, Ordering Paragraph 14, mimeo at 88.

 

F.    On or about January 26, 2004, the CPUC issued Decision 04-01-050 (the "Long

     Term 2004 Procurement Decision"), in which it ordered that "[f]or

     Qualifying Facilities (QF)s with existing contracts expiring before

     December 31, 2005, the utilities shall offer five-year Standard Offer 1

     (SO1) contracts at short-run avoided cost ("SRAC") prices." Long Term 2004

     Procurement Decision, Ordering Paragraph 4, mimeo at 200.

 

G.    For the reasons set forth in Edison's comments, reply comments and

     applications for rehearing filed at the CPUC in Rulemaking 01-10-024

     concerning the Short Term 2004 Procurement Decision and the Long Term 2004

     Procurement Decision (collectively, the "2004 Procurement Decisions"),

     Edison contends that the 2004 Procurement Decisions are unlawful insofar as

     they require Edison to enter into this Agreement at a price exceeding that

     permitted under applicable state and federal law. Edison has applied for

     rehearing of the 2004 Procurement Decisions, which application was denied

     by the CPUC. Edison has filed a petition for a writ of review before the

     Court of Appeal, Second Appellate District, in connection with the 2004

     Procurement Decisions. Edison reserves all rights and defenses with respect

     this Agreement and the 2004 Procurement Decisions. Seller disputes that

     pricing under this Agreement is unlawful and reserves its rights and

     defenses with respect to this Agreement, including its right to oppose

     Edison's petition for a writ of review or further review of the 2004

     Procurement Decisions.

 

H.    In addition, the Long Term 2004 Procurement Decision requires that SO1

     contracts to be entered into thereunder include the provision that the

     pricing terms may change if the CPUC subsequently modifies its policy on QF

     pricing methodology. Long Term 2004 Procurement Decision, Ordering

     Paragraph 4, mimeo at 194.

 

I.    Uniform Standard Offer No. 1 ("USO1") as it existed on February 24, 1989,

     does not in all respects conform to the requirements of D.02-08-071 or

     changes of circumstances that have occurred since the adoption of USO1, and

     therefore this Reformed Standard Offer No. 1 ("RSO1") was developed by

     adding to, removing or modifying portions of USO1 to conform with

     D.02-08-071 and changed circumstances.

 

J.    To effectuate the foregoing decisions, and subject to their respective

     positions as set forth above, the Parties desire to enter into this

     Agreement.

 

 

                                    AGREEMENT

                                    ---------

 

1.    PROJECT SUMMARY

 

     1.1   Seller's Generating Facility:

 

                                       2

 

<PAGE>

 

          (a)   QFID Number: 6308

 

          (b)   Nameplate Rating: 30 MW. (Net of Station Use)

 

               The Nameplate Rating may not exceed the nameplate rating agreed

               to between Edison and Seller in the Original Contract referenced

               in Section 1.1(e) below. Seller may not increase the Nameplate

               Rating after Initial Operation.

 

          (c)   Location: Riverside County, California

               Alta Mesa: ~68 acres in Section 4, T.3S, R.3E., SBBM

               North Whitewater: ~409 acres in Sections 27, 33, and 34, T.2S.,

               R.3E., SBBM

 

          (d)   Type: (Check One)

 

               -----     Cogeneration facility.

                        Natural Gas (primary energy source).

 

                 X       Small power production facility.

               -----

                        (primary energy source).

 

          (e)   Seller represents and warrants that it was in operation and under

               contract to sell power to an IOU at some point in time between

               January 1, 1998 and December 18, 2003, and that its contract to

               provide such power expired or terminated, or will expire or is

               set to terminate, before December 31, 2005. Edison may, at its

               sole discretion, terminate this Agreement by written notice

               effective immediately, in the event it learns of a breach of

                Seller's representation and warranty in this Section 1.1(e).

 

               Enter name of contracting IOU: SCE

 

               Enter date of Original Contract expiration: The Parties agree

               that the Original Contract shall be deemed terminated as of 12:01

               a.m. on the Effective Date.

 

     1.2   Expected annual energy deliveries: 71,000,000 kWh.

                                             ----------

 

     1.3   [This section intentionally left blank].

 

     1.4   [This section intentionally left blank].

 

     1.5   Project Development Material Milestones:

 

          (a)   [This section intentionally left blank].

 

          (b)   [This section intentionally left blank].

 

          (c)   [This section intentionally left blank].

 

                                    3

 

<PAGE>

 

     1.6. Operating Options pursuant to Section 7: (Check One)

 

            X       Operating Option I (Buy/Sell):   Entire Generating

          -----

                   Facility output less Station output less Station Use

                   sold to Edison.

 

          -----     Operating Option II (Surplus Sale):   The Generating

                   Facility output, less Station Use and any other use by

                   Seller, sold to Edison.   Capacity allocated to other use

                   by Seller:   ________ kW.

 

     1.7   Metering Location:   (Check one)

 

          Seller selects metering location pursuant to Section 11 as follows:

 

            X       High-voltage side of the Interconnection Facilities

          -----

                   transformer.

 

          -----     Low-voltage side of the Interconnection Facilities

                   transformer, with the transformer loss compensation factor

                   determined in accordance with Section 11.2.

 

     1.8   Notices:

 

          Any written notice, demand, or request required or authorized in

          connection with this Agreement shall be deemed properly given if

          delivered in person or sent by first class mail, postage prepaid, to

          the person specified below:

 

          Edison:   Southern California Edison Company

                   Attention:   Director, QF Resources Business Unit

                   P.O. Box 800

                   Rosemead, CA 91770

                   Telephone:   626-302-1212

                   Facsimile:   626-302-1103

 

          Seller:   PAMC Management Corporation

 

                   Attention:   Robert Keeley

 

                   12630 Milan Road

 

                   Colorado Springs, CO 80908

 

                    Attention:   President

 

                   Telephone:   719-942-3194

 

                   Facsimile:   719-262-3494

 

          Seller's notices to Edison pursuant to this Section 1.8 shall refer to

          the QFID number set forth in Section 1.1(a). The designated addresses

          for giving notice under this Agreement may be changed at any time upon

          notice by the Party's authorized representative to the notice address

          in effect at the time of the notice address change.

 

                                        4

 

 

<PAGE>

 

     1.9   Location of (Edison) Designated Switching Center:

 

                       Devers Switching Center

          ---------------------------------------------------

 

     1.10 Seller's arrangement includes Host(s):   (Check one)

 

               yes

                     -----

 

               no       X

                     -----

 

           If yes, the following sections shall apply:

 

           (a)   Host(s):      _____________________________

                              _____________________________

                             _____________________________

 

           (b)   Seller has made arrangements with Host(s) to: (Check one

                or both)

 

                a.    ___ Deliver all or a portion of the ectrical output of the

                         Generating Facility to Host(s).

 

                b.    ___ Deliver useful thermal output from the Generating

                         Facility to Host(s).

 

           (c)   Seller shall, within ten (10) days of the Effective Date,

                provide Edison with the name(s) and address(es) of

                representative(s) of the Host(s) who is (are) authorized to act

                on behalf of the Host(s) in matters related to the arrangement

                 identified in this Section 1.10. Seller shall notify Edison of

                any change(s) of authorized representative(s) within ten (10)

                days of being notified of such change.

 

           (d)   Any references to Host(s) contained in this Agreement are not

                intended and shall not be construed to create any third party

                rights or remedies.

 

     1.11   Location of Edison Customer Service District Office:

 

                   Palm Springs District Office

           ----------------------------------------

 

     1.12   The Point of Delivery is as follows:

 

                    Existing 115 kV metering point at PanAero Substation

           --------------------------------------------------------------------

 

2.    DEFINITIONS

 

     When italicized, whether in the singular or in the plural, the following

     terms shall have the following meanings:

 

     2.1    Agreement:   This document and any written amendments which may be

           agreed upon by the Parties from time-to-time.

 

                                       5

 

 

<PAGE>

 

     2.2    As-Available Capacity:   The capacity delivered to Edison from the

           Generating Facility that Edison is contractually obligated to

           purchase at its published As-Available Capacity price as approved by

           the CPUC.

 

     2.3    CPUC:   The Public Utilities Commission of the State of California.

 

 

     2.4    Designated Switching Center:   The Edison facility which is described

           in Section 1.9.

 

     2.5    Tariff Rule 21: The tariff setting forth Edison's interconnection

           standards for cogenerators and small power producers interconnected

           with the Edison system, as such tariff may be modified by the CPUC

           from time-to-time. A copy of the current version of such tariff is

           attached hereto as Appendix B and incorporated herein by reference.

 

     2.6    Emergency: An actual or imminent condition or situation which, in

           Edison's sole opinion, jeopardizes Edison Electric System Integrity

           or the integrity of other systems to which Edison is connected; or

           any condition so-defined and declared by the ISO.

 

     2.7    Force Majeure: Any occurrence, other than Forced Outages, beyond the

           reasonable control of and without the fault or negligence of the

           Party claiming Force Majeure which causes the Party to be unable to

           perform its obligations, which by exercise of due foresight such

            Party could not reasonably have been expected to avoid and which the

           Party is unable to overcome by the exercise of due diligence.   Such

           an occurrence may include, but is not limited to, acts of God, labor

           disputes, sudden actions of the elements, actions or inactions by

           federal, state, and municipal agencies, and actions or inactions of

           legislative, judicial, or regulatory agencies.

 

     2.8    Forced Outage: Any outage of the Generating Facility or Seller's

           Interconnection Facilities resulting from a design defect, inadequate

           construction, operator error, interruption in fuel supply unless

           excused as a Force Majeure, or a breakdown of the mechanical or

           electrical equipment that fully or partially curtails the electrical

           output of the Generating Facility.

 

     2.9    Generating Facility: All of Seller's generating units, together with

           all protective and other associated equipment and improvements owned,

           maintained, and operated by Seller, which are necessary to produce

           electrical power, excluding associated land, land rights, and

           interests in land.

 

     2.10   Host(s): The entity or entities identified in Section 1.10 which will

           accept: (a) useful thermal output of the cogenerator; (b) all or a

           portion of the electric output of the Generating Facility; or (c)

           both.

 

     2.11   Initial Operation: The day that the Generating Facility delivers

           electric power to the Point of Delivery under this Agreement.

 

                                       6

 

 

<PAGE>

 

 

     2.12   Interconnection Facilities: All means required, and apparatus

           installed, to interconnect and deliver power from the Generating

           Facility to the Point of Delivery by means of either the Edison

           system or the ISO Grid, including, but not limited to, connection,

           transformation, switching, metering, communications, control, and

           safety equipment, such as equipment required to protect (a) the

           Edison system (or other systems to which Edison is directly or

           indirectly connected, including the ISO Grid) and its customers from

            faults occurring at the Generating Facility, and (b) the Generating

           Facility from faults occurring on the Edison system or on the systems

           of others to which the Edison system is directly or indirectly

           connected. Interconnection Facilities also include any necessary

           additions and reinforcements by Edison to the Edison system required

           as a result of the interconnection of the Generating Facility to the

           Edison system, the ISO Grid system, or systems to which the Edison

           system is connected.

 

     2.13   Interconnection Facilities Agreement: The Interconnection Facilities

           Agreement, dated as of the date herein, between Seller and Edison,

           attached hereto as Appendix C.

 

     2.14   Nameplate Rating: The gross generating capacity of the Generating

           Facility less Station Use. For purposes of this Agreement, Nameplate

           Rating is that rating specified in Section 1.1(b) of this Agreement.

 

      2.15   Edison Electric System Integrity: The state of operation of Edison's

           electric system in a manner which is deemed to minimize the risk of

           injury to persons and/or property and enables Edison to provide

           adequate and reliable electric service to its customers.

 

     2.16   Point of Delivery: That certain location on Edison's system or on the

           ISO Grid within Edison's geographic service territory, which is set

           forth in Section 1.12, at which title to electricity delivered by

           Seller from the Generating Facility will transfer from Seller to

           Edison.

 

     2.17   [This section is intentionally left blank].

 

     2.18   Protective Apparatus: All relays, meters, power circuit breakers,

           synchronizers, and other control devices as shall be agreed to by the

           Parties in accordance with the requirements of Edison as necessary

           for proper and safe operation of the Generating Facility in parallel

           with Edison's electric system and/or the ISO Grid.

 

     2.19   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

           similar electric equipment lawfully and with safety, dependability,

           efficiency, and economy.

 

     2.20   [This section is intentionally left blank].

 

     2.21   Short-Run Avoided Costs or "SRAC": CPUC-approved costs, updated from

           time to time, which are the basis of Edison's published energy and

           capacity prices.

 

                                       7

 

 

<PAGE>

 

 

     2.22   Station Use: Energy used to operate the Generating 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.

 

     2.23   Effective Date:   June 23, 2005.

 

     2.24   IOU: A California investor-owned public utility corporation, e.g.,

           Southern California Edison Company, San Diego Gas and Electric

           Company, or Pacific Gas and Electric Company.

 

     2.25   ISO: The California Independent System Operator Corporation, a state

           chartered, nonprofit, public benefit corporation that controls

           certain transmission facilities of all participating transmission

           owners and dispatches certain electric generation units and loads.

 

     2.26   ISO Grid: The system of transmission lines and associated facilities

           of the participating transmission owners that have been placed under

           the ISO's operational control.

 

     2.27   Project Manager: The entity designated in this Agreement responsible

           for operating and maintaining the Project with sole authority and

           agency to act on behalf of Seller in all matters relating to this

           Agreement. Enron Wind Systems, LLC shall act as Project Manager of

           this Agreement.

 

     2.27   Reformed Standard Offer No. 1, Reformed SO1 or RSO1: The

           standardized, unexecuted form of this Agreement offered pursuant to

           D.02-08-071, D.03-12-062 or D.04-01-050.

 

     2.28   Uniform Standard Offer No. 1, USO1, or SO1: The standardized Southern

           California Edison Company Uniform Standard Offer 1 - As-Available

           Capacity and Energy Power Purchase Agreement, approved by the CPUC on

           February 24, 1989.

 

3.    TERMINATION OF ORIGINAL CONTRACT, EFFECTIVE DATE AND

     TERMINATION OF AGREEMENT

 

     3.1   This Agreement shall be valid and binding upon the Parties on the date

          that it has been executed by both Parties.

 

     3.2   Unless terminated sooner, this Agreement shall terminate at 11:59 p.m.

          on the last day before the fifth anniversary of the Effective Date.

          Unless otherwise provided herein, any rights vested as of the

          termination of this Agreement shall survive the termination.

 

     3.3   This Agreement may be terminated sooner by Seller upon providing

          thirty (30) days prior written notice in accordance with Section 1.8.

 

                                        8

 

 

<PAGE>

 

 

4.    PROJECT FEE

 

     [This section intentionally left blank].

 

5.    PROJECT DEVELOPMENT MILESTONES

 

     Seller shall complete each Project Development Milestone as provided in

     this Section 5.

 

     5.1   Project Development Milestones

 

          (a)   The following events shall constitute Project Development

               Milestones:

 

               (1)   [This section intentionally left blank].

 

               (2)   Maintenance of Site Control (pursuant to Section 5.3).

 

               (3)   [This section intentionally left blank].

 

               (4)   [This section intentionally left blank].

 

               (5)   [This section intentionally left blank].

 

          (b)   If Seller fails to complete each Project Development Milestone in

               the time and manner provided in Sections 5.2 through 5.6, Edison

               may terminate this Agreement upon thirty (30) days written

               notice.

 

     5.2   [This section intentionally left blank].

 

      5.3   Maintain Site Control

 

          (a)   Seller warrants that it possessed Site Control of the site

               described in Section 1.1(c) as of the date Seller executed this

               Agreement and that Seller shall maintain continuous Site Control

               for the term of this Agreement.

 

          (b)   Site Control: Site Control shall consist of one of the following,

               or other form of Site Control acceptable to Edison in its sole

               discretion:

 

               (1)   Seller's ownership of the location of Seller's Generating

                    Facility specified in Section 1.1(c);

 

               (2)   Seller's leasehold interest or right of way grant in the

                    location specified in Section 1.1(c), which leasehold

                    interest shall specifically include the right to construct

                    and operate the Generating Facility at such location;

 

               (3)   Seller's exclusive and irrevocable contractual right to

                     construct and operate the Generating Facility at the

                    location specified in Section 1.1(c); or

 

                                       9

 

 

<PAGE>

 

               (4)   Seller's exclusive and irrevocable option to obtain any of

                    the rights described in Section 5.3(b)(1) through Section

                    5.3(b)(3) above. This alternative shall only constitute Site

                    Control prior to the commencement of construction of

                    Seller's Generating Facility.

 

          (c)   Seller shall provide Edison with prompt notice of any change in

               the status of its Site Control. If, at any time, Edison has

               reason to believe that Seller has lost Site Control, Edison may

               request from Seller evidence that Seller continues to possess

               Site Control. If Seller fails to provide such evidence within

               thirty (30) calendar days after Seller receives Edison's request,

               the provisions of the last sentence of Section 5.3(d) shall

               apply.

 

          (d)   Where the term of Seller's Site Control does not extend for the

               full term of this Agreement, Seller shall advise Edison of the

               date Site Control is scheduled to expire. Seller shall provide to

               Edison, no later than the date Seller's Site Control is scheduled

               to expire, evidence that Seller's Site Control has been renewed

               or extended. If Seller fails to provide such evidence, Edison

               shall notify Seller in writing that Seller is not in compliance

               with this Section 5.3(d). Unless Seller provides Edison with

               evidence that Site Control has been renewed or extended within

               thirty (30) calendar days after Edison's notification, the

               provisions of Section 5.1(b) shall apply.

 

          (e)   This Agreement is project and site specific; however, Seller may

               with Edison's prior consent, be permitted to adjust the location

               of Seller's Generating Facility within the proximity of the site

               specified in Section 1.1(c) if necessary for project development.

 

     5.4   [This section intentionally left blank].

 

     5.5   [This section intentionally left blank].

 

     5.6   [This section intentionally left blank].

 

6.    GENERATING FACILITY

 

     The Generating Facility shall be owned by Seller. The Generating Facility

     shall be designed, constructed, operated, and maintained as follows:

 

     6.1   Design and Construction:

 

          (a)   Seller, at Seller's sole expense, shall:

 

               (1)   Design the Generating Facility;

 

               (2)   Acquire all permits and other approvals necessary for the

                    construction, operation, and maintenance of the Generating

                    Facility; and

 

                                       10

 

 

<PAGE>

 

 

               (3)   Complete all environmental impact studies necessary for the

                    construction, operation, and maintenance of the Generating

                    Facility.

 

          (b)   Seller shall provide to Edison reasonable advance written notice

               of any changes in Seller's Generating Facility and provide to

               Edison specifications and design drawings of any such changes for

               Edison's review and approval.

 

          (c)   The total installed capacity (net of Station Use) of Seller's

               Generating Facility shall not exceed the Nameplate Rating set

               forth in Section 1.1(b) of this Agreement.

 

     6.2   Construction:

 

          (a)   Seller, at Seller's sole expense, shall construct the Generating

               Facility.

 

          (b)   Edison shall have the right to review and consult with Seller

               regarding Seller's construction schedule.

 

          (c)   Edison shall have the right to periodically inspect the

               Generating Facility upon advance notice to Seller. Seller, at its

               option, may be present at such inspection.

 

     6.3   Operation:

 

          (a)   Seller shall operate the Generating Facility in accordance with

               Prudent Electrical Practices.

 

          (b)   Seller shall operate the Generating Facility to generate such

               reactive power or provide individual power factor correction as

               necessary to maintain voltage levels and reactive power support

               for the Generating Facility as may be required by Edison in its

               sole discretion. Seller shall not deliver excess reactive power

               to Edison unless otherwise agreed upon between the Parties. If

               Seller fails to provide reactive power support, Edison may do so

                at Seller's expense.

 

          (c)   The Generating Facility shall be operated with all of Seller's

               Protective Apparatus in service whenever the Generating Facility

               is connected to, or is operated in parallel with, the Edison

               electric system or the ISO Grid. Any deviation for brief periods

               of Emergency or maintenance shall only be by agreement of the

               Parties.

 

          (d)   Seller shall maintain operating communications with either the

               Edison Designated Switching Center or the Edison Generation

               Operations Center, as requested by Edison. The Generation

               Operations Center can be reached at any time at 626-302-3285. The

               operating communications shall include, but not be limited to,

               system parallel operation or separation, scheduled and

               unscheduled outages, equipment clearances, protective relay

              

 

                                        11

 

 

<PAGE>

 

 

               operations, levels of operating voltage and reactive power, and

               daily capacity and generation reports. For coordination of

               switching and Edison grid operations, the Seller may be referred

                to the Switching Center designated in Section 1.9.

 

          (e)   Seller shall keep a daily operations log for the Generating

               Facility which shall include information on availability,

               maintenance outages, circuit breaker trip operations requiring a

               manual reset, and any significant events related to the operation

               of the Generating Facility, including but not limited to: real

               and reactive power production; changes in operating status and

               protective apparatus operations; and any unusual conditions found

               during inspections. Changes in setting shall also be logged for

               Seller's generator(s) if it is "block-loaded" to a specific kW

               capacity.

 

          (f)   Seller shall maintain complete daily operations records

               applicable to the Generating Facility, including but not limited

               to wind speeds and other pertinent meteorological conditions,

                fuel consumption, cogeneration fuel efficiency, maintenance

               performed, kilowatts, kilovars and kilowatt-hours generated and

               settings or adjustments of the generator control equipment and

               protective devices. Such information shall be available to Edison

               pursuant to Section 21.

 

          (g)   If Seller's Generating Facility has a Nameplate Rating greater

               than one (1) and up to and including ten (10) megawatts, Edison

                may require Seller to report to the Designated 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.

 

          (h)   If Seller's Generating Facility has a Nameplate Rating greater

               than ten (10) megawatts, Edison shall provide, at Seller's

               expense, telemetering equipment.

 

          (i)   Edison may require Seller, at Seller's expense, to demonstrate to

               Edison's satisfaction the correct calibration and operation of

               Seller's Protective Apparatus at any time Edison has reason to

               believe that said P


 
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