POWER SUPPLY AGREEMENT, DATED 12/18/06, BETWEEN AMEREN ENERGY MARKETING CO. AND AMERENENERGY RESOURCES GENERATING COMPANYSupply Agreement |
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Exhibit 99.1
POWER SUPPLY AGREEMENT
BETWEEN
AMEREN ENERGY MARKETING COMPANY
AND
AMERENENERGY RESOURCES GENERATING COMPANY
DATED DECEMBER 18, 2006
Power Supply Agreement
Between
Ameren Energy Marketing Company
And
AmerenEnergy Resources Generating Company
This Power Supply Agreement (referred to as the "Agreement"), entered into this 18th day of December, 2006, by and between Ameren Energy Marketing Company (“Buyer”), and AmerenEnergy Resources Generating Company (“Seller”), where Buyer and Seller shall be referred to herein collectively as “Parties” and individually as a “Party.”
WITNESSETH THAT:
WHEREAS , Seller is a wholly-owned subsidiary of Central Illinois Light Company and has been authorized to sell power at market-based rates; and
WHEREAS, Buyer is a power marketer that has been authorized to sell power at market-based rates; and
WHEREAS, Seller has a fleet of coal and gas fired generating units which currently has a total generating capacity of approximately 1,150 MW that operate throughout the state of Illinois (“Seller’s Generation Fleet”); and
WHEREAS, the Buyer desires to obtain rights to the capacity and energy from the Seller’s Generation Fleet pursuant to the terms and conditions of this Agreement in order to, among other things sell the capacity and energy into the market using Buyer’s market based rate authority; and
WHEREAS , the Parties hereto desire to establish herein the terms and conditions under which Buyer shall procure the capacity and energy from Seller throughout the term of this Agreement.
NOW, THEREFORE , in consideration of the premises and provisions of this Agreement and in consideration of the mutual agreements and undertakings of the Parties, the Parties do hereby agree that the terms and provisions of the Articles and Sections shall read in their entirety as follows:
Article I
Term
1.1 Except as otherwise provided in Section 7.6, this Agreement shall be effective as of the date set forth above and deliveries shall commence January 1, 2007 and shall continue through December 31, 2022 and from year to year thereafter unless either Party elects to terminate by providing the other Party with no less than six (6) months advanced written notice of its desire to terminate.
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Article II
Delivery Point and Transfer of Title
2.1 Seller shall sell and deliver and the Buyer shall purchase and receive energy at the high side of each generator bus of the Seller’s Generation Fleet (“Delivery Point”). All energy delivered hereunder shall be metered as three phase, 60 hertz at the high side of the step-up transformer. The Buyer shall arrange and be responsible for all transmission services and costs relative to the capacity and associated energy Buyer schedules at and from the Delivery Point.
2.2 Title to and risk of loss related to Buyer’s capacity and associated energy purchased hereunder shall transfer from Seller to Buyer at the Delivery Point. Seller warrants that it will deliver to Buyer such capacity and energy free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any person arising prior to the Delivery Point.
Article III
Quantity and Scheduling
3.1 Seller agrees to sell and Buyer agrees to purchase all of the capacity available from the Seller’s Generation Fleet and such amount of associated energy from Seller. Seller also agrees to provide to Buyer, in addition to capacity and energy, ancillary services that Seller has not directly sold to another third party. Before any of its ancillary services are sold to a third party, Seller shall consult with Buyer and shall offer to sell to Buyer any such ancillary services. Buyer and Seller shall discuss the appropriate charges and billing procedures for such ancillary services, and if necessary shall amend this agreement accordingly.
3.2 For planning purposes, sixty (60) days prior to the commencement of each calendar year during the term of this Agreement or at such other times as may be appropriate, the Parties shall determine in accordance with Section 3.3 below the total available MW of capacity and energy which Seller anticipates the Seller’s Generation Fleet shall be capable of providing (“Net Generation Capability”) during the next succeeding calendar year or during the time period remaining until the next determination of Net Generation Capability. Should the Parties fail to agree to a reasonable value for the Net Generation Capability for the next succeeding calendar year, the prior year’s determination shall be used.
3.3 In determining the Net Generation Capability of the Seller’s Generation Fleet, the Parties shall review the actual performance experience of the Seller’s Generation Fleet for the past calendar year and determine by mutual agreement a reasonable value for the Net Generation Capability of the Seller’s Generation Fleet for the next succeeding calendar year or during the time period remaining until the next calendar year determination. The Parties shall give due consideration to pollution control restrictions, the effect of any outage time required for expected replacements, extensions, and improvements or major maintenance of an unusual nature which is in excess of four weeks' duration which would affect the daily capability of the Seller’s Generation Fleet and any other factors as may be reasonably determined by the Parties to have an impact on the Net Generation Capability of the Seller’s Generation Fleet.
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3.4 Unless otherwise agreed to by the Parties, the scheduling of energy shall be in accordance with the following:
(a) Seller shall provide to Buyer notice of the amount of hourly capacity it has available (“Hourly Available Capacity”) to sell for next day delivery during a morning generation conference call which will be held at 0700 CPT each day. Seller shall provide such prior notice to Buyer so that Buyer may schedule the generation into the MISO Day Ahead (DA) market (which currently closes at 1100 EST) or into another market on the business day prior to the next delivery day that quantity of associated energy Buyer needs to sell into the applicable market for next day delivery. Seller should also provide, via an electronic means made available by the Buyer, the Hourly Available Capacity to the Buyer by 0800 CPT. Further, the Seller shall make all efforts to immediately notify the Buyer prior to the closing of the MISO DA market as to changes following the 0800 CPT electronic declaration that will affect the next day deliverability so the Buyer may update the next day schedule.
(b) Seller shall immediately notify Buyer via a phone call of any change in the amount of capacity it has available on an intra-day basis so that Buyer may adjust Buyer’s energy schedule accordingly for both the current and next hour delivery.
(c) In addition to the quantity of energy Seller indicated would be available to Buyer for next day delivery, Buyer shall use commercially reasonable efforts to schedule, no later than thirty minutes prior to the start of the next clock hour, that quantity of additional energy that Seller timely indicates to Buyer will become available for next hour delivery.
(d) All energy shall be scheduled for delivery in whole megawatts. Seller shall be excused from its obligation to deliver and shall not be obligated to operate any unit or units within the Seller’s Generation fleet for delivery of energy hereunder where the amount of energy scheduled by Buyer cannot be delivered by operating one or more of the units in the Seller’s Generation Fleet at or above the minimum run requirement for such unit or units (“Minimum Run Requirement”). Seller shall provide reasonable notice to Buyer when Buyer fails to schedule a sufficient amount of energy to satisfy the Minimum Run Requirement.
Article IV
Pricing
4.1 Energy Charge: For each MWh of associated energy delivered by Seller and purchased by Buyer during the month of delivery, Buyer shall pay an Energy Charge equal to the amount calculated in accordance with the following formula:
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Energy Charge = (Buyer’s Monthly Net Revenues - Monthly Capacity Charge) / Total Energy Purchased by Buyer
Where:
Buyer’s Monthly Net Revenues = Buyer’s Total Revenues less Buyer’s Expenses.
Buyer’s Total Revenues = Buyer’s gross revenues less any gross revenues associated with activities not supported in whole or in part by Seller’s generation or the generation owned and operated by Ameren Energy Generating Company (“AEG”).
Buyer’s Expenses = All administrative and general, transmission, purchased power or other expenses less those expenses not supporting in whole or in part the gross revenues associated with Seller’s generation or the generation owned and operated by AEG.
Monthly Capacity Charge = the capacity charge assessed by Seller to Buyer each month for capacity purchased pursuant to this Agreement and by AEG for capacity purchased pursuant to the Power Supply Agreement between Buyer and AEG dated December 18, 2006.
Total Energy Purchased by Buyer = the total MWhs of energy purchased by Buyer from Seller and Seller’s affiliate AEG.
4.2 Monthly Capacity Charge: Buyer shall also pay a Monthly Capacity Charge, which shall be calculated in accordance with Attachment A. If accounting information is not available to exactly determine the Monthly Capacity Charge by the invoicing deadline for a given month, the Monthly Capacity charge will be estimated in a commercially reasonable manner and adjusted to actual on the following month’s invoice.
Article V
Billing and Payment
5.1 By the twentieth business day of the month immediately following the month of service, Seller shall render to Buyer an invoice indicating the Energy Charge and the Monthly Capacity Charge for such month of delivery and any credit or assessment to reflect any adjustment needed to rectify differences between the estimated Monthly Capacity Charge and the actual Monthly Capacity Charge for prior months of delivery. Buyer shall make payment promptly upon the receipt of such statement, and, in any event, no later than the 25 th day of the month in which such invoice is rendered, provided, however, such due date shall be extended by the number of days Seller is late in rendering the invoice.
5.2 Seller shall keep complete and accurate records, meter readings and memoranda of its operations and costs for the Seller’s Generation Fleet and the sale of its capacity and energy under this Agreement and shall maintain such data for a period of at least five (5) years
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after the completion of each billing month of this Agreement. In addition to the right of Buyer to review certain costs sixty (60) days prior to the end of the first calendar year and each calendar year thereafter as set forth in Article IV, Buyer shall have the right, at its own expense and during reasonable hours, to examine the records of Seller to enable it to determine the accuracy and reasonableness of payments made for energy and capacity purchased under this Agreement. Such right shall continue for two (2) years after receipt of each monthly billing statement. Buyer shall have the right to dispute any billing up to two (2) years after it is rendered. Buyer shall likewise make available to Seller any statements, invoices or other documents evidencing the quantity of energy delivered at the Delivery Point. If any such examination reveals any inaccuracy in any statement, Seller shall promptly revise such statement and the Party owing the adjusted amount shall promptly make payment.
Article VI
Operations
6.1 Metering: Seller shall own and maintain such metering equipment as may be necessary to provide complete information regarding the delivery of capacity and energy to or for the account of Buyer at the Delivery Point. Seller shall make such periodic tests and inspections of its meters as may be necessary to maintain them at the highest practical commercial standard of accuracy, and shall advise Buyer promptly of the results of any such test showing an inaccuracy of more than 1 percent. Seller shall make additional tests of its meters at the request of Buyer. Buyer shall be given notice of, and may have representatives present at, such tests and inspections. If any periodic or additional test shows that a meter is within 1 percent of accuracy, no correction shall be made in billings; but if any test shows that the meter is inaccurate by more than 1 percent, a correction shall be made in the billing for one-half the elapsed period since the last test was made. The cost of any additional test requested by Buyer shall be borne by Buyer if such test shows the meter to be within 1 percent of accuracy, and by Seller if such test shows it to be inaccurate by more than 1 percent.
6.2 Winter Operations: The Parties recognize that there may be some units within the Seller’s Generation Fleet that operate primarily during the months of April through October of each year. The Parties further recognize that additional costs may be incurred in order to commence operations of certain units during the winter season after cessation of operations for a time, and that certain modifications to such units such as installation of inlet air de-icing equipment may be needed. Upon Buyer’s request, Seller shall pr
