Exhibit 10.3.9 AMENDMENT NO. 2 TO THE POWER PURCHASE CONTRACT BETWEEN SOUTHERN CALIFORNIA EDISON COMPANY AND SECOND IMPERIAL GEOTHERMAL COMPANY QFID NO. 3021 1. PARTIES The Parties to this Amendment No. 2 to the Power Purchase Contract between Southern California Edison Company and Second Imperial Geothermal Company, executed on April 16, 1985 ("Contract"), are Southern California Edison Company, a California Corporation ("Edison"). and Second Imperial Geothermal Company, a California General Partnership ("Seller") referred to individually as "Party" and effectively as "Parties." 2. RECITALS This Amendment No. 2 is made with reference to the following facts, among others: 2.1 On April 16, 1985, Edison and Seller executed the Contract to provide the terms and conditions for the sale by Seller and the purchase by Edison of electrical power delivered by Seller to Edison at the Point of Interconnection from Seller's e1ectrical Generating Facility located at Heber, California. 2.2 On October 23, 1987, Edison and Seller executed Amendment No. 1 to the Contract. This Amendment No. 1 provides for the extension of the date of Firm Operation and the Termination Date, as well as amendment of the Forecast of Annual Marginal Cost of Energy. 2.3 The Parties desire to amend the Contract to: a. Divide the project into two phases to achieve initial operation approximately one year apart. b. Extend the project schedule by one year. c. Reduce the Contract and Nameplate capacity values each to 37 MW. d. Revise the forecast of energy payments to begin at a specified value and following achievement of Firm Operation, increase by a fixed percentage over a period of ten (10) years, followed by fixed values to be paid in addition to published avoided cost for an additional period of five (5) years. Thereafter, energy payments will be based on Edison's published avoided cost of energy. e. Seller will provide testimony and/or documentation as may reasonably be required by Edison to support this Amendment in regulatory proceedings. 2.4 The Parties wish to amend the Contract to provide for the changes listed above. 3. AGREEMENT The Parties agree to amend the Contract as follows: 3.1 Section 1.1 is amended to read as follows: "1.1 All notices shall be sent to Seller at the address: Second Imperial Geothermal Company c/o Ormat Energy Systems, Inc. 610 East Glendale Ave. Sparks, NV 89831-5811" 3.2 Section l.2a is amended to read as follows: "a. Nameplate Rating: 37,000 kW" 3.3 Section l.2e is amended to read as follows: "e. Seller shall commence construction, as defined in the Qualifying Facilities Milestone Procedure of the Generating Facility by January 1, 1992." 3.4 Section 1.2f is amended to read as follows: "f. Generating Facility Designation: Second Imperial Geothermal." 3.5 Section 1.5 is amended to read as follows: "1.5 Contract Capacity: 37.000 kW" 3.6 Section 1.6 is amended to read as follows: 2 "1.6 Expected annual production: 259,000,000 kWh." 3.7 Section 1.7 is amended to read as follows: "1.7 Firm Operation: April 16, 1993." 3.8 Add Section l.2g to read as follows: "g. The Generating Facility may deliver up to 20 MW of electric power during the period commencing on April 16, 1992, and ending on the date of Firm Operation. Such electric power shall be purchased on an energy only basis (no capacity payment) as further set forth in Section 8." 3.9 Section 1.10 is amended to read as follows: "1.10 The Contract Capacity Price shall be $187/kW-yr." 3.10 Add the following sentence to Section 2.17: "Firm Operation shall not occur prior to April 16, 1993, nor later than December 31, 1993." 3.11 Section 3.1 is amended to read as follow: "3.1 The first period of the Contract Term shall commence upon the date of Firm Operation but not later than December 31, 1993. The first period of the Contract Term shall be 15 years." 3.12 The first sentence of Section 8 is deleted and replaced with the following: "Prior to April 26, 1992, Seller shall be paid for energy pursuant to Edison's published avoided cost of energy based on Edison's full avoided operating cost as periodically updated and accepted by the Commission; from April 16, 1992 to the date of Firm Operation. Seller shall be paid for energy at the rate of 8.1(cent)/kWh. Prior to the date of Firm Operation. Capacity shall not be purchased." 3.13 Section 8.1.2.1 is amended to read as follows: "8.1.2.1 If Seller meets the performance requirements set forth in Section 8.1.2.2, Seller shall be paid a Monthly Capacity Payment, beginning from the date of Firm Operation equal to the sum of the on-peak, mid-peak, and off-peak Capacity 3 Period Payments. Each capacity period payment is calculated pursuant to the following formula: MONTHLY PERIOD CAPACITY PAYMENT = A x B x C x D Where A = Contract Capacity Price specified in Section 1.10 for Capacity Payment Option B. B = Conversion factors to convert annual capacity prices to monthly payments by time of delivery as specified in Standard Offer No. 2 Capacity Payment Schedule and subject to periodic modifications as approved by the Commission. C = Contract Capacity specified in Section 1.5. D = Period Performance Factor, not to exceed 1.0, calculated as follows: (Period kWh purchased by Edison at the Point of Interconnection limited by the level of Contract Capacity) ------------------------------------------------- Period Performance Factor = (0.8 x Contract Capacity x (Period Hours minus Maintenance Hours Allowed in Section 4.5.))" 3.14 Section 8.2.1 is amended to read as follows: "8.2.1 Energy Payment Option 1 -- Forecast of Annual Marginal Cost of Energy. 8.2.1.1 If Seller selects Energy Payment Option 1, then during the first ten (10) Contract Years of the First Period of the Contract Term, Seller shall be paid a Monthly Energy Payment for Energy delivered by Seller and purchased by Edison at the Point of Interconnection during each month in the first ten (10) Contract Years of the First Period of the Contract Term pursuant to the following formula: MONTHLY ENERGY PAYMENT = (A x D) + (B x D) + (C x D) Where A = kWh purchased by Edison at the Point of Interconnection during on-peak periods defined in Edison's Tariff Schedule No. TOU-8. B = kWh purchased by Edison at the Point of Interconnection during mid-peak periods defined in Edison's Tariff Schedule No. TOU-8. 4 C = kWh purchased by Edison at the Point of Interconnection during off-peak periods defined in Edison's Tariff Schedule No. TOU-8. D = The sum of: (i) The appropriate time differentiated energy price from the Contract Annual Price of Energy as set forth in Appendix B, multiplied by the decimal equivalent of the percentage of the forecast specified in Section 1.11, and (ii) the appropriate time differentiated energy price from Edison's published avoided cost of energy multiplied by the decimal equivalent of the percentage of the published energy price specified in Section 1.11. 8.2.1.2 During the following five Contract Years of the First Period of the Contract Term, Seller shall be paid a Monthly Energy Payment for Energy delivered by Seller and purchased by Edison at the Point of Interconnection during each month in the following five Contract Years of the First Period of the Contract Term pursuant to the following formula: MONTHLY ENERGY PAYMENT = (A x D) + (B x D) + (C x D) Where A = kWh purchased by Edison at the Point of Interconnection during on-peak periods defined in Edison's Tariff Schedule No. TOU-8. B = kWh purchased by Edison at the Point of Interconnection during mid-peak periods defined in Edison's Tariff Schedule No. TOU-8. C = kWh purchased by Edison at the Point of Interconnection during off-peak periods defined in Edison's Tariff Schedule No. TOU-8. D = The sum of: (i) The appropriate time differentiated energy price from Edison's published avoided cost of energy plus the appropriate time differentiated energy price from the Contract Annual Price of Energy as set forth in Appendix B, multiplied by the decimal equivalent of the percentage of the forecast specified in Section 1.11, and (ii) the appropriate time differentiated energy price from Edison's published avoided cost of energy multiplied by the decimal equivalent of the percentage of the published energy price specified in Section 1.11." 3.14 Section 11 is amended to read as follows: "11. TERMINATION 5 11.1 This Contract shall terminate if Firm Operation does not occur on or before December 31, 1993." 3.15 Add a new Section 25 to read as follows: "25. Seller agrees that, to the extent reasonably required by Edison pursuant to regulatory activities, Seller shall provide evidence by testimony and/or documentation in support of the reasonableness of this Amendment. In particular, Seller agrees to provide evidence by testimony and/or documentation in support of the viability of the second Imperial Geothermal project in the absence of this Amendment." 3.16 Appendix B. FORECAST OF ANNUAL MARGINAL COST OF ENERGY is deleted and replaced with the attached new Appendix B. 6 APPENDIX B ENERGY PAYMENT SCHEDULE 7 SOUTHERN CALIFORNIA EDISON COMPANY LONG-TERM STANDARD OFFER ENERGY PAYMENT SCHEDULE(1) -------------------------- Line Calendar Contract Annual No. Year Price of Energy 1 1992 8.10(cent)/kWh(2) 2 1993 8.10(cent)/kWh(2) 3 1994 8.44(cent)/kWh(2) 4 1995 8.80(cent)/kWh(2) 5 1996 9.18(cent)/kWh(2) 6 1997 9.57(cent)/kWh(2) 7 1998 9.97(cent)/kWh(2) 8 1999 10.40(cent)/kWh(2) 9 2000 10.84(cent)/kWh(2) 10 2001 11.30(cent)/kWh(2) 11 2002 11.78(cent)/kWh(2) 12 2003 (4) 13 2004 4.42(cent)/kWh(3) 14 2005 4.12(cent)/kWh(3) 15 2006 3.90(cent)/kWh(3) 16 2007 3.75(cent)/kWh(3) 17 2008 3.41(cent)/kWh(3) (1) The annual energy payments in the table will be converted to seasonal time-of-delivery energy payment rates that are consistent with the time-of-delivery rates currently authorized by the Commission for Avoided Energy Cost Payments. (2) These values are to be used in conjunction with Contract Section 8.2.1.1 during the first 10 Contract Years of the First Period of the Contract Term. (3) These values to be used in conjunction with Contract Section 8.2.1.2 during the following 10 Contract Years of the First Period of he Contract Term and are added to Published Avoided Cost as set forth therein. (4) During that portion of Calendar Year 2003 prior to the anniversary date of Firm Operation, the Contract Annual Price of Energy shall be 12.28(cent)/kWh. During that portion of Calendar Year 2003 subsequent to the anniversary date of First Operation, the Contract Annual Price of Energy shall be 4.60(cent)/kWh and applied in accordance with Footnote 3. 8 4. OTHER CONTRACT TERMS AND CONDITIONS Except as amended in Amendment No. 1 and this Amendment No. 2, all terms, covenants and conditions contained in the Contract shall remain in full force and effect. 5. SIGNATURE CLAUSE The signatories hereto represent that they have been appropriately authorized to enter into this Amendment No. 2 on behalf of the Party for whom they sign. This Amendment No. 2 is hereby executed as of this 27th day of July, 1990. SOUTHERN CALIFORNIA EDISON COMPANY By /s/ Robert Dietch --------------------------------------- Robert Dietch Vice President SECOND IMPERIAL GEOTHERMAL COMPANY By Second Imperial Continental, Inc., Partner By /s/ F. Neil Smith ---------------------------------- Name F. Neil Smith ------------------------------- Title President ------------------------------- By Geothermal, Inc., Partner By /s/ John F. Walter ---------------------------------- Name John F. Walter ------------------------------- Title Vice President ------------------------------- By AMOR 14 Corporation By /s/ Hezy Ram ---------------------------------- Name Hezy Ram ------------------------------- Title Vice President ------------------------------- 9
Ormat (ORA) S-1IPO registration
Filed: 21 Jul 04, 12:00am