AGREEMENT
BETWEEN
LIBERTY PAPER, INC.
AND
NORTHERN STATES POWER COMPANY
INDEX
Page
1. RECITALS 1
2. DEFINITIONS 2
3. SALE OF LAND 5
4. THERMAL ENERGY SUPPLY 8
5. ELECTRICITY SUPPLY 24
6. FIRE PROTECTION WATER SUPPLY 27
7. SOLID WASTE COMBUSTION 28
8. INDEMNITY 30
9. WARRANTIES AND REPRESENTATIONS 33
10. ARBITRATION 36
11. REMEDIES 39
12. EXTENSION AND RENEWAL 45
13. TERMINATION 45
14. MISCELLANEOUS 47
EXHIBIT A MAP SHOWING LOCATION OF TRACTS I AND II
EXHIBIT B STEAM SUPPLY SYSTEM DIAGRAM
EXHIBIT C CONDENSATE RETURN CHEMISTRY REQUIREMENTS
EXHIBIT D ELECTRIC SERVICE RATE SCHEDULE
EXHIBIT E SPECIFICATION FOR ACCEPTABLE SOLID WASTE
EXHIBIT F TERMINATION CHARGES FOR ELECTRICITY SUPPLY
AGREEMENT
This Agreement is between NORTHERN STATES POWER COMPANY ("NSP"), a
Minnesota corporation, and LIBERTY PAPER, INC. ("LPI"), a Minnesota
corporation.
1. RECITALS
1.1 NSP owns and operates a facility located in Sherburne County near
the City of Becker, Minnesota (herein referred to as "Sherburne County
Generating Plant"), which produces steam for the purpose of generating and
supplying electricity to NSP's customers. The primary fuel used to produce
steam at the Sherburne County Generating Plant is coal.
1.2 LPI intends to build, own and operate a facility adjacent to the
Sherburne County Generating Plant (herein referred to as "LPI facility"),
which will use steam and/or natural gas and electricity in the process of
recycling and manufacturing container board.
1.3 NSP desires to grant an option to LPI to purchase additional land
in the event LPI proposes to expand or add to the LPI facility, and LPI
desires an option for such land from NSP.
1.4 NSP desires to provide thermal energy for the LPI facility by means
of selling steam and/or natural gas, and LPI desires to purchase such steam
and/or natural gas from NSP.
1.5 NSP desires to sell electricity produced by its electrical system
to LPI and LPI desires to purchase such electricity from NSP.
1.6 LPI desires access to the fire protection water supply of the
Sherburne County Generating Plant for the protection of the LPI facility and
NSP is willing to provide access to this water supply to LPI.
1.7 LPI desires to have NSP accept the solid waste generated at the LPI
facility for use as fuel and NSP is willing to accept the solid waste for
use as fuel at one of its RDF-fueled generating plants.
1.8 NSP desires to grant an option to LPI for the purchase of land and
sell steam and/or natural gas and electricity to LPI as a single transaction
and provide the additional consideration of access to the Sherburne County
Generating Plant fire protection water supply and combustion of solid waste
generated at the LPI facility.
1.9 LPI desires an option from NSP for the purchase of such land and to
purchase the steam and/or natural gas and electricity and acknowledges that
if it terminates either the purchase of steam and/or natural gas or
electricity the additional consideration of access to the Sherburne County
Generating Plant fire protection water supply and combustion of solid waste
generated at the LPI facility will also terminate and LPI will pay
termination charges specified in the Agreement.
In consideration of the mutual covenants and agreements herein, NSP
and LPI agree as follows:
2. DEFINITIONS
2.1 The following terms when used in this Agreement shall have the
meanings specified: "Available" or "Availability" means the status of the
Steam Supply System when the System is capable of delivering steam at the
Delivery Point in a quantity which meets LPI's needs, but not to exceed one
hundred and eight (108) thousand pounds per hour, and in the quality of two
hundred and fifty (250) pounds per square inch gauge (Pslg) and four hundred
and twenty (420) degrees F, regardless of the LPI facility's ability to
accept steam.
"Compatible" means future expansion and/or addition to the LPI
facility does not materially interfere with the continued operation of the
Sherburne County Generating Facility or current or proposed uses of adjoining
NSP property.
"Condensate Return System" means the pipes, pumps, tanks, meters,
controls, wires, insulation, support structures and other equipment required
to return condensate from the LPI facility to the Sherburne County Generating
Plant.
"Contracted Demand Charge" means payments required by Paragraph
4.52 made by LPI to NSP for the purpose of obtaining electrical generating
capacity so the steam supply to the LPI facility will not be interrupted or
curtailed during periods of peak electrical demand on the NSP system.
"CPI Index" means the Consumer Price Index for all Urban Consumers
for All Cities, as published by the U. S. Department of Labor, Bureau of
Labor Statistics.
"Days" means Calendar Days. In computing any period of time in
this Agreement, the day of the last act, event, or default from which the
period of time begins to run shall not be included. The last Day of the
period so computed shall be included, unless it is a Saturday, Sunday or a
legal holiday.
"Delivery Point" for the Steam Delivery System means the
discharge of the isolation valve downstream of the Steam Delivery System
metering station located in or near the LPI facility as
designated on Exhibit B. Delivery Point for the Condensate Return System
means the inlet from the Condensate Return System to the condensate return
tank located in or near the LPI facility as designated on Exhibit B.
"Effective Date" means the first Day after which both NSP and LPI
have executed this Agreement.
"Energy Charge" means payments required by Paragraph 4.51 made
from LPI to NSP to reimburse NSP's costs to generate and deliver steam to the
LPI facility and return condensate.
"Fiscal Year" means the period of one year beginning on any
January 1 during the term of this Agreement, except that if this Agreement
or any provision hereof is terminated on other than a December 31 the last
Fiscal Year will be the period ending on such termination date and beginning
on the immediately preceding January 1.
"Fixed Facilities Charge" means the payment required by Paragraph
4.50 made from LPI to NSP for the use of the Steam Supply System.
"Full Capacity" means any time after which the average production
at the LPI facility achieves at least ninety percent (90%) of its one hundred
thousand (100,000) ton design capacity over any period of at least twelve
(12) consecutive calendar months.
"Steam Delivery System" means the pipes, pumps, meters, controls,
wires, insulation, support structures and other equipment required to deliver
steam to the LPI facility.
"Steam Supply System" means the boilers, pipes, pumps, meters,
controls, wires, insulation, support structures and other equipment required
to generate and deliver steam to the LPI facility and return condensate to
the Sherburne County Generating Plant. The Steam Supply System includes
the Condensate Return System and the Steam Delivery System.
"Tract I" means a parcel of land which NSP has donated to the
City of Becker, located in the City of Becker, Sherburne County, Minnesota,
described as:
The West 30 acres of the South 850 feet of the East 2575 feet of
the NW 114 of Section 6, Township 33 North, Range 28 West, hereinafter
referred to as Tract I.
"Tract II" means a parcel of land for which NSP shall grant LPI
an option located in the City of Becker, Sherburne County, Minnesota,
described as:
That part of the South 850 feet of the East 2575 feet of the NW
114 of Section 6, Township 33 North, Range 28 West lying East of the West 30
acres thereof, hereinafter referred to as Tract II.
3. SALE OF LAND
3.1 NSP acknowledges and agrees LPI intends to build and operate the LPI
facility on Tract I, a parcel of land located in the City of Becker,
Sherburne County, Minnesota adjacent to the Sherburne County Generating
Plant. The approximate location of Tract I is shown on Exhibit A.
3.2 NSP hereby grants to LPI a ten (10) year option to purchase by
warranty deed Tract II, a parcel of land located in the City of Becker,
Sherburne County, Minnesota adjacent to the Sherburne County Generating
Plant. The approximate location of Tract II is shown on Exhibit A.
3.3 LPI may exercise the option to purchase Tract II when the following
conditions have all been met:
(a) The LPI facility is operating or has operated at Full Capacity;
(b) LPI employs ninety (90) full-time, full-benefit or equivalent
employees in the operation of the LPI facility;
(c) LPI has executed a contract with NSP for the purchase of
additional steam or electricity capacity for an expansion or addition to the
LPI facility; and
(d) The proposed expansion or addition to the LPI facility is
Compatible with the Sherburne County Generating Plant.
Prior to the closing of the option to purchase Tract II, NSP will
provide LPI with evidence of the status of title to Tract II, which shall be
free of all liens and encumbrances other than any easements or rights-of-way
which are contemplated in this Agreement or which do not materially interfere
with use or value of Tract II.
3.4 LPI shall pay to NSP if it exercises the option to purchase Tract
II a purchase price which shall be an amount equal to one hundred thousand
dollars ($100,000.00) multiplied by the sum of (a) one, plus (b) the
difference between (i) the CPI Index as published most recently prior to the
date of the exercise of the option by LPI, minus (ii) the CPI Index as
published most recently prior to the Effective Date. Upon payment, NSP will
transfer Tract II to LPI by Warranty Deed.
3.5 The term of the option on Tract II shall begin on the Effective Date
of this Agreement.
3.6 NSP shall file within thirty (30) Days of the Effective Date a
memorandum with the Sherburne County Recorder stating the terms and
conditions of the option.
3.7 LPI shall be responsible and shall reimburse Malcolm Olson (herein
referred to as "Tenant") for any and all damages to the 1993 crop on Tract
II caused by LPI's construction of the LPI facility.
3.8 LPI acknowledges and agrees the lease between NSP and Tenant, dated
February 3, 1984, for agricultural crop use over Tract II shall remain in
full force and effect until the option to purchase is exercised by LPI. In
the event LPI exercises the option to purchase, LPI shall provide the Tenant
reasonable time to complete the annual term of the lease or be responsible
and reimburse Tenant for an equitable amount of crop damage based on the
average per acre yield and the then current commodity value.
3.9 LPI acknowledges and agrees existing irrigation wells and the
underground pipe located on Tract II shall remain in place until the option
to purchase is exercised by LPI. LPI shall grant Tenant an easement for same
to include access for maintenance and repair of said wells and pipe. LPI
shall take whatever precautions necessary to protect the wells and
underground pipe from damage. LPI shall reimburse Tenant for any damages to
such equipment by LPI, its agents or contractors.
3.10 NSP shall grant to the City of Becker, either by easement or
dedication, a thirty-five (35) foot wide strip of land for roadway or rail
purposes the south line of which shall be in common with the north lines of
Tracts I and II. NSP shall grant to the City of Becker, either by easement
or dedication, a twenty-five (25) foot wide strip of land for roadway or rail
purposes the north line of which shall be in common with the north line of
Tract II.
3.11 LPI shall not subdivide Tract II if the option to purchase is
exercised, except as may be required to obtain tax increment financing, pay
real estate taxes or by law. The transfer of any portion of the ownership
or production capacity of the LPI facility or any expansion or addition to
the LPI facility to a customer or affiliate of LPI shall not be considered
subdivision of the property.
3.12 LPI acknowledges and agrees NSP shall maintain a twenty (20) foot
utility corridor the south line of which shall be in common with the south
lines of Tracts I and II. In the event NSP proposes to install utilities in
the corridor, LPI shall have the right to review and approve the installation
of such utilities within sixty (60) Days notice of NSP's proposal. In the
event LPI does not approve the installation of the utilities, or any portion
or aspect of the utilities, LPI shall pay all additional costs and expenses,
including cost of land, for the installation of the utilities.
3.13 NSP shall reserve easements over Tract II for dust, fog, noise and
other such emissions which may be carried by the wind from the Sherburne
County Generating Plant and related appurtenances.
4. THERMAL ENERGY SUPPLY
4.1 LPI shall purchase steam and/or natural gas from NSP to provide
thermal energy for the LPI Facility. NSP shall provide steam to the LPI
Facility by means of a Steam Supply System which is described in Paragraph
4.3 of this Agreement. NSP shall make steam Available to LPI on either a
noninterruptible basis or an interruptible basis. Paragraphs 4.1 to 4.46
apply to the selection of either steam supply basis. Sale of steam from NSP
to LPI on a noninterruptible basis shall be in accordance with the terms of
Paragraphs 4.48 to 4.52. Sale of steam from NSP to LPI on an interruptible
basis shall be in accordance with the terms of Paragraphs 4.53 to 4.54. NSP
shall provide natural gas to the LPI Facility in accordance with the terms
of Paragraphs 4.55 to 4.56 of this Agreement.
4.2 LPI shall notify NSP in writing of LPI's choice of the form and
basis of thermal energy supply no later than November 1, 1993. The failure
of LPI to notify NSP in writing of its choice of the form and basis of
thermal energy supply by November 1, 1993 shall be deemed a selection of
steam on an interruptible basis.
Construction. Ownership. Operation and Maintenance of Steam Supply System
4.3 In the event LPI chooses steam for its thermal energy supply, NSP
shall construct, own, operate, and maintain a Steam Supply System which will
supply steam from the Sherburne County Generating Plant to the LPI facility.
NSP shall use the Steam Supply System to:
(a) generate steam of the quantity and quality specified in
Paragraph 4.21 from the Sherburne County Generating Plant for delivery to
the LPI facility;
(b) deliver steam of the quantity and quality specified in
Paragraph 4.21 from the Sherburne County Generating Plant to the LPI
facility;
(c) return condensate of the quantity and quality specified in
Paragraph 4.40 from the LPI facility to the Sherburne County Generating
Plant;
(d) provide for communication, which includes a dedicated phone
line and such links as may be required, between the Sherburne County
Generating Plant and the LPI facility to safely and reliably operate the
Steam Supply System.
A diagram of the Steam Supply System is attached to this Agreement as Exhibit
B.
4.4 NSP shall obtain all franchises, licenses, permits, rights-of-way
or easements necessary to construct, operate and maintain the Steam Supply
System. NSP shall contest, within reasonable limits, court proceedings,
orders, decrees, rules, regulations, laws and ordinances which would prevent
NSP from so doing; provided, NSP shall only be required to appeal to
conclusion at the first level of appeal from the original promulgation or
enactment of any such orders, decrees, rules, regulations, laws and
ordinances, whether such appeal is to administrative or judicial proceedings.
4.5 LPI shall cooperate and provide information and documentation
necessary for NSP to obtain the franchises, licenses, permits, rights-of-way
and easements.
4.6 LPI shall provide NSP with a right-of-way, along and in improvements
situated on the LPI facility, as necessary to construct, operate, maintain,
modify, repair, replace or make additions to the Steam Delivery System or
Condensate Return System. LPI shall further permit NSP the right of ingress
to and egress from the LPI facility, over and across the LPI facility by
means of roads and lanes thereon, if there is such, and otherwise by such
route or routes as shall be calculated to cause the least damage and
inconvenience to LPI and the LPI facility.
4.7 NSP shall have the right to enter the LPI facility upon notification
to LPI to construct, operate and maintain and, if necessary, modify, repair,
replace or make additions to the Steam Delivery System.
4.8 LPI shall furnish NSP, without charge to NSP, electricity,
instrument air and well-water as may be required to support the operation and
maintenance of the portion of the Steam Delivery System, including but not
limited to the condensate return pumps, located at the LPI facility.
4.9 NSP shall consult with LPI in the preparation of and make Available
to LPI as they become Available to NSP, the technical design specifications,
construction drawings and plans for review of the proposed configuration,
appearance, and location of the portion of the Steam Delivery System and
Condensate Return System to be located at the LPI facility. Such review by
LPI shall be conducted in a timely fashion, so as not to impact project
schedules.
4.10 LPI shall consult with NSP in the preparation of and make Available
to NSP as they become Available to LPI, the technical design
specifications, construction drawings and plans for review of the proposed
configuration, appearance, and location of any equipment which will be
connected to the Steam Delivery System and Condensate Return System. Such
review by NSP shall be conducted in a timely fashion, so as not to impact
project schedules.
4.11 During the construction, operation and maintenance of the Steam
Supply System by NSP, NSP shall exercise reasonable care not to engage in
acts or omissions which would cause loss or damage to the Steam Supply System
and use its best efforts to avoid damage to any property of LPI and
interference with LPI's operations at the LPI facility.
4.12 NSP shall perform annual maintenance on the Steam Delivery System.
Whenever possible, NSP shall schedule annual maintenance to coincide with
scheduled outages of the Sherburne County Generating Plant and the LPI
facility.
4.13 During the construction, operation and maintenance of the LPI
facility by LPI, LPI shall exercise reasonable care not to engage in acts
or omissions which would cause loss or damage to the Steam Supply System and
use its best efforts to avoid damage to any property of NSP and interference
with NSP's operations of its Sherburne County Generating Plant or the Steam
Supply System.
4.14 Written procedures which shall be consistent with this Agreement and
mutually acceptable to both parties shall govern the inspection, check-out,
testing, start-up, and operation of the Steam Delivery and Condensate Return
Systems. NSP shall develop and maintain all such procedures. NSP agrees to
develop such procedures in coordination with LPI. LPI agrees to provide, at
its own cost, technical resources reasonably required to support the
development of the procedures.
4.15 NSP shall designate a Project Manager for the construction and
start-up of the Steam Supply System. LPI shall designate a Project Manager
for construction of the LPI facility. The Project Managers shall be
responsible to schedule and coordinate the construction and start-up of the
Steam Supply System and for routine communication between NSP and LPI.
Operation and maintenance of the Steam Supply System shall be the
responsibility of NSP and the Sherburne County Generating Plant Manager or
his (her) designee.
4.16 Upon completion of the Steam Supply System, NSP shall purchase and
have in stock those spare parts for the Steam Delivery System which cannot
normally be obtained in less than twenty-four (24) hours, the failure of
which would disable the operation of such portions of the Steam Delivery
System.
4.17 LPI shall not, by reason of this Agreement or the payments made
pursuant to this Agreement, acquire any title, ownership or other rights in
or to the Sherburne County Generating Plant or the Steam Supply System. Any
portion of the Steam Supply System placed at the LPI facility by NSP for the
purpose of delivering of steam or condensate shall be and remain the property
of NSP.
4.18 NSP shall have no interest or right in, and agrees to pay over to
LPI, any amounts received by it, as compensation for the condemnation, or
other taking for public use of any part of the LPI facility, or any other
part thereof on which the Steam Supply System is constructed.
4.19 No changes, physical or electronic, which materially affect the
control or operation of the Steam Delivery or Condensate Return Systems shall
be made by LPI or NSP without the prior written consent of the other party.
4.20 Steam supplied to the LPI facility under the terms of this Agreement
shall be solely for the use in operating the LPI facility and shall not be
resold or transported by LPI.
Steam Quantity and Quality
4.21 NSP shall provide steam to the LPI facility meeting the following
specifications when measured at the Delivery Point:
(a) Temperature: 420 degrees with average daily variations of not
more than plus or minus 5 degrees superheat and transient variations of not
more than plus or minus 5 degrees Fahrenheit superheat.
(b) Pressure: 250 pounds per square inch gauge (PSIG) with average
daily variations of not more than plus or minus 10 PSIG and transient
variations of not more than plus or minus 15 PSIG.
(c) Maximum Steam Flow: one hundred and eight (108) thousand pounds
per hour. LPI may take steam at any rate of flow not greater than the
maximum; provided, when LPI takes steam, the minimum flow rate shall be at
least twelve (12) thousand pounds per hour.
4.22 NSP shall make steam Available in the quantities and qualities
stated in Paragraph 4.21 commencing at 12:01 a.m. of September 30, 1994.
From September 30, 1994 to June 1, 1995, LPI shall not be required to take
an annual minimum amount of steam. Provided NSP makes at least three hundred
and seventy-five thousand (375,000) thousand pounds (klbs.) Available per
Fiscal Year, LPI shall be required to take or pay for an annual minimum of
three hundred and seventy-five thousand (375,000) thousand pounds (klbs.) per
Fiscal Year, commencing at 12:01 a.m. of June 1, 1995. Minimum steam usage
for LPI during any Fiscal Year which has less than three hundred and
sixty-five (365) Days shall be the number of pounds otherwise required,
multiplied times a fraction, the denominator of which is three hundred and
sixty-five (365) and the numerator of which is the actual number of Days in
such Fiscal Year.
4.23 From September 30, 1994 to June 1, 1995, NSP will coordinate with
LPI, and will endeavor to deliver steam to LPI in the conditions and amounts
required during the checkout, testing, and start-up of the LPI Facility. NSP
makes no guarantee of the Availability of any steam to be supplied during
this period. Further, the steam supply during this period is subject to
interruption or curtailment at the sole discretion of NSP during periods of
peak electrical demand on the NSP system.
4.24 If the steam flow to LPI is to be temporarily reduced or limited,
NSP will use all reasonable efforts to notify LPI of the extent of such
reduction or limitation at least one (1) hour in advance. Should the steam
supply to LPI be interrupted through no fault of LPI, NSP shall, within four
(4) hours of the start of such interruption, advise LPI of the estimated
duration of the interruption. Any interruption of steam delivery shorter
than fifteen (15) minutes in length shall not result in any remedy to LPI or
be included in calculating Availability of the Steam Supply System. Any
interruption of steam flow longer than fifteen (15) minutes but shorter than
eight (8) hours shall be counted as eight (8) hours in length. Any
interruptions greater than or equal to eight (8) hours in length shall be
included in calculating Availability of the Steam Supply System at their
actual value, rounding to the nearest whole hour.
4.25 LPI acknowledges and agrees that NSP shall not be required to
provide backup steam during periods of when the Steam Supply System is not
Available.
Metering
4.26 Metering of steam and condensate shall be installed in the Steam
Supply System at the Delivery Point. Such metering will consist of:
(a) Temperature and pressure recording instruments and flow meters
for steam;
(b) Temperature compensated flow meters and temperature recording
instruments for condensate; and
(c) Conductivity and Ph monitoring and sampling devices for
condensate.
4.27 Meters and all meter readings and/or documentation shall be
accessible at all reasonable times to inspection and examination by LPI.
Meters shall be calibrated at least once each one hundred and eighty (180)
Days. Reasonable expenses relating to the calibration, repair and maintenance
of the meters shall be shared equally by NSP and LPI.
4.28 LPI may install, operate and maintain, at its own cost, additional
metering equipment, provided any additional meter is installed at the LPI
facility so as not to interfere with the operation of NSP metering equipment.
Billing
4.29 When steam supply commences and twenty (20) Days prior to the
beginning of each Fiscal Year, NSP shall provide LPI with a statement of the
Fixed Facility Charge, the Energy Charge and, in the event LPI chooses the
noninterruptible steam supply, the Contracted Demand
Charge. Indices will be used to adjust the price components for a given
Fiscal Year in January of that year. Price Components will be adjusted by
the difference of the averages of the indices for
each of the two prior years.
4.30 If LPI fails to take the annual minimum requirement specified in
Paragraph 4.22 for any Fiscal Year, LPI shall pay NSP, within thirty (30)
Days of the end of January of the following Fiscal Year, an amount equal to
the value of the total number of pounds of the annual minimum not taken,
multiplied by the Energy Charge, minus the fuel cost of such undertaken
pounds, as adjusted for boiler efficiency, but in no case shall the fuel cost
credit exceed eighty percent (80%) of the current Energy Charge.
4.31 NSP shall issue bills for steam supply service on or before the
tenth (10th) Day of the thirty (30) Day billing period. The bill shall be in
a format mutually acceptable to NSP and LPI.
The bill shall state the following information:
(a) The pounds of steam of the quality specified in Paragraph 4.21
produced and delivered by NSP to LPI during the preceding month;
(b) Previous and current steam flow meter readings;
(c) Credits, if any, due for Availability of steam supply;
(d) The volume, in U.S. gallons, of all condensate of the quality
specified in Paragraph 4.40 returned by LPI during the preceding month.
(e) Previous and current condensate meter readings;
(f) Total volume of condensate that does not meet or exceed the
condensate quality specifications stated in Exhibit C; and
(g) Sales taxes.
4.32 LPI shall pay bills for steam supply service on or before the tenth
Day succeeding the date bill is rendered for steam supply service by NSP in
the preceding billing period.
4.33 Any monthly statement presented by NSP to LPI which is past due as
specified herein shall be subject to a late payment charge at the interest
rate of one and one-half (1-1/2) percent per month (or fraction thereof) on
the amount past due, compounded monthly, until such past due amount is paid
by the party owing thereon. This late payment charge is merely a further
obligation hereunder and shall not be construed to excuse the fact that a
late payment of non-contested portions of a statement by the party owing
thereon is a default; and further, such charge shall not constitute a waiver
of any remedy the non-defaulting party may pursue in the event of default.
The date of payment shall mean the date the letter containing any payment is
postmarked.
4.34 Shall any non-contested past due amount owed by LPI to NSP exceed
sixty (60) Days, NSP, at its sole option, may discontinue supplying steam and
accepting solid waste after giving LPI seven (7) Days written notice by
registered mail until such past due amounts are paid along with the late
payment charge specified in Paragraph 4.33. In the event any portion of the
bill is contested, LPI shall pay all amounts less that portion which is
contested.
4.35 NSP shall prepare accurate periodic bills. NSP and LPI shall both
review such bills and raise any questions or point out any mistakes promptly.
4.36 All bills and payments pursuant to this Agreement shall be sent,
unless otherwise agreed to, by United States Mail, postage thereon prepaid,
addressed to the persons identified in Paragraph 14.4.
Term of Steam Supply
4.37 NSP shall provide steam to the LPI facility in the quantity and
quality specified in Paragraph 4.21 for a period of twenty (20) years.
4.38 LPI shall purchase steam from NSP for the LPI facility in the
quantity and quality specified in Paragraph 4.21 for a period of twenty (20)
years.
4.39 The twenty (20) year term for steam supply begins at 12:01 a.m. on
January 1, 1995.
Condensate Return
4.40 During each Fiscal Year, LPI shall return condensate water at the
Delivery Point equal to a volume of at least eighty percent (80%) of the
condensate from any steam delivered to the LPI Facility. Condensate shall
meet or exceed the condensate quality specifications stated in Exhibit C, as
measured at the Delivery Point. LPI shall install water treatment equipment
upstream of the NSP condensate storage tank as required to assure condensate
meets or exceeds the requirements of Exhibit C. Water treatment equipment
shall be installed at the LPI facility.
4.41 LPI shall dispose of any condensate which does not meet the
specifications stated in Exhibit C. LPI shall dispose of the condensate at
its own cost, and in an environmentally responsible manner.
4.42 From September 30, 1994 to June 1, 1995, LPI will endeavor to return
eighty percent (80%) of the condensate from the steam supplied to NSP during
the checkout, testing and startup of the LPI facility. LPI makes no
guarantee of the amount of condensate to be returned during this period. LPI
agrees to dispose of condensate and/or waste water from the LPI facility
which does not meet or exceed the condensate quality specifications stated
in Exhibit C at its own cost, and in an environmentally responsible manner.
4.43 LPI shall pay NSP three dollars ($3.00) for each one thousand
(1,000) gallons of condensate less than eighty percent (80%) which are not
returned to NSP, as calculated on a monthly basis.
4.44 If the condensate return rate is less than sixty percent (60%) for
fifteen (15) consecutive Days, NSP reserves the right to interrupt steam
supply until such time as the LPI facility is able to return sixty percent
(60%) of the condensate.
4.45 Prior to the end of the fifteen (15) Day period, NSP and LPI shall
meet to discuss LPI's efforts to improve the condensate return rate. NSP
agrees to give LPI due consideration for its efforts to improve condensate
return rate in this situation.
4.46 NSP shall pay LPI three dollars ($3.00) for each one thousand
(1,000) gallons of condensate greater than eighty percent (80%) which are
returned to NSP as calculated on a monthly basis.
Steam Supply Selection
4.47 In the event LPI chooses steam as the form of its
thermal energy supply, LPI shall periodically have the option of changing the
basis of steam supply. Steam supply basis shall be elected for three (3)
year terms beginning in May, 1997 and continuing every third year in the
month of May until the expiration of this Agreement. Prior to the tenth
(10th) Day of May in each third year, NSP will provide LPI with a quotation
for the Contracted Demand Charge for the noninterruptible steam supply for
the upcoming three year term. After receipt of the quotation and prior to
the thirtieth (30th) Day of May, LPI shall notify NSP in writing of its
choice of steam supply service for the three year term, which will begin on
the first (1st) Day of January of the following year. In 1996 and 1997, NSP
will supply steam for a one-year term, on the basis selected in writing by
LPI in May of the previous year. In 1995, NSP will supply steam for a
one-year term, on the basis determined by Paragraph 4.2. Prior to the tenth
(10th) Day of May in 1995 and 1996, respectively, NSP will provide a
quotation for the Contracted Demand Charge for the noninterruptible steam
supply for the following year.
Noninterruptible Steam Supply
4.48 In the event LPI chooses noninterruptible steam supply, the Steam
Supply System will be Available ninety-five percent (95%) of the eight
thousand four hundred and forty-eight (8448) hours the LPI facility is
scheduled to run during a year. Scheduled operation of the LPI facility shall
be three hundred and sixty-five (365) Days at twenty-four (24) hours a Day,
less one (1) scheduled annual maintenance outage of a duration not to exceed
seven (7) Days or one hundred and sixty-eight (168) hours, less one hundred
and forty-four (144) hours for corrective and/or preventative maintenance
outages. Annual scheduled operating hours for the LPI facility will total
eight thousand four hundred and forty-eight (8448) hours. In those years with
three hundred and sixty-six (366) Days, the number of annual scheduled
operating hours shall be increased to eight thousand four hundred and
seventy-two (8472). Insofar as possible, all maintenance outages shall
be taken at times convenient to both NSP and LPI. Regardless of mutual
convenience, LPI shall provide NSP with not less than sixty (60) Days notice
prior to the commencement of its annual maintenance outage. LPI intends that
the one hundred and forty-four (144) hours of corrective and/or preventative
maintenance outages will be conducted in twelve (12) monthly outages of
twelve (12) hours. LPI shall provide NSP with not less than seven (7) Days
notice prior to the start of any such outage.
4.49 LPI shall purchase steam from NSP at a price consisting of three
components: Fixed Facility Charge, Energy Charge and, if LPI selects
noninterruptible steam supply, Contracted Demand Charge.
4.50 LPI shall pay NSP a Fixed Facilities Charge of Four Million Two
Hundred and Sixty Thousand Dollars ($4,260,000.00) in return for use of the
Steam Supply System for the term of this Agreement. The Fixed Facility
Charge shall be payable to NSP in the form of an annuity with the following
terms:
Principal Amount = P: $4,260,000.00
Term = n: 20 years
Interest Rate = i: The annual interest rate for each Fiscal Year
shall be equal to the average of seven percent (7%) and the
annual average rate granted to electric utilities for Return on
Equity (ROE) as reported on or about the tenth (10th) Day of
January of that year by Regulatory Research Associates, Inc.
Compounding: Annually
The value of the Fixed Facilities Charge for each Fiscal Year shall
be calculated in January of that year using the following formula:
n n
Fixed Facility Charge = (i (1 + i) x P)/((1 + i) - 1)
ROE value to be used for calculating the 1995 Fixed Facilities
Charge shall be twelve point zero nine (12.09%). The value of the Fixed
Facilities Charge for 1995 shall be four hundred and eighty-three thousand,
four hundred and ten dollars ($483,410).
4.51 For each one thousand (1,000) pounds of steam delivered by NSP to
the LPI facility, LPI agrees to pay NSP an Energy Charge. The Energy Charge
shall have the following components:
Component Price Adjusted Index
Fuel $1.15 Actual Delivered Coal Cost
to Sherburne County
Generating Plant as Reported
by NSP to U.S. Federal Energy
Regulatory Commission
Replacement Energy $0.27 NSP Marginal Cost of
Replacement Energy
Fixed O & M $0.23 Total Compensation, Civilian
Workers as Reported by U.S.
Department of Commerce
Property Tax $0.10 Actual Property Tax
Variable O & M Costs $0.10 Total Compensation, Civilian
Workers as Reported by U.S.
Department of Commerce
The Energy Charge is equal to the sum of these components as expressed in
dollars per thousand pounds of steam.
4.52 In the event LPI chooses noninterruptible steam supply,
LPI shall pay NSP a Contracted Demand Charge in the amount of one hundred
sixty-five thousand, four hundred eighty dollars ($165,480.00) per year for
the Fiscal Year starting on January 1, 1995. This value will be adjusted in
accordance with the terms stated in Paragraph 4.47.
Interruptible Steam Supply
4.53 In the event LPI chooses interruptible steam supply, the Steam
Supply System will be Available ninety percent (90%) of the total number of
hours in a year, or seven thousand eight hundred and eighty-four (7884) hours
per year. In years with three hundred and sixty-six (366) Days, this value
shall be increased to seven thousand nine hundred and six (7906). Steam
delivery is subject to interruption during NSP system-wide peak electrical
demand periods. The duration and frequency of interruption periods shall be
at the discretion of NSP. Interruption periods will normally occur at such
times when NSP is required to use oil-fired generating equipment or to
purchase power at a price equivalent to production cost using oil-fired
equipment, when NSP expects peak electrical demand, or at such times when,
in NSP's opinion, the reliability of the electrical transmission and/or
delivery systems are endangered.
(a) Within one (1) hour of publication by NSP System Operations,
LPI will be notified of any daily peak load forecast which includes
conditions under which steam supply to LPI could be curtailed. Such
notification shall constitute the start of a "Control Condition." During
such a Control Condition, steam supply to LPI will be subject to interruption
at any time with fifteen (15) minutes notice. NSP accepts no responsibility
for any damages, direct or indirect, resulting from interruption of steam
supply to LPI during a Control Condition.
(b) Peak periods during which steam supply is subject to
interruption shall be defined as follows: The peak period is defined as
those hours between 9 a.m. and 9 p.m. Monday through Friday, except the
following holidays: New Year's Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. When a designated
holiday occurs Saturday, the preceding Friday will be a designated holiday.
When a designated holiday occurs on Sunday, the following Monday will be a
designated holiday.
Insofar as possible, any maintenance outages taken during the year shall be
taken at times mutually convenient to both NSP and LPI. Regardless of mutual
convenience, LPI shall provide NSP with not less than sixty (60) Days notice
prior to LPI's annual seven (7) Day maintenance outage. LPI shall make all
reasonable efforts to provide NSP with not less than seven (7) Days notice
prior to the start of any other routine maintenance outages.
4.54 LPI shall purchase steam from NSP at a price consisting of two
components: Fixed Facility Charge and Energy Charge. LPI shall pay the
Fixed Facility Charge as described in Paragraph 4.50. LPI shall pay the
Energy Charge as described in Paragraph 4.51.
Natural Gas Supply
4.55 In the event LPI chooses gas for its thermal energy supply, NSP
agrees to supply, transport, or distribute natural gas to the LPI facility.
LPI shall purchase natural gas supplied and distributed by NSP for a period
of one (1) year from the selection of natural gas for its thermal energy
supply. Terms and conditions of gas supply transportation or distribution
shall be as agreed to between the parties at the time LPI chooses to exercise
this option, and shall be detailed in a specific natural gas service
contract. Natural gas purchased by LPI shall be transported and distributed
over the NSP distribution system. NSP may match the terms of any alternative
gas supplier selected by LPI to supply natural gas to the LPI facility.
4.56 In the event LPI terminates the purchase of steam for its thermal
energy supply, NSP agrees to supply, transport or distribute natural gas to
the LPI facility. LPI shall purchase natural gas supplied and distributed
by NSP for a period of one (1) year from the termination of the steam supply.
Terms and conditions of gas supply, and distribution shall be agreed to
between the parties at the time LPI terminates steam supply, and shall be
detailed in a specific natural gas service contract. Natural gas purchased
by LPI shall be transported and distributed over the NSP distribution system.
NSP may match the terms of any alternative gas supplier selected by LPI to
supply natural gas to the LPI facility. LPI use of natural gas as the
primary source of process thermal energy shall not relieve LPI of its
obligation to take or pay for an annual minimum of three hundred and
seventy-five thousand (375,000) thousand pounds (klbs.) of steam and to pay
the Fixed Facility Charge for the Steam Supply System.
5. ELECTRICITY SUPPLY
5.1 NSP shall provide electric service to the LPI facility in the form
of three (3) Phase, four (4) Wire, Grounded Wye, Alternating Current at a
nominal frequency of sixty (60) Hertz and at a nominal voltage of thirteen
point-eight (13.8) Kv, for LPI's use solely for the operation of electric
equipment to be installed by LPI at the LPI facility.
5.2 NSP shall deliver electric service to the LPI facility at the 13.8
Kv side of the NSP transformer located in the NSP substation to be build
adjacent to the LPI facility. LPI will be responsible for the cost of all
facilities necessary to interconnect at NSP's disconnecting means of the
substation transformer.
Capacity Commitment
5.3 NSP agrees to provide and keep Available throughout the term of
electric service for LPI's use at the LPI facility eight (8) megawatts of
capacity. NSP also agrees to provide additional capacity to an aggregate of
fourteen (14) megawatts capacity upon reasonable written notice from
LPI specifying the additional amount of capacity and the date same will be
required. Reasonable notice shall be construed to mean ample time in which
NSP can provide such additional capacity in its system as may be necessary.
Annual Minimum Charge
5.4 In consideration of the capacity commitment stated in Paragraph 5.3
and its investment in facilities to serve LPI, LPI agrees that if the total
net payments during any Fiscal Year, in accordance with the rate stated in
Paragraph 5.3, amount to less than the minimum charge of $336,000.00 per
Fiscal Year, the difference between the minimum charge and the total net
payment shall be included in the bill for the last month of the Fiscal Year
and LPI agrees to pay same as charge for electric service rendered.
Rate and Billing
5.5 LPI shall qualify for and elects the rate schedule for general
service during construction of the LPI facility. LPI shall pay NSP's
established rate schedule in effect from time to time in this locality for
such electric service, the established rate schedule now in effect being the
one attached to this Agreement as Exhibit D.
5.6 NSP shall issue bills for electric service on or before the tenth
(10th) Day of the thirty (30) Day billing period.
5.7 LPI shall pay bills for electric service on or before the tenth
(10th) Day succeeding the date bill is rendered for electric service by NSP
in the preceding billing period.
5.8 Any monthly statement presented by NSP to LPI which is past due as
specified herein shall be subject to a late payment charge stated in NSP's
tariff with the Minnesota Public Utilities Commission on the amount past due,
compounded monthly, until such past due amount is paid by the party owing
thereon. This late payment charge is merely a further obligation hereunder
and shall not be construed to excuse the fact that a late payment of
non-contested portions of a statement by the party owing thereon is a
default; and further, such charge shall not constitute a waiver of any remedy
the non-defaulting party may pursue in the event of default. The date of
payment shall mean the date the letter containing any payment is postmarked.
Term of Electric Service
5.9 NSP shall provide electric service to the LPI facility for the
purposes of construction of the LPI facility within thirty (30) Days of
NSP's receipt of written request by LPI to provide such service. LPI shall
pay NSP for the electric service for the purposes of construction of the LPI
facility.
5.10 NSP shall provide electric service to the LPI facility for the
purposes of operation of the LPI facility by January 1, 1995 for a period of
twenty (20) years. NSP shall not be required to provide electric service
greater than five (5) megawatts of capacity prior to March 1, 1995.
5.11 LPI shall purchase electric service from NSP for the purposes of
operation of the LPI facility by January 1, 1995 for a period of twenty (20)
years.
Authority of the Minnesota Public Utilities Commission
5.12 The electric service provided under this Agreement is subject to the
General Rules and Regulations of NSP on file with the Minnesota Public
Utilities Commission as they now exist or may hereafter be changed.
6. FIRE PROTECTION WATER SUPPLY
6.1 Beginning September 30, 1994, NSP shall provide access to the fire
protection water supply of the Sherburne County Generating Plant at the
north-south centerline of the west boundary of Tract I, seven point five
(7.5) feet below grade. Access to and reliance on the fire protection
water supply is conditioned on the approval of insurers for both NSP and LPI.
6.2 NSP shall supply fire protection water at one hundred (100) pounds
per square inch gauge (PSIG) and one thousand five hundred (1500) gallons per
minute (GPM) at the point of delivery described in Paragraph 6.1. NSP shall
purchase, install, and test all necessary pipe, valves, fittings, and
appurtenances required to supply fire protection water to the point of
delivery. LPI agrees to pay NSP engineering, material, installation, testing
and administrative costs incurred for purchase, installation and testing of
the fire protection water supply access.
6.3 LPI shall provide at its sole expense all necessary labor,
equipment, and materials including all piping, valves and meters, to deliver
fire protection water from the point of delivery to the LPI facility.
6.4 NSP shall assume or incur no liability for the LPI facility, LPI
property, real or personal, or any person, whether or not employed by LPI,
as a result of providing access to the fire protection water supply of the
Sherburne County Generating Plant.
6.5 In the event an insurer for NSP withdraws approval, NSP may
terminate its agreement to provide access to the fire protection water supply
by giving written notice to LPI a termination date not less than one hundred
and eighty (180) Days after notice. In the event an insurer withdraws
approval, NSP shall assume or incur no liability for the LPI facility, LPI
property, real or personal, or any person, whether or not employed by LPI.
In the event NSP obtains insurance from an insurer which will not approve
LPI's access to the fire protection water system, NSP and LPI shall negotiate
in good faith to reasonably allocate expenses arising out of termination of
access.
6.6 LPI shall use fire protection water only for the purpose of fighting
fires either manually, via hose station , or automatically, via sprinkler
system.
7. SOLID WASTE COMBUSTION
7.1 NSP shall accept solid waste generated from the LPI facility meeting
the requirements stated in Exhibit E at one of its RDF-fueled generating
plants. NSP's acceptance of the solid waste is contingent upon the following
conditions:
(a) Results from material evaluation and classification by the
Minnesota Pollution Control Agency (MPCA) and the United States
Environmental Protection Agency (USEPA), which provides conditions to
determine the acceptability of the combustion of the solid waste at the
RDF-fueled generating plant;
(b) NSP receipt and the continued validity of all necessary
approvals from federal, state, regional, county or local agencies or
authorities having jurisdiction, including permit modifications, to allow
evaluation, classification, testing and combustion of the solid waste at the
RDF-fueled generating plant;
(c) Availability of processing and combustion capacity at the
RDF-fueled generating plant; and
(d) Results from material evaluation, classification, and
pre-qualification testing, including a test burn, of the solid waste which
determine the ability to handle and combust the solid waste at the RDF-fueled
generating plant without adversely affecting plant operations; and
(e) Agreement by NSP and LPI on terms of a capacity commitment.
7.2 In the event of any change in the operation of the LPI facility
which results in a material change in the physical character or composition
of the solid waste, NSP's acceptance of the solid waste is contingent upon
the meeting the conditions stated in Paragraph 7.1(a), (b), and (d).
7.3 LPI shall pay all costs in connection with transportation and
delivery of solid waste from the LPI facility to the RDF-fueled generating
plant. LPI shall weigh the solid waste prior to delivery to the plant. LPI
shall deliver the solid waste to the plant in RDF-type trailers compatible
with plant operation. LPI shall deliver the solid waste to the plant on a
schedule compatible with plant operation.
7.4 LPI shall pay NSP for all solid waste delivered to the RDF-fueled
Generating Plant. For accepting solid waste that meets the specifications
of RDF material stated in Exhibit E, LPI shall pay NSP fifteen dollars ($15)
per ton. Alternatively, LPI shall pay NSP twenty dollars ($20) per wet ton
of material delivered by LPI to the RDF-fueled Generating Plant that meets
all specifications of the RDF material stated in Exhibit E, with the
exception of moisture, which shall not exceed fifty-five percent (55%). All
estimated prices are expressed in 1993 dollars and will be adjusted in
January of each Fiscal Year using the CPI Index.
7.5 NSP and LPI agree to pursue classification and qualification of the
solid waste in a timely fashion.
7.6 NSP and LPI agree to use best efforts to deliver solid waste to an
RDF-fueled generating plant not more than one hundred and fifty (150) miles
from the LPI facility.
7.7 NSP and LPI agree to execute a separate agreement which details the
specifics of solid waste delivery to the RDF-fueled generation.
8. INDEMNITY
8.1 NSP shall pay, indemnify, defend and hold LPI harmless from and
against, any and all costs, liabilities, claims, damages, losses, actions,
suits or judgments (including reasonable attorneys' fees), asserted against
LPI by any other person, firm, corporation, governmental authority
or other entity (including, without limitation, employees of NSP) arising out
of, or resulting from:
(a) NSP's negligence in the construction, operation, maintenance,
modification, replacement or repair of the Steam Supply System to the
Delivery Point; or
(b) Any breach by NSP of any warranty or representation stated in
Section 9 of this Agreement.
8.2 Notwithstanding Paragraph 8.1, NSP shall not be obligated to LPI for
losses solely arising out of, resulting from or relating to:
(a) LPI's negligence, gross negligence or willful misconduct.
8.3 LPI shall pay, indemnify, defend and hold NSP harmless, from and
against any and all costs, liabilities, claims, damages, losses, actions,
suits or judgments (including reasonable attorney's fees) asserted against
NSP by any other person, firm, corporation, governmental authority
or other entity (including, without limitation, employees of LPI) arising out
of, or resulting from:
(a) LPI's negligence in the installation, maintenance, repair or
use of any machinery, boilers or equipment at the LPI facility, other than
the Steam Supply System to the Delivery Point; or
(b) Any breach by LPI of any warranty or representation stated in
Section 9 of this Agreement.
8.4 Notwithstanding Paragraph 8.3, LPI shall not be obligated to NSP
for losses solely arising out of, resulting from or relating to:
(a) NSP's negligence, gross negligence or willful misconduct.
8.5 Any party to whom indemnification is owed pursuant to Paragraphs 8.1
through 8.4 will give the other party prompt notice of any claim for which
indemnification is owed and the indemnifying party will immediately undertake
the defense of or compromise or settle, any such claim; provided, however,
that the party owing such indemnification shall consult with the other
party with respect to any such defense, compromise or settlement and such
other party, may at its own expense, participate in (but not control) any
such defense. In the event that any party obligated to defend and indemnify
fails to defend, compromise or settle any claim, the party to whom
indemnification is owed will have the right to undertake the defense,
compromise or settlement of such claim on behalf of, and for the account of
and at the risk of the other party. Notwithstanding anything in this
Agreement to the contrary, if, in the reasonable estimation of the party to
whom indemnification is owed, there is a reasonable probability that the
claim against it may have a material and adverse effect against such party
other than for money payable, such party shall have the right, upon notice
to the other party to assert and maintain control of efforts to defend,
compromise or settle such claim, at its own cost and expense.
8.6 LPI and NSP shall purchase and maintain the following policies of
insurance during the entire term of this Agreement:
(a) Statutory Workers' Compensation, and Employers Liability with
a limit of not less than $100,000.
(b) Comprehensive General Liability or the equivalent at not less
than $5,000,000 per occurrence and a $5,000,000 annual aggregate. This
coverage shall include, but not be limited to, explosion, collapse,
underground damage, independent contractors, broad form property damage,
personal injury or death, coverage for products and completed operations,
and contractual coverage specifically covering the liability assumed under
this Agreement.
(c) Property insurance. The parties hereto shall purchase and
maintain property insurance covering their own property and equipment,
including coverage providing all risk fire and extended coverage, boiler and
machinery, and transit and installation, or policies providing equivalent
coverage. The parties hereby waive subrogation against each other under these
policies and further agree that any deductibles under these policies will be
absorbed by the insured, it being the specific intent of the parties that
each will insure their own property and will not attempt to seek
reimbursement for any damage to such property which is covered under these
policies, or which would have been covered except for deductibles or an
election to self-insure or not to insure.
8.7 NSP and LPI shall be responsible for assuring that each
of their contractors and their
subcontractors carry insurance in the amounts and types required.
8.8 Copies of all insurance policies provided in Paragraph
8.6 or certification thereof
shall be furnished each party hereto by the other party, together with all
amendments and
replacements.
8.9 The provisions made in Paragraph 8.6 shall not relieve
or excuse either party from
any of its other obligations under this Agreement, including its obligation
to indemnify the other
party hereunder in the manner and to the extent provided in its
indemnification provision above.
8.10 No provision of this Agreement shall in any way inure
to the benefit of any third
person (including the public at large) so as to constitute any such person
a third party beneficiary
of this Agreement or of any one or more of the terms hereof, or otherwise
give rise to any cause of
action in any person not a party hereto.
8.11 The provisions of this Agreement providing for
limitation of or protection against
liability of NSP or LPI and their suppliers or subcontractors shall apply to
the full extent permitted
by law and regardless of fault, and shall survive the expiration or
termination of this Agreement.
9. WARRANTIES AND REPRESENTATIONS
9.1 NSP hereby represents on behalf of itself:
(a) Northern States Power Company (NSP) is a
corporation duly organized,
validly existing and in good standing under the laws of the State
of Minnesota and has
corporate power and authority to execute and deliver this
Agreement and to perform its
obligations hereunder.
(b) The execution, delivery, and performance by
NSP of this Agreement have
been duly authorized by all necessary corporate action on the part
of NSP, do not contravene
any law, or any government rule, regulation, or order applicable
to NSP or its properties,
or the Articles of Incorporation or By-Laws of NSP, and do not and
will not contravene
the provisions of, or constitute a default under, and indenture,
mortgage, contract, or other
instrument to which NSP is a party or by which it is bound, and
this Agreement constitutes
a legal, valid, and binding obligation of NSP enforceable in
accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization,
or similar laws at the time
in effect.
(c) There are no actions, suits, or proceedings
pending or to NSP's knowledge
threatened against or affecting NSP before any court or
administration body or agency which
might materially adversely affect the ability of NSP to perform
its obligations under this
Agreement.
(d) EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT NSP
MAKES NO WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AS TO STEAM,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(e) NSP has furnished or will furnish within a
reasonable time copies of the
resolutions of its Board of Directors authorizing the execution,
delivery and performance
of this Agreement by NSP certified by the Secretary or an
Assistant Secretary of NSP, and
such resolutions were duly and validly adopted and are, as the
date hereof, true and correct
and in full force and effect.
9.2 LPI hereby represents on behalf of itself:
(a) LPI is a corporation duly organized, validly
existing and in good standing
under the laws of the State of Minnesota and has corporate power
and authority to execute
and deliver this Agreement and to perform its obligations
hereunder.
(b) The execution, delivery and performance by LPI
of this Agreement have been
duly authorized by all necessary corporate action on the part of
LPI, do not contravene any
law, or any governmental rule, regulation, or order applicable to
LPI or its properties, or the
Articles of Incorporation or By-Laws of LPI, and do not and will
not contravene the
provisions of, or constitute a default under, any indenture,
mortgage, contract or other
instrument to which LPI is a party or by which LPI in bound, and
this Agreement constitutes
a legal, valid and binding obligation of LPI enforceable in
accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization,
or similar laws at the time
in effect.
(c) There are no actions, suits or proceedings
pending or to LPI's knowledge
threatened against or affecting LPI before any court or
administrative body or agency which
might materially affect the ability of LPI to perform its
obligations under this Agreement.
(d) EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT LPI
MAKES NO WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, AS TO ANY
SOLID WASTE OR CONDENSATE, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(e) LPI has furnished or will furnish within a
reasonable time copies of the
resolutions of its Executive Committee authorizing the execution,
delivery and performance
of this Agreement by LPI, certified by the Secretary or an
Assistant Secretary of LPI and
such resolutions were duly and validly adopted, and are as of the
date hereof, true and
correct and in full force and effect.
10. ARBITRATION
10.1 Any dispute arising out or relating to this Agreement,
or the breach thereof, shall be
subject to resolution by arbitration, except antitrust claims or any claims
involving a third party and
based upon contribution, indemnification or damages based on tortious conduct
which shall not be
subject to arbitration under this Agreement.
10.2 Prior to initiation of arbitration, any dispute shall
first be referred by initial written
notice to the persons identified in Paragraph 14.4, specifying the nature of
the dispute and stating
that the party is meeting pursuant to this Paragraph for the purpose of
discussing and attempting
to resolve of the dispute. The parties will use their best efforts to
informally resolve any such
dispute as promptly as is reasonable after the date of any such notice.
However, if the dispute
cannot be resolved within twenty-one (21) Days of such initial notice, either
Party may initiate
arbitration. Any failure to initiate arbitration within forty (40) Days of
such initial notice shall be
deemed a waiver of the right to arbitrate. Any waiver shall not prejudice a
Party's right to arbitrate
a dispute which is substantively the same as the waived dispute, except that
they are based on facts
arising subsequently to the facts that give rise to the previous controversy
or claim.
10.3 NSP and LPI shall, within twenty (20) Days of service
of the notice of arbitration,
select and designate a qualified and independent professional arbitrator. The
two arbitrators selected
shall select and designate a third qualified and independent professional
arbitrator within twenty (20)
Days of their appointment. The arbitrators shall be competent by virtue of
education and experience
in the particular matter subject to the arbitration. The foregoing provision
shall not prevent the
Parties from agreeing to proceed with an arbitration with a single
arbitrator.
10.4 The arbitrators shall have jurisdiction and authority
to interpret, apply or determine
compliance with provisions of this Agreement insofar as shall be necessary
to the determination of
issues properly before the arbitrators. In making the decision, the
arbitrators shall issue appropriate
written findings and conclusions regarding the issues.
10.5 Any arbitration conducted under this Agreement shall be
conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. The
arbitrators shall not have jurisdiction or authority to add to, detract from
or alter the provisions of
this Agreement or any applicable law or rule of civil procedure. The
arbitrators shall have the
authority to require either Party to specifically perform its obligations
under this Agreement. The
arbitration shall be closed to observation or monitoring by a third party
unless either Party requests
the arbitrators to allow third party presence, provided however that either
Party may call upon third
parties to present evidence at the arbitration hearing. The Parties agree to
be bound by the decision
of the arbitrators with respect to such request.
10.6 NSP and LPI shall pay the fees, costs and expenses of
the arbitrator it selects, and
split the fees, costs and expenses of the third arbitrator retained. In all
other disputes, each party
shall pay one-half the arbitrators' fees, costs and expenses incurred in
connection with any
arbitration of any matter hereunder. Each party shall pay its own employee's
costs, expert witness
and consultants and attorneys fees, as well as its costs of exhibits and
other incidental costs. If the
arbitrators find a party has unreasonably brought, or has unreasonably forced
the other party to
commence, an arbitration proceeding, the arbitrators shall order such party
to pay one-hundred
percent (100%) of fees, costs, and expenses.
10.7 Each party shall have the rights of discovery in the
manner provided under the rules
governing civil actions in the district courts of the State of Minnesota. All
discovery issues shall be
determined by order of the arbitrators upon motion made to them by either
party. when a party is
asked to reveal material which the party considers proprietary information
or trade secrets, the party
shall bring the matter to the attention of the arbitrators who shall make
such protective orders as are
reasonable or necessary or as are otherwise provided by law.
10.8 Pending the final decision of the arbitrators, NSP and
LPI agree to diligently proceed
with the performance of all obligations, including the payment of all sums,
required by this
Agreement.
10.9 Any decision, including orders arising out of disputes
as to the scope or
appropriateness of a request for, or response to discovery, of the
arbitrators may be enforced in a
district court with all costs, including court costs, paid by the party in
default or in error.
10.10 All arbitration proceedings shall take place in the
State of Minnesota. The arbitration
shall be held at a location agreed upon by NSP and LPI. In the event of
failure to agree,
the arbitrators shall determine the most convenient venue based on the
location of the majority of
the documentary evidence and prospective witnesses.
10.11 Except as may be necessary for any review by the
Minnesota Public Utilities
Commission or as otherwise required by law, no communications sent or
documents delivered by
either party because of a proceeding under this Section shall be disclosed
by the other party to a third
party if that communication or document contains the caption "Privileged and
Confidential-
Settlement Proceeding" or similar caption.
10.12 Except as may be necessary for any review by the
Minnesota Public Utilities
Commission or as otherwise required by law, a party who intends to disclose
such documents to a
third party shall provide at least ten (10) Days written notice to the other
party prior to disclosure
of such documents to the third party.
10.13 Except as may be necessary for any review by the
Minnesota Public Utilities
Commission or as otherwise required by law, the arbitrators' decision shall
be deemed to be a
settlement between the Parties and the decision shall be treated as a
settlement for all purposes in
the future.
10.14 This Article shall survive the termination of this
Agreement as necessary to resolve
any disputes.
11. REMEDIES
11.1 LPI acknowledges and agrees that LPI's remedy in the
event the Steam Supply
System is not Available as described in Paragraph 4.48, are liquidated
damages which are
calculated as follows: Damages for failure to meet Availability
requirements on an annual basis
will be calculated on an hourly basis up to seven (7) Days (168 hours) per
year. Damages for time
not Available greater than seven (7) Days (168 hours) will be calculated on
a daily basis. The
number of Days will be calculated by dividing the annual number of hours not
Available in excess
of one hundred and sixty-eight (168) by twenty-four (24), and rounding to the
nearest whole Day.
Damages will be assessed on an hourly basis up to a maximum of seven (7)
Days (168 hours) per
year. The hourly rate for calculating damages will be the Energy Charge per
thousand pounds times
eighty (80) thousand pounds (klbs.) per hour. Availability damages for
hours in excess of one
hundred and sixty-eight (168) hours per year will be assessed on a daily
basis up to a maximum of
thirty (30) Days per year. The daily rate for calculating damages will be
the Fixed Facility Charge
divided by three hundred and sixty-five (365). NSP shall credit LPI, within
thirty (30) Days of the
end of January of the following Fiscal Year, an amount equal to the damages
incurred.
11.2 LPI acknowledges and agrees that LPI's remedy in the
event the Steam Supply
System is not Available as described in Paragraph 4.53 are liquidated damages
which are calculated
as follows: Damages for failure to meet Availability requirements on an
annual basis will be
calculated on an hourly basis up to seven (7) Days (168 hours) per year.
Damages for time not
Available greater than 7 Days (168 hours) will be calculated on a daily
basis. The number of Days
will be calculated by dividing the annual number of not Available hours in
excess of one hundred
and sixty-eight (168) by twenty-four (24), and rounding to the nearest whole
Day. Damages will
be assessed on an hourly basis up to a maximum seven (7) Days (168 hours) per
year. The hourly
rate for calculating penalties is the Energy Charge per thousand pounds less
the fuel component
times eighty (80) thousand pounds (klbs.) per hour. Availability damages for
hours in excess of
one hundred and sixty-eight (168) per year will be assessed on a daily basis
up to a maximum of
fifteen (15) Days per year. The daily rate for calculating damages will be
the Fixed Facility Charge
divided by three hundred and sixty-five (365).
11.3 LPI acknowledges and agrees that LPI's remedy in the
event the Steam System is
not Available as described in Paragraphs 4.48 and 4.53 is suspension of the
Fixed Facility Charge,
calculated as follows: If the Steam Supply System is not Available for a
period of ten (10)
consecutive Days or greater, NSP agrees to credit LPI the value of the Fixed
Facility Charge,
calculated on a daily basis, for the duration of the suspension. If
suspension extends beyond one
hundred eighty (180) Days, LPI shall have the option to terminate the steam
supply portion of the
Agreement. If the interruption extends between two (2) Fiscal Years, the
annual Fixed Facility
Charge for the second year will not be due until the Steam Supply System
becomes Available. The
value of the Fixed Facility Charge owed for the second year will be
calculated by the number of
Days the Steam Supply System was not Available due to suspension multiplied
by the Fixed Facility
Charge, calculated on a daily basis. NSP and LPI agree to extend the term
of this agreement relating
to the purchase of steam by the number of Days the Agreement was suspended.
11.4 If as a result of the actions, omissions or fault of
NSP, NSP fails to comply with the
requirements of Paragraph 4.48 or Paragraph 4.53, as applicable, for two (2)
consecutive Fiscal
Years, LPI may terminate this Agreement as to the provisions relating to the
purchase of steam,
provided NSP has not provided LPI, within one hundred and eighty (180) Days
after receiving
written notice from LPI specifying LPI's intention to terminate, with
reasonable assurance that NSP
will meet the requirements of Paragraph 4.48 or Paragraph 4.53, as
applicable, for the remaining
term of this Agreement. LPI will not be required to pay the termination
charges specified in
Paragraph 13.1 if LPI terminates under this Section, and LPI shall be
entitled to pursue any legal
remedies that may be available to it under Minnesota law for breach of this
Agreement by NSP. In
the event LPI pursues legal remedies that may be available to it under
Minnesota law for breach of
this Agreement by NSP, NSP's liability for damages shall not exceed one
hundred thousand dollars
($100,000). Further, NSP liability for damages is expressly limited by
Paragraph 11.12. During
the 180-day period, representatives of LPI and NSP will meet and discuss
alternatives to termination
of the provisions of this Agreement relating to the purchase of steam.
11.5 If as a result of the actions, omissions or fault of
NSP, NSP fails to comply with
requirements of Paragraph 4.22 by the date specified therein, LPI may
terminate the provisions of
this Agreement relating to the purchase of steam provided NSP has not
achieved compliance within
one hundred and eighty (180) Days after receiving written notice from LPI
specifying LPI's
intention to terminate and identifying the specific failure. LPI will not
be required to pay the
termination charges specified in Paragraph 13.1 if LPI terminates under this
section. LPI will be
required to pay a Contracted Demand Charge for any capacity purchased by NSP
on LPI's behalf.
If NSP cannot establish to the reasonable satisfaction of LPI that it will
be able to comply with the
requirements of 4.22, LPI may upon notification to NSP proceed to install
whatever boiler capacity
it requires to meet its steam needs, at LPI's sole cost and expense.
11.6 If as a result of the actions, omissions or fault of
LPI, NSP fails to comply with
requirements of Paragraph 4.22 by the date specified therein, NSP may
terminate the provisions
of this Agreement relating to the purchase of steam provided LPI has not
allowed NSP to achieve
compliance within one hundred and eighty (180) Days after receiving written
notice from NSP
specifying NSP's intention to terminate and identifying the specific action,
omission or failure. LPI
shall pay the termination charges specified in Paragraph 13.1 if NSP
terminates under this section.
LPI shall pay the Contracted Demand Charge for any capacity purchased by NSP
on LPI's behalf
and any unpaid Energy Charge.
11.7 If as a result of the actions, omissions or fault of
NSP, NSP is unable to deliver the
maximum design steam flow of one hundred and eight (108,000) thousand pounds
per hour or the
maximum flow required by LPI, whichever is less, LPI shall pay the Fixed
Facility Charge and
Contracted Demand Charge reduced in proportion to the amount that the actual
maximum steam
flow, as measured by the NSP flow measurement equipment located upstream of
the Point of
Delivery in or near the LPI facility, as described on Exhibit B, is less than
the maximum design
steam flow or the maximum flow required by LPI, whichever is less, and any
unpaid Energy
Charge.
11.8 If as a result of the actions, omissions or fault of
LPI, NSP fails to comply with
requirements of Paragraph 4.22 by the date specified therein,NSP is unable
to deliver the maximum
design steam flow of one hundred and eight (108,000) thousand pounds per hour
or the maximum
flow required by LPI, whichever is less, LPI shall pay the Fixed Facility
Charge, Contracted
Demand Charge and any unpaid Energy Charge.
11.9 Provided timely written notice is given to LPI, NSP
shall not be liable for delays in
delivery, inability to deliver steam, or periods of when steam is not
Available, due to causes not
reasonably foreseeable by NSP which are beyond NSP's reasonable control, such
as acts of God,
acts of civil or military authorities, Government priorities, fires, strikes,
floods, epidemics, war or
riot.
11.10 If for any reason LPI fails or refuses to pay the
charges specified in this Agreement
for more than sixty (60) Days after they become due, except those portions
reasonably contested,
then in addition to the late payment charges provided in Paragraphs 4.33 and
5.8, NSP may
terminate this Agreement for default if LPI has not corrected such
delinquency within seven (7)
Days after written notice by NSP.
11.11 In the event NSP terminates this Agreement for default,
LPI shall remain liable for
all past due payments and the termination charges set forth in Paragraphs
13.1 and 13.2 , applicable
to the date of such termination.
11.12 In the event of termination of this Agreement by either
party or by expiration of the
term after any extension or renewal thereof, LPI shall, within sixty (60)
Days of such termination
notify NSP whether or not it desires to be granted title to that portion of
the Steam Supply System
located on the LPI facility. If LPI desires to be granted such title, NSP
shall within thirty (30) Days
of receipt of notice from LPI, deliver without cost or charge to LPI a bill
of sale granting and
transferring title to that part of Steam Supply System located on the LPI
facility "as is", free and
clear of any lien or encumbrance derived through NSP or any party other than
LPI. If LPI notifies
NSP that it does not desire to be granted such title, NSP shall within one
hundred eighty (180) Days
of receipt of such notice from LPI complete the removal from the LPI facility
of all parts of the
Steam Supply System located thereon. While removing the Steam Supply System
from the LPI
facility, NSP shall (a) exercise reasonable care and use its best efforts to
avoid damage to any
property of LPI and interference with LPI's operations at LPI's facility and
(b) leave LPI's facility
in at least as good condition, operating and otherwise as it was prior to
such tenancy, reasonable
wear and tear excepted. If NSP fails to remove the Steam Supply System within
the one hundred
eighty (180) Days time period hereunder, LPI may remove the Steam Supply
System at NSP's
cost.
11.13 Except as expressly stated elsewhere in this Agreement,
the remedies specified in
this Section are exclusive, and each party's liability for damages is
expressly limited by this Section.
Neither party will be liable, whether arising under contract, tort (including
negligence), or otherwise,
for loss of anticipated profits, prospective benefits or anticipated savings,
claims of customers, loss
of use of capital or revenue, or for any other special, indirect, incidental
or consequential loss or
damage of any nature arising at any time or from any cause whatsoever.
Notwithstanding this
paragraph the parties shall have the right to bring an action for specific
performance to enforce the
terms of this Agreement.
12. EXTENSION AND RENEWAL
12.1 The terms of this Agreement for the provision of steam,
natural gas or electricity
supply may be extended for a five (5) year period at LPI's option, provided
LPI shall give NSP
written notice of its intention to extend not less than six (6) months prior
to expiration of the terms
of this Agreement for the provision of steam, natural gas or electricity.
In the event LPI has paid
the entire amount of the Fixed Facility Charge, as described in Paragraph
4.50, no Fixed Facility
Charge shall be paid during any extended term.
12.2 LPI shall have the right to negotiate a renewal of the
terms of this Agreement for up
to an additional ten (10) year period beginning upon the expiration of the
terms and any extension
thereof as provided in Paragraph 12.1 by giving written notice to NSP not
less than twenty-four
(24) months prior to such expiration; provided, the Sherburne County
Generating Plant is at such
time and is in good faith projected by NSP to continue for such additional
period to be in existence
and operational to produce steam for the LPI facility.
13. TERMINATION
13.1 LPI may terminate this Agreement, as to those provisions
relating to the purchase
of steam after the Effective Date, by giving written notice to NSP, which
termination shall be
effective sixty (60) Days after receipt by NSP of written notice from LPI.
LPI shall pay NSP, within
ninety (90) Days following the Effective Date of termination, the unpaid
principle amount of the
Fixed Facilities Charge stated in Paragraph 4.50, any unpaid amount of the
Contracted Demand
Charge for the Fiscal Year in which the Agreement is terminated, and any
unpaid Energy Charges.
13.2 In the event LPI terminates those provisions relating
to the purchase of steam, LPI
shall be obligated to purchase natural gas from NSP, pursuant to Paragraph
4.56.
13.3 LPI may terminate this Agreement, as to those
provisions relating to the purchase
of electricity after the Effective Date, by giving written notice to NSP,
which termination shall be
effective sixty (60) Days after receipt by NSP of written notice from LPI.
LPI shall pay NSP, within
ninety (90) Days following the Effective Date of termination, that amount of
termination charge
prescribed in Exhibit F, applicable to the date of such termination and to
the nature of LPI's
termination.
13.4 In the sixty (60) Days after receipt of the written
notice of termination, NSP may
match the price and terms of any alternative electric supplier selected by
LPI to provide electric
service to the LPI facility. In the event NSP matches the price and terms,
the provisions relating to
the purchase of electricity shall not terminate and LPI shall purchase
electricity under the amended
price and terms.
13.5 In the event LPI terminates those provisions relating
to the purchase of electricity,
LPI shall not develop cogeneration or electricity generation capability at
the LPI facility or any
expansion or addition to the LPI facility. Backup generation to support the
LPI facility shall not be
considered electricity generation capability.
13.6 In the event LPI terminates those provisions relating
to the purchase of electricity,
LPI acknowledges and agrees NSP's agreement to provide access to the fire
protection water supply
of the Sherburne County Generating Plant, as described in Section 6, shall
terminate.
13.7 In the event LPI terminates those provisions relating
to the purchase of electricity,
LPI acknowledges and agrees NSP's agreement to provide solid waste disposal,
as described in
Section 7, shall terminate.
13.8 In the sixty (60) Days after receipt of the written
notice of termination of steam
supply, NSP may match the price and terms of any alternative steam supplier
selected by LPI to
provide steam to the LPI facility. In the event NSP matches the price and
terms, the provisions
relating to the purchase of steam shall not terminate and LPI shall purchase
steam under the
amended price and terms.
13.9 In the event LPI terminates those provisions relating
to the purchase of steam and/or
natural gas, LPI shall not develop cogeneration capability at the LPI
facility or any expansion or
addition to the LPI facility. Backup generation to support the LPI facility
shall not be considered
steam and/or natural gas generation capability.
13.10 In the event LPI terminates those provisions relating
to the purchase of steam and/or
natural gas, LPI acknowledges and agrees NSP's agreement to provide access
to the fire protection
water supply of the Sherburne County Generating Plant, as described in
Section 6, shall terminate.
13.11 In the event LPI terminates those provisions relating
to the purchase of steam and/or
natural gas, LPI acknowledges and agrees NSP's agreement to provide solid
waste disposal, as
described in Section 7, shall terminate.
14. MISCELLANEOUS
14.1 Neither NSP nor LPI shall release to the press or to the
general public any
information concerning the execution, existence, contents, performance or
breach of this Agreement,
except as may be required in any legal or regulatory proceeding, without
first obtaining the written
consent of the other party.
14.2 NSP and LPI will do, execute, acknowledge and deliver
all such further acts,
conveyances and instruments as the other reasonably shall require for
accomplishing the purpose
of this Agreement.
14.3 No forbearance on the part of either party in enforcing
its rights under this
Agreement shall constitute a waiver of any terms of this Agreement, or a
forfeiture of any such
rights.
14.4 All notices, requests, demands and other communications
required by or necessary
to this Agreement shall be in writing. Notice shall be deemed to have been
given when delivered
by hand or deposited in the United States mail, certified with return receipt
requested, postage paid,
addressed to the appropriate party at its respective mailing address as set
forth immediately below:
David Lenzen Ronald Elsner, Project Engineer
Ronald Lifson Northern States Power Company
Liberty Paper, Inc. Sherburne County Generating Plant
5600 North County Road 18 13999 Industrial Boulevard
New Hope, MN 55428 Becker, MN 55308
Either party to this Agreement, by notice to the other party as required
above, may change its
address for the purpose of all future communications.
14.5 This Agreement shall be binding upon and inure to the
benefit of the successors and
assigns of the parties hereto. Each party may assign this Agreement,
provided, however, such
assignment shall not relieve the assignor of its obligations hereunder unless
the other party consents
to such assignment. Such consent shall not be unreasonably withheld.
14.6 It is agreed that without regard for the place where
this Agreement was made it shall
be governed by and construed, in all respects, in accordance with the laws
of the State of Minnesota
applicable to sales contracts made and to be performed in said state.
14.7 This Agreement is contingent upon approval, as
necessary, by the Minnesota Public
Utilities Commission. NSP and LPI shall use their best efforts to receive
approval of this
Agreement by February 1, 1994. In the event approval is not received by
February 1, 1994, NSP
and LPI shall meet within thirty (30) Days and determine whether to proceed
with the obligations
of this Agreement. After the meeting either party may terminate this
Agreement within thirty (30)
Days of meeting. In the event of termination, LPI will not be obligated to
pay NSP a termination
charge as stated in Paragraphs 13.1 or 13.3; however, as soon as practicable
after such termination
NSP shall submit to LPI a written statement identifying the actual
out-of-pocket costs incurred by
NSP through the termination date in constructing or preparing for
construction of the Steam
Delivery System, and LPI shall pay to NSP fifty percent (50%) of those costs
within sixty (60) Days
after notice of termination.
14.8 In the event that the Minnesota Public Utilities
Commission does not approve the
terms and conditions of this Agreement relating to the purchase and sale of
steam, or if the
Minnesota Public Utilities Commission determines that additional costs must
be allocated by NSP
to the sale of steam hereunder, LPI may terminate this Agreement as to those
provisions relating to
the purchase of steam by giving written notice to NSP which termination shall
be effective
immediately upon receipt by NSP of the written notice from LPI. If LPI so
terminates the provisions
of this Agreement relating to the purchase and sale of steam, LPI will not
be obligated to pay NSP
a termination charge as stated in Paragraphs 13.1 or 13.3; however, as soon
as practicable after such
termination NSP shall submit to LPI a written statement identifying the
actual out-of-pocket costs
incurred by NSP through the termination date in constructing or preparing for
construction of the
Steam Delivery System, and LPI shall pay to NSP fifty percent (50%) of those
costs within sixty
(60) Days after notice of termination.
14.9 If LPI determines not to proceed with construction of
the LPI facility due to its
inability to obtain financing or permits or any other reason reasonably
beyond its control, LPI may
terminate this Agreement by giving written notice to NSP, which termination
shall be effective
immediately upon receipt by NSP of the written notice from LPI; provided,
however, LPI may not
terminate this Agreement pursuant to this paragraph at any time after
February 1, 1994. If LPI so
terminates this Agreement, LPI will not be obligated to pay NSP a termination
charge as stated in
Paragraphs 13.1 or 13.3; however, as soon as practicable after such
termination, NSP shall submit
to LPI a written statement identifying the actual out-of-pocket costs
incurred by NSP through the
termination date in constructing or preparing for construction of the Steam
Delivery System, and
LPI shall pay to NSP fifty percent (50%) of those costs within sixty (60)
Days after notice of
termination.
14.10 This Agreement is contingent upon approval, as
necessary, by the Board of Directors
of NSP.
14.11 This Agreement is contingent upon approval, as
necessary, by the Board of Directors
of LPI.
14.12 This Agreement contains all of the understandings of the
parties hereto and
supersedes and replaces all prior written or oral agreements between them
relating to the subject
matter herein. This Agreement may not be amended or modified except in
writing signed by an
authorized representatives of NSP and LPI.
14.13 It is understood and agreed that NSP and LPI will
exercise good faith in the
performance and enforcement of the contractual obligations contained herein.
NSP and LPI will
attempt to disputes through good faith negotiations. During such
negotiations, NSP and LPI shall
continue to perform their respective contractual obligations.
14.14 As to any proprietary or trade secret information
received or obtained by either NSP
or LPI, or by its agents, employees or representatives from the other party
or such party's agents,
employees or representatives, in connection with the negotiation or
performance of this Agreement
and which is so designated as proprietary or trade secret information, the
party so receiving or
obtaining such information (herein referred to as the "Recipient") shall
maintain the confidentiality
thereof and shall use the same degree of care in so doing as the Recipient
uses in respect of its own
trade secrets and other confidential information, provided that such degree
of care shall in all events
be that reasonably necessary to maintain the confidentiality of such
information. The requirement
hereunder that the Recipient maintain the confidentiality of information
shall extend to all agents.
employees and representatives thereof and the Recipient shall assure that
such agents, employees
and representatives similarly maintain such confidentiality. Notwithstanding
the foregoing, the
following information shall not be subject to the requirement that the
Recipient thereof maintain the
confidentiality thereof:
(a) information that is or becomes part of the
public knowledge or literature
without the fault of the Recipient or any of its agents, employees
or representatives;
(b) information that is or becomes Available to
the Recipient from a source other
than the other party hereto or such other party's agents,
employees or representatives;
(c) information that is independently developed
by the Recipient without access
to information which is required hereunder to be maintained as
confidential;
(d) information that must be disclosed by
Recipient or any of its agents,
employees or representatives pursuant to court order or any law,
rule or regulation imposed
by any governmental instrumentality or agency; or
(e) information disclosed by either or both of the
parties with written
authorization of the other party.
14.15 The purpose of this Agreement is to provide for and
facilitate the sale of steam and
electricity by NSP to LPI and this Agreement is not intended, nor shall it
be deemed to create a
partnership, joint venture or similar relationship between NSP and LPI.
14.16 NSP shall maintain adequate supporting records for
verification of price components,
fire protection water supply installation and construction costs and, in the
event of termination of
steam supply pursuant to Paragraphs 14.7 through 14.9, actual out-of-pocket
costs in constructing
or preparing for construction of the Steam Delivery System. NSP shall
preserve such records for
the term of this Agreement and allow access to them by independent third
party auditors appointed
by LPI.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by
their duly authorized officers as of ___ day of October, 1993.
LIBERTY PAPER, INC.
By:____________________________________
DAVID LENZEN
Senior Vice President of Finance
NORTHERN STATES POWER COMPANY
By:_____________________________________
EDWIN M. THEISEN
President and Chief Operating Officer
By:_____________________________________
LEON R. ELIASON
President, NSP Generation
EXHIBIT A
Exhibit A is a LPI Site Location Drawing. It is a line drawing which shows
the approximate location of the Sherburne County Generating Plant and related
facilities, i.e. Unit 3 dry ash landfill, Unit 3 cooling towers, Unit 1 and
2 cooling towers, substation, recycle basin, bottom ash pond, fly ash pond,
scrubber solids ponds, elk river ash landfill and Becker substation. The
line drawing also shows the proposed location of the LPI facility on Tracts
I and II which are designated in the Agreement and the proposed location of
the steam line and fire protection line. Finally, the line drawing shows the
location of the City of Becker and the City of Becker Industrial Park. The
locations are approximate and the drawing is not to scale.
EXHIBIT B
Exhibit B is a Steam Supply Diagram which identifies the components in the
Steam Supply System which are located at the Sherburne County Generating
Plant and at the LPI facility. The components identified at the Sherburne
County Generating Plant include the Unit 1 and 2 Boiler Buildings and the
main steam and cold reheat lines, and the Unit 1 and 2 Condensers and flow
meters. The components identified at the LPI facility include the control
valves, desuperheater, metering stations, relief valves and manual isolation
valves. In addition, the LPI facility includes the desuperheat spray pumps,
condensate return tanks, condensate return pumps and the condensate quality
monitoring station. The points of delivery are identified as the manual
isolation valve prior to the LPI process and the condensate return tank prior
to the LPI process. The drawing is a schematic and is not an actual
representation.
NSP/LPI
SHERBURNE COUNTY
ENERGY SUPPLY AGREEMENT
EXHIBIT C
Condensate Return Chemistry Requirements
Ph 9.0 to 9.5
Specific Conductivity 5.0 to 11.p uomho/cm
Cation Conductivity 0.30 umho/cm Max.
Dissolved Oxygen 5 ppb Max. if returned to DA Storage Tank
Dissolved Oxygen 25 ppb Max. if returned to Deaerator
Silica 7 ppb as Si02 Max. no condensate polishing
Iron 8 ppb as Fe Max. no condensate polishing
Sodium 3 ppb as Na Max. no condensate polishing
Chloride 2 ppb as C1 Max. no condensate polishing
Sulfate 10 ppb as SO4 Max. no condensate polishing
Total Organic Carbon <200 ppb (ZERO OIL)
Copper <1ppb as Cu
Exhibit D: Page 1 of 2
NSP/LPI Sherburne County Energy Supply Agreement
NORTHERN STATES POWER COMPANY (MINNESOTA)
ELECTRIC RATE BOOK - MPUC NO.1 Sheet No: 5- 19
MINNESOTA Revision: 15th
GENERAL SERVICE
Availability: Available to any non-residential customer for general
service.
Rate:
Customer Charge per Month $21.55
Oct-May June-Sept
Service at Secondary Voltage:
Demand Charge per Month
All Kw - per Kw $ 6.21 $ 8.47
Energy Charge per Kwh 2.91 cents
January - December
Per Kw Per Kwh
Voltage Discounts per Month:
Primary Voltage $ .75 .06 cents
Transmission Transformed Voltage $ 1.50 .10 cents
Transmission Voltage $ 2.00 .13 cents
Interim Rate Adjustment: An interim rate adjustment of 5.36% shall be added
to billings for electric service.
Fuel Clause: Bills subject to the adjustment provided for in Fuel Clause
Rider No. 1
Surcharge: In certain communities bills are subject to a surcharge provided
for in Surcharge Rider.
Late Payment Charge: Any unpaid balance over $10.00 is subject to a 1.5%
late payment charge or $1.00, whichever is greater. The charge may be
assessed four working days after the date due.
Determination of Demand: The adjusted demand in kilowatts for billing
purposes shall be determined by dividing the maximum actual demand in
kilowatts by the power factor expressed in percent but not more than a 90%
power factor and multiplying the quotient so obtained by 90% and rounding
to the nearest whole Kw. In no month shall the demand to be billed be
considered as less than:
1.) Current month's adjusted demand in Kw, or
2.) 50% of the greatest monthly adjusted demand in kW during the preceding
eleven months.
But in no month shall the billing demand be greater than the value in kW
determined by dividing the kWh sales for the billing month by 75 hours per
month.
The greatest monthly adjusted demand in kW during the preceding eleven months
shall not include the additional demand which may result from customer's use
of standby capacity contracted for under the Standby Service Rider.
Maximum Demand: The maximum actual demand in kilowatts shall be the greatest
15-minute load during the month for which bill is rendered.
Rate Code
Transmission
Secondary Primary Transformed Transferred
Small DK004 DK014 DK024 DK034
Large GK004 GK014 GK024 GK034
Filing Date: 11-2-92 By: Keith H. Wietecki Effective: 1-1-93
Vice President, Electric Marketing & Sales
MPUC Docket No. E002/GR-92-1185 Order Date: 12-31-92
Exhibit D: Page 2 of 2
NSP/LPI Sherburne County Energy Supply Agreement
NORTHERN STATES POWER COMPANY (MINNESOTA)
ELECTRIC RATE BOOK - MPUC NO. 1 Sheet No:5-20
MINNESOTA Revision:13th
GENERAL SERVICE (Continued)
Power Factor: For three phase customers with services above 200 amperes or
above 480 V, the power factor for the month shall be determined by
permanently installed metering equipment.
For all single phase customers and three phase customers with services 200
amperes or less, a power factor of 90% will be assumed.
Off-Season Load Service: The optional Off-Season Load Service is available
under this schedule subject to the provision contained in the Off-Season
Load Rider.
Standby Service: Standby Service is available under this schedule subject
to the provisions contained in the Standby Service Rider.
Competitive Service: Competitive Service is available under this schedule
subject to the provisions contained in the Competitive Service Rider.
Minimum Demand to be Billed: The monthly minimum billing demand shall not
be less than provided above.
Split Service: When approved by Company, customer's service may be split
between General Service and General Time of Day Service rates. Only
Company approved storage space cooling and storage space heating equipment
qualifies for the General Time of Day Service portion of a Split Service
installation. The thermal storage equipment shall be permanently wired,
separately served and metered, and at no time connected to the General
Service portion of the Split Service installation. Each portion of
customer's Split Service installation will be considered separately for all
other rate application purposes.
Terms and Conditions of Service:
1. Alternating current service is provided at the following nominal
voltage:
a. Secondary voltage: Single or three phase from 208v up to but not
including 2,400v,
b. Primary voltage: Three phase from 2,400v up to but not include
69,000v,
c. Transmission Transformed Voltage: Three phase from 2400v up to but
not including 69,000v, where service is provided at the Company's
disconnecting means of a distribution substation transformer,
d. Transmission voltage: Three phase at 69,000v or higher.
Service voltage available in any given case is dependent upon
voltage and capacity of Company lines in vicinity of customer's
premises.
2. Transmission Transformed Service is available only to customers
served by an exclusively dedicated distribution feeder. Customer
will be responsible for the cost of all facilities necessary to
interconnect at the Company's disconnecting means of a distribution
substation transformer.
3. Transmission Service is available at transmission voltage, subject
to the terms and conditions contained in the Company's General Rules
and Regulations, Section 5.1.B.
4. Customer selecting General Service will remain on this rate for a
period of not less than twelve months.
5. If a customer has a billing demand of less than 25 kW for twelve
consecutive months, he will be given the option of returning to the
Small General Service schedule.
Filing Date: 1-28-91 By: Keith H. Wietecki Effective: 4-30-92
Vice President, Electric Marketing & Sales
MPUC Docket No: E002/GR-91-001 Order Date: 5-4-92
NSP/LPI
SHERBURNE COUNTY
ENERGY SUPPLY AGREEMENT
EXHIBIT E
SPECIFICATION FOR ACCEPTANCE SOLID WASTE
(Proximate Analysis)
Expected
Average Maximum Minimum
BTU/lb 5,000-5,500 n/a 5,000
Ferrous Metals 1.00%
Glass 3.50%
Moisture 40.00%
Non-Ferrous Metal .75%
Rigid Particle Size 12"x12"
Ash(dry) 15%
95% of all solid Waste delivered to the NSP RDF-Fueled Generating Plants
shall be less than 6 inches in any dimension. LPI shall attempt to the best
of their abilities to avoid delivery of material that includes excessively
long and fibrous material. In the event that such long fibrous material is
delivered, the NSP RDF-Fueled Generating Plants shall accept and process such
materials at the sole discretion of NSP. If NSP determines that it is not
feasible to process such materials, NSP shall reject the materials. LPI
shall be responsible for costs and associated with the disposal of any such
rejected materials, including but not limited to handling, transportation,
and landfill costs.
NSP/LPI
SHERBURNE COUNTY
ENERGY SUPPLY AGREEMENT
EXHIBIT F
Termination Charges for Electricity Supply
AMOUNT
YEAR DUE NSP
1 $1,468,820
2 $1,435,006
3 $1,398,334
4 $1,358,563
5 $1,315,432
6 $1,268,657
7 $1,217,928
8 $1,162,913
9 $1,103,250
10 $1,038,545
11 $968,372
12 $892,270
13 $809,737
14 $720,230
15 $623,159
16 $517,886
17 $403,718
18 $279,903
19 $145,624
20 $0